Remarkable Retail

Season Finale with Special Guest Scott Galloway

Episode Summary

We wrap up Season 3 with the inimitable, irrepressible and always provocative Scott Galloway. For those who have yet to jump on the Big Dawg train, Scott is a Professor of Marketing at NYU Stern, author of 3 best-selling books, podcast host, and the founder of Section4, where he teaches Strategy and Brand Strategy Sprints. His new TV show will debut on CNN+ next year.

Episode Notes

We wrap up Season 3 with the inimitable, irrepressible and always provocative Scott Galloway. For those who have yet to jump on the Big Dawg train, Scott is a Professor of Marketing at NYU Stern, author of 3 best-selling books, podcast host, and the founder of Section4, where he teaches Strategy and Brand Strategy Sprints. His new TV show will debut on CNN+ next year.

In a wide-ranging interview, we get Scott's take on Twitter (and the challenges of digital marketing more broadly), the future of work and higher education, what's next for retail (including a bright future for brick & mortar) and his hot take on the prospects for digitally native vertical brands--including why "digitally native" is a distinction without much of a difference. We also learn who Scott turns to for inspiration, as well as discover our mutual love for the brand formerly known as Restoration Hardware and the word "bifurcation."


But we kick-off with a quick recap of the week's biggest retail news, including our take-aways from the latest monthly sales reports from the US Department of Commerce, Lululemon looking into the Mirror and seeing a fair amount of ugly, and Nike's leap into the Metaverse with its acquisition of RTFKT. 

Note: This is the final episode of Season 3. We will return with Season 4 in mid-January with special guest Dave Kimball, CEO of Ulta.


The Prof G Pod

Pivot with Kara Swisher 

Scott's Books

Section 4

No Mercy/No Malice Newsletters


Scott Galloway

Scott is the Founder of L2 and a Clinical Professor at the NYU Stern School of Business where he teaches brand strategy and digital marketing. In 2012, Professor Galloway was named “One of the World’s 50 Best Business School Professors” by Poets & Quants. He is also the founder of Red Envelope and Prophet Brand Strategy. Scott was elected to the World Economic Forum’s Global Leaders of Tomorrow and has served on the boards of directors of Eddie Bauer (Nasdaq: EBHI), The New York Times Company (NYSE: NYT), Gateway Computer, and UC Berkeley’s Haas School of Business. Scott co-hosts the Pivot podcast with Kara Swisher. He received a B.A. from UCLA and an M.B.A. from UC Berkeley.


Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his       website.    The expanded and revised edition of his bestselling book  Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at  Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a      Forbes senior contributor and on       Twitter and       LinkedIn. You can also check out his speaker "sizzle" reel      here.

Michael LeBlanc  is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice.   He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career.  Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast,       The Voice of Retail, plus  Global E-Commerce Tech Talks  ,      The Food Professor  with Dr. Sylvain Charlebois and now in its second season, Conversations with CommerceNext!  You can learn more about Michael   here  or on     LinkedIn. 

Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue,  his YouTube BBQ cooking channel!

Episode Transcription

Michael LeBlanc  00:05

Welcome to Remarkable Retail podcast, Season 3, Episode 21. The season finale. I'm Michael Leblanc.

Steve Dennis  00:12

And I'm Steve Dennis.

Michael LeBlanc  00:14

Well, Steve, we got a real treat for the listeners for our season finale. It's a very exciting, very special guest to make time in a busy and getting busier schedule, with his new show debuting on CNN Plus, tell the people who we've got as our special guest today.

Steve Dennis  00:29

We've got the Big Dawg, Scott Galloway, serial entrepreneur, author, podcast host. 

Michael LeBlanc  00:35


Steve Dennis  00:36

Going to CNN. Full disclosure here, we've been trying to get Scott on the pod pretty much since the beginning and we finally landed him, so close out strong season three, which is also hard to believe that we are, whatever 60 Plus episodes into this thing. So that's pretty exciting as well. 

Michael LeBlanc  00:54

Yeah, listen, it's been, it is and, and we'll remind the listeners, we've been renewed for season four. So we're ready for season four, and we're gonna kick off season four, we're gonna take a bit of a hiatus and we're gonna kick it off in and around mid January and our very special guests to kick off the season with panache is the CEO of

Steve Dennis  01:15

Ulta, one of the remarkable brands, I think in the, the retail world today. So, that's going to be pretty exciting. They're, they're lighting it up and got a lot going on. So, that's going to be a great conversation.

