Get to know RETHINK Retail’s Top Retail Influencers through the “Meet the TRI” Q&A series! Dive in to learn about a member of the thought leader community and follow their work and insights across our content and their social channels.
Hi, I’m Andrew Neelon, Founder & CEO, 1REC.
Connect with me on LinkedIn!
“Tell us about your background.”
I started my career as a Finance guy doing M&A investment banking. But I always knew I wanted to get into retail. Something about consumer behavior had always been intriguing to me since I took a few consumer behavior classes in college.
So after a short time in banking, I brought my finance background to, and started my retail career at, Hudson’s Bay Company’s Capital Planning team. Most of my time was spent building business cases for major renovations, but I did a few projects for new stores. While I didn’t love the department store model, I learned the “retail ropes” and soon looked for jobs at brands I was personally in love with, hoping they might have a job I’m qualified for.
I landed in real estate more by circumstance than intent: Bonobos was at the top of my desired employer list for many personal and professional reasons, and the only job they had open was a real estate strategy role. I didn’t know anything about that field other than general retail finance principles and some buzzwords I picked up from my desk neighbors at HBC, but ultimately landed the job!
Ever since then, I’ve been in roles covering various combinations of Retail, Real Estate, Strategy, and Finance. While I started that leg of my career at Bonobos pre-acquisition, I later built the real estate shared services team for Walmart’s digital consumer brand portfolio under Andy Dunn, and subsequently led Finance & Growth at Interior Define.
I’ve loved the “clicks to bricks” work so much that I eventually started an advisory platform, 1REC, to help even more brands see the benefit of stores and ultimately help them launch and manage retail expansion programs. As part of this work, I’ve also most recently spun up a digital Community platform, offering a safe space for operators to exchange information, resources, and networking opportunities in a retailer-only environment.
“Brief description of your current role and your space in the industry.”
I’m the Founder and CEO of 1REC, which is an advisory platform that supports retail operators across three pillars: Content (newsletter), Consulting & Advisory, and a retailer-only Community.
“What challenges/opportunities are currently facing retailers?”
- Lack of channel diversification: many new brands have put all their eggs in one basket: e-commerce. It’s become clear that single channel businesses struggle to achieve profitability or (profitable) scale without retail. However, retail is expensive and takes time to build, and both brands and investors may lack the funds and time to diversify their sales channels.
- Access to capital: Public markets are tough in general, and even tougher for retailers. And private markets, VC in particular, have begun to see diminishing interest in the Consumer category. Whether they were well-capitalized or not before the economic downturn, brands need to be cognizant of the limited capital that’s willing to flow to them.
- Supply chain: While a lot of the macro pressures have begun to ease, at best they revealed vulnerabilities in brands’ supply chains, and at worst they drained significant capital from others. Brands are finally beginning to pay more attention to their supply chains, but for many the lack of attention has put their futures at risk.
- Channel diversification: I also listed this as a challenge, but it’s an opportunity to evolve many brands’ economic profiles and customer facing images. The fixed cost nature of offline channels, for example, enables brands to gain significant leverage in their CACs if executed intelligently. And these offline channels also give brands an opportunity to reach new audiences, and create entirely new or amplified forms of themselves (eg stores).
- Technology: Retail tech has been exploding, and there’s a solution or platform out there for nearly every need a brand might have online or offline. And with AI being all the rage these days, there are inevitably major opportunities to tackle old problems in new (and perhaps more efficient) ways.
- Talent: Given the significant amounts of layoffs in the tech industry, retail has an opportunity to attract great talent that was previously less interested in retail.
“What hot topics or trends have you been seeing in the retail space? How do you support these hot topics?”
- Hot topics: diminishing returns of e-com, the importance of offline retail, the challenges of forecasting, the complexities of supply chain, the emergence of AI, the challenges of fundraising
- Support: 1REC specializes in helping brands go offline, through all of its mediums: consulting/advisory, content, and the community platform. Through these channels we offer guidance and support in the way of organizational and strategy development, recommended tactics, and forecasting models; and we facilitate the exchange of all the above, plus vendors and market intel, between new and experienced operators. (we do not support supply chain, AI or fundraising)
“How has the retail industry changed in the past 5 years? What do you predict will happen in the next 5 to 10 years?”
The industry has been through an interesting evolutionary rise and fall, fueled largely by cheap capital’s final days in 2022. For the last 10-15 years, DTC brands were sprouting up everywhere, often referring to themselves as “the Warby Parker for X” and chasing growth at all costs. And in the last 5 years in particular, we’ve seen that phenomenon both peak and decline/conclude. This same peak and trough has coincided with e-commerce’s meteoric rise, quickly becoming the favored channel for investments and talent for most new brands, and even penetrating that of legacy retailers. But in the last 24 months, as access to capital has dried up, so too has tolerance for growth at all costs. This has resulted in significantly reduced investments in performance marketing, and a new desire to invest in offline channels, whether that’s wholesale retail or owned stores. In this way, e-commerce has sort of come full circle in the last 5 years: from the beneficiary of cheap capital and great talent, to a channel with recognized limitations.
