Latest episode of The Voice of Retail #podcast is live. In this special edition episode, I join David Poirier, CEO at The Poirier Group, for a live and interactive discussion on the state of retail and the structural implications of the COVID era to the supply chain and beyond. We also talk about corporate culture and how organizations will need to continue adapting to changes in how we work and how consumers shop as we look forward to the future post-vaccine retail world.
Welcome to the The Voice of Retail , I’m your host Michael LeBlanc, and this podcast is brought to you in conjunction with Retail Council of Canada.
Latest episode of The Voice of Retail #podcast is live. In this special edition episode, I join David Poirier, CEO at The Poirier Group, for a live and interactive discussion on the state of retail and the structural implications of the COVID era to the supply chain and beyond. We also talk about corporate culture and how organizations will need to continue adapting to changes in how we work and how consumers shop as we look forward to the future post-vaccine retail world.
David Poirier
As the founder and CEO of TPG, David is a dynamic and visionary leader who brings considerable experience developed from senior executive roles in the retail, general merchandise, food distribution, health and life sciences and manufacturing industry sectors. He is a Senior Executive and Accomplished Leader who creates and executes operational strategies, business transformation and process improvements that positively impact the organization. He brings a unique set of tools, methodologies and techniques aimed at improving operations in US, Canada, and international businesses. He has an ability to create and translate strategic roadmaps into actionable goals that influence organizations. David thrives at running multiple global divisions in complex and ever-changing business environments, and effecting positive cultural shifts that impact bottom line performance.
The Poirier Group was a natural progression for David, who has become adept at understanding complexity in an ever changing landscape. David claims the secret to his success comes from ensuring balance between improving business processes and building human alignment. His talent for managing multiple client engagements, while overseeing significant transformation projects, ensures that every client will receive his personal attention to ensure that The Poirier Group brand and reputation remains exceptional.
Just over 15 years ago David Poirier started The Poirier Group (TPG) after he worked for years in senior executive roles in retail companies, where he gained significant experience and exposure into the business challenges many companies face. He believed he could make a meaningful impact on organizations across many industries by creating value and implementing and integrating sustainable change successfully. Having worked with large business consulting firms in the past who provided cookie-cutter solutions, David believed there could be a better approach to consulting, and thus, The Poirier Group was born. Since then, TPG has grown to become one of the best business management consulting firms in Toronto.
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I’m your host Michael LeBlanc, President of M.E. LeBlanc & Company, and if you’re looking for more content, or want to chat follow me on LinkedIn, or visit my website meleblanc.co!
Until next time, stay safe and have a great week!
Michael LeBlanc
Welcome to The Voice of Retail. I'm your host Michael LeBlanc. This podcast is brought to you in conjunction with Retail Council of Canada. On this special edition episode I join Dave Poirier, CEO with the Poirier Group, for a live and interactive discussion on the state of retail, the structural implications of the COVID era to the supply chain and beyond, and how corporate culture and organizations will need to continue to adapt to changes in how we work, how consumers shop, as we look forward into the future in the post vaccine world.
Dave Poirier
Great point about being careful around drawing too many conclusions. I think that the favorite quote I have that relates to that was from a guy named Warren Bennis, and he said, 'It's difficult to unlearn the things that made you successful in the past'. And, you know, I've always carried that around. I thought of this as very relevant in, in past times, as well as what we're going through here. And speaking of that, you know, we've seen, we've seen some retailers that have done phenomenally well, you know, grocery pet stores, Ren's pets, we were on a panel together. And so they've had a great ride. How do they take it from being a ride to being momentum for the organization and carrying on?
Michael LeBlanc
Let's listen in now.
Maggie
David Poirier is the Founder and CEO of the Poirier Group. He provides leadership and perspective acquired over 25 years of successful C suite experience with major national and international organizations. David works with leaders to create and translate strategic roadmaps into actionable results, helping organizations achieve their full potential. He brings a unique set of tools, methodologies and techniques aimed at improving operations in US, Canada and international businesses. And he thrives at effecting cultural shifts that impact positively on bottom line performance.
Dave Poirier
Great, thank you very much, Maggie, appreciate the introduction. Mike, I'm thrilled to have you on to have this kind of conversation. And it's quite unique to change it around in that I'm going to be doing some of the question and, questioning of view about the industry rather than the other way around. Welcome, Mike.
Michael LeBlanc
Thank you. Thanks for having me.
Dave Poirier
Glad to. So, we're going to tap into your insights and ability to provide some overview of the retail industry. It's certainly been a crazy time. You and I worked together a long time ago at Hudson Bay Company. And, we thought that was crazy time. But certainly, the last year has really reset things for many, many within the industry. And there's been a lot of innovation. As we've chatted about offline. Let's, let's level set. So, what are some of the best and worst innovations that you've seen over the last year, and pivots that you've seen in retail? Whether it be supply chain, or marketing campaigns, or product launches that really comes to mind for you?
Michael LeBlanc
We're in this now what year, just a year anniversary, every single retailer of every single type have had to pivot in ways they never imagined. Whether they were nimble enough to do so, they were forced to do so. I mean, start you think back to a year ago, where do we find Plexiglas? How do we how do we stand up curbside? How do we stand up a website you can shop from? I mean these things, were not, for them all, they were not ready and not set to go.
So, I've seen incredible pivots around standing up curbside. Curbside jumps out to me, particularly because it touches both eCommerce, touches operations, and touches every piece of the puzzle. And, you know, there's retailers who didn't have enough servers to handle the traffic. Like it's, um, you know, I don't want to fatigue the word unprecedented, but it is such an unprecedented time, and they needed to stand this all up. You know, and in some ways it worked, in some ways it doesn't listen, sometimes duct tape allows you to stand it up quick. Other times, it is very difficult to go from 5 curbside orders to 500 within the space of about a month. So, I think you know, it's a testament to the flexibility of the industry.
