In the wake of the Silicon Valley Bank crisis, we go guest free to dive into a concept that Steve shares in his book and in many of his keynotes. It's called VUCA, and it stand for Volatility, Uncertainty, Complexity, and Ambiguous. We explore the implications of what it means to develop and execute strategy in a world in which changes are coming at us ever faster and more furious.
"You can't stop the waves, but you can learn to surf."
- Jon Kabat-Zinn
In the wake of the Silicon Valley Bank crisis, we go guest free to dive into a concept that Steve shares in his book and in many of his keynotes. It's called VUCA, and it stand for Volatility, Uncertainty, Complexity, and Ambiguous. We explore the implications of what it means to develop and execute strategy in a world in which changes are coming at us ever faster and more furious. In particular we unpack the need for crystal clear vision, deep understanding, greater clarity of focus, and, perhaps most important of all, tremendous agility.
But first we open up with the retail news that caught our attention this week, including a look at US monthly sales figures, layoff announcements from Nordstrom and Meta, Galeria Kaufhof's--one of Europe's biggest department stores--plans to close half of its locations, and Couche Tard's major European acquisition.
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 eCommerce Leaders podcast, and The Food Professor with Dr. Sylvain Charlebois. 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 6, Episode 10, presented by MarketDial. I'm Michael LeBlanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:14
Well, breaking news. We interrupt our regularly scheduled show for a special solo episode, right for the time, ripped from the headlines, faster than a Russian jet spraying a Reaper drone with jet fuel, the banning of TikTok, inspired by the overnight collapse of the Silicon Valley Bank. That's right, we're talking about VUCA. Steve, tell people what's VUCA all about?
Steve Dennis 00:34
Well, VUCA is an acronym. It stands for Volatile, Uncertain, Complex and Ambiguous. And it is actually a, I talk about this in my, in my book, it's actually derived from military strategy. But over the years, some folks have come to use it to describe more kind of broadly the business circumstances. And I think it's a good way to describe the world we live in and provide some useful, useful backdrop for taking action.
Michael LeBlanc 01:04
Yeah, so that we'll have a solo episode, we'll get to talking all about VUCA. And its implication we’re not really going to do a deep dive into the Silicon Valley Bank itself, but more the context of this, this, you know, how do we adapt in all this, whether it's a global pandemic, or all these sudden shocks?
All right, well, speaking of being inspired, we're inspired to do this episode with recent events. I hope you like that. So, great, we're off to Shoptalk in Vegas very soon on a big jet plane and we’ll be very, very busy. First of all, you're on the stage dropping some knowledge with fellow retail thought leaders, tell us and tell the people who a little bit about who you're with and what you're talking about, and when they should block off their calendars if they happen to be, be one of the 1000s attending the show.
Steve Dennis 01:45
Well, I'm batting cleanup. My session is in the last slot of sessions on Wednesday. And we're going to be talking about innovation in retail. And I've got three guests joining me, the Head of Strategy from Tractor Supply Co., Head of Brand Marketing from UGG, and the CEO and founder of a fast-growing sexual wellness brand called Maude. So, we're going to be talking about what innovation looks like, what's the difference between sustaining and disruptive kinds of innovation and some particular ways of sorting out what retailers need to do to innovate at the speed of disruption?
Michael LeBlanc 02:27
Well, there you go. There you have it, folks, if you for some reason were bugging out from Shoptalk early now you've got the reason to change those flights, change those plans, because that sounds like a fantastic session.
Now, we're also working overtime to secure a number of super interesting interviews for the people. And for our Shoptalk adventure. Our good friends at Wizeline have come on board as sponsors of our podcast studio. Who is Wizeline? They are a global technology service provider that gives retailers digital superpowers in areas like omni-channel, digital marketing, personalization, cost optimization through automation. It's so wonderful to have them on board and it's gonna be super fun for us.
We're gonna be by the beach in Mandalay Bay. That's right, we've got a cabana rented as our podcast studio. So, we'll be sipping cocktails and talking retail with some fantastic guests, I'm really looking forward to it.
Michael LeBlanc 03:25
All right, well let's get into the news, well the news, the big story in the news, because we often start with the biggest stories actually the whole subject of the show. In fact, you and I were talking off mic, we were almost gonna jump on last episode. And just, you know, do an augmentation to the, to the to the episode in the news.
