The Conversation: M. Wartenbergh, Global Group CEO, All We Wear Group

With bulk of spending power shifting to millennial and Gen-Z population in less than a decade from now, business organisations and leaders need to unlearn prevalent practices, says Marcella Wartenbergh, global group CEO, AWWG (Pepe Jeans London, Hackett London, Faconnable). The CEO of the fashion company addresses the changing consumer mindsets, building future-ready organisations and incorporating sustainability into business models. Interview with Ajita Shashidhar.

This edited Q&A has been condensed for space and clarity.

CONSUMER EXPECTATIONS

How have consumer mindsets evolved in post-pandemic era? What is the big change?

We are dealing with four generations of consumers. We have baby boomers, used to shopping in stores. The way they work, the way they consume and the way they search for stuff is different from millennials and Gen Zs. For Gen Zs, the first entry into anything is digital. If they want to know about a brand, a restaurant or a university, they go to their smart phones. In between, you have Gen Y and millennials, the biggest consumers who account for most of the economy. They have a lot of money. Millennials thought they were going to save and conquer the world, and suddenly they were confronted with Covid, recession and many other things that made them evaluate life differently. They are a gener- ation between physical and digital as they were not born in a digital world.

So, when we think about leadership, industries, marketing or products, we are dealing with four totally different behaviours. Your decision as a leader has to be different when you talk to a baby boomer, a millennial or a Gen Z. How can we prepare the industry and work for the future? For example, India has the biggest Gen Z population. So, how are we preparing our leadership? Are we building companies, offices, communication and branding based on Gen Z needs? I am a baby boomer and I remember my parents telling me not to change jobs. They told me to put in long hours, be the first to arrive in office and the last to leave. Gen Z needs are totally different. They want well-being, they want to be challenged and they want to shift jobs quicker. Millennials also get bored quickly, so it’s up to us in companies to build things they don’t get bored with. We should also be prepared that they would move to a new challenge after three-four years. This is good because movement leads to innovation. If people always think the same way, companies will not evolve.

So, from a consumer point of view or an industry point of view, we need to think from the perspective of all four generations. In less than five-eight years, all the money will be with millennials and Gen Zs. They are going to run the economy. So, we need to adapt.

You’re in an environment where you’re competing not only with legacy but also new-age brands. What are the lessons?

Competition is good. It makes you sharper. New brands inspire us. We need intrapreneurial spirit, therefore, we team up or collaborate with new-age brands. We have done collaborations with start-up companies for smartwatches. In Latin America, we have collaborated with a beverage company. One of our priorities is digitalisation. That’s where we get inspired by new-age peers. We are continuously trying to increase presence in e-commerce for which we look at how small brands are doing. We also follow their ERP systems. There are lessons to be learnt in digitalisation and new systems and apps that improve day-to-day data creation and management. Also, how to make sure you are on social media as a brand that inspires.

How differently do leaders need to think about building an organisation that would excite millennials and Gen Zs?

When I joined this company, I said we need to have a north star, a vision that everybody can identify with. We needed a common goal and that was to create brand equity through transformation. I knew the company needed to change.

People need to acknowledge that company values are the culture, something that helps the world identify who they are as a company. Those values should be linked to what new generation is looking at — sustainability, innovation, collaboration and belonging. No company, no industry can survive by staying still. Changes happen much faster today. We need to embrace change. Changes are complicated, so you need to think differently. However, you should also embrace that if you fail or do something that is not going right, it is not bad. But you always need Plan B. If the original plan doesn’t work and you don’t have Plan B, the whole company is paralysed.

SUSTAINABILITY, A BEDROCK

How important is sustainability/ESG while building a future-ready organisation?

Sustainability is much more than products. It’s a way of living. It should not be followed because consumer wants it. We need sustainability because we need to be responsible for this planet. Let’s not try to do things which are about just marketing. We have identified four Ps — people, products, places and partners, the whole ecosystem. So, when we start with, let’s say, a product, we have great ideas, incredible innovation and we need to trust that’s going to give us the best ideas. It’s about partnership and trust.

We identified that purpose will be key in each brand. I always tell the team it’s nice when you see a jacket done with plastic but that will have no impact on the planet if you sell only 300 pieces. Jeans, more than 30-40% sales, is what we need to fix. Today, 90-95% of our jeans have at least one input that improves the planet.

It’s not just one collection that is sustainable. Every collection is sustainable. Sustainability has to become a habit. We make sure suppliers also have sustainable practices. If it is a paper bag manufacturer, we make sure they use recycled paper and are aware of CO2 emissions.

TALENT MANAGEMENT

There is a huge shortage of skilled talent globally. What is your suggestion to solve the crisis?

As companies we have a responsibility to train people. We have an internship programme across the globe where we have one intern for every 10 employees. This helps us in two ways. We learn from interns (who are Gen Zs) new-age skills and teach them about what it means to work in an organisation. Being part of an organisation, they learn various aspects of business such as merchandising and sourcing. These internships teach them business skills and help them find good jobs. Most organisations look for talent with experience. If organisations offer internships, they can train talent and offer them full-time employment if they have openings. Else the talent is skilled enough to get a job outside. It is a great way to bring new blood into the organisation.

There is a huge shortage of women leaders in India Inc. There is a similar challenge globally. What can organisations do to increase the percentage of women in leadership roles?

A gender-balanced team results in better ideas and innovations. We need to promote collaboration between men and women across levels. We also need to ensure that women get equal opportunities in terms of taking up sensitive P&L roles or even travelling. Organisations have to invest in developing women leaders.

When I say developing women leaders, I don’t mean to force-fit a woman into a role. We obviously need to get the best candidate for the role. Therefore, hiring managers should ensure that number of CVs of men and women candidates are equal. Equality has to begin from the hiring process itself.

Can we get a sense of AWWG’s business performance?

It is a €650 million business. We have profits of above 10%. India represents 12% of the total business. Pepe Jeans is the biggest, almost 65% of the business. The big transformation was between pre-Covid to post-Covid. We generated 3-4% in EBITDA before the pandemic. Today, we are upwards of 10%.