This week we welcome Emily Heyward, the cofounder and chief brand officer of Red Antler as our guest to help understand what branding is all about, why it is so important and what it takes to build and sustain a remarkable brand. We discuss lessons learned from her career working with top companies such Casper, Boxed and Allbirds, and delve into the key concepts she unpacks in her recent book, including the "5 Why's", the power of focus and simplicity and the role of physical retail in creating an immersive and distinctive customer experience.
This week we welcome Emily Heyward, the cofounder and chief brand officer of Red Antler as our guest to help understand what branding is all about, why it is so important and what it takes to build and sustain a remarkable brand. We discuss lessons learned from her career working with top companies such Casper, Boxed and Allbirds, and delve into the key concepts she unpacks in her recent book, including the "5 Why's", the power of focus and simplicity and the role of physical retail in creating an immersive and distinctive customer experience.
After our interview we jump into our new weekly segment “Remarkable or Forgettable?” where we give our hot takes on retail headlines, and deem them wow-worthy, best ignored or somewhere in between. This week's highlights include what to make of Macy's Investor Day pronouncements, what we can glean from recent retailer earning reports, Kohl's facing new challenge from an activist investor group, Best Buy's new hybrid store model and more.
Emily Heyward is the Co-Founder and Chief Brand Officer at Red Antler. Author of Obsessed: Building a Brand People Love from Day One available on Amazon and / or in Canada at Indigo Books.
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 will be released April 13th and is now available for preorder 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 and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Michael LeBlanc
Welcome to the Remarkable Retail podcast, season two, episode five. I'm Michael LeBlanc.
Steve Dennis
And I'm Steve Dennis.
Michael LeBlanc
Steve, in your mind, what makes a great brand?
Steve Dennis
Such a great question. I think the brands that really separate themselves from the pack, that are remarkable, as I, as I might say, are the ones that, first of all, are highly distinctive and unique. They're very customer relevant. But, I think the big thing is that they make this really strong emotional connection, or bond, with the customer. Which is I think, when we talk to Emily, you know, the reason why she uses the title for her book, I assume, 'obsessed' is that you know, what is that passion or, or incredible bond and connection that brands make with consumers? And then the remarkable part, of course, is not only do they have that bond, but customers are so obsessed with the brand that they will talk about it with their friends and colleagues and workers, and that creates this amplification effect for brands sustains them and propels them forward. So, having said that, we're lucky to have with us on the episode today a very special guest, Emily Heyward, who is the co-founder and CEO of brand agency, Red Antler, and author of 'Obsessed: Building a Brand People Love from Day One'.
Michael LeBlanc
Emily, welcome to the Remarkable Retail podcast. How are you doing this afternoon?
Emily Heyward
I am so good. Thank you so much for having me.
Michael LeBlanc
Well, it's such a treat to be able to speak with you again, you and I spoke for The Voice Retail podcast very briefly. And it just gave me a glimpse into what could be a great long discussion and to have you and Steve on the same podcast together. I mean, really, I think it's the best of both worlds from my perspective. Such a great opportunity to talk about brand and strategy and retail.
Let's jump in. Tell us a little bit about yourself, the work you do and what is Red Antler. And let's start there.
Emily Heyward
Yeah, so, I'm Emily Hayward. I am one of the founders of Red Antler. We're a brand company that's about 14 years old. And we specialize in startups and new ventures. So, about half of our clients are pre-launch startups. Which means that we're partnering directly with entrepreneurs to really help them bring their business idea to life through the lens of brand and really embed brand in their growth from the beginning.
Michael LeBlanc
And when you started Red Antler, was that always the objective? And did you have in mind that you were going to start in that space as opposed to you know, we're going to work with established brands and help them refurbish the brand? It, was it always in your mind that, that there was some whitespace in the brand world where this need was just resonating with you and your partners?
