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IbrahimIbrahim S9E29 1200x675

Many physical retail developments are failing to attract the crowds required to be sustainable, impacted by both online shopping and changing consumer behaviors. This month’s Bigeye Book Club selection, Future-Ready Retail, examines how brands can develop winning strategies to create engaging stories that recruit and retain customers. The book’s author, Ibrahim Ibrahim, is a futurist, retail strategist, and designer. In this episode, Ibrahim discusses key ideas in his book.

Episode Transcript

Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS: 

Ibrahim Ibrahim: What makes great place making is this shift from a shopping or transactional rhythm to a community rhythm, and that rhythm of footfall makes a great place.

Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on the business of advertising produced weekly by Bigeye: a strategy-led, full-service creative agency, growing brands for clients globally. Hello. I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us. Today’s podcast is part of our Bigeye Book Club series in partnership with our friends at Kogan Page. Our featured selection for July is Future-Ready Retail: How to reimagine the customer experience, rebuild retail spaces, and reignite our shopping malls and streets by Ibrahim Ibrahim. Suffering from the impact of online shopping and changing consumer attitudes and expectations, many physical retail environments failed to attract the crowds needed to sustain their businesses even before the COVID-19 pandemic. Future-Ready Retail examines how brands can develop winning strategies to create engaging stories that recruit and retain customers. I’m delighted that we’re joined today by the book’s author, Ibrahim Ibrahim, a futurist, retail strategist, and designer. Ibrahim is the Managing Director of Portland Design, a company he founded, which is now part of the Perkins and Will global architecture and design network. Ibrahim is a board member of the UK Government High Street Task Force, the ULI UK Infrastructure and Urban Development Council, and an advisory panel member for the Center for London think tank. To discuss some of the key ideas in Future-Ready Retail, Ibrahim is joining us today from his office in London, England. Ibrahim, welcome to IN CLEAR FOCUS! 

Ibrahim Ibrahim: Thanks, Adrian.

Adrian Tennant: So Ibrahim, what prompted you to write Future-Ready Retail?

Ibrahim Ibrahim: If I’m truthful, I actually got approached to write it by someone who was following me on LinkedIn. And I had no kind of intention to write a book, but that particular conversation didn’t go anywhere. But, having said that, he planted the seed, and I continued from that thinking about it. And I wrote a synopsis thinking this could be a good idea. But then I was connected to Kogan Page and once they saw my kind of brief synopsis, they said, “Let’s now do it properly and write a proper synopsis.” So we did that, and yeah, then I got a deal. So that was great. And for the next year, I got my head into it.

Adrian Tennant: So, could you tell us about Portland Design and the types of projects you typically undertake for your clients?

Ibrahim Ibrahim: Yes. And I suppose that’s partly the answer to the first question and, what prompted me to write a book is the work we are doing and the speed at which we are witnessing change. Not change in design or technology or some architecture trends – the change of expectations and behavior of our audience. And I specifically call them our audience and not consumers because we don’t take them for granted as consumers. And that change, we kind of refer to as Retail Darwinism, and that is, the expectations are changing much faster than these big behemoths can adapt. And if you are a retail business that has hundreds of thousands of square meters of immovable concrete, it’s very difficult to be agile in terms of the built environment. And if you then, you know, magnify that to an urban regeneration setting, then it’s even more difficult. That’s what drives our business. What actually we do is we’re a place strategy and retail design business. So we help clients define their place, whether that place is a shopping center, whether it’s a high street, whether it’s a big mixed-use development, an airport, a railway station, we help them define what the essence of that place as an experience is. Not as a piece of architecture, not as a piece of urban planning, but as the human experience – we help them define that. And we have data that informs our work in that respect. And once we’ve helped them define that proposition as an experience, we then help our clients translate that into a whole series of different areas of design from brand – brand strategy, brand identity, all their elements of communication – through to sometimes marketing that place, particularly in the retail sphere and shopping centers, through to wayfinding, the expression of branding wayfinding, through to the design of the public spaces, through to the architecture, very importantly, what we call the experience master plan: what offers, what districts, how they connect. So yeah, so a whole range of this blending, this blurring of brand and architecture or interior design is the two. And one of our clients saw that as quite unique and termed it Market-ecture, which I thought was quite interesting. 

Adrian Tennant: In the introduction. I mentioned the decline in footfall at conventional shopping malls, a trend worsened by social distancing during the COVID-19 pandemic. Is this something you’ve observed primarily in Western countries? Or is this a global problem?

Ibrahim Ibrahim: We’ve observed it, in specific areas, definitely in Europe and worse in Germany and Italy and France, less so in Northern Europe, like Scandinavia. We’ve observed it in the Middle East, but less so, generally speaking, the recovery was much quicker. And in Asia, notwithstanding the hotspots of COVID in China, we’ve certainly observed a recovery very quickly. We don’t have experience throughout the whole of America, but where we do work and have a bit of experience, we’ve observed that being very similar to the UK.

Adrian Tennant: In the first chapter of Future-Ready Retail, you observe that retail today is less about prime real estate and more about content, which you define as the curation of blended commercial offers and compelling experiences. You go on to talk about the importance of placemaking. So Ibrahim, what is place-making?

