Richard Armour is a deeply experienced omni-channel retail executive having cut his teeth at Travelocity and Gamestop. Now he is helping drive the digital transformation for Michaels Stores, one of North America's largest provider of arts, crafts, framing, and more for makers and do-it-yourself home decorators. We dig deep into the evolution of e-commerce, how the blurring of the lines between digital and physical makes everything harder and how Michael's has been able to accelerate its transformation. We also unpack Richard's provocative statement that "everything is table stakes now" and lean how Michael's plans to build on their momentum going forward by maintaining a "test and learn" culture.
Richard Armour is a deeply experienced omni-channel retail executive having cut his teeth at Travelocity and Gamestop. Now he is helping drive the digital transformation for Michaels Stores, one of North America's largest provider of arts, crafts, framing, and more for makers and do-it-yourself home decorators.
We dig deep into the evolution of e-commerce, how the blurring of the lines between digital and physical makes everything harder and how Michael's has been able to accelerate its transformation. We also unpack Richard's provocative statement that "everything is table stakes now" and lean how Michael's plans to build on their momentum going forward by maintaining a "test and learn" culture.
But first we take on this week's news, including Steve's admonition to "Buckle Up Buttercup" in the face of escalating inflation. Then we discuss Kohl's Investor Day presentation, which seems long on ambition, but short on truly being remarkable. Then we delve into recent earnings reports, which mostly point to the strong getting stronger as e-commerce growth decelerates and the continuing struggles of disruptor brands (Stitch Fix, The Real Retail) to get on a glide path to profitability.
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To record a question for us go to speakpipe.com/remarkableretail
Kohl's Investor Day Presentation
Steve's recent Forbes articles related to our news segment
Is Kohl’s New Strategy Merely A Slightly Better Version Of Mediocre?
The Profitless Prosperity of Disruptor Brands
The Stores Strike Back Again. Again.
Past podcast episodes referenced
Why Does It Take A Crisis For Retailers To Innovate?
War Comes to the Global Food Supply Chain
About Richard Armour
Richard Armour is SVP, Ecommerce at Michaels, responsible for all aspects of the ecommerce business, including revenue accountability, content strategy, search engine optimization, product management, analytics & more. His focus is on reducing friction across the digital ecosystem to create a seamless omnichannel experience.
Prior to Michaels, Richard was Vice President, Omnichannel for GameStop where he was responsible for the GameStop.com business and accelerating ecommerce growth and integrating the site and store experience. He led several initiatives including the ecommerce redesign and replatform as well as launching an online advertising platform and program.
Richard holds a BS in Business Administration from the University of Texas at Dallas and an MBA in Marketing and Information Systems from Indiana University. He is also a board member with James Avery.
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 four, episode nine. I'm Michael LeBlanc.
Steve Dennis 00:11
And I'm Steve Dennis.
Michael LeBlanc 00:12
All right, and in this episode, we've got a fantastic guest, Richard Armour, Senior Vice President, eCommerce at the Michaels company. Now you put Richard on my radar screen, how did you know of Richard?
Steve Dennis 00:24
Well, we connected a while back on LinkedIn, I don't even know that I remember, remember exactly how, but Richard's kind of like you and I in that we have been at this eCommerce multi-channel thing for you know, a couple of decades. So, in addition to Michael’s being a really interesting company, I just love talking to folks that have been at this for a while and can kind of give a perspective of, of how we got here. And kind of,
Michael LeBlanc 00:52
Yeah.
Steve Dennis 00:53
Help separate what's, what's real from perhaps what's just kind of those, those famous clickbait headlines. So,
Michael LeBlanc 00:58
Yeah, real, a real veteran, everyone's going to enjoy the conversation. And, and what I found so interesting, amongst other things is how ready, so to speak, they were for the implications and the impli-, impact of the COVID era, like they were going already in the direction of, of many of the things that you and I talk about. So, anyway, we'll leave that for the listeners.
But first, let's talk about news of the week, you sent me this note, "Buckle up buttercup", which is all about, wow, inflation numbers are, you know, inflation in the US hit, what is it, a 40 year record. And of course, we have the dark, dark cloud, above all our heads right now of, of the Ukraine war. So, there's a lot going on.
