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Show Notes:
The Human Element: Overcoming the Resistance That Awaits New Ideas:
https://www.amazon.com/Human-Element-Overcoming-Resistance-Awaits/dp/1119765048
Winning on Purpose: The Unbeatable Strategy of Loving Customers:
https://www.amazon.com/Winning-Purpose-Unbeatable-Strategy-Customers/dp/1647821789/ref=sr_1_1?crid=1IR3FJPCBQL58&keywords=winning+on+purpose&qid=1653501110&s=books&sprefix=winning+on+purpose%2Cstripbooks%2C99&sr=1-1
Transcript:
Peter Crosby:
Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
Peter Crosby:
Hey everyone, Peter Crosby here from the Digital Shelf Institute, we live in the most interesting times with both the blessings and the curses that come with that. In retail and commerce today, that means processing all the noise of short term inputs against longer trends and core truths, and deciding what investments to make and roads to take. Tom Goodwin, a retail consultant, author, and speaker, and Oscar of the occasionally annoyingly perceptive question brings his latest views on the interesting times we live in.
Peter Crosby:
The opportunities that await, and the importance of often choosing the simplest path as the most meaningful consequential. So, Tom, thank you so much for being on the podcast. I am an avid follower on Twitter. Your perspective and thoughts and fresh thinking that urges people onto new thoughts is just really impressive. And we're so delighted to have you on the podcast.
Tom Goodwin:
Thank you for having me on, I'm looking forward to this conversation.
Peter Crosby:
You kind of have one of the coolest jobs in the sector. You really get to observe trends and help brands sort of know where to spend time next. I thought we'd start out just by, I don't know, whether it's the elephant in the room right now or not, but certainly we're out of first quarter earnings. Well, we're almost out of first quarter earnings. We're all aware of some of the headwinds in the economy and stuff happening around the world. That is certainly changing short to midterm macroeconomic things.
Peter Crosby:
The R word, for our listeners that's recession. So I was just wondering, what are you seeing out there? When you sit back and look at the environment in the next 18 months and talking to your clients and looking at the data, what pops out to you? What are you sort of when people say, "All right, Tom, how should we be thinking about this? What do you say?"
Tom Goodwin:
It's a very, very complicated picture. I mean, it's almost like a fractal and the more you look at the data, the more things seem quite chaotic. I wouldn't go so far to say unprecedented, but just quite strange. We've got quite low consumer confidence at the same time as having very high consumer spending. We've gone from having people with more disposable income and greater savings than they've ever had to a period where unemployment has been incredibly low. And then suddenly we appeared to be on the sort of cliff edge with dramatic announcements of job cuts. And we see lots of technology stocks in particular performing badly, and it sort of created all this energy that no one's really made sense of.
Tom Goodwin:
I think part of the problem is that we're dealing with a response to unprecedented times. So when companies are measuring their quarter on quarter earnings, they're comparing what is perhaps a normal quarter and a sort of historically typical quarter, with two years of completely bizarre and interim changes of behavior. I mean, my role is very much about a sort of high altitude approach where the details are less important, the sort of big picture that spans different sectors as well as different geographies.
Tom Goodwin:
So broadly speaking, we are kind of at a point in time, which is similar to where we would've been, if the pandemic never happened. So things like eCommerce for grocery are at levels that we would've predicted it would've been at before. What we're really seeing, I think, is companies trying to make sense of the current environment. So how can they do eCommerce, but do so in a way which is profitable rather than just simply chasing growth? We've seen a lot of direct to consumer companies really suffer with some of the sort of typical problems that small companies would have. Typical problems of brand awareness, typical problems of scale, typical problems of logistics.
Tom Goodwin:
They're just slightly different flavors of problems to that we've had before. But generally speaking, we're in an environment that we probably could have predicted, and one where our retail gut and our retail experience will actually help us through. So how can we make it easy for people to buy things that we make a profit from? How can we make it easier to increase basket spend? How can we make it easier to increase frequency of purchase? How can we engage in programs to make people more likely to come back more often and spend more. We're facing fairly similar questions to those that we've always had, and we have a slightly different toolkit to solve those problems with.