Ibrahim Ibrahim: I like the idea of redefining retail, not in terms of real estate, but in terms of content, because – and I’ll come to answer your question about what is place-making – but this is the context. Because retail has always been and will always be about four things: recruitment, transaction, fulfillment, and retention. But what’s interesting is that transaction and fulfillment are migrating away, if you like, from the physical space increasingly. And therefore, the physical space is increasingly being used to recruit and retain audiences. Which means that if you are a recruitment and retention space, you are actually behaving like a media brand, and therefore it’s content that’s going to help you recruit and retain. And if we agree that that is the case, then that changes the whole paradigm. It changes the design of that space. It changes its physical makeup. It changes the service proposition. It changes the experience, of course. It changes the master plan. It changes its connectivity to the public realm and how that works. It blurs much more with the public realm. So to answer your question with that context, placemaking for us is about three things: the three Cs. It’s about content which I’ve just explained. It’s about community. Localism. Reaching out to community, moving away from a hermetically sealed development that looks inwards, and creating a permeable connected development shopping center or whatever that locks outwards and connects to the urban grain, to the streetscape, and to community. So that’s community. And thirdly, culture. Placemaking, to be successful, has to resonate with the culture of its audience and not just be driven by agents that help fill spaces with tenants, without any reference to the cultural drivers that impact the behavior of our audience. And I think that is key. And I think that is where if you like shopping centers have been going wrong with this cookie-cutter approach. So we refer to – and I refer to it in the book as well – the four pillars of placemaking, which goes towards answering your question directly, what is placemaking? It’s based on four pillars. The first is convenience. So placemaking must deliver on one big expectation of our audience, and that is hyper convenience, simplicity, an experience that’s intuitive. That is devoid of complexity. I think that’s the first. And of course, if we drill into that, really extensively by understanding the impact of things like quick commerce and the whole kind of area of convenience. The second is fast. The polar opposite of slow, which is about a place creating programmable content about creating and delivering participatory experiences that are about community – and I don’t mean local community – communities of interest, brands that bring those communities together, and places about activation of public realm with those experiences. Not about a fixed demise that separates the public realm with tenanted space. These are blurred. And I think this blurring of the inside and the outside also is about placemaking. The third pillar is about localism. How do we create a place? And only a successful piece of placemaking must be connected to and align with the local community and the local environment, and its local heritage and its local makeup of audience, whether they are citizens, whether they’re influencers, whether they’re local brands. And very importantly, when we are master planning a place – and again, this is what makes a great place – is how we blend in one master plan local independent brands, influencers, local groups, community groups, not-for-profit organizations, social enterprises, with big brands. And whether those big brands are retail, leisure, entertainment, culture, the days of separating them and putting local small brands into tertiary spaces and giving prime space to big brands are over. And that is the death of place-making. And the fourth pillar that really, I think, cements a place and makes it sustainable in terms of futureproof is what we refer to as belonging, how we create a place that delivers on, and aligns with the values of our audience – their values in terms of the role this place plays in their day-to-day life and in the wider world, and not just somewhere to sell them stuff. And I think that means – and again, to answer your question maybe in another way, which is a very succinct way – what makes a great place making is this shift from a shopping or transactional rhythm to a community rhythm and that rhythm of footfall makes a great place.

Adrian Tennant: You believe that retailers and brand marketers need to shift our focus away from traditional demographic consumer segments, and instead consider cross-boundary, psychographic segmentation, which reveals what you refer to as Generation C. You highlight Nike, Apple, and Patagonia as exemplars of this approach. So Ibrahim, could you give us an overview of Generation C and explain how their traits inform how you design brands and place experiences?

Ibrahim Ibrahim: Yeah, I think the five Cs plus the sixth one is really key, but the sixth one is the first one is control. You know, the overriding demand of our audience now is control. Being in control, feeling in control, that gives them dignity. It gives them hyper-convenience. It means that their experience is intuitive. It means the business is transparent. It means there’s authenticity, all the elements, and what can go on and on about what do we mean by control or being in control, an experience that’s devoid of complexity. Those kinds of things. As I move on to the Cs, the first is convenience, which is exactly what I’ve just said. This idea of hyper-convenience, this idea of creating an intuitive experience. The idea of queuing is anathema in retail. Quick commerce is taking hold. We want – obviously COVID’s really driven the kind of demand for digital experiences – the whole fulfillment ecosystem, how we can have different aspects and types of fulfillment to meet the demands of our audience, how convenience delivers on this, a new way of working, this fragmentation of work, how people want to work as a dip-in, dip-out culture of work, how we fit working increasingly around other activities. We work a bit. We shop a bit, you know, go and eat a bit. We have a yoga class, we go back to work, we then meet a friend, and we work again. And what that work could be 10 minutes of emails, or it could be an hour Zoom call. And we do it all between moving from home to somewhere public, to maybe the office. If you think about how quick commerce is changing our behavior, how we can be anywhere, deliver, order anything, whether it’s a sandwich or a toothpaste, and get it delivered to us within 10, 15 minutes. What does that mean? I mean, at the moment, mostly that’s being done from home, but as we start getting used to that, and we start using quick commerce, wherever we are, we could be sitting on a park bench. I had a call the other day, and someone was literally sitting on a park bench in the call. I’m thinking, “Actually, you know, how we design public seating is no longer just about sitting. We gotta have public seating, which is where we work, which is where we eat. This is where we shop”, you know? So what does that mean in terms of the public realm? So anyway, all that is around convenience, and then, of course, the brands we choose, the brands we select, and the brands we put into our experience master plan are those brands that can deliver community, that have got communities following them, that are what we call community-first brands. It’s not product-first, it’s community-first. And I think that delivers on the S in the ESG. How can we bring brands and our selection of brands and in a master plan that drives social value? And drive the activation of the public realm. And of course, then those brands that we bring in are ones that should drive also what we call the third C is co-creation, brands that are open to helping the audience kind of shape their product. You know, thinking about brands like Fenty, for instance. Fenty is a cosmetics brand, as you know and that is what we call circular commerce. It started as a social network, it’s a social-first brand. And from that social network, from the learnings, from the interaction and the engagement of that social network, they developed a series of products, and they continue to develop those products through their social network. So it’s a circular commerce. So co-creation is really important. The fourth one is collaboration. That’s part of the same thing. How do we create environments, places that drive collaboration? We work with a really interesting group called Incredible Edible. Incredible Edible or a social enterprise that come to a place, they work with a local authority or a developer, and they take space, whether that’s a disused car park or a roof space, and they develop allotments where they grow produce. And they reach out to the local community and get the community to own these allotments. They help them grow the produce. And then the intermediary between that produce being sold to restaurants in this development and Incredible Edible take a cut of that. And so do the community who have been growing it. So collaboration is really important at a community level, at a place level, if you like, but also at a brand level, how we introduce brands and encourage brands that are collaborative with their audience as opposed to what you call monologue brand. And finally, the final C – and the most important C – is conscience: brands that have a conscience that prioritize the role they play in people’s lives and in the wider world. And of course, increasingly, that’s becoming a driver of preference, brands that are a purpose that look at sustainability ESG as a priority. And of course, we can see that also through the growth of B-Corps and triple bottom line. And I know that, and I think that will become universal, a kind of narrative at a kind of everyday level. Not many people have heard now of B-Corps, I’ve been talking about it for three or four years, and as I speak to more and more people, I see it’s becoming more and more kind of universal. And I think that it will get bigger and more kind of popular.