Steve Dennis 01:41
Yeah, I think, coming into this year, we certainly knew inflation supply chain, you know, there is going to be some narratives that we're just going to be with us for quite some time. So, that's obviously very challenging. But yeah, we're starting to move into, I think, a whole new era here with, with the implications coming out of the, the war in Ukraine. So, yeah, it's going to be it's, it's going to be really interesting to see how this plays, plays out.
Yeah, you know, the other thing I had seen about, I mean, everybody's very focused on, on gas prices, of course, and that is a big deal. But also, I didn't realize that so much wheat came out of both Russia and Ukraine, and I suspect that's going to be more of an issue for Europe, than, than it is for other parts. But, you know, when you think about just all the tentacles to, to how inflation is going to affect our lives, but I don't know, they're still probably and maybe easy for me to say, but there's still part of me that says it's a, it's a small price to pay relative to what, what the folks in Ukraine are going, going through. But,
Michael LeBlanc 02:44
Yeah, yeah.
Steve Dennis 02:45
Yeah, it's, uh, yeah, it's buckle up, baby, because it's going to be, it's going to be a wild ride here for, for some time.
Michael LeBlanc 02:51
Well, and I got two quick comments. One is, if anyone wants to understand some of the agricultural food implications of what's happening, tune in to The Food Professor, my food podcast, because we talk about fertilizer, and it's actually the implications are more, more deep than just wheat. It is where the fertilizer comes from, hint, Ukraine, Belarus and Russia. So, it's, it's, it's a very interesting story.
Michael LeBlanc 03:15
And the second thing I'd say, on if I could put a positive spin to any of this, I was talking to a retailer and we were chatting and I said, ‘You know, after the past two years of the COVID era, where you've had to really realign your organization to be agile, because we just can't predict what was going to happen in the future. And we were more thinking about, you know, next waves of COVID. Are you better off today than you were in 2019, to handle what's coming in the shocks that you're experiencing’? And, and, and the general consensus was, you know, absolutely, in a weird way, right. It's in a weird way, COVID prepared us for more uncertainty. And boy, we didn't want this kind of uncertainty, but, it's here.
Steve Dennis 03:51
Absolutely. No, I, I agree.
Michael LeBlanc 03:54
All right, let's talk about Kohl's Investor Day. You've got some, you know, let's talk about, there seemed to be a lot of suitors, they're are up for sale. There's some numbers. Talk about what you're thinking about Kohl's.
Steve Dennis 04:06
Well, we could probably do a whole episode on, on what's going on at Kohl's and some others. But yeah, they've gotten, as we've talked about in the past, I've gotten a lot of interest from activist investors and potential acquiring companies and maybe splitting off eCommerce and all this kind of stuff. But, this past week, they had their Investor Day where they laid out their strategy, where they are no longer going to be a department store, but a active family lifestyle destination or something.
Michael LeBlanc 04:34
They are declaring, "We are not a department store".
Steve Dennis 04:36
No and no, and I am not overweight either. I said it.
Michael LeBlanc 04:40
This is true.
Steve Dennis 04:42
And, you know, it's, and um, there'll be a piece up on Forbes that I wrote before, before this episode comes out. But, you know, on the one hand, I think it's a very interesting cohesive presentation. It looks a little bit too much like a board presentation I did at Sears 20 years ago. So, I have a little PTSD about that, and you can, you can make your own conclusions from, from whether this is really a presentation that's going to rock the world today, versus what may have been a good thing to have started 10 years ago.
But, but, you know, it makes all the sense in the world, I would say at one level. I don't know the senior leadership team at Kohl's, but the people that I know that know them all well say great things about them. So, that's very positive. On the other hand, the truth is, Kohl's has really been stuck in the water for several years now. Their sales in 2018 were 20 billion. If they hit the number they guide to, they're guiding to for this year, they will do 20 billion. So, amid all the talk about all this new traffic from Amazon, all these brands like Lands End, Tommy Hilfiger, etc., they've added, the Sephora rollout, you know, you go, go through all these initiatives the past two or three years. And if it all works out (crossover talk), they'll be struggling, they'll be back to where they were three, four years ago.
