Building a retail brand from scratch is harder than it looks. However, after transforming her jewelry business into a $1 billion brand, Kendra Scott is sharing her learnings with other entrepreneurs, including the three elements that were crucial to her success.
When she started her business, wholesale was key, Scott explained during the Inc. Small Business Week Series. “I didn’t have money for advertising and marketing,” she said. “But Nordstrom, they’re a huge megaphone for my brand. I was in their books or their catalogs. They were doing the marketing for me. And that was driving my direct-to-consumer business or e-commerce business.”
Scott described the ideal retail structure as a pyramid with three sections: a strong wholesale presence at the base, a specialty or experiential retail store in the middle, and e-commerce at the top. “Those three elements together have to work and harmonize together to have a successful business and brand,” she said.
Sharing advice with other entrepreneurs
It’s advice that Scott has passed along to other founders, including Kelly McGee and Cristina Ashbaugh, the co-founders of Yardsale—a ski gear brand specializing in magnetic ski poles that Scott backed as a guest Shark on ABC’s Shark Tank. “Wholesale gives them this opportunity to really learn a lot about their customer and their product experience,” she said. “And, like I said, it’s the foundation for building a really successful brand.”
As a skier, Scott took interest in the brand and closed the deal at $250,000 for 10 percent equity, with a $5 royalty on each sale until she recovers $300,000. “You skiers deserve each other,” Daymond John, a fellow Shark, commented at the time.
Scott’s advice has already started to pay off for McGee and Ashbaugh. “Thanks to Kendra’s guidance, we’ve secured an expansion into REI, marking a major milestone for us, and we’re very excited for the road ahead,” Ashbaugh said.
Turning her company into a $1 billion business
In 2008, Scott opened her first jewelry store in downtown Austin. Since then, she has grown the brand to more than 130 retail locations across the U.S. and over 2,500 employees. She credits her success to engaging with customers and building a company that treats them like family.
“It was this village—this community of love and support—that we started in those very early days of Kendra Scott that has just continued to grow,” she told Inc. in 2022.
Scott knows the middle part of the three-section pyramid well. Leaning into the experiential part of retail, her stores offer jewelry customizations and hat fittings. In March, she opened Beau’s Bar in Nashville. The space, which is Western-inspired, allows shoppers to enjoy cocktails while browsing jewelry, apparel, and boots.
“Retail today is all about experience. If you are a retailer and you are just opening a store and putting product on a shelf and hoping that’s going to build your brand, you are going to fail,” she said.
The four walls of a retail store have to mean something, Scott said. Customers need to feel like they’re stepping into a community that reflects a brand’s culture. The goal is to create an experience so compelling that customers think, “These are my people.”
“Kendra always told us that it’s so important to be experiential and not transactional. And I think that’s been something that’s been really core,” McGee said.
Before opening a permanent storefront in their hometown of San Francisco, McGee and Ashbaugh put Scott’s advice to the test by hosting a series of pop-up events. When it opens, their new space will bring together everything she recommended by operating as a coffee shop, a retail store, an office, a warehouse, and a design studio.
“We heard Kendra in the back of our heads say you cannot just make a store,” Ashbaugh said. It appears they took her words to heart.
—Amaya Nichole, News Writer
This article originally appeared on Fast Company’s sister website, Inc.com.
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