Adrian Tennant: Let’s take a short break. We’ll be right back after these messages. 

Adrian Tennant: Each month, in partnership with our friends at Kogan Page, The Bigeye Book Club features interviews with authors who are experts in specific areas of marketing, consumer research, and customer experience. Our featured book for July is Future-Ready Retail: How to Reimagine the Customer Experience, Rebuild Retail Spaces, and Reignite our Shopping Malls and Streets, by Ibrahim Ibrahim, a futurist, retail strategist, and designer. IN CLEAR FOCUS listeners can save 20 percent on a print or electronic version of the book with exclusive promo code BIGEYE20. This code is valid for all products and pre-orders and applies to Kogan Page’s free e-book offer. To order your copy of Future-Ready Retail, go to KoganPage.com – that’s K O G A N P A G E dot com.

Sandra Marshall: I’m Sandra Marshall, VP of Client Services at Bigeye. Every week IN CLEAR FOCUS addresses topics that impact our work as advertising professionals. At Bigeye, we always put audiences first. For every engagement, we’re committed not just to understanding our clients’ business challenges but also learning about their prospects’ and customers’ attitudes, behaviors, and motivations. These insights inform our strategy and collectively inspire the account, creative, media, and analytics teams working on our clients’ projects. If you’d like to put Bigeye’s audience-focused consumer insights to work for your brand, please contact us. Email info@bigeyeagency.com. Bigeye. Reaching the Right People, in the Right Place, at the Right Time.

Adrian Tennant:  Welcome back. I’m talking with Ibrahim Ibrahim, the author of this month’s Bigeye Book Club selection, Future-Ready Retail: How to reimagine the customer experience, rebuild retail spaces, and reignite our shopping miles and streets. Online shopping received a major boost during the extended lockdowns due to COVID, as did the use of social media and shopping live streams. In what kinds of ways is digital media reshaping the customer journey?

Ibrahim Ibrahim: That’s a subject of a whole book. I think the first thing to say is the idea of even mentioning in your narrative that there is online and offline shopping will be something of the past. A digital-first generation doesn’t refer to shopping online or shopping offline as shopping online. It’s the convergence and the blending and the blurring of online and offline. And more and more online shopping will happen in-store and more and more of that will be socially-based will be on social platforms. So I think the way digital is impacting shopping, and the experience is definitely the consumer knows more about the product than any sales assistant will know. So therefore, that is about transparency. So I think that is certainly driving that. The idea that information about anything is at our fingertips impacts how they see the role of shops. So therefore, that’s going to impact the role of retail. Certainly, it’s delivering convenience through e-payments, through delivering convenience, but also that it delivers a much more immersive experience. I talk about digital magnifying the experience, going to a different level, a deeper level of information of brand stories, if you like. And of course, AR and VR will accelerate that. I think what digital is doing is making shopping much more social. So it was social before, but to a limited extent, now it’s completely social in terms of the ability of our audience to share experiences instantaneously. So the people in the shop are only a small part of the audience, if you like. and of course, you mentioned live streaming. Live streaming will, I think, be really, really important. I think this idea of shops with shelves for sale is going to shift to stages with stories, for sharing. So shops, with shelves for sale; stages, with stories to share. I think that’s the shift, and I think live streaming will impact the makeup and the notion and the purpose of a store. Being a stage set whose audience primarily are not in the store, but are remote. and I’m really, really keen to see how this develops.

Adrian Tennant: Ibrahim. I know you believe we need to rethink mixed-use developments and reimagine them using a blended-use approach. What do you mean by blended use? 

Ibrahim Ibrahim: So what it means is that in any given development, and we are master planning, a series of uses – whether they are workplace, whether it’s healthcare, whether it’s residential, whether it’s education or manufacturing maker spaces – we look at those, and we identify in each of the uses we’re working with what is the blending component, the blending agent, what part of that use blends. When we say blend, what we mean by blend is blends with retail, food and beverage, leisure and entertainment, how that helps activate the public realm, which means that those blending components are at the ground level. And they blend, as I say, and align and blur with retail. So let’s take workplace, which is predominantly one that always appears in a mixed-use. So when we look at co-working, we see co-working not as an office per se, co-working is a response to a demand for a dip-in, dip-out culture of work. That’s what’s driven co-working. And we see that as a very important blending component at the ground level blending and becoming one with retail and wellness to allow that audience to dip in and dip out whilst activating that public realm. And we are working on such projects where we’re blending retail and leisure into co-working in order to reposition and reimagine a shopping center. So let’s take healthcare. Another one that’s beginning to become important in blended-use. We’re seeing the increasing consumerization of healthcare therapies and services, those that used to be clinical, they’re becoming much more consumer-facing. And therefore, healthcare is an important part of consumer experience, an important part of activating the public realm. And again, aligning and blurring with F and B and retail. Let’s take education. We are seeing education components, colleges, universities, adult learning centers, lifelong learning centers, becoming part of the urban realm, becoming part of the consumer-facing experience. If you look at what Related Argen as it is now have done in Kings Cross in London. There’s Central St Martins, a very, vulnerable art design college in the middle of a development called King’s Cross, one of the major developments in London, and they haven’t stuck it out on the side, they’ve put it bang in the middle of the development – on the way that people walk from the major square to the shops and to the restaurants. And when you pass this college, you look through windows and you see artists and designers, making things. They are creating part of that public experience, it’s really interesting. So they saw that as a blending part of the development. Residential: you’re seeing more and more brands occupy residential space in order to allow their audiences to live that brand. So if you’re developing a residential component of a blended-use, where do you put those pieces of residential? And of course, with Airbnb, with co-living, the growth of co-living, so the residential same, manufacture maker spaces, we’re seeing the increasing blurring of manufacturer making. Whether it be 3D printing, 3B weaving, basic fun things like coffee roasting and brewing, they are now part of our retail experience, activating ground level to give really interesting experience for our audience but also lending the offer. Great authenticity and a localism that’s important. So that’s what we mean by redefining mixed-use into blended-use. And it’s really resonating with our clients.