Emily Heyward
Yeah, actually, that whitespace is the reason we started Red Antler. So, I had begun my career, along with my co-founder, working in traditional advertising. We were working with those big established brands. And as the startup scene was just taking off in New York we were seeing all the incredibly innovative ways that people were using emerging technology to bring more value to people's lives, to disrupt categories. We saw an opportunity to create the first creative services company that really was designed to work with startups. You know, at the time, that was not the ethos. People really didn't think that startups should be investing in brand. We got a lot of pushback about whether our business model even made sense, including from people like our parents who were very supportive, but wondered why we were choosing startups as our target audience.
And, I think a lot of people thought our end game was to get our start working with these little unknown companies and eventually work our way up to the big boys. But that was very much not the intention.
Michael LeBlanc
Well, I just want to spend one more minute on this. So, when you say the approach is different, in what way was your approach different when you would go talk to startups, and that kind of caliber of retail or whatever brands versus established brands? Like what was unique about your approach that it was so tailored to that particular cohort, or genre or whatever you want to call it?
Emily Heyward
I think there are a few factors at play that led us to create a differentiated offering. One, is the mindset that founders bring to the table. You know, a founder has a very different mindset about this work, than even the most passionate brand manager at a corporate company. Because a founder has left their whole life behind
Michael LeBlanc
Right.
Emily Heyward
To start this business.
So, the people with who we work with are very much not looking to outsource this. They have very strong opinions. They want to roll up their sleeves. They want to be at the table where the decisions are getting made. So, that was one is that we had to structure a very collaborative process.
Michael LeBlanc
Right.
Emily Heyward
And it also meant that from the beginning, we needed to expand the definition of what we meant by brand. You know, I think that when you work with an established company, and the world has so much context already, for that company, its products, what it stands for, you can come in and do a very narrow, focused effort for them. You can do a single campaign or a part of their website. For us, when we're working with these pre-launch companies, we are starting from literally zero. So, we're having to create an entire world. It's more like writing a sci-fi novel. We have to invent all the characters, all the rules, every single way that this brand is going to show up when a consumer interacts with them, because that all contributes to somebody's impressions and feelings.
Steve Dennis
So, maybe to pick up on that. And before we get a little bit deeper into some of your ideas, people talk a lot about brands, branding, lots of different concepts around that. Can you just give us what you mean by a brand and branding? And particularly why it's so important that you think about building a brand from day one?
Emily Heyward
Absolutely, I think the most common mistake that people make is they confuse the expressions of a brand with what it means to have a brand. So, they'll say to me, "Oh, I don't need a brand, I've got my logo", or "I've got my name and my logo, you know, I just need a website". And I think that for us, our belief is that brand needs to start deeper than that. And what it really is, is an internal understanding of what your business stands for, and why it should matter to people. It's almost answering the question of 'Why should people care about this thing?'. And that's what we call brand strategy.
And then once you have that strategy, or that idea of what you really want to be for people, what you want to own in the world, then that gets translated across everything that you do. So, as we think about brand, yes, of course, you know, logo, color palette, typography, those are all really valuable tools for helping people understand what you're all about, and for giving an impression and a feeling. But we also mean digital experience. We also mean your social presence. Your customer service policy is part of your brand. You know, certainly the experience, once if you're do sell a physical product, you know, when that arrives in the home, opening it up. Obviously, if you're selling through physical retail, walking into your store, that is all brand and all ladders up to people's relationship with you.
Steve Dennis
And so, how would you make the distinction? I mean, that makes sense to me. But, how would you make the distinction between what people talk about as the customer experience versus the brand experience? Same thing or are they different?
Emily Heyward
I would say they're one in the same.
Michael LeBlanc
When, when I think about your book, 'Obsessed', fantastic book, by the way, congratulations. on it. It's, it's been on my night table many, many times, just as, as a great refresher. One of those top books that really is, is very insightful. But it also provides a guide, for a practical guide.
You really dig into, into how to discover this underlying consumer need. And, and I've heard you speak of this before that, you know, these passionate brand owners, these passionate folks who are starting, they come to you and they have cracked a code, I'm doing the following things and it's never been done before. Take me through how you, how you, and in the book, provide that guide to say, "Really? Is it really? Are you really the next Beatles? Are you really the next Google?" How do you unearth that and then strip it down and then start building back up a brand that, that is meaningful and has sustainability to it?