You know, we, the bank kind of started to unravel over the weekend. But we thought, "hey, let's do a whole episode based on not again, not really Silicon Valley Bank, but it's unraveling in the state of chaos". Now, just for a few of the folks who don't know what SVB is, I really wasn't that familiar with it. Founded in 1983, by December of last year, they held 209 billion in assets, 175 billion in deposits, 44%, I'm throwing out a few facts here that I didn't know 44% of US venture-backed tech, IPOs bank with SVB 90% of its accounts more than 250,000, which is higher than your typical bank, which means the risk was a bit higher. I guess the government's stepped in (crossover talk) and then I guess they unraveled with the big problem with billions invested in Treasury bonds. I mean, again, there's lots of folks talking about this that know, way more than me, but basically, that's SVB. And I think they were present in a lot of different places, right. Like you, you knew someone in Dallas that was with the bank. And so, you've come across them probably more than once or twice in your career in consulting. Yeah?
Steve Dennis 04:41
Sure. Well, I'm on a few advisory boards of tech companies. I'm not necessarily going to disclose which of them bank with SVB. But I also, as I'm around the Texas venture community in particular here in Dallas, I’m occasionally down in Austin. SVB is a pretty constant presence at a lot of events. The woman that runs the area here, would frequently be attending. SVB was often one of the lead sponsors of some of these types of events. So yeah, really a key player in the venture ecosystem.
Michael LeBlanc 05:18
So, well anyway, that's probably kind of as much as we're probably going to talk about SVB. But we're gonna get to the, again, this VUCA concept a bit later in the show. But first, our news. So, let's start out with US monthly sales. I guess this is our, our monthly reminder to everyone that month-over-month sales don't matter. But,
Steve Dennis 05:36
Eventually, we'll be able to stop saying that, but as long as the Wall Street Journal and CNBC and everybody else puts it in the headline, I am on a mission.
Michael LeBlanc 05:43
If only we knew If only, we knew someone at the Wall Street Journal that we can tap and kind of, you know, once she becomes the editor of the entire paper, that's when I think we might have some, some luck. But anyway, talk about US monthly sales, what were your observations and what are your thoughts?
Steve Dennis 05:59
Well, it's a little bit of a different day, same story in terms of the patterns we've seen for several months. So, I'll go through this pretty quickly. Sales were up pretty solidly overall. But pretty much in line with inflation. If you look at the rate of year-over-year change across the last several months, the growth rates moderated a bit, but, but not dramatically softer. When you kind of do the deep dive into some of the categories below it was really an unusual strength, I'm not trying to completely understand it in general merchandise stores. So, you know, this would include the discount mass merchants as well as department stores, that was up 10% year-over-year. And personal care, you know, health and beauty aids, beauty, those sorts of things were up 8%. So, that definitely seems to be materially above inflation. Clothing, footwear, those sorts of businesses up slightly, probably down when you consider inflation.
Steve Dennis 06:56
And then again, more of the same in terms of weakness in big ticket kinds of products for the home, furniture, consumer electronics, appliances, and those sorts of things. We did get a little bit of news about inflation and the job market, the job market continues to be pretty darn strong, which of course makes people wonder. And we'll get more into you know, the whole SVB banking sort of stuff in the in the heart of the episode, but, but generally speaking, it's pretty clear that well, inflation might be moderating a bit like for example, egg prices, which had been sky high, have started to drop a lot. Gas prices, which have been quite volatile, but they've in general been going, going down over the last week or so. So, there's some pieces of good news with the inflation picture, but it still remains quite a bit higher than I think the folks in the Federal Reserve and other banking systems around the world want to see.
Michael LeBlanc 07:58
Let's talk about, let's talk about, some quicker hits with Nordstrom. So, they announced some layoffs, which of course is in addition to laying off everyone in Canada, including their stores. But what do you think about Nordstrom's statements?
Steve Dennis 08:11
Well, the Nordstrom business like several other businesses we've touched on, you know, as results have come in, they're not so great. And Nordstrom seems to be making a real effort to get their costs more in line with where their sales seem to be going, which is downward, unfortunately. So, they announced about, I think it's 2500 layoffs. You know, I don't necessarily expect but you know, given what we're going to talk about in the balance of the episode, who knows at this point, but I don't necessarily expect, you know, massive layoffs across retail, but within the companies that are having a hard time driving the top line. You know, I think we can expect more. So, you know, this is one of the bigger companies that announced a pretty big layoff on top of layoffs that we've seen from Neiman Marcus, from Saks, some of the other players who you would think would be a little bit more insulated from inflation, but apparently, sales, the sales outlook continues to be pretty soft.
