It could be argued that Sarah Gallagher has the most distinguished career in fashion ecommerce. She currently sits on the boards of Abercrombie & Fitch and La-Z-Boy. As an operator, she began her career as a merchant, moved to the Victoria's Secret catalog business and then launched and led the digital businesses of iconic fashion brands Banana Republic and Ralph Lauren. In this episode, Sarah shares her career story, leadership lessons, the art and science of fashion ecommerce and thoughts on the future of digital in retail.
Welcome to the Conversations with CommerceNext podcast, I’m your host Michael LeBlanc, and this podcast is brought to you in conjunction with CommerceNext and presented by CommX.
It could be argued that Sarah Gallagher has the most distinguished career in fashion ecommerce. She currently sits on the boards of Abercrombie & Fitch and La-Z-Boy. As an operator, she began her career as a merchant, moved to the Victoria's Secret catalog business and then launched and led the digital businesses of iconic fashion brands Banana Republic and Ralph Lauren. In this episode, Sarah shares her career story, leadership lessons, the art and science of fashion ecommerce and thoughts on the future of digital in retail.
About Sarah
Sarah currently sits on the board of Abercrombie and Fitch Co. and La-zy Boy, and serves as an Executive Advisor of FitforCommerce (retail consultants focused on helping retailers for ecommerce). Ms. Gallagher previously served as Executive Chairperson of the Rebecca Taylor woman’s fashion brand, where she was interim chief executive officer with responsibility for the wholesale, stores and e-commerce businesses. Ms. Gallagher served as President of Ralph Lauren North America e-Commerce and as President of Ralph Lauren Media LLC, Polo.com, where she led all aspects of Ralph Lauren’s e-Commerce business for 12 years to a position of industry leadership and collaborated on its expansion into European markets. Prior to her tenure with the Ralph Lauren organization, Ms. Gallagher served as Senior Vice President, Banana Republic Direct, and Senior Vice President, Gap Direct, divisions of Gap, Inc., where she was directly responsible for the launch of the Banana Republic catalog, website, and all aspects of its e-Commerce business. Prior to joining Gap, Inc., Ms. Gallagher served as Vice President, Apparel, Jewelry and Accessories for Avon Products, Inc.; Vice President and General Merchandise Manager, Intimate Apparel and then Executive Vice President, Merchandising of Victoria’s Secret Catalogue; and in various roles with Lord & Taylor.
About Veronika
Veronika Sonsev is the Co-Founder of CommerceNext. She also leads the retail practice for Chameleon Collective and is a contributor for Forbes on how to grow retail and ecommerce in the age of Amazon. Having spent the last 10+ years working with some of the largest retailers and direct-to-consumer brands, Veronika has intimate knowledge of the challenges facing retail and ecommerce today. She is also an advocate for women in business and founded the global non-profit mBolden, which is now part of SheRunsit.
About Scott
An ecommerce veteran, Scott Silverman has been active in the industry since 1999 and is passionate about digital retail and the innovation driving the industry. Scott Silverman is the Co-Founder of CommerceNext. Previously, he spent 10 years as Executive Director of Shop.org where he launched the Shop.org Annual Summit. Scott co-invented “Cyber Monday” in 2005 and was the founder of Cybermonday.com in 2006, a shopping site that has generated more than $2.5 million for Shop.org’s scholarship fund.
About Michael
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Michael LeBlanc 00:05
Welcome to the Conversations with CommerceNext podcast. I'm your host Michael LeBlanc. This podcast is brought to you in conjunction with CommerceNext and presented by CommX.
Michael LeBlanc 00:09
It could be argued that Sarah Gallagher has the most distinguished career in fashion eCommerce. She currently sits on the Boards of Abercrombie and Fitch and La-Z-Boy. As an operator, she began her career as a merchant, moved to the Victoria's Secret catalog business, and then launched and led the digital businesses of iconic fashion brands, Banana Republic, and Ralph Lauren. In this episode, Sarah shares her career story leadership lessons, the art and science of fashion eCommerce, and thoughts on the future of digital in retail.
