Remarkable Retail

Retail's Great Acceleration with guest Carl Boutet

Episode Summary

This week the "3 Amigos of Retail" re-unite, as we welcome our special guest Carl Boutet for a discussion of "The Great Acceleration." When Carl first coined the term during Steve's virtual book launch event in April of 2020, little did we know how much it would catch on--and how prophetic it would turn out to be. Now we get a chance to discuss Carl's original thinking, how it's evolved and then dive into the highlights from his provocative new book. We dissect the "race to resilience,"  the key forces of the acceleration, retail's increasingly digitally-enabled future and what it might mean to live in a 50/50 physical/digital world (just don't call it "phygital"!). There's plenty of great insight and lots of lively banter.

Episode Notes

This week the "3 Amigos of Retail" re-unite, as we welcome our special guest Carl Boutet for a discussion of "The Great Acceleration." When Carl first coined the term during Steve's virtual book launch event in April of 2020, little did we know how much it would catch on--and how prophetic it would turn out to be.

Now we get a chance to discuss Carl's original thinking, how it's evolved and then dive into the highlights from his provocative new book. We dissect the "race to resilience,"  the key forces of the acceleration, retail's increasingly digitally-enabled future and what it might mean to live in a 50/50 physical/digital world (just don't call it "phygital"!). There's plenty of great insight and lots of lively banter.


Then we wrap up the episode with our 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 big stories include Lululemon's earnings (blockbuster), Nordstrom's earnings (lackluster), Warby Parker and Apple's defiance of the retail apocalypse, growing interest in the resale market and Amazon's big Prime Day announcement.

 

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  and       The Food Professor  with Dr. Sylvain Charlebois.  You can learn more about Michael       here  or on       LinkedIn. 

Episode Transcription

Lucky Day  00:01

This is it, Ned, big smile. Dusty, just relax and have fun with it. 

Dusty Bottoms  00:05

We're just going to have fun with it. 

Lucky Day  00:07

I'm Lucky Day.

Ned Nederlander  00:08

I'm Ned Nederlander.

Dusty Bottoms  00:08

I'm Dusty Bottoms and together we're

Three Amigos  00:12

The Three Amigos!

Michael LeBlanc  00:21

Welcome to Remarkable Retail podcast, Season 2, Episode 19. I'm Michael LeBlanc.

Steve Dennis  00:26

And I'm Steve Dennis. 

Michael LeBlanc  00:27

Well, Steve, as, as listeners may have picked up, it is the Three Amigos episode, which is a reunion of that time IRL, as the kids are now saying, in real life, where we sat down together with retail strategist, Carl Boutet, from Montreal at Retail Council of Canada Store 2019. Big Conference, you were the keynote. So, I took advantage of having the three of us in the same place at the same time. We had a great chat.

Steve Dennis  00:48

Yeah, it was a lot of fun. I'm really waxing nostalgic about those times when I got to stand up in front of a bunch of people, make a fool of myself, and then meet up with many, many colleagues, including you and Carl. So, yeah, that was, that was a good time and I'm hoping we'll, we'll get to do that in real life in the not too distant future, but we shall see.

Michael LeBlanc  01:08

Well, in the, in the interim, until our borders are open, and we're all back together, we thought we'd get together on the podcast. So, we invited Carl and he's got lots of great things going on, including a new book and that book has a really, it's about the great acceleration, which he coined, I think, as he described, he coined it first picked up on your book, launch your first book launch. So, he's got an interesting approach even to how he writes the books, right, so it's a different, a different, not just a different vibe, but a different process and, and a more evergreen approach, trying to comp-, encompass this fast moving, thinking on the what and how the great acceleration and what it means to reset.

Steve Dennis  01:47

Yeah, I'm sort of envious as we get into in the interview about being able to put content out or create content, and put it out essentially, in real time or a lot closer to, to the market. Whereas with books, my book, you know, I had to, basically, be done with the primary writing six, seven months before it actually came out. So, I think it's a really interesting approach and I think Carl's actually absolutely been a pioneer on this idea of the great acceleration, which I think is now pretty well accepted. You know, the thing I think was interesting was, when that first was coined, there was a lot of noise around how we were jumpstarting 10 years into the future and,

Michael LeBlanc  02:27

Right.

Steve Dennis  02:27

right, that's turned out, I think, to be depending on the category much more like two or three years, but I think absolutely, there's, there's no going back. And it's a question of really figuring out what these changes what this acceleration means for your particular company, your particular category.

Michael LeBlanc  02:44

Yeah, and particularly, as I think about ecommerce, it really accelerated certain categories more than others. I think of grocery, you know, it was going to grow, but I think it was potentially a big leap forward and so it's not an equal, like it applies equally to all. So anyway, yeah, it's a great conversation and I just want to remind the listeners, that we're wrapping up Season 2 next week with a really great guest that'll give us and listeners a very big picture perspective, Matt Shay, President of the NRF and then we're going to take a bit of a break, and a little bit of summer hiatus as we, kind of, gear up for Season 3 and next episode, we'll tell you more about what Season 3 is going to look like and some other exciting stuff we got planned, but all right, well, listen, we got a great episode, yeah. So, let's just jump right in. Carl, welcome to the Remarkable Retail podcast, my friend. How are you?

