December 9, 2019: Black Friday Cyber Monday breakdown, retail winners and losers, will BOPIS be the next mass retail adoption?

No time for news? We’ve got you covered. Welcome to the Retail Rundown, your go-to weekly podcast where RETHINK Retail teams up with industry experts to deliver the top trending news stories in retail.

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Hosted by Julia Raymond

Researched, written and produced by Gabriella Bock

Edited by Trenton Waller

TRANSCRIPTION

Julia Raymond: 
Today, we’re joined by Bob Phibbs and Mike Wittenstein. Bob, also known as the Retail Doctor, is an internationally recognized business strategist, customer service expert, sales coach, author of three books, and a motivational business speaker. He has a legacy of bringing failing businesses back to life and has been dubbed the category killer killer by the New York times. Mike is the founder and managing partner of Storyminers, one of the world’s first strategic storytelling and experience design consultancies. Mike is a certified consultant speaker and experienced designer who’s helped his clients for nearly 2 billion from improvements in sales operations, service design, and brand management. Bob, Mike, thanks for joining me today.

Bob Phibbs: 
Thanks for having us.

Mike Wittenstein:
Great to be here.

Julia Raymond:
So today we’re shaking things up a bit and we’re going off track from the normal format we usually do. We’re going to focus our conversation solely around this year’s shortened holiday shopping season and how it started out with record breaking bang for e-commerce. So Adobe released a really interesting report and it revealed that this year’s digital black Friday sales reached 7.4 billion while holiday shoppers doled out a whopping 9.4 billion on cyber Monday. And that translates to 20% more than last year’s 7.9 billion on cyber Monday, meaning that last week was the largest online shopping day in US history. Adobe also found that this year cyber Monday shoppers bought more big ticket items like Samsung TV, smart phones, and Apple watches compared to last year. And the average online checkout was 6% higher than 2018.

Julia Raymond: 
So most notably many shoppers decided to ditch the delivery process and do pick up this year. That drove a 43% increase in buy online pickup in store orders from big box retailers like Walmart and Target. And as digital and omni-channel retailers rejoiced in some of these big wins, the traditional brick and mortar pedaled a little bit in comparison. Retail necks reported sparse crowds in stores and shopping malls. So there’s a little bit of a bah humbug there. But Bob, I want to pass this to you first. Do you think there were any clear winners for some of the black Friday, cyber Monday sales?

Bob Phibbs:
I think certainly Target continues their record-breaking streak. I think Walmart certainly is up there. I think that they reported Old Navy as well, but you know, what’s a winner? I’m sorry. Because I gave 60% off of stuff I’m a winner? I mean at what point are the same retailers really just assuming that because we have volume, we’re successful? I think that’s very different than actually being a clear winner. So yes, I think, and also I think that if I didn’t already say it I think Best Buy certainly just because they’re like last man standing in the electronics world.

Julia Raymond: 
So true. Mike, what’s your take?

Mike Wittenstein: 
You know, when I think about the biggest winners, I think two things. First that just measuring sales is not enough because that’s only one measure of so many things that go into on rail run store dealing with digital transformation and trying to prove its customer experience. For me, and I went out shopping on Friday and Monday, I was the winner. Customers all around had planned their shopping trips. They knew what they wanted, they had information, they had apps, they were using them in the stores. I saw people at Target and other locations actually using the parking lot pickup areas and it was amazing. The folks that had been investing for the last few years, that had been training, that had been working diligently to get the basics right and then to add a little bit more, they were all humming.

Mike Wittenstein:
What I noticed was that the customer experience itself wasn’t that much different. I didn’t see any big lift in the way things actually felt to me as a customer. But I think customers came out way ahead and talking to my friends and colleagues online and in-person over that week, people were really happy and felt they got really good deals.

Julia Raymond: 
I would echo that from my experience as well. I went out and I actually planned a lot of my shopping like you did and a lot of your friends and the experience was great. But I will say I did not see a huge increase in traffic. It did feel like a busy holiday shopping Friday or Saturday. But it wasn’t like it maybe was 10 years ago when people were literally trampling each other over. That’s just my personal experience.