Michael LeBlanc  01:27

Yeah, and so it's David Kimbell, CEO, and we've got, we've already, kind of, structured our questions, and we've been back and forth. So, it's really going to be good, because we'll also take a 'what are your strategies for Ulta', but also, a forward look, beginning of January, we got a, kind of, a forward looking 'what do you think's gonna happen to retail this year'.

Michael LeBlanc  01:45

As, as we enter, and I guess this kind of puts some kind of color commentary on at least the end of holiday and the beginning of next year, which is this new outbreak, you know, I've lost track is it wave four, wave three, wave 5. So that's going to have some kind of impact, it already is, as we were talking off mic in New York City on Broadway here in Canada retail in the province of Quebec just got closed down to 50% of capacity. So, they, what they call the circuit breakers, are starting to kick in, looking forward to getting to our guest, but let's jump in and talk about the news. You're just back from the Middle East. So, in the moments that you've been awake in odd hours, no doubt. What have you observed and what's caught your eye?

Steve Dennis  02:29

Well, probably the biggest piece of macro economic news, as we touched on, I guess, every month for a little while here, the US Commerce department puts out their report on retail sales. Once again, the media seems to focus on the month over month numbers, which I don't particularly care about, but, the, they did report the year over year numbers for the month of November, a little bit of momentum slowing, but overall the consumer is, is spending. They do some category breakdowns and most of the categories, so for example, clothing and apparel, sporting goods, furniture, electronics, those sort of breakdowns, we could maybe put the link in the show notes if people want to get more detail, but all of them are up, low to mid-teens, year over year. A couple places where things have slowed down a bit relatively speaking, grocery and personal care, but still up year over year. 

Steve Dennis  03:24

So, the consumer is spending, some of these people have been speculating aside from just the stimulus impact pent up demand, all those sorts of things we've talked about a bunch is that holiday shopping moved up earlier. So, November is a bit distorted because of what might have happened in December because of fear of stock outs, that, that sort of thing. Yeah, so a couple of things. I'm just gonna mention quickly, there was also some reporting around Black Friday sales versus Cyber Week sales and this kind of supports that narrative as well. Black Friday sales rose 14% year over year, Cyber Week grew by just 3%. You know, again, just kind of a suggestion that everything shifted a little bit earlier. I guess we really won't know until we see the December numbers.

Steve Dennis  04:09

One of the things you mentioned with regard to some of the earnings discussions, Lowe's, the big home improvement retailer, essentially signaled that they were starting to see some real headwinds in terms of consumer demand, and they thought it's actually possible that next year, their comp store sales would be down. So, I think we've gotten again, this kind of post, you know, dead cat bounce kind of thing going on, comparing it to some easy numbers last year, stimulus running out pent up demand, you know, being concentrated into a narrow period and I think this generally pretends a pretty significant slowdown for next year, but anyway, we'll have more, more info in, in December. I don't know have you seen any other stats for Canada or any other markets?

Michael LeBlanc  04:53

Well, actually, I had a great conversation for my, The Voice of Retail Podcast with your friend of mine, Rob Garf from Salesforce. 

Steve Dennis  04:59

Yeah, Rob, yeah. 

Michael LeBlanc  04:59

And we were talking about, yeah and he says hi, by the way, 

Steve Dennis  05:03

He's a great guy.

Michael LeBlanc  05:04

And we were talking about, he's got so much data at his disposal, right, like real time data. So, it was a great opportunity and he was sharing basically what you were saying that the customer got the message, they shopped early. So, it was less a reflection on the day in the event, and I was sharing with him how you, you've referred to it as the hype-y holidays. You know, it's a little overblown. So we, we got into a bit of that discussion, but he reflected exactly what you're saying and, and said, the momentum continues, basically, from the, you know, the Salesforce data, which is so robust on both sides of the border and so that's a great interview, we talked about a bunch of the interesting things.

Michael LeBlanc  05:38

And to your point about Lowe's. You know, as I talk to Home Improvement retailers here, the only question is, how long can this go, you know, they've been on a tail, they've been on a growth tailwind, unbelievable, thanks to the COVID era. You can only buy so many refrigerators and so many, so many renovations now. So I think it's inevitable that their comps start to, kind of, slow down, the only thing they could keep their comps going is if housing starts and people start moving again because that drives a big sector of their business, but.

Steve Dennis  06:06

Yeah, I was gonna say I think a lot of the times, at least in the US, the focus in the media, on Lowe's, Home Depot and others is really the consumer side, but they've also got a very good pro-business and so whether it's new home construction, major remodeling, renovation projects, I mean, that's clearly at least in the US, that's clearly been driving a lot of the business, too and there are definitely signs if that's starting to slow down.