Emily Heyward
Well, I think the piece of the puzzle that it's easy for entrepreneurs to forget, is that no matter how innovative your idea is, or actually, maybe the more innovative your idea is, the more you need to make sure that you're connecting it to an existing human truth. And what I mean by that is, I think that entrepreneurs rightfully get really excited about whatever it is that they're building. And, sometimes forget that the news of it itself is not enough to get everyone else just as excited as they are.
You know, most people, they're pretty ingrained in their habits. They're not necessarily looking to switch things up, other than our true early adopters, which is really a very small slice of the population. So, the best businesses are the ones that say, 'Hey, we've got this really new thing, but it's actually answering an age-old human truth'. We just haven't figured out this particular solution yet. So rather than trying to create a new need, we're introducing a new way to solve something that was already there. The people were already feeling, wishing for it, whether or not they could articulate it.
And I can go deeper on that. I think that, you know, when I used to work in advertising, we used to joke around because we'd be writing these creative briefs that was the one pager that really set out to define what the campaign needed to do. And the worst briefs were the ones that would say, you know, 'Our consumer insight is that people wish there was a crunchy cereal with raisins". I'm like, 'No, they don't', you can't back fit your business idea into the consumer insight. You've got to start with what people are actually wishing for and struggling with, and then have that lead into your strategy because that, that means that what you're building is going to actually be relevant.
Steve Dennis
In my book, I quote a quote that's been probably quoted by a million people at this point, which is, Ted Leavitt’s comment about, 'People don't buy a drill, because they want to drill, they buy a drill, because they want a hole'. But I think it's even more than that, right? Like you buy a drill because you want a hole because you want perhaps your room to look better, or you want to be, have a more functioning warm household, or where like, there's this higher, higher order purpose, or a story you're trying to, trying to create. And I think that's part of what you get out in your book with is this "5 Why's" test. But could you just talk about that a little bit more, because I think that maybe helps bring to life, how you unlock that level of insight, and ultimately, what the brand is going to stand for?
Emily Heyward
Yes, so the "Why' test is a fun little exercise that I invented, to ensure that our team is consistently going deeper, and not just landing on the self-serving problem, right. So, let's use your example of the drill. So, the self-serving problem that people want a crunchy cereal with raisins version would be something like, you know, oh people want to drill holes in their wall. It's like, okay, but why do they want to drill holes in the wall, their wall? You know, well, you know, they look at their walls, and they feel bare. Okay, well, why does that matter? Because, you know, people want to create a home that reflects them. And, okay, why does that matter? And my little joke is that you're only allowed to stop when you get to fear of death. Sense of our own mortality is what actually governs all the decisions we make as human beings, if you go deep enough.
Michael LeBlanc
I think we’re all getting there pretty quick these days.
Emily Heyward
Oh, yeah. Maybe I should stop using that for the time being.
Steve Dennis
No, actually, I love that. Because I think, I mean, I talk, I've talked about it, and others have talked about it, kind of as this idea of, you know, people don't buy products, they buy better versions of themselves. And I think at one level, that's true, but I think you make the point well, in your book and elsewhere that well, it's not just necessarily about, I want to look like I have the best taste or. But you know, there's this more primordial or motivation or something around self-preservation, that that ties back to it. So, I think that's a great, great part of the book that you start out with.
Emily Heyward
I think it doesn't even need to be interpreted as survival. I think it's more about you know, even why do people want to present the best versions of themselves? It's because we want to leave our mark in our short time on Earth, you know. So, I don't think it has to be about like, literally, we're fending off the the wolves in the cold. I think instead, it's really about, you know, what are those fundamental drivers that sit beneath our surface motivations?
Steve Dennis
Right, well, can you tell I just had a birthday, maybe I'm a little bit, you know, we're focused on the morbid, the morbid side of it. Well, can we talk about some of the brands that, that you've worked with, or some of the ones you talk about in the book? One of the things I think that's interesting is, some of these, these brands that are, that are newer and gaining a lot of traction, have really pretty narrow, pretty simple ideas behind them. Is that a coincidence? Or, does that say something about the consumer world we're in today? Or where venture capital dollars flow? Or what's behind that?
