TRANSCRIPT
Peter (00:00):
Welcome to unpacking the digital shelf where we explore brand manufacturing in the digital age.
Peter (00:17):
Hey everyone, Peter Crosby here from the digital shelf Institute. Here's a pithy quote for you, sadly, quite a few retailers picked an especially bad time to be boring. That's from the brain of Steve Dennis, who has spent decades in the strategy seat of retailers, such as Neiman Marcus and Sears, as well as being a trusted advisor to the retail fashion and luxury industries through his consulting firms, Sage Barry consultant. He shares his knowledge with the industry as a keynote speaker, his column for Forbes, and most recently the second edition of his best-selling book, remarkable retail host dish COVID are we post dish? COVID I'm not sure, but anyway, his book revisits what it means for retailers of all kinds to stand out and be worth remarking on in this post COVID era. And as so many more brands are becoming retailers themselves. It's an important book to read and Steve joined me and Rob to share his insights. So, Steve, thank you so much for joining us on the podcast to discuss the second edition of your new book. I really grateful that you're bringing all of this this great revisionist thinking to, to our podcast. Thank you literally.
Steve (01:31):
Well, thanks for inviting me on.
Peter (01:33):
So w when I, when I read it I there's, there's a quote that really jumped out at me about sort of the times we find ourselves in retail. And, and you wrote sadly, quite a few retailers picked an especially bad time to be boring. I think as, as we, you know, as we're in this time of COVID where, you know, coming out and, and the revisions that have come out of that, and, and also just what's changed in the market since you were the first edition. Did you reconsider at all, whether in these times, whether remarkable was the right organizing principle, I know it's tough to change the title of a second edition of a book, but was that still sort of the core idea for you?
Steve (02:15):
I really didn't consider changing it. If anything, I guess it made me more, the COVID crisis made me more convicted towards this, this idea of the need to be remarkable, because as the pressures have gone up on all retailers, really all parts of retail, I'm trying to be a little bit of everything to everybody, or hoping that being what I often refer to as a slightly better version of mediocre is likely to be a winning strategy, I think is clearly the evidence shows that that's not been the case for many, many years now. And as more people and more brands move online, as competition continues to be ratcheting up, it's just really difficult to survive if you're not truly remarkable.
Peter (03:05):
That's one of the things that I love about the word remarkable is that it has this sense of extraordinary, but really it's things that people will remark on, which I think does point us to you know, to a time in, in our society where your brand is no longer what you say it is, what your, your consumers or your social media influencers are. The people that are talking are saying about it. Is that sort of what that word means to you?
Steve (03:35):
I I very liberally stole that from Seth Goden who fun fact was my first business partner a long, long time ago, but set's book purple cow is the place where he really brought about this idea. And, and, you know, he really did say that, yes, it is about being unique. It is about being differentiated, which I think is extraordinary, as you said, as the way people commonly think about remarkable, but it is this idea that people will talk about your brand, which to me also suggest that there's much more of an emotional connection. I think when the world has gotten to a place where, and this is overly simplified, but, you know, we're, we're either running errands or we're really trying to do something special and running errands that sort of convenience driven businesses, largely what the internet is pretty good at and tends to become pretty price oriented. And so if you're going to try to really have an emotional connection with people, if you're going to try to charge a premium price or just break through the noise, that's out there in the marketplace, you're going to have to do something at a whole new level that does make that emotional connection and does help customer, or helps the brand get their story told through their customers and social media and a lot of things that really didn't exist 15, 20 years ago.
Rob (04:57):
So what are the places where I saw the impact of your new edition was where you laid out the six new forces of the COVID economy. And I'm a huge fan of lists. I love the numbers. I run most of my life on lists. And so, so it's catchy. And the one that caught my eye the most was a number six hybridization. And I'm gonna, I, I apologize almost. I don't know if this is uncouth, but I'm going to quote you to you.
Steve (05:29):
Oh, uncouth. If I go, wow, that's really brilliant.
Peter (05:33):
That's where
Rob (05:35):
Please tell me if you agree or disagree with today's remarkable. Retailer must see the customer as the channel and develop a hybrid formula to meet the consumers need any time, any anywhere anyway, and you wrote a Forbes article digging into this. I want to dive into that because I really think that this shopper in charge of when, where, and how they shop is something that we've been talking about for a decade, but it's true in a different way now that you touch in the book. So, so let's, let's, let's go into number six hybridization.
