Our guest this week, recorded live in person at GroceryShop in Las Vegas, is Tim Simmons, SVP & Chief Product Officer of Sam's Club, who takes us deep into the transformation process that he's been helping lead. We learn how Walmart and Sam's Club have been evolving and accelerating the pace of innovation. It's a Master Class on how to embed a culture of experimentation and the role of design thinking and agile methodology.
We're recording live this week from the just wrapped GroceryShop conference in Las Vegas.
Our guest this week is Tim Simmons, SVP & Chief Product Officer of Sam's Club, who takes us deep into the transformation process that he's been helping lead. We learn how Walmart and Sam's Club have been evolving and accelerating the pace of innovation. It's a Master Class on how to embed a culture of experimentation and the role of design thinking and agile methodology. We also learn what "The 5 Why's" and "low fidelity prototyping" are all about and how they are making a real difference at Sam's. We close on the critical role of executive leadership in driving the innovation agenda--turns out "Scooby snacks" might be the key.
But first we share our top take-aways from the conference before diving into our hot-takes on the latest retail news, including what a big jump in interest rates means for retail. But Walmart and Target say "damn the torpedoes, full speed ahead" when it comes to holiday hiring plans. Then it's thoughts and prayers time for JC Penney as they revel more details about their turnaround plans. We raise questions around Wegman's decision to bail on "scan-and go" before returning to the Wobbly Unicorn Corner to discuss Stitch Fix's earnings whiff and the potential acquisition of Purple.
About Tim
Tim serves as the Senior Vice President and Chief Product Officer at Sam’s Club. In this role, he oversees product management, operations transformation, and the user experience across omnichannel commerce, digital in-club experiences, supply chain, merchandising, and more. Tim joined Sam’s Club in 2015 and has worked in various areas of the business including Membership and Marketing, Operations Transformation and In-Club Product Management and Fulfillment before taking on his current role in 2021.
Before joining Sam’s Club, he spent more than 15 years working largely in professional services, doing advertising and consulting for companies such as MRM/McCann, RAPP, Peppers & Rogers Group and Ernst & Young. During this time, he worked with clients across numerous industries including technology, retail, oil and gas, entrainment, travel, food services and health care to help generate growth, increase market share, and provide measurable impact.
Tim has an Associate of Arts degree from Snow College, a Bachelor of Arts degree from Brigham Young University, and an MBA and Masters of International Studies from the Marriott School of Management at Brigham Young University.
About Us
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks , The Food Professor with Dr. Sylvain Charlebois and now in its second season, Conversations with CommerceNext! You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:05
Welcome to the Remarkable Retail podcast, Season 5, Episode 12, presented by MarketDial. I'm Michael LeBlanc.
Well, we are recording this live and in person here at Groceryshop. We're here together, Steve. And thanks again to Steve from MarketDial for making this the connection here and getting to (inaudible) this year and making the help in making this happen. So, listen, we're here and we're talking and meeting all kinds of great folks, right?
Steve Dennis 00:26
And I'm Steve Dennis. Yeah, it's been fun to have some planned meetups and, and those sorts of things, as well as just run, run into folks on the tram as, as we did, that we didn't know. And (crossover talk), and some we don't, -
Michael LeBlanc 00:29
As we did yeah, shout out that great, shout out to that listener who said hi on then and when we were on the tram coming back from dinner on Monday night, so, -
Steve Dennis 00:44
I feel, I feel, like we're cele-, still you know, we're celebrities. Are you the Remarkable Retail guys? And indeed, we are.
Michael LeBlanc 00:54
It's a funny experience, right? It's a funny experience. So, this episode is going to be a great episode we, (inaudible). And recorded earlier this week. Here in Vegas, we've got a great interview with Tim Simmons, Senior Vice President, Chief Product Officer at Sam's.
Steve Dennis 01:06
Some listeners will remember that we talked to Nancy King, -
Michael LeBlanc 01:11
From Target, yeah, -
Steve Dennis 01:13
From Target and when I saw her title, as SVP of Product Engineering. I think that's what, it is something like that. I was like, what does that even mean in the retail context? And then we learned that that's, that's kind of Tim's version of, of his job as well at Walmart. And it's a whole different, -
Michael LeBlanc 01:26
Yeah.
Steve Dennis 01:27
Approach to, to innovation, at least new-, newer to me.
Michael LeBlanc 01:30
Yeah.
Steve Dennis 01:31
And so, not only is the Sam's Club story, and, and all the things they're doing in general, super interesting. But their particular approach to innovation, I think, is really fascinating and they're having a lot of success.
Michael LeBlanc 01:37
Yeah, yeah.
Steve Dennis 01:39
It was a great interview.
Michael LeBlanc 01:44
Yeah, and actually, the innovation is as you hear in the interview, but new to Sam's, too. So, it's a really interesting discussion around the tradecraft around innovation.
Steve Dennis 01:49
Absolutely. Yeah, yeah.
Michael LeBlanc 01:51
Well, let's talk about, let's talk about, Groceryshop. So, we're here. It's Thursday. We're all both about to get on flights, flights home, although you're going somewhere else, right. So, (crossover talk), where are you off to?
Steve Dennis 02:04
I am just taking the puddle jumper over to Auckland later, later this evening.
Michael LeBlanc 02:11
Is that, is that a suburb of, -
Steve Dennis 02:12
Not Oakland.
Michael LeBlanc 02:13
What I was going to say is that -
Steve Dennis 02:14
Auckland.
Michael LeBlanc 02:15
Is that a suburb of Texas, or no, you're going all the way over to New Zealand, (crossover talk), wow, -
Steve Dennis 02:17
I am going to New Zealand, yes. I'm going to be, -
Michael LeBlanc 02:19
What are you doing there?
Steve Dennis 02:21
I am getting my Kiwi on. I am doing a, a talk at an internal company meeting for a big, -
Michael LeBlanc 02:23
Nice.