Emily Heyward
I definitely don't think it's a coincidence. I think that a lot of these brands, particularly when we look at the direct to consumer, you know, consumer goods brands that have launched over the past, let's say six years, have really had the benefit of being new, and being able to launch with a very focused offering. And they all have plans to expand. Like, which, none of them are planning to be, you know, single product brands forever, they would never be able to reach the scale that they're intending to reach.
But by launching with, you know, one or two styles, one or two products, what it enables them to do is tell a story that's less about product and more about an idea. So, if you think about a brand, like Away, which is not a client of mine, but I think they did a phenomenal job. When they first launched, they had one hard-shell suitcase. And that meant that instead of getting you in the weeds about here's the differences between all our suitcases, and here's how many inches they are, centimeters. And, you know, how much can you fit in them, etc. etc. They just told a story about travel. You know, and the suitcase itself was iconic, you'd see it in the airport, and you'd immediately recognize it because there was just one. Now, you know, I mean, I know COVID has been tough on that business, but pre COVID, they were up to selling a huge selection of travel related items, including soft suitcases.
So, you know, I get pushback a lot from legacy brands, or more established brands, who will say, 'Okay, that's fine. That's easy for these new companies. But what about me? You know, I've got all these SKU’s or features', whatever it might be. And my feeling is, what are the other ways that you can drive, focus and create hierarchy and make tough choices, and realize you do not need to tell the entire story, the second someone arrives? Because, I think there's power and simplicity. And I think we all are suffering from information overload. And if the brand can do the work of curating for us, of making those tough choices for us, editing themselves, which any writer knows, is the hardest thing to do. That's ultimately a gift to your audience. You're not forcing them to weed through a bunch of different, you know, similar SKU’s, or drop-down items on it, you know, navigation, and you're just leading them on a journey.
Steve Dennis
Don't you think, I mean, one of the things that's I guess is a broader, a broader topic is, I think, in many ways, a lot of these legacy retailers, and I've worked for a couple of very big ones, one of the challenge is this, this fear around letting go of what you already have, right? Letting go of that customer. Letting go of those product lines. Letting go of that advertising or those brick and mortar stores? Or what, whatever it might be, that's going to allow you to get to this, this new area. So, in some ways, I think these newer brands have a freedom to create and establish that beachhead and grow from there. Does that sound right? Or is there a different way to thinking about that?
Emily Heyward
I think that's absolutely true. But, I also think that for the established brands, it doesn't mean you have to get rid of your full product assortment. I think it's just about creating a layer of guidance and storytelling and taking advantage of technology to serve up what's most relevant to the person who's arriving versus just like throwing it all out there for everybody who appears.
Steve Dennis
Right. So, can we just talk quickly about, you know, one of things I think is, and I've kind of made fun of this over the years, but so many of these digitally native vertical brands, DTC brands, were founded initially, and funded in many cases initially, around this idea that they wouldn't need stores. You know, the 'Software Eats Retail', Marc Andreessen thing. And then, of course, it's turned out that, whether we're talking about Warby Parker, or Bonobos, or Everlane, it just huge (inaudible) Casper, etc., Allbirds. They're all opening stores. And in many cases, these stores are becoming a part, an important port of their profitability and growth strategy. What's, what's changed there? And how does thinking about branding across this digital physical convergence world, how does that play out in today's world?
Emily Heyward
Yeah, I mean, it's funny, right? Because, I think a lot of them did start with the story of like, you know, we've cut out all the inefficiencies of physical retail. And then a year later, they're launching physical retail. So, I think some of them that was always the path, right. And it wasn't something that they came to the realization they needed to do. But, in all cases, I think that you do reach a plateau of how much you can grow strictly through a digital channel. You know, whether that's about it gets more and more and more expensive to acquire new customers. Whether that's about existing in a category in which there's a certain set of high value customers who still just like really want to shop in person for whatever it is you're selling. Or whether that's just about the fact that I think physical retail is still an incredible immersive brand opportunity. I mean, I don't know about you, but like, I can't wait to go shopping again, in person. It's really fun. And shopping online is great. And I do a lot of it. It doesn't scratch the same itch for me
Michael LeBlanc
One of the chapters in your book, 'Making it Personal' talks about the, the connecting of the brand to the founder’s story. And, and it's not dissimilar to what we've just been talking about. There's both upsides in authenticity, and being authentic, but is there a downside into risk around the overall brand taking on a cult of personality, so to speak? Or becoming, you know, the, the personality becomes bigger than the brand? How do you, how do you, how do you manage those two competing, or maybe they're complimentary, forces?
