In this episode, I’m in Dallas, Texas welcoming back to the podcast top retail strategist, best selling author and my Remarkable Retail podcast co-host Steve Dennis! We're back on the mic together talking about the launch of the 2nd edition of his best selling book Remarkable Retail, and we cover a lot of ground reviewing the core principles of the first book, what has changed in the second edition written in the COVID era, and the big trends and six key forces in the post-COVID retail world you need to know to survive and thrive!
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.
In this episode, I’m in Dallas, Texas welcoming back to the podcast top retail strategist, best selling author and my Remarkable Retail podcast co-host Steve Dennis! We're back on the mic together talking about the launch of the 2nd edition of his best selling book Remarkable Retail, and we cover a lot of ground reviewing the core principles of the first book, what has changed in the second edition written in the COVID era, and the big trends and six key forces in the post-COVID retail world you need to know to survive and thrive!
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Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption will be released April 13th and is now available for preorder at Amazon 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.
*Very* excited to host my good friend and podcast partner Steve Dennis's virtual book launch of his new and expanded second edition of his breakthrough book April 13th, 5pm ET!
I get the pleasure of speaking to Steve each and every week for our podcast (btw, check out the latest episode featuring Kiri Masters all about how retailers should think about Instacart and other 3rd party delivery services) now you get to hear him 1:1 talk about the key strategies *you need to know* to survive and thrive in the COVID era of retail and beyond and ask questions directly in this live and interactive event.
Click the link today to register - space is limited!
https://lnkd.in/eGbg-Fy
We'll also be doing a Clubhouse launch event Monday April 12th at 5pm ET, I'll be moderating so please look for me and connect on Clubhouse!
Click here for your chance to win one of three copies hot off the shelves of Remarkable Retail!
Thanks for tuning into today’s episode of The Voice of Retail. Be sure to subscribe to the podcast so you don’t miss out on the latest episodes, industry news, and insights. If you enjoyed this episode please consider leaving a rating and review, as it really helps us grow so that we can continue getting amazing guests on the show.
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. In this episode, I'm in Dallas, Texas welcoming back to the podcast top retail strategist, bestselling author, and my Remarkable Retail podcast co-host, Steve Dennis. We're back on the mic together talking about the launch of the second edition of his bestselling book, 'Remarkable Retail'. And, we cover a lot of ground reviewing the core principles of the first book, what is changed for the second edition written in the COVID era, and the big trends and six key forces in the post COVID retail world, you need to know to survive and thrive.
Steve Dennis
COVID has reset the playing field and introduced some new dynamics. So, part of what I'm doing in the second edition is to update the context, the starting point, so to speak, because there was so much change. The other thing too, which I think really made me feel like I had to update the book was, part of what I was getting at, just to go, to go back to kind of what I had in my mind when I was writing the first book was, as I said, you know, these retailers that really need to transform.
Michael LeBlanc
So, let's listen in now to my remarkable interview with Steve Dennis.
Steve, welcome back to The Voice of Retail podcast. How are you doing my friend?
Steve Dennis
I am well, thanks for having me back.
Michael LeBlanc
Well, you're certainly a familiar voice. We speak more than once a week, thanks to the Remarkable Retail podcast that we co-host. What a great, what a great experience I have with you on that. And, this is, I was trying to think, our last featured interview was January at the NRF in 2019. And, you were kind enough to also join me on a panel I had for Black Friday. So, it's been a lot of, it's been a while so it's great to catch up. Thanks for coming on board.
Steve Dennis
You bet. Yeah, a lot, a lot has happened since then. I believe,
Michael LeBlanc
Oh really? Well listen, as I said, you've been on the podcast a couple of times. And, but just in case, some of the listeners may not know of you or about you, why don't we start there. Tell us a little bit about yourself, your background and what you do.
Steve Dennis
Well, so yeah, I'm Steve Dennis. I am a long-time retail executive. I've spent virtually all my career in retail. I did some big corporate consulting, and a little bit of time in the food business. But really, since the early 90s, I've been working pretty much exclusively in the retail industry. The first 15 years or so of my career was on the operating side, way back when at Sears where I held a bunch of different roles. And, then at the Neiman Marcus group, where I was the Chief Strategy Officer and Head of Multi-channel Marketing, and a few other things. And then, for the last 10, 11 years, I've been doing, I kind of think of myself as a retail renaissance man now because I do so many different fascinating things. But, seriously I do strategy consulting. I do keynote speaking. I write for Forbes. I have written this book, will probably talk about I imagine. And, of course, the highlight of my life and career has been being co-host with you on the Remarkable Retail podcast.
