On the 1st anniversary of the release of the revised and expanded 2nd edition of Steve's best-selling book Remarkable Retail: How to Win & Keep Customers in the Age of Disruption--which confusingly is also the 2nd anniversary of the 1st edition's release--we celebrate its success and impact with our very special guest Forrester Research VP & Principal Analyst Sucharita Kodali. Sucharita is not only one of retail's top thought leaders, but she was our very first guest on the podcast back in September of 2022 and she graciously wrote the Foreword to Remarkable Retail's 2nd edition.
“I think it’s terribly dangerous for an artist to fulfill other people’s expectations. If you feel safe in the area that you’re working in, you’re not working in the right area. Always go a little further into the water than you feel you’re capable of being in. Go a little bit out of your depth. And when you don’t feel that your feet are quite touching the bottom, you’re just about in the right place to do something exciting.”
— David Bowie, David Bowie: The Last Five Years
On the 1st anniversary of the release of the revised and expanded 2nd edition of Steve's best-selling book Remarkable Retail: How to Win & Keep Customers in the Age of Disruption--which confusingly is also the 2nd anniversary of the 1st edition's release--we celebrate its success and impact with our very special guest Forrester Research VP & Principal Analyst Sucharita Kodali. Sucharita is not only one of retail's top thought leaders, but she was our very first guest on the podcast back in September of 2022 and she graciously wrote the Foreword to Remarkable Retail's 2nd edition.
We unpack some of the key lessons from the book and take stock of Steve and Sucharita's predictive prowess. We also wonder aloud about whether there is complacency setting in among too many retailers, if a "collapse of the unremarkable middle" is inevitable and whether certain oft talked about "innovations" are victims of the hype cycle.
But first examine the retail news of the week that caught our attention, including trying to be glass is half full on JC Penney's new strategy to "love the customers that love us." We then move on to marvel at Shein's stratospheric $100 billion valuation, before weighing in on whether the Neiman Marcus Group's new partnership is rather Farfetched (see what we did there?). We close with our take on what to make of Walmart's bold moves to deal with trucking shortages.
Note: The John Oliver "This Week Tonight" segment referenced in the episode can be found here.
And don't forget to check out our bonus episode recapping this year's Shoptalk conference, recorded live from high above the Vegas Strip.
About Sucharita
Sucharita serves digital business strategy professionals. She is an expert on eCommerce, omnichannel retail, consumer behavior, and trends in the online shopping space. She is also an authority on technology developments that affect the online commerce industry and vendors that facilitate online marketing and merchandising.
In her research, Sucharita covers such consumer-oriented topics as eCommerce forecasting and trends, merchandising best practices, conversion optimization, and social computing in the retail world. She has also authored "The State Of Retailing Online," a joint study conducted annually with NRF.
Prior to Forrester, Sucharita was the director of marketing at Saks Fifth Avenue, where she managed the customer acquisition, retention, and market research efforts for the $2 billion luxury retailer's online channel. Prior to Saks, she held management positions at Toys R Us, where she was a merchant in the Babies R Us division and a store manager in one of the company's largest toy stores. She also worked for the Walt Disney Company, where she developed and managed marketing plans for new business initiatives, including the Disney Stores, the Disney Cruise Line, and Club Disney.
Additionally, she was involved in the expansion of Cap Cities/ABC properties, specifically ESPN Zone, ESPN Magazine, and the Go.com network. She has written two nonfiction books and has contributed to BusinessWeek Online.
Sucharita holds a B.A. in economics from Harvard University and an MBA from the Stanford Graduate School of Business.
About Us
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks , The Food Professor with Dr. Sylvain Charlebois and now in its second season, Conversations with CommerceNext! You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:05
Welcome to the Remarkable Retail podcast, season four, episode thirteen. The baker's dozen episode. I'm Michael LeBlanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:13
In this episode, we are back on the mic together at different parts of the country. Steve, it was great to see you in Vegas. And we are taking the opportunity to celebrate the one year anniversary of the release of your bestselling book, "Remarkable Retail: How to Win and Keep Customers in the Age of Disruption", with our very special guest, Sucharita Kodali, VP, Principal Analyst, great friend to the industry and, and to us. She's been on the podcast from Forrester Research, who wrote the foreword to the second edition.
Steve Dennis 00:40
It's always great to have Sucharita on, she's got such great perspective. And she was very kind to write the foreword. So, looking forward to that conversation.
Michael LeBlanc 00:50
And I'm very happy that I got the, the title of your book correct this time, because for many, many months, I did not. I often would say "in the age of digital disruption", and you would keep correcting me but it was some kind of, some kind of reflex of mine. I wanted to rename your book. So, just I thought I'd throw that out in case you're, you know, in case you're toying with a renaming of the book. You know, I seem to have come up with it randomly, anyway.
Steve Dennis 01:12
Well, there is, there is, to be fair, there is a lot of digital disruption. But I think, I think that maybe it had to do with like spacing on the, on the cover or something. Something really profound.
Michael LeBlanc 01:22
That, that sideways writing got me every time. All right. So, we'll get to our interview with Sucharita, but first, the news of the week. So, JCPenney, so Mark Rosen, who came out of an organization I worked for, Levi's, is now at JCPenney, and he seems to have a new plan.
Steve Dennis 01:38
Yeah, their new plan is to love the customers that love them.
