Not only isn't physical retail dead, but brands big and small are innovating in many ways to improve conversion, drive up average transaction value and create memorable moments that keep customers coming back for more. More and more, it's not about physical or digital, it's how they work together to create a harmonized and memorable experience. In this episode we talk with three industry thought-leaders that are helping their clients create new ways to maximize shopper engagement and deliver wow-worthy moments. Indeed, while the role of the store is changing rapidly, retailers' brick & mortar assets, working in concert with all things digital, may become even more important to brands journey to remarkable.
"Reports of my death have been greatly exaggerated." - Mark Twain
Not only isn't physical retail dead, but brands big and small are innovating in many ways to improve conversion, drive up average transaction value and create memorable moments that keep customers coming back for more. More and more, it's not about physical or digital, it's how they work together to create a harmonized and memorable experience.
In this episode we talk with three industry thought-leaders that are helping their clients create new ways to maximize shopper engagement and deliver wow-worthy moments. Indeed, while the role of the store is changing rapidly, retailers' brick & mortar assets, working in concert with all things digital, may become even more important to brands journey to remarkable.
After our panel we jump into our fun new segment “Remarkable or Forgettable?” where we give our hot takes on a selection of retail headlines, and deem them wow-worthy, best ignored or somewhere in between. This week's we talk about Under Armour's earnings surprise, BooHoo's acquisition spree, Nordstrom's "Closer to the customer" initiative, Target's blockbuster new activewear brand and Amazon's big push into grocery.
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Melissa Gonzalez the award-winning CEO of The Lion’esque Group, an MG2 company, pioneers the boundaries of experiential retail to help brands such as Purple, Nordstrom, and Burrow foster consumer engagement and evolve their offering. An innovator at heart, Melissa is consistently recognized as one of the leading ‘Women In Design’ and ‘Top 10 Retail Design Influencers of the Year’. In her downtime, she can be spotted seeking inspiration in unexpected places (like skydiving 10,000 feet above ground).
Matthew Cyr is a tech entrepreneur and ex-retail ops leader with over 15+ years of experience. After opening over 150+ retail locations in the APAC region, building a multi-national retail training team for Skechers, and operating over a dozen retail stores across North America, Matthew has launched an omnichannel retail platform that empowers retailers to better connect with their customers. Be sure to check out their Connected Fitting Room and Assisted Selling solution now deployed in North America, South Africa, and China. www.craveretail.com
Note: Steve serves on Crave Retail's Advisory Board and has a small passive investment in the company through a seed-capital venture fund where he previously served as an advisor.
Trevor Sumner is a NYC-based entrepreneur, product and marketing executive and recognized startup advisor and angel. Trevor is the CEO of Perch, a recognized leader in in-store Product Engagement Marketing, interactive retail displays and augmented reality. Perch was named a Top Tech Company to Watch by Forbes, a Top 10 Retail Technology company by CIO Review and has won numerous Clio, Fast Company, Edison, Bloomberg and Digi awards.
Trevor was the President, CMO and co-founder of LocalVox, a local social and mobile marketing platform for local businesses that was named one of the top startups in NYC by Business Insider, Forbes and Huffington Post, and was acquired by The Blackstone Group. He has spent ~15 years in startups as a product and marketing executive for cutting edge technologies and services. He serves on the board or as an advisor to several startups.
Forbes Names Perch a Top 15 Technology Company to Watch
Perch Named a Top 40 Transformative Marketing Technology by R3
CIO Review Names Perch a Top 20 Retail Solutions Provider
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption will be released April 13th and is now available for preorder at Amazon , Indigo in Canada 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.
This episode is sponsored by The Poirier Group.
Do you want to move faster, streamline your processes and have larger margins? If you’re a retailer in 2021, chances are you do. The Poirier Group’s award-winning team of industrial engineers and performance improvement experts specialize in driving results for retailers and grocers across North America. From reducing call-center wait times, to improving stocking and replenishment processes in warehouses, to seamlessly integrating IT systems and more-- they are the trusted partner you need.
TPG doesn't just design solutions - they leverage years of actual industry experience to implement them and set you up for long-term sustainable success. Just ask their clients: over 15 years in business, 100% have been a positive reference.
Visit www.thepoiriergroup.com/remarkable to learn more - and tell them you heard all about them on the Remarkable Retail podcast!
Michael LeBlanc
Welcome to the Remarkable Retail podcast season two, episode three. I'm Michael LeBlanc.
Steve Dennis
And I'm Steve Dennis.
Michael LeBlanc
This episode is sponsored by the Poirier Group.
Steve, I don't know about you, but the C level executives I'm speaking to more and more, almost daily, and my advisory clients, they're all asking the same thing. Starting to ask beyond the COVID era, what and how should our stores function and look in the post COVID era?
Steve Dennis
For sure. I think that's a huge, a huge question. And I think it gets down to some of the things we're going to talk about in this episode, which is what technology is going to be most important, but it also gets into how they should be designed and operated and integrated with digital channels. So, we'll touch on that I know today a little bit, but I think we may delve into that a little bit more in future episodes.
Michael LeBlanc
Fantastic. Well, we've got a great panel. We've assembled thought leaders to help us figure out, or at least kind of help take us along the journey. So, why don't you introduce them, and then we'll go right to the right to the live panel.
