Our guest this week is Matt Alexander, co-founder and CEO of Neighborhood Goods, recorded live at GroceryShop in Las Vegas. In a wide-ranging and thought-provoking interview, we first learn about the inspiration and evolution of Neighborhood Goods from a big picture vision to three physical locations (Dallas, New York and Austin, with more on the way). We then explore Matt's creative and unique take on concept development, merchandising, story-telling, and more, before moving into his fascinating thoughts on leadership, innovation, and more broadly, how culture affects retail.
Our guest this week is Matt Alexander, co-founder and CEO of Neighborhood Goods, recorded live at GroceryShop in Las Vegas.
In a wide-ranging and thought-provoking interview, we first learn about the inspiration and evolution of Neighborhood Goods from a big picture vision to three physical locations (Dallas, New York and Austin, with more on the way). We then explore Matt's creative and unique take on concept development, merchandising, story-telling, and more, before moving into his fascinating thoughts on leadership, innovation, and more broadly, how culture affects retail. We wrap up with what's next for Neighborhood Goods (with a bit of existentialist philosophy thrown in for good measure).
But first we take on the week in retail news, kicking off with a big picture overview of monthly sales and lots of retail earnings reports. We ponder what it all might mean for the near future, particularly as several retailers "pull their guidance." We then offer up quick hits on the decent (Walmart, Home Depot), the bad (Target), and the ugly (Kohl's), while considering whether Macy's "Polaris Strategy" is actually working. We conclude with our thoughts on the coming lay-offs and potential strategic shake-ups at Amazon.
Steve's Forbes article on Macy's Turnaround Strategy
Catch Steve and Michael at NRF's Big Show
Past Episodes Mentioned
Lori Stillman, from the National Association of Convenience Stores
The Citizenry's Rachel Bentley and Carly Nance
About Matt
Matt is the co-founder and CEO of Neighborhood Goods.
In his spare time, amongst other things, Matt is co-founder of not-for-profit, Unbranded, co-host of Bonanza! on Relay FM, a member of SMU's Dedman Executive Board, and advisor to a number of startups and accelerators.
Matt has been fortunate to be named as one of Monocle's Top 25 Entrepreneurs, D CEO's Most Influential Leaders, FGI's Rising Stars, and more. Meanwhile, Neighborhood Goods has been named one of Fast Company's Most Innovative Companies, Chain Store Age's Breakout Retailers, and more.
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 00:06
Welcome to Remarkable Retail podcast, Season 5, Episode 20, presented by MarketDial. I'm Michael LeBlanc.
Steve Dennis 00:13
And I'm Steve Dennis.
Michael LeBlanc 00:15
Well, Steve, we are going extremely hardcore working long hours at high intensity. You are firing off articles for Forbes and I'm touring a retail store in Manhattan.
Steve Dennis 00:26
Well, how are things? How are things in the Big Apple?
Michael LeBlanc 00:30
Well, it's, it's super fun. I'm doing this tour. It's kind of a pre-tour because I do a tour in January at the Big Show for the Retail Council of Canada, and a bunch of Canadian executives come down. Highlights so far, another fun day, I visited the new small format Target store, the new UNIQLO store in SoHo, and it had a RFID self-checkout, it's just a bin, you throw your stuff in, super cool. I checked out Citizenry, our former guests, or our guests on the podcast, the Google Store and I had breakfast at the RH Guesthouse, which was just delicious.
Steve Dennis 01:02
Well, that's a bit of a coincidence, because last night, I had dinner with a mutual friend of ours who shall go nameless, at the RH Rooftop restaurant in Dallas. So, there's RH everywhere, apparently.
Michael LeBlanc 01:15
Yeah, I could say the RH was wonderful. If you're in, if you're in Manhattan, go for breakfast, the food was great, service amazing and just a beautiful, beautiful space. So, I recommend, (crossover talk),
Steve Dennis 01:26
Love seeing our friends at RH for that.
Michael LeBlanc 01:30
I just, I just want to eat there for free. That would be, that would be good. Our very special guest on this episode recorded live in person in Las Vegas at GroceryShop is the one and only Matt Alexander, co-founder and CEO of Neighborhood Goods now. Now see this was not the first time for you meeting Matt, right?
Steve Dennis 01:46
It is not. I'm trying to remember when I first met Matt, it was probably close to 10 years ago, because I had been an advisor to the RevTech Venture Capital Fund. I met him early on when he and Mark Masinter, who we'll hear about in a second, we're developing the Neighborhood Goods concept. So, I got an early look at that. And then we have stayed in touch over the years as it's, it's developed. So, a super interesting guy, a lovely guy as well. And I think this is, this may be our first tiptoeing into kind of retail existentialism as well.