So, I, you know, I, I just think that there's a little bit too much high fiving about, about the strategy. So far, there's a lot that has, has to come. And so, whether it turns out to really be a breakthrough for them, or just kind of, you know, my favorite term these days, slightly better version of mediocre, we shall see.
Michael LeBlanc 06:26
Right. Well, the next couple of things on the list reminded me of a, a something I think was Metallica, as the rich get richer and the poor get the picture or maybe that's Bob Dylan. But the stronger are getting stronger. The results from Ulta and Dick's, they're fantastic results. And we're going to talk about some profitless prosperity. Let's talk about results from Ulta and Dick's.
Steve Dennis 06:44
Well, there were a ton of earnings this week. And, as we said, we say, you know, we're not trying to make this a current events podcast. But, I, I would say the overall takeaway is what you said, that if you look at some of the players that have really been doing well, for several years, it's kind of more of the same. Great sales, great profits. There's kind of this interesting phenomenon we talked about last week about kind of this rebalancing that's going on where eCommerce, most of these guys are reporting eCommerce being down year over year, but strongly up compared to a couple years ago.
So, you know, that's, I think we're, we're just getting to this point where the players that really made the industry, as we're talking about earlier, the players that made the investments, and we'll talk about more in a second about Michael's, you know, those, those that were really innovating going into COVID, you know, have really been able to pick up market share.
Michael LeBlanc 07:39
Yeah, yeah, right on. Well, let's talk. I, speak of investment, I just want to touch on something that happened here in Canada. We've talked about Canadian Tire before, great retailer here in Canada. They announced this week, a $3.4 billion investment in their business. Everything from improving their digital, but a lot into stores, a lot into systems. So, you know, 10 to 1 ratio, that's like a big US company investing 34 billion. So, it made the news, and I guess it continues to, you know, just following up on what you're saying, just, I just thought of it as another example of an organization that gets it. And, hey, retail is back and, -
Steve Dennis 08:12
Yeah, it's almost making targets of 5 billion that we talked about last week seem puny.
Michael LeBlanc 08:17
And, let's talk about this. Let's finish up on this list. Profitless, profitless prosperity for the disruptors. Stitch Fix, ThreadUp Six-, Stitch Fix had a terrible week. But I think there's some other news, talk about that for a bit.
Steve Dennis 08:30
Well, we've come back to this. We had an episode on this last season, talked about it in the context of predictions, but it's, it's these disruptor brands that continue to grow quite nicely, in some cases, pretty spectacularly on the top line. But, not only are they having a hard time being profitable, it actually looks like it's getting worse. So, we heard this week from Stitch Fix, ThreadUp, I think the week before, from The RealReal, Poshmark, I think also reported. And the story pretty much across the board is sales up, profits getting worse. The thing that I, because I did write a Forbes article about it this past week. The thing I also pointed out, was that here we are in this period where there has been this significant acceleration to eCommerce, and generally a period where people were fairly reluctant to go to the stores. And you think that, that would be enormously beneficial to these type of companies. And yet, in that kind of perfect storm of dynamics, they have not gotten on a glide path to profitability. You know, some of these will, will certainly make it through, but I don't know, I, I continue to feel like the heat is really going to be on for some of these brands to kind of put up or shut up.
Michael LeBlanc 09:43
Well, we have no doubt which one Michaels did because you're going to hear from, from Richard Armour, the, the story of Michaels and, and his background. So, let's, let's get to that and we'll see what happens when it all comes together and gets executed super, super well. Let's hear from Richard.
Steve Dennis 09:59
Well, Michael and I are delighted to welcome Richard Armour to the podcast. Richard, thanks so much for joining us. How are you today?
Richard Armour 10:07
Hey, doing great guys. And happy to be here.
Steve Dennis 10:10
Well, we're, we're excited to talk to you about a lot of different li-, a lot of different things. But we love to just start out each podcast having our guests just take a minute or two to tell us a little bit about themselves, their professional journey, and what their current role is at Michaels.
