Jesse Johnson Of Store 5a On The Supply Chain and The Future Of Retail

An Interview With Martita Mestey

Stay sticky- Retaining current customers is far cheaper than acquiring new ones. By listening and responding to the needs of our current customers, we have not only generated a loyal following but have built a brand that other people want to be a part of.

As part of our series about the future of retail, I had the pleasure of interviewing Jesse Johnson.

Jesse Johnson is the founder and CEO of STORE 5a, a luxury re-seller with locations in Ohio and Tennessee. He launched the company in 2015. As a family member of the revered Diamond Cellar company, Jesse is a third-generation jeweler.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

My grandfather and father both worked in the jewelry industry. Naturally, I wanted nothing to do with it and planned on becoming a famous musician. While I was in college, things were going well with my music. I had started a band, was playing shows consistently and even opened for Twenty One Pilots. However, despite this, music still wasn’t paying the bills. To make some extra money, I began to buy and sell vintage guitars online. I noticed that a lot of people who were into vintage guitars also enjoyed vintage watches, so I added a few to my shop. Eventually, the pre-owned watch business took hold, and I opened my first physical store. By that time, I had stopped selling guitars and focused on pre-owned watches, jewelry, handbags, and streetwear, which is how STORE 5a was created. I‘m passionate about vintage fashion and care significantly about sustainability. I like that vintage fashion goes hand in hand with helping the environment. I couldn’t be happier to have ended up in this industry.

Can you share the most interesting story that happened to you since you started your career?

A couple of years ago, I had a client come in looking to sell an old watch. He said he bought it in the early 80s and had barely worn the watch. He informed me that the watch sat in a safety deposit box most of the time he had owned it. At this point in the conversation, I didn’t know what to expect. However, the gentleman proceeded to pull out an old Rolex box and opened it up to show a steel Rolex Daytona “Big Red.” In the years since he purchased that watch, the watch had appreciated by nearly 13,000 percent. Having purchased the watch for just over $800, he was stunned to learn that they were now selling for over $100,000. This will always be one of my favorite memories. Since then, I’ve come across several customers like this man’s story, who are unaware of the value and appreciation of some of their luxury items that are just sitting on a dusty shelf in their closet.

Are you working on any new exciting projects now? How do you think that might help people?

We’ve had several exciting projects in the works. My business STORE 5a has just opened up a new location in Nashville. It’s only been a few weeks, but we have already had an incredible start. Nashville is an amazing city full of culture and style and we are so excited to bring pre-owned luxury to it.

Simultaneously, I’ve been hard at work creating an online jewelry repair platform called By Vive . Having operated a jewelry resale business for 7 years, I have seen many customers complain about not knowing where to have their luxury jewelry repaired. Our mission is to solve this problem by providing customers with a one-stop-shop, a place to get a quote and book a repair online. This platform is expected to launch officially in June.

None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?

I couldn’t agree more. I have had a great deal of help while building my company. Not only have I had a series of incredible mentors, but I am also blessed to work alongside my brother and father. Starting a business is a constant series of ups and downs. You need a support group around you to not only guide you, but also to help keep you sane. I have been lucky to find a few great people who have really helped shape me and my business. One of my first mentors always showed up with a book for me to read. It sounds obvious now, but at the time, I was stunned to realize how whatever problem I was facing, someone else had already faced before and likely written an entire book on it. Now I am constantly thumbing through books; it’s the greatest business hack out there.

How have you used your success to bring goodness to the world?

At STORE 5a we are constantly trying to find new ways to partner with charitable organizations. We usually have two sales a year, one in the summer and one in the fall. Each time we do this, we partner with an organization to give away a percentage of the revenue. Frequently we work with Dress for Success, Ronald McDonald House, and St Jude.

Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?

The pandemic fast-forwarded retail trends 10 years into the future. While many companies were already moving to sell online, luxury brands steeped in heritage were more hesitant. However, the pandemic was the catalyst needed for many of these businesses to go all-in on the trend.

Along with this, the pandemic piqued both consumer and brands interest in luxury resale. Not only did platforms such as Poshmark, ThredUp, The RealReal, and Depop grow during this time, but large legacy brands such as Target, Levi, and even Gucci began to incorporate resale programs.

As customers are increasingly more aware of the impact their purchases have on the environment; I expect this trend to continue. I expect that we will see other adjacent businesses start to grow around this space as well. Concepts such as rental and repair/repurposing of old goods should start to take hold as major brands and retailers are looking for ways to help close the gap in the circular economy.

The supply chain crisis is another outgrowth of the pandemic. Can you share a few examples of what retailers are doing to pivot because of the bottlenecks caused by the supply chain crisis?

