The Doctor is in: Explore the value of the store, its employees and why the most successful brands are focusing their attention on authentic floor training and branded experiences. 

Our guest is brick-and-mortar expert Bob Phibbs — also known as the Retail Doctor. Bob is an internationally recognized business strategist, customer service expert, sales coach, marketing mentor, author of three books and motivational business speaker. Bob has legacy of bringing failing businesses back to life and has been dubbed the ‘category killer killer’ by the New York Times.
Join us as we explore the value of the store, its employees and why the most successes brands are focusing their attention on authentic floor training and branded experiences.

Episode 26 of RETHINK Retail was recorded on August 16, 2019

TRANSCRIPTION

Julia Raymond:
Hi, thanks for tuning in. Today, we’re speaking with a Doctor. And no, not the medical kind. Our guest is the RD. He’s the real deal. He’s The Retail Doctor, Bob Phibbs.

Julia Raymond:
Bob is a popular motivational speaker, business consultant, and was recently named Ven’s top three retail influencer of 2019. So congratulations on that.

Bob Phibbs:
Thank you.

Julia Raymond:
His work has appeared in national news outlets. He’s been featured in articles in the New York Times, Entrepreneur, and the Wall Street Journal. Bob, welcome to the show.

Bob Phibbs:
Thanks so much.

Julia Raymond:
Will you tell us just a bit about yourself and how you became known as the RD or The Retail Doctor?

Bob Phibbs:
Certainly. I’ll try to make this as short as possible, but I got my degree in conducting, actually, originally, and I put myself through school selling shoes and, ultimately, ended up not deciding to go into education and using music as a hobby. And I worked with a group of basically cowboy stores in the ’80s and grew their sales to be the number one western-wear chain in the US. And one day, the owner asked everybody, “So, tell me what’s the company’s greatest asset?” And I said, “Well, that’s easy. It’s employees.” And he said, “Wrong,” and I was like, “Wrong?” And other people tried to get the idea and they couldn’t figure out either, and, finally, he says, “Oh, it’s customers.”

Bob Phibbs:
I was like, “Mm. Okay.” So I went down to his office and I said, “You know, our customers could go anywhere. They’re loyal to a lot of different things, but our employees is how we made this company, and I can’t work for a company like this. I’ll be gone in two weeks.”

Julia Raymond:
Wow.

Bob Phibbs:
A little shocked, but then I go home and it’s like, “And now what?” And so I spent a couple of months off and I went to a Tony Robbins seminar, and Tony had a very good message, and it said, “You better come up with a brand nobody else can do better than you,” and I literally, the next morning, filed the trademark for The Retail Doctor. And a couple years later… I’ll tell you about that story if you’re interested how I got famous, but that was the moment when I realized if I could do this for one brand, I can do this for many, which is why my client list is pretty much any major retailer, mid-size and up, in the US and across the world.

Julia Raymond:
Yeah. And that’s really impressive that you were so bold back then to just say, “I can’t work for someone that doesn’t see the world in this way,” which is valuing employees as the most important asset. So yeah, tell me a little bit about The Retail Doctor. So you went and you did the trademark, and then where’d you go from there? Was it word of mouth because you were in the business?

Bob Phibbs:
So I did some little consulting things. A friend of mine had a pizza business and he asked me to come and evaluate it, and I spent probably a week, which I would never do now, but I spent a week and looked at all of his numbers and everything. I go, “Dude, you might as well close this unless you’re going to put a lot more money into it because I don’t see any hope. You don’t have the right people, you’ve got an average product, and you’re wasting your money marketing.” He closed the next day. I was like, “Wow.” I kind of felt bad for the people working the business. And then one of my first clients was the Bay Shores Peninsula Hotel down in Newport Beach. It had 23 rooms, and they’d heard about me. And to make a very long story short, we put my culture into that business about selling and taking care of the customer.

Bob Phibbs:
And I will tell you that a little company that we hadn’t ever heard of, when I had stopped working with them, came on the scene called TripAdvisor. To this day, it is still the number one hotel in most of Orange County, out of 350 hotels. And I’m talking about fancy brands like the Ritz-Carlton and Four Seasons and that. They all come back and talk about what a great experience it is to go to the Bay Shores. And I think about that when people tell me, “Oh, culture’s everything. And so we do all these different things.” It’s like, “No. Culture, if you do it right, is about your people and executing a brand standard every day. It’s being brilliant on the basics.” And while I haven’t worked with them for over 30 years, the fact that they’re able to keep it going and look at the reviews they get and what everybody says, and to see that in operation is really gratifying.