Michael LeBlanc 02:20
(Inaudible), it's a great conversation wide-ranging but so interesting. And we'll get to that. A reminder for everyone to be sure to check out our most recent bonus episode with Lori Stillman from the National Association of Convenience Stores recorded live in the MarketDial podcast studio in Vegas, conveniently scoping out the convenience store industry for us. And speaking of Manhattan, we'll be back in the city that never sleeps January 16, at the NRF Show on the stage with The Container Store, presented by MarketDial. We've also got a fun announcement.
Steve Dennis 02:52
Yeah. So, Gretchen, and I will be doing a talk that you will be helping moderate, we will also be, (crossover talk),
Michael LeBlanc 02:59
Wait, but wait.
Steve Dennis 03:01
But wait, there's more,
Michael LeBlanc 03:05
There's more,
Steve Dennis 03:07
We will also be giving out free copies of my book Remarkable Retail: How to Win & Keep Customers in the Age of Disruption to people that attend. We have limited quantities. So, you want to make sure that you actually show up during the correct time. And then after our talk, I will be signing books. So, if you get your free book, I'll be signing that if you already have a book and want to track me down, I'd be happy to sign it as well. So, more details on that as we get closer on social media and, and elsewhere. But make sure you pencil that in at least to your, to your diary for January 16, at the Big Show.
Michael LeBlanc 03:41
Yeah, and those books are courtesy of MarketDail. And I guess this is a good opportunity to say we've been renewed for Season 6 and MarketDial has come back on board. They are sticking with us as our presenting sponsor for, for Season 6, which starts at the NRF Show in January. So, we're very excited about that. All right let's get to the news of the week. It's a big, big earnings week. And it's probably, you know, it's so big. There's so many different retailers reporting, that, you know, going through them all would be a little bit tedious. But are there any, any highlights that you, that you caught that you'd want to share?
Steve Dennis 04:14
I think we got like 75% of all the retailers that anybody ever heard of to report this week. We've got a few more coming. I think Nordstrom and a few others will report next week. But I guess my big takeaways were, for the most part, the earnings and sales were, were pretty decent. We'll talk about a few exceptions in a second. The general kind of high-level trends from most of the, the commentary was that the supply chain is much, much better. And I also saw something on CNBC today that showed how much the backlog is, well basically that the backlog has gone away. So, that's very positive for consistency of inventory and, and lowering costs. So, there's some upside there, I guess, against inflation. Many retailers did make some progress on the inventory glut that we've talked about, I guess, for the past several months. But it's very clear that several of them still have way more inventory than you'd ideally like to have at this point, we'll talk about one exception in a second.
Steve Dennis 05:11
If you look at the overall numbers, because we also got the US Commerce, or an US Census Bureau sales report, the sales continue to be pretty strong, but most of the increase is explained by inflation. And they kind of dig into many of the retailers’ reports, whether we're talking about, you know, Home Depot or, or others, the general trend was that even if sales were up, which was probably true, in about half the cases, transactions were generally down. And there's this overall sense, Target, in particular, called out that October was slowed down a lot. And then November, several retailers said November is off to a very slow start. So, that's not exactly super positive for the next quarter. But many of them really just spoke about whether things are so uncertain, we really don't have a sense of what the future is going to look like, or, yeah, we had an okay quarter, but we think things are going to be a lot tougher going forward.
Steve Dennis 06:13
Several companies withdrew their guidance. So, if people aren't familiar with the Wall Street guidance, generally speaking, you say, you know, here are we, you know, we expect our annual sales will be in this range, and earnings will be in this range, that may get updated during the course of the year, that's pretty frequent. But to actually pull your guidance, as Kohl's did, for example,
Michael LeBlanc 06:36
It's a big deal.
Steve Dennis 06:39
That is a very big deal. Yeah. And that happened with several, several retailers, several big retailers. So, I think that just speaks to a very uncertain environment, generally speaking, things slowing down with all this inventory, you know, that's going to put a ton of pressure on margin, which we did see reflected in some of the company's reports.
Michael LeBlanc 06:56
You know, when you sit back and assess who won, who lost to any, any names come to mind in terms of big winners or big losers, so to speak?
Steve Dennis 07:04
I think the winner, sort of the clearest winner was Walmart, their results were not amazing. But I think when you compare to a lot of retailers that had significant sales declines, and big margin hits, Walmart seemed to do pretty, pretty well, because they did have customer and transaction growth. And they, I mean, it's impossible to go into it. But they do a good job of breaking out different segments, different categories, and all that kind of stuff. And I think the message there was, customers are buying more on a need versus a want basis, and that their value orientation was really helpful. They made a big deal, which I applaud them for that they've really tried hard not to raise prices, or to tamp down the price increases, if they did, that hit their gross margin a little bit. So, that flowed through to their profitability, but it looked like that allowed them to keep or grow market share.