Michael LeBlanc 09:08
Well, speaking of that, a great segue into layoffs, more layoffs at Meta, with their year of efficiency continuing to roll out, Zuckerberg warning, economic instability could continue for many years. I mean, I think they start, it sounds like they're rewiring away from the idea of the metaverse and focusing more on AI and anything else we can make of these layoffs. I mean, they did hire a lot of people, right. I mean, the higher (crossover talk) I mean, it's the industry, right?
Steve Dennis 09:37
I mean these, the layoffs, the two rounds of layoffs have pretty massive numbers. Part of the analysis of seeing which, you know, we've talked about in the past, just in general about some of these tech layoffs is that so many of these companies went crazy, hiring people over the last two or three years. So, even with these layoffs, they're still going to have more people working at Meta than they did a couple years ago. So, it's not, I mean, it's obviously difficult for the people affected. I wouldn't say it's really a sign that something's, you know, really terrible at Meta.
Michael LeBlanc 10:10
Now, a story from Europe here and Europe is in front of our minds, because of course, we're heading off to Barcelona for the World Retail Congress. So, we've been thinking a lot about Europe. Galeria Karstadt Kaufhof is one of Europe's largest, (crossover talk).
Steve Dennis 10:25
Wunderbar, that was a great pronunciation.
Michael LeBlanc 10:27
Danke, Danke, one of our one of Europe's largest and oldest department stores has been struggling, not unusual, really around the world. And now they're closing 52 of the 129 stores by percentage, it’s huge and 5000 job losses. So, I guess, you know, the dynamics are, of course, a little different in Europe. But does the story remain the same?
Steve Dennis 10:48
Well, I think this is really more an indication of the collapse of the middle, you know, we typically end up talking about that focused on the US. But if you go around the world, whether you're talking about Western Europe, or you're talking about, you know, Australia, we've seen a lot of struggles in the department store space. So, I think it is just kind of more of the same. You know, it's interesting, just having spent some time in the Middle East, over the last couple of years, you know you almost see a tale of two cities or tale of two countries or regions or however you want to look at it because, you know, I think the department store sector overall, you know, gross generalization is thriving in the Middle East, but just about everywhere else it's anywhere from extremely challenging to, you know, at best kind of (inaudible).
Michael LeBlanc 11:40
Well, let's end on a more positive note and still in Europe, Canadian superpower in convenience stores, Couche-Tard buys 2200 gas stations in Europe. And that brings, I mean they've got 14,000 stores. So, I guess they'll now have more than 16,000 stores. They tried to buy grocery, French grocer Carrefour last year. I mean, they're $50 billion. I mean, you and I were at NACS in Las Vegas and maybe we'll put some links in the show notes, to some great interviews. The C-store, the convenience store category is just ripe for transformation from you know how people drive to how people spend their time. It's a really interesting space, heh?
Steve Dennis 12:16
Yeah, it is. And, you know, here in Dallas, we've got 711, which is one of the biggest players and they've been experimenting with a lot of things. So yeah, it's a space that, you know, frankly, I mean, I'm a customer. But frankly, I haven't paid a ton of attention to it, and it really seems to be picking up steam. And I remember we were going to NACs and you were talking about Couche-Tard, what, what, what is that word? What are you saying? I'm not proud of this but had little awareness of really how huge they were and how many different brands they've got and the extent of their operations. So yeah, I think it's a really interesting sector to keep an eye on.
Michael LeBlanc 12:53
All right now, just before we get to our deeper dive into VUCA, and its implications to retailers, let's hear from our presenting sponsor.
Michael LeBlanc 13:01
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Michael LeBlanc 13:35
All right, Steve, well, let's get to the meat of the episode, so to speak, or the, the large part of our episode where we're talking about living in a VUCA world and it was all you know, we in one way it was the idea was spurred by the rapid collapse of SVB, Silicon Valley Bank, but you actually wri-, started writing about this even pre-COVID. And of course, we just went through this crazy unexpected time. It's not done yet. And we continue to have these external shocks, but it's nothing in some ways, nothing new. You wrote about it pre-COVID I mean, it wasn't like everything was always expected and everything was cool, and there was no reason to expect any sudden things. So, talk a little bit about that. Because again, you, you, you were talking about it pre-COVID. It's probably been accelerated or amplified with our recent events, but it's not new.
