KEN CHILVERS : The Right Mix in Retail : Wet Seal Uses ‘Video Walls’ to Entertain Its Shoppers

Over the years, retailers have learned that it takes more than a well-known name to entice customers.

Years ago, department store executives discovered the benefits of fancy window displays as a way of attracting attention. Mass retailers have tried other tactics as well. K mart, for instance, has used a flashing blue light and announced minutes-only specials in its stores as a way of keeping shoppers from losing interest and wandering off to the competition.

But this is the ‘90s, and retailers are looking to technology and the latest innovations to lure consumers who have grown bored of the same old promotions.

One of the more unusual methods of attracting attention has been employed by Wet Seal, the Irvine-based chain of junior women’s stores. Wet Seal employs a “video wall” in every store, a stack of video screens with a continuous reel of the latest pop music videos. The idea is to lure customers inside the store and keep them amused. Sometimes, Wet Seal officials say, customers are so absorbed in watching the videos that they don’t want to leave until a particular song ends.

One of the originators of the concept is Wet Seal President Ken Chilvers, who is a major proponent of entertaining customers while they shop. Chilvers, 44, started his retail career at a menswear store chain in Canada in 1967 and was later promoted to regional manager. He moved to the Suzy Shier chain of women’s fashion stores in Canada in 1973 and helped guide its expansion. The chain went from 20 stores to 180 stores over a 10-year span. Eventually, the Suzy Shier chain started looking to Southern California for expansion because of the population’s relative affluence and proximity to many garment manufacturers. Wet Seal looked like the perfect acquisition.

Wet Seal was founded on Balboa in 1962 and had 17 stores when the Suzy Shier chain paid $2 million for an 88% stake. Chilvers took over as president of Wet Seal and Kathy Bronstein was made executive vice president. Together, they launched a major expansion that made Wet Seal a 97-store chain and gained recognition in the retail industry.

Chilvers talked recently with Times staff writer Chris Woodyard about the need for entertainment in stores and about various retailing topics.

Q. How important is it for retailers to “entertain” the customer?

A. Very important. We’re quite sure that customers today don’t view the shopping experience as being as enjoyable as it once was. They are short on time. And during this recession, certainly they are a little bit short of money. So we feel it’s a very important part of our strategy to make the stores entertaining. We need to attract them, keep them there longer and make them feel better while they are there. There’s no question in our mind that that translates into more business.

Retailing is really getting your customer into the store and getting them to buy. It’s our firm belief that retailers are going to have to make sure their stores have some sort of entertainment attached to them. Otherwise, they are not going to get the customers.

Q. How could I, as a small retailer, incorporate some of the elements of a Wet Seal store into my own retail shop?

A. Well, a lot of that depends on what kind of business you’re in and what kind of money you’ve got.

Q. Let’s say I’m selling juniors’ and swimwear fashion on Balboa Island.

A. If you are going to use Balboa as an example, you may be able to get away with more. I think when people are shopping in Balboa they are already in a certain frame of mind. They are already having fun, are on the weekend or on vacation. It’s a little bit different from trudging through Westminster Mall on a serious shopping trip. You have to do a little bit more in a normal mall situation.

Q. From a retail standpoint, what is the difference between the two places?

A. If you are a retailer, you have to have a heck of lot more pizazz in Westminster Mall than you may have to have on Balboa Island.

Q. What is the most important element in your formula? The videos?

A. No, the merchandise itself. You can bring them in with the video walls, but if the goods are wrong you are just going to have them entertained, then leave. And you’re not going to be a successful retailer. The merchandise itself has to be the punch line.

Q. How can retailers make sure they have the right merchandise mix?

A. It’s years and years of experience. It’s a very complex thing. It certainly revolves around knowing your customers. You need to know what they want and what they don’t want in terms of price points, style and comfort.

Q. How do you monitor that? How do you minimize the number of wrong moves?

A. There’s two basic ways. The first and most important is to make sure your team is out in the world and not stuck in an office somewhere--shopping your stores, shopping Europe, shopping the competition. You need to make sure they always have this inherent feeling about what the customer is thinking in terms of what they want to wear. And you better have a very sophisticated, accurate system in place to tell your merchants every day what they want to know, what is working and what is not. And we have such a system. All of our cash registers are plugged into a central computer down the hall. And every buyer and assistant buyer has a screen on their desk. Any time they want to know how something is selling, or not selling, they can pull up that information.

