In our second episode recorded live at the World Retail Congress in Barcelona, our special guest is author and customer-centricity thought leader Martin Newman. While being customer-centric is a stated priority of most brands, many have a hard time delivering on the promise. Martin helps us understand the challenges and the essential building blocks of putting customers first, while laying out how to find your brand's North Star and assemble a truly holistic approach.
In our second episode recorded live at the World Retail Congress in Barcelona, our special guest is author and customer-centricity thought leader Martin Newman.
While being customer-centric is a stated priority of most brands, many have a hard time delivering on the promise. Martin helps us understand the challenges and the essential building blocks of putting customers first, while laying out how to find your brand's North Star and assemble a truly holistic approach.
First up, however, are our hot-takes on the week in retail news, including another trip to the Wobbly Unicorn Corner as "retail disruptors" like Allbirds and Wayfair continue to set alarms off with disappointing earnings results. Better news comes from Walmart with the naming of a new top merchant, while Amazon offers Prime customers an incentive to play fetch.
About Martin
Martin is one of the world’s leading authorities on customer centricity, and a force for positive change for consumers and brands.
As well as fighting for consumer rights Martin is an advocate for diversity, social responsibility and employee engagement for all consumer facing sectors. These issues top the agenda in his media appearances across national press and television.
He appears regularly on BBC TV and Radio, on Sky, ITV, Channel 5 and a host of other media channels such as LBC, The Times and FT to discuss consumer issues relating to the retail, travel, casual dining, automotive and financial services sectors.
Martin has worked for 40 years leading the multichannel operations for some of the world’s most recognisable retail brands. These include Burberry, Intersport, Pentland Brands (Speedo, Berghaus), Harrods and Ted Baker. His bestselling book 100 Practical Ways to Improve Customer Experience, is seen as definitive within the sector and was shortlisted for the Business Book of the Year Award 2019.
Following his career in the consumer sector, Martin founded global ecommerce and digital consultancy Practicology, which was sold in 2018 after having scaled up to a global staff of 100 in offices across the UK, EU, Middle East and Asia. Martin has since set up The Customer First Group and new consumer facing website Customer Service Action.
Martin delivers keynote presentations and chairs many leading industry events around the World. He has shared stages with innovators and entrepreneurs alike, including Sir Tim Berners-Lee, inventor of the World Wide Web, to discuss the future of the internet and its implications for retailers.
Amongst Martin’s many accolades, he has featured in various industry leader lists including Retail Week’s top 50 eTail Power List five years in a row. He has also been named consecutively in the Retail Insiders top 100 Retail Movers & Shakers list, as well as the British Vogue Online Fashion 100.
Martin judges numerous industry awards such as the World Retail Awards, the Customer Experience Awards, the Retail Insider Awards, the PayPal eTail Awards, the Online Retail Awards of Australia and the Great British Entrepreneur awards.
Martin’s counsel also encompasses roles as Non-Executive Chairman of Scout Store, and Board Advisor working with the Boards of consumer-facing businesses on their key strategic questions and challenges. He is also a board advisor to Clearpay, the Mayborn Group and is a Trustee of In Kind Direct and a member of the prestigious KPMG IPSOS Retail Think Tank.
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 00:05
Welcome to Remarkable Retail podcast, Season 6, Episode 18. Presented by MarketDial. I'm Michael LeBlanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:14
In this episode our second interview of several recorded live in our pop-up studio in Barcelona at the World Retail Congress, our very special guest is a fellow RETHINK Retail, top retail influencer and top global expert in consumer centricity, London based Martin Newman.
Steve Dennis 00:29
Yeah, I finally got to meet Martin after feeling like I knew him via social media for many years, finally got to meet him at the NRF and we compared notes on the exciting world of customer centricity, and it was great to be able to get him on the mic to get some of his wisdom from his many years in the area.
Michael LeBlanc 00:50
Now you're just back. You're a little jetlagged, you were telling me off mic, you're just back from, from Shoptalk Europe, and an extended European boondoggle. Tell us about your session on the stage and your assessment of the show.
Steve Dennis 01:01
Oh, it was good. I wish I could have been there longer. I think as I may have mentioned, last week, I was doing a speech at for retailers’ internal event in Denmark. So that kind of cut into my Shoptalk time, got into not only how technology is being used to improve efficiency and effectiveness, but also things about, you know, how difficult it is to find employees and retain them and kind of covered a landscape.
Steve Dennis 01:28
One of the things that was really fun to do as we used this voting technology. So, we asked the audience questions about their attitudes towards certain statements we'd have for those questions and so we got those in, in real time. So, it was a great way to engage the audience, kind of take their temperature and then we talked about, you know, whether they were surprised by that finding and kind of how they're, they're dealing with it. So I was, I was really pleased with it, and we had a good time and a good turnout.
Michael LeBlanc 01:54
Let's get to the news. That's right, we've got the wobbly unicorn soundtrack already. This is almost going to be the wobbly unicorn episode because the wobbly unicorns are getting wobblier.
Steve Dennis 02:08
Yeah, yeah.
Michael LeBlanc 02:09
What's the news? So, let's see. Where are we, where are we, let's start with Peloton for example. Let's just start there.
Steve Dennis 02:14
Well, this is a real quick one but yes, we have a bunch of news because we had a lot of earnings reports this past week from some of these disruptor brands and let's just say in total it was kind of a shit show or to use the technical term.
Michael LeBlanc 02:29
Technical term let's call it that.
Steve Dennis 02:29
Before we get to the earnings just a quick hit because we talked about Peloton earnings last week or the week before, but the hits just keep on coming for Peloton they have or they announced a massive recall. 2 million bikes have to come back because of some issue with I think a seating mechanism or something like that.