Steve Dennis 02:24
Food brand down there. Operator of retail stores, -
Michael LeBlanc 02:28
Not your first time, to that part of the world, right?
Steve Dennis 02:30
It is not, the last time I was there, which was four or five years ago, was actually on my way to Australia to do a talk. But I took a little digression and spent some time on both the North and South Island. So, I'm looking forward to getting back there. And (crossover talk), a mix of business and a little bit of pleasure.
Michael LeBlanc 02:47
And we'll be back here actually, in a couple of weeks at the NACS show, right? The National Association Convenience Store Show, looking forward to that again, (crossover talk), we'll be, we'll be, we'll be here with our friends at MarketDial again. In there. We have a studio in their booth. I'm really looking forward to that, (crossover talk), -
Steve Dennis 03:01
Yeah, yeah. It should be a lot of fun. I think we're supposed to call it NACS though.
Michael LeBlanc 03:04
NACS.
Steve Dennis 03:06
I think, yeah, if we want to be, -
Michael LeBlanc 03:07
What did I call it?
Steve Dennis 03:08
Cool, NACS. No, you used the, you spelled it out, -
Michael LeBlanc 03:09
Oh, I spelled it out. Yeah, yeah.
Steve Dennis 03:10
Yeah, apparently like the cool people say, -
Michael LeBlanc 03:12
NACS.
Steve Dennis 03:13
It's like South by, you know, (crossover talk), South by Southwest, (crossover talk). I heard it's a similar vibe.
Michael LeBlanc 03:16
NACS. All right, well, let's get to what your observations were of Groceryshop.
Steve Dennis 03:21
You know, we've, we've as, as folks will hear soon, we haven't figured out the schedule yet. We got a chance to talk to Christina Gustavson from the Shoptalk organization, I think they just put on great programs. And this is my first time at Groceryshop. So, -
Michael LeBlanc 03:27
Yeah, mine too.
Steve Dennis 03:29
So, it was really interesting just to go deeper and broader on some of the issues going on in the industry, which is, you know, become in the last few years kind of the hot area for innovation, eCommerce, all things, all things digital. So, for me, it was a little bit of drinking from a firehose in terms of information, but I think what was, you know, in terms of the things that stood out a lot of talk about retail media networks, for sure. A lot of talk about various aspects of convenience, you know, ultra-fast delivery, you know, Instacart, the DoorDash people, -
Michael LeBlanc 03:49
Yeah.
Steve Dennis 03:50
We're hearing others, Walmart Go, I guess it's, (crossover talk), called.
Michael LeBlanc 04:11
Yeah, yeah. We talked to them. Yeah, (crossover talk), -
Steve Dennis 04:13
So, a lot of just what's going on in getting the product to consumers, and kind of this big overlay about profitability. You know, that's been one of the things obviously, we've talked a lot about, in general about the profitability of some of these, some of these ventures but I think grocery in particular, has had this big adoption of, of digital. A lot more in terms of home delivery, -
Michael LeBlanc 04:19
Yeah.
Steve Dennis 04:20
But the economics of that are pretty challenging. And so, -
Michael LeBlanc 04:22
Yeah, yeah.
Steve Dennis 04:24
Just a lot of different takes like that. I did say on the I don't want to say the negative side, but it was funny to me the number of speakers that kind of made a big deal about oh, omni-channel important or what was the other one that was personalization and was like, are, am I at a conference?
Marty McFly 04:35
Hey, Doc, hey, Doc, (inaudible). Are you telling me you built a Time Machine?
Steve Dennis 04:37
Yeah.
Michael LeBlanc 04:38
It sounds like I'm in a Time Machine, (crossover talk), they’re starting to talk about omnichannel.
Steve Dennis 04:45
Yeah. We went Back to the Future. I was like, (inaudible), I feel like I'm at NRF in 2009, or something. But yeah, so some of that. And you know, of course, many people were talking much more about, you know, what does it mean for them? So, (crossover talk), -
Michael LeBlanc 05:01
Yeah, yeah, yeah.
Steve Dennis 05:03
It was all just like, -
Michael LeBlanc 05:05
It wasn't a new concept.
Steve Dennis 05:24
I just discovered it.
Michael LeBlanc 05:26
Yeah, yeah, yeah.
Steve Dennis 05:28
But, but some of us were like, yeah, we think the blending of digital and physical, -
Michael LeBlanc 05:31
Could be something, (crossover talk), -
Steve Dennis 05:33
It's going to be a big day.
Michael LeBlanc 05:36
So, lots of great content, coming out of the show. Lots of great interviews. Stay tuned. And we talk to a lot of great folks, both bonus episodes and full episodes. So, we have lots of great insights.
Steve Dennis 05:42
We're going to go from avocados, -
Michael LeBlanc 05:44
Yeah.
Steve Dennis 05:45
To retail media networks, to you know, you name it. It's all there.
Michael LeBlanc 05:48
Well, let's, let's talk about the news of the week. So, let's see, where should we start look-, -
Steve Dennis 05:52
Speaking of fun, interest rates went up.
Michael LeBlanc 05:54
But yeah, I was going to say, let's start, you know, on the economic side. What, what do think you of the, I guess somewhat predictable, -
Steve Dennis 06:00
Yeah.
Michael LeBlanc 06:01
Ebbs and flows, right. Inflation, I think, went down a little bit. So, (crossover talk) what do you make of all, (crossover talk), -
Steve Dennis 06:07
I mean, I, I, you know, we keep coming back to this. I mean, I think we're just in this very volatile and uncertain time, you know, interest rates going up in the US, UK, I mean, you know, you na-, you name it. A lot of folks are thinking that it's going to be pretty hard for the interest rates by themselves to really make a big dent, into, into inflation anytime soon. So, I just feel like we're in this weird time of this confluence of events that, you know, frankly, almost, nobody's lived through. And there's lots of opinions about what it's all going to mean. And I don't know that I trust even the most learned people, because they've been wrong quite a lot.