Steve (06:11):
Sure. Well, the idea that for better or worse, I started working in the world of e-commerce in the late nineties, and I actually headed up a, what we called multi-channel integration at Sears. It starting in 1999. And our mantra there was that silos belong on farms that we had had all these different, and I won't get too much into serious history, but let's just say we were very siloed in our data. And back in the day, when we had 800 numbers, we had like 200 800 numbers. And our CEO at the time, Arthur Martinez said that the future of Sears will be determined. Something like I'm paraphrasing will be determined by our ability to meet our customer's needs anytime, anywhere, any way. So we got that part, right? Everything else is serious. Got, got screwed up in the meantime, but, but this idea that Sears, and then subsequently when I was at Neiman Marcus is one brand operating in many channels with many different sort of media has been in my head for a long time.
Steve (07:16):
And for years looking at customer data subsequently as a consultant very much saw this phenomenon that digital drove physical, physical, drove digital, and increasingly was all kind of one thing. So, you know, when people call this a lot of different things, but this idea that physical and digital from a customer standpoint, we're blurring and blending and becoming more hybrid. I think anybody who's really been paying attention to retail over the last 20 years understands that what I was trying to get at in both the Forbes article and when I started talking about that in the book is not only is consumer shopping behavior, a hybrid, the way we as brands, whether we're a manufacturer brand or a retailer need to think about our go to market strategy needs to be much more hybrid in nature, you know, mix of different formats and mix of different distribution channels.
Steve (08:13):
Perhaps the thing that I think is most interesting and was going on before COVID but is really, I don't know if it's been accelerated as much as people now understand it is it used to be that stores served one purpose, really, and that was for customers to go there, see what was on offer, maybe talk to a sales associate, but figure out what they want to buy, pay for it and take it home with them. And with rare exception, that was really the way stores have been built for a long period of time. Then we start to get into this era where suddenly stores are playing a bigger role in fulfillment buy online pickup in store during COVID. It became pickup. It became more delivery runners going to stores, picking it up, taking to consumers' homes, retailers like best buy target, others fulfilling a lot of e-commerce orders from their stores.
Steve (09:07):
So suddenly you've got this hybrid of fulfillment and the normal role or the historical role of stores. And then you've got product showrooms and the marketing role of stores. So, so I think everything is blending and blurring together. And historically retailers have basically thought, you know, here's my physical store channel. Here's e-commerce and never the two shall meet. But really going forward, they have to be much more put together. And I think it frankly causes us to really think about what a store is for and what future go to market strategies need to look like. So that was a long-winded answer. Hopefully that, that made some sense.
Rob (09:47):
Definitely did. I mean, the, the thing that we see a lot of folks struggling with, and this was true, extremely structurally in the, in the Sears anecdote that you gave, but we still see that seed being true today is how organizations are structured. And in particular KPIs are set group by group and, and compensation is made group by group in a world where different channels impact, you know, relate to each other. So who gets the credit for something happening online or in store, or who gets the credit for a really great trade promotion deal that is set up for basically it's store related brick conversions versus versus a very successful ad campaign that's run online that might impact store. And all of this, all of this stuff is impacting everything else, but the compensation in the, in the reporting lines, haven't, haven't really evolved to reflect that as much as maybe they should.
Steve (10:55):
Yeah. It's interesting to me. I'll tell you a quick anecdote when I was they had a strategy in multi-channel at Neiman Marcus. I started there in 2004 in 2005, we started working on trying to figure out how to get over some of those kind of silo channels being in competition with each other issues. We did a bunch of analysis in terms of how our marketing models were messed up and so forth. But I was trying to make a recommendation to management and to the board ultimately about how we might change our organization. And I went out to see a guy named pat Connolly at Williams-Sonoma. He was the chief marketing officer, and I explained to him the issues we were, you know, all the things you mentioned that our attribution models and we were in competition with each other and each channel had their own incentives.
