This week our very special guest is Chris Schultz, a veteran executive with previous stints at Starbucks and MOD Pizza, who now serves as CEO of Voodoo Doughnut, the remarkable Portland, Oregon based company that invented the gourmet donut category and has developed a cult-like following, despite expanding to a dozen locations.
This week our very special guest is Chris Schultz, a veteran executive with previous stints at Starbucks and MOD Pizza, who now serves as CEO of Voodoo Doughnut the remarkable Portland, Oregon based company that invented the gourmet donut category and has developed a cult-like following, despite expanding to a dozen locations.
Chris shares many lessons from his decades of restaurant experience, unpacking what it takes to consistently deliver "crave-able" product, whatever your target audience. Mostly, we delve into the importance of putting brand first, the importance of constant innovation, and how to keep the magic and preserve authenticity while pursuing an expansion strategy.
As is our custom, we wrap up the episode with our fast-paced 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 Gap's sale of Intermix to private equity, Macy's commission kerfuffle, Wayfair and Peloton's earnings and Dick's Sporting Goods new outlet concept.
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 00:04
Welcome, Remarkable Retail podcast Season 2, Episode 15. I'm Michael Leblanc.
Steve Dennis 00:09
And I'm Steve Dennis.
Michael LeBlanc 00:11
Steve, today we're looking at one of the primary food groups for the COVID year and beyond doughnuts, but not just any doughnuts, not from any run of the mill coffee shop. We're talking Voodoo Doughnut from Portland now of locations across the US and, and a couple in Texas as well.
Steve Dennis 00:26
That's true and I am a pretty longtime fan of Voodoo Doughnuts and of course, I always love talking about food, as you know, and, I guess, people might wonder, why are we talking about doughnuts, particularly a brand that perhaps not everybody is aware of, though they have become quite a tourist attraction, I think. It's this idea of being special, not big, not that Voodoo Doughnuts isn't going to become a sizable company but, it's really trying to find that really unique, differentiated business model. That's not for everybody, but for people that really value what you do. So, I think Voodoo Doughnuts is a delicious and great example of that.
Michael LeBlanc 01:08
Well, it feels, and it, to me, it's always felt like there's a lot of tension in the model because on the one hand, you've got something really fantastic and, you're just, you know, your, your instinct is to grow it. You know, how do I take this thing and even if it's altruistic, I want more people to enjoy my doughnuts or, or whatever I have ait seems like that central contradiction, right. If I grow too fast, or if I don't grow in the right way, or maybe if it gets too big, it loses something, something special that made it special to begin with, right. So, this, to me, is, is, is really why I really look forward to speaking with Chris.
Steve Dennis 01:41
Yeah, I think the challenge is, well, first of all, we've got the whole issue of if, depending on what your investors are interested in, right, you know, if you're a public company, there's, there's certain pressures for growth. But I think strategically it's about understanding who it's really for and the very specific story customers get to tell about the brand. So, I think in Voodoo Doughnuts’ case and in others, they can expand to other markets by still going after essentially the same type of customers and offering the same model.
Steve Dennis 02:10
I think the danger is when it starts to get diluted in some way, because now you have to get a slightly different customer or the only way you can grow is by lowering your prices or by expanding into too many product lines, when suddenly you lose that core, that thing that really, really makes you remarkable. So, I don't think it's an easy, easy thing to do, but I really love this idea of special, not big and, and I think that's a strategy that lots of retailers can, can apply and there's some lessons that I think we can definitely learn from Chris.
Steve Dennis 02:46
With that set up, we are going to explore the idea of special, not big with our very special guest Chris Schultz, CEO of Voodoo Doughnut. Chris has over 30 years of restaurant industry experience most recently with MOD Pizza, serving as the company's Senior Vice President of Operations prior to MOD. Chris spent 13 years at a little outfit called Starbucks as the operational adviser to the senior executive team as the company expanded domestically and internationally. So, he knows quite a few things about the tradeoffs between being special and big. So, let's bring Chris on.
Michael LeBlanc 03:19
Chris, Welcome to Remarkable Retail podcast. How are you doing?