Michael LeBlanc  06:30

I would add one more thing, the grocers actually on both sides of the border. I saw this from the CEO of Kroger and Michael Medline, the CEO of Sobeys said the same thing last week, is they are detecting a more permanent shift still with consumers shopping grocery and cooking on their own versus going out, now that may just be a hangover of resistance or reluctance to go out for dinner the way we used to I certainly think it's a reflection of less business happening over dinner, right, there's less trade shows you don't go out as much. All right, well, let's, let's hold a mirror up in front of Lululemon. What, what would we see, mirror, mirror on the wall?

Steve Dennis  07:07

Well, last, I think last quarter, the lack of mention about Mirror, their, their acquisition of the technology, Workout at Home platform was conspicuous in its absence. They did this time around, talk about how they are cutting the sales estimate for the at home gym part of their business in half. So that is obviously a big- 

Michael LeBlanc  07:34


Steve Dennis  07:34

at least conceptual 

Michael LeBlanc  07:35


Steve Dennis  07:36

Write down. So, you know, whether that is a function of, I mean, we can sort of interpret a little bit what's going on here from some peloton numbers as well, where there is a moderation in the purchasing of workout at home, kind of, equipment as we, kind of, get out of the pure depths of the COVID times. So, I suspect it's a mix of not seeing that kind of hyper growth in general, in the workout at home or to your earlier point it's like, how many Peloton is you're going to buy, how many mirror systems can somebody buy, how many sofas can somebody buy, like there's just a limit, but I think they had also suggested that their projections were pretty rosy. So, that's a big, bit of, overall Lululemon is a company's killing it, but I guess 

Michael LeBlanc  08:23

Yeah, yeah.

Steve Dennis  08:24

The hopes for this being a major growth driver are definitely being tempered.

Michael LeBlanc  08:28

Calvin McDonnell runs a great shop, I wonder how many distractions they can handle, I mean, I think it takes everything they've got to just make sure the supply stays, you know, 

Steve Dennis  08:36


Michael LeBlanc  08:37

With the supply chain challenges that they, that they keep the momentum going in the core business, and I've got to think it takes their eye off the ball from an ancillary business like this, maybe they come back to it when things moderate and they go okay, we got this Mirror thing. Let's, you know, we’ve got, we've got a big installed base. Now let's really grow it. So, I, you know, I remain optimistic about the category in general, but I think for Lululemon, they got, they literally have bigger fish to fry than, you know, getting people to use Mirror is, would be my perspective

Steve Dennis  09:02

Yeah, they've also, in addition to store expansion, and a bunch of other things going on, they've been really emphasizing growing their men's business, which is actually doing quite well. So, yeah, they've got a lot, they've got a lot going on and for the most part, everything, despite all the challenges with supply chain and whatnot, things overall very, very good there, so.

Steve Dennis  09:21

And Nike, they bought a bunch of letters of the alphabet. I couldn't make heads or tails of it. What, what was it?

Steve Dennis  09:22

Yes, the companies are, so R, it's R T. Let's see, I have to cheat, RTF KT studios, they bought. I understand that the kids pronounce that brand "artifact". They make major versions, digital versions of sneakers, and other collectibles. I'm not exactly sure. I mean, I, kind of, know what that means. This is part of the Metaverse strategy. 

Michael LeBlanc  09:57


Steve Dennis  09:58

The second life to second life, as I think both of us have joked about, so Nike, I mean, it's interesting, Nike. I'm a huge, huge fan of Nike's strategy. I love the way they experiment with things, and they continue to kind of push the envelope and they've certainly talked quite a lot about participating in a Metaverse strategy and so this is this is another step, not a particularly big company, part of their strategy to really build out NFT's and just other kind of Metaverse-ish technology and products, so one to watch.

Michael LeBlanc  10:32

I was going to say, in addition to acquiring the technology or renting it, I think they're acquiring the talent, the people.

Steve Dennis  10:38


Michael LeBlanc  10:39

Well, all right. Well, that was a very, actually pretty exciting news. Considering that we're just almost at the holidays. It's typically kind of a slower news, news. So, this wraps up the season three part of our news, we'll be back in January to kind of wrap up and take a quick look at whatever happened on, at least for the first episode, we'll see what, what happened over the holidays. Now, reminder to our listeners, check out our YouTube channel and all everyone smash every subscribe button you can find whether it's on your favorite podcast platform or on YouTube and let's now get to our great interview with the one and only, "the Big Dawg", Scott Galloway.