Carl Boutet  03:31

I'm great. Thanks for having me here. I'm so excited to be. I finally get to meet Steve Dennis.

Steve Dennis  03:36

Usually, I charge for this, so, very lucky.

Carl Boutet  03:41

Oh, Michael. Michael told me, I sent money to Michael, I mean, was that he told me it was going to you.

Michael LeBlanc  03:46

It's funny. You both charged for this. So, it's actually just, it’s actually transfer pricing rates. Long overdue to get you on our new podcast you've got, you've got a book written out. Lots of, few things have happened since the last time we've been together. So, thanks again for joining us and, and listen, for those who may not know of you or heard of you or don't know enough about you, any one of those who tell us a bit about your background and who you are and what you do.

Carl Boutet  04:13

Who I am, I am Carl Boutet, based in Montreal, Quebec and when I grow up, I want to be just like Steve and you and I am a retail strategists / prescriptor, if I get fancy with the trademark, and the idea is helping businesses, retailers and the solution providers that enter in, into the equation for the retailer's to be more relevant and sustainable in their go to market practices. So, that's a really long way to say I try my best to do what I can.

Steve Dennis  04:48

I like that. So, we're going to get into your new project or project as some people say, the Great Acceleration, which is a book, it's a multimedia thing. I don't even know what it is. You can tell us more about that in a second. But I do believe that you first use the term in public. The great acceleration on my virtual book launch event, which was like 13 or 14 months ago, do I have that right?

Carl Boutet  05:14

Yeah, absolutely. I was, I've been working on, on a book project and yeah, it's, it's, it's, it's a shifting dynamic and there is a book and get we can talk about that later, but I did have the guts for the first time to, sort of, propose the idea, as the word acceleration was being pronounced more and more by different business leaders in the media and media pundits, that there would be a possibility that we might, we could look back on this period of, especially on the business side of this period, as the Great Acceleration in the context. 

Carl Boutet  05:54

We've had the Great Depression and the Great Recession and at least optimistically, there's obviously some, some true downsides to all this, but that we could look, choose to look back on this period as the great acceleration just because so many trends, so many business dynamics that we've, we've, the three of us have been talking about for years. We had the impression, especially last spring, when your book launch was, Steve said, this was April, I think mid-April, we were like six weeks into this and we just felt like okay, things are sort of being put forward here. And hence, yeah, that was the first time and is actually when you and I see we're talking with Scott Galloway. Scott popped in from his, from his boat in Florida.

Steve Dennis  06:44

Is his secret underground layer that's over ground 

Carl Boutet  06:48

Yeah, to support and congratulate your book launch and yeah, so he and I think he used the word acceleration and that's where I start intervening because I'd been spinning around in my head for some time, we'll be looking and it was early days, right. So, I put a stake in it and then you were nice enough to, to share that as well and give me attribution for that. So, I appreciate and yeah, so it's in and now the idea is since then, sort of tracking that and the ebbs and flows of the acceleration, but I'm convinced that to are some parts of the business dynamics that have accelerated for good and, and for bad, but there's a feeling of no going back and some of these but in others, which I know you will push back on with me or maybe, maybe some of it's been slightly exaggerated, but that's what we're going to talk about.

Steve Dennis  07:39

Let's dive into it. First of all, talk, talk about the book, why did you write it, who's it for, what do you hope readers will, will take away from it?

Carl Boutet  07:49

I open the book by talking about how it's like a five year project, quite honestly, I had a had a business school reunion dinner, five years ago, in Toronto, and my business strategy prof-, who sat next to me for the whole dinner, we were just jamming and we kept close touch over the years, prior to that around, sort of, all the shifting business dynamics and we were both very interested, especially in business model, business models, and not just in retail, but a whole bunch of sectors were changing under a lot of pressure. And by the end of the dinner, he said looking goes, you know, you have a book in you, and I never even heard that term before and I was, sort of, shell shocked by it and I was like, kind of, shook it off, whatever. 

Carl Boutet  08:31

And then on my way back home, like I wonder what that mean, when, if I were to write a book, what would it be around and in 2016, I actually came across as recently I did a LinkedIn posts around retail relevance, you know, what, what does that even mean, what does it mean to be relevant, then that was where I was starting the idea of talking about what would make you relevant, and how could you measure it and build some frameworks around that and using some of the research Barbara Kahn did at Wharton and some other things. So that was originally what I was going to be thinking about talking about. 

Carl Boutet  09:06

In early 2020, January, pre pandemic, I was really getting, reflecting a lot on sustainability and the role of sustainability as part of that relevance and then I was like maybe I should dedicate more of this to the notion of how we're broadening the sustainability agenda as the triple bottom line stuff and all that good. All that good work and tie that to relevance and even written an article for Retail Insider, why I said that would be the greatest trend of the next decade with the direct-to-consumer being the greatest trend of the previous decade. Then I flew off to Asia, chaired the ASEAN Retail conference for the first time in Bangkok and on the way back, flew through Shanghai spent several days in Shanghai, where I, sort of, was ground zero of a bunch of things including, obviously the future of retail in lots of ways, but without knowing it, ground zero also of the, the, or close to ground zero of the launch of this, this global pandemic. 