Steve (11:41):
And I said, Hey, now, how did you, and from what I understood is Williams-Sonoma didn't have any of those issues. And I said to him, how did you guys, you know, come to get this the way it is now? And basically he said, well, you're like the 20th person has come to see me to ask me about this. And I don't know what to tell you, because we never set it up in the first place. When we started mailing catalogs, we always knew that the catalog sometimes drove people to our store and sometimes drove people to our catalog business, which was eventually the e-commerce business. And we know we just, everything that drove the brand and drove our better performance was the customer was our guiding light. And so we just never set it up. And he said, frankly, I don't know, understand why anybody would do that and stuff. It was always struck me because, you know, that was what, 16 years ago now that so many companies still with all the talk about omni-channel, multi-channel integrated commerce, et cetera, that this still hasn't been really just the basic way that that retailers operate. So if, if, if you aren't thinking about the customers, the channel and you aren't busting those silos and you aren't developing new metrics and then incentives, you know, you're just likely to fall further and further behind.
Peter (13:01):
Then I'd say, let's, let's dig into that because you, you, you know, you essentially try and put a stake into the heart of even the word on the channel. And you write a lot about the customer as a channel. You, you do a list in the book of the eight essentials of remarkable retail. Hey, Rob, another list. And and it's,
Steve (13:20):
I mean, I really, I really, when I was writing it, I just said, you know, how can I get Rob,
Peter (13:26):
It's a freaking buy this book. And, and so I would love to really dig into this one in a lot of detail because the customer is the channel. You know, many people will say that, but when you start saying, so you have to declare on any channel dead, you need customer centric, customer centric metrics, you need to bust down the silos. Like it's those details that are really the hard stuff, right? You can declare these things. So one of your essentials is you call harmonized, like, instead of omni-channel, I'd love you to talk me through sort of that and, and what you've seen done successfully to get to that, to that effect.
Steve (14:05):
Sure. Well, there, you know, a lot of people criticize me of, of getting too much in this semantics, but when, you know, a few problems with omni-channel one is, I just think we have to be careful to not have channel too much in our, in the way we talk about things, because, you know, that's, that's not a very customer friendly phrase. And I think the early days of omni-channel because it's a so long ago now, it was all about, we need to be everywhere. You know, that's like, we need to be, it, it wasn't, it wasn't so much about being particularly careful or customer focused in not strategy was just, you know, we need to be online. We need to be mobile. We need to be social media. And I think a lot of Omni channel initiatives failed, or I know a lot of omni-channel initiatives failed because they didn't really have sufficient focus on what customer results you wanted to have.
Steve (14:58):
An omni-channel almost became shorthand for having better e-commerce capabilities. And in all that rush to develop e-commerce capabilities, we did. And I saw I've seen this with a bunch of clients, but also retailers have studied. We actually made the competition between e-commerce and brick and mortar more intense because he said, oh, we gotta be Omni channel. Let's go develop e-commerce. And e-commerce has got to break even. And all sorts of just crazy metrics got developed, which actually undermine the overall efforts. So, so I don't think it's about being everywhere. I don't think we should be focused on channel thinking. So harmonized to me was really this idea of we've gotta be one brand for the customer customer doesn't care how we're organized or how we measure success and in a world where we're tethered for better or worse. But the reality is so many customers are tethered to their smart devices, 24 7 in an instant, anybody can be shopping, right?
Steve (15:54):
So, so the customer is thinking about the brand wherever it happens to live. And oftentimes that's on their smart device, or maybe it's on their laptop, or maybe it's when they're in their store with the smart device. So we have to have that orientation to what the customer is doing, and it's our job to provide as harmonious and experience for them. So what does harmony mean? Harmony is resolving discordant notes you know, anything that isn't pleasing to the ear, but in this case, the shopping experience, I think about that as pain points, friction, whatever you want to call it, it's, it's resolving that. But ultimately for it really a piece of music to resonate with us or a shopping experience resonate with us, there has to be some sort of wow to it that has to be a crescendo or a beautiful movement or something that makes that emotional connection.
Steve (16:40):
So, so to me, trying to create seamless commerce or whatever, you know, customers don't have a problems with seams. They have a problem with the basics of the shopping experience working and then something or a set of things has gotta be truly memorable, truly remarkable to keep tearing their business in the first place and to keep winning it. So I don't know, I just liked the evocative nature of, of harmonized or harmonious shopping. Whereas omni-channel, to me is just, it's just kind of flat. And frankly, too many people have too many different definitions of it to be useful, really
Rob (17:15):
Make this concrete, what upbeat old school retailers, the ones that have been around for 50, a hundred years, which of them have, have made the jump, or at least a good part of the jump into this into this harmonized execution. Is it the target or the tractor supplies who's in that list? What's a good example of this.