Richard Armour 10:27
Yeah, sure. So, if you guys could see me, you may not believe this, but I've, I've been in the eCommerce space since the early 2000s. So, I've been doing this for a while. And, you know, I came right out of business school, I joined a company called Sabre, and they at the time owned Travelocity. So, I just essentially just, went right in to the world of eCommerce. And, it was something that, you know, when I was at Travelocity, we were just really focused on how do you get people through the checkout process when buying airline tickets. Like, that was my focus. Doesn't sound very exciting. But, I learned a ton, I was in a product manager role. And, just really, I'll say, kind of cut my teeth coming out of B School, and, and just kind of what does it look like? And what does it take to really convert a customer? So, so you know, I was there and I was in a bunch of different, I worked on a bunch of different products for about five years or so.
Richard Armour 11:23
And then, I left there, and I went to this smaller company called Handango. So, not to be confused with Fandango. But at the time, Handango was selling smartphone apps before the iPhone. So, that, that probably dates me a little bit. But that was really cool, because again, this is like mid 2000s, and we were selling smartphone apps. And so, I got to just really see a lot of what the mobile experience, wha-, what worked well, and what didn't. And especially in those days, the mobile experience was, as you guys can probably remember, it was a mess. So, learned a ton there, wore every kind of hat imaginable in the eComm space because it was a small company, and probably made every mistake under the sun. But, it was, it was a lot of fun.
Richard Armour 12:18
And then I left there, and was at GameStop. And was at GameStop for close to 10 years, focusing on everything from digital marketing, to really focusing on just launching all of our omni-channel programs. And, and there it was really interesting, because there was always this pressure of being disintermediated. And, but, that was a really cool gig. And I'm a gamer myself, so just had a huge amount of fun there.
Richard Armour 12:48
And then for the last two and a half years, I've been here at Michaels. And here at Michaels you know, I'm focused on really what we can do with both our site and our app to drive our business, but to drive it profitably. And so, that's really been the focus. We've got sites in both the US and Canada.
As you can imagine every channel you hear about, we've launched it, you know, it's out there, so BOPIS, curbside, you know, shipping from the fulfillment centers, same day delivery, ship from store, dropship, you name it. But really my focus here has been, at Michaels is how do we do all these things, but do it the right way. So, we don't add more friction for our customers, and also for our team members, because we've got these 1200 stores. So, how does all of that kind of just work together? So, I know that's a, that's a mouthful, but that's kind of been my journey. But, I've been kind of lucky and happy that really since my post MBA career, I've pretty much been in eCommerce.
Steve Dennis 13:52
Well, that's a pretty amazing experience. Now, most of our audience is in the US and Canada. So, I suspect just about all of them know about Michaels. But, we do have quite a lot of listeners outside of the area. So, could you just give us like the 30 second snapshot of what Michaels is about for people that might not know.
Richard Armour 14:09
Oh, yes, so, so at Michaels, we are the largest arts and crafts specialty retailer in North America. So, if you think arts and crafts or your thinking canvas, your thinking yarn. You know, we offer those products but, but here's the reality, and this is something that you know, we're so much more than that. And, and what I found here at Michaels is, you know, we serve teachers, you know, entrepreneurs, those folks with their small business, as well as the fine artist.
And so, we have this assortment, this growing assortment, both online and in store, to really be that one stop shop, you know, for that maker. And, and for us, you know we're really just trying to help folks bring the, their dreams to life. And whether they're just getting started and crafting and making, or they could be a, you know, an expert, a, a true artisan, or anything in between, is, is what, is what we try to do here.
But in it addition to that, we do classes. So, you know, you may not even need to be a, an expert, you may not even know what you're trying to do. So, you know, we do classes both online and in store. So, for that real novice maker, we have something for them as well.
Steve Dennis 15:14
Well, thanks for that. My, when my kids were quite a bit younger than they are today, it seemed like I was going to Michaels about every third day. But, maybe not good for your common store sales.
Well, we want to definitely dip into all your digital eCommerce Omni-channel experience. But I understand that in addition to kind of your, your regular job, you've also taken an active role in Michaels’ diversity, equity and inclusion initiatives. Can you just briefly tell us a little bit about what Michaels is doing, and what your role in that has been?