Michael LeBlanc 07:33
Yeah,
Steve Dennis 07:34
And so, I mean, by contrast, because I guess, you know, the most direct comparison to Walmart would be Target. Target had a really rough week, that didn't actually perform that much worse than, than Walmart did. But their sales or increase was, was lower, their margin hit was bigger. They obviously have continued to have too much inventory. And they basically said that that was going to be an overhang for them. And it was going to take them a while to work through that. They were just more negative about the outlook. And so their stock took a big,
Michael LeBlanc 07:53
Oh, big hit, (crossover talk).
Steve Dennis 07:58
Yeah, yeah, it did. Just kind of a few other things that Target mentioned that I think we're interesting. This was before the earnings announcement, they announced a new, larger format. So, just like you've seen the smaller format they're also going with this, you know, we talked about the hybrid format that, that Target has been achieving through their remodels largely, but now they've got a new, larger store that actually has probably more retail selling square footage. But the main thing I think is the way they've designed from scratch, basically designing the back-office space to be able to accomplish eCommerce fulfillment, and so forth. I still fundamentally believe Target is very well positioned. And but, it's clear, it's going to take them another quarter or two to really get their inventory where it needs to be.
Michael LeBlanc 09:10
You know, in thinking about you mentioned Wall Street talking about Wall Street and expectations. You're telling me off mic you basically almost spit your coffee all over your television when you got up this morning. Well,
Steve Dennis 09:20
Well, you know, not because I said it on social media, but when a new Macy's and Kohl's earnings were going to come out. And people you know, somebody said what do you think's going to happen? And I said, well, you know, I think both Macy's, I think Macy's and Kohl's are going to be bad and Kohl's will be a disaster. And then I got up and I turned on Bloomberg. And it was like, well, Macy's had an amazing quarter and I'm like, whoa, wait, what?
Michael LeBlanc 09:38
Well, what do they call that in Hollywood a spit take, (crossover talk),
Steve Dennis 09:42
Pretty much a spit take but thankfully, I did, had not, I didn't have coffee in my mouth when I actually saw it and I was like, Wow, man, I really got this wrong. Except when I listened, it was like, well, what happened was everybody thought Macy's earnings were really going to suck and they only sucked a little. And so that was good for, to use the technical Wall Street trading terminology. So yeah, it was very, very strange. It compelled me to write a Forbes piece, which I guess we can link to, but Macy's results were just objectively bad. Their sales were down, their earnings were down. My favorite comment was from Jeff Gennette, who I'm sure is a lovely guy. People that know him tell me he's a lovely guy. So, you know, no hate against Jeff. But he said there, Polaris Strategy was working. And so they're almost to the expiration date of that Po-, Polaris Strategy, it's a three year program, I won't go into all the details of what it includes. But it's meant to be done by February. And unless your plan was to have your sales go nowhere in three years and your earnings to get worse, (crossover talk).
Michael LeBlanc 10:20
Polaris,
Steve Dennis 10:21
It is hard to say how the, how the Polaris Strategy is working. So yeah, it's very, very strange. But anyway, Wall Street loved it. I don't know what the stock will do today. But the day yesterday, when they made it Friday, we're recording this on Thursday, the stock was up 13% or 15%. So,
Michael LeBlanc 10:57
So well, speaking of pulling back on spending, Amazon announced some pretty big layoffs. And it was in the news in Canada because they've actually got a lot of employees here in Canada, on the device side, on the Alexa side. Last episode, we were talking about how much money they were losing on the Alexa business. So, it seems like they're taking action around that specific advice. But any, any color commentary on what Amazon announced this week?
Steve Dennis 11:18
Well, it was sort of a two staged report. One was It was reported before it was officially confirmed that they were going to eliminate 10,000 corporate jobs, which is only in one way of looking at it, 3% of, of that group of employees. So, it's not humongous in the scheme of things, obviously it means a lot to those particular people.
Michael LeBlanc 11:27
They'll tell you effectively.
Steve Dennis 11:31
Yeah, but so I mean, it just kind of puts it in perspective, because, you know, they're one of the biggest employers on the planet. Amazon basically confirmed that they were going to, I don't think they confirmed that number. But they confirmed that they were doing headcount reductions, and that the headcount reductions would continue into next year, early next year. So, I don't think we know too much yet about the specifics. What I think is the big picture thing, just kind of picking up on what we talked about last week, and, and you can also look at it. I don't think they announced any layoffs, but Alibaba also had, you know, very weak sales results, and lost a lot of money. So, these big companies that were the big, big drivers of eCommerce around the world are and you know, really prioritize growth over profits are now going through a very, very substantial rethink. So, I think that continues to be the story. I think there's a lot more shoes to drop, to use the cliche, in terms of what this means for Amazon's plans and you know, just beyond you know, exactly how many people are, are,
Michael LeBlanc 12:35
Right.