Michael LeBlanc 06:47
But listen, (crossover talk), I, you know, I think what we all learn coming out of COVID is you can't predict, like next week, some days, let alone the future. So, maybe just stay agile and ready to react, right?
Steve Dennis 06:56
Yeah, one of the quotes I've got in my book, and I often include in my keynotes, including in keynotes is from the meditation teacher, Jon Kabat-Zinn, which is "The waves are going to keep on coming. So, you better learn to surf". You know, -
Michael LeBlanc 07:00
Right.
Steve Dennis 07:01
Like that is, -
Michael LeBlanc 07:03
Yeah.
Steve Dennis 07:04
That's the implication because the ability to really predict things is that most people are pretty poor at that. I know that I am.
Michael LeBlanc 07:15
Well, let's talk about who's, like Walmart and Target both announced that they're hiring, Gap, not so much. I mean, it's just standard news. I mean, retailers gearing up for the holidays, right?
Steve Dennis 07:25
Well, it's also just, you know, if your business is not good, chances are you're focused on cutting costs, which you know, long term may not turn out to serve you well. But that's, that's where people are, and then the brands that are doing well or have a strong balance sheet are continuing to invest, which is what we're seeing from Walmart, Target and a whole bunch of other folks.
Michael LeBlanc 07:44
Speaking of other folks, JCPenney, they're opening up a new beauty shop across the United States. What, what make of you I mean, they're taking swings at the bat, we've talked about wishing thoughts and prayers to this leadership at JCPenney, (crossover talk), -
Steve Dennis 07:56
Yeah, I mean, when bad business models happen to good people, I guess, I mean, it's, it's, you know, we've, we've talked about this offline a lot. I mean, I hate to just be so relentlessly negative about certain companies, but it's, it's, hard not to. I think JCPenney, you know, it's the classic version, you know, it was called the slightly better version of mediocre, -
Michael LeBlanc 8:04
Yeah.
Steve Dennis 08:05
Or the faster horse or, like, you know, there's this, all these cliches of taking a brand that is so irrelevant, working on the things to make it moderately more relevant, but still not interesting enough to turn the company around, I don't believe. So, what they are doing, they've been testing, a, a beauty concept, which, you know, a lot of things sound perfectly sensible in terms of focusing on inclusiveness.
Michael LeBlanc 08:23
Sure.
Steve Dennis 08:24
That, you know, stronger value proposition, but they're having to respond to Sephora, their deal with Sephora ending. And, you know, that was kind of the core of their beauty offering.
Michael LeBlanc 08:38
Yeah.
Steve Dennis 08;39
And now they've decided to kind of go it alone, -
Michael LeBlanc 08:44
Yeah.
Steve Dennis 08:45
Develop their own things. Apparently, some of the results from the tests were quite good.
Michael LeBlanc 09:04
I mean, you would probably, (crossover talk) if you were there, you probably would be doing not too similar things, right. I mean, if you were in a similar, (crossover talk), I would suspect.
Steve Dennis 09:10
We just, you know, in our last episode we, we, did the Retail Fight Club on Kohl's. And, yeah, I think when you look at these businesses that are stuck in the boring middle, they're dealing with sort of obvious problems and, but you know, in a lot of cases it's from going you know, on a scale of one to 10, there are three, and they're going to go to four. But the problem is you're not nine or 10.
Michael LeBlanc 09:22
Right, right.
Steve Dennis 09:24
That's the problem. And -
Michael LeBlanc 09:26
Yeah.
Steve Dennis 09:27
And it's hard to know when you get that far behind and you've watched the last 20 years happen to you, if you know, you are in a big hole and, -
Michael LeBlanc 09:37
Yeah.
Steve Dennis 09:38
And it's almost impossible to dig out.
Michael LeBlanc 09:43
So, we saw some really interesting things. We walked the show floor, and we saw some pretty interesting things. And one of the things you and I were looking at we, we saw, we stopped by the, the Amazon, just walked out they had a booth,
Steve Dennis 09:51
Yeah.
Michael LeBlanc 09:52
They had a cart there. We talked to a bunch of other folks who were, you know, talking and you could see it on the show floor. Wegmans came out though kind of going counter to that. And they're not, they're not so interested in the Scan & Go. Talk about that. Yeah. I had a robot open a bottle of beer for me, -
Steve Dennis 09:58
Yes, yes.
Michael LeBlanc 10:00
A delicious beverage, a German beer, (inaudible).
Steve Dennis 10:07
Yeah, it's interesting. So, a lot of people might know Wegmans. I mean, it's a regional grocery store, but very beloved, and they've been testing Scan & Go and they decided to pull the trigger on it. It appears that it has a lot to do with some of the loss prevention issues, which is, you know, being a, you know, all sorts of self checkout.
Michael LeBlanc 10:15
Sure.
Steve Dennis 10:16
You know, that has been an issue of whether or not you know, consumers may like it, eliminate some friction, but the operating of it from a cost standpoint can be, -
Michael LeBlanc 10:21
Yeah, yeah.
Steve Dennis 10:23
Be problematic. I wouldn't necessarily read too much into this. I think there's a lot of experimentation on, you mentioned, we saw a lot of different things being tried on the floor, some of them quite capital intensive. I don't know if that's a problem that is necessarily in need of a solution. But you know, if you need a beer, and there's nobody around, and there's a robot, we've got, we've got it for you. So, -
Michael LeBlanc 11:05
(Inaudible), just a precursor to the robot overlords that will be running our life.
Steve Dennis 11:08
Yes, I, I just, I just saw them stabbing me as opposed to serving a tasty beverage. But -
Michael LeBlanc 11:10
That's how it starts, though, (crossover talk), -
Steve Dennis 11:11
That's how it starts.
Michael LeBlanc 11:13
And then they become self-aware. And then they're like, I'm sick of serving you beer, I'm just going to, -
Steve Dennis 11:17
Seems like a good AI application.
Michael LeBlanc 11:19
It does, yeah.