Steve Dennis
Yeah, well, I'm super excited about the group we put together. There are three folks that I've long, one case, known for quite a while and two folks I've gotten to know in the last couple of years. So, we've got Melissa Gonzales, who's kind of the pop-up Queen from The Lionesque Group. Trevor Sumner, who's the CEO of Perch. And Matthew Cyr, who's the CEO and Co-founder of Crave Retail.
Michael LeBlanc
Well, fantastic and, and they each come at it a different way, which is kind of purposeful, right. We, when we put these panels together, we bring together different perspectives to put together a cohesive whole. So let's have a listen.
Steve Dennis
Well, I'm super excited to welcome three real thought leaders in the retail and retail tech space. And I'll let each of them introduce themselves. So, can we start with Melissa, could you tell us a little bit about yourself, your company and the work you do?
Melissa Gonzalez
Sure, thanks for having me. I'm Melissa Gonzales. I am the Founder and CEO of The Lionesque Group. And I'm also a principal and shareholder of MG2, a global architecture firm that acquired The Lionesque Group in the beginning of 2020. Really sit at the heart of all things possible and physical retail. Everything from short form format, like a pop-up, all the way to large format and rollouts. So, exciting time, challenging but good challenges, and really helping our clients rethink the possibilities of physical retail.
Steve Dennis
So, Matthew, let's, let's hear about you and Crave Retail.
Matthew Cyr
Yeah, my name is Matthew, I'm the Co-founder and CEO at Crave. Really, for the better half of the last two decades, I've been operating in brick-and-mortar stores here in North America. I helped Skechers grow their APAC business, living in Shanghai for three years. Like many, getting into retail wasn't entirely intentional. Except, one day after running an Abercrombie store, I got super addicted. It felt like the startups I started before working at Abercrombie, and I fell in love.
And Crave's purpose was really to help retailers deploy digital engagement solutions, at high converting moments like fitting rooms, like in aisle browsing. We built Crave differently than most tech companies. I built it through the lens of how a retailer buys and adopts technology. So, what that meant was, we wanted to be very fast to deploy. We wanted to be easily scalable. We wanted to make it easy to use, configurable for their needs, and obviously, make it easily to measure. So, despite COVID we actually launched this year, our solution across North America, China and South Africa, which has been really exciting time for us.
Steve Dennis
Trevor let's hear about you and Perch interactive.
Trevor Sumner
I, thanks for having me. My name is Trevor Sumner, I'm the CEO of Perch. And what Perch does is also interactive retail displays. But, what's cool about them is they use computer vision to detect which products you're touching. So, similar to what Matthew was talking about, like, you know, it's amazing how little we actually know about engagement at the shelf and what products people touch. And, you know, what we do is provide the right message about the right time. I think about online, you can click on a product to get more information, you should do that in store. That, that pickup is, that click is when you pick up a product. And so, you know, we've been really kind of focused on product engagement and data analytics in store. And so super excited to be a part of this podcast.
Steve Dennis
Great, well, thanks for joining us. So, Trevor, I'd like to start with you. Lots of people have been saying that physical retail is dead. This seems to fight a little bit against the fact that physical retail sales are actually up last year, despite COVID. That lots of stores opened and lots of big retailers and small retailers announced the opening of quite a lot of stores coming up this year and beyond. I know you've taken on this topic of the retail apocalypse narrative being a false one. Can you tell us a little bit more about your thoughts on that and whether physical retail is dead or not?
Trevor Sumner
Yeah, it just it's hard not to laugh about these things. Right, it's like, you know, it's just a bunch of hooey. And it you know, gets clicks, right. So, like,
Steve Dennis
You can't say hooey on the podcast.
Melissa Gonzalez
Insert laugh track.
Michael LeBlanc
Yeah, exactly. I, you know, like Coresight predicted, I think 25,000 store closures last year. I mean, this is a pandemic. So, that was like, the super test of the retail apocalypse thesis. They were off by 67%. There were like 8000 closures and 4000 openings. You know, and if you look at it, store closures are 70% are department stores and apparel, where there's already too much density.
Trevor Sumner
And so, if you look at the results post pandemic, actually, the opposite is true. You mentioned kind of physical retailers gaining share, Target showing 4% year-over-year increase in physical sales. But it's also like, you know, Target Walmart, Best Buy, they actually took e-commerce share from online peer plays like Amazon. And a record amount of e-commerce is now delivered by local stores. I think the numbers up to 42%, right. So, like, you know, the store is now this actual central fixture for competition whether you know, whether the buying channel is e-commerce or in store, or the fulfillment channel is e-commerce is kind of that delivery or somehow type of local fulfillment. And I know you call this harmonized retail and I love that.
And I think, the last bit is, certain categories blew the doors off. So, certainly apparel was crushed, travel was crushed, those types of things, but groceries had an absolutely record year, pets, home goods, etc. So, yeah, I think the retail apocalypse is just a convenient scare tactic to get clicks just like every snowstorm is a snowpocalypse these days. It's, it's, it's, I'm gonna repeat it, it's just a bunch of hooey.
Steve Dennis
Might even say it's malarkey.