Michael LeBlanc 02:49
I don't even know they sold 2 million bikes but there you go.
Steve Dennis 02:51
Yes, so.
Michael LeBlanc 02:53
That's like every bike plus loaners.
Steve Dennis 02:54
Yeah, so that seems like a pretty expensive issue coming at a time where they could really use some good news. So unfortunately, that happened, as they're trying to do a relaunch and rebranding, so not great news for them, but to get into the actual earnings, the first one to talk about, which we've talked about multiple times, is the continuing train wreck that is Allbirds. They reported net revenue down 13%, which is quite a lot for a brand that is allegedly growing, they lost $35 million, which I think is like 60% operating margin, negative operating margin, that's twice as much money as they lost last year, roughly and their SG&A is 79% of revenue. That's after some layoffs. So, they're really getting de-leveraged because their revenue’s going in the other direction.
Michael LeBlanc 03:57
Yeah, sure. Yeah.
Steve Dennis 03:57
So that's not so awesome. They have a, they've been run by two CEOs, founders, and they're now going to have one of them who's going to be like Chief Innovation Officer, or something like that. So that'll leave Joey Zwillinger. I'm sure I'm butchering his last name. As the sole CEO. Joey is the guy that you will recall, we got to see beaming into the world retail Congress for an interview where he got asked absolutely no questions about the business. It was a lot of, a lot of good stuff, I guess in terms of the sustainability effort.
Steve Dennis 04:00
But kind of buried the lead, I would say, as we say in the journalism is in terms of how difficult the business or how poor the business is performing, and then to make matters worse, which is already pretty bad. They're being sued. Because it's a shareholder lawsuit claiming that all birds failed. To disclose that they were working on products outside of their core product and, you know, that basically was enticing investors into the stock thinking that, you know, their core business was really the place they were investing and then they got distracted, which leads to what the lawsuit claims is that caused them to have a lot of markdowns and all this other kind of stuff, which caused the stock to tank so that's not too awesome.
Michael LeBlanc 05:25
You know, other than that, how was the play, Mrs. Lincoln kind of comment.
Steve Dennis 05:30
Yeah.
Michael LeBlanc 05:31
There's a lot going sideways. Now, I mean, Joey did say, and he did kind of admit to this was a lot harder than we thought it would be in some parts of that interview.
Steve Dennis 05:39
The master of understatement.
Michael LeBlanc 05:40
The master of understatement. Well, anyway, we wish them better days.
Steve Dennis 05:47
Yes, they have a lot of work to do.
Michael LeBlanc 05:49
Let's talk about Wayfair. Again, another organization we've talked about quite frequently, sometimes very, we are baffled, if I could put another consulting phrase to it, but what was your observation about their numbers?
Steve Dennis 06:03
Well, in some ways, it wasn't as bad as it has been the last couple of quarters, the revenues were down only about 7%. Their active customer total, though they were down, customer count was down almost 15% year over year. So that's not great. on a GAAP basis and this is where some of the losses, you know, in terms of standard accounting principles versus, you know, cash flow, etc. There's sometimes a divergence, but they managed to lose $355 million in one quarter. That's quite a lot. Last time I checked.
Michael LeBlanc 06:37
That's quite an accomplished,
Steve Dennis 06:39
Negative cash flow $234 million, but speaking about master of understatement, their CEO started out there, their earnings release by saying this was a strong quarter for Wayfair not sure what universe he's living in, but in that they didn't file for bankruptcy, I guess-
Michael LeBlanc 06:57
I guess.
Steve Dennis 06:58
With a strong quarter, but speaking of bankruptcy,
Michael LeBlanc 07:01
Phones are still working at headquarters, I guess.
Steve Dennis 07:03
Yeah, they are now on the Fitch Ratings does assessments of bankruptcy risk. So, Wayfair is now on that list. So that's not so great. But Wayfair is going to try because their balance sheet, if they continue to have several hundred million dollars go out the door every quarter, their balance sheet is weakening quite a lot. They have some debt coming due and so they're going to do a debt issue or they're going to try to raise, let's see $677 million to kind of refinance themselves at an interest rate of 3.5%. I can't quite understand why anybody-
Michael LeBlanc 07:42
That doesn't seem like-
Steve Dennis 07:42
Would buy the debt at 3.5%, when you can get close to 5 in a savings account, seems like that's, this is a little bit riskier bet.
Michael LeBlanc 07:50
Yeah, yeah.
Steve Dennis 07:51
I don't know, this is not exactly my expertise but that, that seems like a stretch.
Michael LeBlanc 07:56
Who was it, you used this phrase last episode about having to run into somebody else's arms when you get into too much trouble. Do you see the potential of somebody picking up Wayfair in the days or months or years to come? I've always thought there was a couple of big players who could, who could leverage that, you know, cut down the SG&A and all those expenses and right size the business and take advantage of-
Steve Dennis 08:18
Yeah.
Michael LeBlanc 08:19
What they've built in some way. Do you, is that possible or do you think they'll,
Steve Dennis 08:22
It's possible, I think you know, at the moment,
Michael LeBlanc 08:25
In this environment, I guess, you know, in this environment.
Steve Dennis 08:26
Yeah, I mean it's tough, it's a tough environment to do a deal like this, the stocks come down a lot. So, it's a lot more affordable in theory, but it's still a multibillion dollar deal. Under I think any circumstances and so I think you know, the list of possibilities is kind of Walmart, Amazon, end of list, I think but, but I don't know, maybe I'm not thinking as holistically as, as I should about that, but my guess is there isn't, there isn't a deal to be done, at least in the next the next bit here, but who knows.