Steve Dennis  11:18

Well, we're very excited to welcome Scott Galloway to the podcast. I think last time, Scott, you and I spoke was on my book launch and I appreciate your support on that. How are you doing today?

Scott Galloway  11:28

I'm good. Good to be with you.

Steve Dennis  11:30

All right. Well, I just got I feel like there's so much we can, we can talk about so it's hard to choose, but I was wondering, I know you've been pretty active. On Twitter and elsewhere, talking about social media. There's so much going on. We've got brands like Lush pulling out. We've finally got I guess, Jack Dorsey moving on from Twitter. I'm just kind of curious where you are on how brands should think about leveraging social media, what your view is, what's going on, on Twitter next, are you short or long, just, just in general, what's your hot take on the exciting world of social media these days?

Scott Galloway  12:03

Well, look, if, if you want sort of outsized returns, typically, from a brand or even an individual standpoint, the people who, and the organization to get outsized returns are typically on their marketing or branding efforts or customer acquisition efforts are usually ones that embrace and are really deft with new mediums. So, whether it was Trump and Twitter, or Elon Musk and Twitter, or you know, Kennedy and television, whatever it might be, Nike and television, William Sonoma catalogs, I would argue that the last, kind of, five or seven years, if you were going to find a retailer or smaller kind of consumer aspirational brand that made tremendous progress. They were usually very good at leveraging emerging mediums or really understanding and making a big investment early. 

Scott Galloway  12:53

And I would argue those mediums, you know, that kind of medium last decade was probably Instagram, whether it's Lululemon or Sephora, you know, when you think of retailers that have sort of punched above their weight class and done really well, there's usually, you know, they usually have, kind of, over score, they punch above their weight class on Instagram and I would argue the next one is, is TikTok. I think TikTok is extraordinary, in terms of its adoption, sort of faster, zero to a billion than I think any social media platform in history, and distinctive, kind of the headline risk coming out of China around bytedance. I still think that's a huge opportunity for retailers. 

Scott Galloway  13:27

And then there's live video selling that is big in China (inaudible) credible conversion rates, you know, in terms of Twitter, which is sort of a, you know, a side hobby for me, I'm kind of semi obsessed with the company, as a user and as I've invested a few times, it's one of the few stocks that kind of trade around I guess, like I've said this for a while, I think Twitter does not command the space it occupies I think a company that this influence and reach should not be trading below its IPO price. It's underperformed every, every social media company much less, you know, probably every SaaS or tech company and I think it's a big opportunity, but I don't, I just don't meet with retailers or brands and say, oh, we need to spend more on Twitter. It just, we talk about it, but so I think Twitter's remarkably under monetized. In terms of how it impacts retailers though, I'm not sure, I just don't think, so I don't even think Twitter's really in a conversation for most brands and retailers. I think it's an afterthought.

Steve Dennis  14:21

I'm curious, just before we move off of social media. Are there, are there any brands or personalities that you think are, kind of, lurking beneath the surface that you're following because they're doing interesting things that haven't quite gotten that, that reach or engagement yet and maybe folks should be looking at for, for some ideas?

Scott Galloway  14:41

That's a really generous question. I wish I had better answers. So, do you know who Jessica, Jessica Yellin: News, Not Noise? She does this, kind of, a rundown of the day's news and she tries to, kind of, call balls and strikes, and she does it on Instagram and I find the format and her voice is so outstanding. I think it's fantastic news and media property. I really, I think they do a great job. I'm biased, I'm an enormous fan of CNN, I get their CNN kind of five things, emails in the morning. I really enjoy CNN. I'm watching less CNBC. 

Scott Galloway  15:16

I don't know and then I don't have what I call people. A lot of times, I kind of come up with a better out, people ask me where I get my ideas or influence and it's kind of, I get a lot of it from Twitter. I think Twitter does a pretty good job of having stuff bubble u and I'm also really fortunate I have a group of kids or I call them kids, young, young men and women who forwarded me notes on almost everything I do with interesting articles and data, but I don't I wouldn't say I have like a secret weapon like go follow this guy or gal there's a bunch of people who are really inspiring, I think Ben Thompson a Stratechery, he does an amazing job, is incredibly prolific around technology. I love Bob Lefsetz, Lefsetz. He's, he's actually a music industry guy, but I just find he's such a clear blue flame thinker. I love the way he talks about stuff, but in terms of retail, you know, Steve, I follow some of your stuff. My, you know, as a professor, I follow out of Carl, McGill, (inaudible) North who I think you know as well, Steven, I, it feels like we're kind of there aren't a ton of thought leaders given what a big industry it is. 