Steve Dennis 14:37
No, it's not, I mean, I, I somewhat got interested in it. And I won't go into a big tangent here, but I'll call it a little bit of my kind of spiritual awakening or development where I started to realize that you know, I'm not as in control of, of things in my life as I might like to be and I often behave. So, there was a little bit of just understanding that there's lots of forces in, you know, whether we're talking about business or our personal lives that are really outside of our control, and we need to accept the things we cannot change and focus on the things we can. So, that was a little bit of the backdrop, but more specific to my consulting, in my speaking and my writing, was just noticing the increase in volatility, and how hard it was to kind of read the tea leaves or plan for the long term because things continue to shift so dramatically.
Steve Dennis 15:30
And you know, if you look at business models, that kind of, you know, we'll talk more about maybe the macro-factors, but, but even thinking about how quickly business models have emerged, you know, whether it's the Warby Parker's of the world, or the Ubers, or, or Netflix, or these businesses that either didn't exist 15 years ago, were quite tiny, that are reshaping complete sectors. And now we've got, you know, Shein, Taymoo, you know, all sorts of other brands. I mean TikTok, you know, emerged very, very quickly. So, this, this idea of VUCA is really that this is just the way the world operates. And that causes us, and I can talk maybe in a second about kind of how the acronyms lead us to particular,
Michael LeBlanc 16:19
Sure, sure.
Steve Dennis 16:21
Courses of action. But yeah, I just started to see the pace of change accelerating, and that it was becoming harder and harder to sort through what was going to happen. And so, I reflected that in the first edition of my book, and then when COVID hit, you know, call it maybe a black swan event, if people are familiar with that term of, you know, something that comes really, something's that’s hugely unexpected, it kind of comes out of left field and it ends up having really massive, unanticipated impact. And I mean that to me, I just said, "wow, wow, yeah, I mean, this, this has been true”. But, you know, if you needed an example, to really, really prove it, then COVID is a good example". Then I got to say, you know, in the case of the SVB news, which is really more of this broader, and I kind of hesitate to you know, say anything too definitive, because, you know, by the time this episode comes out, or people listen to it, who knows, what else will ask me have happened? But you know, I didn't, I didn't have a potential global banking crisis on my, my bingo card, you know, three weeks ago?
Michael LeBlanc 17:21
Do you think it perceptually, is it fast or moving more change, more shocks now than 50 years ago, than, you know, 75 years ago? Or is the infrastructure in place that it just spreads faster, I mean, the news spreads faster? I mean, it's not like we haven't had global pandemics. We had one right after the first world war that killed far more people. We've had banks, you know, back to the Great Depression, we had, you know, we had banks collapse before. Is it, is it perceptually this a case or is it a reality that with the systems and technology that these things come and go even faster? What do you, what do you, how do you think about that?
Steve Dennis 18:02
Well, I definitely believe overall, that the pace of change continues to accelerate. You're absolutely right. I mean, there are, I mean, we know we've had world war, you know, world wars, we've had, you know, all sorts of (crossover talk) these events. I think the main thing or things that are different, mostly relate to digital technology, and how that has created this vast web of connection. And that web of connection plays out in and, you know, if you just want to talk about media, right. I mean, media now has shifted so strongly to digital, Netflix's entire business model, basically, is about streaming, right? Like you could not technology did not allow for you to prosecute your business in that particular way without this web of connection, without processing speeds, massively increasing without the cost of data coming down, without having people you know, having such a high penetration of smart devices, you know, so all, all these things, created some of these conditions.
Steve Dennis 19:12
Sharing economy models, like Uber and Airbnb, right, the digital connection, is that allows you to connect assets and people, you know, marry this kind of supply and demand in a way that, you know, that just was not possible 10-15-20 years ago. So, I do think there's some massive changes. And then of course, what people learn about whatever a new brand, a celebrity influencer, you know, so much of that is also enabled by digital technology, particularly social media, but, but other things. So, I think the digital shifts are the most profound. The macroeconomic things maybe are more, more similar in their, in their rhythms than, than some of the technology and consumer preference changes and shifts.
Michael LeBlanc 20:02
Well, let's talk about the framework itself. So, at the beginning of the show, we talked about the words at least what VUCA stood for. But take us a little deeper into that. I mean, take us into the kind of as you see this as a useful framework, beyond just the words, but how, tell us how you see this coming together. And when you do your keynotes, how you advise retailers and other communities, how to use this to your advantage, and actually, well I don’t know how to develop strategy or develop a more agile organization using these principles.