And let's not forget the, the suppliers, the vendors. This was tremendous pressure in the supply chain. Again, think back to this time last year, where we were starting to see stock outs on the shelves. You had consumers who started to be very, very worried. I mean, you know, consumers who were loading up on toilet paper and, and it really exposed I think, and this is a theme that will run through our conversation, it really exposed some, some both strengths and weaknesses in supply chain and operations, right. Where I spent a lot of time explaining to media and talking about the nature of supply chain and just in time supply chain.
You know the fact that back rooms have disappeared for most retailers that really the reason they didn't have anything on the shelf was because they didn't have anything in stock and that's the way the system was designed. It was designed to be rapid, to be able to respond quickly and be able to bring in goods when and you know, the right goods at the right time. As you said, you and I have a great history, working in stores and mass merchants where you're, you know, you're chronically bringing in the wrong thing at the wrong, the wrong time. Those days are, by and large, you know, muted. But it did mean that the product wasn't where we thought it would be.
And then, you listen at this time, last year, we weren't even sure if the border is going to be open for essential goods to travel back and forth. And the supply chain is so long and so complicated.
So, I think listen, the best, best in class, we saw retailers stand up curbside. We saw retailers adopt safety measures, regardless of the expense. And I heard that a lot from retailers. I found it very impressive. They said, you know, 'Some, somebody put a form down in front of them said, we need to get Plexiglas up on 5,000 cash registers'. And, you know, no doubt it would be good to be a Plexiglas salesperson last year, that was such an incredible 'Yeah, just sign it', we need to take care of our people. We don't know how that's, you know, at this point, we don't even know if that works.
How do we find PPE? Where do we find PPE? Some retailers had the benefit, I guess you could say of, you know, international sourcing, so they had a hint more than others of what was happening. None of us really, you know, in this time, last year, Jan, February, whatever it was, we were thinking this, this, this was a supply chain issue, you know, are we going to be able to get our products from China. And, then it became, you know, the notion, what if this comes here? And then became, well, I guess we're not going to have a great tourist year. And that became, you know, that's going to cast a shadow on the year. Then it's going to become, oh, my goodness, it's here, and we've got liquidity problems. You know, they started canceling POs. That past, I think, in weeks, not months, that it became readily apparent that the world was not going to end but the crisis was, was real.
Dave Poirier
Yeah, so true and, you know, we, we really have seen a lot of innovation within the retail sector and a number of organizations are planning on keeping the pace of innovation going. How, how do you feel that that's going to unfold for the industry? There, there's always been innovative leaders, but the pace and the degree of innovation that we've seen over the last year, has been unprecedented. So, how do retailers keep that momentum going?
Michael LeBlanc
Well, that's a great question. Because, there's two things that I think helped that pace, the momentum really anchor in. First of all, was the mission, right. You know, better than anyone, that aligning people in an organization is not the easiest thing in the world to do, right. So, it's sometimes it's difficult to get everyone aligned, moving in the same direction. And I think, you know, if you step back and understand the COVID crisis, everyone was aligned on the mission. We're going to keep our people safe. We're going to keep the stores open. We're going to understand, you know, how to stand up curbside. It was a galvanizing moment. We're all suddenly working at home, like there was, there's never a time when everyone was so galvanized, maybe never, I mean, you know, in times of war or other crisis, or, you know, retailers deal with crisis all the time, right. You, you get a fire and in Fort McMurray and your stores burning down. The, you know, crisis is are not unheard of, nothing of the scope and scale. So, 'A' you have that.
'B', I think, and this continues, in my mind today that there's a bit of a mulligan from, from consumers. In other words, is forgiveness for a lack of perfection. And in my mind, and I'm answering your question in a bit of a roundabout way, what made it successful? 'A' the total alignment on the mission, and then 'B' the fact that the consumers were ready to give forgiveness and understand it was all very uncertain.
Now, I think what will stand out as we move forward is that mission is starting to fatigue a little bit, right. I mean, it's all still there. But it's been a long time, right. It's, it's hard on the people. Thanks to the miracle, the vaccine, there's an endpoint to this all. The goalposts seem to move almost on a daily basis. Certainly, we're in the middle of it now, and in many provinces, notwithstanding the Atlantic provinces, the goalposts are moving, but at least we could see that there's an end zone, right. Imagine this time if we didn't have the vaccine on the horizon. And then let's, let's just keep that in mind, right. This this is the fastest vaccine development in the history of medicine. The other fastest one was four years.
I think what retailers learned is, you know, the how to overcome the department of 'No'. In other words, good enough, doesn't need to be perfect. Now, will, one of my questions for you is how do organizations avoid that regression to the mean, right. How do we capture that energy? How do we capture that excitement and keep going with it as the mission starts to, thankfully really, go away? Right, as COVID starts to get under control, the mission starts to become, let's get back to business, and let's get back to comps, and let's get back to finding vendors, and let's get back to negotiations and, and what did we learn?
I hope the organizations that we deal with, whether they be retailers or whether they be providers, have learned that they don't have as much time as they think they have to become remarkable. I have a podcast with Steve Dennis, Remarkable Retail. He's got his new book that's just been published. And, and we talk often about why it takes a crisis to make change happen, to create innovation. That is a, like a constant discussion. He comes to organizations like Sears and Neiman Marcus, he knows of what he speaks. And his clients, you do as well, without a crisis, what does it take? And I think retailers will find out, they don't have as long as they think to change. That pace will not slow down.