Sarah Gallagher 00:44
The other piece that's very, that was always very important to me is to always hire people who are smarter than I am. But they also must share my values. If they do not share the values that is a recipe for disaster. So, teamwork is extremely important to me. Respect is definitely intellectual curiosity or values that I hold dear.
Michael LeBlanc 01:11
Let's listen in now. Sarah, welcome, thanks for joining us this afternoon. How are you doing?
Sarah Gallagher 01:18
Very good. Thank you.
Michael LeBlanc 01:20
Fantastic. Now, where in the world are we finding you this afternoon?
Sarah Gallagher 01:23
In New York.
Michael LeBlanc 01:27
Scott, thank you for joining us. You're here as well. Last time you and I saw each other, Scott. It was in New York City at a fantastic event back in June.
Scott Silverman 01:34
Yeah, absolutely. And great to be recording another fun podcast with you, Michael.
Michael LeBlanc 01:40
Yeah, it's been a while since we've been, on live, together. We did Sarah, we did a bunch of bonus interviews in a podcast studio in New York. And it's great to be back live. So, let's, let's jump right in. Sarah, tell us a little bit about yourself, your, your personal, professional journey. You've got such a depth of, of background. I am so looking forward to our interview today. So, tell us all about yourself and what you do and where you came from and how you got there?
Sarah Gallagher 02:05
Okay. I'm a girl from the Bronx. I went to Lord & Taylor to get a job while I was in high school. And I started as a clerical because I was too young to be a salesperson, and I graduated from college and went to their training program and stayed there for over a decade. And left there as a DMM, of intimate apparel. I was lucky enough to be recruited to the Victoria's Secret catalog, which was very exciting. They were, "The Little Engine That Could", Les had just bought it a few years before that. And he was really focusing on the stores. And we were able to run the catalog out of New York. And it was "The Little Engine That Could", we grew the business tremendously. We broke all the rules in lingerie, which was really fun, especially since I had a lingerie background from a department store. It was wonderful being able to bring color,
Michael LeBlanc 02:29
Yeah.
Sara Gallagher 02:30
And excitement and sensuality, back to lingerie. And that's what we did at Victoria's Secret. It was in the early years that we were very women centric. We were run by women CEOs, and we were caring about our, our customer, and making sure that she felt comfortable in what she was wearing. And it really was groundbreaking. We received permission from our customer to become a lifestyle brand. We included loungewear, swimwear, and apparel and dresses. And it was really a great run. I was, (crossover talk),
Michael LeBlanc 03:48
No that's Interesting, going from a department store like Lord & Taylor to a direct response medium like a catalog. Was it, was, what it, was that the challenge of the opportunities that attracted you and or the brand? Or was it a combination of both because it's a very different vibe, running a department store, particularly back then, which was less, you know, less online than it was a direct response catalog? Talk about that for a bit.
Sarah Gallagher 04:11
Yeah, this was before. This was before online, (crossover talk), you put a glimmer in anybody's eyes, and there weren't even cell phones then. This was the 70's, so it was a whole other animal. I had heard great things about the specialty store business. And I am really, I've always been a control freak. And the catalog was very interesting to me because you're able to control every single page, and obviously buy accordingly. And that part was really exciting and Les’ story about what he wanted to do with Victoria's Secret was really exciting as well. So, that's what intrigued me, and it was a very lean and mean team. I was one of the first few executives who were hired for the catalog. And we were obviously agile and just very passionate about what we were doing. We had someone who had a catalog background when it came to CRM and printing, etc. And then I was brought in as the merchant. And that was where the fun began, because I was able to create things that I was able, not able to create. When I was at Lord & Taylor.
Michael LeBlanc 05:22
You left Victoria's Secret after a great run. Where'd you go next?
Sarah Gallagher 05:25
Well, I lucked out because I was, we were working tremendous hours. We were traveling all over the world constantly at meetings, at the other day. So, we weren't traveling. And I was married for 22 years, and we were able to adopt twins. So, I didn't want to have a book written about me about Mommy Dearest. So, I decided to leave there, and I joined Andrea Jung at Avon. And that is why I called it my sabbatical, I needed to have a job that did not have travel involved. And I took all of the fashion non-beauty, which was really interesting. It's obviously a direct business. Really interesting, again, women's dominated brand. And it really was a time where there was a lot of change going on there.
