You might be wondering who was the first person to lead omni-channel efforts at a major retailer. Was it Phil Phygital, Sean Seamless, Ingrid Integrated, or someone else entirely? This week we reveal our answer.
“The success of our brand will increasingly be determined by our ability to meet our customers' needs anytime, anywhere, anyway.”
- Arthur Martinez, Sears CEO, February 1999
You might be wondering who was the first person to lead omni-channel efforts at a major retailer. Was it Phil Phygital, Sean Seamless, Ingrid Integrated, or someone else entirely? This week we reveal our answer.
Then we dive into why it's taken so long for retailers to embrace the blur that is modern retail today and still act as if the idea of "omni-chanel"--or “harmonized retail”--is a new phenomenon. We do a brief tour of the evolution of shopping behavior since e-commerce reared its disruptive head and unpack why some retailers watched the last 20 years happen to them, before diving into the key steps that retail brands need to take to go beyond the platitudes and table stakes to deliver remarkable results in the future. Some of keys: "silo's belong on farms, become channel agnostic, create new customer-centric metrics, and accept that digital drives physical--and vice versa.
But first we open up with the retail news that caught our attention this week, including our take on last week's monthly retail sales data and Amazon's new (and tepid) Early Access Sale. Then it's time to take on the ever lowering valuation of Instacart, the broader troubles in home delivery, and trying to figure out what's going on at Nordstrom We also give our reaction to Shein's new resale program, which seems more about PR, than sustainability and riff more broadly on the general conflict between cheap and purpose-driven.
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About Us
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks , The Food Professor with Dr. Sylvain Charlebois and now in its second season, Conversations with CommerceNext! You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:05
Welcome to Remarkable Retail podcast, Season 5, Episode 16, presented by MarketDial. I'm Michael LeBlanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:14
Well, Steve, we have a solo episode for the people today, the world's first omni-channel executive. And, you know, we had intended actually to do a lot more solo episodes, but we actually have an impac-, or what do they call it, an embarrassment of riches, we've got such and have had such fantastic guests, we got more to come. So, it's really been a pleasure. And we're thinking about more and more solo episodes, but then we get these great guests. So, it's a fun problem to have early.
Steve Dennis 00:41
It is, I'm used to more people saying no to me. And so I didn't, I didn't anticipate that we'd be able to get so many great guests. So yeah, it's been, it's been really encouraging. And I'm, I'm very grateful for it.
Michael LeBlanc 00:55
Yeah, we appreciate everyone who joins us on the podcast. Now a reminder to everyone to mark it in their NRF show guide calendar. Steve and I will be on the stage with The Container Store's, Gretchen Ganc, Monday 12:30pm in New York City and you've been sneak previewing a bit of material, right. I mean, you, you brought that up last time. So, it'll be I'm looking forward to it Steve, it's going to be a pile of fun.
Steve Dennis 01:19
Yes, I'm not I'm not going to say too much about what I'll be previewing, but I will be dropping some hopefully some useful insights,
Michael LeBlanc 01:27
No doubt, no doubt. All right, let's, let's jump right into the news. Now, we've been starting with the economic report, there's some economic news out, let's jump into that for a few minutes. Like we said, we're not really an economics podcast here, but it is highly relevant to us and our audience. So, what makes you have the latest census bureau results and retail sales numbers?
Steve Dennis 01:47
Well, I think, I think, the interesting thing in all these numbers is to try to read the tea leaves a little bit. And so, we get all these little fragments along the way, you know, whether it's employment or inflation, or what have you. So, the monthly sales results came out almost a week ago now. And they showed overall that sales are up 8.2% year-over-year, of course, the press focused on the month-over-month number. So, I just have to do my periodic reminder that that is not a very helpful number. But the interesting things, I think, continue to be where we see the distortion in spending, and how to try to figure out how much of this is inflation. So,
Michael LeBlanc 01:59
Yeah.