Peter Crosby:
When you think about it, hopefully the investments that have been made to kind of bring a lot of companies, digital capabilities up during this period of transformation, now creates the opportunity to really respond to the changes in consumer behavior, and the places they want to shop by. And now that they're omnichannel, multichannel, whatever, I don't know, I'd love to know what your word is for all that, but give me a sense of sort of taking it back to sort of what counts, which is knowing your consumer and understanding them. What are you seeing as the changes in consumer behavior that create opportunities for the right kind of transformation in this period?
Tom Goodwin:
There's a lot there.
Peter Crosby:
There you go.
Tom Goodwin:
The changes in consumer behavior that I see are almost the time honored principles of what it is to be a human and to buy things, but slightly sort of abstracted into the world of technology where we can do things slightly differently, but the tenant of offering choice, but curation. The ability to make it easy and slightly delightful to buy things. This idea of having a degree of trust in the companies that you're buying from, these have all been slightly exaggerated by technology, but not really sort of morphed beyond what we could have seen coming.
Tom Goodwin:
So I think almost every single, if not every single principle of retail that we've had in our heads, since the 19 sort of '50s and '60s, we can operate with those same principles, but almost apply new technology to do those things slightly better or slightly differently. You made a very good point before, which is the companies that have invested in this infrastructure and in this capability over the last sort of five or 10 years, I think are the ones that can really thrive now.
Tom Goodwin:
It sounds sort of horrible to put it this way, but in a way the dreaded R word is almost the way that evolution happens. It's quite Darwinian. And what we've really had is so much free money and so much enthusiasm for every single new company around that put together a good investor deck. There wasn't really the ability for people to be more discerning. There wasn't really the economic environment where stupid companies failed. And it's a bit, I think it's an old sort of Warren Buffet quote about when you get to see who's naked when the tide goes out. I think what we're really seeing is the tide going out, and we now get to see companies who've invested in the right things.
Tom Goodwin:
We get to see companies that have sensible business models. We get to see companies that have real expertise. We get to see companies that have genuinely different technology. And this is a good sort of time of reckoning, really to kind of, split the world dominant players from the amateurs that all looked good at a time when money was free.
Tom Goodwin:
I'm always aware. One of my favorite things to do is every time there's a big announcement about a sort of V seed doing a sort of series B or a series C, and you see all these vast amounts of money that companies make. If you then go and look into the founders of these companies, it's very unusual that we find a founder that has expertise which is particularly relevant for the company they're trying to grow. You will see all manner of re-imagined bathroom companies or reinvigorated clothing sellers. And when you actually look into the backgrounds of people, you realize they're simply well connected people who got bored of working with golden snacks, or you see people who have a good network of sort of privileged people to help them get funding. But there's a lot of companies out there that have been able to appear to be wonderful while having no real specific expertise, either in the category or even the general notion of retailing.
Peter Crosby:
I will need you to define golden snacks. Is that what I heard?
Tom Goodwin:
I think I misspoke, Goldman Sachs.
Peter Crosby:
Goldman Sachs.
Lauren Livak:
I heard the same thing Peter.
Peter Crosby:
I was like, is that a great term that I really didn't know?
Tom Goodwin:
It's a very technical thing.
Peter Crosby:
No, I thought it was some charming thing from your culture. Oh my God, I love it.
Tom Goodwin:
It's interesting.
Peter Crosby:
No, but I would totally agree with you. I was recording a podcast with my other co host Rob the other day with Mehtab Bhogal from Karta Ventures, it's called and they really focus on turning around distressed D to Cs. And to hear him talk about the sort of the roadmap that they use to go in and turn it around, there's nothing shocking there. It's like using Lean Six and knowing how to focus your marketing and understand your consumer. But I agree with you that sometimes there's people who either go in with a great product idea, but don't have the skills to actually pull off the operational necessity of it, or it's just people who have access to funds that thought they'd give it a shot. And I think to your point, there's going to be a bit of a calling of the herd painfully, I think, over this next period.
Tom Goodwin:
I don't think that necessarily needs to be something which is traumatic for the entire industry. Again, I think we've almost had an environment where four to three years ago, most of these companies were not great companies. They weren't wonderful ideas. To sell pot scrubbers directly to consumers wasn't really a way to sort of guarantee a life of luxury. It's almost like people went around the house and around the garage and they just picked up things and they thought, how do we turn this into a direct consumer brand? And there were many companies that were run by people who didn't have particular expertise.