Michael LeBlanc 05:44
Yeah.
Sarah Gallagher 05:45
So, I did have my sabbatical. And then I got a call from Mickey Drexler to join him at or join the Gap Direct. That was a new division that they were creating. I had worked with Jeanne Jackson at Banana Republic; she was the CEO of Banana Republic. She was at the time that we worked together at Victoria's Secret. She had stores and I had the catalog. So, we had a relationship there. And she tapped me on the shoulder.
Sarah Gallagher 06:01
And it was really an incredible opportunity because of my children, and I had a mother who was ill, I could not go to San Francisco. And they were fabulous. They let me open up their office in the product development group in New York. And I had the merchants and the creative (inaudible) and planning in the New York office. And then we had marketing and some other functional areas in San Francisco. But it was able to build my team out of New York. And it was great because I was very close to the product development team. So, it was very easy to influence some assortments to some exclusives as we needed. We introduced the maternity business at the Gap, and we introduced the petite business at Banana Republic. And I, I opened up the fulfillment and contact center for them. So, it was really outside of my comfort zone of being a merchant my whole life. But this really gave me the opportunity to be a general manager and understand the cross-functional dependencies. So, it really was a great opportunity. I would travel to San Francisco. Occasionally, I had to kick off the whole concept of online to the store fleet, obviously, Banana and Gap had a tremendous store fleet,
Michael LeBlanc 06:16
Yeah, yeah.
Sarah Gallagher 06:18
At the time. This was in 97. No one really knew what online was all about. So, I had to convince everyone that it was really going to be an enhancement to the customer experience and drive traffic into the stores and really tell our story. The interesting thing about Banana was when they were moving away from the safari concept, and to the modern, more contemporary brands. And then we used the catalog and the online to tell that story. So, that was really a very exciting time for me as well.
Michael LeBlanc 08:50
I remember those times I was with Levi Strauss here in Canada launching the first online eCommerce for Levi's here in Canada right at the same time. And we were right at that cusp of those two things. Now, it seems to me, you made that kind of leap into, if we call direct response or cataloger, was it, was it that, you know, when you, when you're a merchant in a department store, feedback comes slowly, like you make big decisions, and you get your feedback in months, not weeks, not days, was it that kind of instantaneous feedback, or that you know, very close to the market feedback that really got you interested in and really continued to accelerate your career was that, you know, because designing product lines you could do in many different formats, but there's just a different response and a different feedback loop? Was that the essence of what got you so interested?
Sarah Gallagher 09:38
One of them is that analytics really came in very early at the time, the catalog, those were really the beginning of being analysts. And we had you know, the CRM tools that we use to make sure we're mailing the appropriate catalogs to the appropriate people. But we also love to add the productivity per square inch of each page. of the catalog. So, you really became much more analytical than you would be in a storyline capacity. So, that was the fun part. And we could see which categories were to be distorted, because they had the higher sales per square inch productivity. So, that part was really very interesting to me. And we took that catalog analytics, that process and that thought that thinking toward the online side of it, so really, it took a lot of the roots that I had from catalog and brought it over to the online world. And obviously, no one really had any rules about websites. I mean, there was certainly the basic architecture. But the importance of making it simple for the customer to shop, I would always have spirited dialogue with the techies who wanted to do all of the bells and whistles and I used to call a smoke and mirrors, that would at times I felt the roadblocks to the customer really getting to buy the product.
Michael LeBlanc 11:04
Right, (crossover talk). It's funny those conversations never end, right. And if you, if you had a conversation today, it'd be about we need more VR in the stores or something because that's going to be the thing that makes us remarkable. So, those kinds of conversations, right? They, they, they go on and on now then from there you went on to be I think the President of Ralph Lauren, right. So,
Sarah Gallagher 11:011
Yes.
