We wrap up our second season with special guest, Matt Shay, President & CEO of the National Retail Federation (NRF). Many of us may know about the NRF because of its annual "Big Show", but as you'll learn in our interview it is much, much more.
We wrap up our second season with special guest, Matt Shay, President & CEO of the National Retail Federation (NRF). Many of us may know about the NRF because of its annual "Big Show", but as you'll learn in our interview it is much, much more.
In our fast-paced discussion we dive into the many facets of the world's largest retail trade association. Matt helps us unpack the retail industry's role as America's largest private employer and as a key barometer of economic fortunes. We get a behind-the-scenes glimpse into the NRF's advocacy work, how it convenes key retail executives and why diversity, equity and inclusion is now front and center on its agenda. He also previews the upcoming NRF Converge event and what we might expect as we all reconvene once again in New York next January for the world's biggest retail conference.
Then we wrap up the episode with our 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 the NRF's updated and up beat 2021 forecast, Microsoft tip-toeing back into physical retail and earnings news from RH (the former Restoration Hardware), Stitch Fix and Chewy.
Matthew Shay is president and CEO of the National Retail Federation, the world’s largest retail trade association. He serves as chief advocate and spokesman for the nation’s largest private-sector industry employer, responsible for supporting one in four U.S. jobs – 52 million working Americans – and generating $3.9 trillion in annual GDP.
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.
Michael LeBlanc 00:05
Welcome to the Remarkable Retail podcast, the final episode of Season 2, Episode 20. I'm Michael LeBlanc.
Steve Dennis 00:11
And I'm Steve Dennis.
Michael LeBlanc 00:13
Well, Steve, it's been quite the 20 weeks for both of us and retail history. I mean from the lows of uncertain prospects, to the end of the pandemic, change of administration, economic uncertainty, to now it looks like a blockbuster forecast and, and, you know, the nowhere to go but up. We've got the vaccine, we've got great percentage of populations, at least in North American major centers vaccinated so we can see the end zone, goalposts keep moving around a little bit, but what, what a difference 20 weeks make.
Steve Dennis 00:43
Yeah, it's pretty amazing. Certainly, never a dull moment in retail generally, but particularly over the last 15, 16 months and yeah, everybody I'm talking to is pretty excited about the future. I think for the most part, things are coming back, at least in the US, more quickly than people expected and, yeah, just a lot, a lot of tailwinds that, hopefully, will carry us forward to a good second half of the year.
Michael LeBlanc 01:10
Well, there's no question. Timing is everything and talk about timing. Speaking of the retail revival, actually the overall economic revival, the NRF just updated their forecast in terms of where they saw the economy going, and where they saw retail going, and their pretty blockbuster numbers and we've got a great guest to talk about the overall context, Matt Shay, President of the NRF.
Steve Dennis 01:33
I'm super excited to talk to Matt, but before we move on, though, we should just briefly mention what we're doing for Season 3. We'll share more details as that's coming into play, but we will be kicking Season 3 off, July 6. And we've got a blockbuster interview with Brad Stone, some of you may know, has written, I believe, the most popular retail book of all time, the everything store about Amazon, and he now has a new book out, his second book about Amazon which is called unbound. So, we will be chatting with him and what he sees for the future of retail, but a lot of really great inside stories and insights about the retail behemoths known as Amazon.
Michael LeBlanc 02:17
I listened to an interview with Brad, and you talked about why a second book and he said listen, the first part was just getting Amazon off the ground, but so much has happened. The growth of Prime, growth of AWS, the transformation of Bezos as a leader to begin with, so I'm excited to talk to Brad I think, I think it's going to be fascinating. So, many things have happened in such an influential organization, the more we can understand the better and we're wrapping up, speaking of which, so let's get back to this episode.
Michael LeBlanc 02:44
So, we are wrapping up the episode in style with Matt Shay, President of the NRF. We talk about big picture objectives, we talk about the tradecraft of what an association like the NRF does, we talk about all kinds of, the, he has this lens on retail, where he's not only just on the Capitol and the Executive Branch, but he's also talking daily to leaders, CEO level leaders. So, it's a great perspective that we're thrilled to bring to the podcast and what a great way to wrap up Season 2.