Steve Dennis 20:30
Yeah, there's some overall big takeaways, I'll get to in just a couple minutes, but just to kind of go, go through the framework in a tiny bit more detail. And yeah, it is interesting, we were talking off mic about how, while as I mentioned, I did include a section about VUCA towards the end of my book, first edition, and then I included it in the second edition, which, which came out after COVID had, had its impact, I have started to add it back in the last year or so to my, my keynotes, because I think it is such an important mindset to have, as we're thinking about strategy. And, and in particular, as we're thinking about innovation and transformation. So, just to go, quickly back to the acronym of VUCA. So, V is for Volatile. And I think everybody probably gets a sense of what that means. It's just how volatile all sorts of conditions can be, again, it might depend a little bit on what industry and what country you're in.
Michael LeBlanc 21:58
Yeah.
Steve Dennis 21:59
But obviously, we saw a tremendous amount of volatility through the pandemic, as we're recording this Wall Street's been pretty volatile. I'm a little scared to turn on CNBC when we get done. But what the VUCA framework calls us to think about is really developing our vision, much more clearly, you know, to kind of narrow, maybe not dramatically, but, but narrow our focus, because if we spread ourselves too thin, if we keep too many possibilities open, then we can really be wracked by this volatility. So, it's always important to have a mission, vision, purpose, those kinds of things. But I think if you buy into this, this notion that we are in this VUCA world, then you really, really have to get the clarity of vision, you know, who, who are you targeting, what benefits, what products and services are offering in a really unique way, what's going to be the thing that really makes you remarkable, to stand out, and so forth?
Steve Dennis 22:31
When we think about U, Uncertain. Again, I think as we sit here, most people probably feel like the future, in many respects, is pretty uncertain. What the VUCA framework suggests is that we really focus on getting a deeper understanding. So, the way I think about this anyway, is, do we understand our customers well enough? Do we know what it's going to take to acquire more customers, grow them, retain them, get high NPS scores, whatever, whatever that might look for you? Do we understand, really, what the competition is doing? Do we understand which technologies are which macro forces use of these external, more external things? Do we really understand them? Do we have the awareness we need? Do we accept the reality that we're facing right now and might face in the future to take the actions we must? A couple of (crossover talk).
Michael LeBlanc 23:18
Is there room in, in the EU, the uncertainty part? I mean, it feels like a daunting task to try to understand everything that's going on, like, is it a, is it a spectrum? I mean, the fulsome understanding of so many issues that are changing so fast, that are actually really, really complex. What do you think about that, like, when you go to develop understanding, no matter what sector you're in, you may not achieve the Zen of really understanding what the heck's going on. But can you get close? And, is the work on understanding, almost enough to, to get close to where you need to be?
Steve Dennis 23:52
Well, I think it's a great question. There's only so much time, there's only so much money.
Michael LeBlanc 23:56
Right, right.
Steve Dennis 23:58
So, you've got to be able to, to set some priorities. I would argue in general, and in fact, I'm just working on the section on the book that I'm working on, which is about well, one of the things it's about is how I believe many companies that are struggling, did not do the work, did not dig deep enough, did not open the aperture enough to understand what was really going on that they kind of approach their situation as amateurs, not professionals, to borrow from our friend Steven Pressfield’s,
Michael LeBlanc 24:28
Yeah.
Steve Dennis 24:29
Language. And so, yes, you cannot do everything. And even with understanding you cannot change anything, but to approach things with more of a beginner's mind, you know, to not be so locked into preconceived notions, habits, assumptions, things like that. By the way, on this topic, I would recommend Adam Grant's book, “Think Again”, which is terrific on this subject, but (crossover talk).
Michael LeBlanc 24:59
It’s about humility, right. I mean, basically be, be, be humble enough to understand how complex it is. And, you know, this beginner's mindset as you as you and Pressfield really talk about,
Steve Dennis 25:08
Yeah, well, there's the humility, I think going in that you might be wrong, that what got you here may not get you to where you need to go. I mean, there's absolutely that part in the beginner's mind kind of part. But then there's, you know, just doing the work, you know, waking up to the other possibilities, and, and then you have to figure out and again, you know, you make the point where you can't do everything. So, you have to somehow decide what you think is important. But you also have to be willing to kind of change that along the way. But I would say that we are in a world where if you're going to transform for the future, you're going to have to dig deeper and understand things, perhaps at a level and then, you know, think through the implications, maybe run scenarios, I mean there's a lot of different ways this could, this could spool out, right?
Michael LeBlanc 25:55
Right. All right, let's get to the let's get to C from Complexity, to clarity, clarity is not the easiest thing to get to some days. But again it's in the work, yeah?