Bob Phibbs:
But the one that really put me on the map was after that. There was a little coffee roaster in Long Beach, California, and I was reading about them in the paper all the time, these letters to the editor, what’s wrong with America?

Bob Phibbs:
The little guy being put out of business by the big guy and I’m like, “What is all of this?” And apparently that there was a little coffee roaster and he was fighting. They were going to put a second Starbucks 100 feet from his front door, and they’d already put one in 10 blocks from him, and so I thought, “Well, I got to go check this guy out.” So I went in, and it was a rainy night, and the drinks were terrible, and the two employees were leaning on the counter, one saying, “You know, this place will be gone when that second Starbucks open, so I’ve already told people I was the manager. Who’s going to check?” And I was like, “Wow, this guy needs my help,” and I went and I talked to Mike and I found out he was actually losing 10% of his business every month over the previous year. And, on top of that, his stepfather had pretty much told him he was never going to become anything, and he was his landlord.

Julia Raymond:
Oh, okay.

Bob Phibbs:
And I was like, “Dude, this is pretty rotten,” and I said, “Here’s my contact, and I guarantee it will turn this around,” and it took him three visits before he finally signed the agreement. They call them independent retailers for a reason. And I said, “I’m not coming back,” and he goes, “I’m willing to do whatever you do.” And so, the first night, gather his 20 employees together, put a picture of the Titanic on the wall. We were in a meeting room, and I said, “Ladies and gentlemen, we’re on this, and it’s not going down on my watch.” And two girls stood up, “You can’t do this to us, Mike,” and, “We’re your family,” and on and on and on and tears and everything. And within 30 days, all but one employee was there, and I was hiring new people and training them along the way, and sales rose 11%. Sales rose 50% over the next year and 40% over the next.

Bob Phibbs:
And so then the marketing kicked in which is… For all you listeners, the experience better be right before you do marketing. So I don’t give a darn if you’re in social media or you’re doing all kinds of promotions and having events. At the end, if you can’t execute brilliantly, and get them to convert in your store, that’s all distraction. So we did that. We got a call. I got a article in the local… I would just call them the Coffehouse Rags. They were the freebies that you get at a coffeehouse. We had a nice profile there. Called the local paper. They did. And then I called the New York Times and I said, “Would you be interested in how a little guy beats a big guy?” And they’re like, “We would.”

Bob Phibbs:
And so we did the interview in July, and I’m speaking in October, and I go down to the hotel, and there’s my picture on the front of the New York Times saying, “Check out the article in the business section.” I open it up. The top half of the business section that day is, “Bob Phibbs, the category killer killer,” and it was all the story about how we had taken on Starbucks. And so from that, then the LA Times asked me to do business makeovers, and it kind of built the house that Jack built.

Bob Phibbs:
And people say to me all the time, “How can I be like you?” And I say, “Do your job. I was lucky. I don’t know people care that a little coffehouse was going up against a Starbucks. And, at the end of the day, it all came down to the experience in that store.” And that’s still true that if you can’t execute brilliantly on the basics, then you’re probably going to be in a world of hurt. And there’s a lot of brands that we could talk about that are having trouble with that right now. Aren’t there? So there you go.

Julia Raymond:
Yeah, a whole lot. And I like how you made a callout there that experience comes before marketing. And it sounds like, even before that, is the people. Right? Because that was the first thing that you did with the coffeehouse was get the right people in there.

Bob Phibbs:
Well, that’s it Julia, and that’s why it was such an affront that the owner would tell me that the employees weren’t the most important asset. That’s how I built my brand. I mean, that’s why when people call me, I said, even now, “I’m the unabashed brick-and-mortar guy. I believe you are settling for crumbs when you could have a whole feast, that you have devalued the experience and you’re just the more-expensive-than-some-guy-online warehouse for your products. And until you fix that, you’re going to struggle and tell me all these silly cross-promotions you’re doing and popups and all these distractions while, when shoppers walk in, you’re no different than the other guy. And that second is when you’re judged.”

Bob Phibbs:
I mean, I don’t know how they’re going to get people back to JCPenney. You’ve torched that so bad. And if brick and mortar is doing so terrible, tell me how did Lululemon open a 20,000-square-foot brand new store? I mean, either you get it…

Julia Raymond:
With a restaurant. Yeah.