Steve Dennis 03:15
Well, Michael and I are excited to welcome Matt Shay who runs the National Retail Federation, we're looking forward to having him close out our season and as is our custom, Matt, we'd love to start with you just telling us a little bit about who you are a bit about your personal and professional journey and the work that you do at the NRF and then we'll dive into some more probing questions.
Matt Shay 03:39
Well, thank you, Steve and Michael, nice to be with you both today and happy to have the conversation about a topic that we all love, retail, and I'm really privileged to, to be the CEO of the National Retail Federation, which is the association in the in the US that represents the full breadth and diversity and scope of the industry, all shapes and sizes of companies and all segments of retail and I've been the CEO for about 10 years and been in Washington for almost 30 years and it's been it's been really the highlight of my career to be involved with retail, and I love the people and I love the issues in the industry. So, I'm really happy to have a chance to talk with you two
Steve Dennis 04:29
Well, we're happy to have you here and it's certainly a dynamic industry, maybe a little bit more dynamic, in the last year or so, than we would have would have liked, but so I imagine many of our listeners know a decent amount about the NRF, but we actually have quite a few listeners from outside the US which doesn't mean that they don't know about the NRF, but maybe you could just explain a little bit about the organization, the mission and some of the key focus areas.
Matt Shay 04:55
Well, the NRF is headquartered in Washington, DC, and our primary purpose is to speak on behalf of the industry with our elected leaders and policymakers and regulators primarily here in, in the US Capitol in Washington, but also across the States, in the US, and in many instances in other markets and with other regulatory and legislative bodies around, around the globe. And, in partnership with our, with our colleagues at other trade groups, as we would in, in Canada, or in other places in, in Europe, or South America, or Asia, or Australia and New Zealand, so all around, but the Big Show, our annual convention each January in New York, which will be held in January '22. We're excited about that, it is a wonderful platform for message delivery, but the NRF itself is a much bigger organization than that with a whole series of other kinds of content activities on behalf of the industry and member engagement opportunities and networking and best practices and the real focus based on where we're headquartered in Washington is to speak with, with elected leaders, policymakers, about issues that impact the industry. So, whole, a whole range of things, but the Big Show is one of the more prominent events that we, that we host.
Michael LeBlanc 06:31
I tell you; I had the strangest year this year. I've been going to the Big Show for 20 plus years, you know, back to when I was in retail and HBC. And it was just the whole year that was a bit off because that was the start of many people's year. So, we're really looking forward to that and that resuming.
Michael LeBlanc 06:47
Let's talk about retail as an industry and its importance. I mean, we know its economic importance, but I'm intrigued to kind of think about, you know, both retail, as an industry, as a barometer of the economy, and also its ability to change and, both, change and reflect society, like, I think about decisions and movements some of the leaders in retail have made that have advanced topics in retail, what are those, kind of, key two or three things that you're, that you're focused on right now, on behalf of the industry, is it, I'm hearing a lot about cybercrime, your breadth is quite wide, but what are the, kind of, the couple things that really, really come up in every meeting with the CEOs that you meet with?
Matt Shay 07:27
Well, I think the foundation is a recognition that as a as the largest private sector employer in the US, and as the industry that creates jobs for more than one in four approaching one in three Americans. Before we went into the pandemic, the number was more than 50 million jobs in the US were created as a result of retail through 3 million establishments and $4 trillion in GDP, which is more than 20% of the GDP in the US. There's a recognition that, that the retail industry has a special role to play, not only in job creation, but in getting Americans introduced to the workforce and creating career opportunities and building experiences that can serve them, whether a lifetime in retail, or whether in other industries.
Matt Shay 08:22
And, so, the conversations that we're having now with elected leaders and policymakers in Washington, is about the economic recovery. First and foremost, of course, has been collaborating both with the previous and with the current administration on fighting the pandemic, and on keeping employees and Associates and communities’ customers safe and supporting the distribution of goods and services through the supply chain, and keeping business open to the extent possible and creating jobs.
Matt Shay 08:56
And, so, as we go into the next phase of what comes next, it's about putting people back to work safely, making sure they're equipped with the right skills to do the things that they need to do as the economy recovers and rebounds and that includes a whole range of topics, whether it's on infrastructure, or on immigration, or on workforce development or on trade. I think there's a whole series of really interesting, relevant and essential topics we need to discuss with, with the administration.
