This week we welcome Michael Schneider the Managing Director of a truly remarkable retailer: Bunnings Group, the leading retailer of home improvement and outdoor living products in Australia and New Zealand. In our discussion we discover how Bunnings became Australia's most trusted brand, the different ways they pivoted to deal with the pandemic and what lessons all retailers can glean to drive growth and innovation in the post-COVID world.
This week we welcome Michael Schneider the Managing Director of a truly remarkable retailer: Bunnings Group, the leading retailer of home improvement and outdoor living products in Australia and New Zealand. In our discussion we discover how Bunnings became Australia's most trusted brand, the different ways they pivoted to deal with the pandemic and what lessons all retailers can glean to drive growth and innovation in the post-COVID world.
After our discussion we jump into our new weekly segment “Remarkable or Forgettable?” where we give our hot takes on retail headlines, and deem them wow-worthy, best ignored or somewhere in between. This week's highlights include growing cargo issues, the impact of the US stimulus package, how Burlington Stores, Dollar Tree and others failed to get the retail apocalypse memo, big changes at Ulta, Coupang's blockbuster IPO and Poshmark's tepid outlook.
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Michael Schneider: With a genuine care for, and commitment to our team, I'm very much a retailer at heart, having spent the vast majority of my career in this ever changing, dynamic industry. After more than 10 years in the business I was appointed Managing Director, Bunnings Australia & New Zealand in March 2016 and have enjoyed the transition and challenge that it's brought. Prior to this, I led the store operations teams across Bunnings Australia and New Zealand, after joining Bunnings in 2005. Before joining Bunnings, I held a range of senior operational, commercial and human resource roles across regional and national markets, both in retail and financial services with The Warehouse Group and Westpac.
I hold a Bachelor of Arts degree from the University of NSW and I've completed the Advanced Management Program at INSEAD, and the Advanced Strategic Management Program at IMD which helps round out my intuitive sense for our customers and team, balanced with a strong commercial focus. As we continue to live our value of innovation and continue to evolve our ever changing business I am excited by the opportunities technology and data create to build on a remarkable legacy, but also create opportunities for growth both for the business, the customers we serve and the teams we work with.
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption will be released April 13th and is now available for preorder at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Michael LeBlanc
Welcome to Remarkable Retail podcast, season two, episode seven. I'm Michael LeBlanc.
Steve Dennis
And I'm Steve Dennis.
Michael LeBlanc
Steve, I'm wondering if you've done any home improvements or maybe added something to the home? If so, you wouldn't be alone. The category is booming here in North America. We saw some numbers and talked about it from Home Depot and Lowe's. Clearly there's a big tailwind. So, what's going on around your house?
Steve Dennis
Well, I haven't done all that much that would get me to Home Depot and Lowe's, though I am working on a couple things. But I did, did buy some furniture and a few other things around the home. So, I'm doing my part to get the American economy back on track. But yeah, it's, it's a, it's a crazy hot category, pretty much I think, everywhere in the world as we'll talk about in a second.
Michael LeBlanc
Well, as you said, on this episode, we're going global across the world to Australia, New Zealand to meet a remarkable retailer, Michael Schneider, Managing Director at Bunnings.
Steve Dennis
Yeah, I had the opportunity to visit a Bunnings store, this was about three years ago, when I was in Sydney. And it's pretty interesting story. I think a lot of people, certainly, Americans in the audience, will be familiar with the format generally. But as we get into, there's some really interesting differences as well. So, I'm excited to bring this story to a broader audience.
Michael LeBlanc
Well, and what I found remarkable, and I had the opportunity to meet Michael and his team, I had the pleasure of touring them around to Toronto retail, back in the before time, when we could use our passports for more than just ID at the drugstore, whatever. And, you know, it's a remarkable brand, because not only does he rank as a top brand in home improvement, like in the category, he ranks is one of the most, if not the most, respected brand of all brands, like of every brand, in Australia. So, it's a really, really interesting store.