Melissa Gonzalez
Oh, I like malarkey, malarkey's good.
Michael LeBlanc
Hey, now it's coming off the rails. You know, as Melissa as we talked about this, this retail apocalypse narrative, which was mostly a media narrative. There is no question though, that retail is undergoing tremendous trends, you know, transformation over the past number of years, you know, store counts plus minus sideways e-commerce up, the great acceleration. So much is happening. You know, I've looked at your work and, and you're very focused on consumer engagement at the store level, right. So, the stores as this key focal point, I see did some work with Purple. I have had the chance to chat with Joe Megibow before from Purple. And just tell us about your perspective around what are the big trends? And what are you advising your clients and incorporating into your designs?
Melissa Gonzalez
Yeah, I mean, definitely to piggyback on Trevor, it's definitely taking that holistic approach and just understanding that the store environment is going to flex for a lot of different needs, and to think more holistically about it.
So, for those that have a national footprint, it's understanding which market needs a flagship destination, what might need a smaller format, the value of having a point of fulfillment come from store, and that last mile. And so, just thinking as a whole, holistically in each market, I think when we talk about flexible fulfillment, you know, we've been doing a lot of our own research with consumers, asking them, 'Okay, well, we don't, we know that people are going to order ahead and do curbside, and all these things, how do we create an environment where click and collect is a moment to connect with your customer?' right. So, it's, it's not just about being transactional, it's still making it gratifying.
So, we're having those conversations, you know, what does it mean to have both this at your store? You know, for, for men and for women, and might be different answers, you know, do they want to unbox it? Do they want to demo the product? Do they want to be able to discard the cardboard? Do they want to be able to meet with a tailor? Do they like, what makes that now a gratifying moment? Because at the end of the day, it's all it's about being in service of our customers? And that in itself can be experiential, right? I don't think that that has just one answer experience, it doesn't just mean instagrammable moments.
The other thing too, is just understanding how you still utilize these to create that emotional connection. Because what can happen in physical is just different through other channels. So you know, whether it's appointment based shopping, if that makes the most sense, you know. And then, what we are seeing is that engagement during appointments are so much higher. Conversions are so much higher, because people are walking in with such intention. How do we take that to the next level?
You know, we're also like, integrating live stream into stores. You know, how do we use this as your canvas for point of storytelling. You don't have the same capacity that you used to have in the physical store, but it doesn't mean it can't be your canvas. It doesn't mean that, you know, you can't bring that to the, to the larger audiences.
So, for us, we're just really trying to think, take a bespoke approach and that we take every client and the individual but we're trying to have them have a holistic approach of really what are we need to deliver in these touchpoints to enhance the overall relationship that you're having with your customer.
Michael LeBlanc
I want to pull on a couple of threads of things you said, you mentioned the term and, you know, flagship stores, and we've seen over the past 18, 24 months, you know, Bose, Microsoft, the most recently Godiva, just get out of stores, are they making a mistake?
Melissa Gonzalez
I don't have the insights to their exact, you know, challenges. But, what I would say that I think is promising is because of so much technology integration that's happening now in stores, I think it's giving us so many additional insights to track metrics around the value of a physical store. So, a lot of the times, you know, we considered success or failure based on the four-wall profitability. Like when doors are open, these are the sales that are happening.
Michael LeBlanc
Sale per square foot, right.
Melissa Gonzalez
Right. But, if we take a more holistic mindset towards this is a touch point, among many touch points, what is the impact to the overall customer lifetime value? What is this doing to our average order value? What is this doing to move skus we wouldn't have? What is this doing to build brand affinity? What is this doing to take customers to fandom? If we if we take that approach, then it helps reshape the value of physical, and then I think that's when you get to see those opportunities where brands and retailers can lean more into these experiential environments. Whether that means a fit shop, you know, for shoes, or sneakers. Or whether that means capsule collections only. Or whether it means you know, what Nordstrom Local is doing, and it's just around flexible fulfillment, which has totally different metrics and a full line store.
Michael LeBlanc
Or even with Canada, Canada Goose did near me, I'm in Toronto. They have an experience store, or had an experience store, that they don't sell in, you know, you walk in a cold room, and you do all these kind of fun things with their product. And it was meant to just, you know, do really have a very, very different set of metrics, that kind of ROI, ROI of impression, right.
Melissa Gonzalez
Yeah, I went to that, they had one in Montreal too, and I went in the freezer, there was no way I wasn't gonna go in the freezer. That was, you know, and I like there's no other proof point, like, okay, I can wear this at zero degrees in a blizzard, you know. So, yeah, I think it's just giving the freedom actually, to take more of those approaches. I think that, you know, on average, you'll probably see the average store size shrink in square footage. And we were already seeing that, it's just, just being more purposeful with the usage of space.
Steve Dennis
Yeah. And I think the Canada Goose cold room is a great example of something that it's very hard to think about how you come close to replicating that experience, online, right. It's a really unique aspect of physical retail. And I think that's part of what we want to lean into.
