Welcome to the Fall 2023 edition of The Baker Buzz! It has been a tumultuous semester at Penn. As stated by Interim President J. Larry Jameson in his email on December 12th, "every person at Penn should feel safe and be secure in the knowledge that hate has no home here.” At the Baker Retailing Center, our commitment remains strong—to foster unity within our community and cultivate supportive environments for our students to thrive. As we look back on the Fall semester amidst the current climate of the world, we do so with humility, yet harbor hope for a
brighter tomorrow, knowing that, as members of the Penn community, we will work collectively towards creating a better future. As the semester began, we hosted our annual Welcome Back event for students, which explores the focus of the Center and our educational programs. It was great to see so many new faces and the enthusiasm was palpable. In September, we held another Ideathon. In this 24-hour hackathon-style event, students competed for a significant amount of prize money for best strategies. Our generous sponsor, FiveBelow, hosted this event in their corporate offices and gave participants a unique perspective of the company’s operations. We then had the pleasure of honoring the
esteemed Leonard Lauder, Chairman Emeritus of The Estée Lauder Companies, with the Retail Excellence Award. This award commemorates Mr. Lauder’s distinguished career in the retail industry and his tremendous philanthropic successes. It was a remarkable event for an array of retail leaders. The Fall also brought a stellar group of industry leaders to campus for the Executive Speaker Series. We were pleased to host Chris Blakeslee of Athleta, Sean Bruich of Nike, Oliver Chen of Cowen and Company, Melissa Christian of DICK’S Sporting Goods, Keith Spirgel of Urban Outfitters, John Thompson of Best Buy, and Mark Yuan and Zoe Yu Zhang of And Luxe. In this issue of Baker Buzz, read how Wharton Professors Santiago Gallino and Marshall Fisher
collaborated with Professor Jun Li of Ross School of Business to lay a bold new strategy for an AI-based pricing model. Professor Pinar Yildirim sheds light on the changing luxury market in a new Knowledge@Wharton podcast episode. Professor Barbara Kahn identifies a conundrum facing retailers this holiday season. And my recent article in Harvard Business Review provides insights into the resale phenomenon. Finally, we are pleased to welcome Destinee Elliott as our new Program Coordinator. Destinee holds a B.S. in Fashion Merchandising and Management with a concentration in Global Brand Strategy. The Spring semester promises to be just as rewarding. Until then, enjoy the winter break. Happy Holidays from all of us at The Baker Retailing Center.
Tom Robertson
Academic Director
Jay H. Baker Retailing Center
Joshua J. Harris Professor, Professor of Marketing
RETAIL EXCELLENCE AWARD
OCTOBER 2023
Leonard A. Lauder, Chairman Emeritus of The Estée Lauder Companies, was honored with the second prestigious Retail Excellence Award during a memorable evening held on October 17th at the iconic Rainbow Room in NYC. This distinguished accolade, presented by the Baker Retailing Center and Retail Leaders Circle, serves to recognize an innovative leader within the industry. Reflecting on his time at the
Wharton School, Leonard reminisced, “Attending the Wharton School was one of the best decisions I ever made.” Leonard continued with enthusiasm, “And so, it’s a huge thrill all these years later to have received the Retail Excellence Award from the Baker Retailing Center. If you’re in the business of retail, this is as prestigious as it gets, and I’m grateful to the center for this recognition.” During the dinner, Leonard's contributions were lauded by Matt Rubel, MidOcean Partners Chairman and Sally Susman, Chief Corporate Affairs Officer at Pfizer. Rubel remarked, "Leonard has been a true beacon
and force in building a vibrant and special global beauty company with his family and team. Yet he did so much more in creating a culture of learning, love, courage, personal accountability, humanity and appreciation.”
Great Retail Ideas Don’t Happen Overnight—Or Do They? How do you make the popular tween-oriented retailer Five Below even more crowd-pleasing, successful, and profitable? On September 22nd, some intrepid Penn students tried their hand at it, competing for a total of $30,000 in prize money at the third annual Baker Retailing Center Ideathon. Click here for video highlights A Candy-Fueled Competition The students were determined to come up with brilliant ideas even if they had to stay up all night! The Ideathon ran from 12:30 pm on Friday to 12:30 pm on Saturday, giving an exciting edge to the competition. This year’s sponsor Five Below graciously played host in their corporate offices
[Wowtown], located in a 20th-century retail landmark: the Lit Brothers building in Philadelphia. Inside, the students were treated to a tour of Five Below’s fun, creative work environment: bins of Squishmallows plush toys, towers of candy, eye-popping wall graphics, hanging basket chairs, pet beds, and glimpses of the spooky decorations the company was rolling out for Halloween. Adorning one wall was a giant Plinko inspired board filled with game pieces to celebrate employees who had achieved five years with the company. The student teams were randomly assigned one of two challenges. Challenge #1 was to design a loyalty program to attract new customers and increase customer retention, customer spend over time, and engagement. Challenge #2 was to define
“The Next Big Thing”: a new concept to further differentiate Five Below, with goals of boosting customer affinity with the brand and increasing both visits and average purchase size. The two first-place teams for the two challenges would each take away $10,000; the two second-place teams, $5,000 each. The student groups would have to wow the judges with a presentation lasting only three minutes. Five Below mentors helped guide and inspire the students as they worked. Also keeping them going were meals, snacks, candy treats, a splatter paint room, a game room, conference areas, and—to make their feet happy before those stressful presentations—complementary pairs of customizable Chuck Taylors for everyone.