Steve Dennis 08:58
And then the one I would say, which is much better news, but still not awesome, was Warby Parker, they had pretty strong sales growth up 12%. Their act of customer growth was not super robust but was also positive. They cut their net loss from $34 million last year to about 11 million. So that's definitely going in the right direction.
Steve Dennis 09:21
They have a much better balance sheet. They're hemorrhaging a lot less cash, still cash outflow but quite modest. So I would not be worried about them in particular, the thing I thought was interesting, and I think in the past, I've mentioned I'm a little bit skeptical that their store expansion strategy is going as well as they seem to indicate, but they have said quite recently that they intend to go from I think it's 207 stores now that they have open to as many as 900 stores, but what was interesting, two things were interesting, is in the quarter, they only open net four stores and at that rate, it's gonna take a long time to add 700 stores to the store count.
Michael LeBlanc 09:21
Yeah.
Steve Dennis 10:06
So maybe there's something about the quarter that made it, I guess kind of weird, but you think if you're on the trend to 900 stores, you'd be opening 30, 40, 50, a quarter.
Michael LeBlanc 10:17
Sure, yeah.
Steve Dennis 10:17
Anyway, the other thing, and I may be just reading too much in, in the past several quarters, they've talked about how their stores are performing relative to the pro forma and there was no detail on that this time. Now, just maybe they had plenty of other things to talk about, but kind of looking at the tepid store opening pace along with no detail on that, I think maybe they're going a bit more cautiously and that may just be a function of the economy.
Michael LeBlanc 10:44
Yeah.
Steve Dennis 10:45
That they're kind of tapping the brakes a little bit just to see how things are gonna go. So that may be, you know, a really savvy strategy for the next year, that doesn't necessarily mean that this business is, you know, not on a robust path.
Michael LeBlanc 10:59
Yeah, and I was a little taken aback by them saying, 'hey, we could go to 900 stores', because you'd want some kind of evidence that you have any trajectory to get to that number, which I don't see, to your point. So, that's what jumped out at me is like, why would you even say something like that because it's, it's demonstrably not happening.
Steve Dennis 11:18
At least not so far and, you know, if you look at Casper made a similar statement, and, you know, they're falling a little bit short of that goal.
Michael LeBlanc 11:25
Hey, listen, there's a long list of people who made that statement, I mean if you go back to Amazon talking about or whether whoever talked about, you know, we're going to 3000 stores for Amazon GO and, you know, they got six now or whatever. Let's talk about Walmart. So, some big news at the personnel level, of course, Walmart's scale and size and scope. People, we don't always talk about people's moves, but this is a pretty important one.
Steve Dennis 11:49
Yeah, well, they named Latrice Watkins as their Chief Merchant, which, of course, is a huge job. It's kind of hard to even get your head around what it's like to be the EVP and Chief Merchant at Walmart. She's kind of a lifer, I guess, at Walmart. She's been there for more than 20 years, she was the Executive Vice President over consumables, which is one of their big, big categories and for the US business, but I think what's particularly significant about it is she's the first woman and first person of color to hold the top merchant job at Walmart. So, I think that is excellent progress. I do not know her personally; I know quite a few people at Walmart who say really wonderful things about her. So yeah, just wanted to kind of lift, lift that up.
Michael LeBlanc 12:34
Let's talk about, last couple of things. Let's talk about this. There's an article in The Atlantic about the returns party being over and we're starting to see this pop up and media about pay for returns less, less willingness to take returns any thoughts on that article, the return party being over or is this just the natural course of things when the economy gets tighter, people get a little less forgiving around returns and what do you think?
Steve Dennis 12:57
I think the thing I wanted to include, I mean, we've, you know, we've talked about returns multiple times on the podcast, I wrote an article for Forbes years ago about the ticking time bomb of e-commerce returns. So, this is not a new issue at all, but it does feel like something has changed in the if we could say the retail Zeitgeist as it. And that's really what the article points out is that as much as people have been watching this issue for many, many years, and there's been a lot of discussion about it, retailers seem to really be starting to change their policy in a significant way. They caught some statistics about the percentage of retailers that now charge for returns going up quite a lot. So, it does seem like the tide is really turning here. They're still certainly a long way-
Michael LeBlanc 13:42
Not returning.
Steve Dennis 13:43
To go.
Michael LeBlanc 13:44
You see what I did there, not returning, you see what I did there.
Steve Dennis 13:46
Yes. So, it's certainly you know, there's a long way to go. In terms of really making progress on this issue, it's probably to you I think, where you were alluding that the tough economy is probably putting more pressure on it, but I think this pressure has been building. I know this pressure has been building for a number of years and maybe it just took enough time like this critical mass or tipping point to use the overly overused phrase as it finally occurred.
Michael LeBlanc 14:12
And you don't often say the words baffling and Amazon in the same sentence, but I'm going to use it a little bit in this sentence, the company is encouraging consumers, the company is encouraging their consumers to say pick stuff up from their pickup locations, and there's a $10 promotion to make them do it. So, are they walking away from, are they walking back the whole delivered to doorstep in a meaningful way or is this what is this, is this different?
Steve Dennis 14:40
Yeah, so supposedly this is something according to the company, they have been testing for a while. Reuters picked up the news that they are encouraging customers not to have their orders delivered but giving them a $10 promotion to go pick the orders up from pick up locations. Now, you might recall, I think, was last week when we talked about Amazon's earnings, that one of the things I pointed out is that their fulfillment costs continue to grow at a much faster rate than sales and this is actually I haven't looked at it every quarter, but this has been a long term trend for Amazon and so this idea of how you can reduce costs in your fulfillment system has been something that's a concern in Amazon for a long time.