Steve Dennis  16:17

Put that on the New Year's resolutions. Figure those out. 

Scott Galloway  16:19

There you go. Get on it.

Michael LeBlanc  16:21

There you go, there you go. Scott, we may or may not be at the tail end of the COVID era, it feels like the goalposts keep moving a bit, but we're kind of making progress. We're almost exactly if not exactly a year way or a year out from post Corona, From Crisis to Opportunity, your book, as you reflect on the past year, has it changed or modified or what you observed, do you have anything to add to your earlier observations, how do you think customers have changed and how you continue to think about that?

Scott Galloway  16:47

Well, COVIDs, sort of, enduring future will be as an accelerant more than a change engine, if you look at the majority of real changes, it's been it's just taken existing trends and accelerated them a decade or dramatically increase the slope of that trajectory. So, I just got off my podcast, at Pivot, we were interviewing two people about remote work and I think the office industrial complex is just, will never be the same. I don't, I think we've gotten really good at figuring out a way to rent our human capital to organizations remotely and we start at that, this notion that, oh, it must be a reduction in productivity.

Scott Galloway  17:24

I think when you take the 10 hours a week of commuting, that a lot of people endure and the amount of time you spend getting ready and the cost to put you in this amalgam of steel, glass and asbestos known as an office. You just think there's just so much additional resources and productivity that we start from even if you're less productive, not bumping off of people. So, I think this is a permanent destruction, some things are permanently altered. I think this shift to remote work as a structural shift, not a cyclical one. I think malls, movie theaters, were all weakening. 

Scott Galloway  17:58

There is a consolidation in retail and that is it once the, you know, once the rains return, and there's a culling of the herd, there's more foliage for the surviving elephants and you're seeing a dramatic reshaping of the retail landscape where it's very difficult for even smaller franchisees or big brands to survive there's consolidation because you got to be able to make the requisite tech investments. You’ve got to make the requisite changes in format and supply chain. 

Scott Galloway  18:25

I'm on the board of Panera and it just strikes me how much where our focus has been as All right, you think of a traditional cafe, but how do we figure out a way to configure it such that it's easy to pick up and never get out of your car or come into the st-, you know, buy online pick up in store smaller footprint or temporary stores in high density areas. It's just all-around supply chain and reconfiguration of the supply chain and technology over 50% of our orders now are digital and when you think about it, the majority of restaurants just can't make those sorts of investments. They just don't have, they don't have the skills, they don't have the capital. So, I think you're going to see, it's not a, you know, it's not a good thing. I think you're gonna see further consolidation. 

Scott Galloway  19:05

But retail the last 20 years has, generally speaking, been just a really shitty place to work or invest unless you work for Amazon and we have these well publicized examples of the few winners, whether it's Restoration Hardware or Lululemon, but generally speaking, if you took Amazon out of every ETF that tracks retail stocks, it's just been a terrible place to work or invest because we have one retailer that's now worth more than probably all of you know the majority of retail in Europe combined and that's the behemoth out of Seattle. 

Scott Galloway  19:39

So I wonder though if there's an opportunity coming out of this, I'm just trying to relate to retail and that was on the board of Urban Outfitters. Now I'm on the board. So, I mentioned Panera, I think a lot about retail have, kind of, curse to it. I enjoy it. I think it's a tremendous opportunity to open stores because for the first time in probably three decades, power of leverage just swung back from the landlord to the tenant and for the first time I'm seeing, first time in my history, career in retail, I'm seeing percentage of revenue deals from tier A tenants. So, who never would have previously even considered that type of arrangement and the thing about retail, that's so dangerous as it relates to leases is that if you screw up and you pick the wrong location, it's a 10 year weeping sore of cash. 

Scott Galloway  20:29

And, because, because landlords had so much leverage, like now you got to sign up for 10 years, you got to enter into a contract that says you'll pay us this much every month for 10 years and then you find it doesn't work after three months, and like, okay, we've got nine and three quarters years of this liability. So, percentage of revenues is huge, swing back and leverage to the tenant. So, what I see is I see opportunity in bricks, I mean, you have to have, you have to be multi-channel, it's difficult to get above a certain revenue level without offering, you know, access to multiple channels, but in terms of return on investment, return on invested capital, Google and Facebook have such extraordinary control over the digital ecosystem that they've slowly but surely raised rents. I mean, let's talk about Amazon in 2014, the percentage of revenue that they secured from the retailers on their third party platform was 19%.