Michael LeBlanc 09:28
Let's pull the curtain back a little bit on the tradecraft of what you do as an association as I mentioned off-mic, I've worked with and continue to work with Retail Council of Canada, so I have some insight into the comings and goings. I mean, you, you advocate for retail across multiple parties, your party agnostic, I'm sure and multiple different, different Presidents, but how do you gather all those resources and continue that discussion. Is it backed by economics and just a bit of tradecraft because I think people we of course, we all know as retailers, the Big Show and we know the name, but you know, the, the sense of what you do on a day to day basis to advocate for firefight, move things forward, respond, promote, push along, you know, give me a sense of the work you, you and the team do?
Matt Shay 10:16
Well, I think there's the work that the professional staff does, which is the day to day relationship development that goes on between and among people that, that do this for a living with the administration or with congressional staff, or directly with members of Congress or directly with regulators at places like the Department of Labor, or the US Trade Representative's office, or the Department of Commerce or the Department of Treasury and so that's all essential to, to having the relationships and having the trust and the credibility.
Matt Shay 11:00
And, the real key, I think is ensuring that, that those that are making decisions, hear directly from the members, in this case, from retailers, from job creators, from people who are out there in industry, who are working with and living through the economic conditions, and the trade relationships, and the workforce challenges, and all of those things that they can speak to much more effectively and passionately and informally, because they do it every day for a living and so, I think the real opportunity in a job, like the one that, that we have at the NRF is to make the connection between those that are, are seeking information because they have to make decisions on issues and those who have the information because they have to live with the decisions that are going to be made.
Michael LeBlanc 11:56
I once described being an advocate as sometimes explaining unintended consequences, would you agree?
Matt Shay 12:04
That's certainly a part of it. I think there's, there's certainly a dimension to the conversation that is to help those that think they have answers to questions, understand that there's sometimes more to it than they initially anticipated and helping introduce them to other possibilities and sometimes we can do that directly and other times, you know, that can be done more effectively by letting someone else be the messenger and share an experience or perspective that, that can be even more powerful because, because it's been lived by the person that, that is explaining it.
Steve Dennis 12:41
So, Matt, one of the newer issues, I guess, relatively newer issues that the NRF has been, been getting involved with is on the Diversity, Equity and Inclusion front. And of course, we're in the middle of Pride Month. I'm curious how that all developed, and what are some of the newer things that you're doing in that regard?
Matt Shay 12:59
Well, I think if we go back to the, to the recognition, just as a jumping off point that the industry is the largest private sector employer in the US and given the diversity of the industry, then the customers that retailers are serving as well as the team members and Associates for whom they're creating employment opportunities in the communities in which they, they do their work is a reflection of this country and the wonderful mosaic of diversity that makes the US such a unique and uncommon place.
Matt Shay 13:39
And, and so, with that as background, I think the retail industry has always been a place that created opportunities, particularly for those that, that didn't have access to other kinds of employment and were able to through, through the opportunities the industry provided, create experience for themselves in the workforce that would allow them to advance in ways that maybe that they wouldn't be able to in another industry. But I think particularly after the murder of George Floyd last year, on May 26 in Minneapolis, that really galvanized many business leaders and in particular retailers to take, I think more concrete demonstrable, measurable action, and to create something that's more sustainable and more durable and, and that means changing things that happen not only in, in places of business and in physical retail locations, but also within those companies.
Matt Shay 14:45
And so, it's really been gratifying to see the way the retail industry has stepped forward and so many individual retail companies have made real commitments. To support the black community and to support other minority populations inside the US and done so in ways that whether that's employment opportunities, or whether that's direct financial support for black owned businesses, or whether that takes the form of increased opportunities for experience within the ranks of management leadership in companies or commitments on hiring, the given a whole range of approaches that different companies have taken based on the segment of the market, they serve in the business that they're in.