Steve Dennis 12:36
Affected and where those cuts occur. So, I imagine some, some pretty aggressive strategic moves. So, it sounds like that the big, big stuff is not likely to happen until after the holidays. So, you know, Merry Christmas, everybody, dance.
Michael LeBlanc 12:56
Well, all I can say is stay tuned to this back channel at this back time because we got lots of more episodes coming up both for the rest of the season, and well into next season as we renewed for Season 6. All right, before we get to our great interview with Matt Alexander, let's hear for our presenting sponsor, MarketDial.
Michael LeBlanc 13:06
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 @marketdial.com That's marketdial.com.
Steve Dennis 13:57
Well, we're back here at GroceryShop with a guy I'm not quite sure why he's here. But Matt Alexander the founder and CEO, (crossover talk),
Michael LeBlanc 13:48
That's an opening,
Steve Dennis 14:01
Explain yourself, but Matt Alexander, who I have known for a number of years, including before his current gig, which we'll get into, but Matt Alexander, who are you? What do you do? And why are you here?
Matt Alexander 14:14
That's a great question. on all counts. Yeah. So, (inaudible) I’m the co-founder and CEO of a retail concept called Neighborhood Goods. We describe ourselves as a new type of department store of sorts, and we have locations in Texas, and New York and more on the way. And I'm here at GroceryShop for, you know, 24 hours and I spoke yesterday, not to date anything, about new store formats. And so, we do dabble a little bit in CPG. We launched a concept called The Marketplace last year and brought it into all of our different locations. And so, it was certainly speaking to aspects of that, but I think it was also taking the more sort of broad stroke perspective about how we think about location and real estate and store format. And seeing if there was any sort of relevance that might apply to the grocery world, obviously more on the sort of discovery side of things,
Steve Dennis 14:46
Right.
Matt Alexander 14:47
More the utility base sort of thing.
Steve Dennis 15:20
Yeah. So, I'd love to come back to that in just a minute or two. But for folks that may not understand Neighborhood Goods. What is that? How did it, how did that all come about? And I remember sitting at a coffee shop with you, four or five years ago, hearing, hearing the story and not knowing whether you were brilliant or crazy.
Matt Alexander 15:38
A bit of both.
Steve Dennis 15:44
A bit of both. I think you need to be a little bit crazy to do some of the things that entrepreneurs do. But yeah, what's, what was the origin of Neighborhood Goods? How it evolved, etc?
Matt Alexander 15:51
So, you want to be both cohesive, and at the same time, flexible, right? Yes. So the, the, the overall premise is, you know, the observation in 2017, or thereabouts when we incorporated the company was that there was a huge rise, obviously, in direct-to-consumer brands, but also just generally people. If they had the inclination to start their own company, it was easier than ever. But customer acquisition costs were flying upwards online. And a lot of these brands were having to start thinking in, in very early stages about distribution, and to a lesser extent about opening their own fleets of stores. In some instances, whether it was pop ups or a more sort of robust strategy. But it just remained very difficult. And so in 2014, or thereabouts, I'd started this sort of, not for profit, retail sort of experiment in Dallas called Unbranded which just gave away free space every holiday season for up and coming brands to test retail and just sort of get in front of their local audience. And it ended up having quite a loyal sort of community built around it in the city and became a nonprofit run by a nonprofit in Dallas called Downtown Dallas Inc. And a lot of the brands that launched out of that are now big sort of national, and sometimes international names that have gone on to open, you know, fleets of their own stores.
Matt Alexander 16:47
And so, in early 2017, I was approached by a guy called Mark Masinter, who's an incredibly prominent personality, and the sort of retail real estate universe. So, you know, he's particularly well known for all he's done to help Apple roll out their stores, Restoration Hardware, and all sorts of others. And he was interested in seeing if there was a way to take and to create a more permanent version of something like (inaudible) at Legacy Western, Plano, where our first location eventually opened. And he had been thinking about it from his angle more on the sort of real estate and sort of, sort of advisory side of things.