Steve Dennis
I can't wait to learn more.
Michael LeBlanc
All right, well, let's, let's bring him on. Michael, welcome to the Remarkable Retail podcast. How are you doing this afternoon?
Michael Schneider
I'm really well Michael, how are you?
Michael LeBlanc
Well, I guess I should have said this morning because in your time, where you are, it's the morning, it's the afternoon here your time zone a go-go kind of thing. I'm fabulous, thank you. And, and listen, so thanks so much for, for joining me. We've talked before, both in person and on The Voice of Retail podcast, but it's such a treat to have you join Steve and I on the Remarkable Retail podcast.
Michael Schneider
Fantastic, and thanks for the opportunity.
Michael LeBlanc
So, let's just jump right in. Tell us about yourself. Tell us about your background and your role at Bunnings.
Michael Schneider
Thank you. Yeah, my, my name is Mike Schneider. I'm the Managing Director of Australia's largest Home Improvement, outdoor living supplier, which is called Bunnings. It was a business that started way back in the 1800s by a couple of Englishman who came out to Australia and started up a timber milling business on the west coast. And over 130 odd years, the organization's grown into a business that employs 55,000 team members. We have close to 400 sites across Australia and New Zealand. And we recently reported our half year earnings results.
So, to sort of give you a bit of a sense of our size and scale we, we had revenue of just over 9 billion Australian dollars. And we had an EBIT, before tax, of 1.27 billion Australian dollars and a return on capital of 76.6%. Which is a very strong position for us to be in, in a very strong period of trading. Which I think you know, has been reflected all around the world in the home improvement outdoor living sector of retail.
COVID's thrown out different challenges for different parts of retail service and hospitality. But the sector in which we operate, the performance has been strong. And unsurprisingly, with people confined to home for long periods of time with lockdown, or nervous to travel, or in the case of Australians, unable to leave the country. We have a government that's imposed an international travel border restriction on Australians leaving the country and it's pretty hard now to get back in as well. But it's certainly serving as well, in keeping COVID numbers low.
Michael LeBlanc
Yeah, there's a quota system kind of thing, right? If you leave the country, only a certain number, people are back in. So, you could be, you could be shut out for, for many months. Is that the way it basically works you?
Michael Schneider
It's similar to that. If you're leaving the country, you need to demonstrate that it's for compassionate reasons, or you're going to be away for I think it's more than three months. And there's a cap on the number of international arrivals because everyone goes through a mandatory hotel quarantine for two weeks when they come back into the country. So, getting that managed in a safe way is obviously very important. But also means that the numbers are pretty restricted. So, I think there's still something like 40,000 Australians wanting to come home. And we've probably got a million more Australians in the country at the moment that we would normally have.
Michael LeBlanc
Wow, it's so, so different, so, interesting.
Steve Dennis
Yeah, its really interesting.
Michael LeBlanc
And, just off mic, we’re just we're talking about, you know, I'm in Toronto, you're in, you're in Australia, Steve's in Dallas in United States. Three very different realities with the same virus, right. Things are probably more like for you and me, between Canada and Australia. But, you know, just the challenges I think there's more commonalities in retail, the challenges and opportunities I think are far more common, that, there's far more in common than there is, is different.
So, for those outside the home improvement industry, those people would know you well. Talk about, talk about your, your format. You gave us a sense of size and scale, but describe a Bunnings and how you go to market?
Michael Schneider
Yeah, thank you. It's um, it's an interesting format. It's predominantly a warehouse format. So, for, for those, say based in the US, you know, you're gonna be familiar with the Home Depot or Lowe's. Or if you're in the United Kingdom, it will be a B&Q. So, large format 7,000 to 10,000 square metre, retail selling spaces with 30 to 40,000 skus. Selling everything from, from timber and paint to outdoor furniture settings, barbecues and green life. And we service both the retail market, so the DIY markets, so B2C. But we also have a significant B2B business. 35% of our revenue is products that we sell to the trade, or pro market. And that's predominantly in building materials and plumbing and categories like that.