Mike Wittenstein:
I actually love that. In the Northwest Atlanta area, we have a new expressway corridor with a pay for it driving lanes and it’s made the driving on the rest of I-75 so much better. And I felt exactly the same way when I was in the stores because it wasn’t as crowded. I could park, I could find somebody to talk to. It was so much less stressful. The whole idea of cramming everything into a day was artificial scarcity and that’s disappearing. I think that’s something that no one’s going to miss.

Julia Raymond: 
I love the topic of scarcity too just because scarcity marketing is becoming a way that some brands that traditionally haven’t approached their marketing efforts like Nike are being really successful with releasing those limited time products and partnering with designers. But I wanted to move on to my second question, which is the … And Mike, you even said this, you saw a lot of people doing buy online pickup in store. Do you think that this year’s noteworthy increase in pickup orders, will be a catalyst for mass retail adoption? Do you think some people might have been trying this out for the first time and now we’re going to see more and more of that?

Mike Wittenstein:
You answered your own question there, Julia. Absolutely. Getting people to change behaviors is really, really hard. And by cramming the day with so filled with things, a lot of people just tried it. It was promoted through some of the apps and people would drive to the parking lot, press the button, wait for somebody to bring out their order, kids in the back seats. I actually saw that and then they move onto their next thing. So they had a successful first experience in many cases. I’m sure there were some failures as well, but then they pack that away in the back of their head and they go, “You know, I could do that again.” And it’s frictionless. It takes less time. For most customers, it’s a really good option. And I do agree that yeah, we’re going to see more people incorporating these new ways of purchasing. In my opinion, from over the years and years that I’ve been looking at retail and customer experience, the more channels that you can communicate with your customer and usually the more loyal they are and the more value you are to them. But I bet Bob disagrees.

Bob Phibbs:
Well since you said it Mike, look, I get it. Mission shoppers, this is their time. If you’re an analytical personality and you’re obsessively watching, you’re going to buy some 60 inch TV and you did all your homework and you were able to order it online and pick it up, I get it. But that’s to me misses the big point, which is retail was always about discovery. And only 10% of your shoppers are in that mission shopper mindset. 60% just know they want something new, they’re in awareness stage. 30% are in comparison. Do I want the black? Do I want the white? Do I want the medium? Do I take the large? Do I want plaid, et cetera. I’ve got to go in and check that out. But this idea that everybody knows what they want is, I’m sorry, bullshit.

Bob Phibbs:
At the end of the day, customers are pretty stupid. And what I mean by that is just because you can find a couch on sale for 299 doesn’t mean that’s a great option. It means you bought some cheap crap that’s probably going to fall apart. And if you really want quality, it’s to run you a grand. But just because somebody got that 299 sofa is not the greatest thing in the world. I think that retail exists to be able to educate, to be able to move that shopper from it’s all about price, which you know, when I’m 20, I outfitted my first apartment with things I got at a garage sale or you got from friends or thrift stores, but you move past that. You get older and you say, “Oh well I’ll buy something new.” So maybe it’s Ikea and I have to use a wrench. And you know, I put the screw too far through and it sticks out the bottom of it, but I didn’t pay that much.

Julia Raymond:
No one will notice.

Bob Phibbs: 
And then you move up to I want something finer and then you should continue to keep moving up because people aren’t just buying a product. They’re buying a better vision of their lives. So if you keep people stuck in this perennial, it’s about the deal and cheaper, I think what really happens is the premium items sit, the luxury items sit, and God forbid you train an employee to actually sell and educate people. And so people bragging they got a great deal on something becomes the better point rather than I got the sofa, which really means a lot.

Bob Phibbs: 
And just to add one more thing, I’m encouraged because I think there is a renaissance of people developing and moving through these stages of the buyers lifestyle because of what we’re seeing with millennials supporting farm to table and different types of whiskeys and becoming really educated on the coffee or the wine and really wanting to see those differences. And the better retailers are going to harvest this and get out of this race to the bottom that it’s all about price and promotion, which if it’s 1940s was brilliant. I just don’t think it has a place in being able to make profit in 2019 and 2020.