Michael LeBlanc
It is a pile of fun. I really, I really do enjoy our time together. So, you know the highlight of my weeks because, we have guests on at similar, to different thing you and I get to chat a bit different format. So, anyway, if anyone's hasn't checked that out, be sure, be sure and check that one out on your usual podcast platforms. All right, well, you mentioned it, you alluded to it, let's get to the big news. You've got a second edition of your bestselling book, 'Remarkable Retail' coming out. Right now, we're recording in early April, it comes out, you can pre-order it now if you're listening to this, or it's available on shelves on the 13th, I think April 13th.
Steve Dennis
Yeah, the 13th in most markets. In the UK and a couple other markets, it's more, it's a couple of weeks later, but for the most part, yeah, April 13th is the release date.
Michael LeBlanc
You know, before we talk about the second edition, again, not assuming everyone who's listening has read the book. Let's talk about the first book. So, in it, you kind of, you look at core principles and observations and you, and you set forward a framework. And let's talk, let's start there, tell us about the first book, and then, tell us about the, particularly the eight essentials framework, because that really sets the tone for, I think a lot of them, the way you think and approach strategic opportunities and risks and evaluations, yeah.
Steve Dennis
Yeah, I think so. Um, so when I think about who the first book was for, it's really for almost anybody in the retail industry. You know, whether it's retailers, or people working with retailers, serving retailers, investing in, in retail, it's a pretty broad strategy book. But who it's for the most, you know, that like the group of people I had in my head as I was writing, it was really those brands that need to significantly transform for a new age.
And, I would say the premise of the book, the main premise of the book, is really this idea that even very good is no longer good enough because what digital disruption broadly, and eCommerce did in particular, was make product availability, access, information, pricing, you know, all those things became very much abundant. And, you really couldn't leverage the historical advantages of retail, which you know, might be exclusive product, or a really great location, or being the only game in town, and all those kinds of things.
So, that's really driven, the need for retailers to be more remarkable. To really distinguish themselves in a very powerful way. Because if you're essentially selling what amounts to a commodity, and everything's about convenience and low price, you're probably going to get beaten by the internet, 9 times out of 10.
The second premise, I would say, which gets a little bit to why I did the second edition. the second premise was that I think most retailers that are struggling, or edging toward a period where they might be struggling, really underestimate the degree of change, or transformation, whatever you want to call it, that is required, and how quickly it needs to be done. So, I really wanted to both encourage folks to think more radically about what they needed to do, as well as hurry basically. And, so that, so you know, the first part of the book, kind of, you know, sets out that premise talks about some of the key trends, dynamics that are going on that I think are important to understand before you start thinking about what it means to be, to initiate the journey to remarkable. And then the second part, it's got this eight essentials framework, which hopefully provides a good roadmap or way of thinking about your business and, and where you need to improve, to close competitive gaps, or distinguish yourself further.
Michael LeBlanc
Right. I mean, what I loved about the, you know, I said, as I thought about Remarkable Retail, what I loved is your jumping off point, even for the naming of the book. In other words, you took a page out of your, your friend and colleague, Seth Godin's idea about, 'Will people remark upon you', in other words, is your brand worthy enough to be shared amongst each other just say, 'Hey, I had a great experience at' or does it just fall away and just become this massive okayness? Which I guess 20, you know, 20, 30 years ago, you could get away with because there's certainly less internet and less availability, and a lot of these things, you know, you could just you could just get through, you could get by. But those days are, are gone. And, if you're not doing any of those,
And then, we broke down together on the Remarkable Retail podcast, season one, the eight essentials. So, we don't need to go into them in any depth. But, actually, I'd encourage anybody who wants to delve in, that's a great resource. But tell me, of the eight essentials, there are some that we would call table stakes. In other words, everybody's going to do them right. And, you'll probably get to parody with others who are doing similar things. But, there's a couple that stand out, and stood out, in my mind that are really differentiators. Like, if, you got to do all these, but you're really got to nail these. And if you nail these, it could move you farther and faster along this, this path of being remarkable. What, what are those two that you would highlight? Or that you thought of as those real, those real drivers, those real difference makers?