Michael LeBlanc 01:44
Wait, stop, What?
Steve Dennis 01:46
Well, so, the messaging on this is really, is really interesting. I mean, basically, what he's saying is, we don't need no stinking new customers, we are going to focus on winning and growing with the customers we already have. I would say he's gotten a lot of pushback, generally, on that, because I think it is pretty clear that JCPenney needs new customers. Because pretty much any brand—
Michael LeBlanc 01:53
Who doesn't?
Steve Dennis 01:55
Needs new customers. So, I think the messaging of it was not great. Whether they're really going to, you know, just focus on existing customers, I think remains to be seen how this is going to play out. Now, what that actually means, right, is, I mean, if somebody who's ever bought from us in the last few years, an existing customer, but they've only shopped once. I mean, you know, there's a lot, I mean, I'm sure Penny's has quite a large number of folks in their database.
Michael LeBlanc 02:44
Yeah, a lot you can do with that.
Steve Dennis 02:45
So, on the one hand, if you've already got some semblance of relationship with them, you've got their email address, whatever, it, it makes a certain amount of sense. But I think, you know, Penny's challenges are much bigger than simply how their customer strategy plays out. You know, they've got some really fundamental issues of being over-invested in, real estate that's losing relevance.
Steve Dennis 03:07
They're a classic example of a brand that is stuck in the boring middle. So, it, it'll be interesting to see how this plays out. I certainly don't think this gives me any confidence that Penny's is going to somehow mount a real, a real turnaround. But we'll see how this plays out. They've got a new ad campaign, and a bunch of other things. But the devil, of course, is in the details on a lot of these things. But they've got a major uphill battle, in my opinion.
Michael LeBlanc 03:30
Well, your comments made me laugh out loud, as the kids would say. You know, thoughts and prayers, basically, you know, they got a lot of hurdles to overcome. And now, Mark Rosen did a nice job at Levi's in, in helping their digital, and I speak from a bit of experience having launched their digital e-commerce.
Michael LeBlanc 03:47
But it's a very different transition from a wholesale brand. Yeah, okay, he's got some stores to run in JCPenney, it's a, that's a very interesting, it's a very interesting choice. And, and, you know, we wish them well, of course.
Steve Dennis 04:00
Yeah, I, you know, I don't, I don't know, Mark. I think, you know, there's, there's probably like a 'when good people get bad jobs', sort of. I mean, I just, I just think some of these, these companies are so disadvantaged. And of course, you know, I, way back when, when I worked at Sears, we spent a lot of time focused on JCPenney.
Michael LeBlanc 04:19
Yeah.
Steve Dennis 04:19
And, you know, really, JCPenney has done very little to improve their business over the last 20 years. So, they're really playing from behind, and have a lot of uphill battle. And the bottom line, which, you know, I often say, which is a real challenge, is that people don't switch brands for a slightly better version of mediocre, you know. People will, they've got to win, you know, in a category that is basically contracting, has been contracting for two decades.
Steve Dennis 04:44
For them to be successful they have to win a lot of business away from pretty good competition. So, aside from the customer focus, what are those things from a product customer experience standpoint that are going to be powerful enough, remarkable enough, to win a lot of business away? And I just don't see it. So, but yeah, best of luck, thoughts and prayers. We'll see how this goes.
Michael LeBlanc 05:08
He's not the first executive to go into JCPenney with the hopes of reviving it. So, as you said, as we said, best of luck. All right, let's, let's move on. Let's talk about SHEIN. So, valued at $100 billion, I, put, put on my best Dr. Evil—
Steve Dennis 05:26
Yeah.
Michael LeBlanc 05:27
Voice there for the billion dollars, and for other reasons. Now, I did, I was reading the article, bigger sales than H&M, Zara, and Forever 21. Well the last one's is not hard, but I mean, it's an incredible story. And it is really a story of cheap versus sustainable, and where that product is coming from.And, and our friend, Jason Goldberg was arguing that, in fact, the way they make it, it's better than some of the other fast fashion to the environment. It's a complex story.
Steve Dennis 05:56
Yeah, I mean, it's a really innovative business model, you know, SHEIN's come out of, you know, pretty much out of nowhere, to this, this incredible hyper growth company in just a few years. And, you know, gotten this incredible valuation. You know, folks don't know, they have this model, where they basically follow innovative designs, you know, largely coming out of influencers.
Steve Dennis 06:20
And then they just make a few of these products, you know, turn them around in just, I think, a matter of hours and days, in many cases, and then they put it up on the site. And if it does well, they make a bunch more. So, you know, to Jason's point, I think it's, it's more sustainable from the standpoint that they're not likely to get stuck with a lot of inventory, which ultimately—
Michael LeBlanc 06:41
Which has been an H&M issue. H&M has got—
Steve Dennis 06:43
Right.
Michael LeBlanc 06:43
Billions dollars of stuff that, you know, just—
Steve Dennis 06:46
I mean, it's, it's pretty much a, a worldwide issue for the apparel business, that a lot of stuff ultimately doesn't get sold and ends up in a landfill. So, from that perspective, you know, it seems to reduce the waste, on the other hand, because it's, sort of, the cheap and cheerful product, it's probably pro-, and then because their customer base is largely teens, who, you know, some of their customers are growing, right.
