Resurrecting Retail with Doug Stephens
Doug Stephens is an internationally recognized retail futurist. His new book, Resurrecting Retail, explores the challenges today’s big-box retailers face from online giants like Amazon and niche, direct-to-consumer brands. We discuss how retailers are responding with innovative, immersive shopping experiences that bring customers back to physical stores. Doug identifies the emerging technologies that will shape the future of shopping for the remainder of this decade and beyond.
Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS.
Doug Stephens: The actual shopping experience itself is, to my mind, the most powerful and manageable, and frankly, measurable form of media that a retailer or a brand possesses. The problem is most of them don’t treat it that way. They don’t treat the experience as a media experience.
Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on the business of advertising produced weekly by Bigeye. Hello, I’m your host, Adrian Tennant, VP of insights at Bigeye, a full-service, audience-focused creative agency. We’re based in Orlando, Florida, serving clients across the United States and beyond. Thank you for joining us. For over a year now, consumers have been adopting new shopping behaviors as a result of COVID-19. As we’ve discussed previously, grocery has seen the biggest shift from in-store shopping to online ordering with delivery or curbside pickup. But what of other product categories? The direct-to-consumer model had been making significant gains for close to a decade prior to the pandemic, driven in part by consumers discovering brands via social media, rather than traditional advertising. Retailers such as Target took note and have successfully integrated DTC brands into its mix. But other retailers are changing the entire notion of what a store is. A recent report from Nielsen IQ notes that quote “to today’s consumers ‘going shopping’ may be less about the actual act of purchasing and more about the holistic omni-powered browsing experience. As the landscape continues to evolve, the physical or online store of the future may not be a store as we know it today, but rather evolve to become more of an experience.” Our guest today predicted this evolution of retailing almost a decade ago in his book, The Retail Revival: Reimagining Business for the New Age of Consumerism. The author, Doug Stevens, is one of the world’s foremost retail industry futurists. His thinking has influenced many of the world’s best-known retailers, agencies, and brands, including Walmart, Google, Home Depot, Disney, BMW, and Coca-Cola. Prior to founding his firm, Retail Prophet, Doug spent over 20 years in the retail industry, holding senior international roles. He’s also the author of three groundbreaking books on retail innovation and a nationally syndicated retail columnist for CBC radio, as well as a featured contributor to the business of fashion. Doug’s perspectives on the business of retailing at the intersection of consumer behavior have been featured in many of the world’s leading publications and media outlets, and he speaks regularly to major brands and organizations. To talk about his work and some of the ideas in his most recent book, Resurrecting Retail: The Future of Business in a Post-Pandemic World, Doug is joining us today from his home office in Toronto, Canada. Doug, welcome to IN CLEAR FOCUS!
Doug Stephens: Thank you so much, Adrian. Thanks for having me.
Adrian Tennant: So, Doug, what is Retail Prophet and what services do you provide?
Doug Stephens: So Retail Prophet is a consultancy that focuses exclusively on the future of retail and consumer behavior. And we advise brands like, BMW, Walmart, L’Oreal, LVMH, and Google, and all focused on this issue of the 5 to 10-year horizon of retail. You know, what’s changing? How are consumer behaviors manifesting in different ways? How do retailers need to plan strategies for that new environment? And certainly for an ever-changing competitive landscape, not the least of which have been many of the changes that we’ve seen in the last year or so.
Adrian Tennant: Doug, did you find retail or did retail find you? I’m curious, did you have any family members that worked in retail when you were growing up?
Doug Stephens: I did actually. My elder sister spent many years working in department stores, and she worked with Macy’s, but that in no way, shape or form influenced my decision to get into what many call, the accidental profession, retail. But it did turn out that it was one of my first, I’ll call it, real jobs uh, after getting married. I got into retail very much on the ground floor of the industry as a young person, kind of working my way up through the ranks of retail companies in both Canada and the US. Starting on the sales floor and finishing as the general manager of a relatively large US company. So that was the beginning. And then, in 2009, I founded Retail Prophet, having had the experience of working in the retail industry and experiencing firsthand how shortsighted an industry it tended to be. As you can appreciate around 2008, 2009, the whole world was sort of imploding. The economic landscape was changing, technology was rapidly changing, certainly a changing of the guard demographically in terms of consumer groups. And so it seemed to me at that point that the world needed a narrative that was looking out on this horizon with a little bit more prescience perhaps than the usual reactive nature of retail.