Michael LeBlanc 11:12
Another leadership, you are taking that leadership role. So, and all these kinds of demarcations in your journey. Were there certain points, you described several of them, both professional and personal choices that kind of guided your path? And now you sit on multiple Boards is, is, were there certain you know, key points that pointed you in certain directions? It was this it sounds like it was this combination of the art and science of retail that really got you interested in setting you down that path? Is there anything else that, that, that you can think of that, that set you down that path that you reflect upon now as in kind of key milestones?
Sarah Gallagher 11:59
I love building businesses, and I love building teams, which are important, obviously, for the, for the results that you want to achieve. So, for me, it was, it was time for me to leave a Gap. After three years, they wanted me to move to San Francisco, and I really had to stay in New York. And with coming to Ralph, I mean Ralph was certainly the epitome of a movie set. And telling an incredible story.
Michael LeBlanc 12:04
Lots of art.
Sarah Gallagher 12:06
Online was just not the most embraced distribution channel for Ralph. I mean he loved his stores and he loved his movie. So, coming in and being able to bring his brand alive online, in partnership with David Lauren, his son, who was the biggest advocate for the digital business was really very exciting for me. You having a brand of the caliber of Ralph Lauren made it easy and that customers trusted Ralph, which was great. And they expected this lifestyle to be communicated through the website. So, (crossover talk),
Michael LeBlanc 13:12
I was going to say that you had a lot of trust. But you also had a lot of expectations, right? You had, you know, particularly you're in the early days about what would a brand like that? What would, how would you articulate yourself online and not just be another machine selling to a machine, right, that kind of efficiency versus experience thing. If you're enjoying this podcast, please be sure and hit that subscribe button on your favorite podcast platform so you don't miss another great episode. We'll be right back with our interview with DTC and eCommerce veteran Sarah Gallagher right after this message.
Michael LeBlanc 13:36
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Michael LeBlanc 13:42
As you look back on your career, is there anything you would have done differently? Any choices, you know the Yogi Berra old quote, right, "when you see a fork in the road, take it", but is there any? Are there any decisions you would have said you know, if I knew, then what I know now I would have made different decisions or how do you think about that as you, as you look back and ahead at your career?
Sarah Gallagher 14:37
I'm really pleased with the decisions that I made with the brands that I worked with and the CEOs and the chairman's that I worked with. I mean to say that I worked with Mickey Drexler, Les Wexner and obviously Ralph Lauren and David Lauren. I mean, it was an incredible, incredible experience. So, thrilled to be out. The one, you know, hard, I have a soft side that I try to keep people longer than I should. And I try to work with people to course correct. And one thing that I did learn is that you give it a try. And after a while if it doesn't work you need to move on. And that was a very tough lesson for me to learn to really move people out of the organization if they really weren't getting whether it be the culture or doing their job properly or respecting what needs to be done. So, that to me was a very big learning for me.
Sarah Gallagher 14:49
The other piece that's very, that was always very important to me is to always hire people who are smarter than I am. But they also must share my values, if they do not share the values, that is a recipe for disaster. So, teamwork is extremely important to me, respect is, are definitely intellectual curiosity or values that I hold dear. And you can be the smartest person in the room. But if you don't end up having those same values, you're not going to succeed in a team that we want to grow.
Scott Silverman 16:19
It's great to hear your background, I, you know, just an observation: you have this unique combination of analytics and like the, the art, I mean, you seem to really be passionate and admire the, you know, the CEOs who were considered kind of the amazing merchants of their time. Yet, you also found yourself in this analytics world at Victoria's Secret Direct. And somehow, I feel like that's the perfect combo for, you know, where some of the things that you're doing now, and, and how lucky some of these or-, organizations must be to have you on their Board. It's, I don't know, if you view that as being that unique. I feel like I often see people starting, you know, on the merchant side and continuing there. And those are the people that are usually the hardest to convince to invest in digital yet, you were able to make that transition pretty, pretty seamlessly,
Sarah Gallagher 17:19
I did, because I always keep the customer at the forefront. And you could say that there was this groundswell of customers wanting to shop easily, and not necessarily have to go to a store to get their, their merchandise. So, I saw that very early on. And I was very excited to be part of being able to facilitate the customers' needs and desires.