Steve Dennis 11:20
Is that machine learning? I don't know, anyway. But you know what, I think the bigger takeaway is not so much in the, the Wegmans store. I mean, this is clearly just as evidenced by what people were talking about here. And just broadly in the industry, you know, taking those friction points out. And, you know, it's, it's, I guess, the last mile of getting out of the store, -
Michael LeBlanc 11:48
Yeah.
Steve Dennis 11:39
It's not the last mile the way we,
Michael LeBlanc 11:42
Yeah.
Steve Dennis 11:43
We normally think about it. And you know, what is going to be that solution that is capital efficient, operating costs efficient, -
Michael LeBlanc 11:48
Yeah.
Steve Dennis 11:49
Serves the, the consumer, -
Michael LeBlanc 11:52
And loved by the consumer, right? I mean, -
Steve Dennis 11:56
Yeah.
Michael LeBlanc 11:57
You, I was telling you the story and Sobeys in Canada has smart carts and initially it wasn't so successful, because you know, you got to return the car to the store. So, you, you, they're wonderful carts, they work fantastically, but then you're in the back of the parking lot, and you have got to bring the cart back into the store.
Steve Dennis 12:09
Yeah.
Michael LeBlanc 12:10
So, they came up with a different way to work it, which was you, you go to a different part of the store, and you move all your stuff to another cart, and take that cart. And I, I was asking the associate, I tried to use a gift card and a gift card didn't work and wasn't programmed. And she said, she said, do people use this thing? And she said they love it. And so, it's interesting, right? Even though there's a fair bit of friction in the experience, people still love dropping things in their cart, -
Steve Dennis 12:18
Yeah.
Michael LeBlanc 12:19
And then even just moving them around. So, you know, I love, I love that Wegmans and everybody else is taking swings at the bat, right. All right, well, now it's time again to visit the wobbly unicorn corner. What, what news from our segment do we want to impart on our listeners?
Steve Dennis 12:35
Well, that's, I think that's the big lesson here is you got to, you got to be trying stuff, right. And you know, the, the first thing you try. And the second thing you try, and the third thing you try may not be the right thing. But if your point, if you, I think if you know you are either addressing a major pain point, and/or I guess, creating a real point of delight, -
Michael LeBlanc 12:40
Yeah, and making it fun, right?
Steve Dennis 12:43
Then, you know, if you're pointed in the right direction, it may take you a while to, to find the right solution and, -
Michael LeBlanc 12:47
Yeah.
Steve Dennis 12:48
To test your way, -
Michael LeBlanc 12:50
Yeah, yeah.
Steve Dennis 12:52
Into that. And if it's a big enough problem, it's probably worth continuing to, to go at it. And certainly, some of these things are, are, huge issues, and there's a lot of opportunity for customer delight or cost savings. Well, I don't, I don't know if it's going to turn out to be depressing, because it seems like you know, at some point, we'll have an uplifting story from the, -
Michael LeBlanc 13:33
Yeah.
Steve Dennis 13:34
The wobbly unicorn corner. But -
Michael LeBlanc 13:36
Yeah.
Steve Dennis 13:37
For those of us that have, may not be fully involved in this exciting new segment. This is where we talk about the disruptor brands that were once unicorns i.e., worth more than a billion dollars that are not so much anymore and this week. Actually, we got two pieces of news. This week, Stitch Fix reported their earnings, which and sales, which were down 16% year-over-year. But in the continuing trend here, the losses got even worse, they had a net loss in one quarter. So, this is on $481 million of business they lost 96.3 million. So, that's not awesome.
Michael LeBlanc 14:13
Yeah, we call that a weak, I guess we would call that a pretty aggressive burn rate.
Steve Dennis 14:16
That is a burn rate. Yes. A Significant burn rate, their client, active client base also fell.
Michael LeBlanc 14:24
What do you, what do you make of this? Because what you know, I loved Katrina Lake business because it was the AI infused box to the door, it all seemed to have all the points connected. You know, it's interesting, they're losing customers not just losing money, like what do you, what do you think? Is it, is it a COVID impact of the way people work? They're, they're less, they don't have to go into work as often. For example, that was a big component, right? A lot of people said, listen, I don't want to wear the same thing, to go into work. So, -
Steve Dennis 14:48
Yes.
Michael LeBlanc 14:49
Stitch Fix’s answer to a need.
Steve Dennis 14:51
I think it's a contributor, but I also think it's one of the things we've seen with a number of these disrupter brands, which is their first few stages of growth. They found like the perfect customers, but then it became harder to really find that best fit customer. And so, I don't think that the idea. You know, the fundamental idea of Stitch Fix is necessarily a bad one. But I think they overshot the runway in terms of how big a business it could be.
Michael LeBlanc 15:00
I see.
Steve Dennis `15:02
It also turned out I mean; this is more anecdotal than anything. But I know a number of customers that were loyal customers for Stitch Fix that found that the actual the recommendation engine didn't work very well. So, they were very heavy on data science. And then they found out that we actually need some people, -
Michael LeBlanc 15:25
Right.
Steve Dennis 15:26
To do this. And the blend of that, -
Michael LeBlanc 15:29
Art and science, -
Steve Dennis 15:31
Is, is, -
Michael LeBlanc 15:33
Art and science, (crossover talk), -
Steve Dennis 15:36
Pretty costly. So, -
Michael LeBlanc 15:38
Yeah.
Steve Dennis 15:39
Some of the economics of this are challenging. So, I don't know that they can't resurrect them-, themselves. But they've certainly had a couple of quarters at least of a pretty bad performance. And this is another one of these, these former unicorns, I mean, the stocks down 75% year-to-date, and what, I think one of the broader things to think about, and we, you know, we've had a couple of these side conversations is, a bunch of these companies, they're going to run out of cash. Stitch Fix has got a decent amount of money in the ba-, but in a, in the bank. But another couple of quarters. And that's, (crossover talk), going to be a problem. And as we've, we've also talked about a bunch of times, there are a lot of venture investors that aren't touching these deals anymore. And you know, now they're in the public market, and you know, do they end up needing to be acquired, which brings me to the second story of the wobbly unicorn corner. Purple Mattress', which is, many people may know. Casper is another one of these sorts of, -
Michael LeBlanc 16:27
Yeah.