Steve Dennis 2:00
As I'm sure people are experiencing their own personal lives, grocery, home, more of like the building materials side of home continued to be up pretty strongly. The more general merchandise department stores, sporting goods, some of those categories that were, you know, kind of distorted positively, during COVID are now, are now slowing down quite a bit. Sales are up, you know, more like the four or 5% range. And then if you look at really big-ticket stuff, like furniture, electronics appliances, those were actually down. And again, it's hard to tell how much of these numbers are affected by rising prices, versus actually unit sales going down. So, that usually is hard to parse out until we see like company earnings reports and some companies will actually detail how much of that is from price, how much is that from new customers, how much of it is from averaging (inaudible) retail, but I think it's an overall picture of inflation, definitely having an effect. excess inventory probably has a lot to do with why the electronics and appliance numbers are down because there's a lot of markdowns there. Same thing in apparel. And, you know, I think other things we can kind of put together this picture of, of deceleration starting to occur in perhaps a little bit faster fashion.
Michael LeBlanc 03:47
Did you buy anything during the Amazon Prime Early Access Sale? I bought a couple of little things. Actually, I bought a four pack of aluminum foil, just quirky stuff that you know, like a little (inaudible) thing like the quirkiest stuff, I don't. But anyway, what, what did you hear about their second Prime Day so to speak?
Steve Dennis 04:07
Well, they keep telling us you know, it's not a Prime Day. It's an Early Access Sale. But it was a bit of an experiment for Amazon to try this a second event, and to do it pretty early. So, it's not really a holiday event. But the general read on it seems to be that it was pretty lackluster, at least if you're trying to compare it to, to typical Prime Day results. And I think that's a little bit unfair, because they certainly did not put as big a marketing effort behind it. I don't think there were nearly the breadth of deals that you would have on Prime Day. And to the extent it was kind of an early jump on the holiday shopping period. It's still really early. You know, a kind of Much Ado About Nothing. Maybe some people are trying to say that maybe this is an indication that the holiday is going to be weak or whatever. I wouldn't go that far.
Michael LeBlanc 04:58
It feels like a stretch To me, I mean, when I look at this event, we've talked about this off mic. I mean, I draw analogies back to (inaudible) Apple used to do their event in their product launches. It was a cultural event, like it was a big deal, like the world stopped and what are they going to be releasing? And over time, you know, it just becomes a company releasing great products. And I think the same about Amazon Prime Day. When it started, it was like a massive, everybody's paying attention. But now it's like, hey, yeah, you know, Hudson's Bay has the Bay Days, and Amazon's got their day and,
Steve Dennis 05:27
Right, (crossover talk) Walmart had had an event, Target had an event. So yeah, I think it's just harder and harder, really, to get as much juice out of some of these things in, in general, for sure.
Michael LeBlanc 05:38
And there's always the discussion. Am I actually getting any juice out of this? Or am I just pulling forward sales? Right, so is this generally,
Steve Dennis 05:44
Right?
Michael LeBlanc 05:45
Incremental, which is, you know, the most interesting question. Let's also talk about Instacart. So, you hear a lot about Instacart. They've lowered their valuation, is this. I'm not sure they're wobbly unicorn territory, but something is going on.
Steve Dennis 06:01
Well, I think we've pretty much seen anybody in the delivery, you know, the home delivery space struggle. I think there's more reality that has come into these valuations over time. Not only is, you know, eCommerce in general kind of slowing down, but more visibility to the underlying economics of doing home delivery. So yeah, this is the third time Instacart has lowered their valuation. Now down to I think, around 13 billion, I think there were as high as 45 or 50, maybe, I might have that wrong. And then actually, when I first suggested that this story be something we cover, it was somewhat in the context that they were still expected to go public, even though they had lowered the valuation Well, in like the last 24 hours, apparently, they're going to delay your IPO indefinitely, I assume that has mostly to do with market conditions, not necessarily anything specific to Instacart. But yeah, maybe a bit longer before we get a real, you know, get to see their s one filing and get a clear sense of, of the underlying economics.
Michael LeBlanc 07:06
Let's talk about Nordstrom. So, a couple things are going on in the world of Nordstrom, and they've got some people changing. And we've talked about this investment that they had before, but maybe you've got some new, new insights to layer on top of the changes that are happening over there.