Chris Schultz 03:22
Hey, I'm doing great thanks for inviting me.
Michael LeBlanc 03:24
Hey, well thanks for joining us. You and I have had the chance to speak on The Food Professor podcast but during that interview I was thinking and reflecting, what a great person you would be to speak, to speak to Steve and I because there are a lot of the themes around the brand and retail and being remarkable, you know, that's the word that just kept coming up in my mind as we did our interview, so thanks again for joining us and, and as I was saying off, off-mic, you just opened a second location in Houston, so you're kind of, you're in Texas which is great.
Chris Schultz 03:51
We are, yeah, we're growing. We're growing as I think I said off-mic, again, it takes a small village, but we got open and we're selling doughnuts and we employed 70 brand new people in the eastern market, which is the most exciting thing.
Michael LeBlanc 04:03
Oh, fantastic, fantastic. Well, listen, we jumped right in, tell us about yourself, personal, professional journey in your role at Voodoo Doughnuts.
Chris Schultz 04:10
Sure, it'd be my pleasure. So, so, I've only worked in a restaurant buis, I'm going to date myself or age myself. It's been 40 years in the restaurant business and I've just, I didn't go to college. It really wasn't a variable in my life. So, I, I just worked in the restaurant business, was very blessed over the years to learn from some really great individuals and the last 25 years of my life, I spent 12 years at Starbucks. Beginning in early '90s till the early 2000s and I started with them there were 200 plus stores, I think I left with 16,000.
Michael LeBlanc 04:42
Wow, wow, wow.
Chris Schultz 04:44
Yeah, lots of growth and spent time living, living abroad, living in the UK and in other markets internationally. Hoping to grow Starbucks there and I was very fortunate to help start a concept called MOD Pizza, MOD, made-on-demand pizza. Here in the states and for those folks that don't know it because I know there's, there's one in Canada currently, but I know they're growing. It's fast casual pizza, kind of, made on demand, fresh in front of you. One single price is cooked about, in about three minutes. And, we were the founders of that down here in the US and joined them at one story of growth and about 380 or so, I think when I left, including 10 in the UK, and then was, was again very blessed.
Chris Schultz 05:21
Someone asked me if I wanted to become the CEO of Voodoo Doughnuts, and you know, I've been the restaurant biz all my life. So, I knew Voodoo and I said two things. I'm not moving to Portland, I was living in Seattle, and I love Seattle and said, I'm not moving to Portland, I'm not writing a resume. So, now I have a home in Portland. my resume, my resume is on LinkedIn. I took over as CEO of Voodoo about three and a half years ago now and really a cult brand that grew, and I know we'll talk about this, it really grew essentially out of downtown Portland and with a real strong cult following. When I joined it there was five, we had five units at that point in time and with an edge to growing and understanding how you grow big and stay small and that's what we're trying to do.
Michael LeBlanc 06:05
How many, how many do you have now, you have one more as of last week, but what's your, what's your (inaudible),
Chris Schultz 06:09
Yeah, so we're 11 now total across the country, with another one coming here very shortly in the Denver Airport and so
Michael LeBlanc 06:18
Fantastic.
Chris Schultz 06:18
Growing, yeah, we're growing.
Michael LeBlanc 06:20
Well, I mean by percentage and it's funny, right, because you come from a business that grew pretty much, except the Bible for growth, I mean, Starbucks, my goodness. You know, what, you know, goes from a few to literally 1000s, but growth is growth, right, I mean, ultimately, growing is going, is going in the right direction. Give me a bit of a sense of Voodoo Doughnuts, the history, the origin story, the backstory for those who aren't familiar.