Matt Shay 15:36
And we've been pleased to partner with the curate retail, QVC, HSN, Cornerstone brands on the small business spotlight, where we identified 50, black owned businesses, and gave them a platform to reach new markets through HSN and QVC and a partnership that we've created with the National Urban League. So, we've been fri-, and then throughout our own membership with a working group that now has almost 100 companies participating, to talk about best practices in diversity and inclusion in a co working group of our board. So, I think, you know, this time it sounds, it's really actions, not just words and I think that's the difference between, say, what's happened over the course of last year on diversity, equity, inclusion, and maybe what's happened in the platform and such.
Steve Dennis 16:30
Well, that's such a great example of where, you know, kind of, this collective action, right, is the power of a big industry getting together and using its, its influence, as well as being able to mobilize a diverse group of people. So, let's make a little bit of a pivot, start looking towards the future in terms of some of the things that you've got coming up. Well, we'll talk about the what's planned for the Big Show in a minute, but there is another event, one of the many virtual events that you guys have put together, called NRF Converge, which I think is June 21, through the 25th, if I'm right about that, what's, what's, what's that about, what can people expect to if they join in on that?
Matt Shay 17:10
Well, you know, we all wanted to be together in January of this year, a few months ago in New York, and we weren't able to do that for, for very sensible reasons. And we did a very successful virtual show in January, but we didn't get the chance to cover all of the content that we wanted to cover at that event. And we didn't have the opportunity to introduce as many of our partners and solution providers to retailers, as we had hoped to just because of time constraints and so, there was real interest in doing sort of a mid-year event and pulling together a number of communities not, not only the sort of content we'd normally have at the annual convention, but bring together our loss prevention community, and bring together our marketing community and bring together all of our associate members, and to do a series of more focused educational tracks and sessions that would allow people to find the content that really fit their needs and their areas of interest.
Matt Shay 18:23
So, so that's what converge is, it's, sort of, a mid-year virtual event that we'll be doing later this month and we've got wonderful pre-registration, the content is outstanding, we've got a number of really wonderful conversations with CEOs of companies scheduled and with practitioners of certain disciplines, inside retail operations and with small business owners, as well as with a number of our partners and service providers. So there'll be a wonderful springboard to January of '22, when we will be together in New York at the newly expanded and fully renovated Convention Center in New York City and we're very excited about that and the team has already well, on the way to put it together and really outstanding program in terms of content, the sponsor, partner, solution, provider interest has been incredibly remarkable and we're well on the way to another record performance in terms of the exhibitors and, and we will be on the way one on attendance as well. So, we're very excited about all this.
Michael LeBlanc 19:44
Are you sensing some pent up demand amongst the trade to, what the kids are calling, IRL, right, in real life and get together and, but, unpack for me a little bit anything you're going to be doing different in January? Well, you know, globally the COVID crisis still continues in some countries. When I, when I'm standing in, in the Big Show in January, any, any thoughts on anything different, other than, you know, new, new renovated Javits Center, what are your thoughts on that?
Matt Shay 20:12
Yeah, I think it's, it's IRL and it's YOLO, right, and you only live once. So, there is an enormous amount of pent up demand and, and we've been very encouraged by the attendance that we had in January for the virtual event, and the attendance that we're going to have later this month for Converge and that's in the face of what I think we would all agree is, is some fatigue, for the virtual world, and a real desire now to get back to doing things in, in, in real life in real time in person.
Matt Shay 20:49
And so, of course, we will start by, of course, fully embracing all the appropriate applicable health and safety protocols that are in place by next year, and ensure that we've got the right approach to how we welcome people back and do it in a way that makes them feel confident that their safety is our number one priority, which, which it is and I think in terms of the content mix, and the layout of the of the show floor and the ability because the Javits Convention Center has been significantly expanded, with an enormous several 100,000 additional square feet of space, we'll have plenty of room to showcase certain topics, and to accommodate more in depth conversations in certain content areas and give everyone plenty of room in which to do that and feel safe and healthy and create some, I think, some new experiences that people will, will really enjoy when they, when they're brought together.
Steve Dennis 22:00
I know for, I, for one, I'm definitely looking forward to getting, to getting back, back out there, getting back to New York, and we'll be sure to put the links to both the NRF Converge event, as well as the Big Show in the, in the show notes. Matt, I want to, before we start to move to wrapping up, could you just step back and reflect on, I mean, obviously, so much has gone on, across all of retail and, and the way the NRF in particular has had to adapt, but perfect for you. Are there any big takeaway messages that you feel retailers need to be thinking about as we move ahead, or maybe any myths you want to dispel or narratives that get played out in the industry that you don't think are super helpful?