Bob Phibbs:
With a restaurant and a yoga studio. But they’re all organic to the brand. You see what I mean? It’s like they know who their customer is. They know who their shopper is, and they’re able to execute on it. So if you don’t know that, then I think you’re in trouble. And the other thing I would just add about working with Mike in the coffeehouse. Mike’s one of the founding members of Specialty Coffee Association. This guy knows everything about coffee, and yet he thought that knowledge was going to be his golden ticket. And I said, “Mike, I don’t give a damn. If your employees can’t talk to me about coffee, it makes no difference if they know it.” And that’s the other thing that sometimes, I think, a lot of the niche boutiques get caught up in the, “We know all of our product knowledge.” Well, I don’t give a damn. If you can’t engage me…

Bob Phibbs:
I walked into a retailer on Madison Avenue in the middle of January this last year. And I walk in, and the girl says, “Can I get you a bottle of water?” And I was like… That was it. That was the best thing you could say to me in all the things you could say. It’s freezing out. The last thing I’m thinking about is a bottle of cold water, but you just instinctively said that. And so what did I say to her? Of course, “No,” at which point, she then retreated to the side of the building to the side of the store, clasped her hands behind her back and fell in pose and then watched me like I was going to steal one their thousand-dollar hoodies. And I’m like, “Really?”

Bob Phibbs:
Everybody keeps saying, “Oh, people are abandoning Madison Avenue. It must be the shoppers.” No, it’s not the shoppers. We are voting with our feet. So if you’re struggling with conversions, if you’re struggling with less traffic, look in the mirror because the little guy saw this before you did. Barneys going bankrupt and saying it must be because of their real estate. Please. They prided themselves on being aloof and having this kind of take-it-or-leave-it. Well, customers don’t want that experience, so wake up if you’re listening to this. Rethink retail, indeed.

Julia Raymond:
Right. I love that. And I’ve heard you talk a lot about how retailers, sometimes they’re confusing the customer service and the customer experience. And what do you mean by… Where’s the true distinction, especially because we have so many online brands nowadays?

Bob Phibbs:
Yeah. And don’t get me wrong if you’re an online retailer. You’re doing your thing. That’s fine. And you’re going to realize how expensive it is to have free shipping and free everything else back and forth. And then I had to laugh. Everyone’s telling me The RealReal is so great. “RealReal, they’re the future. Everyone’s going to be renting these or buying these consignment items and renting clothes.” They had a 20-percent-off sale on CNN last night. I’m like, “Really? Really? Discounting, that’s where you’re going to go?” They don’t realize that if you have a brick-and-mortar…

Bob Phibbs:
Well, let’s go back to online retailers. You’re going to have to open brick-and-mortar stores, and you’re going to have to understand who that customer is in a better way. And there’s a lot of smaller retailers that I think understand that and they’re doing well. But customer service, for a lot of people is, “I’m helpful.” If you ask a question, Julia, “Does this come in brown or does this come in taupe or some kind of an earth tone?” and I know that it does and maybe I can go online and I can say, “Oh, it comes in a wide variety of browns and teals,” and you’re like, “Oh,” and, “You’re helpful.” Well, that’s customer service, but there’s nothing expected. This is that great, I think, lie that the Disney vacation of retail became. “They’re all guests. Everyone’s just a guest in our store.”

Julia Raymond:
Right. Each case study, yeah.

Bob Phibbs:
You know what? You know what, Julia? If you’re a guest at my house for Thanksgiving, I don’t expect to sell you the turkey. Just come in and I’m like-

Julia Raymond:
If it’s really good, though.

Bob Phibbs:
It’s like it’s a-

Julia Raymond:
I’ll buy the leftovers. Yeah.

Bob Phibbs:
Exactly. And people are like, “Well, that’s kind of…” So it’s like, “No, it isn’t,” because a customer experience is taking the idea that I have to, for those few minutes that I engage you… And maybe it’s seconds, but in that minute, to feel they’re the most important person in my world. And when I make someone feel they matter, they buy more. But make no mistake, it’s about converting lookers to buyers. Everyone bemoa bemoans the fact that we have lost traffic to this malls.

Bob Phibbs:
And people love to tell me that, “Oh, footfall’s down.” Look, the browsers on their iPads now. You’ve lost that occasional shopper. But when I walk into your store in a mall, which I might only walk into one in three, that’s your one shot you have to make a sale, which means you have to understand what a branded shopping experience looks like and deliver it. So if your conversion rate… And let’s face it, a lot of stores are probably in the 8 to 7, maybe, percent range, which means 93% of people you’re congratulating yourself… Only 93% didn’t buy our stuff today. You can affect that.