Steve Dennis 07:10
They're going to outgrow, or out love, the fashion of it. And so, that's, you know, I think the claim or the challenge for a lot of fast fashion players, is that a lot of stuff ends up having to be resold or, or thrown away.
Michael LeBlanc 07:23
Yeah.
Steve Dennis 07:23
So, it's not, it's not clear to me what the overall sustainability impact is likely to be. But I think this is a great example where, you know, you say younger people, you know, whether you're talking about Gen, Z, Gen X, whatever, are so interested in purpose driven brands. And yet, here's a brand that I don't think really can make the argument that they're a strongly purpose driven brand. Because, you know, ultimately, a lot of people can afford—
Michael LeBlanc 07:48
Yeah.
Steve Dennis 07:49
Or just, you know, prefer certain kinds of brands, and they make the trade off between price and, and what's good for the environment, or are good for, sort of, a broader social impact.
Michael LeBlanc 07:59
All right, this next story feels, how shall I say, far-fetched to me. I read the headlines and I had to double click on it. FARFETCH invests $200 million in Neiman Marcus Group to run their something or rather. What's going on here?
Steve Dennis 08:17
Well, I actually think this is pretty interesting. When I saw the headline, I was, kind of, you know, like, a dog tilting its head. But I actually think, as I understand it anyway, so, so FARFETCH, yeah, they're, they're investing $200 million in the Neiman Marcus Group. But it's really the partnership that they're going to forge, which I think is interesting.
Steve Dennis 08:35
So, as I understand it, FARFETCH is going to basically help Neiman Marcus Group create more of a global marketplace. So, as we know, a lot of retailers are trying to extend their assortment, extend their reach by standing up some sort of marketplace. And so, I think that is what Neiman Marcus gets out of this.
Steve Dennis 08:58
Also, because FARFETCH is much stronger outside of North America, I think it has the opportunity for Neiman Marcus and Bergdorf Goodman, their other brand, to get more of a global presence. And so, I think for FARFETCH, it's, you know, they're getting also more of a play into the US market, where they're not as strong.
Steve Dennis 09:19
So, I think in terms of mutual, possible mutual benefits, it's pretty strong. I mean, I do think it was curious that they also took an equity position in Neiman Marcus, and I don't know if that was just Neiman's saying, hey, you know, if you want to play with us, that's the cost of doing business, because we could use the cash to invest in upping our, you know, technical skills and other, other things that are they're trying to do, so.
Michael LeBlanc 09:45
Just use the cash, because, you know.
Steve Dennis 09:47
Right, right and, and, you know, I don't, it's hard to say because Neiman Marcus is a private company now, but $200 million, probably only gets FARFETCH, you know, 3 or 4% of the company. So, it's not like it's, it's a big factor in terms of the determining their, their future destiny.
Steve Dennis 10:01
So, and, you know, potentially, you know, it's always interesting, I think, to say if you forge a partnership with, you know, whatever the terms of the deal would be from a, just operational standpoint, that you also participate in the company's upside of things doing well. So, from FARFETCH's standpoint, you know, they get to participate in the growth of Neiman Marcus' equity and presumably a future IPO.
Michael LeBlanc 10:24
Couple of last things, let's just round up with. I noticed in the, in the news, and it caught my attention for a whole bunch of reasons. Walmart offering, what was it, $100,000-$110,000, they've got a real shortage of truck drivers. And this whole shortage of truck driver thing has been on my mind for a long time.
Michael LeBlanc 10:39
And listen, I think we don't have a shortage of truck drivers, we have a shortage of the right compensation to attract people to the, what is a tough job. And so, you know, I, I keep turning that script around, and you pay people enough money, they'll take that job, but you got to pay him enough money, because it's, it's not a great job some days, right.
Steve Dennis 10:57
Yeah, I think a lot of what COVID has taught us about employment is that some of these, you know, more difficult jobs, whether we're talking about truck driving, which I agree, I watched this, I mentioned to you off-mic, that John Oliver did an episode on his show on HBO, which maybe we'll link in the show notes, about, about this, and it really gives me an expanded perspective on just how difficult the job is and just some of the conditions that really drive how truck drivers get paid.
Steve Dennis 11:23
But, you know, we're seeing this across a spectrum of jobs, you know, not just in retail, where people are, are moving to places that not only pay more, but in many cases provide a better quality of life. Whether that's just how they're treated, or a schedule or, you know, whatever it might be. And so, when the labor market is this tight, you know, this is just a natural thing that's going to happen.
Steve Dennis 11:44
So, in some ways, I think, you know, I'm not necessarily talking specifically to what Walmart is doing. But just, I think, in general, this is actually shining a light on, on working conditions in places where you could argue people have been systematically underpaid. So, I know it's very tough on the companies that are dealing with rising costs, and, you know, in some cases, inability to execute the way they want to.
Steve Dennis 12:10
But, and, you know, obviously, that can also have impact on the consumer, you know, they can't get the products when they want or the prices are going to be higher. So, I mean, it's a broader issue. But at the same time, I almost feel like this is a correction of something that maybe is long overdue, but that, that's for a different podcast on the politics of, of labor.
Michael LeBlanc 12:27
Well, all right, let's leave it there. Now, let's get to our interview, our wonderful interview with Sucharita Kodali. So, great to have her back on the mic, she's been a guest before. So, without further ado. Well, this is exciting. We're marking the anniversary, the first anniversary, or the second anniversary, I guess, the first anniversary of the second edition and second anniversary of the first edition—
Steve Dennis 12:46
It's very confusing.