Emily Heyward
So, I think if you mean risk in terms of the brand scaling beyond the founder, that's something that we can absolutely mitigate. You know, I think that you never want the brand to just be about the founder, right. I think that the founder can provide a supporting role. There are places where the founder can be speaking, that like, maybe it's about the mission. That it sort of makes more sense to have it come from a human being than just from some generic brand copy. But, if you mean risk in terms of scandal, I mean, yeah, that's real. And you know, I wrote my book for nice people to succeed. If your founder is planning to go do something terrible, I'm not really worried about your fate.
Michael LeBlanc
Do you think the brands you build though can transcend that? I mean, we've got, you know, more examples than we'd probably care to mention, of founders or executives, that that dance with the dark side in one way shape or another and it comes to tarnish the brand, sometimes permanently. Other times it's it's transitory, do you, do you see the brand, do you. Let me ask the question differently, when you are, when you build this architecture, how closely you weld it to the founders to allow that kind of give, so that it takes on a life of its own versus just, you know, it's just Steve Job's Apple, or whatever, you know?
Emily Heyward
With the brands that we've built, in the cases where it makes sense to have the founder be a public facing part of the brand, we see it as one supporting pillar. It's never the story. And that's even true, you know, we've built brands with actual celebrities. You know, we launched a fragrance brand, with Michelle Pfeiffer. We didn't name it, Michelle Pfeiffer, you know. And there's plenty of celebrities that have a fragrance that's just like their face, right. And with her, this was about a decade's long mission that she was on to put the first safe, fully transparent, fine fragrance into the world. So the story always had to be bigger than her. But at the same time, Michelle Pfeiffer is a beloved actor with an incredible platform. And it would have been really foolish not to, you know, have her show up occasionally, to talk about what she's doing.
So, I think it is always about balance and recognizing that it's just one tool in our toolkit. But we're not trying to build brands that are sort of celebrity vehicles, or founder vehicles, where like, it's literally just about an individual.
Steve Dennis
What do you feel with the, well, I guess, this has been around for a while, but with Instagram, and then with TikTok, though there's, there's maybe more push to have the founder or the celebrity be the face of the brand, or take more of a lead role in the building of a brand.
Emily Heyward
I think you find that on those platforms, the content that tends to engage people most is people. So that's where the founder, you know, comes in handy. Because people love seeing the behind the scenes, hearing from actual people. You know, it feels less like an ad. So again, you know, I don't think you want your entire Instagram feed to just be the founder, but I think, or TikTok, you know. But, I do think that when you have a founder, who embodies the values of the brand, who can be telling that story, you know, it's an asset.
Steve Dennis
But let's shift gears a little bit. You know, I think this last decade or so, it's just been amazing in terms of the number of new brands that have been created and captured customer imagination and gone from, you know, almost nothing to pretty significant businesses. And you've, your, your firm has been associated with, with quite a few of them. But one of the things that, that people push back on, including myself sometimes is that, well, you know, if you're able to raise a lot of venture capital money, which is not necessarily trivial, but you have investors that are willing to lose money for multiple years, well, being able to do these fantastic things around product design, and branding, and marketing, and, and so forth. It's just a different way of doing business.
So, we have some of these brands, and one of your clients, Casper, is a case in point that certainly built a really sizable, fast growing business, but has yet to make any money. We'll see I think their earnings are, are out sooner, we'll see if that's, that's changed. But what, what's your general take on that, that sort of criticism, not specifically about any of your clients, but just in general? Like, okay, well, that's cool, but when are these companies, is actually going to make money and prove that they're big, sustainable businesses?