Steve Dennis 16:28
New, new age, new wave disruptor brands, -
Michael LeBlanc 16:39
There were a lot I know, I, I had, had the opportunity to interview their former CEO, Joe Magigo, who was brought on to try and turn them around. I think they're Utah based, and they had, -
Steve Dennis 16:42
Yeah.
Michael LeBlanc 16:43
Some proprietary tech, and it looked pretty interesting, right?
Steve Dennis 16:50
Yeah, well, for a while they were kind of the outlier. You know, I used to point to them, you know, really in contrast to Casper, because I thought Casper was always pretty questionable and was kind of swinging for the fences. And Purple was actually making some money and growing nicely, and they seem to be more focused on profitability. And now they've, they've hit a wall as well. And I think two things are going on, again, there's the, like, how big a business. How many beds in a box or innovative mattress is, you know, -
Michael LeBlanc 17:14
Yeah.
Steve Dennis 17:15
Does the world need it? I think they also got hit by the kind of forward buying or pulling forward of, of demand. So anyway, there's a, they are allegedly being pursued by a financial investor, but their stock prices have collapsed quite a bit. So, I think, you know, we talked recently about not only a potential, a lot of management changes, because some of the investors are going to get tired of these, these founders promising returns that now, you know, 12 to 13 years in haven't materialized.
Michael LeBlanc 17:44
Yeah, yeah.
Steve Dennis 17:46
But also, I think, you know, there may be prices that are, make them very attractive as acquisition candidates. And so, -
Michael LeBlanc 17:53
Yeah.
Steve Dennis 17:54
Whether it's a financial buyer or a strategy buyer.
Michael LeBlanc 17:52
Yeah. Let's get on to our great interview with Tim Simmons, SVP, Product Officer from Sam's. But first, a message from our presenting sponsor.
Michael LeBlanc 17:57
MarketDial is an easy-to-use testing platform that emboldens great decisions leading to reliable, scalable results. With MarketDial, you can be confident in the outcome of your in-store pilot initiatives before rolling them out across your fleet. In a challenging retail climate of supply chain disruption, labor shortages and dynamic customer behavior. The need for reliable insights has never been greater. Validate your remarkable ideas with MarketDial’s in-store testing solution. The proof is in the testing. Learn more at MarketDial dot com That's marketdial.com.
Steve Dennis 18:33
Well, Michael and I are excited to welcome Tim Simmons to the Remarkable Retail podcast. Live, from Las Vegas. Welcome, Tim. How are you?
Tim Simmons 18:41
I'm doing great. Thank you. It's great to be here.
Steve Dennis 18:43
Now, I think we're catching you hot off the plane. But right before you go on stage is, -
Tim Simmons 18:48
Correct, -
Steve Dennis 18:49
Is that right?
Tim Simmons 18:51
That's right.
Steve Dennis 18:53
All right. Well, before we get into the, the heart of the matter here, maybe we'll just ask you a little bit about who you are. Tell us a little bit about your personal and professional journey. And then we'll, we'll talk about what's going on in the world of Sam's Club. That's a pretty big transition, you and I actually briefly met quite a number of years ago, when you were in the agency world. Just, I guess, maybe two background questions. One, just maybe remind, because we do have some listeners that are in countries that don't have a Sam's Club. So, maybe just quickly give everybody a sense of, you know, about the breadth and scope of Sam's Club? And then that transition, how's that? How's that been from, you know, the agency world to, as I was joking around getting a real job?
Tim Simmons 19:03
You bet. I'll try to be concise. I, I was prior to Sam's Club. I've been at Sam's Club for seven years now. And prior to that, I had stints in advertising agencies, in management consulting, a long career in data driven marketing insights, as well as technology enabled experiences. And so, when I came to Sam's Club, seven years ago, I came into the membership and marketing. It made sense, that was just a natural step in, -
Steve Dennis 19:27
Sure.
Tim Simmons 19:29
To the company. And within about 18 months, there was a leadership change, and I got asked to join the operations team. And I thought you guys were crazy. I thought I'd never operated in brick-and-mortar retail in my life. But it was, it came with an interesting little twist, which was well we want you to run transformation and innovation and some of the thinking behind that was that they wanted the fresh eyes (inaudible) approach to what we're doing in the clubs.
Tim Simmons 19:48
And at the time, we didn't really have dedicated software engineers at Sam's Club. And so, what we did was largely independent of software development. We did a lot of process change, work with equipment, you know, in, in, rolled out self-checkouts to scale, -
Steve Dennis 19:55
Right.
Tim Simmons 19:56
etc. and then after a short period, we realized what we could do with software. And we started to form an engineering and product team at Sam's Club. And it wasn't long after that they said, what you're really doing is product management, we want you to move into it. So, that's what really got me into the space that I'm in right now. Yeah, so Sam's Club formed in 1983, by Sam Walton, obviously, the founder of Walmart. So, we are a, a division of Walmart. And we are a warehouse model. So, we call our stores clubs. So, you'll hear me refer to them as clubs. We have just under 600 clubs, nationally in the US. The Sam's brand is also active in Mexico and China. The work I do largely is in the US.
Tim Simmons 20:34
You know, we have a growing membership base who is a membership model. So, our members pay a member-, annual membership fee. And that gives them access to the club, to great prices, great items at very low prices, as well as for our Plus membership, other benefits, like some cashback benefits and great pharmacy benefits. So, that's, that's, Sam's Club in a nutshell. And the, the transition over, it was really interesting, you know, at first, advertising agencies at a fast, fast pace, that environment is crazy. And clients are very demanding, even more so than now. And so high pressure, intense fast pace is what I described. And when I first got to Sam's, it was kind of the opposite. It was, it was actually a little bit slow for me.