Steve Dennis 15:30
So, it's not surprising to me that they're trying ways to change that. Now, I do think it's funny that the company was quoted as saying they're not doing this as a way to cut costs and that just seems like nonsense. Like, I can't, yeah, there doesn't seem to be any other reason that you would pay somebody $10 to go get something. If you know, it's not a benefit to the customer, necessarily that you would have to bribe them to do it, so.
Michael LeBlanc 15:58
I would do that. Would you do that for 10 bucks? I mean, I've got a pickup location not far away for 10 bucks, I swing by and do it, would you?
Steve Dennis 16:04
Yeah, I mean, it would kind of would depend on how busy I am or where I was going, but I'm aware of where the closest Amazon locker is, and it's not far and if I were headed in that direction, it would be easy enough to do it.
Michael LeBlanc 16:16
All right, well, lots of news to catch up on. So that was great. Now, just before we get to our great interview with Martin Newman recorded live in person at the World Retail Congress, let's hear from our presenting sponsor. If you're a retailer hungry for a better way to gain useful insight on the impacts of your store layout, design and strategic initiatives, you need to know MarketDial. MarketDial is an easy-to-use testing platform that 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. Validate your remarkable ideas with MarketDial in store testing solution, the proof is in the testing, learn more at marketdial.com. That's marketdial.com.
Steve Dennis 17:01
Well, Martin Newman, we meet again.
Martin Newman 17:03
We do, we do.
Steve Dennis 17:04
Last, last time I saw you was at another conference in a different part of the world, but welcome to the Remarkable Retail podcast. How are you today, sir?
Steve Dennis 17:11
I am great. Thank you for having me. I'm really good.
Steve Dennis 17:13
Well, we're delighted to have you here. So, just to kind of kick things off, we usually like to give our listeners a little bit of a sense of who we're talking to. So, maybe you could share a little bit about your personal and professional journey and the work you do and what brings you to Barcelona.
Martin Newman 17:26
Sure, sure. And despite my youthful look, Steve, I'm 57 years of age. So, I've been working for a whole 41 years, I went straight out of universe-, university, Freudian slip, straight out of school, into my father's business, he wished I'd gone to university, but unfortunately, that wasn't my calling at that stage in life. I didn't really know what I was wanting to do in my career, but I did go and work for him and he had a chain of opticians and in Glasgow, in the West of Scotland, and I cut my teeth on the shop floor, customer experience, customer service and marketing.
Martin Newman 17:59
So it was back in the days when no such thing as a CRM solution existed with a roller deck of patient records that I was flying through everyday looking at who needs to get their eyes tested because they haven't had their eyes tested in the last couple of years but my father when he sadly no longer lived my father was not just a great optician, he was a great human being and amazing at engaging with, with patients and customers and, you know, they would come in looking to get their eyes tested and they'd walk out with two pairs of glasses and a pair of sunglasses. Which, if you've ever been to the west of Scotland, you would know you don't really have too much need for a pair of sunglasses and I guess I got that passion, I got that passion and-
Michael LeBlanc 18:37
That's funny.
Martin Newman 18:38
Some of that expertise from, from my father, and it's led me to where I am today. Give you a snapshot of my career. I've been a marketing director of a couple of big sports retailers in Europe. I got involved in the internet in 1997.
Steve Dennis 18:59
I think that’s going to be big.
Martin Newman 18:52
So, it's quite, well, allegedly, allegedly not as big as the Metaverse though.
Steve Dennis 18:59
Don't get us started.
Martin Newman 19:00
Exactly. So, I got involved. I got involved quite early and I, I actually spent about a hundred grand building an e-commerce site. For one of the sports retailers, I was working for, I convinced my boss we were gonna get all this new customer base and demand and everything and about, you know, six months later, I don't think we sold a single thing because of course it was all dial-up modem. Broadband wasn't really a thing. It was such a terrible experience. Nobody bought anything. And as you know what happened after that, but I saw the opportunity and I thought, well, if I need a website, everyone's gonna need a website, I'm going to build websites.
Martin Newman 19:32
So, I had to got my first business in 1998 and I set up a web development company and we were building a combination of brochure websites and e-commerce sites, and did really well for about two and a half years. we made quite a bit of money and then sadly had to pull the plug in the business because when the dot com boomed and then busted in sort of 2000, 2001, software as a service was not, there wasn't really, there was, it wasn't as such a thing at that, at that time, it didn't really exist and so I didn't have recurring revenue. I was selling, you know, a one-off project, getting quite a lot of money for either putting it in the bank or some cases painting it, not realizing that this was going to be an impending doom and gloom that was coming down the track.
Martin Newman 20:16
And when I pulled the plug on the business being completely candid, I lost my confidence. I thought, okay, I'm not an entrepreneur. I've tried that one. I'm not fit for purpose, I'm going back to a career, and I started looking for jobs in London because retail at that time in Glasgow in Scotland, there wasn't an awful lot of opportunity anymore. A lot of the big companies have moved out and moved their head offices elsewhere and eventually, I landed a role at Harrods, the big corner shop, the big department store, and they came down to be their head of Home Shopping. So, I ran catalogs and e-commerce, and I went through a succession of high-profile roles. First of all, at Harrods then at Burberry, wait, Pentland brands, they're a multi brand owner they own Speedo and many other brands.
Michael LeBlanc 20:57
And just for the listeners, what year about was that?