Emily Heyward
Yeah, I think that's a totally fair question. And I do think there was a period of time in which consumer goods companies were raising at a valuation that was probably more appropriate to something like a software company. Just in terms of like, the feasibility of actually growing and scaling that fast. And I think that has shifted. You know, I think that we definitely had a couple years there, where these companies were arguably raising too much money. And it forced them on a path that, you know, and I'm not talking about any specific company, but just in general, looking at the landscape, you know, where they had to make compromises, right. Because, once you raise that amount, like you've got to justify that amount.
Um, but I do think that the companies we're seeing that are most successful in that space, are the ones that have true product differentiation, and are able to create incredible loyalty. So, you know, it's gotten more and more expensive to acquire new customers. Everybody's on the same platform. So those prices have gone way up. You are gonna have a very hard time reaching profitability if it's all about just bringing new people in. But, certain companies that have like an incredible distinct value prop have been able to drive, you know, repeat purchases at a rate that is more like a software subscription. And I think those are the ones that are really pulling ahead of the pack. And that we're going to see great success from.
Steve Dennis
I feel like we can't have a podcast episode these days without some sort of COVID related questions. So, I'll put one to you. One thing that seems to have happened during the past, I guess, nine months, almost a year now, is that some of these brands that were very online dominant, were able to acquire more customers, more quickly because of the shift away from physical, at least in some categories, to digital. And that's made their performance look, look better. And then, you know, arguably, as we start to pull out, maybe those, those dynamics shifts pretty profoundly.
But, is there is there any guidance you have about the way to think about building a brand, or growing your brand in the middle of this COVID situation? But really starting to think about a path towards recovery, what, what might be different, what they need to be doing right now to position them for that recovery.
Emily Heyward
So, I think the best thing that brands can do during this time, especially to prepare for a very unknown future, is to double down on the value that they can bring to people's lives, regardless of external circumstances. Because, you know, I think you could argue that, hey, everyone's gotten used to a level of convenience. And so many businesses have moved online and like that's here to stay, I could just as easily argue, like, 'No way, we're all going to be so excited to be going down to our like, local corner store when this is all over and mingling with the people', right? Same thing with fashion. It's like, 'Oh, no one's ever going to wear, you know, anything other than sweatpants again'. Or you could say, 'No way, like, people miss getting dressed up. And we're about to enter some kind of, you know, high glam resurgence', right.
So truthfully, no one knows. And I think that it would be a mistake to pivot too permanently beyond, you know, getting through these next few months, or year, or whatever it is, as best as you can. Because at the end of the day, whatever you're out there doing needs to be unique to you and the unique value that you bring. It should not be solely rooted in a moment.
Michael LeBlanc
Is there any thoughts you have today about how you would approach building a brand that would have been, that are today different than in the before time in the pre-COVID time? Is trust bigger? Is trust more important? It's always been important? Is that more important? Is safety? Is security? Is reliability? Are you going to approach any different parts of the architecture differently coming out of the COVID era?
Emily Heyward
I mean, we have built a lot of brands now during COVID. And so you know, I'm already in it, right. And my feeling is that the rules have not changed. They've just been heightened. I think they've been brought into high definition. In the sense that, it was already hard to get people's focus and attention, you know. You already needed to be thinking about how to really connect with people's values in a meaningful and true way. How to make sure that you know, whatever you were out there saying was like backed up by the reality of what you were delivering. And I think that's just even more true now. I think people do not have a lot of tolerance for b.s. at this moment.
But I also think that people are eager and hungry to be like, delighted and entertained. So, I don't think everything's all doom and gloom. I don't think brands have to necessarily take a more like consistently somber approach. I mean, you want to be appropriate and not ignorant of everything that's happening around us. But, I do think that what brands really need to be focusing on, then and now, and in the future, is how they can give more than they're asking for. Every time you're interacting with someone, how are you adding more value to their life? How are you brightening their day? How are you giving them a useful piece of information? And, not just think about you know, how do I get their email address? Or how do I get their credit card?