Dave it's interesting. I don't want, I'd love to what, what you think I. I believe that there's going to be this, this halcyon days as stores open up again, and consumers flood back into stores and it's going to mask weaknesses. It's going to, everyone, there's, I think everyone wants to get back to a normal life, right. So, I think there's, I mean, you saw it last week, week and a half ago in Ontario, the day, or the day or two before, you know, we kind of went into grey zone, semi-lockdown, we were hitting the emergency brake, I've lost track of all those phrases. Whatever we were doing, you know, the malls had to shut down at two o'clock in the afternoon Square One, Yorkdale, they were packed. And it I think you're gonna see this rush back to normality. You certainly saw a glimpse of it last year when things simmer down, eCommerce reduced, store traffic increased. And then so it's gonna mask some, probably some weaknesses, right.
You know, advice to retailers is consider this next seven, eight months like a mulligan, you still I believe, have some permission to try things. This is a great time to do that. A year from today will not. A year from today, we will see a second tranche of, you know, back to reality back to comps. And for some retailers, those comps are going to be pretty ugly. Like, you know, on the other side, you know, how do you get a great comp you have a terrible year. So, I guess our friends and apparel for some of them are going to have you know, fantastic comps. But other retailers, it's not going to be they're going to have to adjust to whatever the new abnormal the new normal looks like. So, it's going to be a fascinating time as all these adjustments need to happen and, and will happen.
Dave Poirier
I agree with you, Mike, I think we're going to see some significant boost in consumer demand. You know, there's talk of $200 billion that's been saved up during the pandemic. And I think we are going to see people wanting to celebrate their freedom, whether that be through Travel and Leisure, or through acquiring things that they haven't been able to, or have needed over the last little while, but just going over and having some fun and enjoying what they used to enjoy. It doesn't take long for Canada to blow through $200 billion in savings, though. And, I think
Michael LeBlanc
Yeah,
Dave Poirier
You know, the underlying economy likely isn't going to be as healthy as what everybody is hoping it's going to be. And, the end result, still with, with unemployment higher than what it was previous to the pandemic is going to carry forward. Indeed, there's more diversity of wealth within Canada as well. So, that's going to be more challenging with wealthier people having more money. And, you know, as somebody was saying to me yesterday, you know, are people with that extra money really going to go buy a third car or a fourth car? Or they're going to buy a second or third house? Likely not.
And, so I think we may, we may see that being diverted to investments and to paying down debt as well. So, I think there are some rough roads ahead a year from now as well. I agree with you. And the real challenge, right for the, for the retailer to be able to predict this. I mean, being, you know, a fashion buyer, category manager now is a pretty tough, tough thing, you know figuring out next spring at this point.
Michael LeBlanc
Well, I just wanted to talk a little bit more about the economic conditions because you're right, I call it the stockpile, right. This massive amount of money, the savings rates off the charts. I think the savings rate in Canada has gone from 1% in Q1 2019 to like 14%. Like numbers we've never seen before. But it's in forced savings, right. I can't spend it. You know, I can't travel, I can't do all the things I want. I can't go to restaurants that will be unleashed. Some of it will write down household debt that's good for retailers because it creates more open to buy in the long run. So, I think we should be optimistic about that.
To you know, the IMF is calling GDP growth in Canada 5% this year, that's fantastic. I think next year could be strong as, as well because you know, this isn't going to be a flick of a switch, right. It isn't going to be a 'Hey, the pandemic's over, everybody lets party', right. I think it's going to be, you know, we're still in for a long run. And I think they'll, that'll be a governor on the growth.
I think there'll be inflation that will come and, and take place. I mean, we see it in the supply chain. You know that, there's got to be some inflation that's going to be creeping in somewhere, somehow. We know it's going to happen in food. Sylvain Charlebois, my partner on The Food Professor podcast, does great work each and every year, with these economic models and AI, and he's actually stunningly correct and how much households will spend on food. He says, he says, that's going to go up 4 to 6% alone. And that makes up, you know, a large part of people's, people's spending and disposable income, certainly at the value level.
I think you're going to see all this release some of it, a lot of it's going to go into services, some retailers will be able to take advantage of that, some will not. Listen, how many of us want to go travel. Get in an airplane and go sit on a beach or go somewhere. I mean, that those things will start back up again. Good if you sell luggage and fitness ware and all those great things. And, I think, I think there's, there's it's an interesting idea, but what and how people will spend their money.
And, I think the economy is going to be further, and you touched on it, further bifurcated, right. So, you've got, you know, I think those, those, you know, both societal and economic bifurcation, are been, and have become very pronounced. Now, you know, if you look at the unemployment rate in Canada, it's actually pretty good. But, if you, if you parse it out and look at the unemployment rate at household 70 and above, it's very, it's very low, it's record low,. But if you look at it, you know, 30, 50 you're in the 20%, 25% right now, and now a lot of that is services, right. So, services need to come back.
When, when I talk to my colleagues in the restaurant business, they're like, listen, your economy's not gonna get going until you get us open again. And, by the way, you're gonna have to, you're gonna have to keep those wage subsidies going. The restaurant industry, unlike, you know, the good news, I guess, about retail is there's been, its not good news, but you know, there's been, there's been record good and record bad. But in restaurants, it's been just pretty much record bad, right. It's, you know, other than QSR, it's been very difficult. It's been a struggle. They need help, that needs to come up, that needs to happen, to get the economy going. That's a huge, huge part of the economy.
Now, one thing I wanted to add, and this is, you know, when I wanted to ask you, if you thought and this is kind of a threaded conversation, you know, we talk a lot about what has happened, what is going to be new? Because we know things have been accelerated and changed. You know, the pace of change, eCommerce, the poster child for acceleration, right. 70% growth in eCommerce in Canada, give or take, if not more.
