Steve Schlecht, CEO of Duluth Trading Company, describes himself as an “Uncanny Merchant”.
Early on, Schlecht realized that his company was not just a cataloger, but a web-based and multi-channel retailer. He did not view the digital world as an add-on, but as a way to fundamentally improve his business model in terms of costs and customer benefits. While Duluth Trading Company’s success is all about merchandising quality, IT was instrumental to their success. It helped create a rich ecosystem of branded products.
Recently Duluth opened a flagship store in Mt. Horeb, Wisconsin, and another is on the way. The goal is four or five company stores, Schlecht said.
“We are now a truly multi-channel,” Schlecht said.
After receiving his MBA from Northwestern, Schlecht started his career at Jewel Companies, the supermarket and drug store group in Chicago. He rose to divisional merchandising vice president before concluding that the corporate world wasn’t for him.
Schlecht launched GEMPLER’S, a mail order farm supply business, in his garage. By the time he sold to W.W. Grainger in 2003, it was a leading supplier to the outdoor work marketplace with a 600-page catalog.
Schlecht then purchased Duluth Trading, and evolved the offerings from hard goods to soft goods. Schlecht said, “The Company is an uncanny merchant and a great storyteller.” He did not describe it as an IT firm with clothing for sale.
During his presentation it became clear that Duluth Trading Company uses technology expertly and cautiously to support its business strategy. When the Duluth executives talk about technology, they talk about it second, after they describe their business objectives.
“I hadn’t heard of disruptive technology until a few years ago,” he said.
Schlecht talked about information technology in business terms, and in the context of what he needs to grow his business from a cataloger to multi-channel retailer.
Schlecht also offered his his thoughts on social media.
“Social media. Two years ago at board meetings it wasn’t on our radar screen. A year ago it appeared, but no one had figured out how to monetize it, so we said let’s wait. Today. it is on our radar and we are actively thinking of how we are going to use it. It is a means to have the best two-way conversations with customers. In the past you had to hold focus groups or meet them at trade shows. But [on social media] they expect quick response, 24×7, so if you are going to engage through social media, how do you follow up?”
Schlecht discussed the way IT and marketing are growing closer in the work they do.
“The line between IT and marketing has grown fuzzy, Schlecht addced.
“Marketing used to be all about push — push out PR, push out marketing campaigns. Marketing types were real different from IT types. Marketing is about analytics, very quantitative. We have all this data, the challenge is making it useful.” Schlecht can see Gartner’s forecast, that marketing will spend more on technology than IT does by 2017, unfolding at his own firm.
“We are spending a lot of money on the quantitative side of marketing…In today’s world we are swimming in data. The key is how do you make it useful.”
Mark DeOrio, Duluth Trading Company’s, Senior Vice President of operations and CFO, added that the company benefits from a healthy dose of common sense.
“We don’t spend an inordinate amount of time on too much data, too much analysis. We cut through to what makes sense for the company. I would add we have another luxury — we are not overly focused on short-term results. We are oriented to a decision that may have less of a financial impact in the short term but makes sense for the long term.”