Bob Phibbs:
In fact, even in my online training, we have a retailer who was telling me that his conversion rate’s doubled from 10 to 23 percent by using our sales training, SalesRX. But he knows his numbers. And you’ve got to know your numbers and say, “Well, why aren’t they buying?” Because if you’re just happy with your employees saying, “Hi, let me know if you need anything. I’m over here,” in felon pose behind the counter… If all you can say is, “Hi, can I help you find something?” “Oh, yeah. I’m looking for,” I don’t know. Let’s say, “bed linens. Sheets.” “Great, do you have a budget?” “Well, I don’t know. Something like 20 bucks.” “Okay. Well, here’s our bargain brand, and that’s all we have.” “Well, I’d like something nicer.” “They’re going to cost more.” “Okay.”

Bob Phibbs:
And you don’t see those nanoseconds where you’re judged. I mean, the reality, Julia, is that online is looking at every second that I’m on there, what I click, what I look at. And yet, in a brick-and-mortar store, people let people walk around for 5, 10, 20 minutes without even saying a word because someone in their organization says, “Oh, we don’t want to be pushy. We don’t want to be salesy.” Well, then what the hell do you have? I mean, a store is about you have products that need to be sold, and they need to be sold enough profit that you’re able to stay in business, provide more opportunities for your employees, and improve your operations. That’s really what it’s about. So you can have events and say, “Oh, well, we got all these people in. We had a Millennial event where we made craft cocktails and getting your nails done.” And it’s like, “Well, great. How many items did you sell?” “Oh, it wasn’t about selling.” Well, what is it about then? You’re not a store. You know what I mean? I’m passionate about this, if you couldn’t tell, Julia. So I want to keep you on your time for podcast. But I’m passionate about so many retailers seem to have thrown in the towel or to be working at such a low level that you can stand out because so many people just don’t understand what it takes to create a branded-retail customer experience.

Julia Raymond:
And not forget the sales factor, it sounds like.

Bob Phibbs:
Well, exactly. Here’s the other thing. So a quick story for you. I finished a keynote in Denver, Colorado. I’m walking down the street. There’s a sign on the A-Frame that says, “Four out of five guys notice thicker, stronger hair.” I’m like, “That’s me.” I just walk into the salon right there. A young woman, I just say to her as I walk in, “I want that.” I point to it. She goes, “Well, it’s really expensive.” I was like, “Do I look homeless?” And she goes, “Well, I just wanted to let you know it’s really expensive,” and I said, “Is your manager here?” So this woman comes up from behind. She goes, “I’m the manager,” and I tell her what happened, and she goes, “Well, she wants to let you know it really is expensive.” I said, “Look at my hair. Half of it is gone.”

Bob Phibbs:
And that’s the other thing that’s going on in retail because God forbid you train someone. Your premium items are sitting there and your employee will start at the cheapest and say, “This is good enough,” like I’m your buddy, Julia. You don’t have to get the nicer version, the one that’s more convenient, or the one that might make it better. You can get away with this, so that $85 shampoo sits there. And then you go back to your owner and say, “Yeah, we can’t sell nice things. It’s just not our market.” Well, it is your market. But it’s your employees you never trained because they didn’t understand it’s not about your wallet. It’s about the shopper’s wallet.

Bob Phibbs:
And so that’s the other thing I see so many brick-and-mortars doing is they don’t realize that you have employees who can only sell things on sale and when they’re 20 or 30 percent off. That’s not the reason. They shouldn’t be doing anything to help that sale, really. You do it only when they’re full-priced, which means you better know what a branded fitting room experience is. You better know exactly how to merchandise. There’s a lot of parts to making retail work, and there are a lot of retailers that doing it great. But when you throw in the towel and say, “We can’t because of X, Y, and Z,” it’s usually because you gave up on the idea of a branded customer experience and you’re willing to just settle for whoever you can hire that fogs the mirror to work the schedule instead of giving them some directions. Not even a matter of their aptitude. It’s a matter of your commitment to delivering on that and training it and then holding them accountable. If they can’t do it, “Get the heck off my sales floor.”

Julia Raymond:
Yeah. And, like you said before, experience before marketing. So instead of putting on Millennial events and not focusing on any sales but just thinking that it will magically help people start to convert is something that you were kind of saying. It’s not really true.

Bob Phibbs:
It’s just traffic.

Julia Raymond:
Yeah.

Bob Phibbs:
It’s just traffic. I mean, and getting people in the store doesn’t take money. I mean, it doesn’t take much thought. “Here’s food and drink. Come in as you get off of work in Manhattan.” Of course you’re going to get a bunch of people. And then you take pictures for social media, and then I’ll ask you, “Well, how many did you sell?” “Oh, it’s not about that.” Oh, right. Okay.

Julia Raymond:
Yeah. And you said in your book that the importance of training your associates is just huge. And I was thinking, “Shouldn’t this be a given?” Why is it so difficult? I mean, what are the challenges? Is it the cost? I mean, what have you run into?