Adrian Tennant: Well, here in America, of course, we have a growing deficit in housing supply. In your book, you highlight a couple of European projects that reimagine retail as residential space. Could you explain what Hay Stay and the John Lewis Partnership are doing?

Ibrahim Ibrahim: Yes. and there are others as well, but they’re quite two quite interesting ones. So John Lewis are repurposing, I think it’s two levels – but don’t hold me to that – of well, of quite a few different stores, but the particular one I’m referring to is the London Oxford Street store. So they are repurposing them into residential. But of course, they’re not just creating flats to create revenue. What they’re doing is that they’re using them as a way of their customers or potential customers to experience the brand through the apartments. So I think that’s really interesting. And then Hay House in Copenhagen have done exactly the same thing, but they are not permanent apartments. They are places you can rent on Airbnb. So you can, if you want, if you’re thinking of refurbishing your house with Hay House products, you could spend a weekend in an apartment and experience them, really live with them. So that’s what I mean by what we call Resi-retail, and I think that’s going to happen more. It’s really interesting, Adrian, is it, so what is that? Is that a shop? So the whole notion of the shop is really important. And I think that plays to another thing we talk about, we call it the shift from your brand being a buyer brand to being a join brand. And I refer to this in the book. And how do you become a join brand? How do you get your audience to be fans, to be advocates and not just customers, not just consumers to really feel that you are part of their life? And there’s not many brands that do that to any individual person. I’ve got a few that I would allow into my life, allow to message me anytime because I value their input. But what I’m saying is that this idea Resi-retail shifts customers through these three steps to becoming a joint brand and this is, we call it the three Ls. The first is learn. First thing is that people, consumers, first learn about the brand, they understand it, they understand the benefits. They understand the attributes of the brand, the product, the functions, all the performance functions, all those kinds of things. The next is they love the brand. They talk about the brand, they share on social media. They’re almost infatuated by the brand, and they hope that brand will consistently deliver. But then the third one is how they live the brand. You know what, actually an integral part of their life. It adds value to all aspects of their life. And that brand is much more than just about a product or a service is about the role that brand plays in the world. The fact that I can live, I can go and live with that brand before I buy it, that is an important part. I become then an advocate. I become a fan. and I understand the purpose of the brand. I’m moving from buying a brand to buying into it, buying what it believes, not just buying its products – so that learn, love, live is three steps to becoming a joint brand.

Adrian Tennant: In addition to your own very detailed analysis, Future-Ready Retail also includes sections written by twelve contributors. Ibrahim, how did you select the contributors that decide which perspectives to include?

Ibrahim Ibrahim: Yeah, that was the key differentiator of the book, So I  started with the premise and the honesty, I suppose, the realization that what I’m writing about is a very broad subject, and there’s no way I can be an expert in all of it. And I’m not an expert in a lot of it, actually. And also the bits I am, have more expertise in, there is an alternative point of view. And I didn’t want it to be a kind of monologue. I wanted it to have alternative viewpoints and so I thought to have 12 contributors would be really good in different areas, and it would give a different pace to the book and add a different interest. And I suppose also – which I didn’t plan- but the byproduct of that is that, of course, they all have their networks, so the network effect of the book and the way we can spread the word as multiply by 12, which makes good sense. There are some really smart people, really very varied backgrounds and viewpoints. And, yeah, I was really pleased with them.

Adrian Tennant: Ibrahim, if IN CLEAR FOCUS listeners would like to learn more about you and your work at Portland Design or your book, Future-Ready Retail, where can they find you?

Ibrahim Ibrahim: I’m on LinkedIn. So definitely confirm me on LinkedIn. I’m on email, Ibrahim@Portland-Design.com. And, of course, the book is available on Amazon and all good book shops. 

Adrian Tennant: If you’d like a copy of Ibrahim’s book, Future-Ready Retail, you can save 20 percent when you purchase directly from the publishers online at KoganPage.com. Just add the promo code, BIGEYE20 at the checkout. Ibrahim, thank you very much for being our guest this week on IN CLEAR FOCUS!

Ibrahim Ibrahim: Thank you, Adrian. Thank you so much. 

Adrian Tennant: Thanks to my guest this week, Ibrahim Ibrahim, the author of this month’s Bigeye Book Club selection, Future-Ready Retail: How to reimagine the customer experience, rebuild retail spaces, and reignite our shopping malls and streets. As always, you’ll find a transcript with links to the resources we discussed today on theIN CLEAR FOCUS page at Bigeyeagency.com, just select Podcast. And a reminder that you can save 20 percent when you purchase any of our Bigeye Book Club selections directly from KoganPage.com – just add that promo code BIGEYE20 at the checkout. If you enjoyed this episode, please consider following us wherever you listen to podcasts and contributing a rating or a review. Thank you for listening to IN CLEAR FOCUS, produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.

Categories
Branding Consumer Insights Creative & Production Podcast
MikeStevens S9E24 1200x675

Our guest is Mike Stevens, the author of The Direct To Consumer Playbook: The stories and strategies of the brands that wrote the DTC rules, this month’s Bigeye Book Club selection. Reflecting stories from the founders of Tails.com, Huel, and Casper, Mike shares valuable insights about what works in the DTC space today. IN CLEAR FOCUS listeners can claim a 20 percent discount on The Direct To Consumer Playbook at KoganPage.com by using the promo code BIGEYE20 at checkout.

