“A lie unchallenged becomes true.” So, if a retailer is not, in fact, looking at what’s being said about him for example, whatever that statement is, if it’s not challenged if it’s not responded to inappropriate way, everybody believes it.”

BIO: Rich Kizer and Georganne Bender are consumer anthropologists, keynote speakers, authors and consultants who have helped thousands of businesses in the retail, restaurant, hospitality, travel, salon, healthcare, funeral profession, and service industries since 1990.

KIZER & BENDER are contributors to MSNBC’s Your Business. They made Meetings & Conventions Magazine’s list of Meeting Planners Favorite Keynote Speakers and have been named two of Retailing’s Most Influential People. As global retail thought leaders, KIZER & BENDER are listed among the Top 40 Omnichannel Retail Influencers, Top 100 Retail Influencers, and the Top Retail Industry Experts to Follow on Social Media. Their award-winning Retail Adventures Blog is consistently listed among important retail and small business blogs. KIZER & BENDER serve as BrainTrust panelists for RetailWire and are partners and emcees for the popular Independent Retailer Conference.

Transcript:

Mani: Hello everyone, welcome to the series of podcasts that retail singularity, an offshoot of Litmus7 Systems Consulting is hosting on the future of the retail industry. We see retail changing very rapidly before our eyes and we want to be a part of the forces that are driving these changes. I am Mani Subramaniam, President, Retail Singularity. In this series of podcasts addressing the future of retail, I’ll be talking to leading retail influencers to understand the direction that retail is taking and to try and evaluate the impact of these changes.

Mani: Hello everyone, welcome to today’s podcast on the future of retailing. I have with me Rich Kizer and Georganne Bender who are consumer anthropologists, keynote speakers, authors, and consultants who have helped thousands of businesses in the retail, and restaurant and hospitality, travel saloon, healthcare and service industries since 1990. They are recognized Global Thought Leaders and are listed among the Top 40 Omnichannel Retail Influencers, the Top 100 Retail Influencers and the Top 100 Retail Industry Experts to follow on social media. They are brain trust panelists for RetailWire and are partners and emcees for the popular Independent Retailer Conference. Thank you Rich and Georganne for agreeing to do this podcast with me. As I see retail, am I the only one sensing that the world of retail is changing faster now than it has in the last 50, 80 or 100 years? If you agree, what are the top significant changes that you see happening right now?

Rich: At least 10% a year, we always talk about 10% of change every year. And if we don’t make that change, there’s a dramatic consequence of becoming almost obsolete in a very competitive marketplace.

Mani: Okay.

Georganne: We’re seeing all kinds of changes. We’re seeing how customers want to shop, how retailers are luring customers into their stores, how to give them better experiences in their stores and online. And it’s almost like, if you close your eyes for a week, so many things have changed, it’s hard to keep up.

Rich: You’re right George. I was thinking about that when you were saying that. The thing that I think really has happened to us in the last eight years is that, and probably longer than that, but I mean, intensely in eight is that we’ve created new marketplaces for consumers and we’ve made them very, very smart.

Rich: And that creation of those new marketplaces has not only had the ability to enhance the retailer’s position in the market, but it’s also created a new competitor or a new competitive field in the marketplace today. And that’s what’s really happening is that there are options that almost every customer has the ability and knowledge to go through.

Georganne: Mani, Rich and I work with a lot of independent retailers. We work primarily with brick and mortar stores and it’s amazing to us how even the person who has a small store on main street in the middle of the country is having to dance to the changes that are happening in larger stores because their customers are exposed to that. They’re comparing the shop on the corner to the biggest store on the planet with the best website because they do all the searching and they do all the Google called ZMOT, Zero Moments of Truth. They’re searching stores online before they even walk into them. So even if you’re in a little town, your world has expanded and you expect more.

Rich: And you know what, they’re not all brick and mortar retailer to retailer and I do better on the internet than you do. It’s stores that are invisible stores so to speak, or sites that we can go and buy things and a store doesn’t even have a presence on a street, but it is a substantial competitor.

Georganne: A major source, yeah.

Mani: Okay. Everybody is talking about retail stores that are being shut down. I know that retail stores are shrinking, but retail itself is not, how do we reconcile this and how do we explain this, Rich and Georganne?

