Community has become such a throwaway phrase, and just another check box for marketers. It is well to remember that the real roots of retail were at the local level, delivering necessary services to discrete communities and being deeply entwined in their economic health. The online retailer, 4th Ave Market recalls exactly that dynamic, and takes its name from an historic business section in Birmingham, Alabama. It's the largest Black-owned online beauty and haircare retailer in the US. It's grounded in a long tradition of Black-owned businesses, not only serving their communities, but empowering them and working cooperatively to build one another's businesses. Salim Holder, Co-Founder and CEO, spoke at our Retail Brand Insider Summit about how he brings to historically Black colleges and universities (HBCUs) a unique value exchange that empowers rather than just transacts. Listed to the entire podcast at this link.
MediaPost: When it comes to serving the Black community with an aggregation of relevant hair and beauty products, what retail problems are 4th Ave. solving for?
Salim Holder: I realized that there was this white space that honestly probably shouldn't still exist. There was this community of consumers who are spending quite a bit of money but were really, disappointed, to say the least, in their shopping experience. A lot of times they were choosing between a retail environment that had a little four-foot section called the Ethnic Set, that typically only had a few products from major mainstream brands and huge companies, and a lot of times it wasn't the product selection that fit their needs. I saw this interesting dynamic that a lot of times felt like they weren't wanted in the store. The overall shopping experience became a real concern and a point of emotional tension for this consumer that was spending upwards of $2 billion a year on these products. And that represented eighty-five percent of sales of ethic and haircare and multicultural products, yet only seven percent of store ownership.
We recognized a huge opportunity to create a platform that would, number one, consolidate the number of products that are out there, that are targeting this consumer, whether it's larger companies or smaller companies. And number two, to drive creator accessibility and access to products that are created by members of the community that are of higher quality. And then finally, to be able to really reinvest back into that same community, and that has really become the essence of 4th Ave Market.
MP: What marketing channels have been most effective growing both traffic and the business?
SH: Of course, we've done some performance marketing through paid search ads, paid social media ads, and they've been great at driving traffic and driving awareness. The partnerships, the community-based conversations, where we've been able to set up affiliate relationships - those have by far helped us drive a significant amount of growth. The insight that really, I was able to tap into, is understanding that every single community has a community ecosystem and information ecosystem. I understood that about the Black community. I recognized that the barbershop and the salon, and then the HBCU, and the churches or the mosques, and then community organizations, by connecting directly with those entities. I didn't need to spend money on paid ads. I had to go and connect with them to see how it can be an equal exchange of value. That when they helped promote me, it wasn't just here's a coupon, but here's actual education that can help you get on your feet and make income. By me, going down that path, that has by far been much more successfulthan the paid ads.
MP: What have been the most effective marketing approaches to retaining customers and increasing the LTV?
Holder: The reality is that this consumer cares about brands that are in-line with their values, and that this consumer is willing to change where they spend their money. They're willing to stop spending money with retailers or businesses that are not aligned with their values, and they're willing to spend money with those that are. So, since I can't really compete on price at this point with Amazon or other retailers, I took the bet that if I could add value to them into their community they would continue to come back. And so, I've continued to send email newsletters and other communications that highlight all the amazing things that 4thAve Market is doing in the community, things that they care about, and as a result we’ve heard from consumers who got those emails. Then you see their name come up in the list of orders over the next week or so. So, making that connection has really been phenomenal for us.
MP: That begs the question about how has your business experienced the return to brick and mortar?
SH: It has forced us to do things a little bit differently. We started to figure out ways that we can enhance the value that we're offering to consumers to make their process of choosing and selecting the right product way more seamless and easier for them. We've incorporated some of these things into a proprietary hair quiz that outputs scientifically proven products that work for them. So, we've tried to figure out how can we enhance the value that we offer given that we have so many brands on the platform. We work with those brands to try to figure out ways we can keep them out of the store and into our platform for now.
MP: Explain how you work with HBCUs and came up with a novel value exchange.
SH: Typically [retailers say] buy my product, promote my product, and here's a discount so you can buy some more of my product later. What I looked at was, how can we create an equal exchange of value through specifically thinking about historically Black colleges and universities and those students out there. I recognized that number one as a startup, I do not have a ton of funds to pay a heck of a lot of people. And so, as I look for talent, I start to think about what kind of talent programs can I put in place that I can get people that can work on the platform.
But again, that's what's in it for me. What's in it for them? And a lot of these students [at HBCUs] don't have the network to be able to get into a lot of these bigger companies, so it is not that the companies don't want them, or they don't want to be at the companies. [They need] an intermediary that can help serve as a connection.
And then, more importantly when you get the skills, you still need experience to do it. We have this this live e-commerce platform. So, what I have done is created a program with five different HBCUs. Students will get college credit for working with us for a semester, for a quarter, and what I’ll do is I will teach them some of the skills required for digital marketing. I’m a digital marketing instructor, so I teach those skills. They learn email, paid search, paid ads, etc., and they will run ads on the platform. So now they learn how to do it and can now have experience doing it. When they go to that job interview, they can say, I didn't just learn how to do ads, I ran the ads, and this was the result.
And the third part is connecting with different companies that are trying to build this talent pipeline and to partner with them in the development of the curriculum, and to partner with them even when it comes to their products. So, we have worked with a couple of brands who sell on the that platform. We've connected students with those brands. So that semester they learn marketing, they promote the brand, they put a little money behind supporting the brand, and they are able to build their network as well. And this has been a tremendous program where again that equal exchange of value happens at each point from the corporation that wants to build a talent pipeline, to the student looking to get experience, to the college, having better programs that are hands on giving richer experience.
MP: And how are you tracking its impact on your own brand and business?
SH: I’m absolutely seeing an increase in just traffic from the schools that these students are in. They're sending more people because they are talking about it. They're promoting it on their campus. That's part of their role is to help drive sales on each of those campuses, so I will certainly see a lift on some of those campuses.
And then as I have these partnerships with HBCUs, and we partner with others, from a brand perspective. It's elevating how people see us as a brand. It's not letting people just see us as a retail store that's just transactional. They see us as a community partner, a social enterprise. And so, when I hear that type of communication articulated back to us, not just like hey they're a store. It's more like we're a community organization - that helps me to know that we're going in the right direction in terms of how I want to be seen and remembered in the minds of others.