Michael LeBlanc 12:50
Of the launch, of the launch of what I considered, long considered, not that I'm biased, but even setting all that bias aside, one of the best books I've ever read, of strategy and retail, Remarkable Retail. So, thank you Sucharita, for joining us. We're celebrating, Steve is here, as well.
Sucharita Kodali 13:01
Thank you. Thanks for having me, Michael and Steve.
Steve Dennis 13:09
Do you have any cake or anything to celebrate? I think, is that—
Sucharita Kodali 13:12
Yeah, or champagne. I'm feeling like I'm a little, I'm being gypped here.
Michael LeBlanc 13:18
Well, the next time we see you in person that is on the table. We're all getting around of champagne. And I know Steve expressed to me how appreciative he was of you participating and writing the opening notes. So, we wanted to get you back on at this anniversary. And just chit and chat about the current, current state of affairs and a bunch of stuff.
Michael LeBlanc 13:39
And, and, and let me ping back to you, Steve, you know, let's talk about, for those who have read the book, maybe haven't heard you chat about it. We've talked about it in the podcast, you had a launch, but talk about why you wrote a second edition that released this time last year. What, what compelled you to put keys, fingers to keys again and, and take another run at it, and update the first edition?
Steve Dennis 14:04
Well, in some respects, I think the motivation was the same. You know, I wanted to put something out in the world that would hopefully make a little bit of a dent in the universe around trying to get retailers to think a bit differently about their strategy. So, that was really the motivation for the second edition.
Steve Dennis 14:24
The thing that really prompted it, of course, was COVID. And as we know by now, COVID accelerated an awful lot of trends. So, while the core of the advice I think is fundamentally the same, I felt like I had to, kind of, reset the starting points since so much had happened in such a short period of time. So, it's a little bit different point of departure but really fundamentally the same motivation.
Michael LeBlanc 14:47
Right on. And, and Sucharita, you were, as I said, kind enough to write the, the foreword for Remarkable Retail, second edition. What, what message were you trying to convey and, you know, it had been now, what, 18 months since you've put fingers to keys to write it up. Would you frame it any differently, reflecting on what's happened or what you were thinking at the time?
Sucharita Kodali 15:07
Well, first it was, it was a great honor to get a chance to write it. So, thank you, Steve, for, for asking me to do that. The, in terms of that, that intro, that forward, it was, a lot of it was really about some of the macro changes that I think had even preceded COVID.
Sucharita Kodali 15:25
A lot of it was about the growth of a certain company in Seattle, and another company in Arkansas, that continue to really, you know, kind of, have some of the biggest investments in retail and are continuing to shape and define a lot of shopper expectations. And that's a lot of what Steve addresses, is in that world where things are changing, how, how do you survive, and how do you thrive?
Sucharita Kodali 15:54
So, I don't think that much has, has changed. What I, one thing I will say, though, which is, which is very pertinent to now, is that I made a reference to, like, some political science book called, "The End of History", which was about the end of the Cold War. And if anything, now, I think it's, it's kind of crazy how we're almost—
Michael LeBlanc 16:15
Yeah.
Sucharita Kodali 16:15
Going for full circle, and nothing is ever as it seems, seemingly in history. And I think that applies whether it's political science, or retail, or, or any type of business, which is that you may think that, you know, all right, it's over, like, this is the—
Michael LeBlanc 16:29
Right.
Sucharita Kodali 16:29
New playbook, and, and things change again.
Michael LeBlanc 16:31
Well, we'll get into that a bit later, because I'm very curious to get your thoughts on this, this sentiment, both of you, actually, the sentiment that the, the period of globalization that we just had for the past 20, 30 years, particularly after (inaudible), the walls came down, is, kind of, over.
Michael LeBlanc 16:47
That we're in a new phase, a less positive phase. But let's get back to that. Steve, I, I wanted to check in. You know, when you, when you started thinking, take me back, take the listeners back to when you started thinking about writing a book. What, what were you hoping to achieve, and, and do you think you've, you've, you've got there?
Steve Dennis 17:05
Well, worldwide fame, of course, was my primary—
Michael LeBlanc 17:08
Checked, ticked—
Sucharita Kodali 17:09
Checked.
Michael LeBlanc 17:11
Done it, all right. End of podcast interview.
Steve Dennis 17:11
So, now, you know, I can retire. No, I mean, at one level, I was, I was really hoping to get, I would say, mostly large retailers to really, you know, fundamentally accelerate their change. And, you know, we've talked about it a bunch of times on the podcast, you know, why does it take a retail, a crisis for retailers to innovate.
Steve Dennis 17:13
And, you know, that's certainly what we observed, I think, through the pandemic crisis, that a lot of retailers that were very slow to change, suddenly managed to get a bunch of things done in a very short period of time. So, that was good at one level, but I still think that there isn't nearly the degree of change that needs to happen to be successful in the future.
Steve Dennis 17:13
So, to the extent I could motivate some retailers to, to take a different path. You know, that was what I was hoping for. Now, I think it's fair to say that my book has not changed the entire industry overnight, or anything like that. But in a couple cases, where I've interacted with retailers that are adopting some of the principles in my book, it's, it's, you know, fun to see that happen.
