This week we present our first ever encore episode. We open the vault to extract a seminal recording from our first season, released in the fall of 2020, where we discuss some of the key concepts from Steve's best-selling book Remarkable Retail: How to Win & Keep Customers in the Age of Disruption. In a wide-ranging conversation we explore the key factors that have created the great retail bifurcation, the collapse of the middle and why choosing to be remarkable is increasingly the only choice.
“The problem is, you think you have time.”
- Carlos Castaneda, Journey to Ixtlan
This week we present our first ever encore episode.
We open the vault to extract a seminal recording from our first season, released in the fall of 2020, where we discuss some of the key concepts from Steve's best-selling book Remarkable Retail: How to Win & Keep Customers in the Age of Disruption. In a wide-ranging conversation we explore the key factors that have created the great retail bifurcation, the collapse of the middle and why choosing to be remarkable is increasingly the only choice.
We start by unpacking why it's probably later than you think, the importance of understanding the difference between table stakes and differentiators, the challenge of slow motion crises, and more!
In the second part of the episode, we lay out the strategic choices companies are compelled to make, the importance of decisively picking a lane and why it's so critical to choose remarkable. Then it's a quick overview of Steve's "8 Essentials of Remarkable Retail" framework. We also discuss how to best apply the framework and prioritize turning ideas into action and reveal our gift of prophecy by warning about the excessive valuations of digitally native brands.
Thanks to our presenting sponsor, MarketDial!
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Valid for Retailers and Brands only, use code RBR1950 to access our special rate / ticket price is $US1950. Offer code expires 9/22/22.
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 00:06
Welcome to Remarkable Retail podcast Season 5, Episode 8, presented by MarkeDial. I'm Michael LeBlanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:14
And Steve, you're back or you never left, you're in my backyard again, (crossover talk), -
Steve Dennis 00:17
Still, I have right, I have not left, -
Michael LeBlanc 00:18
Has not left, a little bit of R&R for both of us. So, a very special episode. It is an encore episode as we go back in the vast catalog of our podcasts and, (crossover talk), -
Michael LeBlanc 00:31
Going deep into we took the elevator down five levels to the subterranean vault that houses Season 1, -
Michael LeBlanc 00:38
Season 1, (crossover talk) -
Michael LeBlanc 00:39
Yeah, so for newer listeners Season 1, we essentially walked through each chapter of my book, ‘Remarkable Retail’. Sometimes with guests, sometimes with not, and this particular episode is the one called Choose Remarkable.
Steve Dennis 00:39
of the Remarkable Retail podcast, -
Michael LeBlanc 0:47
Which is, which is I, I think, (inaudible) and the numbers are, you know, we continue to get listens from all seasons actually, it's really interesting to watch the numbers. And when we started talking about the idea of an encore episode, you immediately came to one of the ones in one of the episodes in Season 1 that really kind of deserves, if not more airplay, because it's already had lots of airplay, it really is an anchor episode talk about the one that you, you, (crossover talk), -
Steve Dennis 01:19
Which is where I kind of pivot and make really the case for why very good, is not good enough anymore, and kind of set up some of the principles for the rest of the book. So, it'll be some a reminder, for some of them, but other people will be new material. And so, yeah, we're going to take a little time off and you get to hear and compare how much at least I've improved. Michael's always been good, but I think my, my on air performance is a little bit better.
Michael LeBlanc 01:43
Yeah, so it's bound to sound a little different. We all got, we got new tech for both of us, (crossover talk), -
Steve Dennis 01:46
Yes, upgrades, -
Michael LeBlanc 01:48
But it is one of those key foundational I mean, the whole first season was a key foundational season. So, let's go back in the back catalogue. Now before we get to that, let's hear from our presenting sponsor.
Michael LeBlanc 01:59
MarketDial is an easy to use testing platform 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 MarketDials in-store testing solution, the proof is in the testing. Learn more at marketdial.com. That's marketdial.com.
Michael LeBlanc 02:29
Let's first of all go back into the core principles. So, you know, without getting too far in, tell us what in your mind are those core concepts of the book those core principles that people should have, you know, keep in mind and have handy and really provide, again, the framework for understanding the eight essentials.