Episode Transcript


Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS:

Mike Stevens: As a brand, you know, you’ve got the choices: you can do B2C, you can do third party marketplace, you can do retail, you can do direct, you can have your own shops, there’s more opportunities to build the business that you want to build.

Adrian Tennant: You are listening to IN CLEAR FOCUS, fresh perspectives on the business of advertising produced weekly by Bigeye: a strategy-led, full-service creative agency, growing brands for clients globally. Hello. I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us. Today, we’re going to look at some of the founding stories and strategies of brands that have rewritten the rules of traditional retail and established dominant market positions by adopting the direct-to-consumer or DTC business model. Although many startups launch with eCommerce, few manage to successfully scale their DTC operations. A new book entitled The Direct To Consumer Playbook offers unique insights drawn from best-in-class DTC brands, and is this month’s featured selection for the Bigeye book club in partnership with Kogan page publishing. The Direct To Consumer Playbook’s author is Mike Stevens. Mike served his entrepreneurial apprenticeship on the startup team at Innocent drinks before co-founding the good-for-you confectionery and candy company, Peppersmith. After scaling and selling Peppersmith, Mike now works as an advisor, mentor, and consultant to those seeking to enter the increasingly competitive DTC space. To discuss The Direct To Consumer Playbook today, Mike is joining us from his home in Poole, England. Mike, welcome to IN CLEAR FOCUS!

Mike Stevens: Thanks for having me.

Adrian Tennant: Can you tell us a bit about Innocent drinks and what it was about working on that brand that inspired you to found Peppersmith?

Mike Stevens: Yeah, absolutely. Um, so I was really lucky to join Innocent right at the beginning of that particular business. For those of you who don’t know, Innocent is now the biggest fruit juice company in Europe, so bigger than Tropicana and now owned by Coca-Cola, so a hugely successful business. When I first met Innocent back in 2001, it was a brand new startup. So, little did I know that it was gonna go on to be the success it has been. And I was very, very lucky to be part of that business in terms of rapid growth and learning a lot. But, the main reason I joined Innocent is because it was a startup and even, you know, back in the 2000s, outside tech, startups still weren’t really a thing. The words, “startup” and “founder” didn’t really exist. So, but I always knew that I wanted to start my own business. So I joined Innocent because it was a startup operation and I thought, what a great place that would be to learn, um, what it’s like being in a young business. And, I was so glad I did because it, yeah, ticked all the boxes and I learned so much. I mean, I always advise anyone who wants to start their own business, especially if they’re young as well, go and work for a startup first because you can see what happens. You can see the ups and downs, you can see the pressures and the different things that happen in a startup, which is very different from a nine to five, well-oiled corporate, and then you can see if you like it, but then also importantly, have you got the right skills, attitude, and aptitude, to prosper in an environment like that? And if you have, absolutely take those lessons and then you can start something for yourself. So that’s what I was doing at Innocent, but that took me on to doing lots of different things, including Peppersmith.

Adrian Tennant: Well, I mentioned in the intro that you took Peppersmith from concept through to acquisition. Was that what prompted you to write The Direct To Consumer Playbook?

Mike Stevens: The motivation for writing the book came out of, I guess, some of the challenges we had in the business and the opportunities. But going back to the beginning, I mean, I started Peppersmith because I wanted to do my own thing. And what happened was, at Innocent, we were sort of leading the food revolution. And what I mean by that is the major trends, which were, you know, sort of spearheaded by the likes of Innocent and some other great food and drink brands out there with natural, healthy, sustainable products with a brand to tell the story in terms of why they’re different from all the incumbent food and drink and on the shelf. And the insight that we had is that change was happening all over the food and drink industry. So in every category, whether it was ice cream or milk or bread or cheese, whatever, you know, those trends were apparent. Apart from one category, and that was confectionary. So confectionary was, um, still dominated by, huge multinationals who’d been doing the same thing, not for years, not for decades. But some of them, like hundreds of years through the likes of Mars and Cadbury, Wrigley, these businesses have been around for a long, long time. And, what they did, they did very well. But essentially it was high volume, cheap, not very good for you crap. So we saw the opportunity to mix that up and take the trends we saw everywhere else. And so, my hypothesis was, if natural health is sustainable, and was working in every other category, why shouldn’t it work in confectionery? And we were right. So we built this brand, it was a good-for-you confectionary company that we made chewing gum, mints, and other sugar-free, sweetened candy. And we built that business over nearly 10 years and eventually exited in 2018. But to your question about why I wrote the book, following my experience there, it really was about, you know, the way we were selling our products. So, right at the very start when we launched the brand in 2010, we had a direct-to-consumer offer – which was you could go on our website, hit a PayPal button, and we could deliver you our product directly to your home. But the reason we did that wasn’t ‘cause we thought DTC was an amazing sales opportunity. We did it because we knew as a startup, it was gonna take us a long time to build up distribution. And we wanted to ensure that anyone who’d heard about us and wanted to try the product could. Because we knew that we wouldn’t be in every shop. So lots of people, if they went out and about, they might not find us. So we had this DTC offer, but as we grew, what we found was that our direct-to-consumer business was just growing, organically. It was getting bigger and bigger without us putting a lot of effort into it. It also helped that we went onto Amazon very early on. We were in the UK, we were one of the first food products on Amazon. So that really helped us in terms of internet sales. So that part of the business was growing and we were also having quite a lot of success in bricks and mortar retail distribution. So, the big supermarkets, the main health food chains in the UK, and lots of travel sites were taking the products, but the one thing that I’m sure is true, whether it’s in Europe, or the US, or wherever, dealing with these big retail chains is incredibly hard work. They’re very demanding. They don’t always do what you want them to do as a supplier and I guess as a small brand, we don’t have all the resources to serve them as maybe they would like. Where we got to is that while we had generally a lot of success in retail, it was just getting harder and harder. And at the same time, DTC was growing and we weren’t really trying. So, yeah, we reached the point it was like, “well, if retail’s getting harder, and DTC seems to be pretty open and easy and it’s growing and we’re not even trying, why don’t we put more effort into the thing that seems to be working?” which was DTC. So we decided just to put more effort and resources into our direct-to-consumer channel. What I would say, you know, by the time we sold the business in 2018, DTC and internet sales were about a third of the revenues. So the bulk of the business was still via retailers, but, I think, you know, getting to a third was quite impressive because we were making confectionery products which people normally bought from the store. So to sell in bulk, as we were, and via DTC, I think that was quite a good effort. So we grew that side of the business, but what always played in my mind is “what are the right things to be doing? should we be investing more in marketing? Or is it in operations? How do we think about pricing?” And, what I did, I was asking around my peer group of other founders, who were all, you know, we’re all trying to do a bit of DTC. So it’s probably 2014, 2015, and the answer’s pretty much from all of my, founder, peer group was, we’re doing the basics. But we don’t really know what we’re doing, we’re all sort of learning on the job. And that was the whole community. So us as a bunch of founders, who own these great brands, we’re trying to sell more and more, using the power of the internet. We were all learning on the job. And my, um, my thought at the time was like, “oh, I really wish I could just buy the book to tell me how to do this.” But it didn’t exist. I mean, it didn’t exist, I guess, cuz it, you know, this, DTC selling was quite new. But then also just no one who got around to writing it. So when I sold the business in 2018 and finally stepped away from the brand in 2019, it occurred to me that no one still written the book for brands, in terms of the best practice to sell and direct to consumers. So, because I had the time, and I still had the motivation, and my main motivation was to help other entrepreneurs like myself, I thought I’d write the book. And so that’s why I spent the last two years doing.