Steve Dennis 07:20
Well, it's, it's a little bit hard to figure out what's going on. I don't think they've said a ton, but they've had a couple of high-profile departures in the last I guess about 30 days, their CTO recently announced their departure. And then this past week, their CFO is going to be leaving. So, you know, those are two pretty senior positions. And then Liverpool, the big Mexican retailer made a, um, I think we may have talked about this. In the past they made a minority equity investment in Nordstrom. And Nordstrom has, you know, performed fairly well in the last few quarters, but they guided their earnings down, I guess we'll get to see their actual earnings in a month or so. So, it seems like something's going on there. I don't I don't know whether people are leaving because they're concerned about the future, whether the family is making some real, real shakeups or, or what I know that Pete is, Pete Nordstrom is going to be speaking at NRF. So, maybe, maybe we'll learn more then but something something's going on
Michael LeBlanc 08:21
And shout out to all the Nordstrom PR people that are listening to this, we'd love to have the opportunity to talk to Pete live at the show ourselves. Let's go to the other end of the scale from Nordstrom to Shein. There is some news about Shein, and there are a couple of news stories. There was some talk about them launching a resale option and they were profiled in a British documentary, what do you, you and I were talking off mic about this company, I'm very conflicted about them. But let's start with the facts. So, talk about this resale option that they're getting into?
Steve Dennis 08:22
Well, you know, one of the complaints about Shein and other broadly, you know, fast fashion companies is that they make largely disposable fashion. And, you know, that's obviously not great for the environment. So, launching a resale option, I think is a I don't know if it's more a PR move than substantive. But it's certainly got a lot of press. It looks like they have a pretty cool integration via their app so that you can turn around and sell items. One of the things that I can't quite figure out about this is that the Shein product is so cheap to begin with. So, how much money can a consumer recoup by reselling it, particularly when the consumer is responsible for getting it to the new owner? So, that is only economic-, I mean, I see why this is kind of cool to put out there as a PR thing, the actual workings of this as being something that will really make a difference. And then you know, shipping cheap items again doesn't seem like you know, maybe you've avoided something going to the landfill for a little while, but it seems like it's creating. I don't know. I just look at this and say I don't quite get it other than from a PR perspective. And as you were mentioning, they're getting some pretty bad PR, about, you know, their underlying business model and in what the factory conditions are, I guess, if you dug into that more, maybe you've got some, some more facts to share.
Michael LeBlanc 10:20
Yeah, I mean, there's a channel for one of the, in the, in the UK did an exposure on them. And it's not their first time on the wrong side of the news between intellectual property theft and working conditions. I mean, listen, it's always something I pay attention to when, when companies are selling that cheap product. somebody's paying for that in one way, shape or another. But they're on a terror. I mean, they did the fundraising round. What is the value of the firm at 100 billion out of pretty much nowhere? I mean, it's an interesting, it always, to me sets this dichotomy up between, you know, when we hear about youth focused on ethics and values of the people they deal with, and, and they seem to set that aside occasionally pretty quickly and, and buy stuff from retailers like this. So I don't, (crossover talk).
Steve Dennis 11:07
Yeah, yeah, I was having a conversation on not Shein in particular, but this general topic where they were sharing some details about, you know, Gen Z is so purpose driven, and all this kind of stuff. And I'm like, well, I believe that as a general statement, I believe that those are the beliefs. But to me, you've ultimately got to look at the actions and when you see, and I'm not trying to, you know, do a hatchet job on Shein, but I think there's, there's plenty of questionable stuff there. And you see how much they've been able to sell, apparently to consumers who supposedly hold themselves to this purpose driven. it doesn't, doesn't really line up to me.
Michael LeBlanc 11:46
Hey, this is Michael, are you heading to the NRF Big Show in New York in January, Steve and I will be there. In addition to chitin and chatting with our top retail leaders in the industry in the MarketDial booth, podcasting studio, we will be on stage with Gretchen Ganc, SVP of Strategy and Analytics from the remarkable Container Store. See us live in person Monday, January 16 12:30pm. Expo level three Expo stage three for shift happens to choose remarkable or irrelevance brought to you by MarketDial? Well Steve, we've been at a couple of conferences together in the past month, a couple of spins in Vegas and some other places. And one of the things we both commented on or observed or kind of rolled our eyes a little bit is how many speakers and how much content and how many analysts go, wow, you know, they're embracing omni-channel. And this isn't just retail we were at the convenience store conference. And you know, people were saying omni-channel as if it's some kind of new idea. And I love your, your comeback to that, which is something about a press release.