Steve Dennis 26:05
I like this framework. And I think in most cases, most people would agree that the world has gotten much more complex, you know, whether we're talking about customer behavior, or supply chains, or whatever it might be, you know, integrating technology, I mean, it's all incredibly complex. And, you know, hopefully, if you spend the time on developing that understanding, you’ll have the foundation to be able to deal with this complexity.
But the C that marries up to it, as you mentioned, is, is clarity. And you know, it's a little bit of the you know, if you don't know where you're going any road will get you there, I think about this as intensifying your focus. So, that may be narrowing down the customers that you're focused on, you know, not trying to be a little bit of everything to everybody, because then it's very hard to understand where you're resonating.
Not, you know, not, it didn't have to get super narrow. But I think for example, if some of the brands we've talked about, you know, RH transformed its business over the years by really getting a narrow, much more narrow focus on which customers wanted to serve, and then serving more of their needs in a more profound way.
Tractor Supply has had a lot of success by not trying to be you know, a pet supply player or a home improvement player in the traditional sense, but having a focus on their sort of customers, including with a, with a strong geographic focus. So, I think there's a lot of ways to accomplish this. There's not a one size fits all answer, but getting that clarity of, of customer, product market fit those, those kinds of things, I think are the way you work, work through this.
Michael LeBlanc 27:43
Well, I'm glad you brought it up. I'm glad you brought up some retailers because as we, as we think about these, there's certainly best in class and less than best in class examples. But you mentioned RH is there any others you know as you were saying that I was looking back at all the many great interviews we've done and, and it is a bit of a hallmark, I think, for example, talking to Satish from The Container Store about how we found we found a growth opportunity by being focused and better. And a little bit of buying a company that's really into the more high end work in customers’ homes, but that came from a lot of focus and an understanding of who they are and where the opportunities are, yeah?
Steve Dennis 28:21
Absolutely. Well, I think the one thing we can say is true in retail, but even more broadly is that it's harder and harder to be a little bit of everything for everybody.
Michael LeBlanc 28:31
Right.
Steve Dennis 28:32
Because they are very well-established players. You know, in retail, it's easy to think about, you know, Walmart or Costco, Amazon, that own that position (inaudible) for I mentioned earlier, you know, on the internet in general, you know, from a marketplace standpoint, it allows you to go out and just sort through vast, vast quantities of a little bit of everything for everybody. But really, I think in terms of the space going forward, I mean, you can even look at one quick example that I've been looking into a little bit, even look at the hotel industry. If you go back 20 years ago, and I'm not talking about Airbnb, in this case, we're just talking about, you know, more standard hotel models. You know, it used to be you had several local guys, but then you had several big brands, you know, Marriott, Hilton, Hyatt running essentially the 9same concept for everybody. I'll invite people if they haven't done it to go to the Bonvoy website, which is Marriott, corpse portfolio of brands or the Hyatt site and see how many different formats they now have. It’s 20 plus, (crossover talk).
Michael LeBlanc 29:31
I'm always surprised (crossover talk) when staying at a hotel and you’re like “'you're part of that organization” (crossover talk).
Steve Dennis 29:41
But they you know, but, but you know, the Marriott and nothing against Marriott, I stayed in plenty of them or Hyatt, I stayed in plenty of them. But you know that, that kind of peak of the bell curve sort of format was fine. But you know, what they discovered, and I think you know, what consumer preferences has revealed is you know, there's, there's a great need for you know, same price point but sort of hipper, upscale price point,
Michael LeBlanc 29:11
Right.
Steve Dennis 29:12
And hip, you know, that's the W, really luxurious, St. Regis, etc. So, so, we've seen this micro-segmentation, even though this is on a pretty big scale to really call it micro-segmentation. But we've seen this, this more intense focus. So, for a company like Marriott and Hyatt they've achieved their focus by creating you know or acquiring a dozen plus concepts over the last few years. So, that's just a different version of it. That's not specifically a retail example.
Michael LeBlanc 30:35
You made me think of another example, as you were talking about focus, because even back to our last episode with Kevin Tulip from Primark, I thought his answer around why they don't do eCommerce was particularly illustrative. And it's focused, right, it's like, you know, as you said, in the interview, that “your customers must be asking for it”. How do you, how did he think about that? If anyone hasn't listened to that episode, it's a great exploration, but I think it's an exclamation point on your, your idea of, of the V, U, C so far, right, it’s division and focus?