Work from home, and I continue to think the work from home movement will be one of the most, biggest, long lasting changes. And, and you know, it's funny, David, it's not like you couldn't send all your people who work in your company, in home, pre, in the before time. You could do that. But culturally, it's different, right. It's very culturally different. And I talked to a couple of retailers, and they've recently hired very senior roles outside of where they physically are. And, and before, it's not like you couldn't do that before. You can hire from anywhere. You could, you can hire from Tibet if you wanted, pre COVID. That's not new. But what is new is the culture. Yes, I can have my Vice President of Marketing in Toronto, and I'm, and I'm in Windsor, I can do that now, culturally, I don't, I don't know if that's going to last. I'd love to get your opinion on that. You're, you know, you've forgotten more about company's culture than I even know not even that I have, then I even know. But, if you think about the culture, now that opens up tremendous opportunities for small regional retailers, who then have a pool of labor that's Canada wide, worldwide. But, let's just say it's Canada wide. And, that's phenomenal.
But now, let's think about the rewiring of commerce. Let's just look at Toronto. The numbers are something like 475,000 people come and go on a day-to-day basis to downtown Toronto, of course, that's pre COVID, right. 475,000 people come and go, each and every workday in the downtown core. That's everything from service to workers to whatever that's you know, right now, you know, that's, that's next to nothing, we're stay at home. What's that going to look like post COVID, right? Is that going to look like two thirds? Okay, let's say it's two thirds. Because, I think if I told you, or if you told me that no one's going back to the office. And if someone else said, everybody's going back the office, we're both wrong. I think both of us are wrong. I think the answer is somewhere in the middle. Maybe it's two thirds. You know, whatever that number is, we've talked about the hybrid approach all that stuff.
Dave Poirier
Right,
Michael LeBlanc
That, but, but let's do you know, you're again, you're way better at math than I am. But let's do two thirds number on that. 475,000 people. Boy, that's a lot of people that are not showing up in the downtown.
Again, the upside is follow the customers, follow the money. That means they're working from their home office. What does that mean? 'A' more eCommerce. That is one plus one. When people are at home, and we've seen it, I've seen some numbers out of, out of Amazon Prime numbers some research from, I think it was E&Y They said, listen, you know, it's a factor of 'x' increase of eCommerce shopping when you work from home. And the second part is maybe they're going to shop locally, right.
Like I haven't been, I live in the western part of the city, in the GTA, I can't count the number of times I've been in the downtown Toronto. I can find everything here. And, I think retailers will need to react to that. And, and the good news, you know, this this kind of, you know, you when your toast falls off your breakfast table and lands butter side up.
The good news is there's real estate to be had now. In the medium term, you will see a reorientation, a reorientation of where the stores are, and a reconfiguration to some degree, I mean, no, I don't think I wouldn't advise anybody rush into any of this. Because, I think anyone who knows the answers to some of these questions, or says they know the answer is probably wrong, because we don't. But it'll be, these are the things I'm watching. And these are the things I would say that retailers would keep a close, close eye on. Is how do I recalibrate maybe I need more stores in the burbs less downtown? Maybe the stores are pop-up, right? Maybe, maybe the stores are there Monday to Friday, maybe they go in a particular place, follow the customer and that, and that kind of innovation, that DNA of innovation has to be there.
And, I think for those that are there, they, they need to be remarkable. This is, this was the case, pre COVID, it's going to be the case, post COVID. You, you're, you're good, you have great good service, you've got good assortment, it's okay, everything's fine. It's not gonna be good enough. And that's not going to get, that's going to get more pronounced than less pronounced.
Dave Poirier
Yeah, and you know, picking up on the trends that you were talking about, you know, I've got a place near the Collingwood area, real estate sales have doubled over last year.
Michael LeBlanc
Yeah
Dave Poirier
It's just incredible. It's up 100% over last year.
Michael LeBlanc
Yeah.
Dave Poirier
And so, these are people that are not saying, 'Well, let's get out of the city for a few months'. They're placing a bet that their life is going to be from Collingwood, or Barrie's the same thing. Orillia is going through it, Bracebridge. Lots of cities and towns that are more than a reasonable commute away from, from Toronto. And so, these folks are making lifestyle changes.
Michael LeBlanc
Yeah,
Dave Poirier
And, I think there, there are going to be certainly, most of the retailers that we're working with, most of the companies that we're working with, are looking to hybrid solutions going forward for, for their office staff anyway. And I think we'll see that and
Michael LeBlanc
I think they're more, they're more brave than I would be. I think, when it comes to that, and I don't know, I think it's a little early to call. I always think about regression to the mean. When I look at crises that were similar to this, so to speak, you know, let's go back to 911. And, we all said we'd never do an in person meeting anymore, never got on an airplane. And we'd all be traveling less. Well in five years, the, you know, we were, we were setting records in terms of travel.
So, you know, I'm always hesitant to use the words, 'This changes everything'. I do think, from a hybrid perspective, maybe you've got to go in two days a week, you know, okay, so you can move up north.
You know, I interviewed great thought leader, Rishad Tobaccowala. And I asked him questions about why the smart money was going in two different directions. So, you see Facebook, you see Amazon, you see big companies taking out millions of square feet. Millions of square feet, in Hudson Yards, in New York and office building. And then, you see other people going in the completely opposite direction, forever, you will, you'll be able to work at home. I never believe that, by the way, forever, you know, this whole forever, they can, that could be changed pretty easily. And, he said something interesting, he said, and again, this relates back to your, your particular expertise. He said it's because they're a cult, not a culture. And it is the place where you go to get indoctrinated into the culture of the organization. And you know, for younger, it depends on who your clientele is. He, he was saying, 'Listen, you know, Facebook is basically running a match.com in their head offices'. It's the place where young people meet each other. I mean, it's, it brings excitement.
