Global PerspectivesJanuary 10, 2020

Industry Insiders: Frederick LeCoq, CMO/CDO of Sporting Life Group

What trends will impact the retail customer of tomorrow?

We caught up with Chief Marketing Officer and Chief Data Officer of Sporting Life Group (Golf Town & Sporting Life) Frederick LeCoq in Toronto to discuss the state of the retail industry at the turn of the decade, the role of the physical store and regional differences.

 

 

TRANSCRIPTION:

Julia Raymond:
Here we are at the end of a decade and at the start of a new one, so we felt like it was at perfect time at RETHINK Retail to interview leading retailers in the space on the trends that will impact the customer of tomorrow. Joining me today is Frederick LeCoq. Fred is the Chief Marketing Officer of Sporting Life Group with retail banners Golf Town and Sporting Life. Fred thanks for joining me today.

Frederick LeCoq:
Thanks for having me.

Julia Raymond:
His previous roles were with huge brands Nokia, LG, Microsoft, and the list goes on. So you have decades of experience in this space. Looking back, as we think about past just 10 years even. There’s been so much change in retail. What were some of the biggest challenges and hurdles that you think retailers faced?

Frederick LeCoq:
Retailers been like very disrupted over the past 10 years. I bucket the disruption into five major streams that every retailer have to deal with experience, for sure, and had to find some solutions or deal with, as I said. The first one is, it’s a tough day, if you look at retail in the past, lots of banner grew up, as what I call like specialty retailers. And if you look the one that are being hurt most, a big chunk of them is coming from the specialty world. And, it’s been tough day. Like Golf Towns, part of the Golfsmith was bankrupt in 2016, so we’ve been on a three years turnaround project that is so far and knock on wood, pretty successful.
But it’s been a tough day for specialty retailer. And, the reason for it I think is, as part of the retail expansion, we treated down the experience. We forgot to invest on customer experience and we felt like the assortment, the specialty assortment, was doing the job for us. So I think that’s one big trend. If you’re a specialty retailer, you definitely need to reinvent, tear down and redesign your customer experience. And that’s one big trend that we’re seeing. I think as speaking of that disruption, another one that’s been tough to deal with, it’s competition being one click away. So your competition is inviting itself and your stores.
In the past, when you were in my store you were captive. Well today we got those wonderful little toy called mobile and literary through that device, my competition is actually able to stay connected with my customers in my, formerly would call, my environment. And competition being one click away as it’s another retail disruption that we got to deal with. A third one that we need to consider it’s the business model of retail. That was always, I buy from vendors and I resale to my customers. Well now the problem is vendors are going direct. So with customers that are willing to get connected directly with brands that create a new channel competition that we were not familiar with.
I would say a fourth one, it’s that that brand-new former retail, whether you call it like the pure player, or the marketplace, that’s been disrupting us a lot. And actually I think it’s a great opportunity because, speaking of the first point, where I’m saying, it’s critical to invest into experience because experience creates value. I think those marketplaces should push us to recreate that differentiation factor that actually lies on the experience.
And lastly, from still like retail disruption perspective, owning the last 15 kilometers, the last 15 minutes, what I call that community proxy, it’s got to be close to me revolution.
It’s, how do you own that last 15 to 20 minutes or 20 kilometers. It’s the last segment, to your customers. And there’s a big battle right now and it’s happening. And I think what’s interesting as well is mass retail became the personalized retail. And I think now we’re all trying to recreate that community retail that, pop and mom shop, mass personalized retail is not an oxymoron. It can happen. It should happen. And I think that’s part of the whole retail revitalization project.

Julia Raymond:
Absolutely. So some great points you made about vendors becoming somewhat of a competitor, so some channel competition, you mentioned marketplaces and then everything coming back to the foundation of that experience where specialty retailers really can excel. So looking into the future, you said it’s a good thing in some ways, all these changes are pushing retailers to make changes. What kind of changes do you think will be coming in the next five to 10 years? What trends will we retailers be focusing on?