Georganne: Well, there was that whole talk about the retail apocalypse and everybody losing their minds about retail going away and brick and mortar is going to be gone. And just this week we heard about Forever 21 and people aren’t stepping back to look at the fact that Forever 21 is going into bankruptcy protection. They’re not shutting down every store. I think we all know that the stores that are going away are the stores that needed to go away because they write risks. They were open in the 90s when there was this feeding frenzy didn’t get as many stores out there as you probably could.

Rich: Well, after the recession, we had plenty of space available in landlords for cutting fat cat deals and people were probably getting into space that they really didn’t belong in, in the first place.

Rich: So there’s been a bit of a repercussion about that as well. But if we’re talking about shrinking retail and what is happening, the things that are most important that we work with is that it’s about better control of inventories. And I think that one of the things that happens with retailers, when it gets slow or you get a big competitor that’s knocking at your door, is that you’ve got to make sure you either intensify sales or you control inventory. And a lot of brick and mortar retail stores don’t see that picture until it’s almost too late. So we know that that’s number one is a big issue and one of the first things we look at.

Rich: Number two is becoming specific, not a wandering generality, but a meaningful specific in a marketplace. We think retailers have to take a stand and say, This is who we are and what we can do for you that’s hard to duplicate. And then the third thing that I was thinking about was that, we don’t need all that space, once was a luxury, but now it’s all about productivity. So analyzing sales per square foot, inventory turns per square foot are critical to the success of a brick and mortar store.

Georganne: Yeah. It’s really interesting. Before I talk about the shrinking store, Rich and I were at GlobalShop this past summer in Chicago. And if you’ve attended GlobalShop, it’s the biggest store planning, visual merchandising show. And we went to a panel discussion of four, four kind of hot online stores, very hot online store. And it was led by Melissa Gonzalez who was from the Pop Up store fame. And one of the things they said in this panel discussion was that once an online retailer gets, they said 10 million dollars, they hit a wall and they can no longer, it’s too expensive for them to go out and capture new customers.

Georganne: So they open a brick and mortar store.

Rich: That was interesting.

Georganne: It was really interesting. And it was interesting to hear all the people who were up there on that panel backed up because each one of them had been online stores that they opened up their own. One of them was Showfields in New York. I can’t think of the name of the store that just opened one in Chicago, but it’s a cool place where it’s not just merchandise, it’s also a community center and there’s classes and in-store events, which Rich and I are all over in-store events for our clients. So we’re seeing other people, we’re seeing stores close or seeing other people open up. We’re seeing things like the big stores opening up smaller footprints and that could be because what you said, Rich, they don’t want as much inventory, but it’s also… It’s more convenient for consumers. Mani, I interrupted you.

Mani: No, no, no, that’s fine. It’s fascinating. Not all retailers are suffering, some of them are thriving.

Georganne: Absolutely.

Mani: And what are they doing do to thrive and what should retailers do to thrive in this environment?

Rich: Well, first thing they need to do to thrive in this environment is to reconnect with their consumers, their customers that they’ve lost there. We’re seeing a lot of retailers trying to figure out new ways to connect with customers, to bring them back to their stores and we all talked about, in the industry, we all talk about the in-store experience and how important it is. The retailers that are pulling people back into their stores and keeping them there are the ones that really provide a unique, interesting, fun, interactive place to shop instead of just a place that’s loaded with fixtures where you go to buy stock.

Rich: You know what, the importance is presence. If you’re not present, you’ll never have a position in anybody’s mind. They’ve got to see you, and they’ve got to feel you, and they’ve got to look at you. And I do think that’s a huge internet opportunity for a lot of people, but one of the things we tell brick and mortar retailers today is, if you really are going to succeed, you must have a presence in what we call the world marketplace, which is everybody can see you every day. And if I want to shop at 3:00 AM in the morning, I can shop at 3:00 AM in the morning. I can get all of the details about who you are. That does not preclude that they won’t come to the store, but what it does is it puts you on a platform that says, “We’re as good as anyone else.” Because the platform is level. The message is what makes a difference on the platform.

Rich: So we always say, Have a presence and be unique. Whatever you do, show things that are fun or whatever it is that enhances your image. Because today, especially brick and mortar, is to create an emotion. When I walk in, I should have different feelings. You should take me on a ride or a treasurer hunt. But it should be an emotional event, not just educational. Not just show it, but somehow make me sense how wonderful this place is.