I mean, listen, working remotely is not for everybody, right. It is not for everybody. I have a question for you, how in your mind, I know that you're supposed to be asking me questions, but I'm gonna ask you a few questions.
Dave Poirier
I'm surprised you waited this long, actually.
Michael LeBlanc
Well, how, how do you facilitate a, so the mission, let's say the mission is over, right. We're past COVID, we're in normal times. How do you facilitate a culture where you've got this, you know, several key people perhaps, lots of people on Zoom or on remote, not always in the office. There's not the ad hoc pop your head in the meeting, 'Hey, Dave, you know, I was thinking of this, what do you think?' You know, it's an effort to get in touch with your boss and say, 'I got an idea' or your colleagues. How do you build a culture around that? What are your thoughts on that?
Dave Poirier
It's far more challenging. And, we face that challenge ourselves. And, we have a great culture. The team are just phenomenal with one another. And, we take approaches that are a little bit different for that to build trust within the organization. It's more difficult over a video conferencing than it is in person. We used to all get together on Friday afternoons and have a chit chat and, you know, toast to the week and enjoy each other's company have spontaneous conversations.
Those things are difficult now. And we've looked at mechanisms to do that, we have to draw back to what are the core values of the business? And what are the behaviors that you want to have that are consistent with those core values? And really walk the talk. Whether that be virtually or in person. That, it takes a lot of work. And it takes a lot of effort.
It worked out great for us. I mean, we won that Canada's most admired Corporation. You know, very exciting and, and the team was really pumped up because they, they really did it. And so, it's a lot of what we're doing right now to improve performance of organization includes a significant effort on the culture and value side of things.
Creating alignment amongst the leadership, making sure that people are walking the talk that the behaviors are consistent with those values within the organization, and increasing communication so people understand the why behind decisions. And often, and we've seen this over the last year, a lot of decisions were made very, very quickly, not necessarily explained to the employees or the or the staff, but they did it because they knew that they were on a mission of survival.
Michael LeBlanc
Right, right.
Dave Poirier
And there was a rallying point for the organization. As we come out of this, it's going to be really critical for great performers to continue to have that that rallying cry. That, the thing that's going to align all of their, their team members towards the goal that's exciting for them and can touch them personally in a positive way.
Michael LeBlanc
Now, if you and I were having this discussion in the before time, you, you probably would have said many of those same things, I would bet, in terms of how to galvanize a culture, right. I mean, as I listened to you what, what's different? So, what do you need to do? Is it just you need to actually execute on all these key things? And that's not always done? Is there anything you can think of that you would advise the listeners, advise the viewers, advise your clients, that is different, fundamentally coming out of this for the next couple of years to foster a culture, that is different advice than you might have given them a year ago?
Dave Poirier
There are a couple of things, I think, certainly with this experience of working from home or working virtually, whether as teams or individuals, there are challenges with it. And, back a year ago, I did a webinar just about 10 months ago, I did a webinar. And one of the things that I said in there is it takes 21 days to form a habit. But it takes 66 days for that habit to become permanent, and unconscious. And here, we are approaching 400 days.
Michael LeBlanc
Yeah.
Dave Poirier
And so, a lot of those habits, the lifestyle habits that we've created, over the last year, are going to be fairly permanent. There's going to be a real stickiness to them. And, one of the things is people's lack of desire to get in the car and drive for an hour to work. There's a lot of resistance. And we're finding that even with, with new employees and organizations saying, 'Well, you know, do I have to commute?' and 'How often do I have to do it?', as conditions of employment that, that didn't exist before. And so, I think we're going to, we're going to see that people will make different choices and priorities going forward.
Sure, everybody will love to get together. But there'll be things that they'll have much less tolerance for than they were, than they did before because they were used to it. It was a habit before. And, I think we're going to see that, we're going to see that, that that's going to play out in a couple of ways. So, one is the employee saying, 'I want to work from home. I want to work from wherever I work.' My son is working for a retailer in Toronto, out in BC, very close to ski hill. So, he can live the perfect life out there right now. So, there's a huge advantage to that.
There's also the other side of it in that there's less loyalty both ways. So, if I'm paying somebody $110,000 in Toronto, to do a task, and now I, and now they're working remote, should I hire them in Manitoba instead for 90,000, or perhaps in the Maritimes for 80,000, or perhaps somewhere else offshore for, you know, 35,000. And we've all gone through bad experiences on offshoring, but there was a much more realistic possibilities now than they were before.
And likewise, for a person sitting at home doing their work in front of a screen, the barrier of resistance to switching jobs is dramatically smaller now. You're doing the same job, and somebody else offers you $3,000 more, and you get set in the same seat in your basement, or in the dining room, why not? So I think well, challenges that we're going to face on both sides.
Michael LeBlanc
Yeah, I completely agree. I mean, at the at the end of the day, it does come back to company culture, I think it's harder to establish. But you know, I think, I think companies should be open to thinking very innovatively about how they get people together.
And, you know, listen, there's, there's some, there's some economic benefits we haven't talked about, about the work from home movement for companies, right. I talked to a CEO, he said, 'Listen, I may or may not sign that new lease on that new building. I may not need that, that space'. Now. I got to stretch people out more than I had before. You know, there's some serious upside economics to the work from home movement. If it works, right. If you get the productivity, you know, there's a bunch of, there's a bunch of caveats to that statement. But just alone, there's some economic incentive.