Steve Dennis
Yeah, so they're number seven, and number eight. And actually, they tie back, I hadn't actually thought about it until this exact moment how they, they tie to what I just said earlier. So, number seven, memorable, really ties to, in some respects, this need to be remarkable. You know what you're saying about, the point that Seth made, and I would really encourage people to go back and listen to his TED Talk, which I think was from 2004, maybe, and read his book, 'Purple Cow', which was 2003, perhaps. But, it was this idea that in an ever noisier world where you have lots of choice, that, you know, you've got to do something to stand out, you know, his, his way of talking about it was to be the purple cow amidst all the, you know, the herd of rather average brown cows. And I think memorable is the one that gets to that, you know, what do you do, how do you do something that is intensely customer relevant, very unique, really tied to your brand, but has a wow factor, or series of wow factors, that cause you to really be engaged with that brand in a powerful way, you know, very loyal, but, but as you just mentioned, to literally talk about it. Because this, the, what Seth, you know, really talked about was this idea that, first of all, if you if you can't break through the noise and the clutter, you know, you basically are ignored, and if you ignore, eventually you become irrelevant. But the flip side of that is if you have a story that, that people, that you want to share, and that people are compelled to share, then that's the best marketing and that's the thing that really helps brands go to that the next level. So, so that's memorable.
And number eight is radical. And radical, you know, what I often say is adopting a culture of experimentation, becoming fundamentally more agile, being willing to make mistakes, but pivot quickly, etc. That's, first of all, just what I think is required and has been required for a while in today's day and age, but that's one of the ways you get to be remarkable if you aren't. And building that habit of innovation is the way that you stay remarkable. So, so, it’s an element, you know, going back to what I said, the second premise was, you know, you're gonna have to change more than you probably think you do. And, you're gonna have to change more quickly. And, I think building that culture of experimentation and that innovation muscle is, is really the heart of what you need to do to differentiate yourself.
Michael LeBlanc
And what I like about the model is it grounds some pretty big thinking strategic thoughts that we all have to make about running the business in that simple, 'Will people tell their friends about us?' Like, it's like a litmus test or a touchstone, you know. Of course, behind that is tremendous amount of work, and innovation, and thought, but that ultimately boils down to 'Will people talk about us, or will we just be forgotten?' like, you know, that, that old like, people don't speak, speak ill of us, they don't just, don't, they just don't speak of us at all.
Steve Dennis
Right, right.
Michael LeBlanc
It's almost worse.
Steve Dennis
Yeah.
Michael LeBlanc
All right, let's, let's fast forward. So that your book, your first book, first edition, came out in, in and around February of 2019. Which means you wrote it a little bit earlier now. So, a bit has happened since then. The COVID era, is that what kind of got you to start thinking about second edition? And tell us about the second edition, what's different from the first one?
Steve Dennis
Well, actually, just a quick, quick correction, it came out almost exactly a year ago, today, but, it was
Michael LeBlanc
Oh, okay.
Steve Dennis
So, it came out, just really as the world was going into COVID, lockdown.
Michael LeBlanc
Wow, wow.
Steve Dennis
And, but I finished writing it several months before. So, COVID was certainly not
In mind. So, the book, the book did actually quite well. Well reviewed, it won some awards. So, it wasn't a matter of not proud of the first edition of the book. But clearly, COVID has reset the playing field and introduced some new dynamics. So, part of what I'm doing in the second edition is to, you know, update the context, the starting point, so to speak, because there was so much change.
Michael LeBlanc
Right.
Steve Dennis
The other thing too, which I think really made me feel like I had to update the book, was part of what I was getting at, just to go to go back to kind of what I had in my mind when I was writing the first book was, as I said, you know, these retailers that really need to transform. I would say generally, and retail is a big industry, and, you know, companies sit in all sorts of different competitive situations. But, I would say if I was just thinking about one set of retailers that I was trying to motivate, or people that are looking at the industry, help them understand it, it was okay, you've got to make all these changes. But maybe you have 2, 3, 4 years to do it. You know, like if they were already dead, there's no point in writing the book, no matter how good the advice is like, it's not going to matter, right. So, if you cannot practically apply it, that's not a very useful book.