Chris Schultz 06:44
Yeah, sure, sure. So, when we started, like I say, about 16 years ago now, by two, and I call them wacky, and I think they're proud to be called wacky, two proud, two wacky gentlemen out of Portland, Tres Shannon and Cat Daddy. That's his partner. And they were a bartender and a bar, in a band promoter believe it or not, and they just had this wacky idea that Voodoo was missing a doughnut shop and so while they were bartending and promoting bands, they open a little doughnut shop in downtown Portland on Third and Burnside. I think it was 800 square feet back then and they just, did, they really, I think they really, kind of, founded gourmet doughnuts, right, kind of the different unique gourmet doughnuts. We're the inventors of the Bacon Maple bar and we know that to be true because they used to bring breakfast with them every morning to work and Cat Daddy brought bacon one morning and put on the maple bar was like damn, that's good, we should sell it.
Michael LeBlanc 07:37
It's like the Reese's Peanut Butter Cup story. I love that story.
Chris Schultz 07:39
It was and as the story goes, Anthony Bourdain was in town doing one of his (inaudible) shows back in the day, hadn't planned on going to Voodoo and someone said you got to go this doughnut shop and try these wacky inventions and he came in and try to Bacon Maple Bar and as the story goes, in the television show, showed him that night dreaming of this Bacon Maple Bar, and he went down to the shop and the shop was closed because we used open from bleeder, not 10pm to 10am. Overnight only. Again, wacky marketing, right, wacky guys, and from then it launched and so, we now do north of 41 different skus that we offer in our shops every day, including a whole vegan array and they grew to six stores or five stores before I joined.
Chris Schultz 08:24
We have a couple here in Portland. We're down in Austin on Sixth Street, if you know Sixth Street in Austin, it's kind of, a bar and nightclub area and a store up in Denver on Colfax. We're, kind of, historically been known to be in the high bars, nightclubs, I think two of our restaurants share a wall with strip, with strip clubs. So, not for the faint of heart, but we continue to serve wacky doughnuts and, you know, our AV is about three and a half million dollars. So, really high-volume doughnut shops and continue to innovate, right. We, we try, we'll try just about anything. We did a Jaeger, Jaeger bomb doughnut. The best was, we did a night called doughnut until the FDA came down and said hey, by the way, that little label on the bottom, you can't sell medicine in food. We're like oh shame on us, these guys are thinking, right, they have a pep-, Pepto Bismol. We've done a pickle doughnut; we've tried just about everything you can imagine.
Michael LeBlanc 09:20
You're going to have a vaccine doughnut soon, I think, by the sounds of it.
Chris Schultz 09:22
Yeah, we have a ramen doughnut coming out. Which is rubbed with just crushed up ramen on top of a maple bar, cream filled with, with sriracha on top. So, we're willing to push the envelope.
Steve Dennis 09:36
I love it. I love it. You know, one of the things I love about Voodoo Doughnuts, aside from the doughnuts is, that to me, you know, when I talk about remarkable retail, I talk about it literally in the context that, I think Seth Godin first really made popular, which is that people will talk about it, you know, in my book, I go through a bunch of different strategies to be memorable, to be remarkable and one of the strategies I talk about is this idea of being special, not big, and not that you guys don't want to grow, it's not so much about the growth story and I think what you guys are doing is, is really interesting in terms of, you know, finding that kind of doughnut aficionado or whatever, you know, that, if that language makes sense to you, but I'm curious, you know, as you think about where you're going next, how much of the strategy is to try to stay hyper focused on that Uber, raving fan kind of customer, and how much of what you do is also really, you know, culturally based and the way you execute the brand?
Chris Schultz 10:33
Yeah, those are great questions and, you know, I was saying this just the other day, we're a brand first and we happen to sell doughnuts and that's how the brand was built. They were marketing folks and they really identified, they wanted to build a really cool brand that was known to do something different. And doughnut was just that vehicle for them to get out there in the public and I think even today we need to say, we need to pay homage to that and be really thoughtful around that. You know, I'm a big believer, when you talk about culture. I'm a big believer in, you know, Peter Drucker's comment, right, culture eats strategy for lunch.
Chris Schultz 11:05
And so, for us, it's really about building a unique brand that has a strong culture that, again, recognizes the value of that with our customers. We talked off-mic, I think a big part of our customer base, I, eventually, I guess, maybe even half come to us and they're not even hungry, right, they're just coming because they want to experience the brand and want to come into it and see the music and see the doughnuts and, you know, if you come into our stores, we put our doughnuts in jewel cases, we don't rack them. And so, when you come in, there's this element of you walk in, you're like, wow, what is this, it's kind of Willy Wonka's Chocolate Factory for doughnuts.