Tom Goodwin:
They didn't have an idea which was groundbreaking. They just had a network of people and access to money. And the reality is the retailers are wonderful and sort of magical and mysterious industry, how people behave is really weird. But world class retailers are just incredible at it. A good friend of mine was a buyer for the world's largest clothing company at the time called Primark. And he would go around the world and decide what we'd sell. And he just had an incredible instinct for what trends were coming.
Tom Goodwin:
I think often in this world of technology, we've fallen out of love with people who may just be really good at their jobs. And they may have an instinctive understanding of what's going to sell. And they may have a weird ability to get people to buy things they didn't realize they wanted. And I think in a way, technology has sort of forced us to dampen those senses a little bit.
Lauren Livak:
I'm curious, Tom-
Peter Crosby:
Sorry.
Lauren Livak:
For the companies that let's say really started to focus on eCommerce during the past years in the pandemic, and to your point have a bit of skewed data because of the way the world has been operating. Do you think that they should use the insights and the data that they gathered from the two years as a baseline to predict what's coming next? Or do they really need to kind of set how they're thinking about the future since the last two years were just such a crazy conundrum?
Tom Goodwin:
It's a very good question. And perhaps I'm being offensively blunt here, but if in 2016 you looked at the growth of eCommerce. It was one of the most predictable growth curves you could ever imagine. I mean, there wasn't anything in that, going back to 2001 that no sort of sensible person couldn't look at and see, "Oh, wow, eCommerce is going to be a bit of a thing." You can even break it down by category. The lines are incredibly easy to interpolate from.
Tom Goodwin:
We then had 2020, 2021, which was always going to be an exceptional period of time. And it was very obvious to me looking at people around the world to see that what we had was a sort of paradigm which made sense. So when everybody is at home, it makes sense for every phone call to be a video call because we're all at home. And similarly we're at home so every delivery makes sense. We're at home so there's no sort of challenges to life whatsoever. And maybe we're at home because we're forced to be at home or maybe we're at home because we're anxious.
Tom Goodwin:
The moment you have to pick up your daughter or son from gymnastics, the moment that you have to go into the office on a Tuesday and a Thursday, the moment that you go and see your grandma the weekend, all of a sudden you're entering a different paradigm where it makes sense to kind of pick up the groceries between judo and a tennis lesson. It makes sense to have a little look in the clothing store because your grandma's running a bit late. All of a sudden we entered the paradigm of the store hybrid world, and it seemed quite obvious to me that in that world, we would see slight extensions of the behavior that we introduced in 2020.
Tom Goodwin:
But we wouldn't see a full scale revision to a new sort of paradigm. We would always return to something more like normal, because we kind of chose it this way. I mean, for a lot of people going to a grocery store is quite fun, for a lot of people going shopping for your prom dress is a sort of rite of passage, for a lot of things that we buy doing it in person is better, trying to order some car tires to get delivered and then put them on yourself.
Tom Goodwin:
So I think in a way the pandemic's been a very good exercise in realizing how quickly we remove ourselves from reality, and how insular we can be in our thinking, and how keen we are to kind of claim that everything is different. We fell in love with the idea that everything was different, and everything was going to be like we've never seen it before. And actually a lot of human behaviors and habits are very deeply entrenched and a lot of human instincts have evolved to sort of be seen the way they are today because that's how humans like to behave.
Peter Crosby:
Sometimes I wonder if what's really fundamentally changed is not sort of the impetus behind buying and shopping, but rather the speed and scale and sort of non-linear nature of the buying journey that needs to be understood and accommodated for, which can often be helped by technology. When a lot of shopping is sort of monitored and then run by algorithms and that change happens so much more quickly than does the shopping experience in a store, like keeping on top of all that and then figuring out where the consumer is going to want to engage with you and being ready.
Peter Crosby:
I would imagine that takes where you talked about earlier. So many of the things you said are like, it slightly helps. Marginal ... That none of these things are groundbreaking, but in total you do essentially mean a transformation, but because they add up to something that is different. I'm just wondering when you think about, looking forward, we're I hate to say this, but in May when we're recording this, we're getting close to 2023 planning and sort of, where are we going to invest next for this next 18 month, two year, three year schedule. And when you think about technologies, that might play a role in that. What do you think that no one's talking about that our planners should be paying attention to in retail and brand manufacturing.