Steve Dennis 21:46
Yeah.
Tim Simmons 21:47
And it took some getting used to. But I think what happened with Sam's Club over the last seven years is a fantastic transformation. Where I feel like we're now a little bit in that fast-paced environment on the software development front and on some of the innovative experiences that we're creating for our members.
Steve Dennis 22:44
Yeah, yeah. So, you are about to get on the stage. Can you give us a little bit of a preview of some of the things you're going to be talking about and showcasing?
Tim Simmons 22:54
Yeah, I think one of the things I want to talk about is innovation. So, I'm excited to talk about that and, and the journey in the transformation that we've been on. I think they're also interested in hearing, what are we seeing with consumer behaviors, especially in this environment in this high inflationary environment? And, you know, what are, what are some of the trends? And how are consumers responding to the different offerings that we have to the different, you know, ways you can shop at Sam's Club, and maybe even comparing, a little bit, to the pandemic world to this inflationary world? Because -
Steve Dennis 23:21
Yeah.
Tim Simmons 23:22
They're dramatically different? And what does that look like for us? So, I'm pretty sure those are topics that will come up.
Steve Dennis 23:34
Okay.
Michael LeBlanc 23:35
Well, it's super interesting. Let's, let's pull on the thread of innovation. I'm curious about the tradecraft of innovation. I mean, Sam's as you said, you know, when you got there really, in your, in your lens, picked up that pace of innovation, Walmart, you know, really, when I think of Walmart, now, I think of constant iteration and innovation. But let's peel that back. Let's talk about the tradecraft. How does that, how does that come about? From a whiteboard into the stores at scale? I mean, that's the thing that really interests me, because your scale is so immense, you gotta be you know, once you lea-, let loose, whatever you've had in the workshop, it really gets pressure tested, right?
Tim Simmons 24:10
Yeah, it sure does. I, I, I think the best way to describe it is, we have what I would call a main current in terms of a way of working around innovation in particular, and we have different types of innovation. So, I would frame it this way, I would say, we have what I call five years of innovation. And that's the space where we, we want to play in but we're largely experimenting, we anticipate lots of failure there. We anticipate that that's a learning experience. We have innovation that we do that I kind of call the everyday innovation, which is the problems that we're solving, and we look at the products that we're developing and the product roadmap. We expect our teams to innovate against the everyday roadmap as well. In other words, don't go solve that problem the way everybody else has solved it. Let's solve that problem in a way that is unique to us, unique to our brand and unique to the fact that we're a warehouse membership model, which is very different.
Michael LeBlanc 25:05
Yeah, yeah. Very engaged, very engaged shoppers, right.
Tim Simmons 25:05
Exactly.
Michael LeBlanc 25:06
Very engaged members, right?
Tim Simmons 25:08
Yeah. So, in, in all of them, we follow a very well-known product management lifecycle, right. Where do we start with okay the strategy, or what is the problem we're solving here? We, we really expect our teams to sit with the problem, fall in love with the problem. Don't just take a, I want X, I want biometrics, right, I want to pay with a palm read or pick, pick your solution that might get you know, I want augmented reality in your club, I want virtual reality in your club, we always step back and ask the five whys. Why do you want that? Well, because we're seeing it going on elsewhere and we want to be an innovator. Okay, why is it going on elsewhere? We, we asked the five whys, -
Michael LeBlanc 25:58
That's interesting.
Tim Simmons 26:00
We make sure we fall in love with it. Then we do what I call triangulation, which is we surround the problem with data. We look at transactional data. So, the quantitative data that we've got, we'll look at observation. We have UX researchers that will go into clubs and almost ethnographic like, observation on whatever the problem is that we're studying. And then we also will just test, iterate and experiment with low fidelity prototyping.
Michael LeBlanc 26:20
All right, Interesting. Low fidelity prototyping, that's an interesting term.
Tim Simmons 26:24
Yeah.
Michael LeBlanc 26:25
You know, as, as an organization, you ostensibly particularly some of the small retailers listening have ostensibly unlimited resources, which doesn't mean, you have a free rein to spend money. So, how do you pick and choose? Is it, this is table stake versus this is a differentiator and you've, you've articulated about the timeline, you know, farther out, we're more experience-, and more experiential, shorter in we got to solve some real issues that we're seeing on the, on the store floor, right. Is that, talk about that for a bit?
Tim Simmons 26:51
Yeah, you bet. You know, it's one of the, it's honestly one of, the, in my role as the Chief Product Officer. It's one of the toughest parts of my job. How do we arbitrate really important and valuable resources like software developers? Software Engineers, right?
Michael LeBlanc 27:00
Right, right.
Tim Simmons 27:02
We, we have a couple of things. So, for things that are five years out that were just like, okay, metaverse, we think that's coming out as, -
Michael LeBlanc 27:09
We should pay attention to it.
Tim Simmons 27:13
We should pay attention. I'll have, we have a team that we call, I named, Network 32. It's, it's a name that we picked up from the book Loonshots, which for me, the premise of that book was about, make sure you structure for innovation, which is why we have this team that's looking five years out. So, as those things come our way, we just expect them to look into it, experiment, learn, etc. We don't do tons of prioritization there. But, you know, if we do have to make a tough choice that will kind of come down to me and my colleague, who's our Chief Technology Officer, and we'll say, what makes the most sense.
Michael LeBlanc 27:53
It's kind of that far out what data you're going to pull from the metaverse.
Tim Simmons 27:59
Exactly.
Michael LeBlanc 28:00
I don't know, yes, no, there's no data. It's just the kind of paying attention to it, kind of thing. Now, th-, the, these ideas are these problems. Do they come out of the consumer, out of the store operators. I mean, you were an operator yourself. So, you kind of have a sense of that. So, is, is there a blend of those two things?
Tim Simmons 28:11
They come from everywhere. Honestly, -
Michael LeBlanc 28:15
All day long, 24 hours a day?