Georganne: [inaudible 00:10:11].

Rich: Yeah, make it important to me as a shopper. I can’t get that online.

Georganne: Yesterday we took some clients to downtown Chicago and we spent the day walking around stores at state street and it was really interesting. We went into one toy store, it just had the product sitting on the shelves and it was great product, but it was just, there was nothing exciting about it. There was nobody interacting with us, the sales people were off doing other things.

Rich: Everybody was yawning, even the cashiers.

Georganne: Even cooling off. And then we walked into the Disney store

Rich: And it came to life.

Georganne: And the Disney store has displays set up that pull you into them, and there’s props, and there’s mannequins that are dressed. And right now it’s all dressed for Halloween. And they had put together kits that they have throughout the store.

Georganne: So one of them was a pumpkin that had two other stuffed animals in it and you could pick those up and buy them. I did. Impulse purchases. Everything was brilliantly fine and behind the checkout counter they had the item of the day, they had two of them, that were displayed right behind the counter. So when we worked with stores, we always make sure that the area behind the checkout counter is product so that the customer never stops thinking about shopping. So while you’re standing there, you see this big sign that says, “Item of the day, 12 blocks, normally $1,999.” And customers, we stood back and watched them. Customers were buying those items. The people were happy to be there at Disney, right? People were happy to be there. There was music playing in the store. They had a little section where Rich went for a while and sat down.

Rich: Watched a movie. I watched the Disney movie.

Georganne: Watched the Disney movies while we were walking around the store. I mean, that’s what customers are looking for. If they’re going to get up off the couch and come into your store, it has to be a place where they want to be and where they want to come back. So you asked, which retailers are surviving the changes and thriving? They’re doing things like that.

Rich: One of the most obvious and what I call, brain with solutions to creating an emotion, used to have people, staff that recognize their customer and they don’t have to steal this, “May I help you?” Scrolling out the window. It’s kinda like greeting people that come to your house. When somebody knocks on the front door of your house, you don’t open the door and say, “May I help you?” Or you don’t open the door and ignore them entirely and walk away. But you just become a friend. And you know what? That sounds so remedial. But it is so important.

Rich: In our focus groups, what do we hear all the time? It’s all about the relationship that they built in the next 30 seconds when they walk in. So I think that’s really a key part of becoming successful.

Georganne: And sometimes that’s just smiling at me. In our trip yesterday we were in a big department store and they have a department, a ladies department that’s pretty famous. And inside of it is all the designer products and <inaudible> where it’s hard to find on other stores they are in stores now and which night we’re in there, we’ve timed it for 10 minutes and never saw a person in there.

Rich: We were invisible.

Georganne: In that situation, there wasn’t somebody there. In that situation, it doesn’t matter how great the merchandise is and how well it’s displayed, and it was well displayed and then…

Rich: There was nobody there, then the lady walked up after 10 minutes and said, “Are you finding everything that you need?” So hard, I don’t know where it is.

Georganne: It was all chained down. It wouldn’t matter if I could… if I could find it or not

Rich: Oh my lord. So we get ahead of our way and trip over our own feet sometimes. Don’t worry.

Georganne: Yes we do.

Mani: So what I’m sensing in is that whilst the product is important, and the product can be conveyed by online stores as well, the retailer and the relationship with the retailer is far more important. Is that right?

Georganne: Absolutely. And that’s what you just said, the relationship with the retailer. That’s true also with the younger generations, baby boomers and to an extent millennials were brand loyal, generation Z, you got to earn their loyalty. That they want to work with a company that is involved with their community, and who cares about the planet, is selling sustainable and recyclable goods, and it’s a good corporate citizen, and help to charities. Customers are tougher now on retailers than they ever were in the past. They expect more and the retailers that are doing well are the ones that recognize that and move forward.

Georganne: Another thing about thriving right now, you have to meet customers where they are, and they’re on social media.

Mani: Right.