So why not take some of that money and say, 'Well, this week's meeting is we're all getting on a train and we're going to Montreal for a couple of days', because that's how we're going to build our team. We're not going to build their team by bringing in for the next three weeks, but then we're all going to, you know, we're going to a sandy beach somewhere. But that's not like a once in a year reward. That's how we build culture. And maybe there's money in place for that.
I you know, one thing I think, Dave, and this is my second follow up question to you. I think this is a really gnarly one, particularly in retail where you have literally millions of frontline workers. I mean, the vast amount of you know, 2.1 million Canadians are in the retail industry, the vast amount of them are on the front lines. As head office people, it was always the case that if we're at work, your at work, right. And there was that kind of parody from a culture perspective. You know, I'm safe in my, you know, my basement and in the Muskoka is, but you're on the front lines, seeing customers, and even in the good times, customers can be pretty wacky. You know, it's fun in retail, but sometimes, you know, it's not so fun. How do you balance that culture, the we're all in it together between the field and the head office?
Dave Poirier
Absolutely, and I think we really have to be thoughtful about it. Not, not just in retail, but in CPG. And other industries as well, where, you know, their bonuses sort of paid during that time, and they were fairly quickly removed, some of them have stepped back. Anthony Longo made a stand on that a little while ago to replace it. And so, I think organizations are really going to be thoughtful about that. It's going to be tough, because I think the purse strings will be held pretty tight by, by CFOs, around North America as we go forward. Because they've seen what kind of savings have been generated by having people not go to conferences, not have off site, not the kind of travel that they had before, and yet the organization still surviving.
And so, I think it's going to be incumbent upon those that are really committed to that to the culture of the organization, and the values of the organization to prove, prove the financial connection to that. And I think it is easily done. But it's not been a traditional focus that organizations have had, particularly for large organizations. It's, it's been much more mechanical and get it, get it down to the commoditized tasks within, within stores, and within warehouses, and within manufacturing plants. And, we have to make sure that for those individuals, it's meaningful work and they feel a real sense of contribution of how they make a difference as an individual to the organization, and vice versa. So, they feel that they're contributing in a way that's fulfilling for them. And it's easily done. When you have clear communication. When you have discipline. When you have alignment. When you have clear strategy, and a rallying cry for organization.
I want to turn it back to you,
Michael LeBlanc
Yeah, sure.
Dave Poirier
As well.
Michael LeBlanc
Of course.
Dave Poirier
And ask you some questions. So, there are a couple of questions that have come in from the audience,
Michael LeBlanc
Yeah,
Dave Poirier
Really around, you know, all this innovation that we've seen over the, over the last year. Was it, was a truly innovative? Or was it just getting the house in order? You know, did it, did it really create innovation for organizations? Or was it merely expediting the existing initiatives to get where we are? And what does that mean for the future?
Michael LeBlanc
You know, I think that's a fantastic question. I think in some ways, I'd answer it in three ways. In some ways, some retailers just caught up to where they should have been to begin with. Maybe that was eCommerce. Maybe that was curbside. Two, I think some, some genuine innovation happened more behind the scenes than on the shop floor. Now you could talk innovation about how to keep my people safe, how, you know, how they adapted to PPE and all those things. I think there's, there's more, more reaction than innovation.
I think that there's a lot of innovation happened in the supply chain, more so than anywhere else. I think there's a lot of innovation there. And, I think there is innovation, and, and I don't know how to classify this, I'm kind of on the fence about it, you now see the use of social media, the use, these things advanced years, now, was it coming anyway? We're, you know, does it fall into that first bucket? You should have been doing it anyway. You should have been building community anyway. I'm not sure because I think I think the, the innovative use of social media, you know, it was, you know, it was on the fence.
Look at, you know, flyers, right, we had retailers, suspending fliers, finally doing that test that they always wanted to do. You know, we're always so afraid, you know, we're always so afraid to. It's a really good question, because I think, I think what the COVID era has done, if we learn the right lessons from it, is lay down the framework of innovation more than generated innovation. Organizations learned that they could move faster than they ever imagined. They could be more nimble than they ever imagined. They could be more resilient than they ever imagined. Again, the caveats are we had, we all had a mission, how to capture and stay focused and grab that innovation. I think the innovation, I think this will spur, this period, will spur dramatic innovation.
If you're a retailer in Canada, you're just trying to figure out if you're allowed to stay open on any given day. It's something, if you know, you're open, you're not, you're trying to figure out what color code you are for goodness sakes, in different coasts.
But one thing I wanted to pick up on that you, that you said is about experience, I talked to this fantastic author, Emre Soyer, who wrote a book called, 'The Myth of Experience'. And, I'd recommended for anyone on this call, you know, run, don't walk to go buy that book. And it's, it's a very approachable book. But he basically says, 'Be careful what you learn, experiences isn't always the best teacher,'
What we take away from this, and what you got me thinking about was, you know, how CFOs are saying, 'Listen, I took away all this stuff, you know, no muffins at meetings', you know, which you and I kind of chuckle about, sometimes it's gonna, you know, that doesn't get us anywhere. But, but you know, there was a lot of things, maybe it's flyers, we didn't spend that and the sales still came. Yeah, okay, but this was the most unusual of times, you can't, you can't parse those two thoughts out, and not have them in the same sentence. So, I think my advice is, be careful the lessons you learn from this period. And that goes through how consumers behave. That goes to how your organization's behave. And, and just because you were able to suspend flyers, you know, no more conferences, no more travel, doesn't mean that, that will work, after COVID. But anyway, so it's just my thought around Be careful the lessons we take away from this period, other than to understand, and I don't think any of us do, yet, how consumer behavior is going to change in meaningful ways, right. As you said, you know, time to learn a habit, whatever those times are, we've passed them.
