2 mins on... Commercial Leaders
What does a brand lack when it doesn't have a commercial leader?
The best brand’s build high-performing leadership teams. To do this, they know the senior roles required, what good looks like in each seat and how to make the whole greater than the sum of its parts.
In this post we unpack, in a concise and easy to apply way, a critical function in your brand… Commercial. It’s designed to help senior leaders of brands without a dedicated commercial or trading leader understand what’s missing and align on if / when they need to fill the gap.
We’re interviewing one of the sharpest commercial operators in modern retail - Greg Thorndick - to unpack what a commercial leader is and why they’re crucial to a successful brand leadership team.
We ask four simple but powerful questions:
What does a brand lack when it doesn’t have an experienced or capable commercial leader
What are the key accountabilities for a commercial leader?
What are their primary and secondary KPIs?
What experience and skills does a commercial leader need to be successful in a new luxury brand?
As former Gymshark International Commerce Planning Manager and now Whanau Director of Global Trading & Ecommerce he understands what good looks like.
What does a brand lack when it doesn’t have an experienced or capable commercial leader?
When building a world class product and an exciting brand, the absence of a commercial leader quickly leads to a leaky P&L and cash flow pressure. It’s all art, no science.
Often the gap in commercial is filled (by default) by the finance team. This can often, despite good intentions, lead to a level of prudence that stunts growth.
This is compounded by a widespread misconception: “You can’t build a brand, while trading a business”…
A good commercial leader allows you to do both.
What are the key accountabilities for a commercial leader?
Profitability: Above all, a commercial leader owns the P&L. They understand and direct the parts that lead to the sum, bringing together all departments to ensure commercial targets are hit. The finance team hold commercial accountable, commercial holds everyone else accountable.
Strategic Execution: Not only to set a clear commercial strategy, but to build a team to execute it. Across sales channels, geographies, product categories and marketing channels.
Growth: To be the most competitive person within the organisation. To set, own and drive the number, while respecting the art of the brand.
What are their primary and secondary KPIs?
Primary KPIs: Net Revenue, Stock Cover, Contribution Margin, EBITDA
Secondary KPIs: Gross Margin, Sessions, Conversion Rate, AOV, Cost of Sale
What experience and skills do they need to be successful in a new luxury brand?
Today, a commercial leader in new luxury needs to have digital expertise combined with wholesale and physical retail experience. Or vice versa. Omni-channel is vital.
The best commercial leaders are ‘expert generalists’. Hold world-class expertise in one area (e.g. commercial planning, digital or merchandising) but with strong skills across the others to supplement a 360 approach to P&L ownership and growth.
With traditional trading tactics not always available in the new luxury space (flash sales, always-on outlets etc.), experience of trading through NPD, brand moments and a varied marketing mix is essential.