How Pacsun Turned Customers Into a Sales Force

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0:31Brieane Olson:This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. PacSun has been a brand that has really leaned on collaborations, Kylie Jenner, ASAP Rocky, Emma Chamberlain. We have been building this infrastructure of kind of mutual storytelling, but it didn't go far enough because in the end, that still leaves the consumer or your community on the outside looking in.

1:19Running a business means solving problems. I tell you how the smartest entrepreneurs do it. Hi, I'm Jason Pfeiffer, Editor-in-Chief of Entrepreneur Magazine, and this is Problem Solvers.

1:33The phrase we often use for the time that we're in right now is the attention economy. The attention economy. The more attention you can get, the more economy you can have, basically. The more numbers that you can drive on social media, that's going to turn into dollars. How is it going to turn into dollars exactly? Don't worry about it. It just is. If you get people's attention, then something happens and they pay you and then you make a lot of money, right? This is what breaks down once people actually start doing this, of course, because what you discover is that getting the attention on social media is actually not that hard.

2:09If you post enough stuff, something's going to hit. Lots of people are going to see it. But then what? What do you do with them? You have to build a system, a system that really matters. How do you do that? Well, today, that is what we're talking about with someone who knows it intimately well. Her name is Breanne Olson. She is the CEO of Paxson, the retailer, the clothing retailer, and also the author of Co-Created, which is a book about how Paxson aligned culture and commerce to win Gen Z. Breanne, I am so happy to have you here on Problem Solvers. Thank you, Jason, for having me on. So before we get into what Paxson has done to win on social media, to turn that social media buzz into actual thriving business.

2:52Tell me a little bit about Co-Created. Co-Created is a book to talk about PacSun's transformation, but it really is a roadmap for any brand, any retailer in any industry, honestly, to think about the transformation of pitching a product or your brand to an audience versus the roadmap of building alongside your consumer. All right. So take me into, that's the perfect setup for the thing that we're talking about right now. So maybe take me into perhaps the moment in which, was there a moment rather, in which you said, we need a different way to approach this, or it's time to build a system that goes beyond just grabbing attention or using social media in the way that many brands do?

3:47So I think, first of all, PacSun has been a brand that has really leaned on collaborations for over a decade. So whether that's Kendall and Kylie Jenner, ASAP Rocky, Emma Chamberlain, we have been building this infrastructure of kind of mutual storytelling. And that was a really important first step, but it didn't go far enough because in the end, that still leaves the consumer or your community on the outside looking in. And what we really recognized that we needed to do was to build an infrastructure and to build an operating system that brings the customer in. And we did that through building a youth advisory council, which is 14 young people between the ages of 12 and 26.

4:31It is not a focus group. They are like our board of directors. They advise the leadership team, myself, the board, on strategy for the company to really have young people have a seat at the table because that is who we serve at PacSun. And to be true to our mission, to inspire the next generation of youth, you have to go beyond social listening and really give them a seat at the table. And so I think it's incredibly important. One of the reasons we really started to spend a significant amount of effort and time on social media was the concept of spending time with your customers where they are.

5:06And that means that they're in our stores. Stores are now experiential hubs for us. They are spending a lot of time on TikTok, Snapchat, Pinterest, Reddit. And so I think first and foremost is recognizing how these platforms play a role in their life. And then how can a brand authentically show up and integrate alongside the consumer in your community, as opposed to pushing content at them? Okay. A whole bunch of things to follow up on there. But number one is tell me more about this board, the kind of advisory board. So the Youth Council, 14 young people, they meet with us in person four times a year.

5:47We have digital Zoom touch points every month. And I would say they have open access to all of us. I get text messages, you get IMs, you get messages on social media of either things that they're seeing that they think are interesting, feedback they want to give. hey, I was in this store and this experience happened. So it's like having a live customer or brand ambassador feedback loop so that you're constantly, you're not waiting for the next session. You're getting constant feedback. And a lot of the ideas have been really exciting and the feedback is raw and honest. And we're sourcing round two of our youth advisory council now, and it's actually going to be an opt-in.

6:28So inclusive and accessible to everyone. and whether you're a customer, a brand ambassador, a creator, an artist, and you want to have a seat at the table of helping co-design or co-create the next version of what PacSun in the future is going to be, you have an opportunity to weigh in, apply. And it's been, it's served us really well and I think it's an evolving program. So we'll continue to learn which parts we want to dial up as we move forward. But wait, but who, who are, how did you find them? Like, are these random kids pulled off of Instagram or are they somebody's son? Not random at all.