Carl Boutet  10:03

And when I was, when I came back from that third week in January, I, you know, sort of had this, this tsunami be a chall-, seem to be just ahead of the tsun-, tsunami wave, staying very close to Chinese businesses and how they were reacting and adjusting to it, much better prepared, clearly, than we would be, just because of what they'd already had gone through a SARS and all that, and wanted to communicate that to the businesses here and then the book sort of took a whole other turn and I was looking to, it was about okay, then the word acceleration came along, and, and now on your book launch, coined the great acceleration.

Carl Boutet  10:39

And, then the idea is, okay, so how do we, how do we, how do we prepare, how do we best navigate this acceleration, what does it mean, how does it relate back to my previous focuses on sustainability and remaining relevant and also, what are the data points, I've always been very data centric, or data driven. So, I was really interested in sort of tracking around the world what those data points were, that spoke to the acceleration, especially the e commerce adoption part. So, like, a month ago, now I launched a launched a little over two weeks ago, and I was still updating content, like a month ago, because one of the challenges and knew that you know, this, while Steve is when you're writing a book, I mean, you had to write basically a second one within a year. It just, in our environment, doing something that's so static is a challenge. So, the idea was is more than a book, it's I call you caught using it more the term project, because what it's meant to be is the launch of a subscription service for those looking to better navigate these waters, especially as my thesis says that we're heading to a 50/50 world of physical and digital, how to, how to best, you know, surf-, navigate those waters, or surf that wave.

Michael LeBlanc  11:51

So, really, in the tradecraft of writing the book, I want to touch on that for a few minutes. It sounds like you, you've got a mix of data, you interviewed people, I think you interviewed, interviewed Scott Galloway, for example, and other people you've mentioned. So, that's the tradecraft. So, take me a little bit through the tradecraft.

Carl Boutet  12:07

So, the idea I mean, I'm basically giving the book away, if you think about the idea, it's $12.99 for the digital format and what I'm looking to do is launch a subscription or another look into what I'm doing is launching a subscription service in mid-June. So, the book came out May 19. So, by June 19, a subscription will launch and will be $5 a month where it'll be exclusive content and reviews, data points, the things that you find already in the book that are sort of being instigated, who will be built upon, and that'll be like, that'll be $5 a month, so and the idea of people buy the book, it's the first three months of the subscription free. So, the, so the book basically comes out as free and, and the book is only available on my website, which is a lot of friction and because we do a book because there's a credibility factor, obviously. We do the book because it sort of helps us lay out some groundwork that we want to build upon. Frameworks, like Steve's, you know, they make, they do, we know we're going to evolve and adapt and that's what we want to, sort of, put out there, but at the same time, yeah, the cycles, you know, I'm involved in the more academic one, I'm just writing a chapter for a more academic one and it's like a 12 month process, so it's, I don't know, I'm just trying something out here. It's a bit it's a bit novel.

Steve Dennis  13:22

But, but, maybe let's get into a little bit more depth on what you mean by the great acceleration because, you know, I talk a little bit, well, I guess, one observation I've had for a while is that it has felt to me like the pace of change has been accelerating for maybe over a decade, I don't know how to exactly say, but, you know, things are just changing evermore quickly and I think without a doubt, the pandemic amplified many aspects of where we were seeing change, but what specifically do you see as the great acceleration, what are the main things you observed while writing the book, and maybe just bring it to the current state in terms of what's really most important, most relevant for retailers and brands to think about doing differently by virtue of this acceleration?

Carl Boutet  14:11

When it came to realize, I think what really the great acceleration is meant to represent, at least at this period in time was spring 2020. We go into lockdown pretty much across the planet, or at least better part of it. And we're sort of pushed into new behaviors. When I say new behaviors, they're actually behaviors that were already happening just we do or they were still quite marginal and most of that around ecommerce and the spring, the time when we were doing your book launch and that whole period was, when you look back on it, it almost felt like we've got a portal into the future and we got to see sort of what we were expecting 10 years from now could look like and once, you know, we, this was imposed on us. 

Carl Boutet  14:58

We didn't gradually get there at that nice steady rate we thought we would, especially with, with eCommerce adoption and, and I'm even trying to get away from ecommerce and talk more and more about digitally enabled commerce, we had, just because we had no choice, anything that was non-essential we had we were forced onto these into these into these platforms that we might have already been using a bit here and there but now it was pretty much the only way forward and some of the data points that I like to share to read to make that make that story clearer for instance one that was really strong to me was did an event with our friends from Canada Post here, the new Chief Operating Officer was relating to how he just, kind of, he started, he took over the position February 2020, great, great timing he had, thankfully, had come from Asia where he led DHL's ecommerce division, so he knew about scale and, and basically he had a roadmap to build out the logistics capability of Canada Post and in May, May 2020, hit the volumes that his project plan had, had anticipated for 2029.

Carl Boutet  16:07

So, I mean that was a real data point, obviously, it didn't stay at that level and then reverted back as luck we came out with that first wave of lockdowns, but it still showed that, that was, sort of, an idea of the portal and, and I was doing events in emerging markets places like Nepal and all that where they all had stories like this around digital payment adoption or more in the on the logistics and all these all these sectors everybody was like, you know, we had, we were doing things we were thinking we were going to do 10 years from now. This push just to like 30% digital, 70% and maybe in some cases, depending on which sectors can be a lot more than that and it came back to like in between, we're like at 25, so we went from 20 to 30, back to 25.