But yeah, so pretty much large format. We do have a number of smaller stores across Australia and New Zealand, where the market either is prohibitive from, from a cost or a sales point of view to open a large format store. Or from a from a real estate point of view, that's pretty much all that's available. The challenges in a market like Australia or New Zealand is that most of the populations are congregated around a number of large cities. And often those smaller rural settings aren't as straightforward to sort of open and operate a Bunnings in.
Steve Dennis
So Mike, I understand that, in addition to Bunnings being a top ranked retail brand, it's also one of the top ranked brands in all of Australia. What, and I had an opportunity we talked about off mic, I had an opportunity to visit one of your stores a few years ago when I was in Sydney, and it looks great. But, but give us kind of what's the, what's the secret sauce? What's that thing that allows you to really go above and beyond customer expectations?
Michael Schneider
I think it's a great question, Steve. It's a combination of a number of things. I think, predominantly our people. So, we're very fortunate that, you know, we have a very high permanent base in our team. So about 85% of our team are permanent team members, and only 15%, or there about are our casual team members. I think our team, you know, really do embody the culture of the organization. It's a very warm and inclusive culture. It's very focused not only on, on the sales side of the retail environment store, but obviously online as well.
But more importantly, the work that we do in our local communities. So, you know, we have a real mindset that, you know, our team members live in their local communities. So, they send their kids to school, in their local communities, they raise their families and do a lot of things in those communities. And that really sort of draws the community into the Bunnings ecosystem and Bunnings into that community ecosystem. We do lots of work with schools. We do work with aged care facilities. We do work with volunteer organizations. And you know, through a range of different things that we do, particularly the community barbecues that are cooking every, every weekend, and for some of our stores during the week, we help raise close to 40 million Australian dollars for community groups all around Australia and New Zealand. And I think it's that sense of connection to the community that really does differentiate us.
We endeavor as best we possibly can to do everything to build trust. Whether it's with our customers, or our suppliers, or government, or regulators, you know. And really believe in that, that balance of strategies doing, doing the right things, but culture's doing in the right way. And we place so much emphasis on the on the cultural side of our business that I think that really does come through in the way that customers sort of feel when they engage with the brand. And I think react when they they're asked the question, you know, "Of which brands do they do they trust?" And, and I think that that gives us an enormous, you know, social license to operate within our community and, and to grow our business, but to continue to grow jobs and engage the community in the right ways.
Steve Dennis
Are there things that you have done in recent years to build on that or to respond to more competition? Or are these things that have been part of the culture for a long time?
Michael Schneider
They've certainly been a part of the culture, at least since the start of the warehouse format, which was back in the mid-1990s. But it is something that we're very disciplined around focusing on. And we do that internally rather than, than externally. And what I mean by that is that we invest in resources to undertake activities in store or connect and engage with the community. And we, we seek to involve ourselves with organizations where we find there's a, you know, there's a strong connection from a support point of view. Whether that is those local schools or whether it's in the mental health space. Because we know, particularly in the last 12 or 18 months, just how much pressure there's been in the community, so doing a lot of things in that space to help.
So, it's a, it's a form of constant renewal, I think, you know, it will be very easy to take for granted that once you've established this trust and connection, that it's that it's going to be there. But there's a very active management of that. But it's done in a very, you know, in a very low key way, if you like, one of the things that you won't find Bunnings doing is taking out TV ads to promote what it does. We prefer to let the money go into the actions and the actions ultimately speak louder than, than the words,
Michael LeBlanc
You know, and one of the defining elements of global retail has been a couple things. One is this acceleration of e-commerce, so I wanted to touch base with you on that to see if that's been the case for your market. And then the second characteristic, I found is retailers have just galvanized themselves and stood up projects in such a rapid fashion. You and I, we had the opportunity to meet when we were touring around Toronto retail, and we were looking at some click and collect and some curbside and, you know, we were discussing the unit economics and the practicality of that, that seems to have kind of moved forward as curbside is as taken a big role. Is that, is that the case where you are? Have your thoughts evolved on things like curbside and the integration, really of e-commerce and your retail platform?