Adrian Tennant: Well, you wrote most of The Direct To Consumer Playbook during the COVID 19 lockdowns. In what kinds of ways did that change how you approached researching and writing the book?

Mike Stevens: Yeah. So that was quite a change. So I started in earnest really, at the end of 2019, the start of 2020. And, um,  I guess, my strategy in terms of writing the book, hadn’t changed and didn’t change. And that was going to meet with the founders or CEOs of the best DTC brands that I could find and interview and tell their story. So I did that. And when I first started, I was determined to go and meet, face to face all of the founders,and that started. And then I think it was actually in February, 2020, for the first time, I wanted to meet the founder of Tails.com, which is a DTC dog food company. And in their office, you can imagine a DTC dog food company, every day is a “Take Your Dog to Work” day. So, there were dogs everywhere, but I’ve got quite severe dog allergies, so I was trying to figure out how we navigate that. So, I did have an interview with the founder, sort of away from their office, but I had to follow up, using Zoom, cause I couldn’t go back and see him. And, that was like, “oh, I thought that was okay.” And then the pandemic hit in March 2020 you know, and what was amazing then it meant that yes, it was impractical for me to go and meet all of the founders and I actually had to cancel some interviews that I already had lined up. But what really impressed me was how quickly everyone adapted. And, doing a video call for one or two hours, didn’t seem such a strange thing. So it was actually in the end, I think it was quite advantageous to me that I could ask people, “are you happy to sit on a video call with me for a couple of hours to tell your story?” and the answer was “yep. Cuz that’s what I do all day now.” And secondly, it extended my reach so I was able to find times that could fit with me and whoever I was interviewing and also expand internationally. So, there were Simon Griffith from Who Gives A Crap in Australia. There was Jeff, the co-founder of Casper. Hugh who did Ugly Drinks out of New York. So yeah, there were just lots more people who I could reach, and if I had to go and see them face-to-face that would’ve been more difficult. So in the end, while it’s always better to do face-to-face interviews, especially as you want to get a feel for actually what those businesses are all about, it was helpful in terms of writing the book.

Adrian Tennant: Mike, what can readers expect to learn from The Direct To Consumer Playbook?

Mike Stevens: Well, essentially it is the stories and strategies of the best in class DTC companies. I think the stories are quite important in terms of where the founders come from, in terms of what their background was, what their mission was, what they’re trying to achieve. But then out of those stories and out the growth, the scaling stories of their business, it was me trying to pick out what are the things that those businesses have done so well that has enabled them to be successful? And the way I approached that, I just asked the founders all the things that I wanted to know as a founder. And I think that gave me a real advantage. I was asking questions which I think were probably quite different than a journalist would ask or an academic would ask. I was asking the questions which were keeping me awake at night. How did you approach this challenge that I faced every day? Whether that was a marketing question, that was a finance question, it was an operations question. It was a team, it was investment. It was all the things that, you know, all these businesses have to do, including us. And I think what that enabled me to do is actually because I was a founder asking questions of another founder, it was easy to establish a rapport. I was so impressed with the answers and the time that the people interviewed were able to give me, they just gave me some really powerful, honest, candid answers. And I just don’t think that would be possible if I went in there as anything other than a founder.

Adrian Tennant: Let’s take a short break. We’ll be right back after these messages.

Dana Cassell: I’m Dana Cassell, Bigeye’s Senior Strategist. Every week, IN CLEAR FOCUS addresses topics that impact our work as marketing professionals, often inspired by data points reported in consumer research studies. At Bigeye, we put audiences first. For every engagement, through our own research, we develop a deep understanding of our client’s prospects and customers – analyzing their attitudes, behaviors, and motivations. We distill this data into actionable insights to inspire creative brand-building and persuasive activation campaigns – with strategic, cost-efficient media placements. If you’d like to know more about how to put Bigeye’s audience-focused insights to work for your brand, please contact us. Email info@bigeyeagency.com.