7:07And actually they have no correlation to anyone that works at Paxson. Some of them are customers. So one of our youth advisory members is a girl named Delilah Biggs. She's from Nashville, Tennessee. And in 2023, we were first introduced to her through the brand, through something called an open creator platform on TikTok, where customers who have 5 ,000 followers on the platform can opt into a program that's actually run by TikTok, not by PacSun. She went into her local Nashville store, PacSun store, bought a pair of the low-rise Casey Astra jean, went home, made a simple video in her bedroom.

7:48She has 5 ,000 followers. She sold 11 ,000 pairs of jeans in 36 hours. What? So of course we got to know her that way. And wait, wait, wait, wait, wait, wait, wait, wait. How just, just for, for people who hear that and are like, wait a second, how did a post to 5 ,000 people sell that many jeans? Like what, what literally happened there? Class it up with Crocs. You know, back to school is coming in fast. So why wait to find your new fave footwear. Step into a local croc store and step into your new look. Try it, style it, make it yours because the right pair doesn't just show up, it shows off.

8:29First day fits, handled. Walk out ready for whatever's next. Visit your nearest croc store today.

8:37Brieane Olson:This episode is brought to you by State Farm. Listening to this podcast instead of doom scrolling, Smart move. Another smart move? Getting help from one of State Farm's 19 ,000 local agents when you choose to bundle home and auto. Bundling, just another way to save with the personal price plan. Prices are based on rating plans that vary by state. Coverage options are selected by the customer. Availability, amount of discounts and savings, and eligibility vary by state. so there's the algorithm of tiktok well sure sure i mean we understand live shopping okay right there's um you know we often see with micro influencers or micro creators that their audiences are highly engaged and they're looking for authentic content but the other important thing is a brand needs to be willing to relinquish control a lot of brands won't opt in to the open creator platform on TikTok.

9:29They don't want their product available because they lose control of who might endorse the product. At PacSun, the mentality is if you love our product, you love our brand, we're not going to put barriers or boundaries about you have to be a particular age or we want someone to have a certain demographic. It was a we welcome everyone. So we met Lila through this. She spoke at our PacSun Purpose Summit last year sharing her story. She's been featured in Forbes sharing this viral story about selling these jeans. And we've gone on to sell a million pairs of jeans on TikTok life to date on the platform now.

10:05So, you know, and this is the majority of those sales come from leaning into the open creator platform. So really encouraging people that love the brand to be our best advocates, but also to be salespeople. You think about them as kind of like a virtual showroom, or it's an opportunity for young people to also earn revenue and to fuel the creator economy, which I think is very important to participate in. And I think there are two important things to take away from this. The first is, sometimes you have to be patient. We didn't have that viral story for four years. But we were patient, believing that if we engaged in an authentic, meaningful way with our community.

10:48And we believed in the power of these social media and social commerce platforms that we would see the results. And you have to try a lot of different things because what you assume might work with your audience might not be what actually resonates. And so I think there's a lot of flexibility, fluidity, speed is very important. And then understanding the impact in the Lila Big story, the inventory sold out, not only on TikTok, our inventory sold out digitally online, we had not predicted the demand at all because of the virality and the nature of the algorithm. And so trying to get after and use data and AI for better predictive analysis is also a huge part of adjusting our supply chain, getting our, you know, our inventory in the correct positions to be able to help predict the immediacy of what social media can mean to these young cohorts of consumers.

11:43Everything that you're saying there, what I'm marveling at is the way in which you had to reverse engineer a lot of things throughout the business to truly maximize the opportunity that you're having at that front-facing, creator-led sales channel. And that sounds like the result of a lot of learning, a lot of experimenting. I wonder what your advice would be to founders, you know, a company smaller than Paxson about how to be best using those channels and then also rethinking parts of the business to maximize the opportunity. The advice I'd give is to spend less time talking about your brand and more time listening to your consumers and your community.

12:31Because the more that you empower your community to talk about the brand for you on your behalf, the stickier your brand becomes. And I think that that storytelling power and the power of the creator economy is really exciting. You see it in a story like Poppy. You see it in PacSun's business. You see it in a story like Elf. So there's these brands that have really leaned in and been community first and spent a lot more time listening to their community and treating them like storytellers and creators and building a strategy and a platform of co-creation versus just talking about the brand and the product.

13:10Yeah. What do you think that many brands, I mean, outside of doing the opposite of the thing that you just said, I'm curious what else you're seeing out there in brand world and how people utilize social that you think are really missed opportunities. I think it's difficult to generalize because it really depends on who your consumer is and which platform you're referring to. I think the most important thing for people to do is to not make assumptions. Do the data, do the research, really listen. Build a board of directors, a youth advisory council for your brand, for your company, for your leadership teams.