We hosted our annual Welcome Back event at the Baker Retailing Center—an open information session dedicated to welcoming students to campus! The atmosphere was filled with enthusiasm as students eagerly sought to learn more about the center and discover opportunities on how to become more engaged. We were happy to reconnect with familiar faces and extend a warm greeting to new ones!
The Wharton Graduate Retail Club launched the year with the exclusive Baker & Boyds event, hosted in collaboration with the Baker Retailing Center. This was an evening of connection and celebration held at Boyds, the local luxury fashion retailer. Attendees gained valuable insights into the Baker Retailing Center's offerings with a presentation by Mina Fader. In addition, Alex Gushner, Boyds' men’s buyer and fourth-generation member, delved into retail intricacies, offering a unique perspective on industry challenges and opportunities.
Through the Baker Executive Speaker Series, Penn undergraduate and graduate students are given the rare opportunity to connect one-on-one with retail leaders and founders in a relaxed, intimate setting. Speakers that came to campus this fall included:
Oliver Chen, Managing Director, Cowen and Company: "Retail is a willingness to pay model."
Chris Blakeslee, President and CEO, Athleta: "One big takeaway is that the way you connect to the consumer means everything in the end."
Keith Spirgel, COO, Urban Outfitters: "The store is such an important part of our heritage. The brand would not be what it is without the store channel."
Melissa Christian, VP, Divisional Merchandise Manager, DICK'S Sporting Goods: "We try and push the boundaries. Athleisure is fashion to us. Even when we look at runway fashion, we ask, “How does runway fashion translate to athletic wear?”"
John Thompson, Former SVP and GM, Best Buy.com : "The excitement for me in retail is that it’s a constant reinvention. It’s following the consumer, trying to understand where that change and interest is going to be, anticipate it, and work with manufacturers to ensure that they’re seeing it too."
Mark Yuan and Zoe Yu Zhang, Co-founders, And Luxe : "What makes you buy a product? It’s the emotional connection it provides. There’s nothing that can replace human connection. Find a likable person who can speak to the consumer directly, talk about the product, and build a community." Sean Bruich, VP, Global Consumer Science and Insights, Nike : "People say they want things personalized, but what they really want is uniqueness. We want things to be on trend, relevant, and meaningful to you. Consumers don’t need things that are personalized, but do want things that are personally relevant."
With the frenzy of second-hand shopping and thrifting popularized by Gen Z in recent years, it’s clear that resale is hot within the retail industry. In one of his latest retail articles, The Resale Revolution, Wharton Professor of Marketing, Thomas Robertson, delves even deeper into resale and the latest trend: companies reselling their own products.
In the new Knowledge at Wharton Podcast Episode, Redefining Modern Luxury Consumption, Wharton Associate Professor of Marketing, Pinar Yildirim, discusses the changing landscape of the luxury market, shifts in consumer trends like 'quiet luxury' and 'conspicuous consumption,' and the wide-reaching impacts of counterfeit goods on the luxury market. From once being ridiculed, Crocs transformed into a cultural sensation, embraced by
high-fashion runways and endorsed by celebrities. In the case, Crocs: Using Community-Centric Marketing to Make Ugly Iconic, Wharton Lecturer, Annie Wilson, analyzes the brand's ability to secure a spot as a preferred footwear choice among US teens in 2023 despite their past challenges. Prompting questions about its lasting appeal and strategic evolution in the ever-changing fashion landscape.
Wharton Professors of Operations, Information and Decisions, Santiago Gallino and Marshall Fisher, along with Ross School of Business professor Jun Li, lay out a strategy for creating an AI-based pricing model in the Harvard Business Review article, A Step-by-Step Guide to Real-Time Pricing. They use case studies of two multi-billion dollar retailers' pricing models to illustrate their step-by-step process that weaves together customer insights, data analysis, and optimization tools.
The holiday season is upon us! In the Ripple Effect Podcast episode, How Retail Stores Compete With Amazon , Wharton Professor of Marketing, Barbara Kahn, talks about the latest in holiday shopping and assesses why opposing indicators make it hard to forecast trends.
We are pleased to welcome our newest member of the Baker Retailing Center team! Destinee Elliott is the new Program Coordinator. Prior to her role at the Center, she was an Associate for New Student Programs at Thomas Jefferson University where she also received her Bachelor's of Science in Fashion Merchandising & Management with a concentration in Global Brand Strategy.
The Jay H. Baker Retailing Center, established in 2002, is an interdisciplinary industry research center,
whose mission is to be the global leader in retail knowledge and education.
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