Tom Goodwin:
The very hard thing about retail is it's full of these complete opposites. So there are sometimes in life where you want the biggest choice you can imagine. If you're buying car parts, you need to have access to everything. And there are sometimes where you want to have the smallest choice. There are times when you're buying things for pleasure, and it's a beautiful process that you want to maximize. There are other times when you're almost procuring things and you want things to land upon your doorstep with as little thought as possible.
Tom Goodwin:
We tend to operate in all of these different ways at the same time. So some of the olive oil I have in my cupboard will be olive oil that I bought with no need to have olive oil whatsoever, but I got sort of seduced in some Tuscan Hill town by somebody telling me all about the soil of the local area. There'll be other olive oil in my cupboard, which is a sort of Walmart value special, where I was just running around Walmart quite stressed one day, chucking everything in the trolley, before people came over for a dinner party. To deal with the complete width of activities we have is very difficult.
Tom Goodwin:
One thing I will always maintain, especially in the online world, is that anything that makes things quicker and easier is a must. It's a very boring bit of technology to talk about now that when I talked about in 2016, everyone thought I was exciting, but the QR code is huge. I should be able to buy anything from a hotel room that I stay in, simply by hovering my phone near it. I should be able to walk around any store and order any product to get delivered at home, by taking a post photograph of a QR code. I should be able to reorder the same pair of jeans, which I finally found fit me by snapping a picture with a QR code.
Tom Goodwin:
The moment we realize that the entire world that we walk around is effectively one big catalog. And the moment we realize that anything that can be done to shorten the process from that looks nice to it arriving is key. So that involves things like QR codes, but also technology like image recognition. Every step that gets in the way must be smoothed over, if you are not integrating Apple pay or Google pay or Samsung pay, I'm very confused for you and just removing steps from everybody.
Peter Crosby:
I was paying attention to some of what was coming out of the Google developer conference.
Tom Goodwin:
Yes.
Peter Crosby:
And a lot of their work around image recognition and the connection of it to what you've got to a brand, kind of almost really getting to a place where they can really knit those things together in an impressive way. I'm super excited about that. I can't wait to see that sort of start to really take hold.
Tom Goodwin:
Absolutely. Then you see a mind shift where actually social networks like Pinterest become the world's biggest catalog, not a place to advertise. You start to see everything become the shelf basically. I think sizing is interesting. I know your podcast isn't specifically about fashion by any means, but basically the entire profit margin of the entire fashion industry is taken away by vanity sizing, clothes that are not the same shape and size they should be. And people buy the wrong size because they're confused. It seems remarkable to me that there's not more of a sort of personalized approach towards shopping where your precise size is known and stored as a sort of API almost. And then every single fashion store you visit only shows you clothes that's going to fit you.
Peter Crosby:
Oh my gosh, can that happen, please?
Lauren Livak:
I vote for that.
Peter Crosby:
My COVID pounds are just now I'm still making my shopping life and my self image. Very challenging.
Tom Goodwin:
And these are not new [inaudible 00:21:43]. I mean, image recognition is not new, QR code not new, decent sort of 3D camera applications are not new. It's a question of using what we have in a more imaginative way.
Lauren Livak:
I'm curious about Tom, about the virtual experience or AR or all the different types of kind of seeing things more in real life. I know when you buy furniture, you can picture it in your room. Do you think that, that is going to become more mainstream with the world of dare I say the metaverse and everything that's happening. Do you think that will shift more towards that or more stores or categories are banking on the hybrid approach where people are going to come in store to actually try on or experience those things?
Tom Goodwin:
Yeah, it's very easy for me to sound miserable here. So let me try and answer this question in the right sort of way. There are spectacular things that we can do with existing technology. The ability to buy things online and pick them up in stores is absolutely magical. And by implementing solutions like that, that use your GPS of your phone to make sure that the person comes out to your car nice and quickly, things like that really are quite transformative. They really will increase the sort of profit margin in places where it's currently difficult to eke out profit. The ability to have clothes at the right size, the ability to personalize the storefronts that you create to suggest products that people are more likely to like, these are things which have really huge implications on the bottom line.
Tom Goodwin:
And they mainly involve taking things away. They mainly involve removing experiences. The moment you sort of add an experience, people in our industry love it because we get to talk about something we've done. If there's a new app for Lululemon, that means you can now figure out whether cotton was grown for your sweatpants. It's great because we've done something extra. We've made something. And that means there's a new part of the purchase experience with a new thing.