Matt Alexander 17:04
And I had been thinking about it more on the side, of the brand side of things and it sort of ran off from there. And so, we create, you know, fixed physical spaces where brands typically pay to be in the store. And we take a revenue share of sales, the product is brought in on consignment. And then we equip the space with all sorts of, you know, computer vision enabled cameras, and other ways to capture demographics, general traffic, and all sorts of other insights. We create our own restaurants and each of those spaces. And we create on a fairly local basis, fairly modular, and or fairly malleable fixtures that allow for brands to enter the ecosystem to sort of adhere to our underlying visual and aesthetic system. But otherwise, be able to show up in a way that would otherwise be prohibitively expensive to get into any of these areas. So, (crossover talk), Yeah, in those early documents,
Michael LeBlanc 17:31
Format wise.
Matt Alexander 17:33
I used to, I used to liken it a lot to Apple's approach to the App Store where they have what's called human interface guidelines. So, if you want to be a first-class citizen within the App Store ecosystem, and be featured on the front page of the App Store, and otherwise, you have to adhere to certain visual standards that evolve generally on a sort of annual basis. So, it used to be that for your promotional images in the App Store, you could only use a particular color of iPhone a year and things like that. And so you could look at those as being very onerous, or you could look at them as being a re-, a relatively low threshold, that if you abide by those general rules and guidelines festival, it's good for the consumer to some degree of consistency. But it can also you know, through those restrictions, create a lot of creativity and really unlock a lot of opportunity. And so, we thought about it in a similar way where we didn't want all these brands that have, you know, quite different approaches to their brand had to show up in the store and put-up walls and create this really sort of turbulent and disjointed experience. But you know what it was actually one of the things that has really shifted, so when we first opened in Plano it was a 14,000 square foot space. And we assumed that about 10 to 15 brands would open with us there. And the thought was that brands would need anywhere from 250 to 1000 square feet each. We ended up launching with about 26 brands. And that was because a lot of them started to sort of embed themselves a little bit more into the experience of frame bridge, frame the artwork on the wall, year and day have their flatware in our restaurant and so on and so forth. But today that space has about 155 brands in it.
Steve Dennis 19:03
Is it really that? Wow.
Matt Alexander 19:06
Yeah. And so it's, (crossover talk), it’s almost product placement meets retailing and merchandising, right. Yeah. And so, I think really, for us, what sort of shifted is that the early assumption was that brands would really need these very just sort of discrete and distinct moments to tell their respective stories. And that certainly has appeal. But what we quickly found was that a lot of those brands would do a lot better if there was some degree of competition, or at least context from a pricing perspective or otherwise. And obviously, these are very traditional aspects of retail. But in the context of trying this sort of model, it became just a very interesting exercise in sort of trying to ascertain which brands really needed a smaller presence and just something more product focused. Whereas others may need something much bigger and more narrative and more branded. And so. So yeah, we create these sort of cohesive spaces where all sorts of different brands come in and do that sort of stuff.
Matt Alexander 19:30
And at the same time, we're hosting two to three events per week in each of our stores. We have a fairly sort of thriving run of exclusives and collaborations in our own private label that we've been developing over the past few years. And so, you know, brands come in and out of the ecosystem. We have some that have been with us, essentially, since the beginning, which was not the plan. And we have others that have been with us. You know, for as little as a few weeks at this point, we're launching sort of anywhere up to 10 brands each week right now. In such a flex-,
Michael LeBlanc 22:23
It's such an interesting concept. Now, I want to take a step back and talk about you for a little bit. So, I've traveled extensively across America. I know a few Texans; I don't recognize what part of Texas your accent is from?
Matt Alexander 22:35
South.
Michael LeBlanc 22:36
South, South Texas. Yeah. So, what tell us a little bit about you, who are you? And how did you find yourself in Texas in America doing what you do?
Matt Alexander 22:45
Yeah, there are a lot of questions about why I'm here right now at GroceryShop in America,
Michael LeBlanc 22:52
Pulling back the lens. Why, why are we all here?
Matt Alexander 22:55
What on earth are you doing here?
Steve Dennis 22:57
(Inaudible) centralism, we're getting into retail (inaudible) centralism.
Matt Alexander 22:59
So, I was born and raised in London, to an English dad and American mom,
Michael LeBlanc 23:06
Okay.
Matt Alexander 23:07
So, my mom, you know, all jokes aside, is actually from South Texas from Galveston. And so I grew up as a dual citizen going back and forth between the two. And I came over to Dallas in 2006, to go to SMU. And so, I had always had this sort of nascent entrepreneurial streak in my teens, and I never fully recognized it. But I knew enough that I wanted to study computer science at university and to just generally a broader spectrum of things. Whereas at a university in the UK, you only study one thing. And so, I decided to come to the US for university, sort of experience the other side and then run right back to the UK. But here I am sort of 16 years later,
Michael LeBlanc 23:53
Do you think this concept could work? I know London well; I know Europe fairly well. Do you think this concept is transportable out of places like the United States? Do you think it's broad enough for there's enough demand? I mean, you're certainly seeing demand from the brands.