Michael LeBlanc  16:49

And we're not, and we may not be all the way back, right. I mean, as we speak today both countries, Canada, the US, around the world are in different phases of opening and closing. Certainly, here we've, in Ontario, where I am, essential retail has been closed for 150 days, so.

Carl Boutet  17:05

It's crazy

Michael LeBlanc  17:05

We're nowhere near normal yeah

Carl Boutet  17:07

And remember though, that old thing, you know, that we always heard from the social sciences it takes, you know, takes three weeks a month, seven weeks, depending on it, to develop new behaviors and, and now the idea is well we can still go back to old behaviors, but the premise is that those, some of those new behaviors are going to stick. A good example, I think of that, is, like, grocery is a sector that we knew was coming we just, everybody was just, you know, there just more convenient to pop in and grab what you need to pop in and go out now this, sort of, forced us to and caught the grocery industry totally off guard where our large grocery trains had, gro-, grocery chain sorry, had like three week delays in delivery because they just couldn't, you know, they couldn't keep up my daughter was working. One of the grocery chains said, you know, we were, they were doing 1,000x 

Steve Dennis  17:08

Right.

Carl Boutet  17:09

When they know what their regular volume was, so, for online, so, the, and you've seen that, now you go back into your grocery store today and Steve maybe in Texas, it's been different you were probably more, more used to this than we were, but it looks like one out of every two people in the grocery store has a picker app. 

Steve Dennis  18:10

With a gun in Texas.

Michael LeBlanc  18:12

Yeah.

Carl Boutet  18:13

Well, yeah, you mean a real gun, like us, we have a day of the digital scan gun, but 

Michael LeBlanc  18:17

We have a simple gun.

Steve Dennis  18:19

I just wanted to make sure that, you know, half of our audience hates me and wants to, and will track me down with something, but.

Carl Boutet  18:25

You know

Michael LeBlanc  18:26

I de-, I defend your I defend your right to say that and carry on, I'm sorry. There's, there's my piece. Carl, I've got to ask you this question. Are we overthinking this, I mean, I just got off, overthinking in terms of the changes, like at the beginning of the pandemic, I was like, oh my god, this is, I never, I rarely say it's gonna change everything. I didn't think it's going to change everything, but how could consumers not be changed after 18 months of craziness, but are we are we over exaggerating it, I feel like today, the regression to the mean of behavior is a powerful pull, but I don't know I'm not sure any of us know, but.

Carl Boutet  19:02

So, the basic dynamics haven't changed, right, what makes you successful, and that's why Steve's framework is so good because it really helps you, like the framework didn't change when you did the second edition of the book, Steve, just the way that it manifested. I get what you're saying, Michael, and I, I struggled with this too, like, I'm not looking to create panic. I don't think that's going to serve anybody. I think we were quite underprepared.

Michael LeBlanc  19:25

Was it unprepared or was it built that way, I mean, really, the supply chain was built to ret-. 

Carl Boutet  19:31

Well, it's the same sort of thing. So, the subtitle of the book is a Race to Resilience, right, and I know it's an overused term, the word resilience, acceleration or relevance. These are all things that get tossed around, sort of in the same breadbasket is innovation and all of that. 

Michael LeBlanc  19:43

Big salad. Big salad of words.

Carl Boutet  19:44

I know I know. But so the idea of resilience for me is this idea where we want to head to a place if you could head your organization to a place and you're not going to land perfectly, but if you can have had like, lead yourself to a place where you're going to be 50 / 50, physical / digital, then chances are, if you get, either a digital catastrophe, which can very well happen and is happening, I just heard, I just read yesterday that there was a third largest beef producer in the US just got hacked, and got his whole, their whole system taken down. I mean, these are things like, you know.

Michael LeBlanc  20:18

Russians are busy. 

Carl Boutet  20:20

Yeah, seriously. So, I mean, you don't, it's not just the physical, it's just the resilience, I mean, obviously most organizations are underprepared digitally, and now they've tried to catch up, and I'll even use, Steve, one of your, you know, organizations that you know, best, than all of us, Neiman Marcus, the CEO was talking about the need for clienteling tools. I mean, that technology has been around for a long time and I'm not saying it's going to solve all their problems, but actually need a place.

Steve Dennis  20:44

Well, I have to laugh, that was one of the, that was one of the projects

Carl Boutet  20:47

Yeah, because you were involved in that.

Steve Dennis  20:48

I was working on in 2005. Right, so.

Carl Boutet  20:50

Yeah, right. So, so, that, so, that's what, that's what I mean, by unprepared like, they should have known that, that not that a global pandemic was going to shut down the store, but I mean, these weren't, that project you worked on, Steve was, you know, it was maybe ahead of its time at the time, but it should have been by its time by 2020, right?

Steve Dennis  21:06

Well, yeah, that's one of the questions because I think, you know, not to parse the whole great acceleration thing too much, but, you know, there is this aspect of where part of what got accelerated, in my mind, was that retailers woke up to some realities that had already been there, like they just were, you couldn't, like, this idea that physical drives digital and vice versa, omni channel, harmonized, whatever, you know, is not, is not a new idea, buy online, pick up in-store, many retailers have had that for over a decade. 