So, I kind of had that idea in my mind. Well, COVID really accelerated that, say, three to four year timeframe to three to four months, maybe. So, a lot of retailers that were in trouble, you know, have gone bankrupt, or have closed a ton of stores or, you know, really hanging on the edge at this point, and are kind of dead brands walking as I talk about in the book. So, I really had to kind of bring that all forward and kind of reset the starting point. And then, you know, also just deal with some of the particular things that came out of COVID.
Michael LeBlanc
Did it change, did it being COVID change any of your conclusions or your, your insights, particularly from your thinking that went into the first edition?
Steve Dennis
It didn't really, you know there's an aspect, I think we may have talked about this on the Remarkable Retail podcast, there was an aspect where I was like, 'Well, you know, I told you so.' like, you know, if you were vulnerable, and you know, that's not, other than like beating my chest about that, that's like, that's not helpful, right. So, I had actually, I think validated for me a lot of the points that I've been making over the years, not just in the book, but in consulting and speaking.
The two things, I think that were in there, but I think really got amplified, were that the need to be agile. I think that's been important. Lots of people have talked about agile business models and so forth. But, I think it is really, really emphasize the point that the world is just fundamentally more dynamic. And, if you didn't believe it before, then COVID really taught you that. And, I think the other part is that the, and again, you know, I talked about this in the first edition, but the, the pace of change is accelerating. And, one of my favorite quotes is which was from Carlos Castaneda's book, Journey to Ixtlan, is the problem, the problem is you think you have time, right. I mean, I think a lot of retailers just think like, 'Okay, well, I don't, I don't have to do this until it's convenient, or until we study it more'. And again, I make that point in the first edition. But, in the second edition, I think I hit much harder on that. And again, I think if people don't get that by virtue of what happened with COVID, and I don't know what to say about it at this point.
Michael LeBlanc
Right. Well, let's talk about current events a little bit. Recently in the news, a company said, 'Yeah, we think there's gonna be 80,000 stores closed'. And it's funny, Brendan Witcher, our guest on the Remarkable Retail, says that's just clickbait, it's just nonsense.
But ultimately, I think there will be, you know, store closures is it, is that, do you see that as the inevitable impact of the COVID era? I mean, there's winners and losers for no fault of their own. Good landlord, bad landlord, they sell apparel, you know, some things are out of a little out of your control, some things are not. Is it, is store closures the rise of eCommerce? Or is there something else going on if you're, if you're closing a lot of stores?
Steve Dennis
Well, with regard to that particular story, I just had a little bit of a Twitter exchange on this, I can't really get my head around what the number should look like. But, I can tell you the methodology, or the assumptions that went into that are really faulty. So, I'm willing to say that I don't think there'll be anywhere near that number of closures. But, the US in particular, but some other markets has been very, very over retailed for more than a decade. So, a certain amount of this was inevitable, but you know, low interest rates and some other dynamics kind of kept some of these folks afloat. So,
Michael LeBlanc
Now what, what made it inevitable? Like inevitable, as in, there's too many stores and eCommerce takes a bigger piece of the pie, or there's just too many, too many doors fighting for the same dollar? Which,
Steve Dennis
Well, I think
Michael LeBlanc
Drives the inevitability?
Steve Dennis
Well, I think the inevitability had to do with, with a couple things. One is just the, the massive expansion of real estate square footage over a 20-year period relative to spending. It got very, very misaligned. And, that, that by itself has nothing to do with eCommerce. The other, the other part is that a lot of that space was, or is, in regional malls, you know, which have been falling out of favor for a long period of time. So, a harsh reckoning was inevitable. I think that, that COVID has made it happen.
Well, and in some ways, it hasn't made it happen more quickly, because there's been so much government stimulus that I think we've yet to see it. But, I think the what will happen, you know, late this year, early next year will be pretty dramatic, and I will really get supply kind of better in line with demand.