Matt Shay 22:46
Well, I think the big issue is the way in which the industry so quickly pivoted in the face of the challenges and in the US kept communities and customers safe, but continued, in many cases, service uninterrupted with without having to shutter businesses or turn people away and so, that, I think that was as a lesson, the pandemic, you know, one of the more really reassuring elements that, that it was clear that the priority was health and safety and I think, you know, to play that out some, there's also I think, a really interesting conversation to be had not only about how this changes, retail going forward, in terms of logistics and fulfillment and supply chain and in terms of payments and in terms of social engagement interaction, there's a there's a few different I think elements or broad categories that, that really demonstrated a very dynamic industry.
Matt Shay 24:00
The other was that, for a variety of reasons we didn't see, in this recession, over the course of the last year, the kind of bankruptcies that we experienced a decade ago, when we went through the last recession. And in the last recession in 2008, and nine, there were more than 400 bankruptcies of retail companies in each year in 2008. And in 2009, more than 400 each year and many of those were actual liquidations and this time around there were about 60 over the last year and the overwhelming majority were reorganizations under the bankruptcy laws of the US. and that's for a couple of reasons. One, I think the industry is much healthier than it was a decade ago, that the industry has evolved substantially, made dramatic changes in investment, and the tax reform that took place in 2017. When the US lowered the rate, made us more competitive and allowed people to reinvest in businesses and then consumers really kept spending, consumers were given extraordinary support trillions and trillions of dollars in the economy that kept people spending that kept businesses open.
Michael LeBlanc 25:10
And, key categories were just on fire, right, I mean, I know here and I watch, you know, Home Improvement and Outdoor and, and just as we adapted to the changes in our lives, it was a good time to be a bread maker salesperson, you know, it was a different, you know, is very, to use Steve's word, bifurcated, right, you, unfortunately had really strong demand in some categories and almost non-existent in others, you know, apparel really struggled, but it does seem to be to be coming back. So, very different, very different from an industry perspective and just from a consumer behavior perspective, yeah?
Matt Shay 25:43
Yeah, that's right and I think that was the real key was, was the way in which consumers behaved in the substantial fiscal stimulus, but also the monetary stimulus here and we were able to work very closely with congressional leaders a year ago, and the previous administration, who did remarkable work and came together in a bipartisan way very, very quickly, in a series of pieces of legislation enacted in February, March, April of last year, and then at the end of the calendar year, and now again, this calendar year, that's just, I mean, at some point, we need to have a conversation about how much is too much.
Michael LeBlanc 26:19
Yeah.
Matt Shay 26:19
As we see the way the economy is coming back, but it certainly kept many people employed and I think when the chapter in the book is written, we'll show that we saved millions of businesses and millions of jobs because of the actions that, that our leaders took so quickly.
Michael LeBlanc 26:36
I guess, the, the finance, or the finesse is making sure that there's enough people back, going back into the workforce at this point, right, I'm hearing, you know, labor shortages, as the economy starts to gear up again, so that I'm sure you're focused on that right sweet spot between supporting the economy and getting people back to work.
Matt Shay 26:57
Yeah, I think it is a balance and I think it's also like, it's like the traffic accident that occurs on the highway, you can, you can clear the accident, but that doesn't mean that the traffic immediately starts flowing,
Michael LeBlanc 27:09
Right.
Matt Shay 27:09
at the same speed. So, we, we, understandably, have people that remain, at least in the US, you know, concerned about health conditions and want to be sure that it's okay to go back to work and they can do so safely, and they can commute and get there safely, and they can work with them. That's important. We've got people that have children and family members and others that they need to take care of that, that would prevent them from going back to work right now, we still have this enhanced unemployment benefit that, that it has contributed to a disincentive, and I think that's been widely acknowledged by people in both political parties that, that's playing a role.
Matt Shay 27:51
So, I think in the US, at least, we look forward to the children's return to school later this year in September. We've got a bank holiday early in September, and it's after that is traditionally the beginning of the school year in the US and I think by then, we should feel much better about people's ability to be back to work and we'll have hopefully cleared up some of the traffic jam that's slowing us down at the moment and, and I think as we get into the holiday season might be really exciting to have another conversation in October, November timeframe about how's the supply chain doing our customers behave and what the imports look like, are the ports cleared up, have we unloaded the container ships.
