At the heart of Elk is its commitment to “doing the right thing”, in terms of their customers, their workers and the environmental impact of their manufacturing process.
All factories, for example, are visited numerous times each year, and working conditions, company ethics, workers rights and workplace safety are checked up on. Elk creates biannual collections which typically lean towards natural hues and maximise the use of fine-quality raw materials sourced from all over the world.
Co-founder and creative director Marnie Goding has a passion for local design and independent, ethically sourced fashion. She spoke with Inside Retail Weekly about her vision and plans for the company.
IRW: What were some of the highlights for your business in 2018?
Marnie Goding: We took on a new, permanent member of the team last year who is responsible for ethics and sustainability. That was great because we’ve been on a journey to dive deeper into the ethical, sustainable and environmental side of the business – both through operations and product. Having someone who is actively researching and sharing their learnings with us has enabled us to tick off some things towards becoming a zero-waste business. We’ve already made some changes and are seeing virtually nothing go out. We’ve got 82 people working in the head office, so it’s a busy business, and to see no waste going out the door is pretty great.
IRW: What are some of the changes you’ve made to reduce your waste?
MG: One thing we’ve done is install a five-day composting system. Any green waste coming out of our retail stores, from cut flowers to apple cores, goes into our composting bins – they’re also worm farms! – rather than landfill. We’ve also found waste-stream solutions for odd things like the polystyrene packaging that comes with new computers that we order, and we completely overhauled our consumable purchases list. Everything that comes through the business, from toilet paper to whiteboard markers, is scrutinised and has to be on an approved list of items that have a lower environment impact.
IRW: As more companies embrace sustainable initiatives, I imagine there will be more competition for people to advise them. What was it like recruiting someone for that role?
MG: For a business of our size in our industry, it’s highly unusual [to hire someone to manage the company’s ethics and sustainability]. I don’t actually know anyone else doing it, other than bigger chain stores like Country Road. It’s something we’re very proud of. I can’t imagine how companies get done what they need to do without someone on their team permanently.
In terms of the recruitment process, it was difficult because there aren’t many people out there with this expertise. The other thing is that it’s kind of a sexy topic at the moment, and there are a lot of people who are really passionate about it, but with no industry knowledge or experience. The person we ended up taking on was at Aesop before and she’s just brilliant. She’s got a science background, and while she didn’t know fashion, which was a challenge, she knew retail and factories. She understood what it meant to run a business and produce consumer products.
IRW: When do you anticipate becoming a fully zero-waste business?
MG: The internal operation is pretty much there. The biggest challenge now is actually product because it has the biggest impact on the environment. We’re looking at the principles of circular economy in fashion and looking at what next life is for our product. We’re really scrutinising what we’re doing with packaging. We’re talking to suppliers and looking at alternative solutions for soft plastics – really understanding what we need, how much we need of it, what the best solution is and if we can eliminate it completely.
IRW: When you talk about the circular economy, do you mean Elk would take back old clothing from customers?
MG: We have a program at the moment where we reuse or upcycle broken pieces. There are some great things we do with the Children’s Hospital. But in terms of the large-scale solution, we actually did a trial at our last warehouse sale where we on-sold vintage worn pieces. All the money we collected went to charity. We did it as a trial to see if customers would respond, and we’d like to expand it. I think the challenge is understanding what sort of volume is out there and how you would manage it from a branding point of view. But it’s absolutely part of our corporate responsibility to deal with any ‘leakage’ at the end of the chain, and that’s waste really.
You can have all these great principles, but they need to be supported by really good tech. We’ve brought a new IT expert on board and he’s tirelessly working behind the scenes to revolutionise what we do in the digital space because that’s where the competition really lies for small brands like us. We’re competing for the same consumer dollar as the big guys, so we have to try to be as nimble as possible.
IRW: What are your top priorities for 2019?
MG: We launched in the UK last year. Sadly, Brexit is messing with our plans a little bit, but we have found that even with consumer and buyer sentiment being as low as they could ever get, we are still seeing some success over there. We’re looking forward to seeing some considerable growth come out of that region this year.
