Mental Health and Future Brand Purpose

Hello and welcome to the modern Retail Podcast. Our show that covers the ways the retail industry is changing and modernizing. I am senior Rorter, Gabby Barkco Social content and influencer culture has posed new challenges for legacy retailers when trying to capture Gen Z and the upcoming Gen Alpha The key, it seems, is to stay relevant through both merchandise and marketing during fast trend cycles while still maintaining an authentic brand voice over the past several decades Paxan has maintained a strong pulse on the evolving tastes of teens and young adults From viral dead and fits to strategic partnerships with influential icons Pakan continues to win over both teens and parents by prioritizing affordability and authenticity The brand says it remains relevant through four key pillars Fashion, music, sport and art. Pakan began as a surf shop back in nineteen eighty and grew into a national mall chain Despite a bankruptcy filing in twenty sixteen It has bounced back in recent years It had a particularly big moment on TikTok in twenty twenty three when creator Lila Biggs made the Casey Jean go viral First off, I'm gonna wear my comfy packs on baggy jeans. These are the asterid ones. Ready? Ready for the transition? Yeah The jeans sold eleven thousand pairs in the forty eight hours before Black Friday The brand estimates that the moment led to over twenty million dollars in sales from TikTok alone Then in twenty twenty five The first time in eighteen years, it opened more new stores than it closed PacN's Gen Z strategy consists of customer engagement and community participation And so in twenty twenty five, the company released their first annual youth report and announced its Youth addvisory council. These two programs are an example of PaxSun leaning into customer participation and what it calls consumers as co creators. Speak to Pakson's youth strategy, we are joined this week by CEO Brie Alllson. herer new book created the cultural strategy that redefined Pakan was released earlier this month by Simon and Schuster Bri, welcome to the show. Thank you so much for having First, I want to ask you a little bit about some of the themes that you do cover in your new book, including You know basasically this holy grail that every brand is trying to get to, right? whichich is Jen Z and actually coming up Jen Alpha, my niece who's fifteen. Shout out to Julie, loves Paksun. and so she's now coming into the brand via the Denim route as many do All of this to say, in the last couple of years, you've created two new initiatives, which are the Youth Council Report and the Youth Advisory Council. And these two too me, sort of synthesize what you've been doing in the last couple of years, right? which is this strategy that you call consumers as co creators So maybe we can start by you giving us an overview on how these reflect what Pakan has been doing over the last few years Yeah, sure. I think The most important question a brand needs to ask is if your brand disappeared tomorrow, would your consumer miss you? Where would they go? and why? And so for Pak SN, our transformation over the last decade has really stemmed from that very basic question and trying to give our audience and our community a true seat at the table. And so social listening is kind of beginning point, it's a starting point, but it really requires so much more engagement from the community to really bring them in full circle. So things like the PaxA Youth Advisory Council, which is comprised of teen young people between the age of twelve and twenty six who don't come in like a focus group at PakSun, they come in to really weigh in on PakSun's long term strategy on things such as our PakSN youth hub, our community hub, our new app that champions innovation, creation, co creation, the social economy, the creator economy And so that's one example of how we've really given them a seat at the table, are amplifying their voices. Another is our work with global data and the six thousand young people that we survey annually. There's a ton of research out there about Gen Z, a bit less about Gen alpha, but the intention is not to create more research, It's really to get at the emotive why the why these behaviors are changing, why are the consumption patterns of young cohorts challenging you know typical norms? And so I think these are some examples of how we are weaving in the community, the consumer and the power of co creation across our entire operating system and really putting culture as the strategy for how we're moving forward. Yeah, I wantna talk a little bit about the youth cououncil and who it's comprised of. if you don't mind giving us an idea. And we thought the age range was really interesting too, right? Because technically twelve is a little bit younger than maybe your customer base range So yeah, who are they? and tell us a little bit about the membership and why you feel like they are reflective of your customer base's voice versus just, you know, kind of just telling you what they like personally. Yeah, I think when we were trying to create this community and group, we really wanted to have enough diversity and include a variety of voices, those that could inform a future state and those that could speak to a present state. And so the decision to bring in a twelve