Tim Simmons 28:19
They do, they really do. They come from my peers on the executive team. So, the, the, the executives who run parts of the business, it could be our Chief Merchant Officer could be our Chief Membership and Marketing Officer. They come from their teams as well, they, they also are trying to drive a fantastic member experience, or, you know, a fantastic experience with quality items.
Tim Simmons 28:33
And they all have needs from a technology perspective. So, they come from there, they come from our members, we get member feedback, we have robust member feedback. And so, we will analyze that we'll study we'll look for trends in that, yes, we get it from we've made it as easy as we could possibly make it for our associates in our clubs, our operators to give us feedback, and to give us ideas and to tell us what's broken and what's not working. So, they really do, they come from everywhere, and they come constantly. And we have a prioritization framework that basically lines up to our strategy as a company. And when we can see a business case that's modeled on a need or an idea or a request that's aligned to our strategy, it'll make its way onto our backlog. And as we go through prioritization, we it might, -
Michael LeBlanc 29:28
Investment impact kind of thing, that, that, that sort of thing.
Tim Simmons 29:31
Exactly. Yeah. And if it doesn't align with the strategy, you know, we'll still capture the idea, but we probably won't look into it closely, at least not for now.
Michael LeBlanc 29:40
What I like about your data is you've got both customer behavior and both articulated and expressed. In other words, since everyone's a member, you know exactly what's, what's going on.
Tim Simmons 29:45
Yeah.
Michael LeBlanc 29:46
Let's tap into the question, around, that you're going to be addressing on stage about inflation. I mean, for all of us, it's really not quite a first in a generation. You know, we've had some. I've had some experience with it, but not as operators not like this right. So, how are you, you touched on it already? How are you thinking that's going to impact the consumer and how it's going to impact your work?
Tim Simmons 30:09
Yeah, it's really interesting. You know, if you think about it, I like to compare and contrast it to the pandemic, when the pandemic came, we all went to virtual work, our roadmaps and our priorities dramatically changed. Like the entire roadmap got thrown out. And we said, we're going to do curbside pickup instead. I mean, there were major pivots like that.
Tim Simmons 30:32
With inflation, in this environment, we've seen some changes, we've seen some things that they said, you know, let's get that one first, because that's going to help with costs, that's going to help with the P&L. So, we've seen a little bit, but for the most part, no big major pivots. Our roadmap is largely still the same. It makes me think of a, of a quote that is attributed to Sam Walton from 1991, when he was asked about the recession at that time, and he said, "Yeah, you know, I've thought about it, and I've decided not to participate". And I love that quote, and I think we're, we’re, we resembled that a little bit,
Michael LeBlanc 31:03
Sure.
Tim Simmons 13:04
This year, we've certainly had some changes because of the inflationary environment and, and needing to protect our P&L. But at the same time, our main strategy about being member obsessed, removing friction from member experiences, and optimizing things like curbside, like delivery from club, those are still our top priorities.
Steve Dennis 31:24
Tim, I wonder, I kind of go back and forth on this, because for a while, I used to say that the pace of change just keeps accelerating, you know, it's more exponential than linear, whatever. But then you have things like the pandemic come along, and you can even argue that inflation kind of comes out of nowhere. Do you feel like you've got to be fundamentally more adaptive or agile in the way you plan for innovation now?
Tim Simmons 31:48
Absolutely. Yeah, yeah.
Steve Dennis 31:48
And how do you do that?
Tim Simmons 31:50
Yeah. I like to refer to it as turbulent times. And I think the turbulent times are going to stick with us. If I, if I, look out on the horizon, I just, I see continued turbulent times. I think, if you are not structured in an agile environment, in an agile way, it's going to be tough, right? It doesn't matter what great strategy or idea or concept you have around, hey, how to lead during turbulent times. If you don't have the, the kind of core underpinning structure of how an agile company works, I think you're going to be in trouble.
Tim Simmons 31:36
So, for example, as, as, we work with our 1000s of software developers and our hundreds of product managers, everything we do is based on agile methodology and agile framework. We won't plan out more than, say, two months, well, we'll have outcomes that we want to achieve for the year, we'll, we'll say, yeah, we, these are the things we want to deliver this year. These are the goals we want to hit this year.
Tim Simmons 31;41
But the how and the specific features or releases that we plan, we'll only plan about two months out. And as we look at those, you know, as we look at the backlog, and we look at, what all the possibilities of what we could do, we, we have the environment as our context, right. And so, we're making choices for this month and next month in terms of the actual sprint's, we'll take on. So, without that core operating, agile operating structure, I think we'd be really challenged to be agile in a more strategic way given, given the environment.
Steve Dennis 33:27
But that, I imagine you could tell me if I'm right, that that's a pretty big cultural change, right from a few years ago.
Tim Simmons 33:33
Absolutely.
Steve Dennis 33:34
How has that gone? How have you guys driven, driven that so successfully?
Tim Simmons 33:38
Yeah, that's a, that's a long story. Because (crossover talk).
Steve Dennis 33:41
Stay tuned for part two, -
Michael LeBlanc 33:44
That's right. We'll, we’ll be going for three or four hours.
Tim Simmons 33:48
Yeah. I, I guess the way I'd say it is this, we, we used to bre-, be more waterfall project oriented without question. That's the way the company was when I joined. As we started to build an engineering team. And as we started to stand up by the product management team, we brought in some really good talent, my predecessor did a really good job of saying, look, what is the product mindset? And how do we get that at Sam's Club? And we restructured not only the way we planned, but we also restructured how we work in teams. So, now we work in, in a team that we call the experience team. And that was very purposefully named, we want them focused on the experiences that we're building for members and for associates. And sometimes even for our home office associates, like our merchants, or our finance partners, for example.