Michael Schneider
Yeah, there's absolutely no doubt, Michael, that e-commerce is played a critical role for businesses. And the acceleration of that's been huge. You know, when we met in Toronto, you know, I think it was at a time when we were still very much in the infancy of our, our online model. We had a very limited range of products online. By April last year, we had all of Australia and New Zealand stood up for click and collect. And well click and delivery, and curbside. And the curbside model that we have, drive and collect, allows customers to sort of drive into the car park and have products loaded straight into their car in a very safe and very COVID safe manner.
Now alongside that, we brought forward the transactional capability of our, of our website to New Zealand by six or seven months to be ready to trade when the New Zealand government lifted their very strict stage four restrictions, in April last year. So, we really wanted to make sure that you know, customers could continue to shop with us. We recognize that, you know, confined to home for 20 to 23 hours a day, you know you're looking for things to stay physically active, but just as importantly mentally active and try and get off the couch and, and do some projects. So, you know that work was significant.
And alongside that was, you know, enabling technology to help the team members in our stores be more efficient at picking and packing those orders. We developed technology to, you know, track and monitor the number of customers in stores to meet. Where customers could come into store to manage density limits. And develop things like the product finder app, which actually allows you to see where those products that you're looking for are in a store, so that when you're in the store, you can get in and out as quickly as you possibly can to sort of keep yourself, keep yourself safe. And also, you know, whatever requirements were in place to be at home.
So, I think not only the e-commerce side, but all of the enabling technology around that has been important in it. And it certainly helped stay very focused on the important work we're doing at the moment around re-platforming our website. Which will, will go live progressively across 2021. Which gives customers an improved, you know, functionality to our website, and really positions it as a mobile first platform so that you know that, that shopping from your mobile device can be even easier.
Michael LeBlanc
I've characterized curbside, or at least the philosophy, or the thinking from executives about curbside, in two ways. One, it's a really expensive way to do retail because you've got to bring the products out, you've got to muster them about and you got to bring them out to the curb. The other philosophy is it's a very efficient and competitive advantage way to do e-commerce fulfillment. Where do you sit on that kind of spectrum of thinking around curbside?
Michael Schneider
Look, I think it's very fair observation around, around cost. I think when we've been offering it, so for example, Melbourne, similar to Toronto had a very, very long lockdown. Our's was I think, close to three months. And, you know, that, in that period, we had a number of stores in Melbourne, in particular, that weren't able to be open to the general public. So, any, any opportunity to sell and the volumes actually offset the cost at the time. So, it offset the costs. So, you know, I think where it's necessary, it's really important.
I think, going forward, things like curbside are going to be important for some sectors of the community, for some period of time, whether it's older, more vulnerable people, perhaps people with a disability that can really benefit from it. Our online penetration broke through 3% of revenue in the first half of the, the FY 21. Financial year, it's gone back to below 2% of revenue now. Which reflects where Australia and home improvement in Australia are on the on the journey around online penetration. And we will anticipate that grows through 5%, through 10% in time. And I think once we're through about 5% of revenue, you know, we're really have to have a good hard look at the the fulfillment models we have. Because I think that becomes the tipping point in terms of the impact to earnings purely based on the volumes. But for us at the moment, it's still quite a low percentage of our sales. So very manageable, both fulfillment from store. And what's interesting is, once the doors open, and customers can come back in, they prefer to, at this stage, participate in the in-store environment and shop themselves. And if they are looking to pick up an online order, they've sort of reverting to click and collect, rather than, than the curbside model. But curbside has been really good for the time that was needed, I think.