Chris Schultz 11:38
And I think as you grow, and as we've grown, you have to stay really, you have to respect that. I respect those folks that were part of that in the early days, both customers and employees and as it grows, and continue to do just that, don't dumb-ify it down and I know that's, kind of, a rough term to use, oversimplify it. I mean, I think so many brands, sometimes they want to grow because they want more money, or they want a footprint. And you know, I always talk to entrepreneurs, I'm like, if you only have 10, and you do 10 really well, and you have a cult following. Do 10,
Steve Dennis 12:08
Yeah.
Chris Schultz 12:09
20, 20, sometimes. I just don't know why you want to grow big, if there's not a reason behind it.
Steve Dennis 12:13
Well, I suppose some of that is the pressure of investors, right, depending on what their aspirations are. So, it's always good if you can, kind of, line up, line up what you're trying to do from a brand perspective and a strategy perspective with the sort of investors you attract or end up with, I guess, in some cases.
Chris Schultz 12:28
Yeah, I think it's also about being, again, being transparent, honest and authentic with your investors, when you, when you step off the curb with them, right, and understanding what their vision is that doesn't line up with you, right. We're very fortunate here at Voodoo, our investors really recognize the uniqueness of the brand, and we don't want to be on every street corner, that's just not Voodoo. I have no intention to be on every street corner. We want to be exclusive; we want to be you've got to search us out and you want a company experience.
Chris Schultz 12:55
You know, there's, there's, historically, a line of a half an hour to an hour to get into a doughnut shop. Well, if you're going to stay in line for half an hour, it better be damn good when you walk in, there better be stuff in there besides great doughnuts. And, and we respect that, from the music we play, to our teams, to the environment we've built. We want to step in and be like, wow, this is different. This is not a traditional doughnut shop and I think for, for different brands, whether you're in the retail space or restaurant space. That's the goal, right for people to walk in and go. What was that, you know, I, I'm a big fan of, I'll always remember my experience, I'll never remember what I hate. I just know the experience was great. I want to go back there.
Steve Dennis 13:33
Yeah.
Chris Schultz 13:34
And that's what we're trying to build at Voodoo.
Steve Dennis 13:36
Yeah, I don't know who originally said it, but I, but I quoted shamelessly in my book is this idea that people buy the story before they buy the product. And I think that's, kind of, what you're getting at, you know, to create something that people suddenly want to be part of that transcends, I mean, you got to have a good product or people aren't coming back. But, But how do you transcend just, kind of, the features and benefits because there's lots of places people could fill their stomach or get, you know, a roughly comparable product, right?
Chris Schultz 13:59
Right. I mean, Steve, and I read your book, by the way, everyone should get your book read it
Steve Dennis 14:02
Thank you.
Chris Schultz 14:03
Fantastic. But, but I think you're absolutely right, right, good crave-, craveable product is the ticket to the game. You have to have a good craveable product. And once you're in the game now, how are you going to keep people, right, so, that's, for me, that's the important part, you're absolutely right, you have to have craveable, something that someone craves, that they have to come in and get and now that you've got them, wow them.
Michael LeBlanc 14:23
So, when we think about this creative concept, you and I talked about this before, but I really wanted to pull on the thread a little bit. Let's align growth to keeping the concept intact. How, what's the secret sauce to doing that, it's got to be about the people, it's got to be about the people you hire, it's got to be about the perspectives. Like, do you have a model that you lay on top of the growth and say I can only have a few. Is it as simple as, you know, I can't have more than X number in a city of a population of Y, like, how do you even decide which city to go to next, like, how do you how do you conceptualize that from a strategic perspective and then draw that into execution so that, you know, no matter where you are, it's something special to go to Voodoo Doughnuts.