Bob Phibbs:
Well, that’s a great question. I think there’s always been two sides to retail which is, “We’ll pay our higher-touch sales associates. We’ll pay them more by a bonus commission, a bonus or a commission or something that rewards their sales abilities.” And then there’s the other side that typically say, “Oh, well, they’re all going to quit anyway so we’re not going to have a path to a career choice. We’re just going to…” I can’t think of the word, but it’s, “slash and burn kind of through our employees. And if they last more than three months, that’s fine. It doesn’t really matter.”

Bob Phibbs:
The problem with all of that is one the one side, the high-touch, really personalized service that you would expect to get in a Tiffany’s or a Nordstrom or some other wonderful retailers… And I would talk specific about Nordstrom and Neiman Marcus and some of the other ones. It’s just not there. I mean, you have untrained people. And I did a LinkedIn video at Christmas where I’d gone out of Neiman Marcus after spending 1,000 bucks, and I talked about what a horrible experience it was amazing that I hear that they are $4 billion in debt. Well, that got 110,000 views because people were like, “Oh, this guy could actually figure out what’s going on.”

Bob Phibbs:
And I think it still comes back to that idea that if you’re really serious about competing in this world, then you’re not going to sit on your laurels like a Nordstrom and say, “Oh, we have great customer service.” Great. Well, I’ll tell you what. I’ll bring in a mystery shopper and we’ll see what happens. Let’s just see what that experience is. “Let me know if you need anything, and I’m going to stay over here in my department.” And your goal is to connect at a different level, in retail. So that takes training, especially if you’re going to hire iGen and Millennials who, through no fault of their own…

Bob Phibbs:
And again, I don’t want to come off like this old Baby Boomer telling the world. But what it comes down to is I had opportunities when I grew up. I went and I mowed lawns. I would knock on doors when I was in fourth grade with the boy scouts to collect donations. Our parents would just drop us off. And so we just had some opportunities to get over fear and risk that younger people these days don’t. So it’s not their fault that they text. I mean, Baby Boomers did it to them. They were so paranoid of their kids getting abducted or something after school, they had to come right home and lock the door and stay their room. So of course they found their friends on a computer. So it’s not their fault, but if all you’re doing is on your thumbs, retail isn’t that world. You have to give them voice lessons. “This is what you say to somebody. This is what your body language looks like. This is the process you take somebody through before they say, ‘I’ll take it.'”

Bob Phibbs:
And then when you give them that, Millennials are incredibly smart. This is the generation that grew up on Harry Potter books, on reading. They’ll gobble it up, but you’ve got to give it to them because, otherwise, you’re hiring someone they worked at, I don’t know, some other competitor. And you don’t train them like, “Oh, great. She worked for Wolf Brothers,” let’s say. I don’t know. And, well, you don’t know if she was a good employee there, so now… Wolf Brothers, their customer service was, “Can I help you find something? Finding everything okay? Got a budget?” And now she’s brought that right into the heart of your operation, and without training, you might have brought a Trojan horse into your store because people were used to people taking the time to get to know them and to have a back-and-forth conversation.

Bob Phibbs:
So it is the key. It’s what I’ve done to build every business I’ve worked with. It always starts with the sales process, the customer service experience. And then there’s people that are going to go to it and they’re going to love it and say, “This is different. I’m having a good time.” And there’s other people that say, “I don’t want to do it.” And, at that point, it’s a skill or will issue. I’ve got the skill, but you don’t have the will to want to do this job. Well, then get out.

Bob Phibbs:
But retail is not that bad. I know people making 100 grand a year in retail. Not everybody’s working at $15 an hour. There’s a lot of people that have made this a career. And if that’s you, if you’re just starting out and you’re kind of think, “Well, really?” It’s like absolutely. You just have to find that way to connect on a more human level in this increasingly technological world we’ve got.

Julia Raymond:
Yeah. And what you just said. I mean, that’s what I was kind of wondering is as stores become more connected… And I hate to use the example again, but the Nike store in New York, obviously their flagship is very meeting the customer where they’re at-

Bob Phibbs:
Sure, sure.

Julia Raymond:
… so they just determine the level of service. Do you think that stores of the future will become more like this and need fewer employees because of the support from technology but maybe more skilled employees and they can invest more? Is that something you could see happening?

Bob Phibbs:
I just can’t imagine less. Let’s be honest. After 2008, so many businesses cut their employees. In fact, I think the Wall Street Journal, going back to JCPenney, said Penney’s has half as many people on the floor as they had only less than a decade ago. I mean half.

Julia Raymond:
Wow.