Adrian Tennant: Your second book, published in 2017, is entitled Reengineering Retail: The Future of Retailing in a Post-Digital World. Doug, what did you mean by post-digital?
Doug Stephens: Yeah, the term was chosen very deliberately, because it was my feeling, Adrian, that by 2017, the presence of digital or the presence of technology in a consumer experience was really no longer a novelty or a surprise. It was my belief – and I maintain that belief – that we live in a world where consumers I think are more surprised these days by the absence of technology than by its presence. You know, we’re sort of mystified when we find ourselves in a situation where we can’t benefit from the introduction or from the use of technology. Just to give you an example, I was in a big box store just this last week and I asked a pretty simple question regarding a product that I believe that they might’ve had and it was sort of reduced to guesswork on the part of the sales associate. I asked if they had a certain product and they said, “I think we do. And I think it’s over here.” And in the back of my mind, I’m thinking, “Well, are you telling me that there isn’t a piece of handheld technology or some other piece of technology that can’t tell you exactly where that product is in your store?” So again, I think as consumers, these days, we are more surprised when there’s an absence of technology to assist us then than when there is. So I believed for that reason, we were really living, not in a digital world, but in a post-digital world.
Adrian Tennant: One of the themes you introduced in Reengineering Retail and expand upon in your new book, Resurrecting Retail, is the idea of the store as media. Now, as you know, one of the fastest-growing areas of ad placement is in-store media, with retailers including Walmart, Target, and Kroger creating in-house solutions to offer ad space to CPG brands that they sell. But that’s not what you mean, correct?
Doug Stephens: That’s correct. Yeah. That’s not what I’m referring to. What I mean is that the actual shopping experience itself is, to my mind, the most powerful and manageable, and frankly measurable form of media that a retailer or a brand possesses. The problem is most of them don’t treat it that way. They don’t treat the experience as a media experience. Historically, as retailers, we’ve gone out to the open market. We’ve bought media, we’ve bought advertising in an effort to acquire customers, to gather brand recognition or brand awareness. And then if we’re successful in doing that, we move those consumers to a point of distribution or points of distribution to transact sales. The problem is stores are now the media itself and media in many ways is becoming the store. As a consumer now, I don’t look at advertising as a mere call-out to go to a store. The advertising is the store. I can buy directly from TikTok, from Facebook, from Instagram, from any piece of media that falls within my grasp. So many retailers would say, “Well, if media is becoming the store, does it not negate the necessity for stores?” And my argument is no, not at all, because it’s actually a trading of roles. Physical stores are becoming a very powerful media channel. And I’ll just explain very briefly what I mean by that. We have to sort of start from a place where we accept that the going in, the premise of effective media is that there is an audience for it. Obviously, we want to try and create media experiences, wherever there’s an audience that can enjoy that. If we go back a thousand years ago, that point of gathering an audience was the marketplace. That was really the primary channel through which consumers got information, where they communed, where they connected with friends and family, and ultimately where they conducted commerce. Over time, that was displaced somewhat by other forms of media, whether it was print media, radio, television. And today, of course, digital is the campfire that we all gather around. But the problem is digital is actually becoming prohibitive as a means of acquiring customers. From a cost standpoint, there are brands today already that are saying, “Look, we just cannot afford to acquire incremental customers using digital media. The cost is too high. And in many cases, it exceeds the lifetime value of that consumer.” But when I refer to stores being media, I’m certainly not talking about the networks that, as you mentioned, many retailers are putting in their stores to just inundate us visually and audibly with more and more advertising. I’m suggesting that the experience that I have in a Kroger is actually the most important form of media that Kroger can execute. So it’s a different philosophy entirely.
Adrian Tennant: In Resurrecting Retail, you define retail archetypes. Doug, how did you arrive at this concept?