Steve Dennis
So, what do you take away from, and I don't know, obviously, different countries, different cities, have had pretty wildly different experiences, I guess, with degrees of lockdown and coming out of it, and so forth? And Michael and I have talked about this a bunch of times, in terms of whether people will be, you know, excited to get back into stores, just because they haven't been there. The obvious advantages, in some cases of being able to see the product, touch it, and talk to a sales associate, you know, all those things that explain why Home Improvement doesn't have a particularly high penetration in e-commerce anywhere in the world, probably. But I'm curious, which of these behaviors do you think, and technologies, I guess, persist, versus ones that may not go back exactly to where we were before, but might kind of revert back to the mean?
Michael Schneider
Yeah, I, I'd categorize where we're at, at the moment as an interim normal. I think, I've read a lot about, you know, a new normal state, but I think we're in an interim normal, because people are sort of finding their way. You know, it's certainly for businesses and leaders and leadership itself, you know, the pandemic has been interesting, because, you know, all of us like to chart quite a unique course. There hasn't really been a playbook for dealing with a pandemic. That being said, I think, most good organizations now have developed, you know, protocols and processes to manage. And certainly, for us, in Australia, we've had a series of snap, you know, very short five to seven day lock downs, when, when there's been a case sort of jumped out of our hotel quarantine, or it's been a new, new variant of the COVID-19 virus. Our ability to respond to those has improved every time because you know, you've got practice and you've got established process.
I think what we're seeing in Australia, we've seen a unique position, and I expect some of my colleagues globally on this, when we catch up, is we're in a position that our case numbers are very low now, and to a large extent, you know, an active suppression policy, or pretty close to eradication policy, as a sort of feels means that we can go about our lives in a pretty, in a pretty normal sort of way. And what we're seeing is, consumers are happy to go back, but there's a clear expectation that businesses are doing everything they can to keep them safe. Whether it's density limits in store. Physical distancing measures for, for our team, you know, in some jurisdictions still wearing face masks when they're at work and customers wearing face mask when they're in store.
I think 12 to 18 months from now, when, when there's good penetration of the vaccine, and hopefully international travel is back, I think people will revert to a version of what they know, but will be much more alert to any changing circumstance where they may need to, you know, start to practice physical distancing more quickly, or go back to some of the hygiene things that have been required. And I think, you know, it's not, it's not going to be until that point where people can start to really move freely between, between not only parts of their own country, but across, across countries that I think there'll be a sense that we're in a, in a new space.
And I do think, you know, for a period of time, at least, people are going to want to stick closer to home, because that's where we've been educated, we're the safest. And where the entities are most known. You know, he's in your house, you know, what, what's in your house, getting out, as you say, Steve, to stores where you can do things that make you feel like you're doing normal things will be important. But as I say with that, with that caveat, that there are really good safety measures in place as well.
Steve Dennis
So, I often say it's very hard to predict, you know, consumers say what they think they're going to do in the future. But it's often hard to really know how that's, that's going to play out in reality.
The last question I would have is, how has this, or has it, changed your attitude towards innovation? It sounds like it's fundamentally changed your attitude towards being more agile in your approach. But one of the things that we've seen is quite a lot of innovation, or things coming out of maybe pilot mode into launch. How much of that do you think will fundamentally change your approach to innovation? Or is that more specific to this crisis?
Michael Schneider
I think it's, it's proven just how important innovation is. You know, the ability to act nimbly even, you know, for very big organizations like ours implementing this very quickly. Was, was proof, absolutely. If you like, you can move really, really fast. You've got to manage burnout and fatigue, because you can only move at a pace, you know, for a period of time, before you need to either get some new team in to help, or give people a bit of a break.
But, that investment in innovation is going to be important because so many new things are starting to emerge off the back of, you know, COVID, whether it's in technology or shopping behavior, or, you know, communication and, you know, automation within your own business. You know, we had, we have a national office, a national support office in Melbourne, you know, we had we had jobs in there, we truly believed were going to be very difficult to do from home. And within two or three days, we were happily engaging in those activities working from home.