Steve Dennis  21:39

So, I think in some cases, you couldn't ignore the demand side of it, right and I think the lesson is not necessarily to build out your structure for every eventuality. It is, I think more to realize you don't know exactly how the pace of change is going to come at you, but you better really understand it from a technology and consumer standpoint and you better, you know, whether it's resilience or agility or whatever, you need to build that into your, your business model. There just are gonna be things that happen that you, you know, you never could prepare yourself completely for, but, but what, what were those clues, what was, what were the dynamics that were going on already, that you should have been ready for.

Carl Boutet  22:23

And that's why it's the acceleration, by the way, it's not the reinvention. I mean, that's why we're calling it, we use the word, the word acceleration, these are all things we were coming, they just came to us a lot more quickly than then we were prepared for. So okay, you know, bad on us for not having been better prepared now, well, the real thing that was, that's, that's passed. So, how do we, how do we anticipate a future where we're able to, if we get knocked digitally, we're better prepared physically, and vice versa. And you're seeing that, I mean, even organizations like the good old Warby Parker that I believe we're up to over 110 stores, they're adding 50 more stores, I think they're recognizing the physical, this is not put a, put a hamper, if anything, on physical, they want to increase their physical, their physical presence, and there's great opportunities to do that, because there's probably spaces for rent right now that are a little more accessible than they were before.

Carl Boutet  23:11

So, the, the more progressive organizations are going to see that these opportunities and vice versa, I mean, obviously the ones that got caught flat footed on the digital side that didn't have the tools in place, or these were all projects today had in the works, but were, weren't prioritized, now are being pushed to the top. Click and collect is a great example. Steve, I mean, I remember hearing Hubert Joly last summer talk about how they'd been, they've been playing around with different click and collect concepts over the years and hadn't really settled on one and then, then, and they had three days basically to roll it out throughout the whole northeast. When the opening quote I am in, in the book is of the famous Churchill, a crisis is a terrible thing to waste. So, I think that's part of the acceleration as well and maybe one last thing to why, why, you know, are we, to your question, Michael, are we overthinking it, underthinking it, let's not neglect that 9 of the 10 largest, most well capitalized companies in the world have everything to gain from this acceleration.

Michael LeBlanc  24:13

Well, and retailers of all sizes can gain or lose, right, it is a bit of a moment, right because there's never been so much brand switching, I think I couldn't find it, I want to try a new channel I want to go to a different place. Steve, you know, we had Hubert Joly on the mic and, and a consistent theme over the past couple of years on our podcast is asking people why it takes a crisis to change in retail, we should have, we should have poked around with Mr. Joly a little bit on that.

Steve Dennis  24:39

We let him get away with it. 

Michael LeBlanc  24:40

You know, as Carl described, we kind of did, I didn't, I don't know, you know, we had lots to talk about, but, you know, if I had him on the mic again, I'd say so, you know, what, why does it take so long to make a decision, you know, what other proof point do you need, I was talking to some executive last week about work-from-home and, you know, many are saying they're going to a hybrid model and I said, well, have you told anyone that yet, well, we're going to tell them in the fall and my question was, what more data points you're looking for, to make that decision at this point, is it, and in truth they said, listen, we don't need more data. It's just we've got so many balls in the air, we can't, you know, it's complex, right, to organize. So, it wasn't like they were looking for more data, it was just prioritization.

Carl Boutet  25:23

It's crazy how a pandemic brings clarity really quick.

Michael LeBlanc  25:27

You know, how do you manufacture that clarity though, without, without a global life-threatening crisis. The theme of the podcast.

Steve Dennis  25:32

You should write, you should write that book, Michael. That's your, that's your book. I think you have a book in you.

Michael LeBlanc  25:39

That's my book, in me. Carl, Carl, is there anything, as you thought about acceleration, and I want to get to this 50/50 thing that you've brought up a couple times. I'm not sure I'm bought in on that and, but I want to ask if there's anything that you thought would be accelerated and your data set hasn't or vice versa something you didn't think would be accelerated that did?

Carl Boutet  26:00

I was really concerned around the narrative of the sustainability piece which is, which is really important, I think in the equation and I thought that was just going to be blown out of the water I thought people said listen that's, that's nice, we'll get to it eventually and once we get our ducks in a row and we've got our financial models better settled back in place then we can start rethinking about the, the, you know, the bigger picture and that was, and that quickly, at least in the interviews, and I think there was, it wasn't just lip service and it's already see a lot of action happening around the whole build, back, better narrative, which is, which is heading towards sustainability so that, that, that, sort of, surprised me. It shouldn't have, I guess, I should be, you know, it could have been, I'm usually pretty optimistic, so I should have been that, not as surprise that, that came so rapidly back into the conversation the other piece which I don't know if the data necessarily backs it up and is going to be the whole and I've been involved in a lot of these initiatives here is a whole shop local piece.

Michael LeBlanc  27:03

Yeah, yeah, the Panier Bleu, as it is.

Carl Boutet  27:06

But everybody has one, I mean, Steve, I'm sure, you know, Dallas or Dallas Fort Worth and all, I mean, everybody has, you know, we saw the signs go up, support your local business and all that and, and that's, that one I'm, you know, I'm, I would hope would, would stick more and I just came off of a call with a with a merchant association here in Montreal, they're trying to think about how they can, you know, keep building on that momentum and I don't know how much longer we can build on that, I mean, if it's by this point, you haven't really understood what the impacts that can have, you know, locally on your economy and all that so, I don't know if that's answering your question directly, Michael, but I mean that was, you know, those are sort of two things that beyond and we can get into the 50/50 thing, but, but those are, sort of, the things that are good and bad news I think of, of what the acceleration has and hasn't done.