Another part of the unique thing that stores can do, at least in a full, robust manner is, the fitting room experience. Let's bring Matthew into the conversation. Now Matthew has heard me say this before, but when I first heard about what Crave was going to do, and their initial focus on the fitting room, I will admit I didn't get it. And Matthew and team have proven how wrong I was about what they're doing. But they're doing more than that. But let', let's first talk, Matthew, if we could about why you started with the fitting room experience, and then how what you're doing has evolved over the last couple of years,
Matthew Cyr
Before I started Crave, I was always comparing the online cart where shoppers have organized a collection of items, they're interested in buying to the fitting room, where shoppers have organized a collection of items they're interested in buying. Yet one of those experiences could tell me everything about the customer, conversion or abandonment. And the other, the store, was a complete blind spot. So, it's easy to understand the customer's path to purchase and how to improve those moments when you can capture all that data. And for that reasons, it's not hard to grasp why eCommerce continues to grow sort of faster than stores.
But I think many people forget, obviously, this crowd doesn't, that still stores account for 80% of retail. And yet, a lot of what's happening in the middle of the stores is going unrecognized. So, for those reasons, you know, it made sense for us to launch Crave, and what we believe one of the most critical parts of the customer journey. When she's left her home, she's got in her car, she's got to the store, she's browse the whole store, she's picked up a collection of goods, she's made her way into a fitting room, she's made an investment to buy something. If that's a blind spot to retailers, and they can't help her get the best experience the right products and prompt service. It's a huge miss. I really want to put store leaders in a position to have the right data to optimize conversion and reduce fitting room abandonment. Just like e-commerce teams have all that data undersigned, the online cart.
So, that's why you know, that's why we started in fitting rooms. You know, COVID has obviously been challenging for stores and not just for the purposes of creating a safe environment for their customers, but also their own employees. The people on the front line are retail heroes in so many ways. And I think you know, Melissa just pointed on this. It's really thinking about everything holistically and what we saw with a lot of previous fitting room technology is they really just focused on just what's happening in the fitting room. But really, we needed to create an experience that was convenient and efficient for the frontline that can serve up great data for the managers that could actually help these shoppers inside that moment, have a really, really awesome fitting room experience.
You know, on one end, we actually developed a really easy way to inform the frontline that hey, a shopper’s left the room, and the room should be clean. So, instead of people going back and forth and wasting time in that capacity when they're trying to do ship from store orders, or curbside pickup, they're getting notified efficiently when a room needs to be cleaned. But we also let the customer know on the outside of the door, hey, this room is actually clean and ready to use. That's just a simple way of creating that trust with the sales associates, who all are ultimately embracing the technology that we want them to use. So, we had to create trust with them. So, that way, they could go ahead and really have these personalized and engaging experiences with the customers through that try on journey.
Really sort of capturing that holistic picture, I think is what's helped Crave sort of accelerate its product into stores, obviously COVID, COVID, has accelerated the development of a lot of technology into stores. You know, we even got to use our (inaudible) recommendation engine and our, our outfit requesting engine online. So, we've actually got a couple of retailers right now who allow their shoppers to reserve items, and they can actually show up to the store where their items are ready to go in a clean and sanitized room. And I think, that's how we're sort of evolving our product at this point to make sure that customer journey from online and into a store is really seamless and convenient across the way.
Michael LeBlanc
Matt, I really love that analogy about online and tracking, you know, in terms of the cart. I think people should be looking at that analogy more. The way I think about it for us is this like, think about all the behaviors at the shelf, you know. There are literally millions of people's right now walking down the aisles looking at products just like they would be looking at ads online but we're not actually instrumenting that, right. Clicking on products, just you know, like picking it up and we're not instrumenting that. And, and so people wonder like, why aren't we spending more in terms of digital marketing in store where 80% of the transactions occur? It's like we don't have any of that instrumented.
Trevor Sumner
There are literally billions of these product interactions. And if I said to you, hey, 'I want to do an online campaign and measure it on a CPM basis', you would laugh at me. But that's what, what digital signage and interactive display is doing now, because we don't instrument the click, we don't instrument the cart, like you mentioned. We don't instrument you know,
Melissa brought this up, about how in store affects online sales. You know that all these studies that show about a 38% sales lift in that local region. But we don't really instrument that either. And so, what's interesting is COVID has kind of caused a little bit more technology acceleration, to actually start looking at data and sharing data between retailers and brands and new ways that this stuff is starting to kind of break through and show the value of what can be done here.
Michael LeBlanc
We'll be right back.
This episode of the Remarkable Retail podcast is sponsored by the Poirier Group. Do you want to move faster, streamline your processes and have larger margins? If you're a retailer in 2021, chances are you do. The Poirier Group's award-winning team of industrial engineers and performance improvement experts, specialize in driving results for retailers and grocers across North America. From reducing call center wait times, to improving stocking and replenishment processes in warehouses, to seamlessly integrating IT systems and more, they are your trusted partner you need. TPG doesn't just design solutions, they leverage years of actual industry experience to implement them and set you up for long term sustainable success. Just as their clients over 15 years of business; 100% positive reviews. Visit the poiriergroup.com/remarkable to learn more today.