Mike Wittenstein:
Yeah, that’s been a recurring theme that you’re talking about and I think that’s really important to call out. Going back to, I want to add one more thing to this notion of losing the retail, if you will. The way I would look at this Black Friday Cyber Monday thing is, it’s kind of like the world’s biggest beta test. My opinion is if you’ve got something new to try, you know you should test it a little bit, but roll it out and make a splash, do something new, a little bit different and see if people will adopt it and most importantly see what you can learn from your customers. The other thing is that coming from a customer experience background, we usually deal in personas. Descriptions of amalgam customers. There’s Susie who’s 35 and blah blah blah, and you kind of shaped the experience around her needs.

Mike Wittenstein:
So this year for me was the tipping point where instead of having more personas than we had, excuse me, more shoppers than we had personas, now I think we have more personas than we have shoppers. Individuals like me, like you guys have multiple personas as you go through the day. And you might go into a mall for a discovery experience and down the road for a pickup experience and pass by another store that you happen to shop online. And all of those are valid and viable. I think that’s important for retailers to remember that really the customer’s in control. We used to be able to manipulate them and a lot of retailers did that with their marketing, with their services, making them wait in line, rules for returns, all those kinds of things with so much competition and so much visibility of how the other guys were treating me available to everyone. I think that’s eroding a little bit. We can’t do that anymore. So the customer really is in control and use this time to beta test your new ideas at scale and see how fast you can move in the customer’s direction.

Bob Phibbs: 
So was the customer in control when it was Gap at 60% off any of our stuff at 8:00 AM? I don’t think so Mike. I think the retailer in desperation mode and they’re begging people, take this crap out of here. We have no idea how to sell it. Please take this marginal average looking stuff that you didn’t want before because we got more stuff coming in the back. I think that’s the bigger issue. I think this whole idea, don’t get me wrong, I think that the customer is in charge, but I think that that makes great PR. And yes, I’ve seen Target at work with the drive up and pick up and I get that for a busy grocery shopper. And I understand that a mom with four kids would want that. But the reality is when it’s delivered to trunk, you lose all the ability to upsell and say, “You know, this is a good model, but may I, we might have one better.”

Bob Phibbs: 
You’ve lost all of those things that makes the brick and mortar retail so valuable. And let’s face it, it’s a niche of a niche, of a niche, of a niche. There’s not that many people driving to have stuff delivered to the trunk or the bulk of it comes down to, all I care about in a retailer is can you convert a shopper into a customer at a profit? Can you add onto a sale so that more items went out the door than that customer initially wanted? I don’t think it’s manipulative. I think that is ultimately it. If I go to buy paint and you don’t sell me the masking tape or the trim brush or whatever else it is, then you did the poor job and retail is about being brilliant on the little details and being exceptional on that.

Bob Phibbs: 
I get it that algorithms can do all sorts of things. I get my phone can do a beacon to show me where the men’s underwear is when I walk into Macy’s, but realistically that makes great PR. I don’t think it moves the needle near as much as what most retailers need to, which is an end to the promotion and we’ve got to move this crap out of here because more’s coming in and into how do I actually become more valuable in the purchasing space of this one customer and I think we have a long way to go from there.

Mike Wittenstein:
I agree with you but I think that retailers aren’t doing enough to really understand their customers as a unit of one because each customer’s unique. They want to be transformed, as you said before, they’re looking for great value. They’re looking for convenience, whatever it is that they’re looking for, they should be inserting the words that matter most to them. So it’s really, in my opinion about how flexible and adaptive the retailers and their systems can be over time. One of the effects of having a 60% off everything is that it gets more people in the stores and inflates the numbers. Some of my friends were actually waiting for their regular purchases until this weekend so they can save a ton of money on what they would’ve-

Bob Phibbs: 
So what does that tell you, Mike? That’s not sustainable. The whole point of retail is that someone goes in and she … I’m getting a little too passionate about this, I need to stand down for a minute Julia.