So, you know, the art of anything being possible, I think, has really come to the fore in COVID. And I think it's incumbent now on businesses to embrace that and really make sure that we keep that spirit alive. We have an innovation lab, in our business. And we have a number of team who work in there and they not only develop things themselves that they think are going to help the business grow and evolve, but, but equally are always scouring, scouring the globe, for technology, or operating models that we think will add value to the Bunnings organization.
Michael LeBlanc
Well, it's a great segue to the last conversation, which is, what's next? You've talked about re-platforming in 2021, not as if that's not enough next. Those things are beasts, no matter how they're done. But as you, as you look at the landscape, so to speak, you've had a, I guess a good run, and as much as people have put a lot of time and effort and money into their homes. And, and so what's, what's next for Bunnings?
Michael Schneider
I think it's that, it's that constant quest for, for growth, and profitable long-term growth. You know, we run the business for the long term, and our focus is on, on making sure the investments we make, you know, make it a safer and better place for our team to come to work, first and foremostly. And I think there's a lot, a lot of work, you know, we can continue to do in that space. We constantly think about how we can improve efficiencies in our operating model, so we can invest more into the value proposition for customer and the service proposition for the customer as well. And both of those are incredibly important. And they bring you back to that point around trust that we, we talked about a little bit earlier.
On the on the pro side of their business, you know, we see a lot of opportunity for growth as we continue to develop a really strong credible offers and engage trades and small businesses, you know, in a really, you know, sophisticated way. Both through relationship management, but also through the use of the CRM platform to understand, you know, the business models of the customers we're serving and help them grow, grow their businesses.
And over time, you know, continuing to invest in technology, particularly in the, in the data and analytics space. You know, we generate so much first party data, and we have access to really interesting second- and third-party customer data and making sure we do things in a really ethical way. Again, it's about building trust, and then using that data to improve your shopping experience, through understanding the part of the customer lifecycle that you're in. Are you a first home buyer? Or are you a third home buyer? Or are you downsizing, because the kids have left home? Trying to understand those characteristics about our customers to make sure that what we're, we're supporting them with, in terms of information, or product suggestions are really relevant, you know, to where they're at. So, I think, you know, a pinch, pinch a basketball phrase, you know, for us, it's very much a full court press around, you know, making sure we are growing the business. But as I said at the start with that focus on long term sustainable growth.
Michael LeBlanc
I grab another basketball phrase, a bit of a jump ball moment with consumers after this, you know, circuit breaker of behavior that we've all had for 18 to 24 months.
So, let's say it was great, a great discussion. Thanks so much. The last time we spoke, we both shared that we were hoping to use our passports for other than personal identification to buy a bottle of wine. But that that time isn't here yet. But hopefully, hopefully for 2022. So, listen, thanks again for joining us on the podcast
Michael Schneider
No., thanks, Michael, thanks, Steve. It was great to catch up.
Michael LeBlanc
All right, it's time for a 'Remarkable or Forgettable?' Steve, cargo issues, the supply chain stressed at every node,
Steve Dennis
As we've talked about, you know, when I talk about remarkable, I mean, both distinctive, you know, highly distinctive, as well as something that people will talk about, and I think this definitely qualifies. I mean it's pretty, pretty crazy. You know, online orders have been surging. A lot of challenges unloading ships because of COVID restrictions. Labor shortages. You know, certain categories are just on fire. And so, yeah, it's, it's, this is something that's really starting to have major ripple effects throughout all retail and, you know, I'm not a supply chain guy, per se, but it seems to me like this is going to be with us for quite some time.
Michael LeBlanc
Yeah, well, in fact, let's, let's connect that to the next issue. Priming the pump, so to speak, US stimulus, US stimulus checks, going back out to consumers, what's going on?
Steve Dennis
Well, yeah, well so, the Biden administration passed this, this big stimulus plans. Well, I think 1.9 trillion in total. Not all of that is going to consumer spending and loans but, but a lot is. So, it's really a landmark passage. And it's gonna put a lot of money into consumers hands, gonna help out some retailers. So, I think, you know, hopefully we're seeing just a general sign of recovery coming later on in the year. But, you know, for some people this is going to go to pay rent and put food on the table. while for you know, for other people, it's going to be some extra money in their pockets to go out and, you know, maybe buy that sofa, or refrigerator, or whatever.