Michael LeBlanc  28:00

You know, Carl, we've talked about this, and you've mentioned this 50/50 deal. I'm not sure I'm bought into what that is, maybe it's, maybe it's a concept, maybe it's reality, but I have a hard time imagining 50% of groceries are going to be sold online 

Carl Boutet  28:13

Right.

Michael LeBlanc  28:14

In my lifetime, maybe I just don't see it, but I, I'm, I'm struggling, you know, with a country like China that is completely different, right, they started digital first and maybe in some categories and in, sure, some categories maybe books, maybe not, maybe not, but, but is this a definitive, is this a, is this a North Star, what is this 50/50 in your mind?

Carl Boutet  28:35

So, the 50/50 is as much a reframing of how we categorize and the reason why also I talk about 50/50 because the hope is we stop, we stop talking about the 50/50 because we, once we get to closer to parity, we start making such a big difference and Steve was the first I think they really come out with the silos, the silos idea and start breaking, breaking those down, the silos on the farms, but it was blown on farms, but the, the idea of, so the 50/50 is this notion when I say, for the resilience, you want to head towards that, it's a cultural thing as well, the way you, your organization structure and Steve talks a lot better about this than I do, but and because he's lived, he's lived it, I have as well, but internally knows what those, those dynamics and so, so have you, Michael, but the idea of the 50/50 is also, it's not just as clear cut line between what we know today is physical, and ecommerce. I agree with you. 

Carl Boutet  29:27

I don't think we're going to go to a place where we're 50% ecommerce, but I'm convinced we're going to go over 50% of digitally enabled commerce. I think this notion of a digital layer around us it's thickening by the day as we're getting more and more contextual information in ways to engage. Fast Company just had an article yesterday where David Lauren, a CEO of Ralph Lauren's is basically going to a merchandic-, wants to go to a merchandise-less, no merchandise stores. So, you know, so everything is basically created, bespoke that's all digitally enabled, so, once you factor like click and collect, you know, these are all things that are, that's digitally enabled. So, once you put, I'm not just talking about sitting on your couch and ordering from Amazon, I don't think that's going to 50%, but I think if you, if you put all the other, sort of, pieces of the pie and I know you've been talking about payment, I mean, what, what percentage of payment is digital now, if you put that in there we would already beat 95%. So, it's, it's more like think about all, we're, I think we're still, we're thinking too much still in what our reference points are in 2021. This is ecommerce because I was able to buy sitting on my couch, this is physical commerce, because I had to go in the store and pick it up those, that's going to blend a lot more and that's going to really be, that's what I mean. 

Steve Dennis  30:43

So, isn't it nuts to, I mean, one of the, as you've probably heard me talk about, I mean, one of the problems, I feel, with holding some of these numbers is even if you just talk about ecommerce, transactions that are fulfilled in a direct-to-consumer way, you know, you've got like three, you know, that's 3% grocery, right, and it's like 80% games and books, right. So, I think the, the inherent differences, even if you wanted to glom on to that, sort of, number, the inherent differences by category, really make it irrelevant for any particular retailer, right because I'm not the average, right. You know, yeah, the average person in America, Canada has one breast and one ball. So, what, right, that doesn't help me with anything, but, but even more so,

Carl Boutet  31:33

Is that, okay, I should put that as my, I should have put that as a quote in my book.

Michael LeBlanc  31:38

You should, you should do a chapter as well.

Steve Dennis  31:40

But some of this is just, you know, retail's so huge and when we talked about the averages and we talked about getting to 50/50, you know, even if we want to anchor on that well, that's because there'll be a bunch of 90s and a few teens and some 20s right, so I think.

Carl Boutet  31:42

Right, and, and the way we measure is all over the place to, I mean, we know that, we saw that and, you know, try to, try to understand what ecommerce adoption, just compare Canada to US, we measure in very different ways, what we include and what we don't include in that.

Steve Dennis  32:05

And I think, you know, which I think Michael and I are going to do a whole episode on, on this. Maybe, we should have you back for it, but, but the other thing, which I think is almost, to quote the gear-, with a great Canadian retail strategist, Alanis, Alanis Morrisette. It's, like, what's so ironic about some of the narrative, like, when McKinsey had their, you know, we've accelerated ecommerce, you know, 10 years and eight weeks, right, I mean, aside from the fact, it was really clear that, that wasn't going to be true in another eight weeks, like just by virtue of the shutdown.

Carl Boutet  32:07

Yeah.

Steve Dennis  32:12

The most ironic thing is what actually got most accelerated, I would argue, I mean, I'd love to get some facts, is how important stores are to ecommerce, right, so there was this narrative, like, oh, everything's moving online. Well, no, actually, what's moving online is research and purchasing.

Carl Boutet  32:54

And, it totally is true, but, but, but we can, we can agree, Steve, that, you know, to do that you need to get that, sort of, part of being part of going to the 50/50 you're going to need a lot more digital muscle to, to, to play to that, better use, better using those physical assets, right. 