Steve (17:36):
Yeah. You've mentioned a few. One of the reasons why I like to talk about target or best buy or, or even Walmart, is there was this narrative. Well, first of all, you got the retail apocalypse narrative, which is kind of nonsense, but there was in particular, this narrative that some of these kind of everything store retailers were going to get Amazon, that it was impossible for them to keep their position in a world of e-commerce and the growth of Amazon. And if you look at what best buy target Walmart tractor supply, you mentioned others have done is yes, they absolutely got much more serious and invested pretty heavily in their e-commerce and digital capabilities. But I think the shift they had probably three or four years ago was the stop thinking about their stores as liabilities that needed to have their costs reduced and, you know, needed to be shuttered or downsized and started to thinking about them as, as assets.
Steve (18:40):
So when you think about this harmonized world, it forces you to go through the customer journey and say, okay, what's the different role of digital and physical in being remarkable for the customer. And the fact of the matter is, and not everything certainly, but a lot of the categories that target Walmart and others are in the store is really important. It's important in the customer getting instant gratification. It's important to the customer, learning about brands it's important about in, in putting things together complimented by digital. And we know most customers, I'm sure people listening to this, you know, they're, nobody's just an online customer and just a brick and mortar customer, you know, there's so much overlap and it depends a lot on what it is you're buying and what your alternatives are. And the more you understand that, the more you realize, oh, there are these discordant notes or friction points in the way we do business with the customer online or in a store, I've got to root those out.
Steve (19:39):
But how do I find some things that give me a real competitive edge? And the fact is target Walmart best buy, have some important edges over Amazon. And most of them have to do with their physical stores both in terms of the cost of fulfillment, but also in terms of the instant gratification or one-stop shopping that customers want. So you really have to understand that it's very particular to a given retailer, but you can't just make these sweeping statements about the supremacy of online or, you know, physical stores are dead. The reality is they're different, but 90% of all retail involves a physical store in some way. So it's pretty hard to ignore that.
Peter (20:22):
So when you think of how retail was in your experience that are going after this, what, what are those sort of the, because a lot of our listeners are moving towards a D to C model as part of their way of, of going to market, you know, for some, for, I want this data, I want to understand our consumers better. Some because it can at a differentiated and a more exclusive and potentially higher margin place to do business, et cetera. So I think the, sort of the, the thought process and the shifts in business operations that need to happen from your perspective, w you know, Rob was talking earlier about incentives or, or what KPIs are, you know, what are sort of the, the series of maybe pilots or organizational changes that you see consistently across some of these retailers it might be useful for, you know, for, for brands now becoming retailers?
Steve (21:23):
Well, as much as it's a cliche, I think the core is really starting with, with the customer, the brands that, you know, whether it's manufacturer brands getting into direct to consumer, or kind of traditional retailers, many of them are really upping the ante on leveraging customer data but not through surveys necessarily it's through this more one-to-one relationship with the customer being able to track their behavior. So for manufacturers going direct to consumer the ability to have that relationship or more of a relationship with the end consumer is hugely important, you know, in terms of getting that data, but also being able to reach them and perhaps to, in essence, skip the middleman. You know, there's a lot of inefficiencies in in wholesale distribution that we're seeing being eroded. So some of that's just a smart strategy. But I think, you know, every retailer should have a foundation of understanding which customers would then consumers are really going after what your various goals are for each of them and trying to build that the data about them.
Steve (22:28):
And I think it's worth experimenting with whether it's I mean, there's kind of two kinds of, I guess, if being overly simplistic about there's two kinds of experimentation, you can do. There's more of the marketing experimentation of test and learning AB testing, personalization tests, those sorts of things that, you know, thankfully are fairly inexpensive to execute these days. And then there's really more of a business model experimentation. So if you look at probably what's become the most talked about example of a manufacturer, getting deeper and deeper into C you know, Nike is a great example of where they have really used a, more of a membership model, a mobile based membership model to be able to collect more data about their consumer, but also to be able to deliver it to them more in real time. And secondarily, they have been experimenting very aggressively with a number of different retail formats.