Martin Newman 21:00
So, I thought, you know, I need to maybe try to do my own thing again, but before I did that, I moved to some consulting business. Actually, we're a hybrid, a consultancy and an agency called Contango. They sold our company halfway through my notice period at Ted Baker, I got made redundant. Last one in first one out, big ticket and all the rest of it and I thought to myself, I worked with lots of consultants in my career where you know, McKinsey's, the centers have been brought into businesses and they've all got the same model and it's changed. No, I know they look more for industry expertise. No, but back then they had a model where they would hire the brightest people from the best colleges, schools and universities, super bright people.
Martin Newman 22:00
Yeah, so this was, I came to Harrods in 2004. Okay, I was at Pentland in 2000-, the end of 2005 to 2006. I was Burberry's first head of online in Europe in the latter part of 2006 and then I went to Ted Baker in 2007. So, I had some short lived rules but I got to the end of kind of, you know, four, back to back rules being head of online and I thought to myself, crikey, you know, I'm P&L responsible. In other words, my bonus, my job, my tenure, rests on my ability to deliver a number that somebody else has concocted, not me, but ultimately, lots of other people were making all the big decisions that affected my ability to deliver that number.
Michael LeBlanc 22:26
One senior partner, a lot of young-
Martin Newman 22:28
Exactly, exactly,
Martin Newman 22:29
And we scaled the business. We had offices in London, Dubai, Hong Kong, Guangzhou-, Guangzhou in China, and Sydney and Melbourne in Australia. I'm fluent in Australian, having been there 26 times and, and we sold the business in 2018, we had a good luck moment, we sold to an American company called Pattern, who are an amazing business know the number one reseller globally on Amazon and with a bit of luck as a shareholder in that business, some somewhere down the line that may result in part of my retirement and who knows, but I say about the had a great I've just got a great relationship with the founder of the business and all the people that are left there, and I've moved on and what I do today is I've got sort of three buckets of activity.
Michael LeBlanc 22:29
Sharp people.
Martin Newman 22:29
But they had no real-world experience and I thought there must be a gap in the market for, for a business, an advisory business. It's made up of people like me, who have been there, done it and know what works and what doesn't work and so I set up a business called Practicology. Hence the emphasis on the practical experience and I grew that kind of consultancy for me to 100 people over nine years, no investment bootstrapped it, which I wouldn't necessarily advise anyone else tried to do because it was pretty difficult and had I not had the experience of a business failure before, we were probably going bust about half a dozen times, but I saw the writing on the walls in time with the experience I've had before and I was always able to pivot and take corrective actions at the right moment.
Martin Newman 23:55
So, I'm a board advisor, I've got a number of board advisory roles. I do what I call media where I turn up at events like the World Retail Congress and either do a Keynote or moderate a panel or something along those lines, which I've just done today, the panel and then I have education and like you Steve, I've got a couple of books. I've got a mini-MBA in customer centricity, which I created with a College in Oxford, and I've just also agreed to be a visiting lecturer at Strathclyde University's business school in Scotland and I promise you when I tell you, my teachers will be turning in their agreement. The prospects of me delivering any form of education to anybody else.
Steve Dennis 24:37
That's quite a journey. So, as I understand that, I think when I first ran into some of your work, and I know you've done a lot of different things, the through line seems often to be around this concept of customer centricity or being customer first.
Martin Newman 24:53
Totally.
Steve Dennis 24:54
Those all sound like nice things.
Martin Newman 24:57
Yeah.
Steve Dennis 24:57
What, what do you mean-
Martin Newman 24:59
Sure.
Steve Dennis 24:59
By that and then we'll kind of maybe go, go a little bit deeper.
Martin Newman 25:02
So, for me, it actually starts with being employee centric, it starts with actually thinking about your own people because I really believe that too many businesses out there, don't do that well enough, don't care or look after their own people well enough, create opportunities to learn and develop.
Martin Newman 25:02
Thank you for, thank you for asking that question because you know that, that really is why I wrote my first book, 100 Practical Ways to Improve Customer Experience, because, you know, I realized one day I was having a session with my team at Practicology, and I said, We've got to help our clients become more customer centric. Right, what does that entail, and I looked around the room, and I saw about 40 blank expressions, and I thought oh crikey, I've got a problem here. I better go and work and work out some kind of framework for what it is.
Michael LeBlanc 25:46
They all say they do.
Martin Newman 25:47
They say they do, but they don't in reality, or create succession plans and show people that they can have a long-term career there, you know, create a culture of empowerment where people are, you know, given the trusted to make decisions without always having to ask for permission.
Michael LeBlanc 26:01
Right.
Martin Newman 26:02
Which, as we know, fosters, you know, a very different experience for them how they feel about working in that environment when they're trusted to make decisions, but it also changes what happens to the customer, right, when you're empowered to, to make a decision without having to ask 10 people for permission. So that's my first building block. Obviously, technology is core, but I never start with technology and I've, I've made mistakes in my career, no doubt about it, where when I was wanting to be seen as an early adopter and an innovator when I was on the client side, I would bring in a solution without necessarily really thinking through all the time, you know, what's the problem, I'm actually trying to solve for customers in the first place.
Martin Newman 26:43
So, I think at the heart of when I'm thinking about, you know, customer centricity, it actually starts with giving my colleagues or the employees a voice, and listening to them and what they think about what the business should be doing and then giving the customers a voice. I think we often talk about the latter or we don't often talk about the former. And a very good friend of mine, a guy called Mike log, who's one of the best CEOs I've ever, ever had experience of working with in UK, he ran a business called dreams who do mattresses, beds and bedding and he inherited the business in 2013, he was working with some capital, who are private equity turnaround specialists, you probably know, when they bought the business that was losing 50 million quid a year. Let's say $60 million a year and within a couple of years, they turned it around, and it was making 50 million a year and in 2019, 2020 they sold the business for I think about 600 billion to timber Seeley.