and thirteen year old was really based off of Let's get some early G Alpha statistics and data and insights and also have a real comparison of understanding these insights versus a typical Gen Z So it's about forty percent male, sixty percent female. There wasn't a real intention of that. Our business is about a fifty fifty split. So we wanted to be reflective of that We have people from across the country, so four of them are based in New York, a few are based in the Midwest, some are based across California. We've got two sisters who attend Stanford and are in their first year, their freshman year of college. so we have a nice range of people who are in high school, college, and then kind of the emerging consumer coming through middle school. As we go into our next cohort, it's going to be quite different. We are going to create a program where people are having the ability to interview and select themselves into the process that is much more inclusive. So we will open the program up across the United States and include anyone who has any interest in being a part of this program as last year was our pilot year I' wrong, but I believe some of the current members I guess consider themselves creators at this point. Do that I don't know if that matters much, but obviously they have a very different view than maybe just student who's going you know about their day to day and purchasing their products themselves at the mall Yeah, you know, one of the things that we have discovered through a lot of our deep research, both with global data, but also with our and ambassadors in the stores and in our community engagement and outreach is that Gen Zie and Jen Alpha consider themselves the greatest storytellers in their lives. And so whether you are a you know, creator and have you know five million followers or you have five hundred or you have fifty, young people want to tell stories and they want to be a part of a brand that is encouraging them to tell stories. So I would say that the large majority of our youth council also considers themselves storytellers in some way and some have very small followings on social, some have large followings. but that is really the beauty and the inclusivity of what our Paxson youth community Hub and this overarching group of young people having a voice at the table is really all about. That makes sense. I'd love to hear I know it's been less than a year, right since you've launched it. What are some of your takeaways? Like are there any initiatives or any R and D or anything that's been influenced by the council so far that you can share? Yeah, I would say from a technology standpoint, they have probably been the most influential They really had a heavy voice and a heavy hand in building this new app. which merges the concept of the open creator platform It integrates platforms such as TikTok, YouTube, IG, and also allows them to have more participation. And so that was something that we felt was very important to have the actual users, intended users of the future app really kind of beta testing it along the way. And I know for our head of IT, our CTIO, she really enjoyed the opportunity to work closely with them on this. We're also working very closely with the Youth Advisory Council on our future philanthropy and community pieces So initiatives that we have had in the past such as Selena Gomez's rare denim in our store that gives back to youth mental health advocacy and those groups Future ideas of how we can continue to further engage our brand partners and participate more meaningfully in giving back to the community, they have been an important voice And most recently they did a competitive store walked through in the malls for us and they took photos and they did a very great comparison. We jumped on our virtual call. I was included. almost our entire leadership team joined and our leadership team from the field, trying to understand what makes the best experience for a consumer in the mall. And so I would say that was another real liveetime example how this group is working together and how we're gleaning insights and generating new ways of engaging and thinking Yeah, maybe this is a good time to pause and ask what in your opinion makes Pack on a brand that Gen Zie and some of the teens currently obsessed with it. You're part of this sort of you bigger wave of mall based brands as a millennial, you've been around since I was a teenager who've kind of made a little bit of a comeback or having a renaaissance, right? The mall based brand. So from my purview, I was thinking like there is you're sort of in this sweet spot as far as pricing goes and then not super trend driven, but obviously you have a lot of fits and silhouettes that are on trend right now, but I'd love to hear your opinion on it Yeah, so first of all, I'd love to give kudos to our team because I think our internal team has done such a phenomenal job of building this very meaningful relationship with the consumer. So from our brand ambassadors to those designing the product and our merchants and visual merchandisers, everyone is very engaged in connecting with the community. I would say secondly, if you imagine a PacSun store ten years ago, when you would walk in, you would see PacSN as the label outside the door We were a retailer, but we actually didn't carry any Pacsun