Chris Schultz 15:06
Yeah, and that strategy looks very different from the brand you're in. I'll tell you the Starbucks, you know, Starbucks brand really was built on, well, we want to be on every street corner, where people are traveling through, right. And that was their strategic plan and so, the way they went about it is very different than MOD. MOD wanted to be in every daily need center that are where mom was driving, in the minivan, on the way home and you just stop for a quick meal that was affordable.
Chris Schultz 15:27
And then at Voodoo, it's all uniquely different as well. For me, it's really about being in areas that have high foot traffic, potential tourism, right, for us because, again, it's about the experience of people carrying that pink box. As you start to grow and listen, if I had the magic form on real estate, all due respect, we probably wouldn't be sitting here talking, I'd be on a beach in the Bahamas somewhere, but it all comes out right that first point is real estate and identifying those, those storefronts or those corners, where you think you're gonna get that traffic and then it blends into your people.
Michael LeBlanc 15:58
I had this experience. I was in New Jersey, and I went to Buddy Valastro Cake Boss bakery.
Michael LeBlanc 16:04
And my daughter, you know, she's 13, 14 and she wanted to Cake Boss cake and we were in New York, and I said let's get in the city bus and it was the most interesting phenomena, you just triggered something for me, as I was walking through the airport with his branded box. It was like having a puppy in the car and feels like, what the kind of, buzz you create by all those moving parts of the brand, yeah?
Chris Schultz 16:27
Yeah, I think so. And I love that it's like having a puppy in a park. I'm going to use that again, so I'm going to steal it from you. It’s just people always ask me about that. You know, there's not a day goes by that if you're in Portland airport, or in or the Austin airport, someone doesn't have a pink box taking you back to your friends.
Michael LeBlanc 16:43
Right.
Chris Schultz 16:44
Much like that, I mean, who takes doughnuts home as part of their gifts going home, who does that, right, you can buy all the trinkets, but yet here you are carrying these doughnuts through the, through the airport. And it's funny because we actually worked with TSA here in Portland, originally to allow us to be able to do that and to work with them because they kept asking all these people carrying pink boxes, I'm like, yeah, they're just doughnuts. And, now when I go, travel, the TSA, I travel so much the TSA is always asking me, where's our box, where's our box of doughnuts, bring them to us.
Chris Schultz 16:45
I think once you reach that point where you've got something iconic, that people are willing to travel with, well you've kind of hit it, right, and now you got to be respectful of that and not, again, not to tread too far from it because people will see right through it. I think authentic brands are, I said this now a couple times, but I think authentic brands in today's world. I don't think it's changed that much recently, but you have to be authentic to who you are, we're not, we don't sell. We don't sell espresso beverages in our stores. People always say to me, why can I get a cappuccino, or a latte and I said there's a great coffee shop right there. That's our core competency. We celebrate doughnuts.
Michael LeBlanc 17:49
Last couple of questions. No doubt. You're not the only doughnut shop in Houston. How do you think about the competition in terms of where you align yourself and, and you set up and develop that following and it just, people just go, just drawn to you like a Dark Star, kind of thing, how does that work?
Chris Schultz 18:09
I wish it was that simple, again, if you have that magic, please let me know because I got a new store in Houston. So, I'd love to just go try that out, but you know, I think you have to be respectful of your competitors and recognize what they're doing and keep your eye on them, in every concept I've ever worked in, competitions there and I always say listen, I want my competitors to sell a lot of doughnuts. I just want to sell one more than that because if people aren't buying doughnuts, that means they're out. They'll try me in that, they'll try me in, when they're getting out, now it's up to me to capture them and bring them back.
Steve Dennis 18:39
Sure, right.
Chris Schultz 18:39
But I want to see our competitors busy. I want to see lines out the door of our competitors because I know that people are out and about and buying the product and now I have a chance, I have a chance I'll win them over when they come to see me, so it may be a little different way of looking at it. I look at those competitors. Again, I just want to sell one more than they sell. Okay, then we're good.
Steve Dennis 18:57
Yeah, yeah.