Adrian Tennant: Each month, in partnership with our friends at Kogan Page, The Bigeye Book Club features interviews with authors who are experts in specific areas of marketing and consumer research. Our featured book for June is The Direct To Consumer Playbook: The Stories and Strategies of the Brands that Wrote the DTC Rules, by Mike Stevens. IN CLEAR FOCUS listeners can save 20 percent on a print or electronic version of the book with exclusive promo code BIGEYE20. This code is valid for all products and pre-orders and applies to Kogan Page’s free e-book offer. To order your copy of The Direct To Consumer Playbook, go to KoganPage.com – that’s K O G A N P A G E dot com.

Adrian Tennant: Welcome back. I’m talking with Mike Stevens, an expert in scaling direct-to-consumer brands and the author of The Direct To Consumer Playbook, published by Kogan Page. In the book, you identify seven characteristics shared by best-in-class direct to consumer brands. One of your recommendations for DTC brands is to build community. So Mike, why community building?

Mike Stevens: Community building is so important and the reason, it comes up again and again, when talking about DTC businesses is because DTC enables you to build a community. And the reason that happens is that every transaction you have, you are interacting with that end consumer. In terms of old-school retailing, you’ve just got wholesalers, you’ve got distributors, you’ve got retailers in the way, which separates the producer and the consumer. But now they have this connection. And as you connect with those customers, they find out about you, you find out about them, and you work out, you know, which ones you have the most in common with. And the ones you have, most in common with become your people and they become more than your customers. They’re your supporters. They tell you what to do more of, they tell you what to fix. They buy everything you do, and they tell their friends to do the same. And they also, they interact with each other as well as that community. And it’s, it’s all built around who you are, what you offer and what you care about. And if you can build that community, it’s a powerful marketing tool, but it’s a really powerful reason for being, because they’re the set of people you’re gonna look after again and again.

Adrian Tennant: You also write about purpose needing to be at the heart of every brand. Why is defining the ‘why’ behind a business so important to DTC specifically?

Mike Stevens: When someone comes to you, whether it’s via or social ad or they’ve been told about you, they end up on your website, they’re looking for a connection. They want to understand what you’re about and the reason, having a purpose, and standing for something that’s so important is that competition is so abundant. You know, so customers really need to see what you do. And if they believe in the same things you believe in, they’re going to, become a customer, part of your community, become a friend of the business. And what this means, and this is quite important, as we move onto the internet, away from mainstream retailing, is that, because you care about something and you should be proud of sharing what you cared about, you’re not gonna please everyone. You know, there’s gonna be a lot of people who come to your website and it’s just not for them, and that’s okay. But the important thing to remember is the ones that do come back, because they believe in the same things you do, they’re gonna come back again and again, and be with you all the way.

Adrian Tennant: Here in the US, we’ve seen a lot of editorials recently predicting the end of the direct-to-consumer boom. Economics play a part. The social platforms that originally enabled relatively inexpensive advertising for startup brands have become more expensive in recent years. Distribution too, is changing, as many DTC brands that were once available exclusively online can now be found on traditional retail store shelves. Mike, is omnichannel retail now the way to go for most startup consumer brands, do you think?

Mike Stevens: Yes and no. I’d say no for startups because you know, I’m a huge advocate of using DTC to sort of hone your offer, to hone your product, develop your brand. You know, DTC just gives you a really great opportunity to do that without spending a huge amount of money. But beyond that, Yes, omnichannel or multichannel is really important. The landscape’s changed you know, 5, 6, 7, 8 years ago, Digital advertising costs were low. There wasn’t that many DTC companies around. Look at Casper, for example, they were really the first mattress in a box DTC company, and they worked out, for every dollar they spent on Facebook, they were given seven or $8 in return. That was fantastic. And this is why, you know, the VC community got so excited but what has happened over time, it’s just competition. So more and more people have come into the space. And that means it’s not only a problem in terms of your brand, you’ve now got lots of competition. You’ve got lots of other companies who are vying for the same customers as you. That competition has also hugely driven up the cost of acquisition. So what that’s meant for brands is actually, they now have a scaling problem. It’s hard to scale to either the level they need to be to become profitable, or the level they need to meet the requirements or the promises they made to their investors. So, that means they need to branch out beyond DTC to find more customers. And you know what? that’s perfectly okay. Because one of the really great interviews I had in the book was, Anthony Fletcher from Graze who told me, like, it’s crazy that more DTC brands are not doing multichannel because not only are there more customers to serve, it’s actually you work out, there’s just better ways to serve those customers as well, so you can become a better and stronger business. So yes, I think, multichannel, omnichannel is gonna continue to be the way that most brands operate, but isn’t that great? Because, you know, as a brand, you know, you’ve got the choices, you can do B2C, you can do third party marketplace, you can do retail, you can do direct, you can have your own shops. There’s more opportunities to build the business that you want to build. 

Adrian Tennant: One of the best-known brands in the DTC space, as you mentioned, is Casper, the mattress company, which was once valued at over $1 billion. Now, although it was listed on the NASDAQ in 2020, after 18 months of losses, Casper was taken over by a private equity firm. For The Direct To Consumer Playbook, you interviewed Jeff Chapin, one of the original co-founders of the company. So, Mike, I’m curious, how did you secure that interview, and what are some of the most important lessons you think we can learn from Casper’s experiences?