Tim Simmons 33:49
And that team consists of a cross functional, it's got a UX and design, it's got engineering, it's got product, it's got business leads, sometimes analytics, legal, etc., whatever is needed. And we work in a way that's very collaborative. And we all pull together along that product lifecycle that I talked about. It wasn't smooth and simple at first, I was on the business side at first. And I was sometimes saying, where are these product people in my meetings? And why are they here? And what are they doing, right? But it didn't take long to see the value they brought to the table, you know, it didn't take long to see them coming back with insights about what it was we were about to go do that said, that might not be a very good idea.
Michael LeBlanc 35:37
Interesting.
Tim Simmons 35:38
And it was really valuable to hear them talk about the concept of a minimal viable product and getting to MVP as fast as you can. So, you can learn in an iterative way. I mean, would you rather learn fast for little costs? Or would you rather learn slowly for big costs? It's kind of in my mind what it boils down to. And so, I just saw the value inherent in what they were bringing. And when those experienced teams’ gel and really collaborate that way. It, it broke down all the silos, and it broke down the waterfall mentality. And it really turns into an, an agile environment. It's been, it's been a really fabulous journey to be a part of.
Steve Dennis 36:03
I find it really interesting, because I feel like it's such a big, we've talked to a couple of other, other companies and, and some of the research I'm doing for a new book about this kind of shift to this product mentality, which is I think, not what most retailers we're doing, still aren't doing. Is there any advice you could give our audience, you know if they want to pursue this is agile methodology, product focus? How do you even get started? How do you make the case for it? How do you get the organization moved in that direction?
Tim Simmons 36:33
I think if you're, if your CEO is not bought in, I got this question last week at a, at a different interaction that I was having. And when I think back on it, I think about the two CEOs that I've worked with since we started this journey, both were very supportive. Kath McLay, our current CEO, is extremely supportive of this. So, I think you do need that top, -
Steve Dennis 36:50
Yeah.
Tim Simmons 36:51
Buy in, you need your leader to be saying this is important to us. And it's important enough that culture is built. Yes, in the values and yes, in the big statements, but culture is my opinion and is also built in what I like to refer to. Well, it's not my reference, I learned this from Frances Frye, she, she called it Scooby snacks, right. So, the things that you award, -
Steve Dennis 37:20
Finally something I'm really understanding, (crossover talk).
Tim Simmons 37:22
Yeah, I love that one and it's a great, it's a great metaphor, though because it's the things you like, say, Hey, good job. Or it's the things that you say, you know, that's not how we do it around here.
Steve Dennis 37:29
Yeah.
Tim Simmons 37:30
It's those Scooby snacks that you give out or you pull back that kind of helps create that, that culture. So, it's a combination of top down. So, my advice would be to sell your leadership and get your executive team on board, make sure they understand it, make sure that they back it and get what you're trying to do. But then I also think it's about now going to build that infrastructure, the ways of working, and your process and methodology and approach that enables it, -
Steve Dennis 37:48
Yeah.
Tim Simmons 37:49
And give lots of Scooby snacks along the way in the right direction.
Steve Dennis 38:03
Yeah, I love that. So what's, what's next? Is there anything on the horizon that you can share with us? That's not the people in Minneapolis or Seattle are not going to steal from you?
Tim Simmons 38:16
Yeah, you know, I think our, our, one of our flagship products is our Scan & Go app, right, where, for those who don't know what it is, it's an app that members can log into, they can put a form of payment into it. And as you shop, you scan your items, when you're done, you check yourself out, you pay, and you simply show a QR code at exit, so that the greeter can simply verify your transaction. It's brilliant, it has like 90 NPS members, love this, right? And we continually optimize it. Just when you think, hey, we're there, scanning goes there, you say, you know, members want to now order cafe food on the Scan & Go app which wasn't there before.
Michael LeBlanc 38:44
Right.
Tim Simmons 38:45
Members want to do multiple transactions where you know, I want this part on this credit card, this part on that credit card. And so, we're just constantly optimizing it, I think you'll see us continually improve that experience. It's just a member's delight. And we want, we want to just keep going right. We'll continually optimize Last Mile, everything having to do with convenient access. So, curbside delivery from our clubs. We're really still in our MVP for delivery from Club. We're leveraging the Walmart Go Local network of drivers. And we've learned a lot in the first two quarters of the year. And we're about to go bigger with it, with our members and move on from MVP to a core offering. So, you'll see us constantly improving anything to do with convenient access anywhere where we see member friction. You'll see us chipping away and trying to make that simple and smooth. So, those are the main things I'd be pointing to.
Steve Dennis 39:52
Awesome.
Michael LeBlanc 39:53
All right. Well, Tim, thanks so much for joining us on the Remarkable Retail podcast here at Groceryshop 2022. It is a real treat just listening to you. You know, you got the, the neurons firing, it's fantastic tradecraft around innovation. So, congratulations, much continued success. Good luck on the stage, break a leg.
Tim Simmons 40:08
Thank you.
Michael LeBlanc 40:09
And thanks again for joining us on the podcast.
Tim Simmons 40:12
Thanks so much. It's been great to be here. Appreciate it.
Michael LeBlanc 40:14
If you like what you heard, please follow us on Apple, Spotify, your favorite podcast platform. So, you can catch up with all our great interviews, like our discussion with Seth Godin on what retailers can actually do to fight climate change. New episodes of Season 5, presented by MarketDial, will show up each and every week. And be sure to tell your friends and colleagues in the retail industry, all about us.
Steve Dennis 40:34
And I'm Steve Dennis, author of the bestselling book, ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’. You can learn more about me, my consulting and keynote speaking at stevenpdennis.com.
Michael LeBlanc 40:48
And I'm Michael LeBlanc, Consumer Retail Growth Consultant, keynote speaker and producer and host of a series of retail trade podcasts including this one. Plus, the host of the popular YouTube cooking show, Last Request Barbecue. You can learn even more about me on LinkedIn or at meleblanc.co.
Safe travels everyone.
SUMMARY KEYWORDS
Steve, Michael, Tim, Sam’s Club, innovation, talk, big, Stitch Fix, problem, people, retail, members, store, business, brand, interesting, Walmart