In the next 5 years, I suspect we will see the consequences of e-commerce’s over-investment. I believe this will manifest itself in three ways: (1) the consolidation/bankruptcies of pure play e-commerce brands, (2) a slow down in new e-commerce brands, and (3) a pendulum swing back to brick and mortar, and bringing with it some major innovations in offline retail technology, formats, and frameworks.
And over the next 10 years, I predict that the convergence of tightened data privacy restrictions, combined with the pendulum swing back to offline retail, combined with AI, will result in some pretty cool ways to leverage other forms of data to drive offline expansion. Companies like placer.ai are just beginning to scratch the surface of new “offline” analytics, and incumbents like RetailNext are constantly developing new analytics offerings. Offline retail is in the beginning stages of a major evolution!
“Do you have any interesting projects coming up?”
I’ve recently announced the launch of a retailer-only community platform: the 1REC Community. In addition to all the trends and predictions I’ve shared in the above questions, I also believe that many of the new retail operators will soon realize how complex retail stores are to grow and manage. I also believe that experienced retail operators will be forced to innovate as a workforce, as investor dollars, technology, and talent makes its way into the industry in a bigger way. In an effort to help bridge the gap between brick-and-mortar newbies and experienced retail operators, I’m launching this platform so that brands both new and experienced can expand their network and knowledge in a modern, digital community.
“Which resources do you use to keep up with industry news?”
RETHINK Retail has of course been one of the biggest sources: the newsletters, events, and networking opportunities have been incredibly helpful. I also follow a lot of retail leaders and vendors on LinkedIn that share a lot of relevant content and perspectives (many of which are RR’s Top Retail Influencers and Global Retail Leaders!). And then of course other industry newsletters like Retail Brew and Retail Dive. Sometimes I’ll listen to podcasts, but not as often as I probably should!
“What is the greatest challenge the industry is facing?”
Keeping up with consumer trends. Retail is inherently a slow industry, and many of the major legacy brands are still playing catch up. With increased access to information and new technologies, consumers’ preferences and behaviors are changing faster than many retailers can keep up with – whether in their experience channels or in their backend operations and tech stacks.
“How do you continue to grow and develop as an influencer of the retail industry?”
I try to keep an open mind and be open to new perspectives, but also balance that with sharing my strong perspectives with the world. Having an open mind gives me the ammunition to understand innovation and change, while sharing my own perspectives provides the opportunities to have meaningful dialogue about what’s happening and where the industry is headed.
“What are the most critical changes that we must make to face the future effectively?”
- Get back to the fundamentals of retail: capital isn’t cheap anymore, and the meteoric rise and fall of DTC has lost investors’ tolerance for growth at any cost. New and young brands need to learn how to build good businesses, not just good brands.
- Embrace technology: Much of retail lacks technology compared to other industries. Instead of fearing it, retailers must accept and integrate it. Especially with the emergence of AI, companies and employees need to embrace change.
- Take a stance/embrace CSR: Consumers nowadays expect brands to take a stance on social issues. Whether that’s leaning into sustainability or taking more direct political stances, customers want to know where companies stand, and will reward you with trust, repeat business, and free word of mouth marketing.
“Who is making the greatest advancements in the industry, and what are they doing?”
- Nike: embracing technology, omnichannel, tapping into communities and culture. I’ve always loved Nike as a brand and as a business. They’re iconic not just because they have great product, but because they also embrace technology, lean into omnichannel, and genuinely care about their communities and the cultural elements important to them – everything they do is for their customers.
- Happy Returns: I feel like Happy Returns was one of the first companies I’d heard of that tackled such a clear customer issue for the industry: the huge pain in the a** that is returns. It’s such a simple but meaningful and effective mission, and it’s exciting to see a business lean into that pretty singularly.
- And 1REC of course! As the worlds of stores and e-com have collided, competed, and now integrated, the rise of e-com and its thought leaders overtook those of traditional brick and mortar retail. One of the many contributing factors to the channel’s and its operators’ success has been the strength of their community. And much like the e-commerce channel itself, their communities were digital. Access to knowledge and networks helped operators learn and iterate quickly, and 1REC aims to bring the same approach to brick and mortar retailers.
“What has helped you get to where you are and what advice would you have for others who want to set off in a similar direction?”
I think my strong sense of curiosity and unending hunger to learn are the primary attributes that helped me get to where I am today. No matter where I’ve worked or what position I’ve held, I’ve loved digging into the “why” and “how” behind every decision. Whether that means staying up until 2AM digging into data, taking every inbound vendor call I can, or networking aggressively, I have an insatiable desire to gather more knowledge and perspectives.
My advice is in the same spirit: be curious.
- Accept those seemingly irrelevant vendor meetings (they may give you good ideas, and at the least will give you new perspectives)
- Stop saying “no because…” and instead say “yes, if…” (this will train your mind to be more curious and exploratory to figure out how something could be possible)
- When receiving negative feedback, challenge yourself to think “how might this be right” as opposed to debating its truthfulness (curiosity in yourself and your perception is just as important, if not more important, than curiosity in a subject matter)
“What is the best resource for people who want to dive in deeper?”