Steve Dennis 12:48
Yeah, I feel like 2010 called and want its press release back. It's kind of like a rant alert here. I feel like this is really going to rile me up.
Michael LeBlanc 12:54
Yeah, yeah.
Steve Dennis 12:56
But I feel like if you're getting on stage, and we may lose like half the listeners here, but if you're getting on stage at a conference, and you feel like the big thing you have to offer to the world, is that you've discovered that consumers like to shop in phys-, physical and digital channels.
Michael LeBlanc 13:07
Yeah
Steve Dennis 13:08
You may have been in a cave for like 15 years.
Michael LeBlanc 13:24
I think you're actually being generous when you say that 2010 called and wants its press release back, I remember writing press releases in the late 90s, early 2000s, about this idea of convergence. And, you know, whatever we were calling it back then, right? I mean, and this is the essence of our talk today.
Steve Dennis 13:41
One of the things I'm going to talk about and do a little bit of a preview here, maybe we'll put a link in the show notes, is I'm going to preview some of the new work I'm doing for a new book at the NRF Show in January. And one of the things and you and I have talked about this a little bit offline. One of the things I'm going to talk about in terms of being able to drive innovation forward is this idea of, of and borrowing this from our, our great guest, Steven Pressfield, of doing the work of really being hyper-aware and digging deep to understand what is going on in and around you in the industry and trying to make sense of that as early as you can, and accepting what is the emerging new reality and taking action. And I think just about anybody in retail that has been doing that, over the last 20 years, would have been much further along in many of their innovation strategies, you know, not just like two or three years ago, but in many cases, if you look back at what many companies were doing to your point 20 years ago, there's a lot of activity. You and I think share sort of the same, same history. I started working back and maybe it's a little bit of a reveal here in terms of this idea of who was the world's first omni-channel executive? Because I joke around in my book, I think,
Michael LeBlanc 14:04
Yeah.
Steve Dennis 14:05
(It might have been me. And it's not so much about my bonafide days or whatever. But in 1999, and I used to actually open some of my keynotes with this, I would put a quotation up without saying who it is attributed to. And the quotation is something like, the future of our brand will be determined by our ability to meet our customers’ needs, anytime, anywhere, anyway. And then, (crossover talk), and then I asked people.
Michael LeBlanc 15:34
Wait a minute, I think I heard that on the stage at the NACS show last week.
Steve Dennis 15:40
Maybe? Well, I asked people, well, who do you think said this? Or, you know, if you don't know the person in particular, what was their job? And when did they say it? Now the most common, sometimes they get like Jeff Bezos, you know, those,
Michael LeBlanc 15:56
Sure, sure.
Steve Dennis 15:58
Sorts of answers. But I would say the most common physical or legacy retailer executive is, is Terry Lundgren, at Macy's, because he was the guy that really started to talk about omni-channel a lot. So, that's the guess. But it's wrong. It was much earlier. It’s, (crossover talk).
Michael LeBlanc 16:06
Yeah.
Steve Dennis 16:07
I was working at Sears at that time. That was something that he said at our annual officers meeting. And there were some people in strategy, not me, that had been looking at the potential impact of eCommerce. We had already launched sears.com, several years earlier, so eCommerce wasn't new. But this idea of the blurring of the lines, the blending of the channels was something that people were looking at. And we came out of that meeting, among other things, deciding that we needed an enterprise-wide initiative to work on this idea of channel integration. We didn't call it omni-channel, but channel integration, and that they should name an executive to lead it and that guy, spoiler alert, was me. So, in 1999, I became March, I think it was in 1999, I became the vice president of multi-channel integration at Sears and, (crossover talk) and in charge.
Michael LeBlanc 17:09
Aka, the world's first omni-channel executive.
Steve Dennis 17:13
Well, perhaps,
Michael LeBlanc 17:15
Perhaps.
Steve Dennis 17:16
Yes. But the point of this story, though, is and you know, it's hard to say this in a, in a nice way, because Sears hasn't exactly lit up the world in the last 25 years, (crossover talk),
Michael LeBlanc 17:25
Hey, now wait a minute.