Ecommerce certainly is a bit of a contributor. But, mainly in that those brands that are poorly differentiated, you know, going back to the point I made earlier, is if, if you know used to be able to only get certain products, from certain physical retailers, like that was the whole competitive world. Well, now that you can get products from anywhere, and in many cases, get the cheapest product and delivered it to your home. Those retailers that have physical stores that don't add any real value, they become irrelevant. So, from that standpoint, eCommerce has, has forced certain types of retailers, either out of busines, or to close more stores. So, eCommerce, generally speaking, is a, is a contributor to, to obliterating certain formats.
And then I would say, in general, because of the endless aisle and omni channel retail, and so forth there, there are certainly some companies that can do the same amount of business without as many stores or with somewhat smaller stores.
So, that all adds up to a big contraction in retail space. But what I think UBS gets wrong, what is often wrong in the retail apocalypse narrative, is, and you know, you and I have talked about this a million times, is the role of stores in supporting an eCommerce business. So, lots of these stores will remain because they will be there as brand advertising. They will be there as fulfillment centers, return centers, etc. So, that doesn't mean that I mean, in some cases, it will be stores that will get retrofit to that function. In other cases, they may get relocated, because as they perform more of a fulfillment role, it might make sense not to be in the same real estate but,
Michael LeBlanc
I think no need to pay the same rent if you're, if you're a drop off location for returns online. You don't need to pay high mile, High Street rent,
Steve Dennis
Right, but I think the UBS analysis fundamentally misunderstands that there are plenty of retailers that are growing their store footprints to offset some of the closings and that the role of the stores is actually, you know, it's way too black and white analysis of (inaudible) you know, if you go if, if eCommerce grows there, therefore, you know,
Michael LeBlanc
If 'X' then 'Y'
Steve Dennis
Yeah, which is just, I mean, I think it's just obviously wrong. Like I don't even, at this point I like, I think it's just incredibly, incredibly misguided.
Michael LeBlanc
And let's pull on that thread though a little bit. Because recently there's been some stores for strategic not financial reasons who, or brands I should say, that have closed their stores. I'm thinking Disney and even before COVID Bose, Microsoft kind of on the, on the, on the edge started to, start to close their store. And we also see brands taking advantage on the other end of the spectrum, of real estate that's available, rushing to opening, or at least planning stores. Who's right in all that?
Steve Dennis
Well, as a general rule, I would say if you are a brand, where your physical presence is important to kind of being the kind of full representation of your brand, you know, it's not just about eCommerce transactions, then you're going to need a store strategy. So, it's, it's a little bit mystifying to me with, with the Bose, and the Disney's, and I think Godiva, you know, where, where that in store experience seems to be pretty important to acquiring customers, getting more of their share of wallet, marketing the brand in a way that's very different than you can do in digital advertising and those kinds of things. Now, that doesn't mean that their particular store strategy was the right one, or they couldn't do with fewer stores, perhaps. But, getting completely out of physical retail, and thinking you're going to be able to drive your brand and rely on eCommerce, it seems to me like there's not a lot of evidence that, that that works. There's plenty of evidence that when people close stores, the eCommerce business actually gets worse if they are more, you know, higher end differentiated products.
Michael LeBlanc
Well, and some of them baffle me a little bit. Like the Bose, for example, because it just I used, I'm in my local mall, it's a nice mall and you'd go by the Bose store and I'd always pop in. And, I have to say, I often didn't buy that day. But then I'd say there's some new Bose stuff, and you have a listen and stuff. And then, you know, it was at least in your consideration set, you know, I'm going to get my TV needs a better speaker, I'd think of Bose. Now I don't even think of Bose anymore.
Steve Dennis
Well, it's certainly not easy to measure the advertising role of stores. If you get out of retail, now, you know, some of these brands have wholesale partners, right, so they haven't necessarily totally gotten out of the ability to see a product,
Michael LeBlanc
I'm sure I can go see Bose at my local Best Buy for example.
Steve Dennis
Right, right. So, I mean, there you have to look at how much distribution do you really need and the economics of that. But, I absolutely think that this idea that, that you're going not only have top of mind awareness, but you're going to have customers like really fully appreciate why they pay a premium price for a product like, whether we're talking about Bose, or Godiva, or whatever. And, you're going to be able to do that through just being on Best Buy's website in the search function? Or having to spend and compete for keywords and SEO? Like that's not, digital advertising is not really brand building, right. And, brand preference building. So,
Michael LeBlanc
It also makes me,
Steve Dennis
I think it's a really nice kind of misunderstanding of dynamics.