Michael LeBlanc
We certainly saw the impact of the $600 stimulus checks in January in US retail. So, it does seem to be stimulus response. Even if it's putting food on the table, it is still resulting in sales in the retail category.
Steve Dennis
Yeah, absolutely. And I think it'll be interesting, you know, as more people start migrating, more back to stores, how that changes the distribution of spending, but I think certainly, this is going to put a lot of wind beneath the sails or whatever cliché you want to use.
Michael LeBlanc
Well, speaking of back to stores, here, where I am in Toronto, we just came out of the North America's longest lockdown. Michael mentioned something in the, in his report about how long it was in Australia. And I've been thinking about this distortion of understanding the penetration of e-commerce, you know, as we come out of like almost 120, 100 plus days of stores being locked up, and they'll be a sudden rush to stores. So how are we going to understand where the waterline for e-commerce is going to settle? So that's, that's been I've been thinking about that lately.
Steve Dennis
I think it's gonna be complicated. We've talked a bunch of times about just kind of the reallocation of spending based upon certain needs, you know, by category. But certainly, when you think about how people are fulfilling their orders, you definitely got, you know, cities like London, Toronto, New York, not so much anymore. But you know, you had several cities that were on, you know, very massive lockdowns for extended period of time. Then you've got places like Dallas, where I am, which we locked down very briefly. And, I think people have more, for better or worse, have a more relaxed attitude about going to stores. So, I think it is going to be really hard to parse that out. As earnings come out, and things go back to normal because it's just gonna be a big distribution across categories and across geographies.
Michael LeBlanc
So, staying on the store trend, Burlington and Dollar Tree aggressive store openings, what's, that's, that's kind of counterintuitive to the retail apocalypse narrative, what's going on?
Steve Dennis
Now, it turns out, they're a bunch of these retailers that, that didn't get that memo. Actually, I saw thing that Coresight published this week that said, more store openings were announced in the past week or month, than store closings. And, you know, I think some of this speaks to, certainly in the case of Burlington and Dollar Tree, the overall strength and the value segment. They also alluded to the fact, which I think will be another interesting dynamic that could be quite remarkable about how, as other players go out of business, it creates gaps in the market for the stronger players to come in. So again, it's this idea I think, we talked about last week about the consolidation of market share around the strongest players. But yeah, they're gonna open, I think Burlington said 100 stores, they now think they can get to 2000 stores. They used to talk about getting to 1000. And Dollar Tree and Family Dollar are gonna open like 600 stores. So, that's pretty, pretty significant. And, you know, probably taking advantages of some good rents as well.
Michael LeBlanc
Well, feels like in another category, some folks didn't get the obituary notice on these stores coming back. Talk about that.
Steve Dennis
Well, this is the latest in a string. So, Lord & Taylor, who folks may remember, basically went out of business last year, they are now planning to come back as an e-commerce only retailer. So, they join Pier One and a bunch of other stores that, or brands, that look to be following this strategy. So I mean, it's certainly an asset light way of doing things. They've got, you know, a certain amount of name recognition, which helps them in getting back customers, and presumably they're going to leverage some of their databases. So, it's an interesting strategy. I do wonder, to what degree these, these brands can be successful at any real scale, given all the competition and lacking the physical assets. But, but we'll see it's certainly a hot trend.
Michael LeBlanc
So, you're leaning more to forgettable than remarkable on that one for sure, by the sounds of it. Yeah. Let's talk about another remarkable thing, we'll see which way, remarkable good or bad? Ulta announced results and I've had a CEO change and senior management that took me by surprise.