Bob Phibbs:
The reality is you make a profit on the one items. And to consider all the ones’ needs to have all the millennials who have understood all of the deals and I use your shopping card and I’ll get that extra whatever, 5% off. And all the online retailers that are now clogging up. I was in New York city last weekend and all the delivery trucks had all this crap going back and forth because it’s cheaper and cheaper, margins go down, retailers are in trouble and we’re still talking about it’s a customer of one and we need to know our customers. That’s crap. You need to do your job, which is have compelling product presented so well that when I walk in I’m like I could see that in my home and have somebody add a little humanity into it so it’s not a technology play. It’s a human play and get that merch out the door at a profit.

Bob Phibbs: 
If you keep failing at this, you end up like a Neiman Marcus, 4 billion in debt saying, “Everything’s fine.” You end up with the guy at Gap saying, “We’re going to split off Old Navy because we did such a great job of …” who’s no longer there, or Peck. Right. “Oh, it’s such a great job of managing the brand. All we have to do is just cut it in half and they’ll both do better.” I mean, let’s have some reality checks here. Unless you’re brilliant on the basics of providing the right merchandise at the right time, at the right price that you can get margin, then you are just having a going out of business sale on layaway with these costs of promotions and saying, “Oh, if we can get people to use buy online pickup in store, here’s $50 off because we’ll change the behavior.”

Bob Phibbs:
Look, BOPIS exists and it took me a while to get this. It keeps people from going down to the store expecting to find that item on the shelf and it’s not. That’s what it’s brilliant for so that that shopping trip isn’t wasted. I used to think it was all about nobody wanting to talk to anybody. It’s more that if I go out of my car, I want to get it. And when 40% more people buy more when they go and buy online pickup in store, that’s the opportunity a smart retailer has to jump on instead of having some clerk try to find the item missing 10 minutes, the customer gets frustrated, et cetera, et cetera. They understand the goal is to get them to linger in the store instead of the buzzwords. We just want to get them in and out as quick as possible. I will turn off my mic now.

Julia Raymond: 
Well, it sounds like Bob you’re saying it comes down to the basics. You have to have brilliant retailing. You have to focus on the human experience and the people that are in your store, which from personal experience just last weekend and it’s so funny that you used a sofa for your example because I actually did buy a couch on Black Friday. And it was facilitated-

Bob Phibbs: 
Was it beige? Tell me now.

Julia Raymond:
Oh gosh. Well it’s beige leather. Oh no. Is that bad? Should I change [crosstalk 00:17:48].

Bob Phibbs: 
That’s why it’s on sale. I’m giving you a hard time. Go ahead.

Julia Raymond: 
Oh, I know. And I almost picked like the black one, but it seemed too dark. So anyways, yeah, it just, my purchases that were larger basket size over the weekend were not my online purchases. They were the ones facilitated by people in store. I will say that, but that’s my personal experience. Then it sounds like on the other hand, Mike’s bringing up a good point about the focus on knowing your customer and some personalization points.

Mike Wittenstein:
Yeah. When you know that information, it’s so much easier to anticipate what your customer needs and not only to have it in stock but be able to promote it. Like Bob said before, if you’ve got the paint, you need the paint stick and the brushes and all that kind of stuff. As soon as you can discover or the sooner you can discover a customer’s intent, like what mission are they on? I’m trying to repaint the kid’s room. Grandma’s moving in and we’ve got to fix up this new room. It’s so much easier to be a good retailer seamlessly between all the different channels. That’s how you can be of greater value to folks.

Mike Wittenstein:
It’s not just amaze them when they walk in the door and coax them into buying something more than they were experiencing. It’s about providing total service and amazing experience and getting them the things that add value to their life. That’s part of the design. Anything that we do in retail, in my opinion with all the tech and the people and the changes has to elate the customers, engage the employees and profit the shareholders at the same time. That’s really good retail design.