Bob Phibbs:
I mean, that’s kind of shocking. And Sears was one of the first that did that, and we see how well that worked out. The reality is that on every customer service survey you see for the past couple of decades, the number one thing people really gets them riled is, “Nobody greeted me or valued me, as a customer.” You may be the only person that that person speaks to today in a friendly enough way, and realizing, in this day and age, “I have to like you before you like me,” is very different because, in social media, I decide who I’ll let follow me. Right? I have that. And you have to actually train, “No, it is about somebody else being more important than you.”

Bob Phibbs:
And when you do that, you realize the party’s in the aisle, Julia, that there’s these great stories of people out there that you discover how you’re products work into it. If you’re just curious, why, today, did this woman walk into my store at 3:00 in the afternoon? You’re just curious about her. An apparel store, let’s say. Maybe she lost 50 pounds because she went through a divorce. Maybe she just had a kid. Maybe she’s going to run a triathlete. There’s a million stories that are there, and your goal is to find a way to unlock them. And then when you collect the stories, the products come naturally. But we’re so caught up in selling… Or it’s all about the product like, “Oh, we have this new black dress in.” Like, “Really? That’s going to be compelling? Really? You’re going to sell this little black dress in a compelling way?” No. It’s not about the product.

Julia Raymond:
When she’s looking for workout pants, yeah.

Bob Phibbs:
Exactly. If I just understand that, “Oh, so it’s really me getting in her head that’s a bigger game than that?” Yeah. It’s a fun game. I’ve met some incredible celebrities, but I wouldn’t have known that they were standing in front of me, at the time, until I put myself out there, that risk. Letting go of that fear that they may not like you is kind of the key, too.

Julia Raymond:
Yeah, I love that. I really think that’s a big part of it that’s maybe missing right now.

Bob Phibbs:
Yeah.

Julia Raymond:
But you brought up JCPenney a few times, and I just have to ask because they’re in the news right now. They’re following the same footsteps as Macy’s in doing the thredUP partnership.

Bob Phibbs:
I know.

Julia Raymond:
What do you think about that?

Bob Phibbs:
ThredUp?

Julia Raymond:
Yeah. I mean, JCPenney, where are they going?

Bob Phibbs:
I get it. Look, people kind of forget. They’re like, “Oh, it’s a new way of shopping.” Millennials don’t have money. iGen… If they’re out on their own, they have student debt. They’re living three in a apartment to be able to live in the big cities. And so I get that this rental thing is interesting. But at some point, no one’s making money at this.

Julia Raymond:
Right.

Bob Phibbs:
So you’re going to expand it to Macy’s, and now you’re expanding it to JCPenney and this idea that people want to buy used clothes like a garage sale because you can get it on an app, and then they don’t have to wash it. They’re sending it. There’s a lot of concern right now that we’re going to go into a bit of a recession. It’s going to be a bit of a downturn. You really think that that’s something that people are going to continue doing? I mean, how does it make… I know it makes sense for the VCs that are backing it, but at the end of the day, I think we’re seeing different types of consumers.

Bob Phibbs:
There is some thought that maybe online is slowing. The gains are not nearly like they used to be and that maybe that’s just going to be a niche that a certain percentage of sales will always be online. And the same thing. Maybe there’s going to be a certain percentage of people that will only rent. But, it pales in the number of people that still want to go out into a brick-and-mortar store, go out into a restaurant. I know there are people that just want to do takeout. People are saying, “We’ve lived through the golden age of restaurants.” Well, I don’t quite buy that. I think that things are certainly changing. But if you’re in business, whatever you’re choosing, it’s about being able to have somebody exchange… They have more value in your product than they have for their money, and you add more value to their money by servicing them with a product.

Bob Phibbs:
So I think that it’s interesting that they’re trying it. My thing with Penneys is they should go through and make the whole brand about empowered women and tell a story about empowered women in various stages of their lives, go after that full bore and unapologetically, and they are mentors to women, and they just bring all these women together and have different lines and different needs and they understand her instead of, “We have an apparel line.” They don’t see the place that they could have in a consumer’s life right now. ThredUP is basically saying, “We’re going to take over your closet,” and you can rent it and rent the runway or The RealReal. You’ll be able to buy people’s castoff designers from various decades, and I get it. There are people that buy those things, but the vast majority are just going to go to a mall or see a pretty window, and they’re going to walk in the store, and that’s when your luck can change, when you realize that person walking in the door can change your entire business by valuing them over the product.

Julia Raymond:
So yeah. Just really back to the points that you make about creating that branded, exceptional in-store experience is something that maybe they need to try a bit different.