branded product. And flash forward, ten years forward today, we have over fifty percent of our product is Pacsun branded the consumer's favorite pair of jeans, as you mentioned earlier And their favorite hoodie, their favorite soft t shirt, their favorite graphic Te mostly carried the axen brand name. And so we've really weighed in on that affinity and we focus on high quality Great style and fashion, but making sure that things are in a range of affordability. And so we want to make sure that we're able to engage the consumer in meaningful ways. We try to meet the consumer where they are, which is one of the reasons that we invested in TikTok as a channel so early In twenty nineteen, we joined TikTok eighteen months later, we had two million fans foollowing us on TikTok and today when we're one of the top most shop brands on TikTok shop, and we really invest in the open creator platform and fueling that aspect of the creator and community basis. And so I think meeting our consumers where they are championing new exclusive products and partnerships, whether it be with Emma Chamberlain, Kendall and Kylie Jenner. Aap Rocki, who was our guest arrtistic director for several years These are other moments that we were able to show up in a way that was different in the space than what others have been doing. Speaking of TikTok, I feel like we have to talk about your viral genes from twenty twenty three. This was that was sort of like the Um Onset of TikTok shhop, you were one of the first brands to go on it. I believe the current estimate is that you've sold over a million pairs on digital. So yeah, I mean, you know, from your book, for example, I am quoting at the time of this writing, in the last rolling twelve months, we've generated over forty million in sales and sold one million pairs of jeans on TikTok shop alone. And while that's still ten percent of your overall digital business, It is pretty significant and it's growing. So the question is, yeah, where do you go from there? And I think Sometimes we ask brands like, is this a lightning in a bottle situation, right? Like can you reverse engineer virality the way that happened sort of organically three years ago? or can you build off of that momentum Yeah, absolutely. I think we have successfully built off of the momentum. O TikTok revenue has grown over the last three years. So twenty twenty three marked kind of the first moment of ourality there and we've had many other moments since then. And so I think it is a building effect. I think it's a community effect as well. We're not just on TikTok or YouTube for the benefits of trying to create revenue. We're there to connect with the consumer. We're there to amplify their storytelling, and we're there to be a beacon for their self expression. And so when the majority of our sales on the TikTok platform come through the open creator platform, it means Those consumers, that community is picking us. There's no contract between us. They are saying, I'm a champion, I'm a fan of PCun, and I want to bring your brand to life in the way that I see fit. And that's also relinquishing control for a brand to be able to really lean into the community and say, we empower you. We're excited for this, and it's also a way for the consumers to generate revenue, which I think is very exciting So I think this is the beginning of a big shift in terms of the retail industry in total. I would say that it is a behavioral shift that we're really paying close attention to in those signals of them wanting to shop lives, them wanting to shop from someone's bedroom or someone that they know, or someone that they know that they know and the power of the algorithm I think there's a lot of learnings that we can take away. And a lot of those early learnings on TikTok and our experience on TikTok shhop are what helped shape our PacSun community Hub. So PS Community Hub, the new app that we have that benefits the consumers and the creators from a shopping standpoint and allow them to engage with our community and PacSun collective in more meaningful ways really generated from some of these early learnings that we had along the way Yeah, I want to talk about the app a little bit in a second, but I'm kind of curious whether you've had any other breakout of you know success as far as items that just kind of you know fire on TikTok following the jeans. I know your hoodies and your tees are very popular, but I'm curious if there's another example of this where a creator just kind of helped teinens or the G Z on to a certain product Yeah, we had a metro booomin tea, so a tea that goes back to music that has sold I think close to one hundred or two hundred thousand of this particular t shirt. And what was most interesting was when you think about dupe culture, there were also a lot of dupes being generated on the same platform at the same time and that actually created a halo effect us So as opposed to it being a deterrent, getting the authentic one from Pak Sun became viral in itself. And so I think that's another great example outside of the denim that we've had go viral several times and continues to be a big push is this men's graphic t shirt. which, you know, really had legs of its own And then I do want to talk a little bit about stores because you know you have an exciting stout, which is that you are currently