Michael LeBlanc
It also makes me sanguine about malls, because you know, I'm sure I could go see and I don't mean to pick on Bose, but they're a pretty good example, I don't, you know, I'm sure I could see a great Bose setting up, set-up at Best Buy. But that's a destination for me. Like versus I'm walking, you know, in a mall to go to place to place. So the impulse to kind of accidental, that kind of inspiration shopping. Back in the late 90s there was a Time magazine article, very famous one, talked about the disintermediation of retail eCommerce is gonna wipe out retail because it wasn't necessary. People would just go buy direct from the brands and retail's core function was, was being ameliorated and, you know, that didn't come to pass in the past 20 or 25 years. But now with 20% of eCommerce, if not more of core, is, is now that, could that now happen? Is that prediction, was that prediction too early? Is this, is that biggest retail, the biggest risk to retailers is their vendors?
Steve Dennis
Well, I think that, that is a risk. You know, a lot of people you know, Marc Andreessen, I think in 2013, or whatever said, you know, the only retailers that'll be around will be pure play online retailers, and you know, we're not remotely close, even with COVID. Like, we're
Michael LeBlanc
Not at all.
Steve Dennis
We're not, not at all remotely close to that. So, you know, I think that there is a again, you're kind of this aside from what we were talking about, like the role of physical stores in terms of fulfillment, and, you know, that sort of thing, I think consumers, in certain cases, really value the in-person experience because they want to, you know, put outfits together, or sit on that sofa, or try to figure out 'Well, why is this particular thing twice as much money?' And, you know, 'Does it fit me?'
So, there's a whole bunch of reasons we're or circumstances where physical retail adds a lot of value. And, I think we can certainly see this like, you know, in the home improvement industry, like hardly like there's a lot of digitally influenced sales and there's certainly some home delivery and some small items, but, you know, lumber is probably not a great eCommerce business, right? So, I mean, there's just lots of categories where I think brick and mortar will be, you know, not necessarily the way the sale is rung up, but will play a critical role.
So, ecommerce penetration will, will continue. I think, you know, again, people quote, different numbers, but we're at about 20%. But, you know, a lot of that 20% is actually stuff that's bought online, but the store is involved in terms of fulfilling it. So, that's a whole other, probably separate podcast about that. So, so eCommerce is going to continue its penetration. But I don't see us getting to 50%, much less 100% anytime soon. And as it comes to the disintermediation, I think, you know, there's a lot of incentives for brands to go direct to consumer.
Michael LeBlanc
Right. So, it doesn't even have to involve stores. Like we could, we could, this could be not even a store, a physical store discussion. This could be, 'Why would I go to any of the retailers’ websites to buy when I could go directly to the vendor site"
Steve Dennis
Correct.
Michael LeBlanc
'To buy'
Steve Dennis
Right.
Michael LeBlanc
And that, and that's a legitimate question. But is it, is it as big a risk as people seem to make out? Or what's your perspective on that?
Steve Dennis
Well, I think when it comes to multi-category, multi-line retailers, whether we're talking about like Dick's Sporting Goods, or Neiman Marcus, or The Bay, or whatever, I think, you know, some of that is convenience driven, which is 'Where can I go see this product?'. So, you know, to your earlier point, sometimes like I'm in the mall, and I'm just going to go pop in, right, to check it out. Other times, it's a destination, and maybe I'm going out to the grocery store,
Michael LeBlanc
I'm in The Bay, I'm in the Hudson's Bay, and I go to floor to five, I go to beauty, and then I go upstairs, see what they got in housewares.
Steve Dennis
Right. So, there's, there's a convenience dimension, that's, you know, sometimes it's super convenient, just to get online and have the box show up at your house, right. But other times, you're out for other things, and it's convenient to just, you know, walk down the aisle to the next door or whatever. So, I think there's a convenience dimension and immediate gratification dimension, which is important to stores.
Steve Dennis
But I think when it comes to, to manufacturers brands, you know, sometimes people want to go to Dick's Sporting Goods because they, and I'm just picking that as an example, because they want to get some running shoes, and socks, and some shorts, right. And, you're not necessarily super brand specific, right. In other cases, it's like, well, I really want Nike stuff, and I want to see all the Nike stuff. And, and so, I go directly to the website, or I go to the Nike store.