Georganne: If a retailer goes on Facebook, or Instagram, or Pinterest, or Snapchat, whatever they choose. Probably Facebook and Instagram are the two biggest. If they’re going to go on there and meet their customers, the experience on Instagram has to be almost as good as it’s been in the store. You can’t just post static pictures of here’s a blouse, and a skirt, and a pair of pants, and a handbag. Isn’t this nice? It has to be more of an active photo and show them how to wear it and offer them ideas and suggestions and-

Rich: It’s like a symphony of emotion when you show it, they experience it.

Georganne: They do.

Rich: Yeah.

Georganne: I don’t buy my clothing online because I like to try things on and I like to feel the fabric, but I purchased many things off of Instagram and Facebook just because of the way they interacted. And there’s the good retailers, there’s a conversation and it’s a two way conversation. Customers ask questions, they respond. They want customers to post photographs on their Facebook pages of them wearing the garments or using the items and that’s how you engage two people. That’s how you connect with them. But understand social media is mandatory, but it’s also a two way conversation.

Mani: Right, okay. And it’s complex, right? It’s difficult to master though.

Georganne: It is. I mean, a lot of people think we still work a lot. We teach a class on social media marketing, and it’s still amazing that at the end of 2019, there’re some people who think they can just turn over their social media to somebody who’s 18 years old because they get it more than I do. You can. It’s become mainstream marketing. It’s almost as complex now as when you put together a radio or a TV ad, right? I mean.

Rich: Oh, yeah, it is. I mean, your words were used, the pictures we see, all of those create emotion.

Georganne: It requires a lot of thought, a lot of thought.

Rich: So it’s not a matter of listing an item and a picture. That’s stupid. They turn you off.

Georganne: We have clients too that we have connected with people who do social media marketing and sets their business because they get it and they can move them more forward in social media than if the retailer tries to do it themselves. There’s a lot to keep up with. It is a full time job. It’s not almost, it is because it’s that important.

Rich: And some of those people that do the social media stuff for them, one of the biggest things that we’ve been able to help those people with is to understand what retailing is all about. Because they have all the technical knowledge and how they can make this really work and sing and do whatever the case. But it’s also who are we appealing to and what are we doing in the background? So-

Georganne: Well, okay, there’s the difference. So when retailers farm out their social media marketing, they have to find somebody who understands their store, their market, and their customer, and customizes. Those companies that do it for you that are generic, every Tuesday they post a picture of somebody on a beach and every Wednesday, and it’s the same generic photos that you can find on everyone, 15 other people’s Instagram and Facebook. Those people are just wasting their money. Because again, it’s personal. It’s an experience. Mani, do you ever watch QVC?

Mani: Yes.

Georganne: Okay. So I love QVC. I love watching QVC. The people who buy on QVC thinks that host is their best friend.

Rich: Exactly.

Mani: Wow.

Georganne: We know those holes and if you read the comments on the chat boards, on the QVC website, or if you go to their Facebook or their Instagram, those customers, they’re part of QVC.

Rich: Yes.

Georganne: And it’s because they have built a relationship, worked really hard to build a relationship with their customers.

Rich: It’s like they have a tattoo that they see, every time they want to go shopping, they see that tattoo, oh, I’m going to watch QVC.

Georganne: You’re crazy.

Rich: Well, that’s what it is. They have branded their customer. I mean, they love… What can I say? I really think that.

Mani: Which makes me wonder, do you see a world where customers are more empowered than they were in the past and how were they empowered ?

Georganne: Oh, customers today, Mani, they hold all the cards.

Rich: They’re smarter than any customer ever in the history. I mean, we’re creating brilliant people about going shopping.

Georganne: Kids are brilliant about shopping. Yeah. I mean, we’re empowered because we hold all the knowledge that we need in the palm of our hands. I can look at any retailer on the planet and find out about them online in seconds by Googling them, going into their social media, going to their webpage and doing all those things. And they’re empowered because they have choice. If I don’t want to buy it from you, sorry, not going back. We were with a guy last night, met a retailer last night who said he doesn’t have a specific credit card. And the reason he doesn’t have it is because when he got his first job, that credit card turned him down. So he’s never carried it since. And that’s the epitome of the empowering of these customers. You do something to me I don’t like, you ignore me, you don’t provide what I want, whatever it is, I’m not coming back because I can go someplace else and get essentially the same thing.

Mani: So interesting.

Georganne: It’s customers. Customers hold all the cards.