Scott Galloway  21:24

So, to pay for their fulfillment to pay for the Amazon Media Group, they got about, you had to pay Amazon about 19% of, 19 cents on every dollar you got on their platform. It's now 34%. So, the consolidation across digital marketing, and Amazon, in terms of e-commerce has just met, those three players every year have raised their rents and so I think what you might have is when you have a decline in the rental power, or the rents of bricks and mortar and an increase in the rents on digital, all of a sudden bricks and mortar begin to look economically viable again, or economically attractive. So, I would argue that if you're in a position to play offense, your return on the investment dollar right now is actually, maybe greater in opening bricks. 

Michael LeBlanc  22:10

It's probably one of the ironies of the COVID era is there's a lot of movement and opportunity in physical retail, where your neighborhood Soho, for example, has got lots of space where that used to be such a premium, unattainable, for 

Scott Galloway  22:22

Everything’s empty, everything’s empty.

Michael LeBlanc  22:26

a lot of brands.

Steve Dennis  22:27

One of my dreams, Scott is to have you and Marc Andreessen in, like, a cage match, you know, where you, turns out 

Scott Galloway  22:34

That guy'd win, he's big, and he strikes me as mean, he does do a lot of media though.

Steve Dennis  22:39

I'm like, I'm not going to comment on that. You know, what, so one question, you talked about how poor the returns have been in, in retail in general, maybe this is as good a time as any to talk about some of these digitally, digital native brands and which have, perhaps staying power, obviously, many of them are moving into physical retail very aggressively, which I certainly find pretty, pretty ironic and what's your take on how many of these digital brands really digitally native brands really have staying power, what people should be paying attention to as we get more IPOs more earnings report?

Scott Galloway  23:12

Well, it sort of, I don't know what's, what's old is new again and that is retail, I mean, channel strategy and supply chain are super important and then obviously, merchandising and voice and when I think of some of the most successful retailers over the last decade, they generally have a few things in common. They're vertically integrated, they not only have they've not only forward integrated into stores, whether it's apple, or you know, I look at what Restoration Hardware it's done with, they're kind of their Grand Palazzos or whatever they call their stores, which I think are just incredibly visionary. 

Scott Galloway  23:42

You want to be vertical; you want to control the product, you want to control the distribution to try and maintain margin power and it's very difficult to point to any retailer that's, I mean, kind of what a multi-brand retailer has really killed it. Maybe, Home Depot, you know Walmart's just done okay, I guess but the guys that have outsized returns, you know, you talk about digitally native brands, you know, Warby Parker has done really well but Warby Parker has vertical, proprietary, I think, merchandise value proposition, I mean, they've taken what used to be three and $500 glasses and very fat and happy and come up with Exotica and their stores are wonderful. They started online, but I would argue that the point of differentiation is actually their bricks now, which I think are really inspiring. 

Scott Galloway  24:25

I look at All Birds, I think they're going to be challenged. I don't think that their product because the products differentiated in store experiences. Okay, but I wonder if it's sort of too fashionable, and I look at their customer acquisition costs and the way they, they've had some slights of hand and the way they report their numbers. I think they're gonna fall under pressure, you know, and then there's other I wouldn't call a retailer, but I think about, I'm just saying about recent IPOs, On Running had an enormously successful IPO. I think that brand is highly differentiated. So, it's, but when you talk about, you know, just say that you're kind of digitally native. It's like saying your electricity native and that is okay. It's, it's, it's everybody's digital. William Sonoma does a great job online and they, their background is in database-driven catalogs merchandising, so they're just very good at it. 

Scott Galloway  25:13

It's well, to be successful, are you great at digital, are you great at bricks and the answer's yes. Right, there's just going to be very few retailers that ever get above a certain watermark in terms of revenues and or margins. Unless they do a really good job of all of them. I look at Nike. Nike, you know, I've consulted to Nike and Samsung for the last decade, and I said the same thing to them every year, you got to go vertical, you got to have a great percentage of sales, controlled in a brand aspirational environment. Nike listened, Samsung did not and IKEA thinks about a third of their revenues, maybe more, it'll probably be half and then five or seven years are done through controlled channels, either their own stores or their own website and I think that's a reason why Nike, which should have been ground zero for destruction, when you think about a brand that should be susceptible to the decline in the advertising industrial complex and broadcast media-, media, you would think, well, Nike won't do well, Nikes done really well, they absolutely skated where the puck was headed, and invested more in vertical.