When it comes to supply chain issues, everyone is feeling it and luxury brands are no exception. The pandemic forced factories to shut down and simultaneously many brands were expecting a dip in sales. Because of this, it’s easy to imagine that they were eager to slow production. However, the opposite occurred. With consumers stuck at home, many started to transition their purchases from experiences to products. Couple this with the fact that the US government injected roughly $5 trillion dollars into the economy and luxury brands simply could not keep up with the demand.

To combat this, many retailers are stretching their inventory by promoting lesser known, readily available brands and products. Additionally, many retailers are trying to find new avenues of acquiring inventory. This has led to a huge increase in the interest of second-hand products.

Even in my own stores, we saw how the lack of new products available in retail stores pushed consumers to try resale. The lack of available new products led to higher pre-owned prices. Products such as Rolex watches and Hermes bags have been selling for prices above retail.

How do you think we should reimagine our supply chain to prevent this from happening again in the future?

1. To combat supply chain issues and help prevent them in the future, we will see a few different things happen. Firstly, I believe we will see brands working to optimize the number of suppliers they work with. As brands identify which suppliers are more agile and responsive, we can expect to see them invest more into these relationships and cut the other loose.
2. Secondly, I think both suppliers and brands will focus on incorporating more technology and innovation into the supply chain to optimize efficiency. This could include technology that helps speed the prototyping phase, reduce waste, or simply better track inventory. Regardless, all these subtle changes will help ensure a smoother supply of goods.
3. Lastly, I believe we will see a push for manufacturing to be brought back to Europe, the US, and neighboring countries. With more emphasis being placed on environmentally friendly practices and concerns over trade wars and IP theft, more and more businesses are moving away from Chinese manufacturers.

In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?

We’re social creatures and centers for commerce have been a part of human society for thousands of years; I don’t see that completely going away. However, as consumers spend more time and money online, stores will have to work hard to convince customers to shop in person. Smaller brands/stores have seen success at this by treating their retail locations as equal part event spaces. These locations help the brand integrate themself into the local community and create a consumer experience.

Some of the ways they are doing this is by holding album release parties, book readings, trunk shows, and private events. Additionally, they are rethinking the design, layout, and locations of their stores. Inspired by social media, stores are creating spaces that are more visually appealing for clients. Some go so far as to have spaces designed specifically for consumers to share photos on their social platforms.

Lastly, we are seeing further integration of technology into the retail space. Brands such as LVMH are turning to AI to help with inventory optimization, product recommendations, and other back-end operations. While many of these tools are already in use for most ecommerce businesses, I believe that these technologies will start to find their way into the physical retail store.

Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?

Trying to win customers based on pricing strategies alone will not cut it. The businesses that are seeing the most success at fighting off Amazon and DTC manufacturers from China, are deeply focused on their brand. Building a powerful brand is one of the best ways to showcase what separates your business from another. It allows customers to connect with the business on a more personal level and this begins to chip away at their desire to simply price compare.

Additionally, I think it is extremely important for SMEs to embrace their smallness. Being small allows a business to get more intimate with the customer and integrate into the local community. Little things such as building a strong email list, being present on social media, and hosting events are easy ways to leverage your local community.

Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.

1. Focus on a niche- From the start, we have focused strictly on pre-owned luxury accessories. We have often been tempted or even encouraged to add clothes to our collection or even dedicate part of our retail space to new branded products. However, in the end, we made (the sometimes tough) decision to stick to what we know and do best. This has allowed us to focus our efforts and build a reputation within the industry.
2. Stay sticky- Retaining current customers is far cheaper than acquiring new ones. By listening and responding to the needs of our current customers, we have not only generated a loyal following but have built a brand that other people want to be a part of.
3. Think like a brand- When I first started in the resale business seven years ago, many customers were shocked to see how much time and energy we put into making our shopping experience as luxurious as possible. Even though our products are pre-owned, we treat them as if they were being displayed new. Ensuring that the displays, packaging, and even marketing materials all feel cohesive.
4. Find the right employees- I cannot overstate this enough. Finding the right people has made all the difference in our business. Part of this process required us to get clear about who we are and where we are going. It was not until we had a clear vision for our company that we could accurately decern who we were looking for. Additionally, once people know what your goals are, they want to join and reach out to you.
5. Little changes = Big impact- To be honest, this is the hardest principle to uphold. When we as a team get together and decide on large initiatives, it is easy to get everyone fired up and moving in an exciting new direction. While this is great, not putting the same effort and energy into smaller, less exciting improvements can be death by a thousand papercuts.

Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

I am a big believer that each of us has a larger impact on life than we typically imagine. In today’s world we’re always being pushed to consume, but rarely to create. I would challenge everyone to build or create something every day. Whether it is as simple as creating a new favorite dish, writing a journal entry, or as big as building a business; we connect and contribute to our environment when we create.

How can our readers further follow your work?

You can connect with me personally on LinkedIn here.

You can also follow me on Medium here.

Follow STORE 5a on Instagram here.

This was very inspiring. Thank you so much for joining us!