Steve Dennis 31:04
Well, yeah, and the other thing I will, I will add, and I do talk about this in the book a bit, but plenty of others have it as well as, as important as it is for figuring out who your brand is for, what it's for and how you will become remarkable for them. It's also really important to say, who it's not for, like, it's like, it's okay. Like, you know, I've had people say to me, “hey, you know, what I've said to them, you know, what do you think about this store? Or maybe I recommend a band to them, or, you know, or something. And they're like, “I don't get it”. And I'm like, “okay, that's okay. Like, maybe it's not for you, like not everybody has to like everything”. And I think it's often a good example of a really good brand strategy, particularly for not, you know, one of these massive, you know, mega brands.
Michael LeBlanc 31:57
Yeah.
Steve Dennis 31:58
Most people don't work at these massive mega brands, and you don't want to try, to out, Amazon, Amazon, (crossover talk).
Michael LeBlanc 31:01
Right. (Crossover talk) you can’t emulate them.
Steve Dennis 31:04
But who is it, you know, who is it for? But also, who is it not for? Because if you're trying to please too many people, or like I said, kind of that peak of the bell curve, you know, normal is for distributions as some people say, you know, then, then you may not be able to really carve out something that can be sustainable.
Michael LeBlanc 32:15
Right. Interesting for a different discussion, but you know, page it back to our department store episode is, you know, structurally, I'm trying to, you know, please a lot of people across too many things. And maybe that's just a, it's just very hard, very hard to stretch, a concept along so many different segments. Let's talk about the last Ambiguity, to agility. And we've used the word agility, many, many times, many retailers to talk to me about the lessons learned from the COVID era, for example, that they just got to be more agile. Is that, is that the, really the final letter, so to speak, in VUCA? Is it the most important or do you think these are all equally important? Is it, has anyone stood out to you more important than the others?
Steve Dennis 32:56
Well, if I had to pick one, I probably would pick the need to be. I mean, there's lots of things we need to do, right? We need to dig deeper, we need to have resilience, we need to, you know, do a bunch of things. But I think agility is really kind of the big takeaway, particularly from the last few years. You know, there's a lot of ambiguity, ambiguity in outcomes, the ambiguity, you know, like, as we speak, you know, is there, are there going to be a lot more troubles in the banking industry? Well, maybe, yes, maybe no. Will interest rates be going up a lot over the next six months? Maybe yes, maybe no, right. I mean, it's not, (crossover talk)
Michael LeBlanc 33:34
Are public banks going to survive? Maybe yes, maybe no.
Steve Dennis 33:37
Right. So, you know, so I think, which is not to say that we shouldn't get input and develop a point of view, but it's probably more useful to be prepared to develop with a number of scenarios. You know, eventually you've got to, you know, one of my favorite quotes, I think I've probably mentioned it on the podcast. It's in the book from Lorne Michaels, the producer of Saturday Night Live. You know, “The show doesn’t go on because it’s ready. It goes on because it’s 11:30”.
Michael LeBlanc 34:05
Yeah.
Steve Dennis 34:06
So, there clearly are deadlines and realities, where we have to
Michael LeBlanc 34:12
In minimal viable concepts. I mean, it's funny, because that pushes against the completeness of the thought in one way is that listen, we just, we just got to get it out there and got to get it going. We got to. get curbside stood up, because the pandemic has shut down the stores. I mean, I think it fits in your overall framework, but speak to that, because that, I guess that that's the emphasis on agility and taking risks. I mean, it all comes together. Yeah.
Steve Dennis 34:37
Well, I was interviewed by somebody the other day about the kind of, the concept of agility and creating a culture of experimentation and those kinds of things. And I said, ‘well, you know, it depends on what the decision is. Going back to RH you know, if you're RH at some point, the reality is you got to decide to get a piece of land, build this huge store, drop I don’t know what those stores cost, but you know, Trump lost, you know, 10s of millions of dollars, right? I mean, there's, there's not a, you know, they may have tested elements of it. But you know, there's no way really to test that concept without doing it. So, that's one that's harder to kind of get, get into this, you know, sprint model or, you know, whatever. But there's lots of other things where there isn't this, you know, five years of planning kaboom, you know, grand opening (inaudible), and, you know, works or it doesn't. So, I think, you know, we have to be mindful of what decisions we're talking about. But I would say, in general, this idea of lots and lots of planning, lots and lots of study, and then, you know, tada, here's my new thing.
Michael LeBlanc 35:28
Yeah.