Chris Schultz 18:58
I can't pave every street corner, so, you know, this, this space is, is tight, right, and you have a lot of different areas. Everything from Tim Hortons sells baked doughnuts to Krispy Kreme and Dunkin and they're all different than us, but if people are visiting those shops great, because they'll come to me some time, now it's up to me to keep on bringing, bringing them back to Voodoo for that special occasion.
Steve Dennis 19:18
So, I'm curious, I'm mindful of our time, but I had a couple questions I just wanted to run past you.
Steve Dennis 19:23
One is, and, you know, you, I'd be interested in your perspective, you know, in the context of Voodoo, MOD and or Starbucks, but as you look back on your experience, and you think about, maybe, lessons for listeners that might be in a totally different category or, you know, smaller or bigger operation. Is there one or two, are there one or two mistakes that you've made that you really learned a lot from?
Chris Schultz 19:48
Well, we need a, like, a four-hour podcast of that one, Steve. Yeah, I mean, there's been a lot and through my career, it's when I don't listen. As, as a leader, right, in other words, I'll give you a great example. I thought vegan doughnuts, when I came to Voodoo, I thought, well, we don't need to do vegan, we have a little assortment of vegan, that's good enough and, and come to find out there's a big vegan group out there. And it took me a year to realize, holy, we're missing a whole opportunity here, but I, what I, what I didn't do is ask, ask people, right, I didn't use my resources. I thought I knew everything and I thought boy, I'm the guy, I know everything there is to know, let's just go that direction. And I think many times leaders and entrepreneurs, just don't ask, right, you've got a winner, you know, real estate's a great example. You know, one out of three restaurants survive just because of the location. And I've made a lot of mistakes in choosing, in choosing locations, but again, it's not that, it's just because I didn't ask I didn't do my research, I didn't do homework and I, again, just thought I knew it all and realized very quickly, not so much, Chris, not so much.
Steve Dennis 20:56
Yeah, that's becoming one of my favorite things and sometimes people think I'm like, turning into a self-help guru or something when I make some of these comments, but I'm like, you know, chances are, you're wrong, whatever you think about something, there's a pretty good chance, you're wrong, not necessarily that you're completely wrong. But, you know, a little bit of humility, a little bit of inquiry, I think, in almost anything, probably serves us, serves us pretty well. I think it's very hard for us, and I hope in a few weeks, will not have to resort to this, but given that we're, we're still in this COVID era, hopefully moving to a post COVID era fairly quickly here. I'm curious, is there, or were there things that you learned during the height of the pandemic, particularly being a food service business that you think will, will carry, carry you forward and again, might be some words of wisdom for folks in different parts of retail?
Chris Schultz 21:47
Yeah, there are a couple. One is, is stay true to your core and let me just go a little bit in that, we, we were doing really well pre, pre COVID really well. And we stopped innovation, we stopped doing an innovation, maybe, once a quarter, you get a new doughnut in our shops, but we just stopped because we're doing so well, like, why spend time inventing doughnuts, people are coming in and buying them anyways and then COVID. And then they were like, okay, well, what's gonna bring people either online or third party, or in the store by doughnut, we had to innovative, go back to our core and so now once a month, we roll a new doughnut out, the ramen doughnut we talked about, we had to go back to the core.
Chris Schultz 22:24
And that was an "aha" moment for me and even post COVID, you'll find with us, never get too high on it. Don't, what I just call don't read your own press clippings. Right, stay true to your core, and do what got you there and go back to it, go back to it.
Chris Schultz 22:39
The other part that was an "aha" moment for me, was the strength of my people and my leadership, my store leadership, I mean, our store leaders, so many times, I don't think I gave them the benefit of doubt, of the job they were doing, and how much responsible they can take on and make decisions on their own. You know, today, if you run a doughnut shop for us, you know, you're you're a nurse, you're a nurse practitioner, you're doing COVID checks with every single person, your temperate checking people, people away on, it's unbelievable the amount of work, they're not just writing a schedule now and selling doughnuts. They've become therapists and doctors and all sorts of different things inside their stores. And, you know, taking care of not only the employees, but the customers. And I don't think I respected enough, the value of them and their ability to really troubleshoot and really be thoughtful around that.