opening more stores than you've closed, which among retailers is very rare, as you know. So you know with digital, we've talked a lot about TikTok, but it seems like that's actually seeping through to your physical retail strategy, right? Like people who couldn't get the jeans or the t shirt online were kind of trying to track down the product in your stores. So yeah, tell us a little about that. And then I believe you're also opening international stores now. So just overall big expansion here for you Yeah, so last year we opened about ten stores. this year, we're opening another ten and growing. And I think Aacense s'its at about three hundred locations today. We see white space to continue to open stores where the customer is demanding it and where it makes sense and we have a high propensity and density of consumers that don't have that experiential retail moment in kind of their purview. And so I think opening stores has been very rewarding. We saw our store traffic last year at plus seventeen percent. and so that was well above the industry standard I think that's also another bet on opening new stores. The halo effect that we've seen on TikTok and on selling out on our website has created a rush to stores and people are asking for the viral TikTok jean or the metro boooming shirt. And I think that concept of exclusivity and the selling out has helped create a bit of a halo. But I also think byy showing up both organically and intentionally across these channels, you create an ecosystem where the customer no longer delineates digital from store from experiential. if we're showing up track side at Formula one That is another touch pointo with the consumer and making sure that these touch pointos have consistency but also have a surprise and delight that that keeps the consumer engaged and coming back. And then lastly for international, because I'm so excited to share, today we actually opened our first stor in Dubai at Mall of Emirates. and this morning I was getting videos from the team. There were thousands of kids lined up It was a huge, very exciting moment for the brand and so really pleased to see that off on a great start. Yeah, I'm kind of curious about whether you believe the international customer base will have any different behaviors or do you feel like through your data, you feel like these you know, young people in Dubai are seeking out pretty much the same thing that people stateside are No, I think there's an absolute opportunity to learn and to understand as we expand internationally, what does that look like Wh should we be co creating with in that region? What you collaborations or product drops should we bring to life that are specific by region, by neighborhood, by city, and really lean into the power of community. And at the same time, we're eager to see what resonates from you know, this audience that is predominantly very well traveled and already has a high affinity and awareness for PCN. And so I think over the next few months, we'll certainly learn and then our strategy will e and flow from there. I want to bring it back to your youth report. Curious whether you know that global following because of social media now, right? everybody wants the viral product to come to them. Is that something you're also tracking in your annual report? I know that's something you're going to be putting out very soon too Yeah, our Paksan Youth report will come out in September. that Anna is the anniversary of last year's first report. And I think what we're most eager to see is to be able to track behavior year over year. now that we have kind of a basis point and an understanding of where this cohort was, we'll certainly look to evolve it. I know our partners that are based in the Middle East are eager to do a similar report of their own and to ask similar questions, but to their demographic and audience so that we can have a side by side comparison. So that is something on the docket as we look at kind of the future years of how this research will continue to evolve. And what we love most about the research is we're not actually asking about Pakan ourselves and we're not gatekeeping the information. We really are bringing this back to our purpose to inspire the next generation of youth and to create a better world at the intersection of music, fashion, art and sport. And so by surveying them and trying to get at the why behind the data, why are consumption patterns changing? Why are these behaviors and shifts urring and try to get inside of the deep emotive changes, we think we'll be able to unlock more information for more brands so that we can better partner to inspire the youth more effectively together in the future other things, you going through your inaugural report last year, there were some pretty interesting and to me surprising takeaways from some of the younger participants. I wanted to ask you about maybe your favorites or what were some of the surprising ones to you. think For example, the fact that yeah, something like music is a huge influence. Obviously TikTok is a big part of that. Anything else you can share that maybe is going to you're going to be integrating more into your strategy based on that Yeah, I think to your point, hearing that music is the number one way that young people self identify and also create their style from was