Martin Newman 27:35
And the first thing that Mike did in his first six weeks is he basically went around every single store in the UK, he went spoke to customers, he went and spoke to as many colleagues as he could have a conversation with, because he wanted to know firsthand what was going wrong, what was broken in the business, he knew he wasn't going to get that necessarily from data, he was going to get that from qualitative conversations with as many colleagues and customers as he could talk to and off the back of that he created a sort of listening tool called Pillow Talk, which is essentially where they run a survey of customers, whether they bought something or not and they get, believe it or not, them incredible engagement. 40% of consumers fill this out every day they have a prize or reward, but at the end of the day, people don't do it for that.
Martin Newman 28:21
They do it because they want to share their experience and he takes that insight or he's not, he's no longer there, but he would take that insight and he would make sure that every single meeting in the business started with insight rather than finger in the air because it gave them, it really told him, it really told him what was working and what needed to be what needed to be fixed or repaired. So, for, for me, listening to customers, listening to colleagues is really important, providing a great culture and the right, and the right environment, for your own colleagues to thrive and do the best job that they can. Technology and so, technology as an enabler, right and what I always say with technology as we tend to overestimate the impact of technology in the short term, but massively under, underestimate its impact in the long term. So those are just some of my building blocks.
Steve Dennis 29:08
No, those are excellent. You know, one of the things and this is just, I guess, being a cranky old man, but you know, being around long enough to have participated in any number of customer centric, customer first, we put the customer at the center of everything we do.
Martin Newman 29:25
Yeah.
Steve Dennis 29:26
Having an empty chair at the conference table representing the customer.
Martin Newman 29:29
Yeah.
Steve Dennis 29:30
You name it.
Martin Newman 29:31
Yeah.
Michael LeBlanc 29:31
That's my favorite.
Steve Dennis 29:32
And I recently heard, and I won't say whom but a CEO in their investor presentation lead with we are going to become customer centric. As you know, he could spontaneously combust fire or nuclear power or something. So, customer centricity sounds like a really great idea. People have talked about it forever. Why from your experiences is it so hard for people to get from saying it to doing it,
Martin Newman 30:04
To doing it. It's a great question. I think a lot of it's down to the fact that actually the definition or it's a bit like omni-channel or digital transformation, if you ask 100 people in 100 businesses what either of those terms mean, you'll get 10,000 different answers, right. So, if everyone's got a different view of what customer centricity is, and there isn't a Northstar, that everybody has clarity.
Steve Dennis 30:25
Sometimes people think it's customer service, right,
Martin Newman 30:27
Yeah.
Steve Dennis 30:27
Right. That's-
Martin Newman 30:27
Yeah, you might think it's customer service, you might think it's just about the contact center.
Steve Dennis 30:31
Right.
Martin Newman 30:31
You might think it's purely about customer experience about the bits that touch the customer.
Steve Dennis 30:35
Yeah.
Martin Newman 30:35
But it's not, it's so much broader than that, so what I would, what I would. If I was gonna round out when I was talking about my framework, it's also about diversity and inclusion. You know, if your business for example, if your board of directors is pale, male and stale, if your senior leadership team is pale, male and stale, if the masters in your business don't represent the customers that you're trying to effectively sell to and serve, then how are you possibly going to do the best job that you can, when you're not really representative of the people in your selling to
Steve Dennis 31:03
Great point.
Martin Newman 31:04
So I think all these things, you know, are increasingly important to customers, but businesses maybe don't have that framework, or that visibility of all the different building blocks and how to stitch them together, but I would start with a north star, if you start with a north star, and the north star could be, I'm sorry to, I'm sorry to say this, but the north star could be, we are going to be the most customer centric business in our space, but what you've got to do after that is obviously then take the next step and the next step for me would be every single part of an organization, every single person and every single part of an organization can have an objective and some form of measurement that relates to that north star of being truly customer centric.
Martin Newman 31:47
Because whether you're facing the customer directly yourself in a store, in a contact center, or whatever it happens to be, or you're the facilitator and a provider for other people in the business that are, IE, you look after supply chain or you look after finance, you're making decisions that affect the ability of your colleagues to deliver the experience that your customers are looking for.
Martin Newman 32:09
So, everyone can have some form of measurement there. So that's a starting point because if you don't do that, then no one is going to buy in to this north star, no one's gonna buy into this big, strategic nirvana to be truly customer centric, or the most customer centric brand in their space, what they're going to be focusing in on is my tenure, and my bonus, rely on my ability to deliver the OKRs or the KPIs that relate to my part of the business and that's all I give a, that's all I care about. So, like if I tell somebody, I don't care about what happens elsewhere, because that affects me directly. So, I don't think we create an environment that fosters customer centricity from the get-go. So, we have to know what it means we have to understand how to join up, but we have to start measuring people in some shape or form and tell them what their role is going to be helping the organization to deliver it.
Michael LeBlanc 33:03
You've unpacked really well, both the challenge and the opportunity, shall we say about being customer focused, and you've spoken, you've spoken on it frequently. What are the kind of two or three just really key things organizations need to do if you can boil it down to be really effective at being a great customer experience organization?
Martin Newman 33:23
Sure, I think the first thing you have to do is you have to listen to your customers, and you have to listen to your colleagues, if you don't give them a voice, then you don't understand the problem that you need to solve for both of them and if you don't have a truly engaged workforce, who think you've got a thriving culture, and they want to spend the rest of their lives working for you, then you're always going to have a lot of disruption within your own business and they're not going to go the extra mile to deliver the experience that your customers are looking for and if you're not listening to your customers, then the chances are, you don't really understand them, you don't really understand what their pain points are, or the problems that they want resolved. And therefore, you're probably going to end up making investments in the wrong areas.