Frederick LeCoq:
Well, as I said, the key to success is really doubling down on the experience, now in the future from a retail perspective, I think there’s some major insight that we need to look at. One, I was talking a little bit before about, we created a monster` that was depersonalized retail, and I think we need to rebuild that customer connection, customer trust, and people want to know, and I think one opportunity here in the future is around transparency and traceability. And I think there’s something very important here about … and it’s not only for the product that we carry us, because as Golf Town of Sporting Life, or to some extent towards the rest. I think it’s really overall people are looking for that information. And I’ll take an example for, everybody’s talking about grocery and E-comm. E-comm and grocery.
Well, when you’re buying a grocery online, let’s not talk about grocery like the cookies and stuff like that. But let’s talk about food and everything that has to be fresh. Like how do you deal with the cold chain? How do you ensure that the product that you bought that’s in a box that’s being delivered to you has been maintained at a good temperature? I’m always watching, I can’t help it, my home country and look what retailers are doing out there. But if you’re able through whatever app or whatever, to track your delivery and the temperature of your order from the time it leaves the store until it gets to your house, that builds customer connection, that build trust. And I think that’s one of the thing that is a great opportunity once again, to rebuild that stickiness.
Retail is more than convenience, and it’s got to be more than convenience. So I think that’s one piece here around that transparency and that traceability. Another trend that I see from retailer, we’re all sitting on terabytes of data, millions of terabytes of data, and we won’t do anything with it. It’s sitting somewhere, but in many cases, by the way, the guy who’s sitting on top of the data is different from the guy that’s supposed to activate the data. And there’s very little connection. I think through data, and once again around what I call data and all the modeling that can come from AI, and being cool and not creepy, there’s a fine line here around data activation.
The third trend that I would say we need to deal with, when it comes to the future of retail, is all the new business model. And retail is been very linear. When it comes to the future of retail is all the new business model and retail is been very linear. I buy a product from A, I store a product, I warehouse the product. I source, I warehouse, I display, I merchandise, I sell, very linear.
The resale market is huge. And, close there’s some very high end reseller consignment store. You can go and buy some probably products I wouldn’t be able to buy. And they’re accessible, they’re here, they’re in good condition. And, when you look at that new economy, I think as a retailer, you need to ask yourself, what role am I going to play in there?
It’s well on its way in the apparel clothing world. Ikea’s been starting to do this on the furniture world, but is there any legacy retailer in today’s world when it comes to recommerce? Who’s the Ikea of recommerce in different industry. And, that’s another opportunity that we’re having there. And it’s a brand new business model. I’ll give you another example, talking about all the different new business model that exist, and then we need to look at, if you’re a grocery retailer, It’s always been the same way. I got my product, I do my flyer, with my massive reach and hope people will come to my store.
Okay, let’s park that for a second. And let’s say, you want to cook something tonight, and you’re going to go to a recipe website and you’re going to say, “You know what? Hey, I’d like to cook something tonight.” And you’re being inspired because you want to cook some fish. Well maybe you’re going to handle browsing that site with a great fish recipe. And what’s the number one question when you saw the recipe and you’re like, “Oh I’m inspired by that thing. I want to do it. Then do I have the ingredients?”

Julia Raymond:
Oh no.

Frederick LeCoq:
Oh no. All right, same plan, you’re going to look for another one. But what if at that level you were able just to click a button because that recipe website is connected in the backend with a retailer and just say, “You know what? All the ingredients that you want for your meal tonight are being delivered at your house within two or three hours.” So it’s click and all the ingredients are being delivered to your house. So when you come home at night, and you got your friends coming over, all the recipe are here and you can actually cook. So you shop not by your list, you shop by a recipe. It means just from a retail perspective say, “Hey, you know what? This is not traditional retail.” We’re not talking about advertising or flyer to customers so they can buy their weekly seamless.
We’re trying to inspire our customers through a recipe or through something else. And then we make it easy for them. One click being delivered. So all these new business, whether it’s recommerce, resale, whether it’s, and what I would call anywhere commerce, anywhere there’s a content connection.

Julia Raymond:
It’s so true. And what you said about owning that last 15 mile or 15 kilometers, wherever you’re from, that ties in to what you’re saying about owning new business models. If you’re going to dive into that, you really need to figure out that portion as well.

Frederick LeCoq:
Yeah. It’s critical. In France, we had an expression in the past for the grocery store. It used to be called … It’s interesting, by the way. We called it family stair. What is family stair? Sounds like family store isn’t that? Because it was just over the family? It wasn’t a store of the family. So that was a banner in France called family stair. I remember my grandmother saying all the time, “I’m going to the family stair.” And the family stair was that, small size. It wasn’t like 60,000 square feet.
It was all like big enough store to have everything she needed but not too big. So it wasn’t like from a grocery perspective, overwhelming. And, and she was going there and then as her kids grow up, my mom actually was going there. So it became kind of a family store and, we would never thought of going anywhere else because that was part of our community. And, I think through data, through experience, through also people, the people you have in your store. Those are critical in term of differentiating yourself, that building, that emotional connection, that stickiness, that store stickiness, something that makes you come back.

Julia Raymond:
Going to the family store. The store of today has changed a bit. And are we in some ways coming back to where it used to be, where retailers are looking okay, “We really need to incorporate community?”

Frederick LeCoq:
I think we’re coming back. We’re coming back because we just realize that mass is like mass retail, just like by the way, mass broadcast. Everything that’s has been mass has been depersonalized.

Julia Raymond:
Diluted.