Michael LeBlanc
Well, Emily, this has been a fantastic conversation and it was a real treat for me to listen to the two of you discuss brand and brand strategy. So, on behalf of Steve and the listeners, thanks so much for joining us on the Remarkable Retail podcast. It was great to, great to have the opportunity to talk with you today.
Emily Heyward
Thank you both. I so enjoyed the conversation.
Michael LeBlanc
All right Steve, it's time for 'Remarkable or Forgettable?' Let's kick it off with earnings season. So, Macy's Casper, Wayfair, Lowe's and Home Depot, one at a time, Macy's earnings, but let's not talk about Macy's earnings, let's talk about this statement that they said that a, their e-commerce went up 21% and b, that their e-commerce is now the more profitable than their stores. Remarkable? Forgettable?
Steve Dennis
Well, what's remarkable is that they had the gall to talk about those results in the context of their e-commerce growing slower than the industry. And this idea of trying to measure online profitability versus stores, as if there's some totally separate, separate thing. So, I found it remarkable, but not in a good way. But overall, I think the results were pretty forgettable.
Michael LeBlanc
Let's talk about the other big, the other big home online retailer, Wayfair.
Steve Dennis
So, I'm going to give a little bit of a mixed response here. So, what's remarkable about Wayfair's results is, they went from losing, I think, pretty close to a billion dollars in 2019. to having, I think it's now three consecutive quarters of profitability. Now, part of the issue with Wayfair has been that they spent a lot of money on customer acquisition costs. And that's really prevented them from profitability. So, they got this kind of double whammy of things shifting massively online. So, that was great for volume and leveraging their fixed costs. And at the same time, they got a lot of growth without having to pay for it, basically. So, kudos to them for really turning things around. It's pretty dramatic change in such a short period of time.
Still a little skeptical as to what this looks like further down the road. They did see some deceleration in growth. And they did see some average order value is coming down. So, maybe some storm clouds on the horizon there.
Michael LeBlanc
Well, and a pretty big tailwind behind them with the pandemic, right. Lots of people spending on their home. So, if you can make a go of it now, you got to wonder what happens when, when that turns around.
Speaking of which, Lowe's Home Depot, the home improvement folks both released their results, what'd you think? Remarkable or forgettable?
Steve Dennis
Well, this is another one that I'm caveating a little bit. I mean, the results were pretty amazing. So, from that standpoint, I'd say they were they were remarkable. But as we were just talking about, you've got all this investment in, or all this spending in people's homes. And, I think both of them pretty much alluded to the fact that they expected some real slowdown as we start to get a little bit back to normal. And you know, some of this spending is kind of a one-time expense, you know, you're doing projects or buying appliances or whatever, you're going to buy those every quarter. So, so, I guess kind of to be expected.
I will say one thing about, about Lowe's and Home Depot and some other folks though, I mean, part of their ability, ability to generate these results is they did a lot of right, of the right things before the pandemic, you know. They really did invest in digital. They invested in their harmonic shopping capabilities. And so, they were well positioned to really crank out some good, good profits. But clearly, huge tailwind from some of the dynamics from, from the pandemic.
Michael LeBlanc
Well, let's talk about, we talked about the department stores with Macy's. Let's talk about Kohl's. So, there's been activity with some investors trying to disrupt things and saying Kohl's isn't going in the right direction. What do you think remarkable? Forgettable? Do you think they can turn themselves around?
Steve Dennis
Kohl's is another one of these brands that we've talked about a bunch of times that are really kind of stuck in the middle? And, they're not, they've done some interesting things but haven't really been able to move the dial very much at all. So, I think this investor group, which I believe is the same group that forced some changes at Bed Bath & Beyond. They look like they really got you know, they're like a dog on a bone, with this one in pushing Kohl's to say take some more aggressive action. You know, the company's pushed back to say they're doing a lot of things that the investor group is suggesting they do. So, I think this is going to be remarkable and it's probably a story that's going to be with us for a while. Kohl's overall business performance though continues to be you know, pretty meh.
Michael LeBlanc
Yeah, I think I think they got to watch out that they're not the dog that caught the car. In other words, let's get them to change it, 'Oh my god we own these guys now.'