Steve Dennis
Yeah, I think a lot of people were surprised. Mary Dillon's been the CEO there for I think, seven or eight years and has done a remarkable job. I mean, Ulta has, I think they've like tripled their market cap, doubled the number of stores during her tenure, and posted some really good results. So, I think Ulta is definitely a remarkable brand. I mentioned them several times in my book and in my speeches. But yeah, they're their earnings were a bit disappointing, I guess. And then yeah, they're making a change. Dave Kimbell has been there for a number of years is, is being promoted. So, I don't know that the management change, or the, the earnings were particularly remarkable. I think they were, you know, within, within the range, and certainly her replacement. I will, she's I guess going up to executive chairman or something, but, you know, having somebody who's been on the team for a while, I think, you know, doesn't necessarily suggest any real concerns,
Michael LeBlanc
And doesn't really suggest any radical change of direction either considering.
Steve Dennis
Yeah, I would have to agree.
Michael LeBlanc
Yeah, yeah, yeah, yeah. Let's talk about, let's talk about Poshmark. They bring home the numbers, but their outlook disappoints which I found an interesting dichotomy.
Steve Dennis
Yeah, you know, we talked about Poshmark, I guess, a couple weeks ago, but this is their first public earnings announcement. And the revenue was up, I think, high 20s, which was nice considering generally apparel has been pretty challenged, as I'm sure everybody knows, by now. But yeah, they really, they really kind of tap the brakes on their outlook. And, you know, I don't know if that's because they assume that maybe more spending is going to start to revert back to physical stores, where they don't have a presence. Because yeah, you would think that apparel would have a little bit stronger outlook, as we move ahead. So, that was a little bit mystifying to me. So, remarkable, I guess, in terms of we're going to have to keep paying attention to this because I don't know what exactly that suggests for the futures. Bit surprising.
Michael LeBlanc
Well, speaking of pivot, let's pivot all the way over to South Korea, which has been such a mecca of design. I was interested in reading this hot Korean IPO Coupang, what do you know about that?
Steve Dennis
Well, I guess they're by far the, well, first of all, like their, their, their market values was like some crazy, like 100 and 10 billion or something. I can't remember it was. It was an astonishing number.
Michael LeBlanc
Is that in US dollars, is that in US dollars Steve?
Steve Dennis
In US dollars, yeah. I mean, and it's, I think people are assuming this could be the biggest IPO of the year. But folks may know, I mean, South Korea is certainly a hotbed of innovation. I believe among the major developed countries; they've got the highest level of e-commerce penetration. I think it's close to 40%, which is even, I believe, a little bit,
Michael LeBlanc
22% in grocery last, that's pre pandemic number 22%.
Steve Dennis
Yeah, so I mean, as the leader, there, in a huge industry and, you know, big country and fast-growing country. You know, it's not too surprising that this was a big splash. But yeah, that valuation was like, what? Thought I misread this, misread that.
Michael LeBlanc
Yeah, I thought it was in a different currency when I first looked at it.
Steve Dennis
Yeah, yeah.
Michael LeBlanc
All right. Well, that was 'Remarkable or forgettable?'. We'll be back next week.
Listen, let's bring this episode to a, to a close, we've got. We'll get back next week to more great, to more great guests to lend us their insight and tap into their wisdom. But for now, Steve, take us home.
Steve Dennis
Well, if you like what you heard, subscribe on your favorite podcast platform so you can catch up with all our great interviews and insights and new episodes will show up every week. And please take a minute to drop us that elusive five-star review. I'm Steve Dennis the expanded and completely revised second edition of my bestselling book 'Remarkable Retail: How to Win and Keep Customers in the Age of Disruption' is out in April. Preorder your copy right now at Amazon, Indigo, bookshop.org or just about anywhere else books are sold.
Michael LeBlanc
And I'm Michael LeBlanc, Producer and Host of The Voice of Retail podcast and you can learn more about me on www.meleblanc.co. Have a safe week everyone and Steve, talk to you again soon.
SUMMARY KEYWORDS
stores, retail, remarkable, curbside, people, business, bunnings, australia, customers, steve, home, commerce, category, penetration, michael, community, work, number, new zealand, brand