Julia Raymond:
I would agree there and I know in the report it said 82% of shoppers doing buy online pick up in store actually come into the store and pick up additional items while getting their pre-ordered item and like Bob said, 40% spend more than they would have otherwise. So it’s an interesting offering. A lot of retailers are doing it, some are doing it better than others. And I think that we’ll definitely see an increase next year. And with that, I think we covered that question quite a bit. So I wanted to move on to a different one that’s just more about the sense of urgency. Is black Friday and cyber Monday, are they losing the sense of urgency? Are we going to see something different next year when it comes to the holiday shopping week? Is it going to be a holiday shopping month? What can retailers do to make sure that they’re maximizing these holidays that are somewhat manufactured?

Mike Wittenstein:
You know, I think it really is turning into one big week. It’s kind of like what happened in Miami. I grew up in Florida and Miami was its own little town and so was Fort Lauderdale and so was Coral Gables and now it’s like one big giant beach community and you can’t tell where one city ends and another one begins. I think the same thing is happening in retail, especially as people become more facile going to stores, using technology and using technology in stores. It’s just one big thing. It’s going to be interesting to see how retailers respond.

Julia Raymond: 
Bob, do you agree?

Bob Phibbs: 
You know, I would take a step back. I mean, I agree with Mike in that respect that look, when Amazon is announcing black Friday sales in July, the whole thing just becomes preposterous. We’re just watching this giant lie to everybody. And I must admit, when I saw the USA Today and some of these gift guides, best black Friday sales, like Apple earbuds, normally 249, 234. I’m like, “Save 14 bucks. So this is the deal I need to make my shopping complete.” I mean, at some point you just, you’re painting the lily here, this is all joke. But just to go back, my mom and dad were in this, they went through the depression and they went through the world war II and things were pretty tough for them. I didn’t realize we were actually lower middle-class when I grew up.

Bob Phibbs: 
I didn’t quite realize that with the amount of times that my mom darned our jeans and saved string and saved every leftover and made everything into it. But I’ll tell you when Black Friday came, that was the one time that families could go out and go to the malls or go to their local areas and there were discounts. And so it was a big social thing to do that families would do together and then they would get their Christmas shopping done as a unit. I think as we have moved more to the bowling alone mentality where people are more alone, that this idea that Black Friday is losing the social component, which should be a big deal because ultimately all of those impulse purchases are again, what improves margins. If we are really nothing more than rats to the cheese, which it’s seeming more and more, then I think anybody can give away the store.

Bob Phibbs: 
It’s how do you go through and be profitable and if people are really going to be using this idea of cyber Monday and Thanksgiving and Black Friday to shop online, does Black Friday have a real advantage in a brick and mortar store? And I’m not so sure it does. I mean, I think that Black Friday is ready to be reinvented. I think that this idea that these killer deals are out there is a joke. Again, just go down the list and look at what was supposed to be a great deal. And to me a great deal is you could buy this Bentley for the price of a used Harley Davidson. That would be an amazing deal to me. But usually it’s really nothing like that. And we all kind of support it still. But I think the struggling retailers are still going to be struggling in January.

Bob Phibbs: 
I can’t imagine that JC Penney saw a 10% increase. Although I will say on a side note, their new store in Texas looked promising. It’s just that they have enough money to roll that out to enough. But ultimately the more promotional it stays, there is always somebody cheaper. And when you figure that most retailers carry 60 to 75% of the same merch as anybody else, all you have is your people that are going to make the difference. If your Gold spur is going to be that we put stuff on sale more often than the other guy, unless you’re a VC firm, just throwing money at you like Uber or some of these other delivery outfits, I just don’t think it has legs for being a sustainable business.

Mike Wittenstein:
Hey Bob I was listening to you, I was listening from a different perspective. I put on my brain science hat for a minute. I don’t know a lot about that, but just enough to be dangerous. And one of the things that I think is built in as a bias to this whole frenzy of selling cheap on this whole now week period is that it’s basically about addiction. People are addicted to getting a really good deal. It makes them feel really good. Like they beat the system finally because so many things, the advertising interrupts them, the pricing varies based on who you are, where you are, when it is. I’ve seen Coke machines that charge more when or soda machines not to call out a brand that charge more when it’s really hot and sticky outside. So customers are used to being pummeled and that’s not very profitable.