Steve Dennis 02:54
I probably won't cover all of them. But really what I tried to do in part one of the book was make the case that you have to choose remarkable, and some of the underlying reasons for that are just what you had to understand to for me to try to get you to that conclusion is, first of all, there's been this epic revolution across really the last 15 or 20 years where technology's accelerated consumer behavior has changed radically, the force of the various forces of competition have really been up ended. And of course, all of this has been made even more dire or complex, accelerated, whatever you want to say it by, by the pandemic.
Steve Dennis 02:54
So, we have a world that has been turned upside down. And we have all these forces that have been at play for a while, dramatically accelerated as it relates to the retail playing field. I guess, you know, you and I have been, I think (inaudible) as well as others have been fighting a little bit of this retail apocalypse narrative, but certainly there's been a big reset in the amount of retail space still going on. Some of that is due to overbuilding. Some of that is because certain categories like apparel, and department stores have been very, very challenged. And so we've seen this so called collapse of the middle among unremarkable retail formats, we've seen a lot of shifts in terms of retail or wholesale relationships, just in general, I think, kind of a bifurcation of outcomes among different income classes, and both classes and so forth.
Steve Dennis 04:27
The, the other thing that I think is definitely a big part of the book, and we'll certainly talk about more as we go forward is, is this idea of the blurring of the lines between shopping channels, that the distinction between eCommerce and brick and mortar is really not much of a difference in most cases, and that we have to think about it as all commerce and that the customer is the channel and that's again, been accelerated by the pandemic but it's been there for, for a while and I think the retailers that have performing better really embraced that notion a few years ago.
Steve Dennis 05:04
Probably the last one I'll, I'll mention for now is trying to disabuse folks of the notion that you can cost cut or store close your way to prosperity, that that's not to say that you shouldn't close stores, or you (crossover talk), -
Michael LeBlanc 05:20
You should lead (crossover talk), to do whatever there are, (crossover talk). Everybody's there's lots of decision we were just talking off mic about in Toronto, I was looking at a statistic in this I'm sure it reflects itself in many major urban cities with lots of workforces that come and go into a downtown or a core.
Michael LeBlanc 05:35
There's something like 400,000 people in the Toronto area that come into the downtown core service people, workers, and now that's at 10%, 10% of that volume today. Now, it's probably not going to stay at 10%. But it's hard to see it going back to 100%, post-COVID. And then what does that mean? Like, as you said, you know, you're probably going to need less stores downtown. I mean, that's, you know, that's not a improve my brand situation, that's just the da-to-day, where should my stores be? And how big should they be? And all those kinds of things, right?
Steve Dennis 06:03
Yeah, and I know, we touched on this a little bit with the last episode that I think generally, what we've seen is that if you're closing, a lot of stores or finding that you have to really gut your cost structure, not, not in response to the pandemic. But that's been a path you've been on for a while, which is certainly true of dozens of retailers, we could probably name off the top of our head, if that's the path you've been on, it's probably the case that you have a brand relevance and differentiation problem, much more so than you have a cost problem. It's just you haven't figured out how to grow share of wallet and market share. And you basically have run out of options. It's largely a downward spiral if we don't fundamentally figure out how to become more remarkable.
Steve Dennis 06:45
So, as I as I try to land the plane, so to speak, at the end of part one, what I'm trying to drive towards is this idea that even very good is not good enough anymore. When consumers have so many choices at their disposal, so much information, so many ready substitutes, essentially, for the vast amount of things that, that they're buying. And so, you really, it really puts pressure on retailers and brands to up their game to be, as I say, remarkable. And I think it's become, I think it was certainly pretty clear pre-pandemic, that this was becoming much more of an imperative.
Steve Dennis 06:47
But I think as we come out, and hopefully more or less, we start to come out, in the not too distant future, as we come out of this, you know, the playing field will be reset in a lot of cases, because of store closings and bankruptcies and shifting consumer behavior. But still, it's going to be the case that in most places, you're going to have a lot of competition and a lot of the power will rest with the consumer and you still have to figure out how to be that signal amidst all the noise that and you know, create a story for customers that don't want to spread.
Michael LeBlanc 07:54
So, along those same lines, I, I you know, flipping through the one of those chapters, you talk about you talk about the idea that it's later than you think basically. I used to have this saying with my team was more tongue in cheek than real, but every now and then it was realistic as it looks and it's never too early to panic. You know, not that we panicked a lot on a day to day basis. But, but as you say the time is always later than you think and, and to provide some context for that you provide the readers and, and the listeners with you'll provide the listeners (inaudible) questions. Five or four questions that they should be asking themselves about their business as we kind of transition into the eight essential then then I'm going to ask you just to kind of brief briefly go over the eight essentials and help you understand the difference between differentiators and, and, and table stakes. But what are these, the four things that retailers should be should be keeping in mind as they think about part two?