Steve Dennis
So, do you think, I just got off a conversation right before this with a senior guy at a big tech firm, and we were talking about why, well, Michael and I have talked about on the podcast several times about why it takes a crisis for retailers to innovate. But in particular, for example, the study you mentioned, Trevor, the so-called halo effect. I mean, that's been out there for a few years, right. And some of the known data attribution issues have been out there. It's not like digitally driven brick and mortar sales aren't a phenomenon that's been well recognized for years. So, I'm wondering did it just take this massive acceleration of, of not only e-commerce, but digitally influenced physical sales to get the retailers to see the light? Or is there something else going on there?
Michael LeBlanc
I'm not sure, I'm not sure they see the light yet. That, we all, like you said, we all know this study, but you know, we go to the same conferences, or we used to in a pre-pandemic world, and if you ask them how they're measuring the lift from online based upon their store investment. Nobody, nobody gives a good answer. I don't know who's doing that well, versus just that kind of broad-based halo effect 38% number. And maybe that's a limitation of my visibility. I'd love to hear, you know, who's doing that.
Melissa, Melissa, what do you think about this? This is really core to what you've been talking about, right, right?
Melissa Gonzalez
Yeah, I mean, I think for sure, a lot of stuff that's happening in retail have been conversations we've had for years. I think, the consumer is what's pushing it forward. Necessity is driving adoption. So, when we think of, you know, not just e-commerce, but the use of mobile devices in a physical environment themselves, right. Your, people didn't even give QR codes the time of day a year ago, and now if you survey people, 80% of people know what a QR code is, right? And they are comfortable purchasing with it. They, they want to use it for gaining additional information. So, think about the opportunity we have in store to, you got somebody in your store, and you're in their device.
Michael LeBlanc
Has this been a slow boil crisis? In other words, you know, we've got the COVID crisis we all know of, but really, when you see pureplay competitors taking share, is this, is this the slow boil crisis that finally is resulted in, 'Hey, we've got a big advantage here. We got physical stores, and that still matters Is that, is that what you're hearing from your clients Melissa?
Melissa Gonzalez
I think the ones that have been savvy about it, for sure. I mean, a lot of them that have moved forward with it have had a lot of these initiatives underway. You know, like Walmart's had an incubator, right? Target's had their initiatives. Like a lot of them, have had them underway. And I think it's, what it's done is it shifted the mindset, a little bit of, you know, what we don't have to have it all perfectly figured out, we can take a more agile approach. We can be a little bit more, we can be a little bit more daring, I guess, is the word on doing a pilot. It doesn't have to permeate our whole entire environment. Maybe we're solving for issue one, let's see the impact of it, and then we can figure out if we could roll out. And I think that open mindedness towards an more agile approach is also helping a lot of these retailers.
Michael LeBlanc
Yeah, I also think it's it that that cultural change, the agile approach is one piece because they've been forced to deliver projects on really tight schedules that are imperfect and finding that there's still ROI. And so, I think that's kind of changed the expectations. But I also, you know, in talking to a couple different retail executives, yeah, one thing that they don't want out there is that COVID was a great cover to make a big move, right? You want to fire 30% of your, you know, your sales associates, blame it on COVID. You want to completely change your strategy around e-commerce, or BOPIS, blame it on COVID. There's a lot of different things, you want to renegotiate with all your supplier contracts, blame it on COVID. And so, it gave them the cover to start taking bolder action, on top of this kind of more agile mindset. Which is fascinating. I hate to blame it on something else. But hopefully this convinces them about the importance of making bolder moves in the future.
Steve Dennis
Well, I think it was that great e-commerce guru, Winston Churchill who said, 'Never let a good crisis go to waste', right. And I think that's, that's part of what we're, we're seeing.
Trevor Sumner
I think he also said, and this actually probably applies too, is like, Americans, you can always count on Americans to do the right thing after they tried everything else. Maybe it's the same with retailers.
Steve Dennis
Well, Michael, and I have enough cross border skirmishes. So, let's, let's not, let's not go too far in that direction. So, maybe we can just do a bit of a quick take here, from each of you. So, a number of things we've, we've been talking about here are particular to COVID has brought about. You know, we've seen an amplification, distortion of a lot of consumer behavior, a lot of retailer behavior, in response. I'm curious what your views are around what changes are really particular to COVID? And which behaviors and focus for retailers needs to be important in a post COVID. world? Melissa, do you want to start on that?
Melissa Gonzalez
Sure. Yeah. I mean, I think the safety measures that have been infused probably will stick around for a while. I think there'll be a curve there and how consumers are, their comfort level comes back. I think that a lot of the trends, and we think of flexible fulfillment, is not going away. So, I still believe that that's, that's a clear opportunity for brands and retailers to think about how they make that a moment that's not just transactional. I think that the, this whole BYOD, Bring Your Own Device world, is going to be a fluidity that we have to plan for. And we need to just think about how do we, how do we use that strategically, because I think there's a lot of opportunities in there. And just, you know, I think also because people are missing physical so much, you know, we don't want to go so far and we make these environments overly tech. But be purposeful around that. And make sure that it's furthering one of the biggest value adds that I think that physical retail has, and that's human connection. So, if it's a clienteling tool, how does it make a salesperson better at what they're delivering a customer? You know, and just really having that mindset towards, towards the approach.
Steve Dennis
Which what's your take, Trevor?