Chris Schultz 23:27
And then the final piece for us is a strength in social media. I know that's a "Oh, duh, Chris", of course, social media. But when you eliminate all other means of talking to your customers, in other words, they're not coming in your stores. So, you don't have any way to wow them. Well, how do you wow them now, you have to go talk to them through social media. And I'll tell you, we devoted some resource and time on it, but not nearly enough and so, we've gone back and regauged that and re-thought about it and, and I think post COVID, for us, you know, to really recognize, I was always saying my marketing team is the 50 or 70 employees I have in my store. That's my marketing team, right. I don't even invest in marketing because I have all these people in my stores and now, I'm like, wait a minute, if people aren't coming in, those 50 marketers can't do their job. Now we have to figure out something else.
Steve Dennis 24:13
And do you think that's likely to persist, when we get back to more normal times, whatever normal times look like?
Chris Schultz 24:19
Oh, that's, that's that's the million-dollar question. Again, I'd be on a beach somewhere, but I think the reality of it is.
Steve Dennis 24:25
We'll pay you double if you give us, give us a good answer.
Chris Schultz 24:27
Yeah, I think we're collectively. And I've heard someone say this before. We're collectively in North America. We like people. We like to get out. We like to enjoy companies. We enjoy that. That's part of who we are, it's a human, a human nature. So, I think people are going to come back. I'll tell you my offices, now, have been shut down for a year. We do, we do all the zoom meetings, but just last week, a couple of folks said why don't we get back to the office because they missed that interaction.
Michael LeBlanc 24:52
So, it is that connection to the, to the, to the culture with a capital C right. So, the, it's like an indoctrination of the culture, it's very hard to do that on zoom, zooms very productive but it's, it's difficult to, to have that culture flourish, you can have it, clearly, you can sustain it, but it's hard to make it flourish and, and maybe that's not, you know, five or seven days a week, maybe, that's twice a week maybe one, one week it's in Florida, maybe, one week it's in Toronto, who knows, right, kind of thing, you know.
Michael LeBlanc 25:23
Anyway, listen, this is a great way to wrap up the conversation and fascinating listening to you talk about this and, and it's a great note to end on that the strength of the people is really what reinforces the strength of the brand and the culture and, and it does reinforce very much, Steve's, you know, special, not big philosophy, and, and, and thinking, so, Chris, thanks so much for joining us on Remarkable Retail.
Chris Schultz 25:45
Oh, but I appreciate the time, I really appreciate the opportunity.
Michael LeBlanc 25:53
Time for another episode of Remarkable or Forgettable, let's jump right in with our good friend, Ron Thurston's INTERMIX being sold from the Gap to private equity, what do we, what do we think of that overall movement, I guess, we could say or at least investment in retail by the private equity side?
Steve Dennis 26:11
Well private equity hasn't had the greatest track record, investing in retail, I have to, have to say, but I think this is more on the one hand, Gap needing to focus on its core businesses, INTERMIX is a very different business, for them, like, the average value, average order value is like probably 10x a typical Gap, Old Navy store. So, I think some of that is strategically for them to focus and I think there's just a lot of interest in acquisition, you know, but private equity and buy bigger firms, you know, this, kind of, this consolidation going on. So, a bunch of deals in play and a bunch of interested buyers, I think we're gonna see a lot of these assets shake loose here over the next year or so. So, whether it's remarkable or not, I think it's something to really pay attention to.
Michael LeBlanc 26:53
So, one of the things that I've been looking at and we've been tracking, is when you introduce frictionless payments and innovation into retail stores, there's always a bit of a disruption or a ripple effect on the people who work there. Back to our earlier days, you know, he's selling, selling big ticket appliances online for a commission sales force, you know, that, that you had to take into consideration, that, so, there's, Macy's when was in the news with some, kind of, you know, commission kerfuffle, talk about that for a bit.