Richard Armour 15:44
Yes, and I, I've been so proud to be, to be part of this, Steve. So, when you walk into our headquarters, the first thing you're going to see is a sign that essentially says, "Everyone belongs at this craft table". And that really is who we are at Michaels.
And so, the good news is there, is, you know, when we kind of look out as we want, whether it be our assortment in store, our employees in the store, or at our Support Center, we want to make sure that we're reflecting the community. And we also want to make sure that, that we are as inclusive as we can possibly be. And so, as part of that, at, at Michaels, we've got a, several, we've got eight, actually. We've got eight employee resource groups. I'm in one of them called BOLD, which is essentially for, for, for our black organized leaders of diversity. That's what that stands for.
But the reason I'm so proud of that is you know, as I've gone up and grown up in my career, and especially I find in eCommerce, sometimes there can be, you know, a lack of diversity at times. Especially the higher up you go. Michaels has really taken, kind of I'll say, you know, this to heart, and we're really just kind of looking at our landscape, and just trying to understand, what can we do to really in-, increase the diversity for the overall company? And everything that we can do to support our makers, like I mentioned.
So, you will see assortment in our stores, you know, we bring an assortment, you know, for Black History Month, or Women's History Month. Where we're sourcing that product, from, from smaller businesses, diverse businesses, those things, getting visibility. When we do marketing, we're getting marketing, or in driving awareness and visibility for these diverse makers. And it's just something I'm so proud of. And it's a really cool thing to see as it continues to evolve.
Michael LeBlanc 17:33
You've been in eCommerce, as long as I have actually. I launched Hudson's Bay eCommerce back in 2000. So, great opportunity to ask you, as you reflect on what's transpired in eCommerce over that time, I mean, some things is, you know, what's old is new again, right? Suddenly, we're talking about in store pickup and curbside. These things have been around for a long time, they probably got accelerated by the COVID era. But, as you reflect on the evolution of eCommerce over the, your time, talk about, talk about that experience and, and how it folds into your efforts at Michaels.
Richard Armour 18:05
Right, no, no, it's good. I, I think what I would say first off is, it's a lot harder now. Like, like, I've realized. So, when I first started, it was really, we were kind of just focused on okay, how does your conversion look? You know, are sales growing? Are you profitable? And, you know, today those bread and butter metrics, I mean, they're, they're still important.
But, you know, as I look on it, at, look at it, it's, you know, we're also looking to see, okay, are you focused on supply chain? I will tell you this and, of course, we all know about some of the recent supply chain challenges. But, just more broadly, especially if you're at a retailer that has both a physical and online presence, really optimize, optimizing around supply chain is critical. And, and that's been an area that has, is, in-, incredibly complex. And so, you know, that's a piece of it, whether also, inventory management, because, as, you know, as we've kind of gotten to this place, where it's no longer just the product you have in your fulfillment centers. You have this natural, I'm going to call it inventory contention between, you know, what's in your store for a walk-in customer, but then also what's available for buy online, pick up in store, or curbside, or also shipped from store. So, inventory management has also gotten much more complex as well.
Richard Armour18:45
And, I also just think, operationally. So, it, it used to be where I could be, you know, not necessarily siloed. But, we could work up our eCommerce plans, and sales and, and look at what the outlook would be without really having to think through all the implications at the store level. But now, and especially at Michaels, with the majority of our online orders being fulfilled by stores, there really has to be much more collaboration, planning and then also, just understanding. Are you adding friction not just for the customer but for the team member to really fulfill these orders? And so, you know, I would say, it's just gotten much more complex.
Richard Armour19:24
And, the other thing that really stands out to me is, it feels like everything is table stakes now. It, it used to be, where, you would do something like, I would say, ‘Oh, we got this really great new personalization algorithm that's bringing up better product recommendations, or product reviews’. Well, well, now, that's yesterday's news. That's just expected. You, you need to have that. You know, we can talk about, you know, BOPIS or curbside, or same day delivery. Hey, that's great. But, the customer kind of expects that now. So, so again, I think, you know, everything is table stakes. So, it's gotten a little bit harder to really, truly find and, and understand. Okay, what are those differentiators? And then, how do you hold on to them? Like, how do you, how do you hold on to them and kind of put maybe some walled garden around it? I think that's just gotten a, a lot tougher, and, and you know, it takes a lot more strategic thinking. And, I think a, more of a, a long term view than where it used to be. Heck, probably just like, I'll say, like, eight, nine years ago.