Matt Alexander 24:06
Yeah, I think there's also this sort of model and approach that exists in both Europe and Asia in various different forms. And so there's more sort of brand literacy around this sort of concept. Not that there isn't one here. But I think it would be fairly easy to show up and do something interesting there. And you know, I was just in London a week or two ago. We have a one-year-old that we took over there and we sort of spent a little bit of time running around London and,
Michael LeBlanc 24:19
"God Save the King". Can we say that now?
Matt Alexander 24:27
Yeah, it was quite awkward. Actually, my son we, we were walking past Buckingham Palace the day before the Queen died and he was flashing the palace like pulling up this shirt and we ran through the BBCs (inaudible) permanent cameras right there and then and then she died the next day. And so, it's like I posted literally on Instagram saying like, the disrespect with a picture of him and it was still up the following day, it was very awkward. But it was, it was actually, it was, it was really interesting to be there, we were out to dinner, and it was very obvious what was coming that day. And I was standing outside with my son. And the moment that (inaudible) BBC push notification hit everyone's phone. I was, we were sort of standing and just saw that it sort of happened all at once. And so, it hadn't hit mine yet. But it was very clear what had just happened. So, it was, it was interesting to be there. We weren't there for too much of it. But (crossover talk),
Michael LeBlanc 25:26
What a cultural moment now, now, as you reflect on, like, I'm, I'm really trying to get to your sense of aesthetics and culture and how it kind of, you know, becomes this vector for what you articulate in the physical stores. So, I'm kind of intrigued by that. So, do these, do these things, set you on a course that says, you know, we should look, or do, or pursue a certain thing? Like, how does that get you going?
Matt Alexander 25:49
You know, I was an English major. And I have a fairly sort of romantic sort of side to me in that regard. And I, I, I care a lot, and,
Michael LeBlanc 25:56
A storyteller, you're a good storyteller.
Matt Alexander 26:04
The thing I probably care about the most with Neighborhood Goods is the feeling, which is this sort of intangible sort of sum total of all these different sorts of business decisions we make, right? But having that sort of particular feeling, and how we think about training, and how you can sort of create some degree of comfort for the teams is crucial. And so, and so to answer your prior question, yeah, doing something in England has always been in our sort of roadmap, and doing it sort of sometime between five and 10 stores it has always been the thought. And it was largely from my personal experience growing up where there were companies set up in Europe to specifically rip off the US, sort of upstart concepts that did not expand internationally quickly enough. And often they would be these rip off versions, would be more successful in many respects, because they just took all the lessons and did it in,
Michael LeBlanc 26:37
Yeah, yeah.
Matt Alexander 26:39
A more efficient way. And so, I do have this sort of real desire to do something interesting there. And I've often been asked, whether it's by my team, or investors, or whoever it is, as to, you know, what sort of motivates me. And it's always been this sense of participating in a conversation much bigger than just ourselves, right. So, like, speaking at GroceryShop, just generally sort of talking about, you know, for us, what's important, has always been this sense of fallibility. And recognizing that we are on this sort of, you know, I think, I think the retail industry uses the word solution far too much. And I think we, you know, a representative of things that, you know, people like, you know, you Steve who have been talking about for, you know, a decade where there's been this clear-cut opportunity in the marketplace.
Matt Alexander 26:55
And there are dozens of similar opportunities in the marketplace today. And I think what ultimately has given us a lot of momentum is that we weren't the first people to come along and create this sort of concept. You know, what, right when we were opening, Simon had something similar at Roosevelt Field, the Edit, and they've been a few different groups. And it's a very good idea, and it serves brands well, but the crucial piece to it that a lot of them have missed is that you can't just white box, the space and sort of ostensibly shell, sell shelf space, you have to have taste, you have to have a perspective, you have to have a you know, that brand, texture of your own and that sort of perspective. And so that, for me, comes from the sort of cultural moments. And I think, you know, we've had no shortage of cultural moments in the US, (inaudible) since we started the company that you know, the company that Mark and I incorporated, that the parent company in August of 2017, so it's just about five years. And then Plano, our first store opened in November 2018. So, coming up on four years. And in that time, you know, like our Austin store opened on March 13, 2020. And then I closed all the stores on March 14, less than 24 hours later.
Matt LeBlanc 27:16
Wow.