Tom Goodwin:
But I think most of the time people are actually looking for less. Most of the time, the moment you have a viewfinder to see what the table looks like in your room, some people will look at it and then go, "Oh yeah, that works really well." But there'll be lots of other people that realize it doesn't quite fit. And there'll be lots of other people that have doubts about it. There'll be lots of other people that think, "Oh, I don't think I trust this."
Tom Goodwin:
And I'm just not convinced that retail is really solved by the use of technology in these ways. I think our job is mainly to get out of the way rather than to introduce new experiences. I think most people actually have imagination. Most people have got a pretty good idea how big a dining chair is. Most people have a pretty good idea of what a console table looks like. It's not a terrible thing to sort of let people use their own hands and tape measures to check things for themselves.
Peter Crosby:
So Tom, when you're advising clients, when you're sitting down with people that are trying to make some of these choices of where to put their energies, their money to make more money and connect with their consumers, how do you help them? What I imagine is ruthlessly prioritized. If it's away from the shiny and towards to your point, the kind of the simplification, but how do those conversations go and what sort of tools do you have in your toolkit to-
Tom Goodwin:
They don't go very well because what you are supposed to do in my position is I'm supposed to be in the art of confusion. I'm supposed to be in the area where you ask people what are you doing about blockchain? I'm supposed to come to this industry and make people feel worried that they're not doing enough and the thing they need to do involves technology and writing me a check. And the sad truth is that I'm not really prepared to behave that way. And what I say to them is go and visit five of your stores.
Tom Goodwin:
Not in the same town, over the next three weeks as you go about your life, make it a habit to visit your local store and observe people and try. And if you work for Home Depot, try and find a screwed fit electrical socket outside on the side of your house, try and take back an item that you've bought by mistake, try, click and collect, look at other people and see how they're behaving. And when you do that, one, it's great fun. I mean, it is actually amazing how fun retail is as a sector.
Tom Goodwin:
Two, it's amazing what you learn. Speak to people that work there, ask them what the biggest challenges that they have are, speak to people who put out stock in the evening, because they'll give you all the information that McKinsey would've charged you a million dollars for and not actually told you. Go out there and use those experiences to shape what you do next. And one thing in particular I would say is if you went to most stores this week, you probably would not have a wildly different experience from that you would've had 20 years ago. Most of the products are laid out in a similar way.
Tom Goodwin:
Fashion stores love to think of stores as being a sort of magical maze-like process where there are 17 different pairs of jeans and they're all hidden in different corners of the store with sort of secondary and tertiary placements of the same items. The fundamentals of retail are actually quite straightforward. Make it easy for people to find what they went in for, add a little bit of delight, which means that people pick up something else, make sure that you can serve them at the tills very quickly, make people feel good about the decision they've made. And quite often these things come down to having the right sizes on display.
Tom Goodwin:
They come down to having inventory systems where people don't have to phone up 20 stores nearby to see if they've got them in stock. And instead someone can go on a computer system and get accurate real time inventory. The online world is full of innovation, but the offline world of retail is strangely lagging. Even now, let's say I want a UK travel adapter. Let's say I'm flying to the UK tonight and I want a UK travel adapter. I don't think there's any real way for me to find a store that has that in stock near me other than perhaps Walmart or perhaps Target. And even then I won't necessarily have a high confidence that them saying they have it in stock, means that they do and they know where it is and things like that are very boring. You don't really win awards for an inventory management system. But actually I think it's the basics done brilliantly, which becomes the right kind of metaphor to think about the future of retail.
Peter Crosby:
Brian Solis who is the innovation evangelist at Salesforce, he put on LinkedIn, this sort of AR app by a company named Dent Reality, guy's name there is Andrew Hart, and it was an app that knows where things are in the grocery store. And so you're walking in and in the example I saw it was pizza, and you put in pizza and it will guide you through the aisles to the pizza. Now that's super, I mean, I know it's hard because every store is different and all that, but the fundamental help that it gives to the consumer and I certainly, I take your Home Depot example, way to heart, where what you're looking for is a particular lug nut in the nightmare of the shelving, and to solve that in a way that I don't have to speak to a human being, one because sometimes they're hard to find.