Scott Galloway  26:09

Whereas I would argue Samsung is gonna have a difficult, difficult time supporting its margins when they have a guy named Roy from Verizon, you know, pushing their product, it's just so long-winded way of saying verticalization multi-channel, you know, I don't I don't think I'm saying anything you guys. Don't get or understand. There's been some recent retail IPOs. I think people always try and position retail as tact, so they get a bigger multiple, but it kind of is the same thing, right. It's supply chain. It's great merchandising, embracing new mediums, but like, I think on running, which is the most successful of them, I think in terms of IPO, they've just done a great job with product and merchandising and voice. 

Scott Galloway  26:53

So that's not really changing. I know, one of the most successful retailers the last decade, Restoration Hardware. You know, the CEO, there is not a luddite. You know, he gets you know, he appreciates technology, but he's a merchant and I just walk into those stores, and I look around and I'm just f***in inspired. I want to buy everything, and I want to stay there for lunch and it's just, you just think, wow, this wasn't and it's not, I mean, technology is important. I don't know what's going on behind the scenes in terms of supply chain, but it feels like we're bifurcating into Amazon, and then inspiring, you know, it's like, okay, it's multi brand and if it's getting to me with getting something to me within 48 hours and convenience and selection, Amazon kind of 50 cents on the dollar digitally.

Michael LeBlanc  27:34

Efficiency, your experience, right, I mean, it's a bifurcations and I think we owe Steve now a couple of nickels because that is bifurcation

Steve Dennis  27:42

I get a small fee every time somebody says bifurcation

Scott Galloway  27:44

is that your term 

Steve Dennis  27:46

Or an angel gets its wings, I don't know.

Scott Galloway  27:47

Your experience, yeah, that makes sense.

Michael LeBlanc  27:49

Scott, quick last question. I know we're tight on time, your strategy sprints have been getting rave reviews. I know Carl Boutet, who you mentioned did that, I recommended to one of my clients, is that the future of business education beyond, you know, notwithstanding the fact you're an NYC, Stern Prof. Well, how do you see the future of education, and will employers acknowledge and start to recognize that as, as low, check, a legitimate versus traditional kind of University College choices and creds?

Scott Galloway  28:19

Well, thanks. That's a generous question. So, my online ad startup, section four, we're basically trying to take elite business school classes and make them more accessible, you know, $700, or instead of seven thousand, or three weeks instead of 12 weeks, no admissions process, and we're a mission driven organization, if you can't afford to take the course and you want to, we have this very rigorous scholarship process where you send us an email saying you can't afford it and we let you take it. There's got to be an unbundling of universities, they have created artificial scarcity by creating ridiculously, you know, this rejection is culture where they take pride in turning away 90% of their applicants, we have priced ourselves out of the, not out of the market, but I believe one of the greatest distractions and prosperity across the middle class has been the inflation over the unrelenting inflation over the last 40 years of higher education. 

Scott Galloway  29:10

I think there's just a ton of opportunity, whether it's Google certificates, or what we're doing in section four, or Tedx or To U these companies are doing great work and I think it's going to place a lot of the schools under pressure, the elite schools will be fine because they can sort of arbitrage their degrees. So, they partner with companies, and they say, hey, get a degree to be a Chief Digital Officer, and you can put it on LinkedIn, and we'll charge you $25,000 and there's a large market. It's 90 points of gross margin. They get 40 points to the online company who's better at acquiring people online, but they're basically kind of arbitraging or milking the brand equity of their great brands.

Scott Galloway  29:48

I think there's a ton of opportunity in, we're already seeing it, more money was raised for edtech startups in the last quarter, then in all of 2020 and 2020 was a record year. So, you're gonna see huge pressure not placed on some of the elite schools, but the second-tier schools that were charging an elite price because we're a corrupt cartel. We raised prices in lockstep and you're going to see, you know, the mother of all chins, is waiting for fists of stone as higher ed, where we have raised tuition 1400% in the last 30 year and you know, and higher ed generally speaking as administrators and faculty, we ask ourselves the same question every day. How do we increase our compensation while reducing our accountability and we've managed to do that with this rejection is culture, where we think we're Birkin bags, not, not, not public servants? 

Scott Galloway  30:39

It's very unhealthy for society and cloak ourselves and nobility and self-aggrandizement and arrogance that results in a lack of access to, to education where the elite schools which are still very powerful, are kind of enforcers of the caste system and we, we bring in two cohorts their children of rich kids, you're 77 times more likely to get into an elite university if you're from the top 1% income earning household, 34 of the top 100 schools have more people in the top 1% than the bottom 60 and then the second cohort is what I affectionately referred to as the freakishly remarkable and if by the time you're 17, you're captain, your lacrosse team and have built wells in Africa and have a patent on a vaccine. Congratulations, welcome to Harvard, but I can, I can prove to each of us mathematically that 99% of our children are not in the top 1% and so

Steve Dennis  31:30

Wait, can we go over that again? you had me and then you lost me. 