Steve Dennis 18:17
The other part is that, you know, as a consultant, and as a speaker, and as a writer, you know, you only reach so many people, so many organizations. So, one of the advantages of a book is, you know, it could be a, I always say like a florist in Wichita, Kansas, or some other smaller business that's never going to be able to, maybe, get to a conference to hear me, or Sucharita, to talk or, you know, hire us as consultants.
Steve Dennis 18:42
You know, that there's a way to, kind of, put a bunch of advice in a digestible form, that can make a difference. And it's been really, really gratifying to get feedback from small businesses that, that they feel like it's made a difference. In fact, you know, you and I were just at Shoptalk, and we had several people come up to us to talk both about the book and the podcast, and how it's affected them.
Steve Dennis 19:04
So, just, you know, you're not going to make any money from this type of book. So, it's not about the money. It's really about hopefully seeing change happen. But obviously, you know, I'd love, I'd love to get the message out there even, even on a wider basis.
Michael LeBlanc 19:20
Now Remarkable Retail and I, I, I said this off the top, in my mind, and I think in yours as well, it's really a strategy book. And it's certainly not a book about predictions. But there are things that you, I guess, would say predicted or thought that they would turn one way or another.
Michael LeBlanc 19:36
Is there anything that you feel you really nailed, you got right, and others maybe that didn't pan out exactly the way that you thought might? You know, I guess we could frame this around our, our six forces of the COVID economy. But is there anything that comes to mind when you, you know, one year later, from the second edition, reflect back.
Steve Dennis 19:55
Yeah. Well, so, yeah, it is one year as, as the edition came out, but as you alluded to with Sucharita, you know, you have to finish writing the book pretty much about five months before it actually comes out. So, it's a little bit longer. But, you know, I think, you know, I've made a big deal about the retail apocalypse being nonsense.
Steve Dennis 20:12
And I think by the time I first really started talking about that, both in the first edition and the second edition, I think it's become pretty clear that physical retail is far from dead. You know, I've also been challenging whether so many of these digitally native vertical brands are actually going to turn out to be successful. So, I, kind of, went out on a limb on that.
Steve Dennis 20:33
And I think if we look at what's happened, in the last few months anyway, I think that's becoming more clear that, that, that whole area is not quite as easy, or maybe not quite as big and profitable as, as people hoped. As it relates to some of the specific things, I said about the impact of COVID, I feel really pretty good about everything I said.
Steve Dennis 20:49
I think the one thing that has really surprised me, you know, as I sent the book off to, to the printers in the early part of last year, I really thought 2021 would be a much tougher year for retail. Not that certain retailers like the, you know, the so called essential retailers, you know, I thought that they were going to continue to be strong as the effects of COVID kind of lingered.
Steve Dennis 21:15
But I think I underestimated the degree to which, well, I guess I didn't see how much federal stimulus there was going to be in the US, but also underestimated how important that could be. And at the same time because people weren't traveling as much, you know, they had a lot more discretionary income. So, there was just so much fuel, I guess, to, to drive spending.
Steve Dennis 21:37
So, 2021 ended up being a much stronger year than I imagined. And in particular, one of the things I talk about in the book is this idea of the collapse of the middle. That these unremarkable retailers that are neither, neither great on the value side of the equation, or strong on, I guess, what we could call the more experiential side, I really thought that that collapse was going to accelerate.
Steve Dennis 21:58
So, the, you know, the Macy's or the JCPenney's of the world, were going to have much tougher times. And I think, you know, that has not turned out yet to be the case. I still think it's going to be an issue as we move forward. But to that, certainly, kind of, like the, what's the expression, kind of kick the can down the road, in the case—
Michael LeBlanc 22:14
Right.
Steve Dennis 22:14
Of some of these retailers.
Michael LeBlanc 22:15
Sucharita, last time you and I saw each other in person I remember, like, sometimes I don't remember anything, but this I remember clear as a bell, you and I were sitting in the, in the media room at the last NRF, what was that 2020. And we were talking about a bunch of things, including, you know, the role of marketplaces and the role of these, I guess what we call digitally native vertical brands that, that Steve was, you know, later in the book, kind of, skeptical.
Michael LeBlanc 22:42
And we're now seeing IPOs come out and we're seeing information come out that, kind of, lends credence to the challenges that they're facing about, what, what do you call it, Steve? Profitless profitability or profitless, profitless sales, profitless growth. Sucharita, how, do you think it unraveled the way you thought, and was there any surprises as you, would you, let me wrap this long question. There is a question here, somewhere—
Steve Dennis 23:06
We'll find it eventually.
Michael LeBlanc 23:07
We'll find this question eventually, I'll come to it. You know, if you were to write the, that intro, again, if you're going to write the opening remarks again, would you, would you write them a little differently? What, what do you think about those, kind of, two things and things both we talked about, and, and how you put keys to, or pen, fingers to keys last time.
Sucharita Kodali 23:27
Well, I, I think that they're, you know, kind of, they're, they're different audiences and different types of retail that we're talking about here, right. And I, I think that the message to some of those larger enterprise brands that Steve was referencing, I don't know that the message is all that different to them.