Matt Alexander 27:17
And so, like, we've been through a huge amount. And I think, you know, one of the questions that came up again yesterday was, like, what challenges do we face? And I think it's always been this sort of sense of how do you build trust? And I think that comes from aesthetics. And I think it comes from the vocabulary you choose to use about these sorts of things. And I think it obviously comes from your actions. But it's also this sort of piece around, you know, the broad was sort of the way things have played out and the way we've sort of moved along with the various, you know, turbulence in the world, I think it has been quite affirming. And it's not like you want to look at a crisis as a welcome thing, because it's obviously not. That way it would have been great to have just been kept running along in 2020. But I also think that if we had been running at that pace in 2020, we would have been racking up a psychological debt that would have come due at some point in that year, and I think we would have had real sort of fundamental questions, to answer of ourselves as to how we run the business and how we do it in the best possible way. And so in many respects, the pandemic forced us to slow down. And I think now we sort of come out of this with just more of the sense of identity and who we are, and certainly, who we are not.
Matt Alexander 28:26
And, and so you know, to bring it all back to the royal family. I think, I think, you know, it's moments like that, you know, in that one in particular, I grew up and I remember talking to my grandmother, who lived in London through the Blitz. And I remember talking to her about how I didn't personally feel much for the royal family that it felt like a very much this sort of tourism sort of institution,
Michael LeBlanc 28:39
Disconnected institution from.
Matt Alexander 28:41
And as I've gotten older, I just, I have a much different perspective around the Queen and that sort of stabilizing sort of power and some of these things that I think, you know, in a world that's very format-, frenetic today, where that sort of degree of stability and sort of reliability can be incredibly impactful. And so, in that moment, I did find myself thinking a lot about that. And, and it's certainly not anything particularly anag-, analogous to what we do, but it certainly does provide a certain amount of energy and inspiration for how we can think about how to build the company forward.
Steve Dennis 31:18
So, interesting. So, I want to talk a little bit about where you're going next with Neighborhood Goods. But I'm, I'm curious, building on some of the things you just said. What do you think of some of them, because I'm sure you've studied and not only worked with a lot of brands, but also studied what other retail brands and just brands in general have done to innovate and stay agile and all those kinds of things? Are there any like two or three lessons, as you look back that you say, Okay, if I were an entrepreneur, or if I'm a legacy brand, trying to reinvent myself, these are some of the principles you just absolutely have to do. And I'm not trying to get into COVID. In particular, it's really more just the learnings you've had across the last four or five years.
Matt Alexander 32:00
It's hard to pinpoint any one in particular, right? There's been sort of back-to-back lessons on just about a daily basis. But I think some of the core tenets of how we sort of built the company are trying to sort of pay more than typical for our store teams, we provide equity to everyone in the company, we have all of them participate in the same Slack. So, it's sort of a relatively sort of open ecosystem. I think there's a lot of those things have been very much affirmed. And so, I think, in the broader world, there is this sort of correction underway.
Matt Alexander 32:23
And it has been underway, probably alongside the pandemic, but certainly continues around store teams. I was speaking at a conference in Seattle a month or two ago, and someone in the audience asked me, you know, how can you possibly justify paying people more and more in, (inaudible) frontline workers, quote, unquote, and had like, they keep demanding more and where's the ceiling? And it was this sort of relatively sort of derogatory way of talking about people and the role they have to play. And my answer was that all these people, if they are there, and they have passion, and they care, they can do more than just whatever you think frontline entails. And you can, you can distribute more responsibility, and provide some degree of autonomy into those locations and those teams in a way that can create a huge amount of opportunity and completely reframes how you would think about that compensation sort of discussion.
Matt Alexander 32:49
And so I think there's a lot of things there that we were sort of, ahead of not. not in a sort of, in a predictive way, but more just that we felt it was the right thing to do. And I think there's some of that coming around today that I think, as a result, we found ourselves in a good position, but I think will be a really crucial piece of how we go forward. I also think that, you know, I mentioned the solution thing, I think people are so in search of, you know, tech solutions, I walked the floor here yesterday, and it's mostly sort of technology solutions to improve upon various aspects of sort of baseline sort of experience with mostly grocery retail here, but obviously for a lot of others. And, and a lot of those have great products and great ideas. But I think retail, especially in that legacy crowd, they look for those things with such hunger to resolve all these like deep seated issues. And I think more often than not the problem that they're actually coming up against is a relatively simple one, which is that they probably just have the wrong product or they've they have they've lost that retail is ultimately about relevance, right? And so we dress it up and all these words are like localization and whatever else. But it's ultimately like, do you have products in your store that people that live within X proximity care about? And it's not that hard, right? Like, (crossover talk),
Michael LeBlanc 34:54
Say that again, go back, say that again, (crossover talk). My goodness you're breaking ground here.
Matt Alexander 35:03
And so, I just think it's you know, the lessons I think, is that and, Steve, I feel like this is something you've been saying for a long time, which is that, (crossover talk).