Bob Phibbs:
Yeah. Well, again, it’s only time and money. It’s certainly much more valuable than saying you’ve hired influencers who probably bought most of their followers. And when you look at some of the… Who was it? There was a young woman who had a famous influencer that came up with a clothing line and couldn’t sell 50 T-shirts.

Julia Raymond:
Oh, wow.

Bob Phibbs:
And they were shocked like, “Oh, what does this mean?” It’s like, “It means it’s smoke and mirrors.”

Julia Raymond:
Yeah, there’s not a lot of authenticity-

Bob Phibbs:
Exactly. Exactly.

Julia Raymond:
… in some of the influencer marketing, definitely. And I think there’s a lot of retailers that are just throwing money at that, hoping it’ll stick.

Bob Phibbs:
Well, and that’s it. People are trying anything, like you say. The thredUP. I think Macy’s with their Backstage Pass where they take all their leftover stuff that didn’t sell anywhere else. Instead of using a third party to clear it out of the store, they’re going to leave it in the store. And when I go into their stores, you know what the busy department is? Backstage Pass because it’s the 60, 70 percent off stuff from several years ago or several seasons ago. So you have to say, “If that’s the future, how are you going to hold onto a Herald Square? Where’s the cache to buying a Macy’s or registering for a wedding or going there, getting ready, outfit your family for a trip?” I don’t think they’ve answered that yet, but they’re throwing a lot of things at the wall hoping, “Dear God, something has to fit.”

Julia Raymond:
Yeah. And you said it was like seven to eight percent convert, right, of mall shoppers?

Bob Phibbs:
In most stores, yeah.

Julia Raymond:
Yeah, brick-and-mortar. And do you think that’ll decline or increase? I mean, what’s your take on brick-and-mortar right now? I know you said that there are concerns about a recession.

Bob Phibbs:
I think the challenge is that there’s just too many places to buy too much of the same stuff. Wall Street bankrolled so many brands in the ’80s and said, “Here, we’ll just throw money at you. Buy stuff.” So I know, in California, you get off an off-ramp of a freeway, it’s either a Michaels or a Bed Bath & Beyond with a Lowe’s or a Home Depot with a grocery store of one or two stripes along with a Starbucks or a Panera Bread, and you’re like, “Really? Is there that much demand for it?” Not really, but they’re all built, and so it is going to be painful to figure out where we go from here.

Bob Phibbs:
The South Coast Plazas of the world in Costa Mesa, they’re still going to be around. Same thing with Michigan Avenue and an awful lot of others ones, but it’s those C and D-level malls, particularly in rural America, which was already decimated, usually by Walmart who went in in the ’80s and gobbled up their downtowns. What’s going to happen when the JCPenneys and the Sears and eventually, I think, certainly a lot of the Macy’s go out? Those don’t become viable properties without the majors. So yes, you can move restaurants into them and make a food court, but that’s still… The magic of a great mall is understanding that people go there to eat and to shop and to be entertained and getting that mix right so that when I’m waiting for the movie, I’m going to stop and get something at the restaurant or I’m at the store and I happen to be walking out and I decide to get dinner there. That’s where the sweet spot is, which is why a lot of people are looking at the mixed-use and building apartments around them and trying to find different ways to repurpose them.

Bob Phibbs:
So I’m certainly bullish on brick-and-mortar. And I always say to my clients and to my audiences, “There’s a great shakeout going on right now. No two ways about it. It just doesn’t have to be you. If you want to change your way of looking at the shopper and you’re going to change the way you look at a store instead of saying, “It’s a warehouse for merchandise that 90% of my competitors have,” and you say, “We’re going to be different here,” and you execute that brilliantly because you train your employees, I think the proof is there. I mean, the business is there to be had. And of course you have to be omnichannel, and of course you have to have ability to buy online and return in store and all of those different things, but those are all part of servicing the store. They’re not instead of. Does that make sense?

Julia Raymond:
That totally makes sense. And it reminds me because I was chatting with… I’ll have to double check this. I think it was on our Retail Rundown the other day. And he was saying that, kind of a similar thought, we’re moving into this new sense of retail where it’s community-based and people are really interested in being able to work, eat, live, shop in the same five square miles and be able to just walk places.

Bob Phibbs:
Exactly. They don’t want to have a car. Yeah, exactly.

Julia Raymond:
Right.

Bob Phibbs:
Millennials don’t want to have a car, and I totally get that, which is why the cities are booming right now and for the foreseeable future.

Julia Raymond:
Exactly, and I just wanted to ask one last question before we wrap up here, and that’s you recently partnered with Oracle on a study for generational shoppers, and it said that Gen Z consumers value brick-and-mortar stores more than their parents or grandparents, and I kind of wanted to ask you why that is. What’s your take on that?