Sucharita Kodali 23:50
You know, I think that all of the principles in the book still absolutely very much apply. And the point is so well taken about that middle, you know, companies like Sears that, you know, I mean, that still continue to hang on. And I, I think that it is, I don't think, you know, kind of, it is absolutely, you know, inev-, I will, you know, put a stake in the ground say it's an inevitability that that middle is going to shake out.
Sucharita Kodali 24:17
The question of, you know, when is still TBD. And there, you know, maybe the, the, that when is, is going to happen pretty soon because, because of inflation, right. Because of inflation and interest rates likely going up as well. So, that could be the bigger factor that influences some of those businesses versus, ironically, even the pandemic.
Sucharita Kodali 24:45
Because the pandemic gave them a lifeline because of all of that excessive government stimulus support that, that was, that was out there. You know, the one thing I probably would have done a little bit differently, if we had, if we'd done it in later 2021, as opposed to when we did, which is, I would have gone back to the notion of hype more.
Sucharita Kodali 25:10
Because I felt like, you know, 2020 it was a period where, you know, kind of, people just needed to get their bearings. And then in 2021, we started to hear all of the crazed frenzy around everything from the metaverse, to Web 3.0, and cryptocurrencies and, you know, Bitcoin rearing its head again.
Sucharita Kodali 25:31
And it just reminded me of 1999 all over again. And, you know, it's this, it was, it, it's exactly a redux of it. Down to the fact that we're now in like, Cosmo 2.0, but with Cosmo 1.0 economics, you know, I mean, so—
Michael LeBlanc 25:47
Right.
Sucharita Kodali 25:47
It's, it's just—
Steve Dennis 25:53
And Google, and Google because—
Michael LeBlanc 25:54
Can I say, Second Life, can I say Second Life at this juncture, as well?
Sucharita Kodali 25:59
Exactly, exactly. It's like Second Life again. I mean, it's really Second Life, but without, like, nobody knows how to even get into the metaverse like, you know, I mean, it's just, it's just, it's lunacy. But yet every, every brand wants to build something for it. And it's like, you don't even know what you're building for.
Michael LeBlanc 26:18
Well, let me follow on one thread of something that you got me thinking about. The COVID, the impact of the COVID-era the last couple of years feels like, and what do you think about this, that it actually prepared retailers, particularly probably more so the bigger retailers, for what comes next.
Michael LeBlanc 26:36
Because it felt like if you could twist or form your organization into more agility, and you probably had a bit of a tailwind in terms of sales, or you are essential, as Steve would say, you came out of it a better operating retailer, would you, what do you think of that thought?
Sucharita Kodali 26:54
I do think that companies are strong, the companies that have survived are, are stronger, in some ways, than they were before. But at the same time, I don't know that they have completely adjusted culturally.
Sucharita Kodali 27:12
And I would have thought that what happened is that some of those really fast decisions that they had to make under the pressure of the pandemic, that culture would have empowered them to believe that, hey, we do have the capability of making decisions quickly, we can very quickly stand up something experimental and see if it works or not, and then get feedback and, and readjust.
Sucharita Kodali 27:35
And what I am seeing now, though, is the opposite. Which is basically a reversion back to 2019. I'm not seeing faster movement, I'm not necessarily seeing, you know, kind of, all right, we had this, this to-do list that was three miles long, you know, kind of, we're a faster company now, so that list should be much, much shorter now.
Michael LeBlanc 27:56
Longer, or, or that list should be longer, because, I guess, we can get a lot more done.
Sucharita Kodali 27:59
Yeah, yeah, I guess that's the other way. But I don't know, are they adding more, the things that I see them adding are like, you know, kind of, a metaverse, you know, kind of application—
Michael LeBlanc 28:09
Yeah.
Sucharita Kodali 28:09
Like not, not things that are, that customers are asking for.
Michael LeBlanc 28:14
Steve, what is, what is Remarkable Retail look—
Steve Dennis 28:16
Could I just—
Michael LeBlanc 28:16
Yes, go ahead.
Steve Dennis 28:16
Could I just add one thing to that? The thing that I'm worried about, which I think is related to what Sucharita is saying, is I almost feel like there's a certain amount of complacency that is starting to set in. You know, when I see things like folks saying, oh, you know, department stores are back. I think that's just crazy.
Steve Dennis 28:16
You know, I don't, I don't think there's anything. I mean, it's, it's true that department stores sales performance is better than it was a year ago, right, which is not a very hard thing to accomplish. But a sector that has lost market share for 20 straight years. What is the evidence that any of these guys are doing anything fundamentally different that is going to allow them to gain back share of wallet or market share?
Steve Dennis 29:03
And I don't think, you know, we've joked around that for Macy's, it's Wetzel's Pretzels, you know, that seems like to be the best thing they can come up with or, or it's marketplaces or social media networks or something like that. Those well all may be perfectly fine incremental ideas, but they are not fundamentally changing their competitive position.
Steve Dennis 29:21
And so, I worry that just because we've, we're seeing, kind of, you know, what I believe is going to be sort of this dead cat bounce, hate that sort of violent language, but you know, can't think of a better term for it. That, that, you know, things will sort of settle down and then, you know, two years from now it's going to be a crisis again, for whatever reason.