Scott Silverman 17:46
And but you kept the, the, the passion. You know, like you talked about, you know, Ralph Lauren, it's his movie, it's his store. And you seem to have, like, an immense amount of respect for that, where I think there were some people in digital in the early days that didn't view it that much. They thought they knew better; they could look at the numbers and make all kinds of decisions. So, that's, that's really, to be admired. So that's, that's great to hear about that. So, I want to talk a little bit about what you're doing now. You're on the Board of some large retailers, like Abercrombie & Fitch, and La-Z-Boy, where digital is a big part of their business. And for the digital read-, leaders that are listening to this, I think they'd be really interested to understand how a Board member looks at the digital business. And when you're being presented with a pitch for investment from a CEO or Chief Digital Officer, how are you looking at it now?
Sarah Gallagher 18:45
I think everyone understands that there's a transformation that's going on with the digital track-, you know, digital practice, and how it's integrated into everything we do. And the term digital first is obviously very important. Unfortunately, most Boards are not digital natives, or even digital savvy, because of the age of most of the Board members. They usually depend on those who have a digital background to be those who can cut through what the presentations are. And I think that's doing a disservice to the Board members. I think, and we've talked about this. Obviously at the meetings is that we need to make sure that we are bilingual, that the folks that are presenting whether it's a Chief Digital Officer, the head of technology knows how to speak in a term in ways that the Board can understand. There are theories that they could but rather confuse you and get you so intimidated that we'd pass anything through and that, those days are over. You really have to understand who your audience is, the Board, what their background is, and what value they can add to your presentation, really making sure that it's understood by all.
Sarah Gallagher 19:30
One of the other practices that we do is usually have an outside person come in a firm, come in and do an evaluation of the current state. So, you have an outside perspective, not just the internal perspective. And that helps give, of course, the Board some kind of sense as well. And they usually do a peer group assessment. So, those kinds of steps along the way, will help the Board. And if you are presenting, and you know that there's some digital, natives or savvy folks on the Board, it's always good to talk to them prior to the presentation, just to get their insight just to see if they're on the same page as you are. So, there's some peppering of your ideas, you don't need to go through, you know, page by page of the deck. But just your strategy, so that there is (inaudible) a buy-in when the Board meeting happens, or there could be challenges prior to the Board that you could prepare for. So, you're more prepared for the actual presentation.
Scott Silverman 19:09
You talked about some of your early days that at, at Ralph where the digital, you know, wasn't the, I think you put it the, the preferred distribution channel. Obviously, things have changed quite a bit between then and now. Do you feel like digital is getting recognition at the Board level? Or do we still have more, a little bit more ways to go?
Sarah Gallagher 21:29
Now, I believe fundamentally, Board mem-, the Board understands how important digital is, obviously, post-COVID, everyone knows how important it is. The good news is with Abercrombie, they had a very well-developed digital business. And that really helped them go through years of COVID, quite frankly. But yes, I think everyone fundamentally understands the issue is to put the execution side of it, what is the cost associated with it, what's the length of time for making this happen? It has to be embedded in a long-range plan. And obviously, getting the skill set hired within these organizations are very important. And we all know that this skill set is very, in very high demand. So, there's a tremendous amount of investments across all functional areas to support the digital vision.
Scott Silverman 22:34
You know, I wanted to continue on, you know, a little bit of the thread around the impact of COVID. It seems like one of the biggest impacts is on culture and workforces, whether they're remote or hybrid, or whatever someone is describing them. You've worked in, you know, some brands where they're very creative. So, I'm interested to hear your point of view. You have, certainly a lot of background in fashion where it seems like potentially being in-person could, it will be, really important. But I'm interested to hear what you're seeing, what you're hearing about, if you have a point of view of where it's going to land in the next, you know, few years?
Sarah Gallagher 23:20
What we're seeing is that I believe hybridism is here to stay. There is certainly a recruiting opportunity for folks who, at times of their life, would prefer to have a few days at home versus being in the office five days a week, or traveling. So, that has been a wonderful opportunity for us, especially when you have a younger population who has, you know, certainly expectations about a quality of life that is different. I always laugh at these, you know, Gen Zers, when you know, I was a baby boomer, and I was in a stock room for five years and just happy to be there. I never came out to see the light of day.