Steve Dennis 17:27
If you notice they're barely our business anymore. But you know, if Sears could be this forward thinking, and started spending millions of dollars trying to understand how to be one face to the customer, to be a single brand operating in multiple channels. If that was the level of insight that we were developing more than 20 years ago. What have the rest of y'all been doing all this time? That's kind of, (crossover talk).
Michael LeBlanc 17:56
You make a really interesting point that, that sears.com and to be clear to the listener, we're not talking about eCommerce because sears.com, had lan-, launched prior I mean, I (crossover talk).
Steve Dennis 18:02
eCommerce was not new.
Michael LeBlanc 18:05
Right?
Steve Dennis 18:06
In 1998, I was helping Levi sell the first pair of jeans online. I didn't really become what it didn't have the same title. But I launched Hudson's Bay hbc.com eCommerce in 2000. So, we're in the same as you said earlier, we're in the same kind of time zone. But this idea of the omni-channel, because when I launched Hudson's Bay, it was picked up in store, returned to store and, you know, it was blowing everybody's minds about how the two things were coming together. But we're not talking about eCommerce here. We're talking about something more strategic than that.
Steve Dennis 18:38
Absolutely. And the other thing, and I quote, I quote, this guy in my book, there's a VP of Marketing at Sears at the time was a guy named Bob Thacker. And he famously, at least within the halls of Sears very famously said, "that our mantra had to be that silos belong on farms", which I have used at nauseam since then,
Michael LeBlanc 18:50
Right. It's a great line.
Steve Dennis 18:56
But, but what we recognized and this is, again, why it makes me so crazy that we are even talking about this 23 years later, is we recognized that if you're going to be in service to the customer, if you're going to be truly customer centric, the single biggest barrier was all the silos, you know that the data silos, the inventory silos, the metrics, this idea that eCommerce and, and stores were kind of in competition with each other. So that, (crossover talk).
Michael LeBlanc 19:27
That's a great, great chestnut right that cannibalization chestnut which comes up still to this day.
Steve Dennis 19:33
Well, right and also this idea, which you know, I actually learned more about flash forward about five years ago when I was at Neiman Marcus and was running strategy, but also responsible for, for multi-channel. You know, we very much understood so this is 2004 We very much understood that most of our customers were already active in multiple channels, you know, that might be researching online to buy in the store. But it was very clear. And you know, there is this whole issue of, you know, the multi-channel customer is your best customer, I think that actually may be confused as causality. It turns out your high spending customers do more of everything with you. So,
Michael LeBlanc 20:13
Right.
Steve Dennis 20:14
I think unless, and we did actually study that, some more and, and that's probably a topic for a different day. But in any event, it was very clear, even back, you know, more than 15 years ago, that there was this cross-channel behavior that stores were advertising for online, and online was advertising for, for stores. So again, I think this is all well known, I had meetings with BestBuy, William Sonoma, JCPenney, Home Depot, all these companies were pretty aware of this more than 15 years ago. So, the question is, you know, given that this was out there in the ether, and given that there are certainly plenty of white papers and, and conference presentations, you know, going back more than 10 years ago, why weren't more companies deeply aware of this, you know, really accepting that this was the reality that they had to confront, but most importantly, taking the aggressive actions. So, I really think if you were, if you haven't been acting this way, you know, for years, what, what is the issue there? Because of that, that should be addressed. And frankly, I still think that, you know, whiteboards tolerate this, (crossover talk), is beyond me.
Michael LeBlanc 21:29
Well, let's, let's, peel that back. So, you know, as we often say, this, our podcast isn't a history lesson. It's a strategy podcast. So, let's talk about a couple of elements that probably hold people back. But then let's spend most of our time thinking about going forward. So the, the things that hold people back, and you and I've talked about this on the podcast and off mic, it is sometimes it's the nomenclature, its semantics, its, you know, descriptors that don't really help the average retail, think through what omni-channel and phygital and all these ridiculous things actually mean? And actually, take us backwards, not forwards. Do you think that's a contributing factor?