Michael LeBlanc 28:36
Yeah.
Matt Shay 28:36
What are we thinking, for the end of the year holidays?
Michael LeBlanc 28:38
How much, how much our pallets gone up in price, you know how crazy it is.
Matt Shay 28:41
That's right, that's right, so true.
Michael LeBlanc 28:44
You know, Matt, it's been such a treat having you on the, on the podcast, you know, opening up and understanding the NRF, beyond the headlines, getting into both, the tradecraft and your perspectives have been really appreciated. I couldn't think of a better, Steve and I couldn't think of a better guest to wrap up our second season focused on the industry we all love, which is retail. So, thanks again for, for joining us.
Matt Shay 29:05
You're very welcome, Michael, pleasure to be with, with you and Steve, who's a longtime friend and (inaudible) of mine and I'm privilege and honor to be with you and I wish you both the best and look forward to listening to some of your other conversations with other great guests and hope to come back sometime and have another discussion.
Michael LeBlanc 29:30
Welcome to our last edition of Remarkable or Forgettable for Season 2, Steve, let's, let's kick it off, kind of, where we left off, NRF has put out their forecast this week, actually going up fairly significantly in terms of where they see the US economy and where they see US retail wrapping up for the year, what do you think?
Steve Dennis 29:49
Well, I think the range they've got is an increase of 10.5 to 13.5, something like that. So huge, huge sales increase. If that comes true that would be a record for the US since 1984. So, that's pretty big news and I think it certainly speaks, you know, I don't, I mean, I'm not an economist I don't have enough of a perspective to say exactly what I think about those numbers, but I think it definitely lines up with a lot of the momentum we're seeing in the economy and consumers’ willingness to get back out, back out there and, and spend and the effect of stimulus and all those kinds of things.
Steve Dennis 30:24
So, you know, my history, I guess, in looking at these forecasts has been that the NRF tends to be on the more optimistic side, so given that history I might, I might feel like, maybe, the lower number is closer to what we might see, but this is such a volatile time I think it's you know, it's really hard to pin down and I think that's why they gave a fairly big range compared to what they did but, but it's exciting I hope, I hope we hit anything close to those numbers if not even better.
Michael LeBlanc 30:50
Let's talk about RH, the former Restoration Hardware, they like to be known as RH. They've got their earnings, exceeded expectations. We've talked about that, what do you think?
Steve Dennis 30:59
Well, to me, I'm a little bit of a broken record on this, RH is, is one of the most remarkable stories, I think in retail over the last few years, I talk about them quite a lot in my book, I think they are just firing on all cylinders. I mean, there's no question they've got a headwind given how strong, or tailwind, I should say, given how strong the home categories have been and their numbers are in comparison to having a bunch of their stores closed last year, so the increase in and of itself is not super remarkable but the way they just keep cranking out this record performance, opening these beautiful stores, that, you know, a lot of people thought they were crazy, including myself, that they would invest so heavily in physical retail that they're going to be opening I believe in London next year. So, they're getting international expansion, so, I mean, this is just a great example of a company that has really got a laser focus on their customer they go deep on it, and they bring this, this memorable experience as part of the whole equation, so, pretty darn impressive and I think their stock price reflects that.
Michael LeBlanc 32:06
All right, let's talk about Microsoft. We were on this podcast talking about how they were closing stores and now they seem to be opening stores again.
Steve Dennis 32:16
Well, allegedly, the information wasn't super specific, but, you know, I think, but, what they had out there was not the least bit remarkable. So, perhaps it's not so shocking that they're going to reload on this, remains to be seen whether they'll be able to do a better job at it this time. A bit forgettable at this point, I think, you know, this, you know, Warby Parker can open 150 stores, you'd think Microsoft, you know, with the products they, they sell, could probably have a few that would work. So, so from that standpoint, I don't think it's particularly remarkable they probably can get better lease terms and those kinds of things, and they were sitting on, on the stores they built over the past decade or so. So, it just more, more to come, more to, more really want to watch to see what, what this move looks like and whether it's much different than what they did before.