an affirmation for our team. We try to weave music in in a very intentional way. And we've showed up at a lot of the major festivals and we champion young emerging musicians and artists but it's something we want to do more of. So next weekend in New York We'll be celebrating with our goovball partners and doing some really exciting breakthrough things and we'll be building on the successes and learnings that we had the last year. And so I think that also helps shape our merchant and design teams as they're thinking about styling and how fluid style and individual expression are, how music plays a big role in that and how we're tracking that and using that data I would say something else that was very astounding and surprising to so many and almost felt like alarm bells was that you youth today, mental health is their number one priority and it's their number one concern and challenge, even above their physical health or wellness and above their academic health or wellness And I think Reraming it a bit, it actually makes me feel very optimistic about these future generations because it's not as though these issues didn't exist prior. It's that previous generations weren't willing to be vulnerable enough to talk about that, to talk about mental health in the workplace. And so I think that these unlocks are really helping us as organizations and brands to think about our social responsibility in a different way and to be able to help build ecosystems and opportunities for young people to be their most successful as they enter the workplace. And so some of these unlocks have also enabled us across divisions in the organization, not just to build different product but to build different programs, to build different internships, to think about wellness in a different way across the organization and the integration of Gen Z and Jen Alpha into the workplace today I'm curious if you can give us an example of that on the mental health and wellness topic. I imagine your rare partnership is maybe a part of that, but any any others you can name? Yeah, our rare partnership has really scaled over the last two to three years and what started as an initial engagement with Selena Gomez and a give backack through actually our. com at checkout has scaled to a much larger program where we actually have a denim line that with every purchase, the consumer has the opportunity to give back And the consumer also has shown tremendous generosity. They are now matching dollars at checkout. and we've generated north of seven million dollars to Selena Gomez' programming. so I think we're very proud of that. We also have an established relationship with the Los Angeles Rams really focusing on the community that Pakistan is based in and in the Los Angeles area. and we're on seven million dollars in donations. to help fight absenteeism in inner city Eglewood schools And so that has been something that I think ur teams are very proud of We came to learn from the superintendent that the number one reason that young people weren't going to school in middle school and high school was that they didn't have clean clothing. And so We've been able to lean into that and build that program from its inception and really grow it. And now we have washers and dryers called Loads of Loves in all of those schools able to help them keep the clothing clean. And I think just really it comes from an overall feedback loop of listening carefully to the community where the need is and then doing our best to address that Speaking of California, I do want to ask a little bit about how you know, the brand's roots kind of tie back into the culture. Obviously a lot's changed over the last few decades, but yeah, I'm curious,, you know, because I was just thinking, you know young people or consumers on the other side of the world kind of discovering this brand that has you know its roots in this California surf culture. It's so interesting and obviously social media has a lot to do with it, but do you feel like there's ever pressure to kind of, you know, thread that needle or try to, you know tie that back? or do you feel like, you know, you've just diversified and expanded so much now that Maybe that's not. is relevant anymore Yeah, I think we're very proud of our heritage and our legacy is starting as a surf skate retailer and brand. And we've evolved alongside the consumer. And you know, should surf or skate have a comeback, they would be a part of sport. And from a fashion lens, we could incorporate, you know surf I think we still have bits and pieces of that, but reallyally the four pillars are what have created such clarity for our teams and for our consumers and what allow us, I think effectively to globally scale, we are a brand based in Los Angeles and we do celebrate everything that is so special about California. and that also includes music and that also includes art and museums and curators and creators and artists that we're able to shine a spotlight on through our Pakun collollective program that are based in Los Angeles. And as we look to evolve, and for example, in the store in Dubai, we look forward to partnering with artists that are local to that region and to be able to really take this power of co creation and scale it in the most effective way. so We will always be a champion of young people I think we will