Steve Dennis 08:47
Well, before I do that, there's a quote that I have in the book that I love, which is from Carlos Castaneda in his book, ‘Journey to Ixtan’, where he says, "the problem is you think you have time". And I think again, pre-pandemic, there are plenty of examples of companies that I don't know if they thought they had enough time to catch up or what, but clearly, the customer the world has gotten away from them. And I think that is a function of, of disruption happening faster and faster, all the time.
Steve Dennis 09:21
But what, what I try to frame up as we wrap up part one, are these four questions which I suggest that people keep in mind broadly as they think about their strategies, and in particular, if they're reading the book.
Steve Dennis 09:35
The first is, could the pace of disruption be about to hit your business even harder and more profoundly than you currently can imagine? And again, as we've talked about a bunch of times, I wrote this book before the pandemic, so I didn't have a pandemic in mind. So, -
Michael LeBlanc 09:49
In the in the simple halcyon days of pre-pandemic, we just had a retail apocalypse to deal with, -
Steve Dennis 09:53
Yeah, exactly, exactly. So, -
Michael LeBlanc 09:55
We'll look we'll look back fondly on those days.
Steve Dennis 09:57
Yeah. So, you know, I couldn't really couldn't imagine some of what's transpired. But I think, you know, again, is those things hopefully recover a bit. I think these questions will still be important.
Steve Dennis 10:10
But the second one is, could your current value proposition not be nearly remarkable enough to fight and win in the future? This gets a little bit too something I've said many times, which is, is making sure that you're not just a slightly better version of mediocre or, or comfortable that even being very good is really good enough anymore.
Steve Dennis 10:28
The third is, could your organization not be changing significantly or quickly enough? And I think one of the things we've seen is, and this is not an original point, that a lot of innovation is hampered by a culture or lack of processes around innovation, funding, those, those sorts of things, I think, with the COVID-19 crisis has taught us, again, something I think that was there. But even more important now is just how you need to build agility into your business model.
Michael LeBlanc 10:58
Comment on that, as I've been talking to elite business leaders, as they never realized how agile they could actually be. Decisions, thousands of decisions that needed to be made in a pretty quick amount of time. But the (inaudible) straightforward one that seems to have surprised many is how quickly they could pivot to having all their employees that could off-, work at home.
Steve Dennis 11:18
Michael LeBlanc 11:19
And, and you know, many of them, I talked to one retailer, and they struggled for years with this, pros and cons and, and then it was done in a week.
Steve Dennis 11:25
Michael LeBlanc 11:26
And so, it, it feels like in some ways you get in your own way. But it that was one of the things that they remarked upon, -
Steve Dennis 11:32
Michael LeBlanc 11:33
Was, wow, we really can't be this agile, I wonder how we can capture that lesson and apply it against other things?
Steve Dennis 11:37
Well, once again, is right. The problem is they think they have time. And I think it's really easy to as we've touched on a few times already to defend the status quo or be the department of no or whatever, all these other these I, ideas we've, we've talked about that keep companies from being innovative. But when a crisis hits a real crisis, with so much urgency, it's not so hard for people to take action. I think the broader strategy question. I mean, it's great that if we learn what to do in the event of another global pandemic, hopefully that won't happen again. I think the real question is, how do you deal with a swell motion crisis? Because every company that was in trouble before the pandemic, or just about every company, I'm sure somebody will point out an exception. But you know, JC Penney, right, that has been a slow motion crisis. They have been in crisis for 20 years, it's just on any given day, -
Michael LeBlanc 12:28
Second, longest liquidation sale, -
Steve Dennis 12:30
Exactly, hashtag, (crossover talk), world's second longest liquidation. So, so, I think the, the broader strategy question, really, I mean, how, and hopefully, maybe companies have learned that they can do it if they have to. But the question is, how do you create that importance and immediacy, every day, make that part of your culture, not just when, you know, the buildings on fire to go call the fire department, you know, so, (crossover talk), -
Michael LeBlanc 12:52
How do you get organize your organization around crises that are less intense, but nonetheless, pretty fundamentally important? In other words, they don't feel as intense in the moment, but they could lead to the ultimate demise of market share, or the, or the organization, right?