Michael LeBlanc
Well, I would, I would definitely echo those comments. I also think it's really interesting, you know, it's put a huge strain on supply chains, and inventory management, you know, just making sure that there are products on the shelf. And that's forced retailers and brands to collaborate much more on data. Which also has had the, you know, effect of normalizing the data and making it more available across all platforms. And that collaboration, I think, is going to become increasingly important.
Trevor Sumner
I think, you know, on the mobile experience, you know, you've seen almost every major retailer launch updated loyalty programs to kind of capture that first party data, because, you know, all of a sudden, even in grocery, you're having significant e-commerce share. So how do you turn in store shoppers into omni channel customers using digital.
And then the other thing that's connecting all of this, to me is, I'm really excited about 5G coming this year. You've certainly heard that Walgreens is lighting up 9000 stores. You know, according to IDC, there's going to be a 10x increase in IoT in-store. And that's going to help accelerate all this. Whether it's inventory robots, robots, or interactive displays, or BOPIS, you know, tracking. You look at what Walmart Media Network, which has rebranded to Walmart Connect, it's, they're doing that so that they actually can leverage the store as part of that, you know, media touch point and measure that. And, and I think that that's really, really fascinating, because I think that's going to be an underlying conductivity technology that's going to enable a lot of these visions to actually be easily, you know, kind of implemented,
Michael LeBlanc
I did want to talk about things that are structural design elements to store that in, involve technology that are there as a, an adjustment to the COVID era, versus ones that add value and will be part of a structural change to stores. In other words, that you know, what isn't new, about the COVID era, what isn't new about retail is that store traffic is hard to come by, so retailers more and more turning their attention to conversion. So, you know, most, jump in on that, first of all, I mean, you know, as you thought about, and advised and designed pre COVID, what in the past, you know, 10, 12 months and what we anticipate is dramatically changed the way you're gonna lay out a store, post COVID.
Melissa Gonzalez
Sure, I mean, from a design standpoint, one of the things that we are working heavily on is, is just modular design. I mean, we've talked about it before. And a lot of the times the approach was modular fixtures. But what we're talking about is a space that can truly morph front of house to back the house as needed. Because, if we talk about the growth of flexible fulfilment, for example, and that not going away, that's going to have peaks and valleys throughout the year. So, it's having the fluidity within the design framework to say, how do we flex our environment, when it needs to be a point of fulfillment versus a point of engagement, events will have happen again. You know, sometimes it's 80/20, sometimes it's 20/80. And so, you know, it's creating everything about that. The walls, everything to be movable. And I think that that's a newer approach, I think we've done it like in pieces, but really understanding that, and that goes all the way from, from the storefront window. And just understanding what the purpose of that, how that also flexes throughout the year.
Michael LeBlanc
So, a quick follow up question and then I'll go to Trevor. Tip of the spear in terms of in-store technology, what absolutely has to lead now and in the post COVID era, in terms of in store technology to achieve all these objectives? What's the most important part in that store as you walk into that store from behind the scenes and from the customer experience perspective?
Melissa Gonzalez
I mean, I think that the evolution of contactless payments is a big one. And I think that that creates a rethink around the whole cash wrap experience and the fluidity around it. And instead of it being this one clunky experience. And of course that'll vary, right. If we're talking about 1000 square feet versus 30,000 square feet, it's not really apples to apples. But imagine in a larger format store. It's, do we have command stations? Do we have more of the Apple Store approach? How do we create environments where we just meet the customer at the moment that they need to be met, to help that conversion happen as fluidly as a can, knowing that they have now this new adoption of using their own mobile device to convert to a purchase? And I think that that's something that, you know, had very low adoption in our country, pre COVID. And it's still, you know, not a huge percentage, but it's a behavior that I think that we have to lean into as we're thinking through store design.
Michael LeBlanc
Very interesting, Trevor, you've been thinking about this probably for, for longer than anyone what, what are your thoughts post COVID and technology?
Trevor Sumner
Yeah, I don't think, I don't there's an easy answer, because there's, just like the data and the retail apocalypse, you really got to go by category, by store, like, how important is the sales associate in the experience? You know, I think that this is an exciting time for the, you know, enablement of what I call the kind of super sales associate. You know, they have, you know, a mic and an earpiece, and it's voice activated. There's a company called theatrical that does this, so that they have all the information available. Tablets from Salesfloor or Tulip that allow them to, you know, have all the product information at the palm of their hand But even in off time, be able to market to online customers, that's part of it.
I think, you know, one of the things that I'm excited about is, you know, I think traditionally, we've looked a little bit at like, you know, flagship stores or showrooms versus big box, and there seems to be like a more of a democratization of experience that's happening. So, I mean, you're seeing Ulta launch at Target, and Sephora at Kohl's. And so this, you know, the traditional notion that there's like, convenience, value, big box, and then there's kind of showroom experience, and those are separate things. That's kind of blending together. And, I mean, we're seeing that a Perch, where traditionally, this notion of lift and learn kind of like minority report level intelligence type of, you know, technology was seen as a novelty and a luxury experience. But, our fastest growing market segment is CPG, and grocery.