Roger Martin, has a great book. And one of the things he talks about is how consumer behaviors are like, you know, eroding assets on your balance sheet. And that's the case in, in normal times, right. A lot of what consumers do, you and I, the people listening, do is, know a little by rote, right by habit, I go to the same grocery store, I go here, I go there, I do that, I go into work five days a week, I do all those things, you know, a lot of those behaviors are gonna change in ways we don't quite understand. Some of that is going to be work, driven by work from home. You know, some of its going to be externally driven. Some of it's just going to be, you know, maybe my priorities are different now. Maybe I enjoyed that time with my family. Maybe I'm going to spend my money differently. Maybe I've had the chance to reconsider my life. Maybe, you know, maybe, maybe I'm gonna eat differently. Maybe I'm gonna eat less. Maybe I'm gonna eat, you know, anyway. So, but, but you get the point is, is I think I think we have to be careful of understanding what's to happen. long answer to a short question.
Dave Poirier
I agree, and a great point about being careful around drawing too many conclusions. I think that the favorite quote I have that relates to that was from a guy named Warren Bennis, and he said, 'It's difficult to unlearn the things that made you successful in the past'. And, you know, I've always carried that around. I thought it's very relevant in, in past times, as well as what we're going through here.
And speaking of that, you know, we've seen, we've seen some retailers that have done phenomenally well, you know, grocery, pet stores, Ren's pets. We were on a panel together. So they've had a great ride. How do they take it from being a ride to being momentum for the organization and carrying on with the success next year and beyond?
Michael LeBlanc
Well, that's a literally the multi-billion dollar question. I mean, you know that, you know, the tailwind behind grocery is, is not going to be repeated. There will be, you know I talked to, I have a food podcast and I talk to restauranteurs and people in the food industry, and I asked them this question, 'Do you think after, what do you think's going to the outcome? We've all been eating and making more meals than we ever imagined we would, Are people going to be more discerning when they go to a restaurant more demanding?' saying, 'Listen, I can make that at home, you better do better.' Are they going to be, 'I don't care what you make me, I'm just sick of cooking. So, just make me something' Or, is it going to be somewhere in between? What I'm getting at there is, is there is no question that the momentum is going to shift back, like a pendulum is going to shift back to food service. Some of it will stay in grocery. I think that's where the groceries can win. You know, that will resume but those who've taken this opportunity to learn and innovate and don't take the foot off the gas for innovation, I think there's a risk, you know, the numbers just come in, are just come, the numbers just come in, right. I mean, now, they're, they're getting into a comp basis where the numbers aren't coming in, right. So, now they're on the downside of, of good, great comp starting like now, where they're gonna have to comp off, you know, the crazy times in the beginning of the pandemic. But, I do think that the retailers need to be, go back to basic principles, they need to be remarkable. I think, I think we kind of go and reset, how to capture that momentum, how to capture those sales is really going to be proving your worth to the customer.
I also think we should talk about sustainability. Because sustainability took a bit of a backseat. You mentioned it about, about employees. I think also employees, particularly younger employees, they want to care about the place they work and they want to see that company that does well and, and does all those things, I think that's going to get accentuated. I also think that sustainability will come roaring back in even stronger than it did. The good news is all those investments that went into sustainability initiatives have not in any way shape, or form sunk costs. I think they've been, they've been credits in the bank of the future, you know, as we had to shift the plastic bags instead of, you know, refillable containers, because of COVID. That will come back. And I think that will come back even stronger. And I think people will be more thoughtful about what they do, what they eat, what they wear. And then there'll be more like, 'Hey, I got buy, you know, I didn't buy as much' this is a bit of a risk. 'You know, I got by I didn't buy as much clothes as I did last year. And you know what? I found out, I didn't need it'. Now, part of that I'm not going to the office as much. Part of that is 'Hey, I didn't really need to buy that stuff', we're not going to know that, we're not going to know that for the next year. Because everybody's going to rush out and buy stuff. Maybe it's because of the, the COVID 15, as we call it. You know, maybe those pants don't fit the way they used to, they'll be out there shopping. And maybe it's a bit of a, I heard somebody call it 'revenge shopping', which is a colorful way of saying pent up demand. But, you know, we see it right. People get a glimpse of a normal life and normal life is, is shopping, going to restaurants and being with people and i think, I think you know, we're gonna see a lot of that jonesing for normal life come back.
Thankfully, you know, we're starting to pick up a bit of pace. It's choppy for the vaccine, but it's coming. We can see it happening in other countries. We can see what's happening. Look to the US, we can't always learn a lot of lessons exactly from the US market, or the UK market. But, we can sure see, as they start to get past, and their vaccination starts to roll out that we see some very important things.
I would, I would ask, speaking of vaccinations, I don't want to dwell on that, but I do want to say and talk about vaccine hesitancy, I did some, an interesting interview with Michele Sexsmith from Environics Analytics, and they've got this new vaccine hesitancy overlay of their segmentation, fascinating, right. Because the averages in Canada, for example, is about 15%. That's going to get worse, not better. As AstraZeneca, as Moderna now struggle with, is it good? Is it bad? Stop start. You're gonna see that number go up. And it's going to be more troublesome than we hope it will be. And it's, there'll be hotspots. You know, look to the states where they've got a lot of, you know, relatively they've got a lot of vaccinations, you've got big retailers, Target. They're, they're paying their employees to get vaccinated, right. They're giving them, you know, they're not giving them time off. They're giving them like $100 to get vaccinated. This is, I think this is the future in Canada. We, it's hard to imagine the future today, we don't have enough with the stuff. That will resolve itself and then we need to align to let's make sure and get past it. So, I think I think there's a bit of chop there for sure.