Steve Dennis 13:08
Yeah. Well, and it points a little bit to question number four, which is without starting to make aggressive changes in the immediate future, will you not only fail to thrive, but actually not survive? And I think what's happening with the COVID crisis has been a lot of folks did, or organizations and their leaders did see this existential crisis, right? It's like, oh, oh, if we don't figure out how to shift more of our business to online, or do work from home, or, you know, go down the list of these things, and like, we don't figure out how to do that now or tomorrow, we can be out of business, but how and I'm not saying you can ever, like keep your organization at that level of urgency for an extended period of time, you would burnout, I'm sure, but how do you get much closer to that, that level of urgency around things that are important but aren't necessarily going to put you out of business tomorrow or next month, but will eventually cause your demise.
Michael LeBlanc 13:59
When it gets to one point that you can include that part of the book with what it's, you know, whether you fight on price or fight on product fight and service fight on convenience? Yes to all those or no to some really, it comes down to making only one choice, right? And that's the choice that you've got to be remarkable because in a world where there's so much abundance of everything, price fighters, lots of product, you know, great service, not so much of that these days, and convenience, you better be something over and above all of that, right. You got to you there's really effectively you say is only one choice to make.
Steve Dennis 14:33
Yeah, I think it's when I've back in the good old days when I did keynote speeches, -
Michael LeBlanc 14:37
Remember those, -
Steve Dennis 14:38
On stages, -
Michael LeBlanc 14:40
Stages, remember those?
Steve Dennis 14:41
I often wou-, violated probably what they teach you in keynote speaker school, though. I've never gone to go to keynote speaker school as people have seen me probably would, would know. But I but I have this big picture of the proverbial fork in the road, which is you know, you've got you've got to pick a lane what, what is really the problem is not committing. You know, that's the so-called, death in the middle. And I think the strategic lane in these very simplistic terms is, do you want to try to go down the path to out Amazon, Amazon or out Walmart, Walmart and be all about, you know, scale, scope, convenience price? Or do you want to forge a different path and for a few companies taking that, that fork towards the more Amazon kind of model may, may be sensible? For most, that's not really a choice, because we're never going to be the low price leader. We're never going to have the kind of scale and supply chain and all that other good stuff, (crossover talk), -
Steve Dennis 14:41
You've, you've got a quote in there from Seth Go-, from our, our guest from Episode 2, Seth Godin who talks about, you know, the problem with the race to the bottom as you might win, or you might come in second, -
Steve Dennis 15:17
Right, (crossover talk), -
Michael LeBlanc 15:37
Great quote, -
Steve Dennis 15:38
So, it's, it's, it's a very big choice to make. So, I think, what I try to switch here, as we're pivoting to part two is to say, okay, look, you have to pick a lane, not picking the lane is almost guaranteeing your, your irrelevance, that slow motion crisis will eventually catch up with you. And 99% of these should probably pick the more, you know, be special, not big competing on price lane, a few, -
Michael LeBlanc 16:15
Steve Dennis 16:16
Work at Costco, whatever, we can find some, some retailers were leaning into that left hand turn is sensible. But for, for most it's going to be to try to figure out how to really narrow your, your customer focus and go deeper on to few things that can really make you remarkable.
Michael LeBlanc 16:32
Well, let's talk about the framework and lay it out for us in the eight essentials of the ones and we're not going to go through them in any kind of depth. But we do have eight episodes ahead where we where we are, and we're going to have great guests, and it's going to be just a pile of fun. We were talking fff mic about the guests coming. The difference between the things that are you just got to do and those things that will make you clearly differentiated in the market.
Steve Dennis 16:55
We talked about, I think, in the initial episode, I developed this eight essentials framework based upon my corporate work, senior roles at retailers, and then over the last 10 or so years, through consulting assignments and, and doing research and so forth. And I found that these eight essentials fit the vast majority of cases. But to your point, six of the eight are increasingly becoming what I would call table stakes. That is, if you aren't pretty proficient at them, chances are, that's a problem for you.
Steve Dennis 17:31
And then the last two are really more differentiators. So, to tick off the six that are table stakes, the first is digitally enabled. And I think this has really become much more obvious in the past six months. But it's this, this idea that so many customer journeys are enhanced by some sort of digital interaction. And obviously that can vary everywhere from being pure eCommerce to the way digital technology is helping sales associates, to the way people are using mobile devices to, to inform their shopping journey. But, but fundamentally, I don't believe it's digital first, necessarily. But I think this idea of, of most shopping journeys being enhanced led, whatever term you want to use, by some form of digital technology is, is critical.