Sarah Gallagher 23:34
So, it's a whole different animal now. And it's good for them. I think it's wonderful if they really want to have a balanced life. They don't want to be shackled to their desks. And they you know, COVID gave a chance for folks to really kick the tires, retailers were certainly not the ones who were going to open up to flexibility. We were pretty much a nine to a, God knows a nine to nine kind of an operation, six days a week, totally dedicated. And now we're seeing that there are different ways to skin the cat.
Sarah Gallagher 23:50
But culture can't be sacrificed in doing that. And that is a very big challenge. Both of the brands that I'm on the Board, have very strong cultures, which is wonderful. And they did a lot of cultural work prior to COVID, thank goodness because I think that data also helps. It's important. It needs to be able to understand which skill sets can be more remote than others, and other ones that really need to be in the office. So, there are some functional areas that need to be in the office five days a week, or really want to be. And there are other ones, obviously, finance and technology that don't necessarily have to be, be in the office, and some of them are 100% remote. So, it's the flexibility, the agility, the, it puts a tremendous amount of pressure on the managers to make sure that the teams are working effectively together, that there is trust and respect that everyone's getting their job done. And that there are no checks and balances put into place. And there are certain times of the year that everyone gets together, whether it's to celebrate, or to, you know, kick off the season, etc. So, it's not that there is no time for everyone to get together, there should be, you know, pre-planned events that really gets everybody together as a team. But I think the, the days of everyone being in the office all the time are behind us. And I think it's a good thing. I think it's healthier.
Scott Silverman 26:18
I wanted to wrap up by, you know, asking you to look into the future a little bit. You have a lot of experience with digital leadership, and I am interested to hear your point of view of where do you see that evolving in say, the next five years? This title, Chief Digital Officer, which we've seen, in the last five years or so, do you see that going away as digital kind of just works its way through all parts of the organization? How do you see CMO roles? Will the CMOs be the ones that are really leading digital in the future? Or is a Chief Customer Officer or you know, where do you see things happening?
Sarah Gallagher 27:03
I think the Chief Digital Officer has to, you know, get the transformation done. And then everyone else should live it and breathe that every day, it should be embedded into the organization, that you didn't really, you don't really need a Chief Digital Officer anymore. I've been reading a lot about the CDOs, those especially, who end up executing the long-range plan and transform the organization so that they could be the future CEOs of organizations down the road. And I think that's going to be really very exciting for those people who can really speak the digital language, and really lead the future.
Sarah Gallagher 27:19
CMOs, they have had some very heavy lifting and a tremendous amount of learning curve and change management that they've been responsible for. And they have to continue the right brain and left brain because they need to have the branding, the storytelling, the you know, customer centricity as part of their DNA. But they also need to have the performance marketing chops to make sure that the data analytics are being looked at appropriately. They have a tremendous amount of tools at their disposal, understanding that they would be the customer advocates, they are responsible for every single touchpoint of the customer. And they should be doing it very prudently to make sure that they're not over communicating.
Sarah Gallagher 27:37
Hence, the whole personalization that we're just scratching the surface with, I'm sure that's going to take hold, you know, three to five years that will have another life, the whole AI and what does that all mean? I mean, they will be a very important part of the senior leadership. I believe they should report directly to the CEO, I think they have such a critical role in how the brand evolves and grows. And I think it should be a very exciting time for them whether they still stay as CMOs. (Inaudible) Chief Customer Officer, I'm not sure but their role will be very important in the organization's growth.
Scott Silverman 29:17
Well, as someone who's been, I, I, I'd say, kind of on the sidelines of digital for the last 20 plus years and cheering it on. It's nice to hear you describe the path for the Chief Digital Officer into, into CEO roles I've seen that in a few situations. And I expect, I agree that we're going to see more and more of that. It's such a pleasure to hear you talk about your career, Sarah and your thoughts on where things are and where they're going from someone that has such an amazing background. So, thank you so much for spending some time and sharing your insights with our audience today. I really appreciate it.
Sarah Gallagher 30:00
Thank you. I enjoyed it.
Michael LeBlanc 30:03
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