Doug Stephens: The idea of brand archetypes is not new. Brand archetypes have been around in conversation in marketing circles for years now. But this notion of retail archetypes came out of a conversation I was having with a fellow named Ben Kaufman who’s the founder of a store called Camp in New York City, they now have multiple locations. But Ben was talking about this toy store that he started – Camp – and suggested that the issue confronting every retailer is that they need to be the answer to a consumer question, but the question can’t simply be, “Where can I buy a toy?” or “Where can I buy a new pair of shoes?” or “a new dining room set?” because the answer to that increasingly is “anywhere.” Go online and in five minutes you can have a thousand different choices of places to buy toys. His point was that brands need to become the answer to deeper questions. So in his case, he said, we are not the answer to the question, “Where can you buy a toy?” We are the answer to the question, “Where can I go with my child to spend quality time, to have really meaningful time, time well spent?” So this conversation sort of got me thinking. If that’s a question that consumers are asking, “Where can I go to spend valuable time?” then what other questions are they asking? What other questions can brands be the answer to? And so I began to really explode that thinking out and looking at it across different boundaries. So can brands be leaders in the cultural space? Can they be a lightning rod for social issues, for environmental issues? Yeah, absolutely. A brand like Patagonia doesn’t answer the question, “Where can I buy outdoor apparel?” Because again, the answer to that is anywhere. Patagonia answers a different question. That is: “Who aligns with my values? As a human being, what brand out there is resemblant of my values as a person?” And so I just started really looking at this at a more granular level, you know, and really trying to explore many of these evergreen questions that consumers are asking that brands can step up and be the answer to. Because I think that all brands today find themselves in this same place, Adrian. It’s that no matter what you sell, the internet has commodified it. The consumer has an endless well of choice in every product category. So every brand needs to be the answer to a deeper question or a more important question than “Where can I get this product?” And if you can be, if you can manifest that, not just by declaring it, but by animating it through every fiber of your brand and every consumer interaction, then you take on a completely new position in the marketplace. And the term I use in the book or the phrase I use in the book is that purpose is the new positioning. Forget about your SWOT analysis, your Boston matrices, your omnichannel sales plan. The first question that every brand today needs to answer is: “What is our purpose to consumers? What fundamental need do we satisfy by virtue of our presence?” And if you can figure that out and bring it to life, then you can sort of move on to strategy part two. But this is a fundamental question that we have to answer.
Adrian Tennant: Let’s take a short break. We’ll be right back after these messages.
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Adrian Tennant: I’m Adrian Tennant, the host of IN CLEAR FOCUS, the weekly podcast from Bigeye, featuring marketing professionals sharing their advertising strategies and tactics that are working today. Whether you’re an in-house brand marketer or an agency-side partner; a DTC startup or an established enterprise, I invite you to join me for lively conversations with guests that you won’t hear anywhere else. Fresh perspectives on the business of advertising served weekly IN CLEAR FOCUS.
Adrian Tennant: Welcome back. I’m talking with retail futurist Doug Stephens, CEO of Retail Prophet and author of Resurrecting Retail: The Future of Business in a Post-Pandemic World. Of course, you’ve interviewed many retail professionals as part of the research process for your books and included interviews in your own podcasts. Are there one or two who stand out to you as being particularly innovative or visionary in their approach to creating the retail experiences of tomorrow?
Doug Stephens: Yeah. You know, I think there are certainly a lot of phenomenal people doing a lot of amazing things. But I really enjoy talking to people who I regard as being pioneers. You know, people that really went out on a limb intellectually, to try to kind of poke a hole in the universe as it were, as it applies to retail. So I mean, people like Rachel Shechtman, for example, who founded Story in New York City way back in 2011, hard to believe it was a decade ago. But a store that really was the ultimate media experience. It was really a store that was designed to be like an editorial experience, a community experience. A store that really did not rely on the sale of product, but really, made most of its revenue through brand endorsements and activating brand experiences. So, you know, people like Rachel that really, as I say, were tremendously innovative and taking risks at the time. I would also include in that, someone like Vibhu Norby, from a company called b8ta, that again said, “You know, maybe there’s a different way of monetizing products at retail, and maybe it’s not through the sale of the product, but rather by capturing the data of interactions between consumers and those products. And maybe there’s a means of monetizing that data through subscription with brands who are interested in getting that sort of market information and consumer information.” So it’s really folks like that that I regard as the true explorers, you know, in this industry and the people that forged a new path that I think, frankly, it’s taken a decade for many people in the industry to appreciate.