Steve Dennis 22:04
Well, I don't love to get too caught up in this semantics. And I've been accused sometimes of making a big deal about that. Because I think, you know, I hate the term phygital. And, you know, I often say, I said on the stage many times there, I only have two complaints about omni-channel, it's the omni, and it's the channel part. But the substance of that is, it's not about channels, this channel centric thinking, which is so pervasive has been the single biggest barrier to progress, I would say, in retail in at least a decade. And the omni part is also a problem, because it is not about being everywhere, it is about showing up in remarkable ways in context. In context where it matters. So, I think, you know, you could argue, nobody necessarily interprets omni-channel, literally. But I do think it can push us in the wrong direction. Similarly, you know, creating a seamless experience. Customers don't like it when have you ever, ever heard a customer talk about you know, it's a pretty good company, but there's too many seems like, just don't pick language that is not customer friendly, or, or confusing. So, it's not about semantics. I think, you know, ultimately, it's about where, where it takes us. And it's important to take friction out of the customer experience,
Michael LeBlanc 22:36
Sure.
Steve Dennis 22:37
It's important to, you know, get rid of those seams, it's important for things to be more unified. But most of those things are table stakes, you know, what are the things,
Michael LeBlanc 22:42
Right, right.
Steve Dennis 22:44
That is really going to differentiate you? And what is getting in the way of you doing that? If not, you know, we don't have a time machine. You can't, can't go back and do the things you should have done 10 years ago, but what do you need to do today?
Michael LeBlanc 23:45
And I still find that sometimes, and I'm guilty of asking the wrong questions, right? How's your eCommerce sales? How's your store sales been? More and more, as you've often said, it's, it's a distinction without a difference. And that really and I know, I know, when we're talking and doing interviews with folks, it's, that comes up often. In other words, you know, when you, when you talk about measurement, you're not really measuring necessarily, or even asking the right questions, right?
Steve Dennis 24:10
Well, I mean, I wouldn't say that it's totally unimportant to pay attention to eCommerce sales. But when we know that for most companies, most web traffic actually drives behavior in a physical store channel. You can absolutely and I can point to plenty of companies that have chased the growth of eCommerce or trying to make you know, quote, unquote, "eCommerce profitable", that have led themselves to totally the wrong place. You know, if you're trying to make eCommer-, just think I'll give you one, one example, if you're focused on improving eCommerce conversion. But it turns out your eCommerce site is incredibly good at driving people to your store. You will actively change things to improve eCommerce conversion that will cause your physical store performance to be worse. Or if you say, we've got to break even and eCommerce will again, if, if the role of your digital assets, primarily pay off in the store, you will systematically under invest in your digital assets because it doesn't look like they're making money. But it's completely because you're not thinking about the customer. And you're not measuring the right things. So, (crossover talk), that's, again, why this, this channel centric thing is really going to take you to a bad place.
Michael LeBlanc 25:30
Well, let's talk about measurement there. I mean, retailers, I talk to struggle sometimes to measure that kind of direct accountability to their eCommerce site. They know it intuitively. And but there's different places that retailers are along that journey. What's your, what's your best advice for measuring that properly?
Steve Dennis 25:49
Well, first of all, first and foremost, you should have customer centric measure-, measurements, you should have customer segmentation. And you should be paying attention to how you're doing with each of those segments in terms of acquiring customers, growing the activity with those customers. So, average transaction value, frequency, you should have measures of retention. And you should have some sort of measure of remarkability or net promoter score. So, first and foremost, you should have a top-down customer centric measurement. And within that, you will see where the customers are active. And you should do this in a channel agnostic way. So, you don't really care very much where they are, where they spent. So, if you start from that premise top down, you will go a long way. And there are plenty of companies that have started to do this. The second thing is to think about what's really the economic unit of value. And again, too many companies are well, we have the website, that's our store 101 or whatever, you know, they think about it as a thing.
Michael LeBlanc 26:49
It's going to make it the biggest, (crossover talk) store in the chain, right? I mean, that was an,
Steve Dennis 26:51
Yes.
Michael LeBlanc 26:52
An objective. I remember that was (inaudible) 10 years ago for us. Let's make the online store, one of the top, you know, 10 or top one or store and,
Steve Dennis 26:58
Right.
Michael LeBlanc 27:02
And that right there puts you into a framework that may or may not be useful, right?