Steve Dennis  33:10

Absolutely. Yeah, and I think I like, 

Carl Boutet  33:12

And that's, and that's really what I mean conceptually by the 50/50. Again, I'm not suggesting that we're going to a place, and I think what doesn't get talked about enough is this digital layers business where we're just the way we're engaged in doing, we'll be engaging even in the physical store. It's gonna become messier and messier to tell it apart.

Michael LeBlanc  33:29

Well, you know as Steve said, I think this is a whole other episode just you if we parse this out there's four or five things, we talked about today that in and of themselves could be whole episodes, maybe that we'll, as Steve said, we'll get you back on Season 3, which launches in, in July, but for now 

Carl Boutet  33:45

So, what, Steve has to go on vacation again?

Steve Dennis  33:49

I’m always on vacation.

Michael LeBlanc  33:49

Taking a bit of a hiatus, it's true to recharge and to gear up for, for what is going to be an exciting third season, so, well one thing I'm not tired of is talking with you, Carl Boutet, so thank you for joining Steve and I.

Carl Boutet  34:04

That's why he's a pro, see that's why he gets the big bucks. See I just said that right in there.

Michael LeBlanc  34:08

I know, I know. Thanks, again, so much for joining us, we'll put a link into the show notes where they can find and access your book and your great SaaS insights service and all those great things. I wish you continued success and I know we'll keep in touch, so it is not goodbye, but it is farewell and thanks again for joining us on the Remarkable Retail podcast

Carl Boutet  34:26

As they say in French, Au revoir, see you soon.

Michael LeBlanc  34:34

All right, we're back with another episode of Remarkable or Forgettable, Steve, let's talk about earnings, we've been talking about earnings in the past episode, let's talk about Lululemon and Nordstrom, both out with earnings, what did you think?

Steve Dennis  34:45

Well, Lululemon is, just continues to be a remarkable company. Their sales are up 88%. I don't know, again, as we've talked about when with these comparisons, it's hard to really make sense of that number. What I dug into a little bit is they’re actually up 57% from 2019. So, as we talked about using that as a comparison, so. That's a pretty remarkable number. Here's a fun fact. Lululemon's market value is currently $41 billion. That is twice the market cap of Macy's, Kohl's, Dillard's, and Bed, Bath & Beyond combined. 

Michael LeBlanc  35:24

Wow.

Steve Dennis  35:24

That was just, kind of, fun with math. So, yeah, I think, clearly, activewear has been on fire, they've been well positioned for, where the apparel growth is, but still, I think they were executing incredibly, incredibly well, great margins, you name it. Nordstrom up I think something like 44%, so not as good as a lot of the other apparel players. So, they were getting beat up a little bit, there was kind of an interesting take in the news that somehow their, their sales were adversely affected by their store closures, like the permanent store closures and I think that was a weird take because the stores they closed only accounted for like 5% of their total sales. So, I think really what's going on here is that the kind of, wearing occasions are the, you know, are problematic for them, you know, they're up because,

Michael LeBlanc  36:17

Doesn't matter how many stores you sell or how great your ecommerce is, if nobody's going to parties and less people going to work and all that, right.

Steve Dennis  36:22

So, I think, right, I think that's going to be a headwind. It will be an improving picture. I think that's going to be a headwind for a while, so I get that, you know, this kind of story about Nordstrom in total is, kind of, forgettable. They are, like Macy's and some others, really doubling down on the off-price part of their business, which has been a strong, I'm sure many people know, it's been a strong component of their overall mix for a long time. I just wonder how much, how high is up on, on the off-price business and there's so much competition. It's been so hot for such a long time. So, I think the thing to watch with Nordstrom is can they really get back on sustainable profitable growth once we get, kind of, past the weird comparisons.

Michael LeBlanc  37:01

Let's talk about Warby Parker and apple. They're both going, who knew, again, once again, who knew, stores are important, Warby Parker and Apple, both announcing more stores, not less.

Steve Dennis  37:10

Well, yeah, it turns out physical retail isn't dead, Warby Parker is going to open 35 new stores this year, they said, which I think will get them to like 150 stores in total and to me, they're just 

Michael LeBlanc  37:23

It's a big, a big expansion on their base, right, I mean, they got 100, it's like a 30% expansion.

Steve Dennis  37:27

And, I think what they found, which others have found is that, you know, digital drives physical, physical drives digital, and it's all one thing and they quoted a stat, I think it was, I'll probably get the number a little bit wrong, but 75% of their ecommerce customers have also shopped in a store. So, this symbiotic relationship between digital and physical is clearly pretty strong.

Steve Dennis  37:51

Apple, they were a little coy about exactly what they were doing with new stores, they got asked a question about whether they were going to close stores, I think was the context and they said no, actually, stores are very important to our brand, I think, you know, bigger obviously than Warby Parker, but kind of the same dynamic of, of having that experience. They just opened a store in Rome, and they alluded to, to a new store opening. So, it's not clear how many and how fast, but they, they definitely are going to continue to invest behind physical retail.

Michael LeBlanc  38:20

Well, let's talk about moving on to resales activity, Etsy buys Depop and Rent the, and Rent the Runway enters the resale. So, this thing seems to be a thing, but now we've had a guest on a prior episode talk about the resale market and this looks like it could continue to be a thing or is this sack of equity, money trying to find a home and trying to grab onto a big trend?