Q. So the key is to keep your staff out on the street, encourage them to go to the beach, wherever?

A. They go to concerts. My partner went to a Paula Abdul concert when she was visiting stores in Miami and watched all the kids to see what they are wearing. The staff talks among themselves about what that could mean a few months down the road. We do a lot of our own product development here. We have to have that kind of inspiration.

Q. Is it hard to figure out who the fashion leaders are?

A. It’s becoming less of a problem because we’re out there. With this generation of shoppers, there is less of a distinction between what the moms and the daughters are wearing in casual sportswear. They buy similar things and like similar things. If you go back a generation, you would have heard moms saying, “I would not be caught dead in what my daughter’s wearing.” We can all remember that.

Q. How has this change come about?

A. Well, I suppose women in that age group, the 30-to-50 age group, remember that they once were the other part of the equation. Now that they are on the top side of that equation, I think they are doing a better job of staying close to their teen-age daughters and trying to become a little bit more of a pal. They try to preserve that youthfulness.

Q. As a retailer, how do you hold yourself back from trying to appeal to the entire women’s market, instead of specializing in just a segment?

A. You can only take a segment of the mothers. They are going to have a need in their wardrobe that we are not even going to attempt to chase. She’s in the business world and needs a business suit. She is going to have to get that somewhere else. But when she wants to do the weekends or the casual things or go shopping with her daughter, then she thinks of us. It becomes a “do-together thing.” We see a lot of evidence of that. They come in our store together and spend a lot of time shopping for fun and for expensive merchandise.

Q. What do you do when you visit a store?

A. We watch what’s going on. People will sometimes give you answers to questions that they think you want to hear or that they think they should say. But you really need to watch what they do. Watch what they buy. Watch what they don’t buy. Watch how they shop. You will learn a great deal.

Q. Besides an attractive selection of merchandise, what else does a retailer need?

A. The environment. You need the environment in which to showcase the merchandise in a favorable light. But if you only have half that package, you will not succeed. You better have the goods and have the environment and you better have the service. And the service has to be defined as your customer perceives it, not how you perceive it.

Q. Video screens really hold customers in the store?

A. Honestly? Yeah. And if you were doing an older demographic, then give me some Frank Sinatra tapes. I mean, music is an entertainment vehicle for anyone who walks the earth. Get country western tapes for a store in San Antonio.

Q. Your stores have the clean, high-tech look. Have you seen other retailers who have their own successful looks?

A. Disney is a fantastic example. They have the package. They have popular merchandise. They have the environment. They do a wonderful job with fun and props. And they have the video--albeit a single screen. They really have that down pat. There’s a good example of a company that has over 100 stores and has the three pieces of the puzzle. They are performing beautifully, despite the tough times.

Q. What about the future of entertainment-oriented retailing? Is it becoming more popular?

A. We don’t see it yet. It’s very difficult when times are tough to convince yourself to go ahead and spend a lot more money on environmental kinds of things. Cash is tight. Times are tough. But I sense that perhaps when times get a little better you will see more of a polarization. You will see the strong guys going ahead with these kinds of elements. The weak guys who can’t afford to add to their stores’ environments may not survive, unfortunately.

Q. What about advertising?

A. We don’t advertise in the traditional sense. The malls themselves are, in our opinion, a form of advertising. You get traffic because of the nature of the center itself. Your store becomes the ad. The money we would perhaps spend on media advertising we put into the store environment.

Q. Wouldn’t you need lower prices throughout the store to make that work?

A. We do not think about or promote the notion of price at all. We think the customer is sick and tired of all those nonsensical promotions. We would rather promote the fashion than have the customer look at the price and say, “Now, this is affordable.” That, in fact, is what we believe happens.