So, I think retails very, very complicated. And, a lot of times the problem with some of these broad statements is, is you're talking about an entire industry and there's a lot more nuance to it. And, what I often say, particularly in my consulting world, is you know, averages aren't particularly happy to a given competitor. Like I don't, you know, talking about the growth of online, if you've been in the off price, retail business was kind of a non-factor because hardly, there was very little that was done online. If you're,
Michael LeBlanc
Still is in some way,
In Canada, I mean, you know, your, your big players in that, in that aren't online today, it's a physical shop.
Steve Dennis
Right. And then, the flip side, if you talk about books or music or whatever, like, okay, well that's like 70% online, right. So, so, averages aren't, aren't particularly helpful to a given retailer, or even a given person in a category thinking about their strategy. So, so, what I try to do in the book, and just in general, in my work is trying to say, 'Okay, well, let's, let's separate the facts from the fiction here, maybe dispel some myths, but let's bring this down to the level of strategy and operations for your particular situation'.
Michael LeBlanc
Well, speaking of that's a great, a great segue to my last couple of questions. One of them is, is you've got this idea of the six forces that you're, so your eight essential model is, is in place, but you're now thinking about six forces that the COVID era has, has brought with us and not short-term, but these things that people need to be thinking about, and you write about. Talk about those six forces, and what your thinking.
Steve Dennis
Yeah, so the first one I call retail bifurcation 2.0. So, you know, I get a lot of crap for this, but talking about retail's great bifurcation, but it's the general idea that the middle of the market has been collapsing, but success has been found at kind of either end of the spectrum, you know, the value, convenience, dominant assortment spectrum, Amazon, Walmart, Costco. Other end of the spectrum, you know, either luxury or more finely focused, especially concepts. So, there's this kind of death in the middle. And I think, you know, kind of touched on this earlier, I think bifurcation 2.0 is really, really just hammering those retailers that are stuck in the middle, like there's very little room left to survive. Again, as I said earlier, I think this has been masked in the US, largely because of so much stimulus. But, I think when the stimulus comes off, we'll see the pace of store closings and bankruptcies in that mediocre middle will really increase.
The second one is well, you know, I danced around calling it the great acceleration because our friend Carl coined that and, you know, I didn't want to have to pay him a royalty, but, but it's an accelerate, accelerating, acceleration. And partly I say that is because I make the point else elsewhere in the book, that pace of change, whether it's technology or consumer preferences has been accelerating for years. But COVID really just kind of amplified it to a new level. So, that's the penetration of eCommerce. That's the adoption of technologies like contactless payment, appointment, shopping, virtual personal shopping appointment. So, that sort of stuff. So most, most technologies that were already kind of in play, or nascent got jump started, in some cases, you know, in one year in some cases, five years.
The third one is really this reallocation of spending. Some of it driven by what we consider to be essentials. So, the most obvious one there is how groceries just exploded at the expense of dining out. But also, a lot of things around the work from home. You know, whether that's, like, literally, I'm working from home, so I need office supplies, office equipment, or I'm at home a lot, that it's time to get that new sofa, or get a Peloton, or you know, things that are very much driven by how much time we're spending at home. I think this will, you know, probably at some point going to be coined the phrase the great moderation because I think we will see a deceleration. But, but certainly, if you look at the the fortunes of retailers and category spending across the last year or so we've seen some really big distortions.
The fourth one is really this kind of consolidation of power, kind of the rich getting richer, the poor getting poorer. And by this, I mean, I think it's both in terms of retailer brands, that were very well positioned, had a remarkable value proposition, gaining share from either brands that are going out of business or closing a lot of stores, you know, that market share has to go somewhere, and tends to go to the stronger players. Same kind of thing on the real estate front, right, with shopping centers, closing malls closing, again, you know, that business even it's even, even if it had been declining over time, you know, that business is going to go elsewhere. So, I think we'll see a lot of market share consolidate to the stronger players. And, we're also seeing and we'll see more of it, of these bigger players buying up, not necessarily weaker players, but perhaps companies that got into trouble because of too much debt or whatever. And so, they can pick up brands use their strong balance sheet their cash to pick up brands.