Michael LeBlanc 29:39
Maybe it's a good time to buy another retailer, another department store retailer. Steve, what does, what does remarkable retail look like in the near-, or longer-term future? I mean, you, you were on the stage with some great folks at Shoptalk and they were talking, you asked this really insightful question about, you know, if you, if you walked into the store now versus, you know, even 2019, how would the store look, and act, and be different. How are you thinking about remarkable retail in the, in the near and longer term?
Steve Dennis 30:08
Well, I don't know that I can give you a highly specific answer. I mean, I guess to me, you know, everything is in flux all the time, you know, that's the nature of modern retail. I think the thing we know for sure, is that we're going to continue to see more choice, as well as more noise, you know, this whole idea of remarkable is to really be about raising the bar, you know, that even very good is not, is no longer good enough to win.
Steve Dennis 30:32
And I think the, that bar is going to continue to be raised. So, I think that's going to play out in different ways for different retailers. But the, the general advice I've been giving lately, which I don't really talk very much about in the book is, I, I think we're going to be moving into a world that is less about formats and channels, you know, more brands as, as platforms.
Steve Dennis 30:57
And so, if you believe that's the way we're moving, then the, kind of, typical retail model, I would argue, needs to be reconfigured, you know, bundled, unbundled, or unbundled, re-bundled sort of, sort of over time. Which is why I think that, and I know this has come up a few times, that so much of retail strategy from what I can see is, is this concept of building a faster horse.
Steve Dennis 31:20
You know, it's optimizing what we already do, instead of stepping back and saying, okay, what, what might this all look like in five or ten years time? And, and, you know, whether, it's, you know, it's easy to make fun of the metaverse, but, you know, I don't know what's going to happen with the metaverse. I certainly think it's not going to be very big in the immediate future.
Steve Dennis 31:38
But, you know, the boundaries are being exploded, people are able to, to bring in all sorts of different service offerings underneath the umbrella of their brand. And so, I think you just have to really force yourself to think, kind of like a blank sheet approach to retail and then work backwards, as opposed to the tendency to, kind of, keep tweaking what you're already doing, and think that, you know, some new project is going to be the thing that's likely to make the difference over the long term.
Michael LeBlanc 32:05
Sucharita, I was watching a presentation you were on, and you were talking about the, the incorporation of consumer attitudes and values into the values of the retail brands, in terms of as a success factor. And, you know, would you assess that at this point to be table stakes? And if so, what are the differentiators that are left to win with.
Michael LeBlanc 32:25
So, for example, we're seeing lots of brands pull out of Russia. Some notably have not and they may suffer for that, but that's one just latest, you know, milestone or whatever we want to call it around this intersection of norms, values, and attitudes for retailers. So, how do you see that on the spectrum of, of table stakes? And, and what do you see then as a differentiator to make them remarkable?
Sucharita Kodali 32:48
Well, yeah, and, and I think it's Yale Business School that's doing a good job, kind of keeping track of, of every brand that has a presence in Russia, or had a presence in Russia, and what they're actually doing, grading them. So, and hopefully, consumers will, will react and investors will, based on, on that information.
Sucharita Kodali 33:07
But, but in terms of, all right, so if, if everybody does all of these things that you expect, where, where are those levers of differentiation? And, and Steve and I have had that conversation, have had many conversations about this. And, and I think this is where Remarkable Retail is particularly good at this, is, is, you know, kind of identifying what's your thing, you know, what is, what is it that you can bring to your customers uniquely?
Sucharita Kodali 33:07
What is unique about your customers that you can solve? And there's a little bit of homework that needs to be done for every brand, there's journey mapping, there is soul searching, there is really looking at your assets and defining your assets broadly. They can be physical assets, like a factory somewhere, it could be, you know, a patent that you may have, it could be the perception of your brand and, and whether or not people think that it can flex into other categories or services.
Sucharita Kodali 34:09
Your assets could be your human resources and the team that you have, you know, it could be your location. I mean, there's so many different things that can be an asset and then, you know, kind of looking at that as the, the way to explore opportunities. The challenge is that there are a lot of retailers that are me too, right.
Sucharita Kodali 34:30
And they, they do things because their competitor offers it or they're doing things because they feel pressured by investors to offer something. And that isn't always the right reason to, to do something, you know, I mean you should do something because your, your shoppers want it. You know, or you think that you can attract a new shopper base from it, but not, not simply because, you know, you're keeping up with the Joneses.
Michael LeBlanc 35:00
Well, let's, let's turn our mind to the last question which I'm going to frame it as advice for the listeners, advice for retailers, two starts and one stop, based on everything we think and, and think about, and reflect on from Remarkable Retail the book and what we've learned, and what we see ahead of us. Steve, why don't you start us off. Two, two starts, two things retailers should start doing, one thing they should stop doing, as we wrap this episode.
Steve Dennis 35:25
I'm going to take a maybe, a little weird take on this, I think one is to just lean into discomfort. I'm going to, indulge me for a second, I'm going to read a quote from the opening chapter, or the opening of Chapter 19, which is about being more of a radical.
Steve Dennis 35:43
And as listeners are listening, they can try to guess who said this, "The other thing I would say is that if you feel safe in the area you're working in, you're not working in the right area. Always go a little further into the water than you feel you're capable of being in, go a little bit out of your depth. And when you don't feel that your feet are quite touching the bottom, you're just about in the right place to do something exciting."