always look to serve to inspire the youth And we will continue to evolve the brand alongside our community. And so I think it's a constant evolution, but with some very clear pillars that we have really made an intentional choice to talk about. Yeah, that makes sense. And then I guess to loop it back to the app, which you've mentioned a couple times, so I do want to circle back to that. You know we talk a lot about how the brands are communicating with the youth today, whether it's like a discord channel or obviously you've got like the youth advisory, but is the app is that where you kind of want to bring that foold in, like let's say somebody from TikTok is going to download the app and You know, you'll have that party information available to you and maybe learn more about that customer. Yeah, how did you design it, I guess, with that in mind Yeah, I think the Paxson community hub is intended to be a central location or an energy space for community, creativity and technology to meet. And so it's not a replacement of TikTok. It's not a replacement of any of these other platforms It's really intended to amplify or be a center meeting place. And so instead of a consumer having to go ono separate platforms to get samples for a brand or from a brand in order to then champion them and be a part of the creator economy, this kind of centralizes that and creates a more sticky and direct relationship with the brand And so the app is very much in its infancy and we're having a lot of great learnings in these early stages and it will continue to evolve. But it is intended to be in service to the people that we've built it to. So it will continue to change and evolve in response to what the customer is looking for, where is the community looking to lean in more? is the way for them to apply for the youth advisory program best suited there That will be the central hub for it, but we will talk about it on TikTok and we will put it across all of our social channels and we will put it out in discord chats and Reddit. And so I think it is notot intended to replace anything, but really to be an amplification or energy hub around it All right, well, Bri, we can wrap up, but I just wanted to give you a minute to talk a little bit about, you know, the next cohort that is coming in when it comes to your youth Counsel You mentioned the age range and so I'm kind of curious, you know Do you talk to the twelve and the thirteen year old who obviously whose parents are going to be helping make a lot of their consumer decisions differently than maybe you would like the college student or the older maybe working genen Zer Um yeah, I guess how do they all help blend this data together and Yeahah, where do you differentiate, I guess Yeah, you know, I think it's a really beautiful integration and we're so fortunate to have such a welcoming and inclusive community. and that definitely is reflected in our youth addvisory Council. We welcomed them for kind of our first meeting of the year at our headquarters in California. and the younger folks had flown out with their parents and they were also included in dinner. and they were equally curious willing to share and wanting to participate in helping to amplify not only their child's journey, but also their story. And so I think Lila Biggs and Beck with Life of Beckett are two great examples of, you know that's an important also peer group in their life. And it's very influential also in the way you look at overall spending across the economy And so I think getting the insights And having it mixed is definitely a part of our intention moving forward. I think having some of the younger voices in the room certainly helps shape the conversation differently. And we say that with the most positive intention. and I think that they're welcomed and there becomes almost a mentorship betweenween not only the entire cohort and the Paxon leadership team, but also between the generations of Gen Z and Gen Alpha and better understanding one another just as humans in the most powerful way possible Well we we' let you go, but I wanted to just give you a minute to give any closing thoughts, you know, especially anything that you've written about that you wanted to mention that maybe we haven't talked about Yeah, I would just say in closing and thank you so much for having me on I really encourage everyone to get a copy of Co Created or listen to the audiob book. It's available on Amazon, Bernson Noble, and atpaxsun. com. And I would say it's not just a book on the transformation of retail. It really is focused on understanding these young generations built for students, for entrepreneurs, for fellow CEOs and leadership teams to understand how you can weave purpose into everything that you do. And so it is definitely a book on purpose, putting your community first and most importantly, the power of co creation. Thank you again for joining us Thank you so much for having me Thank you for listening to this episode of the mododern Retail podcast. A show by Digitay Media. If you haven't already, please subscribe and head to Apple Podcast to leave us a review and a rating Find more of our coverage at modernreail. co and follow us on socials like LinkedIn and Instagram at mododern Retail You can also follow me at Gabriella Barco, that's BA R KHO on all Socials. See you next week.