Adrian Tennant: Well, we heard recently that WeWork is rumored to be collaborating with Saks Fifth Avenue to create spaces that combine areas for working and retail. What are your thoughts?
Doug Stephens: So when the story broke, as, as you can imagine, the peanut gallery that exists in the retail industry had a lot to say about it. There were kind of boos and mostly boos and jeers coming out of the audience on this when people couldn’t fathom, like, “What’s the connection here? Why would Saks Fifth Avenue be looking to create co-working space and who on earth would want to pack their lunch every morning and head off to a department store to work?” And on the face of it, I’m the first to admit it doesn’t seem like a natural parent but I think that what you have to appreciate in order to understand this move is that HBC – Hudson’s Bay Company, the corporate entity – is not really a retailer. And I mean, let’s face it, they haven’t been a retailer for about a decade. They are a real estate holding company. That’s really, to my mind anyway, that’s what they do. And the last decade of moves, frankly, have been focused on real estate, not on retail. I would argue that HBC hasn’t really had a retail strategy, you know, for many years. So if we look at this as a strategic move by a company that believes fundamentally that most of the space that it holds as assets are really just that they are real estate assets. Then looking at trying to optimize those real estate assets makes perfect sense. You know, asking yourself “What else could be in this space? How else could this space be utilized or have value?” And so on that level, I appreciate their curiosity. I appreciate their willingness to experiment with things that do make people stand up and say, “What the hell is that all about?” You know, we need more of that, you know? And frankly, if everyone agrees with something that you’ve done and believes that’s the right thing to do, then it probably wasn’t that innovative in the first place. So whether or not they’ll succeed is beside the point. I think the two key points are first and foremost, HBC is not a retail company. They’re a real estate company. And secondly, they too are just prodding and poking at the universe, trying to understand where there might be value, where there could be a wellspring of value. So I don’t fault them for that.
Adrian Tennant: Well, staying with rumors, The Wall Street Journal recently reported that Amazon has plans to open several large physical retail locations in the US that will operate like smaller department stores. This could extend the company’s reach in its sales of clothing, household items, electronics, and other categories. So Doug, what’s your take on this latest development from Amazon?
Doug Stephens: Yeah, it’s a really interesting development. It’s one of those that when you read it, you say, “I’m not surprised.” It’s not surprising, but it’s certainly interesting and compelling. And in a weird sort of way, you know, one of the old credos in any investment community is that you try to determine where everyone is running to. And if you’re smart, then you run in the opposite direction and right now, the retail industry as a whole is running away from physical retail and running toward digital. So what does Amazon do? Amazon takes exactly the opposite approach and they run toward the physical world. Now, this isn’t Amazon’s first foray into physical retail. Of course, they bought Whole Foods several years ago. They have opened Amazon Go stores, Amazon Four-Star stores and if we’re being completely honest, their track record in physical retail isn’t that extraordinary, really. Having said that, this makes a lot of sense. There are things that are simply difficult to buy on Amazon and difficult to buy on any retailer’s website, frankly, things that require more consideration, things that require touch and feel, complex products that really require more information or confidence before a consumer’s willing to make a purchase. And of course, apparel falls into that category as well. So that makes sense. This also provides a local logistics point, a point to distribute products from, a point to collect returns from, which would only add efficiency to Amazon’s bottom line. It also gives them an opportunity to collect more data about how consumers shop in physical environments. Amazon knows full well how we behave online, but it gives them an opportunity to create yet another data point in the marketplace to begin to connect consumer behavior between the online world and the physical world. And then there’s the more sinister side. It also gives them the ability, as we know from past announcements, it gives Amazon the ability to absolutely tank the market caps of companies like Kohls, who could potentially even become acquisition targets. We know that anytime Amazon merely clears its throat and sort of fixes its gaze on a category, they have a tendency to really rock the market caps of incumbents in those categories. We’ve seen them do it in the pharmacy sector. We’ve seen them do it across various categories. So that could be potentially the play here as well. But I think the big message to the marketplace, Adrian, and my opinion is that this is a warning shot across the bow of all physical retailers. And most specifically, I’m thinking of categories that have sort of dodged the bullet up until now, categories like home improvement. If Amazon can open a quote-unquote “department store” and sell in the physical world, well, that brings them one step closer to selling lumber and concrete and building supplies and maybe doing a much better job of it than the incumbents in that category. So, I think everyone has to take this very seriously. And above all, Amazon has the luxury to spend a tremendous amount of money doing this and sticking with it and experimenting. So, yeah, not a surprise. It could have many, many strategic dimensions, but something that everyone in the retail industry should be taking note of, for sure.