Michael LeBlanc 33:05
All right, Chewy puts out numbers and seems to be optimistic that the pandemic puppy trend or at least the annuity that you do for these businesses when you buy a dog or a cat, they're going to last several years, so that's like buying an annuity for pet stores. What do you think of the results and their forecast for that business?
Steve Dennis 33:25
I had, kind of, a mixed reaction to this one, I mean, when you look at their numbers in terms of sales being up 32%, they posted some great numbers in terms of customer activation, it's the second quarter that they've made money which, you know, there's a lot of these kinds of companies that don't make money, so from that standpoint, you could say it's remarkable, but at the same time, it's like a perfect storm for this kind of company, you know, the shift to ecommerce, the pet buying behavior, and so 32% increase to me was not really, that, you know, it's, kind of, in line with where overall ecommerce is and if they can't make more money when, kind of, all the stars are aligned in terms of organic traffic and,
Michael LeBlanc 34:06
Yeah.
Steve Dennis 34:06
and, and underlying trends, you know, that bodes well, because I don't think it's going to get easier going forward, maybe we've got another quarter, you know, kind of, interesting comparisons but, but certainly to get to the back part of the year, it's not going to be so easy for, for them to outperform the industry and drive profits in the way they have before, so I was, kind of, a little perplexed, actually.
Michael LeBlanc 34:29
All right, so you put them in the doghouse for that one. Let's talk about, let's talk about Stitch Fix. So, Stitch Fix, a wonderful company with, you know, buried in the bit of the fashion, drag on the fashion business, but a great direct-to-consumer data science company and, you know, they put out their earnings and they're getting into resale, talk about that.
Steve Dennis 34:49
Well, very cool, cool company. You know, they've, they've been a bit of a volatile company in terms of their sales performance and profitability even going into the pandemic. So, their sales increase, which I think was like around 40, mid 40s, I think, given what we know about apparels rebound in and of itself wasn't super exciting, but they did manage to make money which has been a challenge for them on a on a base that's relatively low as you mentioned they're going to enter resale, which it seems like, you know, if I don't enter resale or you don't enter resale, like, we're gonna be the only one to have an entered the resale business in the last month.
Michael LeBlanc 35:25
Or at least, or at least put it in a press release, anyway.
Steve Dennis 35:28
Exactly, so Remarkable Retail podcast and fashion resale, it's a great idea, you know, I'm going to raise $750 million on the basis of that, you know, they've, they've got a very unique value proposition and some new leadership coming in and so, I think they're, they're an interesting one to watch. Again, I mean, I hate to be a bit of a broken record on this as well, but it's very hard to make sense of the apparel numbers really right now, because the comparisons are so easy. So, is 40 good, is 50 good, is 60 good, this is
Michael LeBlanc 36:00
I'd like, I'd like to see these comparisons done like many retailers look at them, over 2019, that gives you a better sense of, of, not perfect, but a better sense in my mind.
Steve Dennis 36:09
True and I believe there's we're up relative to 2019 but they're the sort of company like Chewy, that's a relatively new company and is acquiring a lot more customers so, that's, you know, so, they, you would expect them to be, you know, whereas Macy's, Kohl's you're like oh, no, well you know, they're very mature. So, so yeah, it's just, it's like
Michael LeBlanc 36:27
It's like, it's like a same store metric, right, I mean, you got to look at, you know, by percentage of the same customers, if you're on, if you're spending all your money acquiring customers it's not like for like numbers, right?
Steve Dennis 36:37
Yeah, but then I think both, with Chewy and Stitch Fix there certainly have been some pretty positive, kind of, underlying customer dynamics. So, you know, that should bode well, for at least future sales, whether, whether, you know, they'll be able to really improve their profitability. You know, it's gonna take us, really, another probably six, nine months before we can really start to make better sense of that.
Michael LeBlanc 36:59
All right, well, that's our last edition of Season 2 of Remarkable or Forgettable.
Michael LeBlanc 37:10
All right, Steve, take us home.
Steve Dennis 37:13
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 and Keep Customers in the Age of Disruption’ is now available on Amazon, Indigo, bookshop.org or just about anywhere books are sold.
Michael LeBlanc 37:46
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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