Steve (23:25):
So, you know, depending on what kind of brand you are having a, a significant, you know, your own significant retail experience can be a lot easier. You know, if your m&ms right, it's a, it's a kind of a very limited kind of strategy. You know, if you're Nike or some of these apparel brands you know, there's more of an opportunity to put together something whole holistic. But the reality is that I think the gravitational pull is going to be for more manufacturers to go more D to C for the reasons you mentioned in terms of data, but also the potential that that's a more profitable strategy. And the other thing, which is just harder and harder, which gets back to this idea of being remarkable is if you're pretty much a commodity product, it's too easy for consumers to find a cheaper substitute. And so getting away with being, you know, even very good is, is harder and harder. So I think a lot of manufacturers are called to either find out why, you know, figure out ways to add more value to their whole wholesale distribution partners, by product providing more exclusivity or fitting into their merchandising strategy in a more powerful way than historically has been true. But it also may be creating products or creating a retail format to go, go to the end consumer.
Rob (24:47):
Yeah. Is that last point on where the bar is on the experience? I think goes into so much of a, the theme of being remarkable. You can't, it's no longer good enough to be good enough. And we, we ha we had this almost, I don't know, 50 or 60 year period of mass market retail in the U S where effectively you get in a really great location. You know, you borrow money, you develop a retail location. That location gives you almost a monopoly access to consumers within a certain geographic radius around the location for whatever category you're selling, right? And then you just, you, you pack the shelves with brands that the consumer will basically recognize to help increase conversion rate. And that's the formula, and it's not like it's the easiest formula in the world, but it's at least, you know, it's kind of mathematical and it's boring.
Rob (25:44):
And by the nineties companies got really good at it and were stamping out thousands and thousands of these stores all over the place. And you're sorry, sorry, let me just, let me just finish my thought here. Now, the statement you're making is essentially the experience itself has got to be differentiated and not only that, but the products, the brand name doesn't get you there anymore. The product itself has got to be actually not just very good. It's gotta be gotta be excellent and remarkable on some level in order to have sticking power. Is that a good characterization?
Steve (26:18):
I mean, another way I talk about this in the book is, you know, th I mean, this is a fundamental principle of strategy, but the ability for any business really to make sustainable profitability or excellent and sustainable profitability is based on some level of scarcity. And to your point back 20, 30 years ago, where 98% of all retail was done in a physical store and you had to go there whenever that store happened to be open, and you could only buy whatever that particular retailer carried. And the way you collected information was by looking at magazine ads or TV ads, or maybe talking to a sales person, or you're somebody you go to church with or whatever, you know, there, there wasn't, there was scarcity of information. There was scarcity of choice. Depending on the city you lived in, there was scarcity of places.
Steve (27:15):
You could go buy things well over the last 20 plus years, all that kind of scarcity for the most part has evaporated. So the new scarcity can't be based upon I carry a lot of stuff or I have the lowest price, or, you know, I have a bunch of information about you that nobody else and these products and nobody else has. I mean, all that stuff is now readily available. So, you know, you could point to someone like RH with their gallery stores as having created new scarcity, because they've created a store format, which has everything you want to go see if you're the right sort of customer for RH. And that's a big part of strategy too, is the right focus. Who's it for, who's it not for, but if you're the RH type of customer and you're in the market and you can get to those stores, you'd be an idiot not to go there because it is the one place where you can see all of this kind of furniture it, and imagine it in, in your home.
Steve (28:16):
So, you know, that's a more extreme example, but, you know, there used to be plenty of places where you could go get, get furniture. Now, you know, if you're interested in any kind of home furnishings, just do a search on Wayfair, and you're going to do a pretty good job of finding finding lots of choices. You know, if it's a search driven business and a price driven business, the internet is pretty good at that, right? And it's really hard to compete with that if you don't have the scale and scope that many of these businesses, not just Amazon, but other businesses pay. So I might say to people, you know, you got to let go of the scarcity that drove your business 20, 25 years ago, and find new sources of scarcity in a world where everybody's connected and, you know, the internet never closes endless aisle, yada yada.