Mike Wittenstein: 
So addiction while it brings in customers, lowers profits like you talked about before. On the other hand, and this is the customer experience side of me speaking, another way to attract customers that’s got equal stiction if you will, is to delight them. And that gets back to your notion of give them a great curated experience. Let them discover something new, make them feel wonderful, help them transform their lives and that down to the unit of one is a better experience and delight yields more profit. So that’s another kind of emotion that we could steer to work. But to do that you really have to be focusing on, and this would be advice for retailers throughout all of next year, is in addition to thinking about selling more, also start thinking about how can you serve more. Use the resources that you’ve got and see if you can add more to the customer side of the balance sheet. So they’re getting more of what they value. And it’s not just a simple money for a box of stuff transaction.

Bob Phibbs:
So you used one of my favorite buzzwords that I hate. This idea that we’re delighting customers. I can’t see anyone anywhere in the world saying, “I felt delighted because I went into that retailer.” I just can’t. And yet it’s a buzz word that everybody uses. It’s all about customer engagement. We have to delight and surprise. You surprise me a lot of times with the condition of your fitting rooms and your bathrooms and the poor choices you have on the sales floor. But to delight me, to truly delight me means I have met an enchanting individual who I will go out of my way for. And that more than likely it’s going to happen in a smaller boutique. It’s going to happen in a curated version of a brand. I don’t think delight is what I would ever say at a Macy’s. I don’t make delight is what I’d say at a Home Depot or Lowe’s. I don’t even know that the possibility of being delighted there is.

 

Mike Wittenstein:
Delighted is good. I’m sorry go ahead.

Bob Phibbs: 
So I think it’s really important that, NRF is in a few weeks and I’ll be speaking there on January 13th. Subtle hint. But when it really gets down to it, the C-level PR people that talk about how great their brand is, when it hits the metal in the actual store and you realize that half your employees are looking down at their cell phones, the other half are behind the counter laughing or doing anything else but waiting on somebody, that’s where you’re lacking and that’s what we notice. And yet to get from there to an engaged, enlightened group of people takes a solid training program, but holding them accountable. And then your goal might be delight, but don’t kid yourself. Your goal is to be personable, to be friendly, to add something, to build rapport and discover a stranger, to be able to engage them in a way that converts them into a customer. If I could just have more focus on converting shoppers to customers, then I would be happy. But this idea that delighting is an of itself a end goal, I just don’t, I’m sorry, I just don’t buy Mike.

Mike Wittenstein:
Delight for me and as a customer experience designer is a catch phrase that means whatever the positive emotion is that the business is emitting or evoking amongst its customers. At the end of the day an emotion is a valid business outcome. People pay more for things that they like. So instead of delight being a single word that everyone strives for, it could be triumphant, refreshed, renewed, advantage. It could be any number of things, but that has to be chosen by the retailer and very carefully orchestrated. That’s how you can differentiate one experience from another. And what keeps people coming back. Disney does an amazing job with that.

Bob Phibbs:
Disney is Disney please. That’s like saying Apple. You know Apple is Apple and Disney is Disney. I mean at the end of the day they’re not a retailer. I just did a quick search of delight online. The example, the little girl squealed with delight. That’s how I think of delight.

Julia Raymond:
Well, I have a question for you both because the Canada Goose in Toronto just opened their new experiential retail space called Journey or I don’t know if it’s open, but it will be very soon. And I was reading some comments on the post I saw and someone, I think her name was Suzanne Sears from Retail Insider was saying, “I think that the idea of a retail career is changing.” And she said, “Maybe retailers should focus on hiring hospitality graduates instead of business graduates because of the new experiential spaces that are coming out.” Do you agree with that Bob?

Bob Phibbs:
Okay, so A, I don’t think they’re hiring business graduates necessarily. I think the challenges are running. We’re hiring people that really don’t like other people that never worked in retail, that never understood retail and they’ve never sold anything to anyone. And so they’re duplicating a frictionless inhuman way to go. I do agree that hospitality tends to help you people in the hotel business. Because A, they’re trained better for one, but also number two, that the idea of hospitality is important. But let’s make no mistake here, someone walking into your store is not a guest. If I have guests at my Thanksgiving dinner, I don’t expect them to buy the cream corn. I expect them to just come and have a good time. And I think a lot of retailers are getting caught up in popups and all of these events and that it doesn’t matter if they convert. Everything matters if it doesn’t convert.