Steve Dennis 36:06
That of course, was noted retail strategist, David Bowie, who I often lean on for, for advice. But I thought, it's, you know, it's, it's taking more risk. It's, you know, failing better, all those kinds of things people say. I think the other thing that I would say to lean into, if you're not doing it, so, would represent a start is, you know, don't underestimate empathy as a business strategy.
Steve Dennis 36:27
I think one of the reasons why it's always been ridiculous that this idea that physical retail is going to go away is because people like to be connected. And I think if you're going to respond to this inherent need of, of, of human beings to be connected, then you have to develop a greater capacity for empathy.
Steve Dennis 36:45
And I think that can unlock a lot of new, new business strategies. And then my stop would be just stop talking about channels. You know, I think by now, it's just clear that there's this blended, blurred world we live in, and the customer is the channel.
Michael LeBlanc 37:00
All right. Sucharita, last words to you. Two starts, one stop.
Sucharita Kodali 37:04
The things that I think that retailers should start doing is, they should absolutely start to focus on the things that, that are disrupting the world. Like, for instance, climate change being one, and the other being a new global order. And that has implications for things like supply chain and where you source products.
Sucharita Kodali 37:30
And it may be very painful in the near term, but every company that, I think, now is manufacturing in the far east needs to rethink that. And, you know, not, not to, you know, kind of just get up and, and throw it all out, because that's, that's not viable or realistic. But diversification and reducing dependency on regions that could be hostile to your home country.
Sucharita Kodali 38:03
So, so that's, that's, I think, some really important things that I don't see a lot of retailers grappling with. And I don't know if the senior executives and the board is grappling with that. You know, there's a lot of, of focus on, you know, kind of, still a lot of decisions in the weeds when, when there are big strategic, you know, disruptions that are happening in business and retail overall.
Sucharita Kodali 38:31
In terms of stopping, I think that we're in the midst of another hype cycle, with respect to technology companies, and Silicon Valley pushing, you know, things, you know, and hoping that there's a network effect that then makes, you know, a small group of investors, extremely wealthy, but doesn't necessarily impact the rest of us.
Sucharita Kodali 38:55
And I think it's really, really important to understand that, you know, it's, it's okay to be aware of what's happening. But, you know, kind of, you don't need to jump on things like crypto and the metaverse now. You know, maybe there'll be success-, you know, they'll, they'll, they'll take off and be incredibly embraced in the future. Maybe they won't.
Sucharita Kodali 39:16
But you will see that happening if they do get to be more embraced and you will have a chance to jump on at a later time. But you don't need to distract yourself with the, you know, kind of that interim period where there's still a lot of shakeout, you know.
Sucharita Kodali 39:33
And you know, it's not in, it's not necessarily in your interest to, to spend time and resources on it. It seems to benefit, you know, kind of others more than it seems to benefit the retail industry, to be candid. So, that would, that would be my, my advice.
Steve Dennis 39:51
I think it's always, just quick, I think number one, it's always good to follow the money and I think Sucharita's really pointing to, you know, a lot of times there are interests, pushing these stories and narratives ahead, that, that don't necessarily line up with, with what's in your interest.
Steve Dennis 40:04
The other, the other thing I heard, I know, Michael, we talked about this on another episode, but this idea of, you know, thinking big, starting small, and being, being ready to scale fast. And that I think serves us well in a lot of, lot of cases and building a culture of experimentation.
Steve Dennis 40:18
But you know, you got to keep your eye on the ball, you know, you can chase a lot of bright shiny objects and, and really miss what's going to drive your business, you know, not only, you know, next quarter, but you know, over the next few years.
Michael LeBlanc 40:29
Well, in terms of thinking big, I couldn't have imagined a better guest to help us and you celebrate second. Sucharita, thank you so much for joining us. I learn something every single time we speak in online or together, and hopefully soon together in person. Now that things seem to be opening up a little bit. And I really like to thank you for joining us. And, and Steve, last words to you.
Steve Dennis 40:55
Well, I want to thank Sucharita, as well. I mean, she's been, you know, incredibly generous with her time. It's the second time as a guest on, on Remarkable Retail—
Michael LeBlanc 41:04
Yeah.
Steve Dennis 41:04
And writing the foreword. And I would encourage folks if they are not paying attention, I don't know why this would be the case, but if they aren't paying attention to what Sucharita's doing, they're really missing out because there's always just incredibly rich data, but most importantly, the insight and interpretation on top of that data. So, thanks so much.
Sucharita Kodali 41:22
Oh, well, thank you guys. Thank you both so much for having me here. And always being open to, you know, having a wonderful conversation and dialogue. I also enjoy, enjoy spending time with you.
Michael LeBlanc 41:34
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 and insights, and new episodes will show up each and every week. Be sure to check out our YouTube channel, and last but not least, tell your friends and colleagues in the retail industry all about us.
Steve Dennis 41:49
And I'm Steve Dennis, author of the bestselling book "Remarkable Retail: How to Win and Keep Customers in the Age of Disruption". You can learn more about me, my consulting, and keynote speaking at stevenpdennis.com.
Michael LeBlanc 42:03
And I'm Michael LeBlanc, producer and co-host of the Conversations with CommerceNext podcast, The Voice of Retail podcast, keynote speaker and host of the all-new Last Request Barbecue cooking show on YouTube. And you can learn even more about me on LinkedIn, or meleblanc.co.
ave a safe week everyone.
SUMMARY KEYWORDS
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