So, we're seeing the democratization of these technologies, and these convenient definitions are starting to blend. And I think, ultimately, the thing that's most important, which we've all hit on, is data. Is being able to actually do tests, run by data, and use that to drive your design. And that data driven design methodology, that's to me, that next, that next frontier, because there is literally so much data, we're not capturing about how people interact with products and sales associates. There's a new startup called Rilla Voice that literally, what they do is they record every conversation between the sales associate and a customer, and do you know word clouds and all the kind of stuff that we used to do for like telesales.
Melissa Gonzalez
Isn't that creepy?
Trevor Sumner
I'm not saying,
Michael LeBlanc
Compelling or creepy? or, yeah you know, just deemed illegal actually, in Canada, so I don't know.
Trevor Sumner
Yeah, yeah it's like, they're going to walk through that.
Steve Dennis
Maybe that will be our new segment Michael, 'Compelling, creepy or illegal?'
Michael LeBlanc
Its the orange jumpsuit crowd that will dictate the future. Matthew jump in here. We've been talking a lot about technology and, you know, the future, and the intersection of stores, and design, and the tip of the spear from a technology, what's the most important technology in stores? Last word goes to you, what are your thoughts on that kind of roundabout question.
Matthew Cyr
So, I want to piggyback off of what Trevor was just saying, regarding data. You got to think about what's, where certain pressures are coming from, you know, you guys just said the words 'creepy'. But, you know, if you think about Gen Z category, or younger millennials, where they're using TikTok today, and Snapchat, and Instagram. They're getting more personalized content than ever before. In some ways, it's so good that these shoppers just expect to open these apps swipe down, and instantly they're seeing the products that they love. When these shoppers go back to stores and Gen Z's love going to stores, they don't want to walk back in time and see nothing personalized to them.
I think structurally, we're going to have to have stores incorporate digital ways to personalize that experience to make sure that as they browse from one aisle to another, or as the smaller store format, sort of open up with less merchandise, you don't want to hide the breadth of your full catalogue, which isn't going to go anywhere. Yet, these stores might be opening up at 40% of their traditional size, but they still have 100% of the merchandise. So, it's going to be really important of how do we connect with that consumer as she walks through the store? How do we personalize it for her? How do we use solutions, you know, little plug for myself and Perch here? You know, how do we how do we implement digital engagement platforms that give the shopper a way to connect in a digital way and still get that touch and feel experience while talking to people at the front line, and just how we harmonize all of those technology experiences is going to be really critical. I think stores will finally embrace their true inner superpower which is being media.
Michael LeBlanc
Well, it's a great way to leave us. Steve, final thoughts as we, as we wrap this great panel. I mean, it's very, lots of insight and we could, we could go on for many iterations, but bring us home. Wrap this up for us from your from your perspective.
Steve Dennis
Well, I feel like there's so many different dimensions we could, we could take this. And, and hope not too many people are going to be disappointed to learn that, that physical retail is still alive and they're going to have to do some work if they're falling behind many of the leaders in this business. So, I thank you guys for coming on and illuminating the conversation. And we look forward to more of your insights. And, we'll put clicks, or excuse me, we'll put links in the show notes for more information on all three of you and your great companies. And I just wanna thank you again for coming on.
Melissa Gonzalez
Thanks so much for having me.
Trevor Sumner
Thanks, Steve.
Michael LeBlanc
All right, well that now familiar sting means it's time for 'Remarkable or Forgettable?', Steve, Under Armour, surprise earning warning, what's going on?
Steve Dennis
I think it's pretty remarkable. Under Armour is one of these companies that as much as they've had the physical side of their business hurt. They've made up for a lot of it online. And I think it speaks to a general trend we've seen with a, with another, a number of companies that have surprised because, number one, they've been able to cut costs quite a bit. In many cases, they've tightened up their inventory. So that's helped their margin, a little bit. So, maybe it's not so surprising anymore, that we're seeing some of these earnings patterns. But yeah, like people were pretty worried about their earnings. And now, their sales are still pretty tough, but the way they've been able to convert it to the bottom line is pretty impressive.
Michael LeBlanc
Alright, next one, Boohoo acquisitions?
Steve Dennis
Well, yeah, I'm not sure how many people know about Boohoo, but they're, they're pretty good sized, UK based, online only brand, or up until this point pretty much online. So, they've been on an acquisition spree. They've bought a bunch of relatively small online brands in the past week. But they've also been buying up companies like Topshop. They bought the brand and website of Debenhams, which a lot of folks in the UK will know as a, well and elsewhere, is a quite sizable 240-year-old British department store chain. So, I think it's, it's pretty interesting. And again, I think this is another trend we're seeing, which is that the stronger getting stronger and the weaker, getting weaker. And there's going to be opportunities to pick up some pretty well-known names at fire sale prices and build out perhaps even stronger position than they already have.
Michael LeBlanc
Well, and it kind of reinforces that store still matters. So, let's talk about speaking of storage, let's talk about Nordstrom, closer to the customer initiative, investor day.