Peter Crosby:
And two, I don't necessarily like to speak to human beings in stores. So to be able to do that would be an absolute delight, and those are the kinds of things I look at. And maybe because they address my personality type, but just think that those are the innovations that actually change and to your point, make the consumer experience more than any sort of fancy VR/AR that just kind of adds to the experience rather than your way in a way. I think subtracting from the experience, cutting the noise out.
Tom Goodwin:
Essentially, yeah. It's great to offer people the choice as well. I worry slightly that we are in a world now which means that if you don't have a smartphone, you can't really exist. You can't really pay for parking these days without a smartphone. And one should be mindful that there are some people that are quite lonely. I mean, part of the reason I love retailers, because I spent about the first six years of my career working in it, and it was staggering to me how much fun it was to be a sales assistant in an electrical store.
Tom Goodwin:
And it staggered me how weird people are and some people just came in because they were lonely, and they'd walk out with a dice and vacuum cleaner and an extended warranty, which is quite an expensive way to make friends. But there is something wonderful about people. And I think the more that we are able to cater to the sort of full width of human behaviors and needs, and to offer people what they want the better. And like you say, it should be rooted in simplicity because actually finding the pizza through an AR experience can be a really straightforward way to do that.
Tom Goodwin:
I worry sometimes there are other people that come to that and they say, "Great, now that people have found a pizza, why don't we gamify it so you get points for finding the pizza." Why don't we have a sort of metaverse version of the store where you can go and find the pizza in the metaverse and then you get even more points.
Peter Crosby:
Pizza, NFT.
Lauren Livak:
Speaking of that-
Tom Goodwin:
Yes.
Lauren Livak:
Oh, sorry. I was just going to say, speaking of that, when we think about technology and the things we should or shouldn't be talking about, what would you say are the ones that people should stop talking about? I'm really excited for this answer.
Tom Goodwin:
It's the right question. We have at our disposal so many amazing things. And every time that we talk about the metaverse is time that we're not spent talking about coupons. So every time that we talk about NFTs is time that we're not spending talking about staff training. So it's not that talking about NFTs is a complete waste of time. It's just that there are other more important things to talk about.
Tom Goodwin:
I mean, you could have a project in a retailer called retailing on the moon, what would our stores look like on the moon? What would they look like without much gravity? What would they look like with really long lead times, because they're on the moon, and you could look at that and say, "Well it's worthwhile because one day we might be on the moon. And it's useful to think about these things because it gets our imagination going." I think that's the spirit in which people are talking about NFTs.
Tom Goodwin:
I think I've made a documentary about NFTs. I know about NFTs, I think they are basically a really bad use of our time. There is a particular use for them in retail, where if you are wanting to create a sort of turbocharged loyalty program where people spend significant amounts of money to become a real participant in your brand, then there is something to be done with NFTs, but that is such a sort of fringe use and it's also entirely not essential to use NFTs. That sort of makes the whole thing a bit redundant. I think NFT thinking, I think the metaverse is described as a world built upon the blockchain, and involves sort of web three type dynamics.
Tom Goodwin:
I also think that's largely a waste of time. We should indeed be thinking about the 3D internet. We should indeed be thinking about a time where we spend our life online because that is today, but we should be figuring out ways to sort of bridge the online and the offline. How can we make it easy to buy something on the internet? How can we make it easy to buy something in real life on your phone? That's how we should be thinking about it, rather than sort of replicating the physical world in the virtual world because in the metaverse, if you can do absolutely anything, if you can sort of get drunk with a famous musician or if you can go on holiday to a beach in the Maldives, or if you can have sex with a supermodel or something. I'm not sure why you choose to go to Home Depot and buy a fridge. There's probably more extravagant uses of your time.
Lauren Livak:
I love that and I love that a big theme of this podcast is back to the basics and thinking about simplicity versus complexity, and what you just said about bridging online and offline. I think that needs to be the core of what we are all talking about, right? Because commerce is online and offline, how can you get your consumers to the point of human behavior and live their lives effectively using both in store and online. At the end of the day, that's what we're trying to do.
Tom Goodwin:
Yeah. I have this sort of weird dream that you might go into a medium end clothing store like H&M or something, and there'd be a sort of mannequin dressed in clothes and you'd see the t-shirt and think that's quite nice. And then you'd sort of hover your phone near it. And it would say, here are three other items that this t-shirt goes with brilliantly. These two are in stock, press this button and they'll bring them out to the desk. Here are five pairs of shoes that go with them. We only have three of them in stock. Here are the other two, press this button and they'll be delivered to you later. Then over a period of time, knowing the items that you brought from that store, you'd get an occasional newsletter saying, we know you've got those sneakers and we know you've got this t-shirt, this is a great new pair of pants that we've just brought out. That would go really well with them, to buy it, press this burn now.