Steve Dennis 27:07
100%. And just think how much better it would be if you, if you took, say, the City of Toronto, where let's say you had five stores, and you said, our goal is to double our total growth in the store or in the city. Irrespective of what channel you spend it. I have (crossover talk), no question that if you had made that decision, that would be a far better outcome than trying to make your eCommerce site a certain size or, or, or breakeven.
Michael LeBlanc 27:37
And (inaudible) it addresses the cannibalization (inaudible) night that we continue to hear, right, you're just taking sales and moving on to a different place you are not growing the market.
Steve Dennis 27:47
Correct. But you know, unfortunately, the brands you're competing with that are channel agnostic, they don't really care. Now, when I say they don't really care, you should pay some attention to how you're investing your money, and where you see the ROI. But the choice between physical and digital is largely a false choice, you know, that storage drives your online business, it's, that's another thing that's funny to me that. But again, it just sort of proves the lack of awareness on the part of some companies, but you know, some of these digitally native vertical brands that said, oh, you know, when we open stores, our online business goes up. And, you know, my, my polite response is, no shit, Sherlock, you know, all that shows you is you haven't been paying attention to all these other direct-to-consumer brands, like William Sonoma like Sur la Table like REI, like land, you know, it's a huge list that have known that, you know, since the 80s, frankly, but certainly, you know, that is a very known phenomenon, because people understand the interaction between physical and first it was mail order or direct mail, you know, now it's online. So, you know, you got-, you gotta be paying attention to what, what people understand and apply it in the unit-, you know, in the, in this new context. So, really, you know, I think you've got these customer segment metrics that should be one of the driving factors. Secondarily, you should be thinking about your trade area dynamics, you know, irrespective of exactly where the sale happens to be run up, because that's the other thing we've talked about a bunch of times is,
Michael LeBlanc 29:33
Right. right.
Steve Dennis 29:35
You know, a lot of eCommerce is where it's ordered. It's not necessarily where it's fulfilled or how the demand is generated. Now, having said all that, it's still complicated. And your attribution is not terrific. But I can tell you that the channel centric metrics will take you to the wrong place. So, if you can move at all, to more customer segments, trade areas, specific measurements, you will be moving in the direction, the right direction and you'll be making better decisions.
Michael LeBlanc 29:50
Now. Now, one of the dominant narratives a couple of years ago during the COVID era was the acceleration of eCommerce now, we know that by in large was not the case, certainly not by any number of 10 years, it was a little bit more of a case, by the way, in Canada, but still, do you have any perception that the COVID era accelerated or changed perspectives? I mean, I know when I talked to executives, they're now focused on being more agile. Was there an upside so to speak to perceptions or strategy out of the COVID era of retail, those couple of crazy, crazy years that we spent?
Steve Dennis 30:28
Well, I think where we've seen, I mean, you're right, there hasn't been as much acceleration, as is commonly thought, I think where the acceleration has occurred, it's largely in, you know, what we talk about as kind of the buying versus shopping, the errands versus experience. You know, I think people got exposed to how much time they waste, you know, running errands,
Michael LeBlanc 30:40
Right.
Steve Dennis 30:41
Where they can easily get something delivered. Or they just, they've been exposed to some other, other categories. So, I think it's, it's put us on a path we were kind of already on, and in some cases accelerated by six months, in some cases accelerated by maybe 18 months. But a lot of that eCommerce acceleration to the point I was making earlier, actually involves stores. So, you know, a lot more fulfillment from stores, whether that's through the mail or local delivery, and a lot more customers are going to pick it up themselves. And so that's another dynamic of convenience. It's just, you know, I think and it's, again, why I think, thinking of eCommerce as a, as a channel, isn't that helpful? Because it's a means to order or it's a means to gather information. And you know that we've been on that, that path for a long time as well, it just kind of accelerated a little bit. But you know, the question is, okay, so given that that's happened, what's the implication? Well, the implication is even more awareness around the blurring of the lines, that it isn't about two separate channels, it's about the customer being the channel. And they're going to avail themselves of many ways to learn about our product, to order the product, to go get it or have it delivered to them. So, it's really stepping back into saying, you know, we're a brand, operating in many different ways, communi-, communicating with customers in many different ways, including, you know, TikTok, or whatever. And we have to configure our business in such a way to meet those customers' needs in a remarkable way and make money. You know, the other part is,
Michael LeBlanc 32:31
Yeah.