Steve Dennis 27:21
Yeah, so, as we've talked about a million times on the podcast now, the blurring of the lines between physical and digital is just continuing to march forward and as you pointed out, sometimes this creates some interesting challenges, whether that's you know, order online, pick up in store, you know, the technology integration, this particular thing is now that customers are able to buy product on their phones while in the store or check out without talking to a sales associate, you've got a sale that is rung up in a physical store, but the sales associates not necessarily directly involved in ringing the customer up, even if they helped them, so the sales associates feel like they're out of commission, the way the system works bypassed it and so they created a bit of an uprising and uproar within Macy's on the part of their commission sales people, so.
Steve Dennis 28:17
You know, this kind of thing is just going to continue to go on I think there's no there's no turning back and the blurring of the lines and so, you need the technology the processes or practices or whatever else to, to make that both a great experience for the customer, as well as a great frictionless experience for your associates.
Michael LeBlanc 28:35
Right on, we got a couple of big names with earnings out that were pretty impressive, Wayfair and Peloton. Peloton was in the news for the not so good reason of having to finally admit that they had a problem with their treadmills, but notwithstanding that both of them posted some pretty good results.
Steve Dennis 28:51
Well, these companies have been on a tear, I think this, they're, they're, kind of, the poster children for how the great acceleration, as our friend Karl talks about, has really helped some of these companies. I talked about Wayfair and Peloton in my book as being these companies that have grown very nicely, but haven't been able to make any money, but during the COVID times was the first time that they had quarterly profits.
Steve Dennis 29:14
What's going to be interesting I think going forward, I mean, Peloton has got the whole issue with the recall that is obviously not a great, great thing for, for the business that they'll have to work through, but the broader point I think is as more people go back to stores, as the reflexive customer behavior is, maybe, not necessarily to go directly to online providers of some of these big ticket items, well, that starts to put some headwinds into, into both of these guys, as well as some other numbers. So, I think, I think with, at least in the US, with the, the stimulus still, a big factor and, and still some hesitancy to go back into stores. I don't think this next quarter will be where we see it so much, but I think when we get to the final quarter early next year, that will be much more front and center. So, remarkable earnings, something definitely keep our eyes on
Michael LeBlanc 30:00
Going, going, gone format, that I have to say that, brand name, I think they came up with that on a zoom meeting, but notwithstand-, notwithstanding that, perhaps, you could speak to the idea.
Steve Dennis 30:13
Well, so, two things I think are remarkable here, one is people are talking about the name, I, kind of, love it. I know some people really hate it.
Michael LeBlanc 30:21
You can guess which side of the camp I'm on.
Steve Dennis 30:23
Yeah, yeah, I don't know, I think it's just funny and I always like a joke-y brand name, I guess. What's interesting to me is, so, they're opening an outlet store. I'm not aware of any significant chain that is really doing, you know, outlets for sporting goods. There's definitely some, you know, resale that's going on, but it's pretty small, so, I don't really understand why that hasn't happened. Maybe, there's some good reasons, maybe we'll get some, some comments from listeners on that, but Dick's Sporting Goods, you know, been on a tear, leading sporting good retailer in, in the US opening a lot of full price stores opening a big experiential full price concept store and now getting into the off-price market. So, even if they could do 1/10 as well as a, as a TJX, or Ross, or Marshalls, I think that could be, could be pretty interesting, so.
Michael LeBlanc 31:17
Well, it is a strong category to be fair and, and in our time left, let's come up with a better name for them, here's, I'm going to throw one out, you throw one out. Endzone.
Steve Dennis 31:27
That sounds, that sounds a little, a little dark, instead of, you know, there's Tuesday morning, maybe, they should be Monday Morning Quarterback.
Michael LeBlanc 31:35
I don't know, I like Endzone, right, you know, it's, anyway, all right.
Steve Dennis 31:41
It's where sporting goods go to die, Endzone by Dick's Sporting Goods.
Michael LeBlanc 31:46
All right, well that was another episode of Remarkable or Forgettable.
Michael LeBlanc 32:00
All right, Steve, take us home.
Steve Dennis 32:02
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 32:36
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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