The other thing we’re looking to do is relocate our head office into a new facility. We’re currently working out of five buildings, which is just insane. So we’re looking to consolidate and gain some efficiencies from that.
We’ve also got some new iterations of the website coming out over the next 12 months. We launched ‘version one’ of our new website fairly quietly last year. Before that, we had a very antiquated hand-built website that didn’t allow us to do anything, so the main focus will be on customised versions for international websites around pricing, language and experience. We’ve got a lot of online business in the US and Canada.
IRW: One of the biggest retail stories in recent years seems to be the massive power shift towards brands. How has the retailer-brand relationship changed since you started Elk?
MG: Our business is still majority wholesale. Sixty per cent comes through wholesale, so it’s incredibly important to us. Consumers these days are very careful with how they spend their money, so the relationship we have as a brand with our customers is incredibly important because you want to give them a reason to buy your product.
The old days of browsing through racks of different things in a department store – where it becomes just faceless product – are perhaps over. Making sure you have context and communication with your end consumer is vital because it justifies your price point, it justifies make and fit. You really want to people to fall in love with your brand. You want them to come back every season to see what’s new.
IRW: Given all that, what role do you see the retailer playing today?
MG: What the retailer does is the fabric of the community. There are people who still like to buy directly from a retailer. They like to be in their local community going shopping and knowing their local business. The retailer is selling our product and our story, and we’ve always treated them like a part of our family because we’re all in bed together, effectively. We don’t sell our product without them. Beyond trying to sell product is the fact that if we can make really good ranges and do great quality and hit the market, then our product supports their business, and their business employs six women on the weekend to do part-time work, and it’s this economic support of a local community. It’s about encouraging good business and making sure they can pay their bills and send their kids to school. We’re all part of this big chain of retail.
There are brands out there that are cutting their staff back and not putting people on the road because times are tough. We’re putting more staff on the road and they’re still visiting those retailers because if we don’t hear their woes and we don’t hear how hard things are, or conversely how good things are, we can’t meet the market. And if we can’t meet the market, we can’t sell product, if we can’t sell product, I can’t employ staff and support the people overseas who make our product in a developing country. It’s this big chain of cause and effect.
IRW: Elk partners with over 1000 stockists around the world. What have you learned from working with so many retailers (presumably mostly small and independent ones) about what separates successful retailers from unsuccessful ones?
MG: I think there’s a bit of what I would call ‘retail exhaustion’. It’s really difficult out there at the moment and part of the challenge is that things are changing so quickly and traditional retailers are finding it really difficult to keep up with everything. The ones that we see as still doing well and growing are the ones that are active and progressive and innovative and not sitting on their hands.
All our retailers are doing well, but there are some that have an older thought process around how they used to do things and there are some that are reluctant to try new things, whether that’s consumer events or marketing in new ways. They’re the ones that are struggling a bit.
IRW: Are you considering opening more of your own bricks-and-mortar stores?
MG: We’re a multi-channel business, so we’re constantly monitoring the direction of each part of the business. Bricks-and-mortar will probably be something we focus more on next year. We’re in a highly competitive market for product, and brand is king. At the moment we have far too many people who don’t know about us. We’ve got a fairly aggressive influencer strategy coming out this year to increase following and awareness, but there’s nothing like bricks-and-mortar to grow brand awareness. It’s also the best market research you can get. I think we’ll look to open another store in Melbourne or expand to Sydney. All the brands are in Melbourne, but all the media’s up in Sydney, so we many need to go up there to fight for that share of media space.
IRW: Elk expanded into apparel a few years ago. How’s that part of the business going?
MG: We actually went into apparel eight years ago. It’s a huge challenge for us because we’re known as an accessories label, people don’t realise we’ve been doing apparel for quite so long. If you lumped all accessories into one pot and had apparel on the other side, it would probably be 50-50 now, but we’re seeing the growth come from apparel, which is interesting because it’s such a competitive sector. I think people are happy with the quality we’re making – our prints sell really well – and size range is important too. We go from a size 6 to a size 18 now, and starting next season, our shoes will go up to size 43. Trying to meet the market at both ends of the size spectrum while maintaining quality is what keeps people coming back season after season.