Steve Dennis 18:19
Two is human centered and this is just my twist on customer centricity. And I talk a little bit about why I think customer centricity initiatives have failed. But I think the two bigger ideas in this one is number one, we need to think more broadly in our business model, than, than simply customers that there are other folks that are involved in our success, most notably our sales associates, but certainly vendor partners, the communities in which we operate, and so forth.
Steve Dennis 18:47
But the other part of human centered is to, to really try to get into, for lack of a better term, kind of the difference between left brain thinking and right brain thinking, you know, how do we get emotion more into the equation of how we solve business problems and meet our customer needs? Because you know, the fact of the matter is, sometimes we're very rational and a lot of times we aren't, if anything, the COVID crisis has made this almost more clear, right? Because fundamentally, being safe, right, that's a very, you could arg-, argue that's very logical, but it's also a very just gut, kind of wired, biologically wired feeling that we have to be mindful of.
Steve Dennis 19:25
Three, is harmonized, which is my term for omni-channel where I try to get at that it's less about being everywhere, for every customer as omni tends to point to but it's really about creating this harmonious experience. However, the customer chooses to shop, whatever she might be buying, and have whatever that path to purchase looks like.
Steve Dennis 19:47
Four, and, an you know, I think there's starting to be an argument you could say we're, we're almost one in four could be combined because so many shopping journeys now are informed or involve a mobile device. So, some of that is the, the form in which we engage in our shopping process. But also, it really changes the definition of a best location, you know, the best in our brand is showing up so often, wherever the customer happens to be. And they can be shopping in a nanosecond, basically, if they choose to, and they can go from our store to someone else's store, obviously, in a pretty seamless way and often do.
Steve Dennis 20:25
Five, is personal, it's deliberately not called personalized, that part of it. But it's this idea of really understanding our customers as deeply as we possibly can, and really evolving our business model to be intensely customer relevant. So, I get into a little bit of that kind of customer research, data analytics leverage piece of this, but also things like personalized marketing and, and customized product and curation that's informed by a deep understanding of the, the customer, what makes us relevant.
Steve Dennis 20:55
The last one in the table stakes number six, is connected. Again, this also has a bunch of layers, but it but it really fundamentally is about how we're in this kind of boundaryless world, not only from a kind of supply chain standpoint, and, and devices being connected through the internet of things. But the way we are connected as individuals and tribes through social media and all sorts of other ways, you know, basically facilitated by, by the internet. So, those are the six and yeah, I do have a hard time as I look through now, at lots of businesses of seeing, like, you know, if you aren't pretty decent, at some of these, you're probably falling behind. There certainly are opportunities for some retailers to excel here.
Michael LeBlanc 21:35
So, then we get to the essentials, and of the essentials, the ones that allow you to differentiate. So, tell me about those memorable and radical?
Steve Dennis 21:43
Yeah, so number seven is memorable. And this is the one that probably aligns the best with just the general notion of being remarkable or how people tend to understand it. Um, though, I tried to explain how all eight essentials are part of that equation. But memorable is, is wha-, what is that thing that we do that that story we create for the customer that they tell themselves or they will tell to others to liter-, we-, literally remark to people that what, what are we doing to create that memory and that story, I both explain what I think the components of memorable are. So, those are things like being distinctive, intensely customer relevant, authentic, really, this idea of amplifying the wow, you know, what's really that thing that, that stands out super distinctive, and, and you might share, but then I also go into a lot of different strategies. Because this, this is where it gets harder to apply some of these principles broadly, because in a industry as diverse as retail, particularly, you want to include things like restaurants and other things that are kind of retail-ish. There are a lot of different strategies. So, I go through about a dozen different ways that different companies are, are being remarkable, in some case examples.
Steve Dennis 22:55
And then radical is, is mostly about what it takes to be consistently innovative, to build a culture of experimentation. What are those ingredients that allow you to have a repeatable formula to not only be remarkable today, but continue to be remarkable in the future?
Michael LeBlanc 23:12
So, let's talk about a framework around the framework and the pylon. The idea here, can you imagine a world where folks are listening and they go, okay, in 2021 we will take on human centered, 2022 will take on harmonized, you know, and so forth and so on, you can almost see, you know, people exploding each of those pieces of the pie, so to speak. But you took a different approach. You said, listen, as you're listening to this, here's five kinds of, you know, framework on the framework, as you listen and think about your own context. Take us through those.