13:53Make sure you're not playing into the misconceptions about your consumer, irregardless of which demographic they fall into. and really consider the power of co-creation. What does it mean to build with your consumer as opposed to for your consumer? And it might seem subtle, but there are some real differences in how you would show up, what internal practices you need, how you build internal teams that really value listening and how do you incorporate it into your operating structure. And so I think as we look through that infrastructure change and you really question what is your purpose, why do you exist, and why and how should you show up, it should come back to really going beyond just listening to your community, but bringing them in to build with you.

14:43What have you found to be the most effective ways of doing exactly that, bringing people in? So early on on TikTok, for example, one of the things that was resonating the most was unboxings in our stores. So people on TikTok wanted to see what it was like behind the scenes for a store employee to be unboxing the next new thing. And those took off and were incredibly viral. So I think there's also parts of our process that, you know, from a traditional marketing media standpoint, we would have never showed your end consumer or your audience that customers and audiences and communities today want the behind the scenes view.

15:26They want to have the view into what happens, you know, in the back room, what happens when it's getting out on the sales floor. I think another thing is engaging with your community, reposting your community's content on your page can be incredibly effective, especially across meta platforms. Having a real voice at the table in Reddit chat rooms, really important. And I think if you think about Snapchat, it's like one of the most used platforms by young people today. What is the authentic voice? What is the content that young people are looking for, your consumers looking for by platform and being very thoughtful?

16:06I think the mistake people make is assuming that the same content can go across all platforms and it doesn't need to be unique or different. And the truth is all of these platforms are very unique and special in their own right. So what works on Pinterest is going to be very different than what you might put on TikTok. And so understanding the platforms, understanding your community and why they use them and how they show up and then how you can break through and show a different lens of your brand depending on the platform of choice. What does it look like inside of PacSun to be managing all this?

16:40Do you have a massive social media team? How have you structured it so that it sounds like social media is leading a lot of the conversations that are happening inside of the company and that these teams are not siloed so that logistics and inventory is directly involved in and responding to what's happening in social? How are you structuring all this? I would say we first of have a fairly lean organization. At the same time, we have, and we say it with a lot of pride, a lot of scrappiness in terms of our values and really leaning in and building. We're not using outside agencies for creative.

17:22We're not using outside agencies for paid or social media. Everything is built in-house with a team that really values and understands what we're achieving at PacSun and what our mission is to inspire the next generation of youth. I would also say the organization as a whole isn't as siloed as it is in other organizations. So marketing bleeds into product brand creation, design, merchandising. They work very closely with the digital team, planning and allocation. And so these teams often share common leaders and we don't have a traditional structure in terms of marketing. And so I would say that's a benefit in terms of moving quickly, having everyone on the same page.

18:02And then we've hired people who are best at social media. So the first thing we look at is what does their own personal social media profile look like? And are they engaging in their own way, in their own life across these channels so that they can effectively use them? And I think we have a very talented pipeline and we've been able to really be able to build a team that's incredibly passionate about what we're setting out to do and really bringing to life this intersection of music, fashion, art, and sport in a very unique way. You know, something, Brianne, that I hear all the time in conversations about social media is the word community.

18:42You have to build your community. You have to foster your community. But I think a lot of people just are using community to mean audience. It's just, you know, You build your audience, you engage your audience, but community really should be something different. And it sounds like you're pretty mindful of that. So I'm curious what that word means to you and how you would like the average PacSun fan, person who's following the brand, how you would like them to feel connected to you. Yeah, I think first and foremost, when we decided to lead with purpose, we reevaluated stakeholder centricity. And we really thought about who do we want to have the most buy-in into the mission, the purpose, the values of PacSun, the results.

19:32And we brought in our suppliers, our brand associates, our brand ambassadors, of course, the board of directors, our employees, our customers. But it's really thinking about it in a much more 360 degree view and having really kind of equal stakes at the table when you're considering who your stakeholders in the business are. When you think about your community, it starts first and foremost with our brand associates in our stores. We have six, 7000 brand associates in any given time, up to 10 ,000 during peaks. And it starts with that energy, that enthusiasm, that passion. That's the very cornerstone of our community.

20:13And then, you know, inciting in people the excitement and enthusiasm of the brand and inviting our customers in to be creators, to be builders with us is the next step. And that's why we're so excited about the PacSun Community Hub, which is an opportunity to do just that. You want to join the Youth Advisory Council, you can join the PacSun Community Hub. If you want to be an artist or you're a young aspiring designer, you're an aspiring photographer or stylist, we have the PacSun Collective. That's an opportunity for young people to get involved and to be a part of the brand early on, really dependent on what they care about.