Peter (29:02):
So it's interesting, Steve, when, you know, when you talk about the need for the new scarcity, I love that as a, as a kind of a, of a call to action, like figure that out and really your list of the eight essentials of remarkable retail, I think are a place that readers can go to kind of dig into that. And a couple of things that stood out to me, you know, there's sort of in a way harder than just be in a geographical location with, with less competition and people will come to you. You had two essentials that, that in your list, essential number seven, let's start with that. The, the essential is that you be memorable in retail. And do you want to just talk me through some of the ways in which you've seen retailers become memorable that really lend to, to the principles of how one might think about that?
Steve (29:57):
Yeah, so the concept of memorable is probably the one that, that lines up the best with this idea of being remarkable. You know, it's being intensely customer relevant, it's highly differentiating. And then you know, creating that kind of wow factor. The problem with retail or the challenge, I guess, in writing this book is retail is such a diverse industry. So what I try to do in the chapter is explain a number of different ways that retailers might seek to be memorable. But one, I think for sure, that's easiest to get our head around is to try to be the only place for, for consumers to go or close to the only place. So that's usually about either building a highly powerful brand consumer brands that, you know, so apple is probably the best example of where they've got so many people that are, you know, obsessed about having the, the apple product and almost anything apple puts its name on.
Steve (30:57):
So, you know, either you're creating that product that is super in high demand, or, you know, the other alternative is, are two other alternatives are, you know, have very narrow distribution or, you know what we're seeing a lot now, particularly in the grocery businesses, a lot more of this transition from private labels to private brands. In other words, not a store product is really just about price, but is actually creating a point of differentiation. Target's probably the best example of, of someone that's really invested behind that strategy in recent years. And so that gives the consumer a specific reason to go to that retailer, whether it's in store or online, but it also has the advantage of not being products that are readily price shop on Amazon or, or other places. But most of this, you know, it comes back to really understanding who the customer is and why they're going to choose you over the competition and really driving deeper on that. So that can be a product example, or that can be a store, a store format, a lot of the digitally native vertical brands that have had a lot of success, not as much profitability, but a lot of growth have, you know, really picked a particular type of customer and a particular kind of product. And, you know, really gone after that in a very specific way for product differentiation. And then back that up by a distribution strategy that gives them advantage and potentially higher margins.
Peter (32:29):
And when, when you think about that, you know, again, bring it back to our brand manufacturer listeners. Do you feel like cause you talk about a couple of the various ways that you could do that. I think memorable can also come from the ongoing service and connection that you build post-sale and we're seeing a lot of attention on that, that piece of it is that, is that where you can see a lot of opportunities for, for being memorable is even if your product may not be the most differentiated, I know I can count on you or you'll always tell me the next thing I should have in my child's journey. That kind of stuff is that, is that part of the,
Steve (33:14):
I think, and I know I get a lot of flack for this, but I think retail has suffered from these, these statements that it's all about product. I think that's demonstrably not true. Customers are trying to solve, you know, they're either trying to solve a problem or they're trying to create a story about themselves that makes them feel better or that they want to tell others. And so my general advice is to keep kind of pushing up the higher order need that the customer has. You know, if I buy a $5 bottle of water it's not just because I'm thirsty, right? The need you're meeting is more than just quenching my thirst. If someone's buying a $3,000 handbag, you're not solving the need that I need something to carry stuff around. So I think you have to kind of go higher and higher in, in the solution to, I guess, to use the cliche that you're providing.
Steve (34:13):
And I think when you do that, it's really, that's another bit of this hybridization is that a lot of the branding brand offerings are not just about a product, they're about a broader solution. So maybe that is shipping me a product when I need it. Maybe it is providing more information, maybe it is value added content, so that's not going to work for every industry. But I think the more you think about kind of the total cost of ownership or the more holistic solution you're providing, you can go above and beyond the kind of standard features and benefit products, that product thinking that is, has driven a lot. You know, if you think some folks are probably familiar with Quip ultrasonic toothbrush, well, it's a pretty good product. But the fact that they shipped you a battery in a new brush head every three months is, is taken care of a broader solution. You're solving a problem for me. I don't have to remember that. Oh, maybe I need it's time for me to get a new, a new toothbrush or whatever, or I'm out of a battery now I've got to go to the store to get one or hope that I can find one in this drawer. So keep asking those questions to get to that kind of higher level and state, I think is, may guide you to thinking about your business in a different way and probably a more hybrid way. Yeah.