Tom Goodwin:
And within one button press, that pair of pants would be winging it's to you. Because there are things in retail where we actually care quite a lot. Most people would like a kettle and a toaster that match each other. It seems quite logical that you might buy things like a kitchen bundle where rather than spending every living hour of the day for three weekends traipsing around retail stores, you can just sort of get four suggested kitchens that would include all the different products that go together. And then you get sort of up sold on a service package where someone will maintain all of those items and, maybe you get a sort of box of groceries delivered that sort of works well with the items that you've just bought.
Tom Goodwin:
There seems to be so much room for imagination and kind of joining up the dots. And it's almost joining up the dots, which is what this is really about, which seems to sort of go unloved because I don't think people really have jobs that deal with the complexity of the sort of interlinks between different products. Some company probably somewhere has the global head of fridges, the global head of toasters, the regional sales manager for dishwashers, and actually what you need is a much more holistic way to think about this stuff.
Peter Crosby:
It reminds me so much of a recent book that I read and we had one of the authors on the podcast, Lauren Nordgren and David Schonthal who are from the Kellogg School, wrote a book called The Human Element, which the subtitle is overcoming the resistance that awaits new ideas. They talked about how so often people in whatever problem you're trying to solve or something that you're more likely to put energy and thought into the fuel, how do I get this out to more people? Or how do I make this bigger rather than focusing on frictions?
Peter Crosby:
So the whole book was about how to really understand what the frictions are and then how to transform them. What you're talking about is exactly like that to me, where if companies spend a lot more time on what are the things that stand in the way of a consumer making the delightful purchase, then you'd probably find your innovations that are worth investing in and then the technologies follow.
Tom Goodwin:
Yes, I do worry about this quite a lot, actually, partly because my whole consultancy company is based on this way of thinking, and sort of reduction and simplicity and doing the little things that matter. And I'm just not that sure that companies really want to buy that because I do think it's quite easy to get promoted into a company within a company by announcing a new initiative with NFTs.
Tom Goodwin:
I do think if you do a flagship store for the future, and it's got a sort of robot at the gateway, like a pepper robot holding an iPad, then I think it looks really good in the company report. If you say, actually we didn't put a robot in this bank branch, but we did make it really easy to sign up for a new account, you can't really take a picture of something that's less. It's quite hard to brag about less as well. If you're able to do something really insignificant that increases coupon redemption by sort of 1%, but it doesn't look good in a photo, and it doesn't sound that exciting and a press release, then it kind of becomes quite useless I think to people in a way. So I'm not sure how we bring about this thinking. I'm not sure how we celebrate less, how we celebrate sort of sophistication and discernment.
Peter Crosby:
It's a great call out. I'm not sure. I know either ... I mean I hate to, I talked with another author recently, but I'm doing a fake cigarette smoke thing, which listeners can't see, but Fred Reichheld who created the NPS score essentially and built an industry around it, talks a lot about this in his latest book where part of it is building up the data that really matters. If you are in a store that does that experience that you described, where you can go in and scan the t-shirt, your conversion rates are going to go up dramatically.
Peter Crosby:
The stuff that matters and so it's figuring out what are the ways to measure the impacts in a way that is undeniable and it's always easier said than done. But I kind of think, I know what you're talking about. Like promotions and careers and when people are desperate, they look for the shiny and so I obviously don't have the answer, but I do feel like at the end of the day, it does get back to the customer and to the numbers.
Lauren Livak:
But I also-
Tom Goodwin:
Carry on Lauren.
Peter Crosby:
No, go ahead, Tom.
Tom Goodwin:
I worry a bit that we have fallen so much in love with data that we require it for anything. I mean, I feel like these days you could literally invent the wheel and someone would say, it's great you've invented the wheel Lauren, but today's actually not innovation day, can you bring that back on Thursday? Because we're going to have an innovation workshop and then someone else is going to say, "Well, we weren't only looking for a wheel, have you got any data to show that people wanted wheels?"