Q. Why do you believe customers are tired of sales?

A. They are just inundated with them. I think there is a blur out there of, “What is regular price?” If a company is constantly running off-price promotions, it must be terribly difficult for them to get anyone to buy anything at regular price. They get into this self-defeating cycle. You have to put everything on sale all the time or run ads. It doesn’t have to be that way. We look at a company like Nordstrom, which, like all of us, is going to have their bumps along the way, but in our opinion is fundamentally a fabulous retailer. Two sales a year. That’s it. These sales are for a very confined period of time and are very predictable. Other than that, they are promoting fashion service, and they outperform many other companies. They are far more productive than those companies that resort to this price-point promoting all the time.

Q. Don’t people come to expect that a certain retailer will be found in every mall?

A. In California, I can think of two or three circumstances where a new mall has come along and cannibalized sales of a store in an older mall. It’s going to happen if you’re going to be in every mall. Someone is going to open a better mall down the street. It happened right here. MainPlace/Santa Ana opened and look what happened to The City (Shopping Center) two miles away.

Q. How many elements can you change in a store to keep the look fresh without sacrificing the theme?

A. We have very few things that are sacred. If you have too many things that are sacred, you won’t progress. We have to continuously come up with a new “plot,” and we have to spend a tremendous amount of time on it. For us, it’s evolution.

I look at a company like The Gap, which I happen to be a great admirer of. They never change their look--ever. And they are fabulously successful.

Q. Why is that?

A. Well, quite frankly, (Gap President Millard S.) Drexler probably looks at a Wet Seal store and scratches his head and shrugs. I look at a Gap store and scratch my head and shrug. That’s because we are totally different kinds of retailers. He’s dealing in very basic merchandise and good value, and he does beautifully. We choose to do it a different way and it works for both of us.

Q. How do you decide what the optimal size of a store is?

A. It evolves. If you are a customer-driven company, you are out there all the time. You are obsessed with tracking what your customers are doing. Finding the right size is one of the benefits of being out in the stores. You might find a store that is packed. Otherwise, I might be sitting here reading a computer printout and see that we’re doing $700 of sales per square foot in that store and making money. You would say, “This is great,” and then move onto the next problem. But if you go to the store and you see that things are jammed and customers are annoyed, then you are going to say, “I don’t care about a computer printout. This thing is too small. We are trying to please customers here. I want to replace this 2,500-square-foot store with a 5,000-square-foot store.”

The next computer printout comes along and tells you you are doing $500 a square foot in the same store. That’s good news. You just doubled the size of your store. So $500 a square foot in the bigger, more comfortable store, is tremendously better than $700 in the cramped one.

Q. What is the best strategy in terms of laying out merchandise in a store? Do you put the higher-priced items in back and bargain items out front?

A. Price is never part of the strategy. Generally speaking, we try to have newness at the front. The expertise in the visual display of it is definitely left to the stores. It’s something in which they are constantly trained.

Q. How important is frontage in malls?

A. Critical. We now won’t do a store that has less than 40 feet of frontage. And we’re doing very few 40s. With less, you become just another box in a mall. You have to break out of that and mean something.

Q. How does interior lighting work to make a store more attractive?

A. We’re not as bright as we used to be. We find the video wall is compromised if you have too much general lighting. We do a lot of track lighting to call attention to the merchandise. The shadows are intentionally created where the merchandise is not. We think it adds to the drama of the store. It’s a very important element to get the lighting right.

Q. What about mannequins and display? A lot of your merchandise is hung on walls. How come?

A. To show more looks. Your odds improve if you can show more merchandise. Your odds improve in creating interest from your customers.

Q. Why use very few lifelike mannequins?

A. Mannequins can go out of style. You have to worry about makeup, hair, posture and all those things. But the stuff we use and create is never a problem. We can make them as zany or conservative as we want. It’s harder to do that with traditional mannequins.

Q. Do you keep your formula the same in different cities, such as Visalia or Los Angeles?

A. Sure. There is only one thought process. There’s an argument that the people in Visalia may appreciate it more than the people in L.A., who are constantly inundated by pizazz. In Visalia, it’s news. There are some adjustments in the merchandise, not in service.

Q. How do you keep up with the fashion trends in different cities?

A. One, you better go there once in a while to see what is going on. And two, your computer will tell you when an item is too fashionable for Visalia, even though it might be perfect for West L.A. You can’t be a successful chain-store operation at the 100-store level and beyond without a real good computer system managing your inventory. It cannot be done.