Frederick LeCoq:
Yeah, we’re forcing it. And I think people want something that’s relevant. People want something that’s personal. And I think we have to reinvent this and always take the example in retail. What we need to do is build a home of something, not a house or should I say a warehouse of something, but a home of something, and think about that. What’s the difference between a house and a home? You flip a house but you’re home sick. How’s that? And what makes a house a home. And I think, I don’t care flipping a house, meaning I’m not loyal to that place.
I’m flipping my retailer. But if my home retailer, my family store was going to go away, I would miss him. I would be home sick. And I think the difference between a house and a home, it’s about the people. It’s about the conversation. It’s about the hard work, what’s on the wall.

Julia Raymond:
How you feel when you’re there.

Frederick LeCoq:
How you feel when you’re there. A home is a destination. It’s not a place. It’s not staged. It’s authentic. And I usually … whether it’s during Thanksgiving or family days, people are taking their car to go home, and they’re going to fight two hours traffic, three hours traffic. Airport there’re jam, why? They need to go home. And I think if, if as a retailer, you’re able to leverage all the technology that we have today, that we made it in half, 20 or 30 years ago, and you put it to serve that home building, versus just a house real estate program, then you’re going to be winning.
And that’s the thing we’re pushing. We want to become the home of golfing Canada and, ask yourself, what does it take? We don’t want to be the warehouse of golf because being a warehouse, Amazon can do it better than we do. And I don’t want to be in a warehouse, a warehouse is cold. There’s no emotion.

Julia Raymond:
Yes, definitely. And for specialty retail, it seems like that might be the competitive advantage is creating that environment where people just come to speak with the associates, look at the new products.

Frederick LeCoq:
Going back into retail, look at another industry, which for me it’s fascinating. It’s the video game industry. And on one hand you had the music industry where all the record store, like [inaudible 00:26:32] and they went down pretty quickly. There were specialty store music, specialty store by the way. And if you look at the content they distribute, I would say it’s the same. Like the video game and music. It’s entertainment, but the video game store are still alive.
Why? There’s a reason for this because when you go to a video game store, you’re probably going to connect with a game addict. So somebody who share your passion, the person you’re going to connect with is probably going to say, “Hey, you play that game, you should play that one. This one is really cool. I played it.” You’re probably going to bump into same kids. You’re right. They’re going to say, “Hey, you know, what did you see that tips and tricks, at that level.” So there’s bunch of things that you’re getting from that visit, that is beyond price. It’s all those soft benefits. And it’s that connection on your passion. And, I think it would be easy to buy a video game online. I’m not saying they don’t, but there’s still people going in-

Julia Raymond:
Yeah, you can just download it. You don’t need go to the store.

Frederick LeCoq:
But there’s people going in shopping mall to discuss with the video game. And same in the music industry. They’re like the guys that actually did it right. That were very like passionate about what they were doing, that were like connecting with you on an emotional level, around your music style, and et cetera, they’re still in business. So once again, the minute you take away that passion, that experience, that conversation, the world mass equal dictation, personalize equal conversation. So we’re shifting. If retail is shifting from dictation to conversation, that’s a new way of doing business, and customer loves it. They love it.

Julia Raymond:
So we’re looking at the business. And for the video game example you gave, I know US retailer Five Below partnered with a video game Esports stadium company to start opening communities attached to their stores, where they can come play games. It’s like you said, thriving on the community and the emotional connection.

Frederick LeCoq:
That’s what it is. We all have our community team, sports team. We want to be a part of it. And community for some time has been a bit fluffy. Everybody say, “Oh I need to do something in community.” And people struggle to define what was community standing for. But I think the minute you spend time really defining who your community is, your community could be … it doesn’t to be people that are very close to your store. They could be a golfing community, it could be a running community, can be something else. But define what your community is. And then after invest on your community and give back to your community, give back. I think it’s, it’s a two way relationship. The linear tough, the linear thing is dead. The linear economy, nobody wants it anymore.

Julia Raymond:
No. And speaking of communities, as in, you said it’s not just in your region, since we’re filming this in Canada, I wanted to ask you from your perspective in the retail business, are there differences in Canadian retailing that are apparent versus maybe the Asian market, the EU, US?