Bob Phibbs: 
And so yes, I do agree that you can have hospitality people that are [inaudible 00:31:42]. I think their big thing with Canada Goose is they have a snow storm every day in the store and how that’s it. You know, we’ve seen Nike and others open stores that have basketball courts and all of this. And I think those are a lot of gimmicks. But I come down to the hard work. The really hard work in retail is how do I craft a branded shopping experience that converts lookers to buyers. If you come from having worked at a great Marriott, a seven, a luxury Marriott like the Chatwal in New York city, well that’s great. But you know what, I’m probably not going to work for minimum wage or a starting salary in a buyer’s office of 25 grand.

Bob Phibbs:
And so if we say that, then ultimately you say, “Well then how do we get there? It’s going to have to be through margin. It’s going to have to be through finding ways to not just keep giving away the store because your employees don’t know how to sell, but that we actually realize we’ve got to get more out of the people that are coming in since there are less trips coming into the store.”

Mike Wittenstein: 
Yeah, I think we should set a higher bar, not just in retail but in the hospitality and healthcare and everything. There’s so many decisions being driven by the bottom line and that’s not really what makes the bottom line better. What makes the bottom line better is providing more value to customers. I wish we had better metrics. For example, what is the value that this retail experience or this non-experienced basic shopping thing really offers to customers? We just don’t know how they value us. So we keep pushing on our side of the balance sheet and I think we’re leaving really good opportunities on the table. I think we can be more profitable. Customers can get better products and services if we just learn a little bit more about each other. And we just don’t value the value that we create for customers.

Mike Wittenstein:
It’s all about transacting for boxes and that mentality is I believe it’s on its way out. And retailers are going to need to adopt a more mature, more evolved, more adaptive way of thinking about things. They’ve got to keep customers in the center of what they’re thinking about or they’re going to continue to starve on this Black Friday, cyber Monday thing. It’s continuing the same behaviors with slight variations. I don’t see a lot of big innovations and I think that paying attention to what your customers care about would stoke that kind of thinking and get us to something new and better because right now I don’t think it’s that great.

Bob Phibbs: 
If I buy from you, I value you Mike. Other than that, I like you. There’s a big difference. Sorry.

Julia Raymond: 
Absolutely. And the fact that most people still do shop in store. We can’t forget that it’s not all e-commerce. In fact, one in two people in that Adobe report said they preferred going into stores on days like black Friday. And I loved what you said Mike, about the new metrics that just don’t really exist yet for measuring the value of these new experiences that retailers are putting a lot of effort into offering customers. And so I wanted to pose the next question and the final one for today’s rundown, which is how will these traditional retailers need to update their holiday sales strategy next year based on what we’re seeing from this season?

Mike Wittenstein:
One of my core principles for this podcast is that you need to know your customers better. And it turns out that there’s a really cool new set of tools, not that new, but for most people they’re just starting to hear about it now. It’s in the data science area. You can use machine learning algorithms, sensors of all different kinds to pick up what’s going on in the real world at a scale that’s unheard of before and for retailers they’re just barely starting to get their arms around it. But double down on data science. Have some of your folks start studying what that is and what some of the implications for retail are. Have somebody learn machine learning, go to an AI class, start thinking, get a couple of tools, just start playing with it and get that learning trajectory going because it’s truly one of the few choices that you have in your strategy.

Mike Wittenstein:
You can choose what you learn, you can choose who you hang out with. Everything else is pretty much a consequence to that. The second thing that I think retailers should be doing is talking more to their customers and I literally mean talking to them in the store. Maybe even during this holiday season. Of course that might cut into sales and chat time, but you’ve got some very unique customers on unique missions coming into your stores before the Christmas holiday. So find out what it is that they’re there to do. Learn a little bit more about their favorite features they’d like to have in an app, would they use an app, those kinds of things. But talking directly to customers is so much, it’s so enlightening compared to looking at sales data and aggregate information about groups of people that’s been homogenized to the point that you really can’t use the information. Two last things.