Steve Dennis 35:07
It'll sound better coming from you.
Matt Alexander 35:11
It's that, you know, retail, from a basic sort of philosophical perspective is a relatively simple thing, where it's about providing relevant things to people, (inaudible) in a nice format and creating a positive sort of interaction and memory, right. And that doesn't need to be this hugely dressed up thing. And so, the world gets wrapped up in (inaudible) experiential retail, and what we've always said is that we are a lowercase letter company. And so, if it's experiential, it's lowercase E, experiential, meaning that someone might be nice to you that day, or you might have a great cocktail at the bar, or you might, you know, like, meet up with a friend, whatever it is, it's not that you're jumping into a bullpen and taking a selfie, right. And I'm like, and so I think, I think there's just a lot there. I think, you know, some of it's hard, you know, like, for a lot of these larger retailers that the enormous space attached to predominantly malls, and there's a lot of great malls in the country, it's that it’s not necessarily the problem. It's more that I think, the rise of direct-to-consumer brands, which is really just, you know, brands that have more of a focus on the narrative aspect. That it's really just that people care about that sort of texture, they care about the intention of what they're purchasing.
Matt Alexander 35:53
And so, I think the lessons really out there, it's, it's, it's, I think it's this sort of big call to action to just sort of return to the basics somewhat. And I think so many people are missing it in favor of like, okay, yeah, that makes sense. But how do we add more video to the website sort of thing, and it's just like, and that might help you get to, ultimately where you need to be. But it's, I think what we spend the majority of our time doing just by virtue of our business model is thinking about that lifeblood of brands and what is ultimately going to work and not all of those brands are going to work, right. That's part of the model.
Michael LeBlanc 36:19
Right.
Matt Alexander 36:20
So, it's just this sort of, I think we from, you know, the reason we are afforded the opportunity to exist as a concept and to grow in this market is because larger retailers were complacent, you know, two decades ago, and I think, I think that a lot of them are sort of realizing that and have been realizing that for the past, you know, five to 10 years. But it is an interesting time. On the flip side, it's an interesting time for these, you know, direct-to-consumer brands, like capitalism, no longer flowing to them, there's an expectation of profitability. And so they're all having to think about wholesale, they're all having to think about stores, but much more so than when we started the business, which, on the one hand, yields a lot of opportunity for us, but on the other means that it's just it's a radically different equation for how you sort of grade what is going to be a good partner and how you think of all these things. So, it's an interesting time in the space for the retail, it's always going to be an interesting time, the space, it's never going to be that linear it's a huge amount of personalities and different dynamics,
Michael LeBlanc 38:18
Yeah.
Matt Alexander 38:19
In play. But I think for me, the key sort of lesson is that it's, it's, it's owning the fact that you're never going to have a finished product. And the recognition that it's always going to be this effort of iteration. And sometimes it's like much more than iteration and doing much deeper change throughout your organization to meet the moment. And I think as long as we are able to stay in that moment, and that headspace, I think for the better. But I think it's really about how we all sort of find ourselves in that sort of headspace and sort of stop looking all the time outward for solutions and sometimes maybe looking a little bit more inward. But you know, that's just my perspective. (Crossover talk),
Steve Dennis 38:49
That's just my opinion, man.
Michael LeBlanc 38:51
What a great perspective what a, what a great discussion coincidentally with two fellas from Texas, who neither of whom have Texas accents.
Steve Dennis 38:57
Thank you. That's the nicest thing you've ever said to me.
Michael LeBlanc 39:01
Well, Matt Alexander, thanks for joining us on the Remarkable Retail podcast. It's a real treat to meet you and hear the story. It's a fascinating take and just having your take on what you see as you walk the floor here and being here together at GroceryShop. Thanks so much for stopping in and chit chatting with us and wish you safe travels and continued success and I hope to stay in touch.
Matt Alexander 39:20
Yeah, absolutely. Well, thank you so much for having me on.
Michael LeBlanc 39:23
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, including Hal Lawton talking about Tractor Supply's remarkable life out here growth story.
New episodes of Season 5, presented by MarketDial will show up each and every Tuesday. And be sure to tell your friends and colleagues in the retail industry, all about us.
Steve Dennis 39:43
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 through my consulting and keynote speaking at stevenpdennis.com.
Michael LeBlanc 39:55
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 the NRF Big Show in New York, January 16, on the stage talking about what it takes to be remarkable, with The Container Store, SVP Gretchen Ganc.
See you in New York, everyone.
SUMMARY KEYWORDS
brands, retail, store, people, big, RH, speaking, sales, create, thinking, called, earnings, years, space, Macy’s, interesting, lessons