20:50And so I think there are brands that build really sticky communities and they matter and they stand the test of time. If you look at Trader Joe's or Whole Foods, those are examples of brands, Patagonia, that have created this brand affinity that really has a long duration. And that's what we're seeking to do at PacSun with young generations today. Okay. I think you would tease some of that stuff earlier, but it's worth unpacking what these things actually are. You had mentioned the PacSun Collective and the Community Hub. So these are kind of open opportunities for your consumer base to get involved.

21:23Can you talk me through what those are and what it looks like to execute them? Yeah. So the community hub available on the Apple Store, you can download it. It's a way to get involved, whether you want to create a piece of content and participate in the creator economy. You want to request a sample from the brand. You don't have to go to just YouTube or TikTok or Meta to get engaged. It can cross post for you using smart AI as a backbone. If you want to be a part of the PacSun Collective, which is a program we've been running for four or five years, which really invites people to come in and participate in our creative process, you can apply on the Community Hub.

22:04It's really a convergence of creativity, community, and social commerce all in one. And so we're in the early stages of the development and the launch of this app. We started in January with the initial unveiling, and we're kind of in those early developmental and learning stages. But it's been very exciting because young people want a seat at the table. And you've got to create space for that in both your processes internally and externally. And also an infrastructure internally that allows for that engagement and dialogue and really clear values so that there's some clear parameters of what we stand for and what we don't stand for.

22:48What have been some of the major learnings running this? And I know they're all still relatively new programs, but about what has engaged users the most, what has excited them, what has moved them to take an action, what actions are most meaningful to PacSun, any of that stuff. I think it goes back to a listening feedback. The reason we built the hub was because we were hearing our community and our customers struggle with certain aspects of current platforms and how they can participate and kind of the removal of the brand from the center of the community or the conversation. And so we wanted to ensure that, you know, from an open platform perspective, they were earning their highest commissions by being able to go more direct, that there were opportunities for them to have their voice heard, that there was a more inclusive view of year two as we go into Youth Advisory Council for everyone to be able to apply and participate as opposed to selecting people who had high engagement with the brand, whether it be Lila from TikTok and the virus.

23:55Astro Gene or, you know, two twins that are at Stanford who had been huge fans of the brand, you know, we really want to create a system and an ecosystem that's more open. And so the community hub has been a real effort towards that. And we're certainly seeing early signs of good results in terms of engagement and building that community from there. At the same time, recognizing our strongest platforms for our community still are our traditional shopping app, TikTok, Meta, Pinterest. Those are the places that we're currently spending a lot of time with our consumer and then the hubs of our experiential stores and what customers expect there.

24:37And now really shifting towards we've opened 20 stores in the last 18 to 20 months, building that as well. It's really unique to have so many touch points with your consumer and to be able to, with consistency, deliver on that brand value and brand promise. Brand, this has been really great. Finally, let me just ask you, I pulled up PacSun's Instagram before this conversation and I thought, holy crap, it has 2.6 million followers. I mean, And for a retail brand, for anything, that is massive. But that is a very, very large number to me. What do you think on this platform, what has been driving that level of growth and following?

25:22I think it's an engagement with the consumer that crosses a lot of spheres that matter in their life. So when we go back to our purpose, it's music, fashion, art, and sport. And as you scroll through our channels on these platforms, you'll see a little bit of that come across in each of those spheres. And I think that intersection and building community and really staying connected to culture is a way for young people to stay connected, to be abreast of what's new and to follow along. And so I think that has been a formula that's unique to PacSun because we have our own PacSun brand, which accounts for about 50 % of our overall portfolio.

26:02And then we've got unique relationships with the Metropolitan Museum of Art, Formula One, Selena Gomez, Rare Denim Edit, you know, a plethora of brands to talk through. So I think we have a lot of content and we have a lot of great things to share with the consumer. And so that has been a real draw in terms of our following. Who are the people? I mean, I'm just scrolling through and it's just kind of like an endless parade of very attractive young people. Who are these people? Are these influencers that you're using? Are they models? uh are they for the most part yeah for the most part our instagram was customers creators reposting content that people are posting you'll get a smattering of new launches so the metropolitan museum of art you'll get imagery from shooting inside the museum when our team had the opportunity to do that or formula one track side if we did a swim event or a denim event, you'll see some imagery from that new product drops.

27:04So PacSun is very unique in terms of the range of products that we offer. And I think that's a reflection across our social channels. That's great. Brianne Olson, CEO of PacSun and also author of Co-Created, the cultural strategy that redefined PacSun. There's surely a lot more in there than we were able to hit today, but I really appreciate your time. This is so interesting and congratulations and all you've built, I'd love to keep an eye on how you're growing those programs, because I think that that in particular is a real next level thing for me as I'm listening to you talk about how it's one thing to invite people to engage with you on social.