Michael LeBlanc 21:03
It's, it's so many great points, I want to pull on a couple of threads you've mentioned a couple times. The a-, your focused on the associates, right? How do we make their jobs easier, more simple, not more complex, with all these fantastic ideas that we, that we come up with? And, this whole idea of table stakes versus differentiators, such a moving target, right. So, it kind of segues me into the next question, which is, you know, thinking about the experience of Michaels during the, the great acceleration or during the COVID era, did, did you experience that movement where you had the vast changes of demand and patterns that have ebbed and flowed? And do you think it's changed that pattern for good?
I mean, really, you play, as Michaels, you play in that, trying to figure out positioning, I guess, on any given day, between being very efficient, as you said, create less friction for everyone, and then being very experiential, right, room at the table, craft, events, hosting events. And how do you, how do you work through that, I guess it's a long question, there is a question coming here. Have you worked through your thinking? What does that-
Richard Armour 22:05
It, it, it's a real challenge. And so, first off, let me talk a little bit about the pandemic. And, and, I, I don't, we were by no means isolated in this. We saw a, these, the, I will call it probably, the most accelerated growth I've seen in my career. And it wa-, in, in the shortest amount of time. But, what I will say is, the good news was, and I'm so glad, at Michaels, we'd already been doing this is, we already had several of the programs already in place. We were already investing in all these programs. And I'll just call them omni-channel programs. But, but you guys know what I, I mean, whether it be shipped from store, whether it be buy online, pick up in store. Those existed, before COVID hit.
So, I started in 2019, in September at Michaels. We had already mapped out what we wanted to do to update a BOPIS. We had mapped out 30 friction points for both the customer and for our team members. So, it was a lot, it needed a lot of help. So, we just attacked that thing. And we were, we were making major strides, and starting to see nice improvement in our survey, net promoter score, and then COVID hit. But the good news was, is we had already been making those investments and making things better.
And then, we, when it, when COVID came across, we said, ‘Okay, well, we've been focusing on BOPIS, one of our next items was curbside’. So, we had not launched curbside, but then we, we quickly, we'd already mapped it out though, that was the good news. And so, we were very able to very quickly and rapidly roll out curbside nationwide to all of our 1200 stores, you know, including Canada, which was fantastic.
And, you know, we already had ship from store. And, this was probably the thing that was just so powerful for us because we were able to essentially scale from, we had about 300 stores, to all of our stores, doing ship from store in just record time. And, I remember, the hard part in that was making sure we had enough cardboard of all things. We needed, we needed to, to make sure we had enough packing material.
Michael LeBlanc 24:14
Supply chain, supply (inaudible).
Richard Armour 24:15
We weren't having to right processes. We weren't having to scramble on, well, how will this work? And so, all of that was mapped out. So, the good news is, is we were able to rapidly accelerate, watching those programs. And then, as we've moved, and I'll say, quote, unquote, “past COVID”, we've really spent time refining those programs now. And so, it's really great.
Like, I fully believe that, that what we saw during the pandemic accelerated us probably 18 to 24 months, maybe even more. But, what we've taken from that is okay, these programs are here to stay. Like so, and we also want same day delivery. And, I've had, one of the customer feedbacks we got was someone said the only good thing to come out of COVID was same day delivery. That's probably a lot of hyperbole there.
Michael LeBlanc 25:04
Yeah.
Steve Dennis 25:05
Hyperbole is the greatest thing ever. So, let's (crossover talk) hyperbole,
Richard Armour 25:10
Yes. But, but it’s really good to hear. And, I think it really emboldened us with these programs. So, I know there's a lot there. But, we have really, really, I think, I'll say that we were already under this digital transformation, we accelerated it. But, it has just continued to build on this hypothesis. And, we were able to grow the business and grow it profitably. And, while it was a scramble, it was not a scramble on, on what to do. It was just a scramble on, how do you take this and scale it? Is really the thing we were focused on.