Frederick LeCoq:
Yeah. There’s funny stuff. I’ve been in Canada for seven years, so coming from Europe, and I would say the first thing that struck me when I arrive is the connection of Canadian with the weather. And I’m like, “I’ve never seen this in my entire life.” Like the connection to weather. People in Canada, are plugged on the weather network, the weather.It’s part of their lifestyle. They’re not complaining about the wetter, it’s just part of their lifestyle. And, I remember in the beginning I’m like, “Wow, there’s something here.” And, as I said, they’re not complaining about it, but it’s just part of … so when you do retail in Canada, at some point you need to pay attention to the weather.
And it’s funny, and technology actually enables you to leverage that thing. In the past life, we run a promotion where, we attached the level of the promotional discount to the temperature. That was pretty cool, actually not creepy, really cool at that time. And we saw sales increased that were unreal because, you’re talking to Canadians about something that they pay attention to, the weather. If you’re actually able also through digital to promote this kind of product, versus this kind of product. In Calgary, you can take two feet of snow. It’s 13 degree, one day and the next day you take like two feet of snow. Well, if you’re in the old traditional world with your flyer and you’re promoting T-shirt, well good luck. You’re not going to sell much.
But if you’re actually able to read and react, and leverage like whatever digital capability to exist now to promote winter boots, then the weather is going to help you grow in your business. So I think, that’s one piece that I would say is, the weather, the impact of the weather across the country and it’s coast to coast. I’d say the other thing that’s interesting around like Canadian, do we shop, so some people will say, they’re value shopper. Some other will say, rational shopper, or smart shopper. So I would call it smart shopper, I think.
If you look at the consumer decision journey, we spent quite some times in the evaluation stage.

Julia Raymond:
Definitely.

Frederick LeCoq:
So we want to make sure that, we’re getting the best deal, the best product. We do a lot of social proofing, like social here is unreal. Like the social proofing piece of it. By the way, talking about retail. When are we going to bring social proofing in our store? I’ll park that for later, but everybody shot by review. And if you look at traditional retail, like how do you shop by reviewing store.

Julia Raymond:
Try to look it up online.

Frederick LeCoq:
That’s the way you do it. Could we make it easier? Going back to the, I’ll call it the smart shopper. And they spend a lot of time to actually evaluate and benchmark, the product, or the solution they are trying to bite versus they crash test it and make sure. And when they buy, they know they got a good deal.

Julia Raymond:
They’re very sure.

Frederick LeCoq:
Yeah, it’s a little bit less impulse and more, I would say more smart. I think that’s the second piece I would say about Canadian shopper. One piece that also struck me, it has priced something to do with the value shopper segment, but it’s the presence of those massive loyalty program that you have here. Which I haven’t seen that many loyalty program of this kind in other countries. And that’s actually pretty impressive.
What’s been built, there’s an empire of data, has been built here. In many cases, in many countries you’ve got a loyalty program, but your loyalty program is actually tied up to your banner, or to your business. But here those, I would call that Metta loyalty program. They’re actually loyalty programs that are not specific one vertical of one industry. They’re just like-

Julia Raymond:
Massive.

Frederick LeCoq:
… massive. And, I think that’s another trend. And, the last one, which I think for me is, it’s super interesting. It’s Canadian. And that’s struck me when I arrived seven years ago, because I was shocked by the online penetration number versus what we’re used to see in Europe, England, South of the border. And, I would say it was probably 50%, like the penetration was probably 50% of what you could see in some of the countries. And I think Canadian, they really like shopping in person. That community thing.
The last thing that, I’m really amazed. And that struck me when I landed here like seven years ago, is the online penetration rate, versus what we used to see. And, whether it’s in England, or in South of the border, and the number I was giving it at that time in 2012, where like it’s more or less 50% of what’s happening in Europe and what’s happening in the South, and I’m like, “Wow.” And my first question was, why is there such a low appetite, for E Commerce, or online purchasing in Canada. So there’s a few factors that can explain the lower number, but what I think is the most critical one is Canadian love shopping in person, versus shopping online.

Julia Raymond:
I have heard that, from another person, a Canadian podcast host said that it’s just the malls are booming here. They’re not closing, likely are down south.

Frederick LeCoq:
No. And I think there’s reason for this, and we’re not in the same situation from a number of mall, number of store expansion. That whole retail expansion had been going. But, I think over and above, it’s that community play. And, I think Canadians they like their in-person connection. They like the conversation. They need it actually, they need it. And there’s other reasons, also like, the country’s big, so the shipping deadline. So, there’s other reason why, but I think the core, in my opinion, the main one is because Canadians just love shopping in person. That’s the way I see it.

Julia Raymond:
That’s a great cultural insight. And I know you said there’s geographic reasons as well, but just hearing firsthand your experience coming from Europe to Canada is really great.

Frederick LeCoq:
Yeah. And, the business I was in the past was really like, I went full tilt and an online, launched a startup to sell car online. So when you’re in the mindset of saying, I want to sell a car online, you’re coming to Canada, “Oh, less than 5% of shopping online in 2012 something. What’s going on?” Though I didn’t get, it’s pretty specific to Canadian and to the countries.

Julia Raymond:
Well, thank you, Fred Lecoq, chief marketing officer from Sporting Life Group. It’s been amazing to have you here, and all of your insights about where retail’s been, where it’s headed, and some cultural differences in Canada.

Frederick LeCoq:
Thanks so much.