Bob Phibbs:
I don’t know what… All I know is we did the survey. I don’t know that I have the answers for it.

Julia Raymond:
Oh, okay.

Bob Phibbs:
No, I’m kidding. It was interesting that there’s, again, this idea that maybe it’s not nearly as fulfilling to go through and buy something online as it is to discover it in a store. And the distinction I always make is shoppers go online to buy. So I have a HP printer. I want the model 54 color printing cartridge, and I’m probably just going to go online and get that because I don’t need to go out to a Staples or something and try to find that. I mean, that’s easy. I go online to buy it. However, I go into a store because I want to get a new printer and I want to touch it and feel it.

Bob Phibbs:
And as much as people say it doesn’t matter and they’re trying AI and all of this, at the end of the day, it seems to be a human need to be able to go out and actually meet human beings. And I know some of you who may not like to talk to people or like, “Well, I don’t. I don’t care what you like,” because that’s what retail does is retail builds those little gossamer strands from one person to another that makes a community. And the less we have those, I think, the more alone we feel. So when a Millennial or a iGen can go out in the world and get that experience, and it’s like, “Wow, she was really great,” and they love to tell those stories about meeting a business owner and the story behind the boutique. I think that’s where we’re hearing this is about being authentic in this day and age, and I think that’s what’s actually resonating with these younger consumers.

Julia Raymond:
Yeah, just a play on authenticity and connecting with others. That makes a lot of sense.

Bob Phibbs:
The other thing was… Just a quick thing about that. I think it was a third or half of consumers would be willing to pay more for a more personalized experience in a store. Now, I know that data geeks are like, “Oh, that means we can combine your browser data from your phone and we can scrape it, and then when you walk in, it’ll say, “Julia, we’ve got these new hot pink sweats that we saw you in.” No, that’s not personalization. That is the height of the opposite of that, which is, “We have an algorithm that is trying to sell you stuff.”

Bob Phibbs:
A personal experience is just being curious. When you walk in, I say, “Good morning,” and you say, “Oh, good morning.” I go, “Feel free to look around. I’ll be right back,” and I come back and I check on you and I find we have something in common before we ever talk about the product. And then I might say if we’re in a… I don’t know. We’re in a window covering store, and I might say, “What room gets the makeover today?” And now you just start telling me, and suddenly, life gets easier.

Bob Phibbs:
And I’ve been doing this for a long time, so it’s going to sound like… People are like, “Oh, that’s brilliant.” It’s like, “Well, wait until you experience it,” because it resonates because that’s how we like to talk. We’re all just sitting around the campfire hoping somebody listens to our story, Julia. So when you can do that and you can make somebody feel they matter, they’re going to buy more from you, and it’s going to resonate because you’re authentic. It’s not a cookie cutter. And so if your employees sound like cookie cutters, then you probably are making customers and shoppers feel less like they matter, which is why they’re holding onto their wallets, and that’s a real problem if you’ve got a brick-and-mortar store.

Bob Phibbs:
But I’m hopeful because you know what? I’ve seen the other side. If you are willing to make people feel they matter, they will go through and buy more. And more importantly, they’ll rave about you. You don’t have to buy influencers.

Julia Raymond:
Exactly, and that comes full-circle to what we said at the beginning of the call which is that you ran a huge cowboy store chain, right, way back when.

Bob Phibbs:
That’s right.

Julia Raymond:
So you know first-hand that it works.

Bob Phibbs:
That’s right. And my clients of 2019, the same thing. Is it easy? No, but it’s a heck of a lot more fun to figure all of that out and get that hope back than to buying in the doom and gloom, “It’s a retail apocalypse. No one’s buying brick-and-mortar. It’ll never be the same again. The golden day of shopping has come and gone.” I mean, come on. Who wants to go to work with that. Right?

Julia Raymond:
Well, thank you, Bob, The Retail Doctor. I really enjoyed our conversation today, and I look forward to maybe connecting at future retail shows or sometime in person, if possible.

Bob Phibbs:
Fabulous, Julia. I just encourage if you like what you hear, you can find me at retaildoc, D-O-C, .com. You can find my podcast, Tell Me Something Good About Retail on most every platform. And if you’re looking for a motivational speaker, a trainer, or an online retail-sales training program, I encourage you to check me out because unless you’re willing to move the needle yourself and expect more from yourself, the shopper’s not going to do it for you. Thanks so much for having me today. I appreciate it, Julia.

Julia Raymond:
Thanks for being on the show.

Bob Phibbs:
Thank you.