Rich: They know where to go and they know what they expect.

Georganne: And they talk to each other.

Rich: And if they find it at three o’clock in the morning, they’re going to find a new place to go because you let them down this afternoon.

Georganne: And they talk to each other.

Rich: They do.

Georganne: If I had a bad experience in your store on a Tuesday, by Tuesday afternoon, I told the world on Yelp. Right?

Mani: Right. So obviously there are ways in which retailers can use this aspect to their advantage, right?

Georganne: Yes. The customers love to post on Yelp and Foursquare and [inaudible 00:20:51] and all those places. And retailers need to read what’s being said and respond accordingly.

Rich: It’s amazing to me how many don’t, never look. And you know what, I love this quote. I say it in every presentation when we do social media, “A lie unchallenged becomes true.” So if a retailer is not in fact looking at what’s being said about him for example, whatever that statement is, if it’s not challenged, if it’s not responded to in appropriate way, everybody believes. Hey, it must have happened. It must be true.

Georganne: Respond to within 24 hours.

Rich: Exactly.

Georganne: Retailing, right now you have all the challenges you had in the 50s, 60s, 70s, 80s, 90s, and early 2000 then you got to multiply it by 20.

Rich: We gave everybody a huge megaphone that is heard around the world.

Georganne: They have so many more responsibilities today that it is hard to keep up.

Rich: You know what I would love to see, and I mean, this would just be a dream to me for the retailers, but what I would love to see is army of people who would go to different retail stores to express their need, and they would walk in and sit down and maybe for one day go through everything that a retailer should think about, about using technology, using reports and finding out what’s being said. I can’t tell you how many times we’ve walked into a retailer’s office and I said, “Do you use all the technology that you have in your hands so far?” And they’ll look at us and smile and say, “Of course we do.” And then we walk into an office, we see a stack of paper that’s eight inches tall and I’ll say something like, “What is this?” And they’ll say, “Well, those are reports on inventory.” Or, “That’s a cycle count stack.” And they’re old. They haven’t been moved in the last month.

Rich: It’s because retailers are busy, busy, busy. And by getting that army of people to help them, it would be like the shortcut to say, Here’s what you need to do every day. Here’s what you need to do once a week. Here’s what you need to do once a month. And then show me how to use that information. But it’s difficult because when we walk in truly, many, many retailers don’t know how to use it. So they’re really at the rudiments or the basics of how to operate the store.

Georganne: Yeah. And you know what, at the end of the day, retail’s magic. I mean, we spent probably four hours yesterday walking around Macy’s on state street at the flagship store in Chicago, at Marshall Field’s. There are seven floors. And Rich and I walked every single corner. And it’s really easy for those of us in the retail industry to be armchair quarterbacks and criticize and, stores aren’t doing this and stores aren’t doing that. But we saw people shopping yesterday, buying, we saw registers that were busy. We saw people interacting with sales people, but we also found [inaudible] of net sales for many. We found a corner that has… its devoted to the history of Marshall Field’s and what Marshall Field’s stood for. And we found an area that has antique clothing-

Rich: From the 20s to 30s.

Georganne: 30s and 40s that customers had donated to the store. We found a-

Rich: Back to the museum.

Georganne: Yeah. We found a World War One and World War Two Memorial to people that had worked at Marshall Field’s and were lost in those Wars. Retail is magic and there’s stories to be told and-

Rich: And community.

Georganne: … and community and legends to share on. And I think we lose track of that sometimes when we’re so busy talking about the next big thing and why this retailer isn’t doing this.

Rich: And those primarily are things that are almost impossible to do on the internet to create that kind of emotion when you walk in through the front doors. And that’s what we talk about, positioning in the mind is created by doing something special no one feels is or can do.

Georganne: Yep. So obviously we spend a lot of time in stores watching customers.

Rich: That’s what’.

Georganne: That’s our shtick.

Mani: Your passion for retail, and the knowledge of retailing processes, and what helps a retailer is fascinating. Thank you very much for sharing [inaudible] and your wisdom, and I’m looking forward to working very closely with both of you. Thank you Rich.

Georganne: Mani.

Mani: Okay. I appreciate.

Georganne: Thank you so much. Bye-bye.

Rich: Bye-bye.