Steve Dennis
Yeah, they just had last this past week, their, their investor day for the year. And they announced a number of new strategies. The main one is this idea of being closer to the customer. And so, part of that is something we've, I know, touched on a few times, which is the rollout of Nordstrom Local stores. But it's more than that. It's really focusing on how to grow share of wallet and market share on a market-by-market basis, regardless of whether that's online or in store. And, regardless of which format it is. So, as I'm sure a lot of folks know, Nordstrom has their full line stores, but they also have Nordstrom Rack. And, you know, some other properties like Trunk Club. So, so I think it's, it's, it's pretty interesting. I guess, you know, when it comes to remarkable, I think it's, it's a pretty remarkable strategy. I think there are a lot of lessons to be learned for quite a few retailers. I think the challenges, two challenges at Nordstrom are, it's a pretty mature brand, they're just not a ton of upside growth. So it's more about optimizing. And also, certainly given the pressures from COVID, they're certainly facing some strong general headwinds in the market for you know, who knows another 6, 12 months?
Michael LeBlanc
All right, for this next one, I'm going to do my best Dr. Evil impersonation. Target hits All in Motion brands, a billion dollars. Wow.
Steve Dennis
Yeah, I mean, I was, well, first of all, I think this, as I'm sure lots of folks know, plenty of retailers have been emphasizing their private brand businesses both to hopefully get the improved margin that's possible, but also to improve their differentiation. So, Target's been making a big push on private brands for, or semi exclusive brands, for a number of years. But this brand is really just like a year old. And to be able to grow a brand from nothing to a billion dollars in a year is pretty remarkable. And, they certainly had the benefit of the shift towards more casual apparel and so forth. So, I don't think they would have necessarily gotten there, I'm sure they wouldn't have gotten there quite so quickly.
Michael LeBlanc
Amazon put out their results. And we talked about that last one, but they've talked about, or some analysts have talked about, almost 2000 grocery stores.
Steve Dennis
Well, I definitely put this on the side of remarkable in that people will be talking about it, not only in the short term, but I think for quite some time. Grocery is really one of the big next frontiers for Amazon. And, even though they've got Whole Foods, Whole Foods is really a pretty small player in the scheme of grocery. The big play is to get more into the mass market grocery and that's what they're doing with Amazon Fresh. So, it's going to be highly disruptive. Definitely going to be good for consumers. Whether what Amazon will do in the marketplace against a lot of very good competitors will end up being remarkable from a business design, I guess is, is TBD. But certainly, they've got a lot to leverage, and they've got the money to invest behind it. So, watch this space. I think it's going to be; grocery wars are going to be a thing I think we'll be we'll be talking about by the end of the year.
Michael LeBlanc
So, I would, I also think is remarkable is that it's a flashback to me when they came out with Amazon Go and, and some analysts, Bloomberg, said, 'Yo, they'll have 1200 stores by 2021. It's 2021, they got less than 30. S, we'll see how it all shakes out. All right, that was our latest episode of 'Remarkable or Forgettable?'
Well, you know, Steve, we're certainly mixing it up in this second season, as the listeners probably are starting to figure out. We've got solo episodes. We've done one-to-one fireside. You did a great chat with, with Ron Thurston. We've got Emily Hayward, author of 'Obsessed' and from Red Antler, coming up and, and we're getting great feedback. So, for the listeners, just keep it coming. And, and really, you know, this, this story is not going to be our last episode talking about stores. And who knew, like we'd be talking a lot about stores at all. But in reality, we knew because we've been talking about it, and stores are back. So, you know, we can expect to be talking more and more about this as our season continues, yeah.
Steve Dennis
Yeah, it's funny a couple years ago, I think, I wrote a piece for Forbes called 'The Stores Strike Back'. And, then I included some of that in my book. And now, I feel like I should be writing 'The Stores Strike Back Again', or 'The Stores Strike Back, Part Deux' or something. It's, it's pretty interesting how it's evolved.
You know, one thing I was thinking about listening back on the episode is, in some ways, the store equation is pretty simple, right. It's about how you create more traffic. It's how you convert that traffic. It's how you maximize that traffic, in terms of cross sell, and upsell. And then how do you make it such a great experience that the customer wants to come back over and over again. But, the remarkable part, of course, is that they're willing to talk about it. And so, I think often find, whether I'm speaking or consulting or whatever, go back to first principles and just think about that retail equation, and where the leverage is either to take out, address a point of friction, or really find something to amplify the 'Wow'. So, I think if maybe we kind of keep coming back to that and how physical intersects with, with the digital and how the world's becoming more hybrid and blended, I think, I think that's pretty interesting. But,
Michael LeBlanc
It's so interesting. I mean, it was great panel and lots, lots more to come on, on this issue, and and many, many more. So, why don't you, well, let's, let's read us out.
Steve Dennis
So, if you liked what you heard, please subscribe on your favorite podcast platform and drop us that elusive five-star rating and tell a friend, I'm Steve Dennis, the expanded and completely revised second edition of my bestselling book, ' Remarkable Retail; How to Win and Keep Customers in the Age of Disruption' is out in April. Preorder your copy right now at Amazon, or at Indigo, or anywhere else, you find great books.
Michael LeBlanc
And I'm Michael LeBlanc, Producer and Host of The Voice of Retail podcast. You can learn more about me on www.meleblanc.co or on LinkedIn. Steve, have a great and safe week.
Steve Dennis
You too.
SUMMARY KEYWORDS
store, retail, retailers, physical, talking, technology, customer, people, remarkable, sales associate, crave, online, commerce, shoppers, nordstrom, big, product, trevor, year, melissa