Michael LeBlanc 25:39
You know, I've, I've talked to retailers who, who've gone through a, a similar I, I, I haven't talked to very many that were, were as prepared as you were. But, they also said that the volume actually was helpful, because, you know, it's hard to do a couple of deliveries to the parking lot a day. It's actually where you can dedicate the process and really work through the, through the process when you get 200 orders going out to the parking lot. Did you experience that as well? (crossover talk)
Richard Armour 26:03
That's exactly right. No, I'm, I'm glad you mentioned that. So, this was also probably one of my proudest moments at Michaels. So, one thing I love to do is to go and visit stores. And so, I was visiting the stores up in Cleveland, and one of the sales manager, a store manager, she came up to me and she said, ‘You know, Richard, during COVID it was, it, was this amazing thing to see because’, and they are in this massive parking lot guys, like, where the, where the, are the stores. And, she said, ‘Richard, we had so many cars lined up in the parking lot for their curbside orders’. And, she said, ‘Not only that, Richard, but, we had so many ships from store orders coming in’. She's like, ‘Richard, we kept, we were able to keep our folks working and busy’. She goes, ‘I remember we would, I would take a bite of my sandwich at lunch, and then it was, okay, quick bite, okay, pack this up, quick bite, let me run this out to a car’. But, I've took a lot of pride in that because, you know, we kept people, you know gainfully employed, we met the needs of our customers. And, to your point, it was that scale, because we just saw so much of a shift of, whether, when it was foot traffic before, you know now it was folks in their cars, or it was folks that were, we were using our stores as miniature fulfillment centers. But, it all really worked together. But that scale helped. And also, but, you got to be careful with that scale because if you have some things that are wrong, or that are eating away at your profitability, you can really, you can really take it in the short. So,
Michael LeBlanc 27:29
The problems get big faster, basically.
Steve Dennis 27:31
Hey, Richard, I have a, just go back for a second. One of the things Michael and I have talked about on the podcast a few times back, we dedicated an episode to it, is this question around why does it take a crisis for many retailers to innovate? It seems like, when I think about what you just described, what Target, Best Buy, Tractor Supply, there are a few other companies that ended up doing what you did, which was accelerating their journey. But, they were doing a lot of the foundational things before COVID. And I'm curious, what was it about the Michaels culture or process or what you went through that made those things a priority before a crisis? And then, I guess, going, thinking forward, what are those foundational pieces that will keep you, hopefully, on the leading edge of digital transformation, or whatever we want to call it?
Richard Armour 28:21
Right, I think before, and this was a really good thing. And, again, when I started at Michaels, there was no needing to sell in the fact that we needed to transform how we were thinking about digital in this company and meeting the needs of our customer. But that was already sold and completely from the CEO down. And so, when you have that, there was a recognition that all of the programs could be improved and there were resources behind improving it.
So, I think that was, that was really helpful because I've been in situations where you almost have to prove there's a problem. So, the good news was we were growing our eComm business, we were growing it profitably and, there was recognition that it could be so much more, and it was already ingrained. So, it was already an initiative for us.
When we looked at just growing our digital presence but doing that with the stores. Also, because our customers just see us as Michaels, they're not seeing us in these channels. But, we knew we had a lot of work because the net promoter scores were so bad, was, we essentially, we were already bought in. And then, so then, we had that momentum. We were already making those enhancements.
And then with COVID, it took away, for lack of a better term, noise. Everyone knew exactly what needed to happen. And so, there was this singular focus. So, when we were rolling out same day delivery, it could be things where it may have taken a few weeks to maybe align on something, where here it was hours. It was a meeting, it was a quick phone call, okay, this is what we're doing. Here's how we'll price it. Maybe we will get it wrong. If we get it wrong, we will iterate. So, I think it was also this environment where it was a crisis where it really reiterated, it's okay to fail. Let's just move as fast as we can. And don't get me wrong, guys. We made a ton of mistakes along the way. But, we just iterated just so quickly to get it right. And, we knew we had to move quickly. So I think when you have that, and you've got the support of your executive team, good things can happen. And, and that's exactly what we saw.