Dave Poirier
Yeah. And I actually saw a new number this morning. 21% now.
Michael LeBlanc
Yeah, it doesn't surprise me. I was hoping it was gonna go the other way when everyone watched millions of Americans, you know, get, you know, the benefit, I guess, of being a slow follower. Millions of Americans get the vaccine but you know, one or two cases that starts to you know, starts to put a kernel of doubt in your mind that kernel could grow you know, I think I think we've got a bit of a road ahead of us. So, then retailers and all the people listening have a role to play and, and, you know, like the American retailers said, you know, listen, we're just, we're just gonna use the old fashioned method, we're gonna pay you cash.
Dave Poirier
And we're gonna see heightened fear lasting for a while in society, I believe, as a result of this. It might not be COVID, but it'll just be about,
Michael LeBlanc
Yup.
Dave Poirier
Crowds and, you know, avoiding crowds, that sort of thing. That brings me to one of the, one of the last questions, which is, you know, we've seen a big push for direct to consumer from manufacturers, and obviously, Amazon as well. So, circumvention of the traditional retailing channels within Canada, where do you see that going? Is that going to continue? Is there going to be a roll back? Is it gonna be a roller coaster? What do you think that's going to look like in the next year or two?
Michael LeBlanc
I think it's overestimated in the short-term and under-appreciated in the long-term. The COVID era put, you know, press the gas down on eCommerce, DTC eCommerce but it didn't put a brick on it. It's gonna, it's gonna fall off. Right now, it feels like everybody should do everything shopping online. Of course, we're, you know, here in Ontario under stay-at-home orders. My goodness, you know, if you're living Montreal, you got to be home by five o'clock in the afternoon or something. So, I think, I think it, it will always be the case that certain vendors will have a core audience that will look to them to find the best, the latest, the hottest, right. Nike, for example. So, Nikes pulled out, two weeks ago, Nike pulled out of, out of seven more retailers, Macy's, for example, just to mention one.
But you know, there's a lot of people who go to department store and say I'm just looking for a good pair of runners. I'm not looking for the latest Nike. So, I think the disintermediation has been this hovering cloud, the sword of Damocles above retail for, you know, before we even met, like in the late 90s. And, I think a it's easier said than done. I've had that experience. Like when you get to a vendor, vendors are very good wholesalers. Becoming a retailer is a very different business. It's a different culture. It's just a different business. The technology's easy stand up a Shopify site, that's not hard. I think more will try it. And I think more should try it. I think, but they need to think of their strategy. I don't think, you know, appreciate, I don't think under appreciating channel conflicts and channel strategies goes away. I think there's a way to do it. I think any commodity, anyone listening to this, anyone listening to this right now who sell something to a retailer, has a core audience that could be 2%, that could be 5%. It could be more, who would look for that kind of innovation, who would buy directl. And that number is going to grow over the long-term for sure. What it's going to grow to? Your guess is as good as mine. You know, on the one end of the scale, you've got you know, Canada Goose talks about wanting to be 75% direct to consumer, you know, with stores and eCommerce, not just, not just eCommerce and only have five or six, you know, major retailers that they pick and choose. That's a strategy. All I would say to that is, it's good to be king doesn't last forever.
Michael LeBlanc
All right, rapid, rapid fire questions. Michael LeBlanc to David Poirier, first international vacation destination post COVID?
Dave Poirier
Barbados
Michael LeBlanc
Will the Leafs take the north division or will the Jets zoom pass them?
Dave Poirier
The Leafs will not take the north division.
Michael LeBlanc
Barbecue brisket, ribs, chicken or plant-based burger?
Dave Poirier
Chicken.
Michael LeBlanc
MBA or experience?
Dave Poirier
Ideally both.
Michael LeBlanc
Morning sit-down breakfast or lunch at your desk?
Dave Poirier
Oh gosh, for a morning sit down breakfast that is in the week, weekend. I'll say morning sit-down breakfast.
Michael LeBlanc
Last one Bitcoin or Vegas?
Dave Poirier
Vegas at this point. With Bitcoin well north of 60,000, I think, who knows what the upside is on it. But it's a fascinating thing to watch.
Michael LeBlanc
Don't forget that password. It's been such a treat for me to be here. I'd love to come back. I want to thank everybody for joining us, the hard-working men and women in retail and the CPGs that kept us fed, kept food on the shelf, kept products on the shelf and, you know, kept our spirits up, you know, just from me and, and my family and my people, I just you know, I just really appreciate it, right. Just, just a genuine appreciation and to you, Dave, you've been a longtime supporter of mine. So, I really, really appreciate everything you've done for, for me and, and everything you do for the industry.
Dave Poirier
Glad to Mike, great chatting with you. And thanks for joining us. And, thank you all who joined us today. Really appreciate your, your attention, and we'd love to hear your feedback. If there's anything more we can answer or if you have some specific questions, please follow up and send them to, to me, or to Mike, or both of us and we'll make sure that they get answered and we look forward to seeing you next time. Thanks very much, everybody. Bye for now.
Michael LeBlanc
Bye everyone. Thanks for tuning in to today's episode of The Voice of Retail. Be sure to follow the podcast on Apple, Spotify or wherever you enjoy podcasts so you don't miss out on the latest episodes, industry news and insights. If you enjoyed this episode, please consider leaving a rating review, as it really helps us grow so that we continue to get amazing guests onto the show. I'm your host, Michael LeBlanc, President of M.E. LeBlanc Company Inc. And if you're looking for more content or want to chat, follow me on LinkedIn or visit my website at meleblanc.co. Until next time, stay safe. Have a great week.