Peter (35:33):
I like how the book lays out a bunch of those different
Rob (35:38):
Axes on which you could, you could be thinking about this, but cause like to Peter, to it, for me, it's, you know, the old adage fast, cheap, or high quality, you know, pick two or whatever it is, you can't have the best product and also the best post shop, post purchase experience and also the widest distribution and also, and also in, also in also right. It's, it's just, it's impossible to be the number one at all of the things. So you almost have to pick what your, what your axis, where you're going to be remarkable is first and foremost and doubled down on that. And then now maybe, maybe there's time to pick a second.
Steve (36:25):
Yeah, I, I think that two thoughts to that one is some of some folks may know this, this idea of, of 1000 true fans. Guy, I think he's the publisher of fast company came up with I have a little bit different take on that, which is who is that obsessive core customer? You know, when you think about your product, who is that smaller group of folks that this is just the perfect product for them, that you're meeting their needs in such a deep, deep way and have that be the initial guide and then branch out kind of logical concentric circles. I think that's really important for brands that have been around for awhile, because if you think about, say a Macy's you know, 40 years ago, 50 years ago, they were kind of the only place to go or one of the few places to go to see this whole range of product, but then along comes off price retailers and category killers and Ulta and Sephora, and suddenly all that stuff is diluted.
Steve (37:29):
So I think, you know, and it's a whole different podcast that talk about the future of Macy's. But I think for a lot of brands that got to where they got to for a strategy that was powerful 30 or 40 years ago, but it's no longer sort of powerful. You almost have to go back to first principles and say, okay, who's at the center of my bullseye, who are these customers? I want to be, have become raving fans or whatever you want to call them and how might I migrate to get there. Now the challenge of course is if you're already a big business, you know, you may have to give up some, some of those fringe customers along the way to get back to that. But if you don't, you're going to slowly erode your business over time, which is what we've seen with a lot of very famous brands, whether it's toys R us or JC penny or Sears, where I used to work, you know, go away.
Steve (38:16):
The other thing I would suggest is which is a little bit off your question, but ideas get transferred very quickly now. And my experience has been, and others has said this, that consumers look at almost any retailer as only being as good as kind of their last great customer experience. And so, you know, if I have, can have this experience with best buy, why can't I have this experience with Coles or if I can have this experience on Amazon, why can't I do this on Macy's dot com or whatever? So spending time, not just looking at your most direct competitors, but looking at adjacent retail space, but frankly looking at adjacent consumer space, I worked with a brand a few years ago that when they did their started on their new direct to consumer strategy, they spent a lot of time looking at competitors all around the world that were not retail at all. Because they saw some leading edge service and loyalty programs and so forth coming from other industries. So I think that it's a really open the aperture in terms of what, what you consider competition or where you can source your ideas.
Peter (39:29):
That's a great thought. And Steve the book you know, we can only capture so much in a 35, 40 minute podcast. So I've, I've, I've done my best to try and bring out these themes, but I would recommend all of our listeners pick this up and look at the second edition because I D I do think the additions that you've made to the edition, sorry, English language are, are remarkable in a lot of ways. And I think worth reading as we head into 20, 22 and start thinking about how do we get closer to our consumers and our customers. And so actually in closing, I hope you don't mind, but I'd love to make you quote you to us by having you just read a little passage from your book, which, which was in the final chapter of a brave, which you've entitled a brave new world. And if you wouldn't mind, I'd love to see if, I guess with that, if you, if you've got it up
Steve (40:29):
Yeah, it's actually the the various not to be a spoiler alert, but it's, it's it's actually the virus very last couple of sentences in the book, which is the journey to remarkable is inherently about planting seeds, cultivating what starts to grow and eventually reaping the rewards of our hard work and a new willingness to take risks. It's worth remembering as the ancient Chinese proverb says the best time to plant a tree was 20 years ago. The second best time is now.
Peter (41:00):
Love it. Great call to action. Steve, congratulations on the second edition and thank you so much for coming on the podcast to share these insights with us. We really appreciate it.
Steve (41:10):
Well, it was great to be on and thanks for your very kind and generous words and yeah. Look forward to to staying engaged.
Peter (41:20):
Thanks to Steve for sharing some of his remarkable book with us. The link to his Amazon page is in the show notes. Please share this episode with your colleagues and thanks as always for being part of our community.