Mike Stevens: It was great to talk to Jeff and hear his story beyond Casper. Cause I do believe, you know, when the history of DTC is written in 50 years time, Casper will be one of the brands that mentioned they were real sort of trailblazers and pioneers. And it was great to hear the whole story from Jeff. Yeah, in terms of how I got that interview, like I got most of my interviews really from founder networks. You know, I was lucky that as a founder, that I knew quite a lot of the people I interviewed firsthand anyway, and then there was only one or two degrees of separation between the rest. So, was again, another advantage of being a founder. So, you know, Jeff was really kind to spend quite a lot of time with me actually, and talk through the Casper story. And one of the things that he said is that, yeah, they spent lots and lots of money, provided by the VCs, cuz they had some really decent valuations. It meant they could get a lot of money from VCs without being diluted too much. So it seemed like why wouldn’t you do that? But what, in the end they actually spent all that money on marketing and that was marketing to try to stay ahead of the competition. In the book I mentioned there wasn’t one or two competitors, I think in 2019 we got to a number of 176 mattress-in-a-box DTC companies in the US. I mean, that’s a crazy number. And as Jeff told me, if you needed to try and outspend five competitors, you know, if you needed to try and keep going longer than those five, you could probably do it. But when you’ve got, you know, 200 or 500, it’s like whack-a-mole. You know, you spend a bit of money, one disappears, and then the next one pops up. It makes life really hard. And I think where Casper got into trouble is they took on the strategy of “we were the first, we are the best. We want to stay top of the pile.” Um, and they spent a lot of money to try and achieve that. Where in effect, they should have been investing more of that money into new product development, new channels, in terms of business infrastructure. And I think they’ve got that now. And I think one of the reasons that they have been bought by private equity and taken private again is because they’ve gotten everybody really good value. Because, you know, Casper is, they make great products. They’ve got a really strong brand, so there is definitely still value there. What Casper and the management team failed to do over the years is turn that opportunity into profit. So hopefully they can do that now. For those of your listeners who might have come across Adam Grant and his book Originals, there was a great chapter in there about the fallacy of the first-mover advantage. As a first mover, you know, whoever’s following you can actually learn not only from your opportunities, from your mistakes. And it sort of makes it easier to follow than it is to lead. And I think, you know, Casper sort of led such a dynamic marketplace for so long, it wasn’t hard for some of the competitors to catch up and it caused them a marketing problem to stay ahead. Jeff was great and I’m a fan of the business still. And especially their branding. I love their attitude to customer service as well. Have a read in the book in terms of how they approach that, but did they make all the right decisions at the right time? Probably not, but they’re still going and they’re still learning.

Adrian Tennant: The Direct To Consumer Playbook has been out for a couple of months So, Mike, what kinds of responses have you had to the book so far?

Mike Stevens: Yeah. The book launched at the start of May in the UK and the end of May for the US and the rest of the world. So, I’ve been getting some responses from the UK market and it’s been going great. In the last month, it’s been number one on the Amazon marketing chart. So, I mean, that was just great to see and also I’ve been getting some really nice professional feedback in terms of endorsements for the book, but also really important, now is actually from people reading it and trying to use it. The book was written, you know, to be helpful for entrepreneurs. So when an entrepreneur sort of jumps on Amazon, alright, it gives me a review and says, look, this is, just a really helpful book. I mean, That’s the main thing. So now I’m just really interested in terms of how it translates to international markets and particularly the US. There are US brands in the book, so hopefully, it is easy for any of the readers, wherever they are, to relate. And I think, you know, DTC being sort of what it is, the fundamentals of DTC are the same wherever you are in, Boston or Brighton in England, or Bangalore, or Bahrain, or wherever – it’s the same stuff. So, yeah, I’d be really keen now to hear what international readers think of it.

Adrian Tennant: And Mike, what are you working on right now?

Mike Stevens: So, after selling, uh, my business, I’ve been doing two things. One has been writing in the book. And the second thing is I consult, I also mentor, I advise, I write articles. I love consumer goods and especially challenger brands. It’s really why I’ve been doing it for 20-plus years. So I’m really happy to interact with or help anyone who’s trying to do something new with a physical product. So, anyone who’s listened to this who needs any help, you should come check me out.

Adrian Tennant: And how do you see the direct-to-consumer landscape evolving over the next two to three years?

Mike Stevens: I mean, I think DTC will continue to be harder, for sort of new entrants. And that is only because it’s so competitive, but there are things that are getting easier. Firstly, there’s so many great tools that a DTC company can use. I mean, even when we started, I mean, Shopify wasn’t really around you know, we didn’t use Shopify for the first sort of three or four years we were doing DTC, but the, you know, tools like Shopify and Klavyo are just fantastic for creating an ecosystem you can use to get going. Then it’s saying, you know, making sure that you’ve got the right products and the right marketing messages. I mean, that’s really up to you, but the tools are there. I also do think in the next few years, we will see a correction in digital marketing costs, and the reason I say that is it’s about supply and demand. I think as more and more businesses realize that they’re not getting the right returns, from digital marketing, the cost of acquisition, it’s just actually higher than they can support. And more brands will be looking at sort of a different marketing mix. and that will mean, you know, demand will go down on those channels. So I think, yeah, the cost will come down, whether they will be as effective or not, as they have been in the past, we will see. But I do think there will be a correction there. 

Adrian Tennant: Mike, if IN CLEAR FOCUS listeners would like to learn more about you and your services, where can they find you?

Mike Stevens: Yeah. So, a good place to start if you’re into DTC would be the book, so that is available and I know you’re gonna share some links, Adrian, so thank you for that. But in terms of getting in touch with me personally, which I love, so please do, you’ll find me on Twitter. My handle is @OpenMikeStevens. My website is Stevens.earth. And also, you know, I’m quite active on LinkedIn as well. So Mike J. Stevens or just search, Mike Stevens, Direct To Consumer Playbook or Mike Stevens, Peppersmith, you are sure to find me.

Adrian Tennant: And if you’d like a copy of The Direct To Consumer Playbook, you can save 20% when you purchase directly from the publishers online at KoganPage.com. Just add the promo code BIGEYE20 at the checkout. Mike, thank you very much for being our guest this week on IN CLEAR FOCUS!

Mike Stevens: It’s a pleasure. Thank you, Adrian.

Adrian Tennant: Thanks to my guest this week. Mike Stevens, an expert in scaling direct-to-consumer brands and the author of The Direct To Consumer Playbook. As always, you’ll find a transcript with links to the resources we discussed today on the IN CLEAR FOCUS page at Bigeyeagency.com. Just select Podcast from the menu. If you enjoyed this episode, please consider following us wherever you listen to podcasts. Thank you for listening to IN CLEAR FOCUS produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.