Steve Dennis 23:43
Yeah, well, what I guess the general advice I give, and some of this is, it's very hard, kind of, as I was alluding to, before, when you're talking about an industry as diverse as retail, you know, this kind of one size fits all prescription I think, isn't particularly helpful. The other, -
Michael LeBlanc 23:59
If you're if you're running a retail banking product, and you're sitting in marketing strategy, you're not having dissimilar thoughts. So, to your point, I actually see the this framework far beyond just the context of retail, as we all think about selling a good to a consumer, right, or even, (crossover talk), - you'd be, right, (crossover talk), somewhat,-
Steve Dennis 24:15
Yeah, I think if you've got a consumer, certainly if you get a consumer facing business, most of these principles would apply, you know, restaurant, hotel, banking, etc. You know, where you're, you've got the merging of digital and probably some sort of in person experience so, so I absolutely agree. But it is hard to give this kind of one size fits all prescription. The other thing is certainly some companies that may be reading this might be pretty good at a lot of this and others may be really behind, what (crossover talk), -
Michael LeBlanc 24:44
I mean, I've done that I mean there's a bunch of different ways you can do it. But I've done that with clients. And I think, you know, the invitation I talk about at the outset of part two, is to look at all of the eight essentials. And you absolutely could do this with your team on a whiteboard, just list each of them. And then ask yourself or assess yourself on these five questions or, or kind of maturity criteria, I guess you could say.
Michael LeBlanc 24:44
Should rank themselves, Steve? Like, what (inaudible) if you're sitting in a boardroom and you've got your book, everybody's got a copy of their book on there, in front of them in a boardroom and say okay, so should they get out pens and paper or sticky notes and say, who thinks we're out, (inaudible) of a scale of one to 10? Who thinks we're a 10 on the These are a five on these like, (crossover talk), is there a process that you have in mind, -
Steve Dennis 25:30
But number one is how relevant is the particular essential to achieving remarkable outcomes for your core customer. So, you can do that one to five, very high, whatever.
Steve Dennis 25:40
Number two is, what is your current organization's level of distinctiveness on each.
Steve Dennis 25:46
Number three gets to the problem is that you think you have time and then we talked about earlier is, how urgent is it for you to close the gap, if you're behind, or extend or create a lead, if you're more in a parity situation?
Steve Dennis 26:02
The fourth is the degree to which progress on each of those eight essentials, or any of those eight essentials would have a material impact on your results? Because you know, you could be behind and pretty distinct, but it might not be a big lever for your particular business for whatever reason.
Steve Dennis 26:17
And then the fifth, which hopefully helps a little bit with resource prioritization is okay, what's the level of difficulty to achieve the desired impact? So, you can look at that in terms of cost, complexity, capital, maybe you've got some cultural barriers that okay, this is really going to be hard. And so maybe you need to work on changing your team before you prioritize this or getting help.
Steve Dennis 26:38
So, I think, yeah, absolutely. You can go through each of these essentials and, and do an informal ranking. But then I think you can step back and say, okay, where should we start. And I did find a few weeks ago, where we did this exercise, and it was pretty clear, they had two of the essentials to do the most work on those were the things that were the most urgent and had the biggest chance to really make a difference, short term and long term. There are a bunch of others that well, you know, it'd be nice to make some progress. But we only have so many people, we only have so much money, we've, we've got to map out this roadmap. So, so, I think that's really the key, at least initially, is to do a high level roadmap. And that will point you to which of these areas where you really need to do a deep (inaudible), one or more areas where you might need to do a deep dive, -
Michael LeBlanc 27:21
Is there any one of those that you experience amongst your clients, or in your personal experience, the most difference of opinion amongst executives? So, I look at them. And I look at number three, the urgency to close the gap would feel to me like you'd have a very, potentially very big difference of opinion at a table. Is there anyone that, that jumps out at you, as consistently being wow, we, we really got two minds in the same room here?
Steve Dennis 27:46
I don't know that there's one. I mean, I probably would say urgency, if I had to pick one. But a bit, it really varies quite a lot. I mean, I think just in general, and I know we touched on this in an earlier episode, and I go to it, in, in some more depth is, you know, sometimes you'd have you have organizations that just are so internally focused, that they don't even really have an understanding about how dire their circumstances are and what would be involved.