Tom Goodwin:
The fire guy came in last week and we really dig that idea, but we can't find a budget for fire. I worry that we sort of sanitize and we sort of process everything so much, the really good ideas that you can't really support with much data, but you feel in your heart, I feel like it's quite hard to operate in these cultures now. I see quite a lot of ads on Twitter that really annoy me because they appear too many times and I block the company and I think, I wonder if anyone's tracking how many people blocked the company after seeing an ad from them.
Tom Goodwin:
I wonder in a world of newsletters, which are very enthusiastic and very frequent, obviously someone's tracking how many times people click on it. Obviously someone's tracking how much stuff they sell from it. But is anyone caring about how many people unsubscribed, and is anyone caring about the degree to which you could have kept that customer? Because actually, having me check your emails from you once every six months is far more preferable than me just blocking you from my email inbox, or me unsubscribing and never subscribing again. But we don't tend to measure negative things or the kind of lack of good things happening. So I think we need a more sophisticated conversation about this stuff.
Lauren Livak:
I also think I would say there's a place for everything. When we think about innovation and we think about the basics and the business, there's a world where yes it is someone's job at a company to think about innovation. You always need to think about what's coming next, what's happening, but that shouldn't be the focus and north star. It should be being brilliant at the basics and figuring out your customer and figuring out Tom, to your point, what data you need. You need what you need to use, what it's actually telling you. And that's the north star of the company and what you're focusing on.
Lauren Livak:
But I believe in innovation and staying on top of it, but it shouldn't be, "Hey, what's the next shiny object to make sure that we're out there and we're staying up to date." But just kind of staying on top of it and focusing on it, and making calculated and informed decisions about if it's the right path. I feel like that fits within the organization.
Tom Goodwin:
One way to recognize is the brilliance of the people that you employ. I mean, retail is quite spectacular in that there is genuinely something completely magical and mysterious about it. And the people I know who are good at retail are really good at retail, and I trust their judgment and I don't know what data they have. They're probably forced to use data sort of retrospectively to set in ideas they had with their gut. And I think, I don't know, maybe we need to trust people more. Maybe we need to sort of recognize there's a type of brilliance that we can't really understand, in the same way that people in fashion are able to understand the world and the zeitgeist in ways that we don't really understand.
Tom Goodwin:
And there's this sort of empathy I think people have. Again, I don't want to sort of rant too much, but I think often within our companies, we surround ourselves with people that don't make us realize how strange we've become. And my favorite thing to do with clients, let's say your client sells margarine. They spend all day in sort of margarine workshops and they spend all day talking about yellow fats with other people, and they spend all their day sort of wandering around their brand of onion.
Tom Goodwin:
And I'd like to say to those people, how much do you think about gasoline? And they'll be like not very much. And I'm like, "Well, the people who work in gasoline marketing are as obsessed with gasoline and their brand as you are with your type of margarine." How much do you think about your shampoo? Not very much. Well, the people who work in shampoo are also spending all day thinking about this, and they need to sort of come to your sector almost with a sort of informed naivety where you are aware that your brand is really important, but you are not that interested in it, where you are aware that there are only so many companies that have permission to do things that you're trying to do.
Tom Goodwin:
And just to sort of approach your attitude towards marketing and sales with a bit more of a kind of realistic perspective of the role that this company plays in people's lives. And that is in no way to be sort of depressing about it. It's just to be aware that actually, maybe packaging is the big marketing pull for next year. Maybe a new product that spans the line between ketchup and brown source. Maybe the things that you need to do are actually quite simple things that you need to do really well, rather than complicated things to dabble with.
Peter Crosby:
Well, Tom, I think we joyfully turned this into kind of a megasode because we had so much to talk about and I really appreciate you going on this journey with us. I love for me, the takeaway is with all the noise in the world. And we started out talking about the particular noise in the world today and probably over the next several quarters is to try and tune out the noise, and get to that simplicity of what will actually transform in some ways, maybe in a reductive way, a consumer's experience to discover you, to discover your brand, to find their way to it in a really simple way. I love that and I really appreciate you sharing it with us.
Tom Goodwin:
My pleasure.
Peter Crosby:
Thanks again to Tom for his golden snacks and challenging observations. Keep up with what we are up to at the DSI. The blue become the member button at digitalshelfinstitute.org is waiting for your click. Thanks as always for being part of our community.