Martin Newman 34:00
So for me, that's the starting point. When it comes to implementation, you've got to have support from the top within the business culture, comes from the top. We need to either have a leader who is going to unblock the roads and the path for others to deliver customer centricity. So that could be your CEO, or you need to have a chief customer officer or someone who has the responsibility for not only defining what this new roadmap looks like, but is also empowered to drive change and transformation throughout the business because otherwise, you know, when I was head-
Michael LeBlanc 34:37
An incent-, an incentive to do so.
Martin Newman 34:38
An incentive to do so, 100%. So, when I when I worked on the client side, and I worked for Paris and Ted Baker and Burberry and brands like that, and I went to the Chief Technology Officer, and I say to her or him, you know, I've got this, I'm empowered by the board, I've got this mandate to drive a more customer centric experience across the business. We've got all these new initiatives, initiatives that we want to implement, he or she would say to me, sure, Martin, I really buy into that you can have all of that five years on Friday, because I've already got a roadmap, the length of my arm and a backlog of all the things that I've got to focus on.
Martin Newman 35:11
So, who's empowered to say to that person, you need to reprioritize that backlog because this is now your new set of priorities and when I talk about technology, technology is very compli-, it can be very complicated, but I think we overcomplicate it. As I said earlier, I think if we understand the problems we're trying to solve, and if we start with empowerment, if empowerment is the theme, if we empower our customers, to have the experience they want to have, we empower our colleagues to do the best job they can, then we know we're on to a winner, then a lot of other things are going to be superfluous. So the rest of the stuff that's on your bank log almost becomes irrelevant to some extent.
Michael LeBlanc 35:47
It's a really great point, because, you know, it's not like anyone arrives in an organization and the organization has zero, blank slate, we're not working on anything right now.
Martin Newman 35:55
Yeah.
Michael LeBlanc 35:56
I mean, there has to be a change and a change agent. Speaking to change anything, you know, we talked about the COVID era, the long, long, short term implications of the COVID era. Do you think anything has changed in the way you think about the work you do or customer experience because of what we've been going through?
Martin Newman 36:13
Not massively to tell you honest truth, I mean, you know, I just ran a panel session there on you know, what's next for e-commerce and I started by making a point that, you know, a bit like, we get so media hyped up interesting, listening to Professor Galloway this morning, you know, and he talked about that, and we do we get saw, you know, the media has a lot to answer for because you got all this media hype about all the high streets dead, the high streets dead. You know, I spent years defending the high street and say, what a load of rubbish, it's not going anywhere, you know.
Michael LeBlanc 36:41
Back in the retail apocalypse.
Martin Newman 36:42
The majority is, exactly, the majority of sales are taking place still at that time on the store and then of course, you have, you have stores being shut in the middle of the pandemic, and all of a sudden, you know, it's no surprise that online sales spike, but I knew when stores opened, it was good to go back the other way but the point to make is, as we are sitting here today in the UK, now 26% of all retail sales are online, that is still nearly 50% up from where it was prior to the pandemic.
Steve Dennis 37:11
Ordered online.
Martin Newman 37:12
Ordered online. Yes, of course,
Steve Dennis 37:14
Ordered online.
Martin Newman 37:14
That's a good point. Good point. Point of order there from Steve. It's a good point. Yeah, ordered online and of course, some of that will be clear later, but, but the reality is, e-commerce is not going away. S, you know, we've gone from the high streets dead to we've had 10 years of digital transformation and a few months to, it's only about e-commerce now, to e-commerce is dead, we're back to the high street and the physical world.
Steve Dennis 37:36
To why are we even making the distinction between entire physical stores.
Martin Newman 37:38
Exactly, exactly.
Michael LeBlanc 37:40
And I often point out the inverse math right, so that means 74% of retail, depending on how you define it.
Martin Newman 37:47
Yes.
Michael LeBlanc 37:47
Was done in the way it's been done.
Michael LeBlanc 37:48
I was told there would be no math, but.
Steve Dennis 37:50
Right.
Martin Newman 37:50
Exactly. Exactly. Not my, not my strong point, not my strong point. No, you're 100% right, Michael. Absolutely. So, I think we're too quick to latch on to some of these short term, you know, micro moments or macro moments of change, that aren't necessarily permanent. You know, I think a lot of things are gonna go back to where they were, but you know, obviously, obviously the level of digital change and disruption and the adoption of e-commerce, has seen a lot of people who never used to shop online before shopping online.
Martin Newman 37:53
And getting very comfortable with shopping online or the frequency of purchasing online has definitely increased a bit, but you know, the reality is, when you keep human beings up, what are we going to do, we're gonna go and we're going to want to get back into stores, we're going to want to get out there be entertained, be in the real world, and the physical world, but after time things go back to the way they were. I'm a firm believer that everything in life is largely, is largely secular.
Martin Newman 38:47
You can go back 100 years, and you can see similar patterns when we had the Great War, and then you had the flu pandemic and then you had the boom of the 20s and then you had the Great Depression, then you had the Second World War and if you look at what's happening with politics and everything else, you know, we're in an interesting and challenging time. And of course, we've got the cost-of-living crisis at the moment to contend with which is worse than different markets like our little island of the UK, it's a lot worse than I-.
Michael LeBlanc 39:14
Scott had a lot to say about that, and being a fellow resident, apparently.