Steve Dennis 28:13
In other cases, you've got organizations that have studied a ton and run all these different scenarios, but they're afraid to pull the trigger on anything. In other cases, their definition of improvement looks pretty easy to them, when you know, if you were to do it from more from a customer and competitive standpoint, you would go like, you know, actually you have a lot more work to do and that's a lot more expensive. You know, I always think it's great to, not that this is an original idea. But you know, there's an aspect of getting your facts in order, right and, -
Michael LeBlanc 28:41
Yeah, yeah, -
Steve Dennis 28:42
Having the clearest view of the situation. But you know, if you can't see clearly, even with all the facts and your organization is not positioned to act then you can still really get, get hung up. So, I think, think it's complex, but I think if you're honest about going through this kind of high level diagnostic, and you ask yourself, where there is disagreement, okay, what is at the root of our disagreement? And can we bring any more facts to bear? Or, you know, just ultimately as the CEO say, look, okay, I've heard, I've heard this, now we're going to go, you know, I mean, obviously, different organizations have different decision making processes.
Steve Dennis 29:18
And the other thing, which is a question you didn't ask, but the other thing, I think that can really help illuminate, you know, whether use the eight essentials framework, specifically or not, is just to do a much, a much better job of customer journey mapping. And I found time and time again, that some of the organizations that are doing very well have been engaged in that work for quite some time. And those that are drifting, or in some cases, in very serious trouble, really haven't done that work. And some of that speaks to whether they are fundamentally customer driven, data driven, etc. But some of that is they haven't been paying enough attention to realize how much (inaudible), and this is not a COVID comment. I mean, that just adds another layer to it. But, but you know, they haven't realized how much customer journeys have changed, you know how many of them may start on a smart device, right? Or how many might start in product search on Amazon, not going to their website or whatever, like there's a bazillion different ways customers journeys have changed. But if they, they think that their, that core customer they've had for years is still shopping the same way, chances are, they're not probably more importantly, the customers they need in the future to acquire or to grow their share of wallet, probably shop a lot differently than the customer that was driving their business three years ago, five years ago, 10 years ago.
Michael LeBlanc 30:40
And the biggest (inaudible) I've experienced in that realm with my clients has been the degree to which they're mobile first, you know, the, the role of mobile, I think is often understated, you know, or at least under appreciated. And, and I, I got a I got one last question on this whole strategic planning process. I've been in two rooms, two different organizations in one room, they really care ranking against the competitor. So, the competitor and lots of competitor analysis, less so on the customer journey. And I've been another room that said, well, I don't really care what competitors do, and we're going to do our own thing. Let's just understand what the customer wants. Is there is there a single truth to that? Or is the is it a bit of approach or should it be a little bit of both? Like, I guess my question is, how important is what all your competitors are doing to your planning using a strategic framework like this?
Steve Dennis 31:30
This whole idea of best practices, which I think is maybe not exactly what you were getting at, but, but you know, there's a lot of effort, and a lot of consultants, pushed the idea of oh, let's, you know, we got to understand best demonstrated practices among our competition, I, I guess I look at that as input that can inform your strategy. But if you're just copying the best practice, it's not necessarily giving you an advantage. Again, it gets a little bit to the table stakes and differentiators, -
Steve Dennis 31:30
First of all, I wouldn't, I would never say it's unimportant not to understand what your competitors and your customers are doing. One of the other quotes I have in the book is that from Henry Ford, who said, "you know, if I'd asked customers what they wanted, they would have said a faster horse". So, (inaudible) aren't always going to lead you to the next great thing.
Michael LeBlanc 32:15
Yeah, yeah, -
Steve Dennis 32:16
That, that can help you understand what's a table stake now, or, or could be in the near future. But it doesn't necessarily get you to that next thing, it's input. Bu, - but I'm a little bit more of a fan of, of human centered design as a way to unlock some breakthrough technology. But all of this has to be done in the context of where what the customer might be ready for, or where, where he or she is moving.
Michael LeBlanc 32:38
(inaudible) some, some, you know, pick a phrase, you know, some the blue ocean strategy, you know, where's there where's there some place to go that is underserved and understanding the market, the consumer and the competitor all at the same time, right?