Steve Dennis  38:41

Well, it is pretty remarkable how much activity there has been in just the last few months. I mean, it's clearly a very hot category with apparel starting to come back. It's, it's, you know, seeing a lot of uptick there as well, Etsy buying Depop. I didn't even know who they were, but apparently, they're worth about 1.6 billion because that's what Etsy paid, but it's a, it's a lower priced fashion, app-based resale company. So, I think in their, in their article it said that like 90% of their customers are under the age of 26. So it's got, kind of, a really pronounced niche. 

Steve Dennis  39:18

Other end of the spectrum Rent the, Rent the Runway is more, you know, higher, higher end and I think it's a pretty logical extension for them. So, from that standpoint, I think it's pretty remarkable. The, the level of activity and the growth is, is pretty remarkable. Again, you know, my question here is just you know, how high is up, most of these different organizations, whether we're talking about Poshmark or, Poshmark, or the RealReal, thredUP, they're all losing money. So, what is that path to profitability, how many of these companies can actually get to profitable scale, time will tell, but certainly it's a hot category.

Michael LeBlanc  39:57

Well, let's, let's finish up on Amazon, as we often have Amazon, the news, they're talking about Prime Day folks coming up talking about Prime Day, which is coming up in America in June and candidates been deferred actually, because they're still struggling with the pandemic, and their, and their warehouse. So, they've deferred to a future date. What intrigues me about Prime Day is the competitive response. So, you know, news, for example, that Walmart and Target intend to have their own sales. Is that the best strategy or is there another strategy where you say, listen, I'm not going to, I'm going to ignore Prime Day, as a retailer and not validate it or even make it even bigger with more publicity. I'll just, you know, they'll have their day, and I'll have my day too, but let's not make their day even bigger and more high profile, what do you, what do you think about that as a strategy?

Steve Dennis  40:41

Well, I'm going to give you a very strong, I'm not sure. The thing that makes me, I mean, I certainly think it's worth having your own day and if you're Walmart, if your Target, you've got the power to do that, but there's also this old expression, you know, go hunting when the ducks are flying, right and so Amazon just creates so much attention, and so much traffic around this day to sit it out, means probably seating a fair amount of volume. So, I think in some sense, they're forced to do it.

Michael LeBlanc  41:15

But, neither, neither Walmart, right, I mean, neither Walmart nor Target, actually have their own day. I can't think of a, you know, Black Friday, but they don't have their own day, right.

Steve Dennis  41:24

They don't know, they don't and, I guess, my question would be, well, why not, I mean, you could certainly compete to a certain degree against Amazon, just to, kind of, preserve market share and top of mind awareness, while still doing something that's unique to your brand, and in a different timeframe. So, I don't know. I mean, certainly, Amazon has had this Prime Day for a number of years, and Alibaba has Singles Day or China has Singles Day. So, it's not like this is an unknown quantity that just, kind of, came out of left field in last year or two. So, good question, maybe, maybe we'll see something from them later in the year.

Michael LeBlanc  42:03

Well, what's been remarkable to me is how Amazon's strategy is more to gain Prime members because it's a real mishmash of product that's available on Prime Day, right. It's, you go there and it's, it's often their devices, which are deeply discounted, but it, to me, it, strategically, seems like they're trying to grow their prime numbers. How big is up, you mentioned, 200 million Prime members. So, the interesting thing is, do you think it's remarkable or forgettable, that they can continue at that pace to add Prime members?

Steve Dennis  42:28

Well, I think it's gotten to the point where, it's almost like why wouldn't you have, if you can afford it, why wouldn't you have a prime membership, but yeah, at this point, I wonder how many more people, who haven't figured it out yet. You know, can they possibly drive on this day, I agree with you. I don't think the shopping experience or the consumer value proposition on Prime Day is especially compelling, seems more like it is, as you say, a gimmick, kind of, to, to drive even more prime signups, which, you know, just drives the whole Amazon flywheel, so strategically, it makes a ton of sense. 

Steve Dennis  43:00

I certainly would expect that over time. Well, actually, I'll step back. What I was going to say is, I think over time, you would see diminishing returns from Prime Day just because the number, the base is so big, the more that Amazon gets into physical grocery, that might create its own opportunity for some of those folks that are sitting on the fence in terms of Prime to make it worthwhile because then they're really getting into a whole new category of frequent spending. Certainly, with the number of supermarkets they have open right now that's, that's not an issue this year, two or three years from now it might be more interesting.

Michael LeBlanc  43:38

All right, well, that's this episode of Remarkable or Forgettable.

Michael LeBlanc  43:49

Alright, Steve, take us home.

Steve Dennis  43:51

If you like what you heard, please follow us on Apple, Spotify, Amazon Music or your favorite podcast platform, so you can catch up with all our guest interviews and insights and new episodes will show up every week and please take a minute to drop us that elusive five-star rating and tell a friend in the retail industry. I'm Steve Dennis, the expanded and completely revised second edition of my bestselling book, ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’ is now available on Amazon, Indigo, bookshop.org or just about anywhere books are sold.

Michael LeBlanc  44:25

And I'm Michael LeBlanc, Producer and Host of The Voice of Retail podcast and you can learn more about me on LinkedIn or on meleblanc.co. Steve, have a safe week.

SUMMARY KEYWORDS

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