Michael LeBlanc
They got the people, too right? The brands and the people.
Steve Dennis
Yeah, brands, customer lists, talent, technology, real estate, you name it, there's lots of lots of plays. So, so I think there's really going to be this kind of contraction or consolidation among the stronger players, broadly speaking.
The fifth is the great rewiring. And this is a term I took from Rishad Tobaccowala, and he talks about how COVID has really just fundamentally changed the way we shop, the way we dine, the way we are educated, and work, and so forth. So, you know, and this is the one where I think it's harder to know the degree to which this rewiring will persist. I think the work from home one is the one that's probably the most profound over time. And when you think about that, not only does that dictate what you spend your money on, but also, you know,
Michael LeBlanc
Where you are shopping
Steve Dennis
Yeah, right, are there more, more people, you know, more retail, restaurants, in the suburbs relative to urban cores, you know, that those sort of things could be pretty, pretty significant. And, that's got implications for real estate prices, and whole bunch of other things.
And then, the last one quickly is, but it's actually the one that I'm kind of most jazzed about, is what I'm calling the hybridization of retail. And again, you know, like a lot of things I talked about in the book, some of these things have been going on for a while, and people are just, they've either been accelerated or amplified, or in some cases, people are just like waking up to the reality that they didn't see before. But, I think, as we talked about earlier, retail stores, which are basically designed to be places for people to go and buy things are really serving more hybrid role. You know, we talked about the marketing role of it, I think that's becoming more obvious. Fulfill, fulfillment of eCommerce orders from store stock. Curbside pickup, service centers, return centres, you know, all these kinds of things, I think, will change the nature of a given physical store pretty considerably over time. And, I think it'll also lead to a different way of deploying your different formats, because you may have, you know, if you're a grocery store, you may have the dark stores that are doing just fulfillment. So, you can keep stores just being consumer only, or ghost kitchens. You know, there's a lot of things going on here where new formats or, or maybe formats that were around, are getting reimagined and maybe aggressively rolled out. So, so a lot of hybrid, you know, virtual digital, but also, I think the role of physical retail is pretty significant.
Michael LeBlanc
Well, the book is 'Remarkable Retail' and no matter when you're listening to this, it's available. If you're listening to it in mid-April, it's on, you can get on preorder, but soon, no matter where you are in the world, you'll be able to buy it. So, I encourage everyone to do it. It's fantastic book. And, we're, in fact, even going to give a couple away. So, thank you, Steve, you've, you've given me a couple, three books to give away. So, we'll have a fun promotion that I'll have linked into, or are connected into the show notes. So, check out that. We're going to give a couple of books away just to share the wisdom, so to speak. Thank you very generous.
And, again, I'll quick thing we've got an event coming up, you've got a book launch coming up. I say we because I'm hosting. I have the pleasure of hosting. Talk about that for 30 seconds. That's happening on
Steve Dennis
Yeah, Tuesday, the 13th at 5pm Eastern Standard Time. It's a one-hour event, which will include myself, surprisingly, and you, were also going to have Sucha, Sucha,
Michael LeBlanc
Also, not surprising.
Steve Dennis
Sucharita Kodali, a Forrester analyst who was kind enough to write the foreword to the second edition. Seth Godin, and several other people. So, we'll be talking about the boo. We'll be talking about what's next for retail, and taking some questions. And, so I imagine you might be able to put the link in the show notes. And I'm also, if you follow me on social media, @stevenpdennis on Instagram and Twitter, we'll have that information there as well.
Michael LeBlanc
That's great. I put the, I'll put the link for that. And for the listeners, it's a great opportunity to ask Steve the questions that you might have after listening to this interview. So, it's a great, great opportunity. So, Steve, thanks again for joining me on The Voice of Retail. It's great to hear your voice as always. And, I wish you much continued success with the book, and the launch of the book. It's already got such great momentum behind it. So, congratulations on that. And thanks again for making time to chat.
Steve Dennis
You bet. Thanks for having me.
Michael LeBlanc
Thanks for tuning in to today's episode of The Voice of Retail. Be sure to subscribe to the podcast so you don't miss out on the latest episodes, industry news and insights. If you enjoyed this episode, please consider leaving a rating and 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. Visit my website at meleblanc.co. Until next time, stay safe and have a great week.