Adrian Tennant: Doug, you’re the author of three books, a consultant, a podcast host, a writer, a keynote speaker. That’s a lot to juggle. What’s your process for generating consistently high-quality thought leadership content across multiple platforms?
Doug Stephens: Oh, thank you for that. I guess the first thing is, you know, cast a wide net. Retail doesn’t exist in a vacuum. No industry exists in a vacuum and retail, perhaps more than others, is affected by a number of different things. So I look to pop culture, music, politics, and art. All of these things are places of great value and categories that influence consumer behavior. So I think we can learn a lot from looking outside the retail category as well. I think the other thing is to look for a counter-narrative. Industries like companies tend to succumb to groupthink, so always look for what others might be missing. For example, in Resurrecting Retail, as the pandemic sort of took its toll on the industry, a lot of people were pointing to the idea that the pandemic was really just an acceleration of trends that were already in play. And it would be easy to jump on that narrative train and just run with it. But my feeling was that there were probably deeper undercurrent things that would have only happened as a consequence of the pandemic that might actually have a more devastating impact on the industry. So I went digging for those, you know, digging for the counter-narrative. And then finally, don’t simply document facts, because the internet does a wonderful job of that for us. Tell stories, put your facts and information into the form of a story that people can actually embrace, they can assimilate, and they can build into their practice, going forward. Stories are probably the most powerful way to help people learn. So those are some of the things anyway that I follow. And it seems to work.
Adrian Tennant: So Doug, when it comes to securing new clients for Retail Prophet, which of the content channels work best for you? Is it keynote speaking events, the books, or the podcasts?
Doug Stephens: That’s a great question. And frankly, it’s one that I’ve never really even thought about that way – I’m almost ashamed to admit that I don’t personally pay much attention to which channels are more effective or less effective or where we have an audience. You know, we have people here that do that. I tend not to be one of them. But the way I look at it is this: I think that ultimately your brand is a zeitgeist of all that you bring to all channels. It’s every piece of content that you put out. It’s every narrative that you create. And ultimately, I think that it has to be provocative. It has to be challenging. It has to give people the sense that they’ve grown by virtue of listening to you. They may not agree with everything you’re saying, but it’s expanded their thinking and presented them maybe with an alternate view. And I think if you can consistently deliver quality, regardless of channel, ultimately you will create a market, you will create a tribe, so to speak, that follows you, and powers your business. So that has always been my focus is really, regardless of channel, just always try to create something that people remember and that people appreciate.
Adrian Tennant: That’s great advice. If IN CLEAR FOCUS listeners, would like to learn more about you, Retail Prophet, your podcast, or your books, where can they find you?
Doug Stephens: The mothership is RetailProphet.com. And if you go there, you’ll find links to everything else: books, podcasts, articles, you name it. RetailProphet.com, and that’s Prophet with a “P-H.”
Adrian Tennant: Doug, thank you very much for being a guest this week on IN CLEAR FOCUS.
Doug Stephens: It was my pleasure indeed, Adrian. Thank you very much.
Adrian Tennant: Thanks to my guest this week, Doug Stevens, CEO of Retail Prophet and author of Resurrecting Retail: The Future of Business in a Post-Pandemic World. You’ll find a transcript with links to the resources we discussed today on the IN CLEAR FOCUS page at bigeyeagency.com under “Insights.” Just select “Podcast.” Now, if you enjoyed this episode, please consider following us on Apple Podcasts, Spotify, Google Podcasts, Amazon Music, Audible, YouTube, or 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.