Mike Wittenstein:
Do a customer experience brainstorm. Bring people from the top to the bottom of your organization, multi tiers multi levels and just put them in a room and have them brainstorm things around customer experience. That will get some fresh thinking started. And it will also create some relationships between the different levels or silos in the organization, which you can leverage later on. And finally, I would encourage every retailer to try something big, bold, and new for the next shopping season. Experiment. It’s the world’s biggest beta test in retail. So take advantage of it. Try something new, see how much and how quickly you can learn from it. That’s it.

Julia Raymond: 
Great. So you said invest in data science and customer service. Talk to your customers and be big, bold and new when it comes to next year’s holiday season. That’s a really good recap.

Bob Phibbs:
I would say treat Black Friday as what it is. And if you want to go after the dirt scratchers, then go play it. I don’t think that a strategy for Black Friday is about customer service. I think realistically what has to change in 2020 is we have to get out of this idea. It’s all about the customer engagement and we’ve got to get the employee engagement. Walk your damn floor, talk to your employees. If you don’t make their day, they’re never going to make the customer’s day. Be particular about who you put on that floor and make sure they’re trained. And exposure is not training. I was in a customer experience session and this major retailer got up and she said how they had a 45 minute video that all their employees had to watch and patted yourself on the back that that was training.

Bob Phibbs:
It’s like, that’s not training. That’s exposure. It’d be like you looking at Serena Williams playing Wimbledon going, “I could do that.” You’re like, seriously dude, you could not do that. Not unless you do the back hand five hundred million times and you can do it over and over again flawlessly. And so this idea that training is something we did not, something we do has got to change. And then you’ve got to hold them accountable. If your branded experience is how, this is how we greet people, this is how we engage a shopper and build rapport before we ever talk to them. This is how we explain our process on more expensive items. Here’s how we go through and we mention our other services and here’s how we add on. And ultimately, here’s what we say to that customer and follow up, whether that’s through email or text or an app or Tik Tok or whatever and then hold them accountable to deliver that.

Bob Phibbs: 
I think that that’s tough, but the big ideas would be that you close your store on that day and join the other ones that have said, “We don’t want to play in this game.” And if you do realize that just getting more merch out at less margins doesn’t make you a winner. It’s only if you can be in business in 2020 and you can have enough money to pay your employees better to deliver a better experience. Until we get that mindset, I think most retailers are going to still be running from the Walmart, Amazons and Targets of the world who figured a lot of this omnichannel stuff out already. And they have gone after that shopper who thinks that they are better because they bought cheap crap cheaper and haven’t really evolved into, but what about that next customer who needs to be able to understand why our products are better?

Julia Raymond:
So it sounds like you said investing in employee engagement and training first and foremost, and then seeing black Friday and the holiday shopping for what it is and changing that mindset which that’s a bold move for sure for retailers that say, “Hey, we’re not playing this game anymore.” So-

Bob Phibbs:
I mean, what if you added, we’re going to add 25% more people on the floor who are going to having fun instead of we’re going to add jugglers and magicians and we’re going to have people who are going to be able to go in and make face painting with kids. It’s like, why don’t you really deliver value, which would be have enough people on the floor with the technology that we don’t have to wait in line to your point, Mike, but more importantly, that helps us get everything on the list. And not just that one thing that had the super discount that some famous blogger on YouTube talked about last night because it was a sponsored post. There’s only like so much rats to the cheese I think most customers want to feel and I think we approach it more and more as we focus in on the black Friday metrics.

Julia Raymond: 
Absolutely. And I have to say that reminded me I had an experienced in Sephora recently and it was amazing because they had a girl doing checkout through the iPad because the lines were getting really long and it made a world of difference. So really good point there. Bob Phibbs, the Retail Doctor and Mike Wittenstein of Storyminers, the founder. Thank you both for joining today. Loved hearing your insights and I hope to have you on the show again.

Mike Wittenstein:
Wonderful. Thanks so much. And happy holidays to everyone.

Bob Phibbs: 
Ditto.