Steve Dennis 39:18
So one of the things I think is interesting, I'm curious, your perspective, I feel like a lot of the mistaken narratives aside from just the clickbait nature of digital media, are often what I would say are driven by kind of the left brain thinking like the logic of why wouldn't you shop on, you know, some people would be like, why wouldn't you shop online, because that's just the logical thing to do and the way I can calculate what the impact of e-commerce will be, it's just kind of fun with math, but if you actually understood if you had a higher higher EQ, and you actually understood the emotional drivers of a lot of purchasing, like if you had the capacity to understand that you would at least know mitigate or moderate, I guess, your view of what was likely to happen I so I feel like when we talk about customer centricity, it can be this blend or part of it is blend of art and science, that's part of the hard part of piecing things together and figuring out where things are going, would you, is that part of your thought process or?
Martin Newman 40:16
I would agree with that, but I think actually, you know, you talked about emotion or emotive, you know, responses and I think that, that's really key for me and I think that where, what's happened with a lot of retail in the last 50 years, is it's increasingly lost. You know, because 50 years ago, retail was much more localized, we didn't have a lot of the big national chains, or the big national chains were a lot smaller, and the experience was a lot more localized and what a lot of retailers have done is they've empowered their head offices to make all the big decisions, and they've taken the power away, the people who are running the stores in the local area and I don't understand that at all.
Martin Newman 40:51
Because surely somebody that's in Denver, Colorado, is better placed to dictate how they should be merchandising their store, or what the bestselling products are compared to somebody sitting in a head office in Miami, who's living in a different climate and yes, they might be looking at data, but I think when you're on the ground, and you can see things firsthand, I think you get a different perspective. The other thing I would say is that every single business can start the process of turning a customer into a fan, I don't care what you sell, I don't care whether you sell dodgy, you know frilly shirts, or flowered shirts, or whether you sell, or whether you sell multicolor glasses, or whether you sell widgets are when you sell laptops, or you sell checks shirts, Steve, or black glasses that we're both waiting or books.
Martin Newman 41:38
I don't care what you sell, everyone can start that, everyone can start the journey of turning a customer into a fan. It's the process that you go through of doing that, where you deal with customers differently, that starts to change them from feeling that all you're interested in is their money and it's a transactional relationship, relationship to something that actually has a bit of depth to it. Where it becomes more about the relationship and where they start to build up some degree of emotional connection with your brand and I think once you've done that, and you can build on that, then you're really in a, really an amazing space.
Martin Newman 42:15
And when we're talking about channels, for me, it's all about telling us what your customers want you to be and the reality is, and one of the reasons why obviously the internet pure play businesses are finding things a bit tough at the minute is they've gone from spiking like mind, and the best performance they've ever had during the pandemic, to all of a sudden their sales are flat, or in some cases in decline and where the advantage all multi-channel retailers have got is they've, it's taken them longer to maybe evolve and mature their digital operations, but now they've got a pretty good digital proposition and ecommerce proposition but of course, consumers are indexing going back to their stores.
Steve Dennis 42:53
Right.
Martin Newman 42:54
And if you can join all that together, and you can have a single view of the customer and you can start to, start to deliver the type of experience that customers really want and you understand what that looks like because you've listened to them in the first place and you've understood the problems that they want resolved, then you're on to a winner.
Steve Dennis 43:11
Well, I love that. So, one quick closing question before we lose you. Is there anything that's on your radar screen that you think maybe is under appreciated or you know, retailers aren't paying enough attention to right now that we haven't talked about?
Martin Newman 43:25
I'm going to talk well, I kind of,
Steve Dennis 43:27
And if you say Metaverse you’re kicked off.
Martin Newman 43:28
I'm not going to talk about the Metaverse. I'm going to talk; we have talked about the circular economy briefly. I want to talk about the circular economy and I want to talk about diversity and inclusion and the reason why I want to talk about those two subjects is like you I've sat on a number of boards and I can tell you from my own experience that if you go back five or 10 years ago, I would say that most board-, most boards were paying lip service to these things and they saw them only as a cost and not as a benefit.
Martin Newman 43:53
I see where we are today is they now recognize that there are moral imperatives, their moral imperatives and morally the right thing that they should be doing and focusing on. However, I still don't think they really understand necessarily the commercial opportunity by being a truly diverse and inclusive business that's representative of the customers that you're selling to and the business that proves it's not just talking the talk, but it's walking the talk on sustainability and from a consumer point of view, we are all wracked with guilt, about what we buy, from whom we buy it and what the impact of that is. I really believe that I don't care what anyone says about younger Gen Z is not caring about it and still buying fast fashion. I've got two Gen Z's at home.
Martin Newman 44:36
Everyone has guilt, about conscious consumption, what we buy and what the impact of it is going to be on the planet and the future of our children and our children's children. So, anything a retailer can do, to help mitigate that risk, and give us more insight and more ability, whether that's through the circular economy, or whether you know whether that's bringing in our own products, and eating all products to people who can afford to buy those products in the first place, or buying recycled products or renting instead of buying a brand new product. Those brands are going to be helping us mitigate our risk and every study you'll look at, of businesses who are diverse and inclusive, or who really focus and understand the implications of sustainability to consumers, particularly given that Gen Zs, the younger generation, are the future of our business. If you can do those two things, right. I guarantee you'll be successful, both now and in the future.
Steve Dennis 45:29
Excellent. Well, that's a great place to leave it Martin Newman. Thanks so much for joining us.
Martin Newman 45:32
Thank you very much for having me. Cheers Steve. Thanks, Michael.
Michael LeBlanc 45:35
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 Judith McKenna, President International, Walmart. New episodes of Season 6, presented by our friends at 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 45:55
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 46:10
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. You can catch up with me on stage at Store conference in Toronto, May 31 and you can see both of us at the Lead Innovation Summit in July, live on stage in New York with our friend of the pod Simeon Segal from BMO.
Until then, safe travels everyone