And let's, let's talk about Best Buy. So, they're doing some restructuring of the physical, their physicality, the physical stores. Best Buy is such a great store. We're going to have Hubert Joly on, former CEO, in a couple of, in a couple of months, with his new book. Remarkable or forgettable what they're giving a try?
Steve Dennis
I think it's remarkable. I know we're going to talk about this in a future episode. What I think is interesting about the reconfiguring of their stores is that it's, it's really this idea of physical stores taking on this, this new role as you know, the traditional role of a store but also being a pickup center. Being a service center. Being a place to fulfill local delivery and e-commerce orders. So, so, I think this is a trend that was slowly happening, but really picking up steam. And I think Best Buy is just kind of the the lead dog here on these changes in terms of making stores more hybrid in nature.
Michael LeBlanc
Alright, we're going to call this the canine issue, the canine episode, with all the dog references.
Steve Dennis
I saw your dog earlier, Michael, and so you know, I've got dogs on my mind apparently.
Michael LeBlanc
Alright, Apple inside the Target. To me, it looked like a shop-in-shop. Nothing interesting going on, or not terribly remarkable. What was your impression?
Steve Dennis
Well in and of itself, I think this is pretty incremental. So, I would say forgettable. What I think is interesting, and I think we should take this on in a future episode, is just how various companies, whether it's the big guys, like Apple, or, and Nordstrom, and some of the smaller companies are getting into these wholesale kind of partnerships or store within a store partnerships in a physical space. And so, this changing nature of distribution. The role of stores. The getting closer to the customer, perhaps, with more points of distribution. So, I'm not, you know, I'm not sure what's exactly driving it with Apple. So, in and of itself, I think it's you know, not terribly interesting, but I think it maybe speaks to a broader trend we should, we should get into maybe in a future episode.
Michael LeBlanc
All right, last one. I guess some stores are dead. Frye throws in the towel. Saying, 'That's it we're going to wrap it all up.' Any thoughts on, any final thoughts I guess, on Frye?
Steve Dennis
Well, it's always sad to see any retailer have to close stores and you know, the effect that has on vendors and their associates and so forth. To me, you know, I often talk about, well I talk about in my book, and I talk about in my keynotes a lot of times. These retailers that basically watched the last 20 years happen to them. And Frye was kind of you know, they're a regional player so, some folks probably know them well, some folks are like 'Who the hell are these guys?' But you know, they really didn't change very much in a long time and this is I think, just the result of it. But you know, here's, here's a category, you know, you got guys like Best Buy, which are doing fantastic, right. And here's a kind of small version of Best Buy that wakes up one morning and goes, 'Ah, you know what? We're done.'
Michael LeBlanc
Right, like that was the tone of the announcement is like, 'Ah, we've all got up this morning and realized there's no hope for us so, we're just going to wrap it up'.
Steve Dennis
Yeah, I mean, I get, I get that obviously the pandemic causes you know, these, these very unexpected, really huge waves. But this idea that just one morning you kind of wake up, particularly in a category that's doing pretty well, and like "You know, yeah, we're just going to pack it in." It seems like there might have been a couple things they could have done along the way.
Michael LeBlanc
Yeah, well anyway, remarkable in that sense forgettable in another sense. Wrapping up another great episode, another great iteration of 'Remarkable or Forgettable?'
All right, well, that's a wrap another great interview and another great episode. Thanks again to Emily Hayward for being our special guest and discussing with us the brand and brand importance and her great new book, 'Obsessed' so look for that link in the show notes, and on the shelves near you. Steve, take us home.
Steve Dennis
Well, if you liked what you heard, please subscribe on your favorite podcast platform. Drop us that elusive five-star rating and tell a friend or two. I'm Steve Dennis, the expanded and completely revised second edition of my bestselling book, 'Remarkable Retail: How to Win and Keep Customers in the Age of Disruption' is out in April. Preorder your copy now at Amazon, Indigo, bookshop.org or just about anywhere books are sold.
Michael LeBlanc
And I'm Michael LeBlanc, Producer and Host of The Voice of Retail podcast and you learn more about me on www.meleblanc.co. Steve, have a safe week and I'll talk to you again.