Steve Dennis 32:49
Yeah, one of the things I think is interesting, and I've been thinking a little bit more about, and I was in a conversation with, with a partner at a big consulting firm about this, is just the degree to which customer segments are fragmenting, you know, for the most part, a lot of the big brands, retailers, you name it over the last few years have gotten there by being really good at kind of serving the peak of the bell curve. Part of what the internet has allowed for and what certain venture capitalists have been willing to find are these interesting little kind of sub-segments, where somebody's taken a very particular problem, and developed an you know, it's still a niche business. And I think what's so what's instructive about that, I think, sometimes for bigger brands is to say, you know, what, is it about this particular brand, you know, is it I don't know, bombas and socks or quip and toothbrushes or something, you know, what is it about some of these brands? What have they unlocked? Have they just picked off 1% of our business? That's all it's going to be? Or is that speaking to a broader trend? And I, (crossover talk), -
Michael LeBlanc 33:55
It's the Warby Parker question, right? It's like, -
Steve Dennis 33:58
Yeah, yeah, -
Michael LeBlanc 33:59
H, - how many people are going to shop there? They've just, you know, they, they, they're still going to buy their eyeglasses where they get their eyes tested, I'm sure, well, maybe not?
Steve Dennis 34:07
Well, that's, I mean, I, I wish I could tell you that I have figured out a precise formula to. So, I have a client that refers to some of these brands as mosquito brands. Like they just they're annoying. And you've, and you've got to sort of pay attention to them, but they're really not going to kill you, (crossover talk), -
Michael LeBlanc 34:20
Do in the tent.
Steve Dennis 34:21
And I think it's hard to know, I mean, I think you can certainly with the benefit of hindsight, look back at some of these brands that were never going to scale above, you know, even getting aside from just the ridiculous amount of money they spend on marketing and so forth. But you, you can say like, that's a that's a $50 million idea, not a $5 billion idea.
Michael LeBlanc 34:37
Casper's always, always brought up in that kind of line of thinking, right? It's like, oh, there's such a big trend, and they're really a small, still a fairly small part of the overall mattress industry.
Steve Dennis 34:50
Well, it's worth I think, getting into what you think the potential addressable market is for some of these ideas and do they get to any kind have real escape velocity? Or do they really impact you that (inaudible) all that significantly. So, I think that's a worthwhile exercise. And, and Casper in particular, I mean, economics in that business are pretty terrible in the way they've gone about it. So, we'll, we'll see what happens there, they can be death by 1000 cuts, too, right? I mean, you could say, if you're the big mattress guys well gee, they're only going to take 5% of the business, if that 5% of the business represents 20% of your profits, that may be a problem, particularly if you are unwilling to compete with yourself, or your response is just to lower your prices to compete, to protect, you know, 5% or 10% of your business.
Steve Dennis 35:37
So, there's a lot of complicated factors, I think, in dealing with these insurgent brands, but again, you know, that gets to really understanding what they're doing. And is that just a mosquito annoying thing? And you don't want to chase your tail? Or is this revealing something about something you have to protect? Or maybe it's a source of innovation, because most of those brands that have that are worth paying attention to that have that have particularly some of these digitally native vertical brands? I mean, nothing prevented a lot of these big companies from creating a competing business, right. I mean, LensCrafters could have created you know, ten years ago, (crossover talk), -
Steve Dennis 36:12
The problem is, I think with, with some of these remarkable brands that actually have enduring properties. And so there's still a lot of things that, you know, is Casper an enduring brand or not, I think you know, you got to be careful that you don't, again, it's just this issue of do you have time or not?
Michael LeBlanc 36:12
And has, right, (crossover talk), -
Steve Dennis 36:32
Because if Warby Parker just to stay with that example, you know, their, their valued now at over $3 billion, you know, we'll see what happens with that with that valuation. But in terms of being an acquisition target, it's gotten pretty rich for some of the folks that might of wanted to acquire them. And if Warby Parker's is going to clear the market on the particular type of customer that wants that, like, the last thing you want to do is just create a Warby Parker wannabe, you know, that'll probably be a waste, and, and just dilute what you're doing with your core business. So, there there's a lot of questions that you have to answer, but it gets back to you know, doing the homework, really accepting what this can mean for your business and then being willing to take aggressive action before it is too late for you to catch up or develop your own fighting brand.
Michael LeBlanc 37:14
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.
Michael LeBlanc 37:34
And I'm Steve Dennis, author of the best-selling 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 37:48
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 meleblanc.co.
Safe travels everyone.
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