Scott Galloway  31:33

Well, my point, oh, you're being funny.

Michael LeBlanc  31:39

He's a Harvard educated 

Steve Dennis  31:40

I was trying to communicate as a Harvard educated. 

Scott Galloway  31:42

There you go. Like I think it's a big deal. I, I'm, I, this is a kind of a personal thing for me. When I applied to UCLA, the admissions rate was 74%. Now it's 12%. So, the reason I'm here speaking to you guys is because higher ed used to be seen as a chance to turn unremarkable people and give them remarkable opportunities. Now, it's how do we identify the rich or the freakishly remarkable and turn them into billionaire. So, I hope that, you know, couldn't happen to a nicer group of people. I hope that higher ed, its current institution, is kicked in the nuts over and over for the next 10 years at the hands of startups and also, some universities. I'm being a bit reductive here. Some universities, including the University of California have not lost the script, they've committed to expanding the freshmen seats by 20,000 students over the next decade. So, ASU is doing good work. Purdue refuses to raise their tuition, there are some, there's some real innovation, but I'd like to see what I'd call the gale force winds of disruption, howl like crazy in the world of higher ed,

Steve Dennis  32:47

I couldn't agree more and it's one of the things I really, really appreciate. Not only are all the provocative things you think you talk about in retail and consumerism, but, but I really appreciate the social consciousness that comes through. So, if people are not checking out your podcast and your newsletter and all the things that section four are doing, they'll definitely do that. We'll put links in the show notes, is there anything, Scott, anything new and exciting coming up for 2022 that you want to share that maybe isn't out there quite yet.

Scott Galloway  33:15

I'm writing another book called America and 100 Charts. And I'm trying to find what I think are the 100 most interesting charts that kind of depict where America is and where it's headed. So, I'm excited about that. I got my show on CNN Plus starting in March. 

Michael LeBlanc  33:31


Scott Galloway  33:31

So I got a lot, a lot going on.

Michael LeBlanc  33:33

And a new doggo how's the dog? 

Scott Galloway  33:35

That's right. 

Michael LeBlanc  33:36

Great Dane.

Scott Galloway  33:37

The Dang, she's great. It's a joy. It's, we have the little one, Gangster and we have the big one and I, It sounds obvious, but I didn't realize how big this Great Dane would get it. How fast, how big it would get, yeah, it's a joy. Do you guys have dogs? 

Michael LeBlanc  33:52

Yeah, I got a Rottweiler German Shepherd combo, which is basically smarter than I am. Yeah, with lots with way more energy. So yeah, it's, it's a blast. It's a blast. You're on a similar journey. I got the dog about the same, same time you did.

Steve Dennis  34:06

I think I need to get a dog my, my wife got the dog in the divorce. So, I got a little work to do there.

Scott Galloway  34:11

You know, it really is. I'm fast-, I mean I'm super into dogs, I'm just fascinated about the relationship between humans and beasts and I just, it's one of the most. Maybe this is a negative statement on my life, but it's one of the most rewarding things in my life. I just absolutely love having, having dogs. I think it's hugely rewarding.

Steve Dennis  34:27

We'll wrap it up now, Scott, I know you're obviously a super busy guy doing a lot of interesting things. Thanks, thanks so much for making the time to spend a few minutes with us and hope you have a good holiday season. We'll look forward to everything you're doing next year.

Scott Galloway  34:38

Michael and Steve, thanks so much, and congrats on the pod.

Michael LeBlanc  34:42

If you like what you heard, please follow us on Apple, Spotify, Amazon Music, or your favorite podcast platforms. So, you can catch up with all our great interviews. Subscribe, so that just automatically shows up. Tell your friends and also new insights and new episodes will show up every week. So, tell your friends because that will help us share the word, the good, the good, the good wisdom, now be sure and check out, and be sure to check us out on our new YouTube channel not so new anymore, we've got a couple episodes up there and just look for Remarkable Retail. 

Steve Dennis  35:12

And I'm Steve Dennis. You can check out more of my work at my website, or on Forbes, or on Twitter and please check out my second edition of my book, ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’. Available just about everywhere books are sold. 

Michael LeBlanc  35:33

And I'm Michael LeBlanc producer and host of The Voice of Retail podcast and a bunch of other stuff. You can find me on LinkedIn, learn about me on 

Alright Steve, great episode. Look forward to chatting again next week. Be safe and have a great rest of your day.


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