Steve Dennis 32:32
You know, you have to pay attention to the underlying costs of some of this. So, that's where being sort of aware of the fulfillment mechanisms and the marketing costs, you know, that's very important. But you know, again, that's, that's, that's pretty blurred, given that digital advertising is going to pay off sometimes for you in the store and sometimes for you in an eCommerce transaction. And the same customer may operate one or act one way, one day and act a completely different way, (crossover talk), with the same brand.
Michael LeBlanc 33:04
So, let's, let's bring this home, let's tie this together, if you could, with advice to the listeners, and, and I'm going to ask this in a framework, I find it kind of fun, and hopefully, the listeners will find it interesting, two starts and one stop. So, two things the listeners should do today, they may already be doing them. But generally, your advice, two things they should start doing right away. And one thing they should stop doing, that maybe they’re, maybe they've been doing and it doesn't work or just never worked. So, two starts, one stop.
Steve Dennis 33:36
Well, I'll do this stop first, this isn't the most helpful advice, because many of our listeners may not be in charge of this, but the main one is to break down the silos. And unfortunately, that usually has to start at the top of the organization just because we you know, if we work in a more junior way, you know, I had this case in one of the places where I worked where I was very passionate about breaking down the silos, but my boss wasn't so passionate, and he got to decide on how things played out there. But, but getting away from the channel centric siloed thinking, would be, would be the big stop.
Steve Dennis 33:51
The start I would say, one is to do customer journey mapping. The more you map out different customers behaviors or paths to purchase whatever you want to call it, the more you unlock opportunities to provide this more harmonized experience and to see how digital and physical interact, and how you know, frankly, the same customer can, can start in a digital channel and go to a physical channel or starting a physical channel and go to a digital channel and back and forth, you know, particularly on mobile devices. And then the other start I would be what I would say is to really rethink your metrics. You know, what success looks like at the customer level in terms of acquiring, growing, retaining and having the word spread, (inaudible) your brand, as well as at the trade area level where you're really channel agnostic in terms of your overall results.
Michael LeBlanc 34:59
Well, all right. Well, it's a great discussion. I mean, you and I are clearly passionate about this subject. So, you know, again, every time we talk this through, I get a little clearer. So, hopefully that's the case with the listeners, hopefully they take away something from our discussion, a little bit of brief history in time. And your, yeah, maybe give you a trophy or something, the first omni-channel executive.
Steve Dennis 35:21
I get (crossover talk) the participation award, yeah. (Crossover talk), a certificate participation award.
Michael LeBlanc 35:25
If you want, if you want some energy on your LinkedIn profile, you should just add that and see what happens.
Steve Dennis 35:30
I had another suggestion for changes to my LinkedIn profile. So, maybe I'll just start doing some AV testing and see, see what happens.
Michael LeBlanc 35:39
You know, hear from all kinds of folks, no doubt, and listen, thanks, everybody for tuning in. And another great episode. We'll be back next week. And let's, let's leave it there.
Michael LeBlanc 35:44
If you like what you heard, please follow us on Apple, Spotify, or your favorite podcast platform, so you can catch up with all our great interviews, like our discussion with Seth Godin on what retailers can actually do to fight climate change. New episodes of Season 5, presented by MarketDial will show up each and every week. And be sure to tell your friends and colleagues in the retail industry, all about us.
Steve Dennis 36:06
And I'm Steve Dennis, author of the bestselling book, ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’. You can learn more about me, my consulting and keynote speaking at stevenpdennis.com.
Michael LeBlanc 36:21
And I'm Michael LeBlanc, Consumer Retail Growth Consultant, keynote speaker and producer and host of a series of retail trade podcasts including this one, plus the host of the popular YouTube cooking show Last Request Barbecue. You can learn even more about me on LinkedIn, or at meleblanc.co.
Safe travels everyone.
SUMMARY KEYWORDS
customers, people, eCommerce, retail, omni-channel, eCommerce, companies, Sears, channel, store, Nordstrom, physical, podcast, pay, bit, sales, silos, early, talk, hear