Steve Dennis 35:29
That, which was really the model that I think you and I really grew up on, you know, at least the earlier parts of our career. So now, I think it has to be much more dynamic, we have to build as much agility into the system as we realistically can. Lots of tradeoffs involved with that. But certainly, the general direction is to try to build more of that into your system. I think the other thing, and maybe I'll just kind of wrap up on this point is one of the quotes that I often include in my keynotes and definitely have in the book is from a meditation teacher, Jon Kabat Zinn. And you know it's really in the context of kind of calming your mind, but I think it works pretty well in business, as well as that the waves are going to keep coming. So, we have to learn how to surf, like just accept that the to-ing and fro-ing of customer behavior or competitive macro, whatever I mean, these, these things are going to be out there. So, we can't wish them away,
Michael LeBlanc 36:22
Yeah.
Steve Dennis 36:23
We'll just put our head in the sand, right, the action is to learn how to surf to build that agility, and then bring as much knowledge, you know, going back to some of the other letters in the VUCA framework, but bring as much strategy, knowledge, preparedness, as we can to, to the table. And that's, you know, that's how we're best positioned to take advantage of what might unfold.
Michael LeBlanc 37:05
Let's wrap the episode with a question that I sometimes asked in my interviews, advice two starts and one stop. Give us, give some advice to the retailers and the folks listening, even though you're not retailers, you're thinking about innovation, you’re thinking about your company, you're maybe your own company, two things they should start doing right away. And one thing they probably should not do any more, stop if they're doing it today?
Steve Dennis 37:27
Well, I think the major start would be around the focus and the clarity of who you're aiming to serve, you know, both customer, existing customers, you want to serve better in more remarkable way, but also those who are looking to acquire and grow in a meaningful way, like really getting clarity on that, and understanding whether you're really doing enough to stand out from the competition, not just you know, this weekend with a hot deal. But you know, fundamentally.
Steve Dennis 37:53
The second one, I’ll probably go back to something we touched on, which is to, in the words of the great retail strategist, Kendrick Lamar, “sit down, be humble”, you know, just realize that, you know, we need to be more open to possibilities, we need to realize that we don't have all the answers, we're not in control of as much as, as we think I think when you do that, a number of good things can happen. One is you're just open to more possibilities.
Michael LeBlanc 38:19
Right.
Steve Dennis 38:20
Secondly, I think maybe you get a little bit more vulnerable, and you ask for help. I mean, I point to some of the mistakes that I made in my career was being unwilling, you know, like, I'm the executive in charge, I'm supposed to have all the answers and, you know, to, to use a, an unfortunate reference perhaps, but you know, this idea that “I alone can fix it”, right. Like, it's a very, very narcissistic way of approaching things. So, I think if we move more towards humility, it creates, you know, more, more possibilities. And we invite people in to solve, you know, what are often pretty, pretty challenging (crossover talk) relations (crossover talk).
Michael LeBlanc 39:09
I mean, I mean, when we think about the stop, I guess the, the stop that we should maybe end on is stop thinking about month-over-month sales results in the Wall Street Journal, ba doom boom. But what else can you add in terms of something you see retailers doing and maybe advice for them not to do, thinking in the context of VUCA in a dynamic world?
Steve Dennis 39:35
Well, I think it's more around, stop attaching yourself, I guess, or leaning on, kind of one size fits all or more monolithic strategies, you know, be, be much more open to the test and learn kind of philosophy fundamentally. But, but it's really all, all things that get in the way, you know, stop doing all the things that get in the way of deepening your understanding and creating that agility and giving you that clarity to really become more remarkable. There's, there's probably a lot that fits under that, that broad heading.
Michael LeBlanc 40:13
All right. Well, that's a great way to leave this episode. Really a great theme and probably great advice. So, let's, let's leave it there. And once again, looking forward to seeing everybody in Vegas, baby. Let's leave it there, and everybody travel safe.
If you like what you heard, please follow us on Apple, Spotify, your favorite podcast platform to get you up with all our great interviews, including “Organized for Growth”, our interview was to Satish Malhotra, CEO of The Container Store.
New episodes of Season 6 presented for another season by our friends at MarkeDial will show up each and every Tuesday. And be sure and tell all your friends and colleagues in the retail industry all about us.
Steve Dennis 40:53
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 41:07
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. You can learn even more about me on LinkedIn and you can catch up with Steve and I in person at Shoptalk in Vegas, March 26. And a month later in Barcelona at the World Retail Congress April 25.
Until then, safe travels everyone.
SUMMARY KEYWORDS
talking, people, understand, retail, retailers, store, brands, layoffs, episode, customers, agility, little bit, remarkable, framework, fast, big, clarity, focus, book, inflation