Steve Dennis 30:24
So, when you think about what's next, so, we've got this world, obviously, the blurring of the lines or the hybridization, I like to call it, between digital and physical, and how the role of stores is changing, which you've described, media networks, the meta-verse, losing some of the third party data, you know, as you think about what you are worrying about working on next, but what would you offer up, and what kind of guidance might you give to our audience in terms of things that you think will be (crossover talk) forward?
Richard Armour 30:54
Because there's, there's, there's a lot there, Steve. I think, you know, as, as you look at it, and again, I'm a pretty old school guy with, with some of the things I say, so, you'll have to forgive me, I tell. I will say as whether it be NFT's, meta-verse, whatever the next big crypto is going to be or any of that, I feel like it's really important to understand what your North Star is, and who you are.
So, what I mean by that is, and especially I'll just say, within the Michaels world, we're trying to grow eCommerce, but we want to do it in a way that, it makes sense for our customers. Where they're happy with what happens. But, that also, we do it profitably. And so, and I, I called that out, because that's really important. Because, you know, as you do these things, it's really important to measure performance. And, because there's going to be a lot of these things that come up and I think it's really wise and smart to, to dip your toe in these things, test them, iterate, and then just measure it, and understand.
Because maybe you'll start and something won't be profitable, and you can look to say, well, hey, maybe this will be, end up being a big traffic driver for us, or, hey, maybe there's FOMO, you know, you don't want to miss out on this. But I really think it’s credib-, think it's incredibly important to test these areas, but make sure that you're measuring your profitability.
And that's why just, you know, in our own world at Michaels, we kind of, of, of slice our eComm business down into every fulfillment node, and just measure the profitability of it. And then, as new things pop up, let's do that and measure it too and know not all, that, that not all channels or initiatives will be created equal. But, just get in there and test, and, and try these things out. Because you just don't ever know what the next big thing is.
And the other thing I will say is try to go in with as few biases as possible. It's really easy. I think when we have all this on our table, for myself being, having done this since the early 2000s, to come in and have like this biased approach, or think you know better A lot of times I like to go in with just a very blank slate and just, you know, be very open, because I have found things that didn't make sense before, makes sense now. Things that used to make sense, no longer make sense. And, just listen to what the data and the customer tells you. And, and then that should always guide you the right way. But know there's probably going to be a few bumps along the way to get there. That's for sure.
Steve Dennis 33:11
A like that, and I think that, a lot of great advice in there from a person with a tremendous amount of experience. So, I think we have to leave it there for today though, there's always more we could talk about, I'm sure. But, thanks so much for, for joining us, Richard, if people want to learn more about you, learn more about Michaels, where's, where's the best place to do that?
Richard Armour 33:31
Steve, it's pretty easy. I'm on LinkedIn. So, again, my name is Richard Armour. So, just go out there on LinkedIn. I'm pretty active out there. And then, from a Michaels standpoint, we also have a very, I'll, I'll say a, a very pronounced and, and a very a, we're very active on LinkedIn, as well. And, you can also come to our website. So, at michaels.com. Check us out there. We, we've got a lot of the information on what we're doing and, and just stay tuned. We're really excited about what we've got coming in the future from a Michaels standpoint, so, so keep us, keep us in mind. But, I will say this, Steve and Michael, it's been great talking with you guys today.
Steve Dennis 34:09
It's been great having you on. Thanks so much, Richard.
Richard Armour 34:11
Right. Thank you.
Michael LeBlanc 34:13
If you liked what you heard, please follow us on Apple, Spotify, your favorite podcast platform so you can catch up with all our great interviews and insights and new episodes will show up each and every week. Be sure to check out our YouTube channel. And last but not least, tell your friends and colleagues in the retail industry, all about us.
Steve Dennis 34:28
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 34:42
And I'm Michael LeBlanc, producer and co-host to the Conversations with CommerceNext podcast, The Voice of Retail podcast, keynote speaker and host of the all new Last Request Barbecue cooking show on YouTube. And you can learn even more about me on LinkedIn or meleblanc.co.
Have a safe week everyone!
SUMMARY KEYWORDS
Michaels, eCommerce, store, Michael, richard, curbside, customer, talk, podcast, Ukraine, thinking, fulfillment centers, week, people, accelerated, programs, profitability, bit, Kohls, same day delivery