EPISODE 076 : 08/25/2022
Andrew Busby’s career in both retail and technology spans more than 22 years, including work with such UK retailers as John Lewis and Argos. In 2016, he founded Retail Reflections, a retail analyst practice, and today, he is the Global Industry Leader for Retail at Software AG. Andrew is a regular speaker at industry conferences, a former Forbes contributor, best-selling retail author and a RETHINK Retail top global retail influencer.
Host: Ned Hayes and Ashley Coates
Guest: Andrew Busby
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Topics discussed in this episode
- Detailed small business insights from Olympia, Washington
- Small business resiliency and adaptation during COVID
- Doubling community outreach during the pandemic
- Opportunities for small business loyalty programs
Watch Spark Loyalty’s Small Business Success Channel
Ned Hayes [00:00:01] Welcome to Spark Plug, where we talk to smart people working at the intersection of business and technology brought to you by SnowShoe. Your smarter loyalty leader.
Ashley Coates [00:00:12] Sparkplug is happy to welcome Andrew Busby to the podcast today. Andrew’s career in both retail and technology spans more than 22 years, including work with such UK retailers as John Lewis and Argos. In 2016, he founded Retail Reflections, a startup retail analyst practice which has grown into one of the most sought after companies for retail thought, leadership and content. Andrew is a regular speaker and M.C. at industry conferences. A former Forbes contributor, bestselling retail author and a rethink retail top global retail influencer. Welcome, Andrew.
Andrew Busby [00:00:47] Thanks, Ashley. It’s great to be here.
Ashley Coates [00:00:49] So happy to have you here. Let’s start with your career background. You have a long career in both retail and technology, which is our favorite intersection. Can you tell us a little bit more about your career path leading up to now?
Andrew Busby [00:01:01] Yeah, of course. Yeah. Thank you. I got into retail over 20 years ago when I joined UK Retail called Kingfisher, who were primarily UK, but Europe as well. And in those days it’s quite different to what it is now. So I was running I.T. operations at one of the companies called Superdrug, which is a health and wellness and beauty kind of retailer. In those days it included being you comment Woolworths are all UK names if you like. So maybe not quite so familiar to some of the audience, but that got me into retail and I loved it. And then I had a career for a number of years. Then I was asked to go to an I.T services provider to look after one of the main customer at the time. So I had for probably out the next 12 or 13 years, I was in various roles, head of retail, business development, that sort of thing, working with retailers in the UK and as you rightly say, 16 outside of Retail Reflections. And yeah, all our customers, they’re all technology companies. The reason why they come to retail reflections is they’re looking for bespoke industry thought leadership. And this is from the likes of IBM, HP, UPS. There’s quite a long list right down to a much, much smaller boutique. But the thread that binds them all together is it wanting to do business with retailers? And they know that if they put out content themselves, it’ll always be through their mouthpiece, if you like. They want somebody who’s independent, who’s hopefully a credible name in the industry and all that sort of thing. So yeah, we’d do written things like this webinars, videos, appearing at conferences, all sorts of things. And there’s always been a technology trade which will probably come back to a little bit later.
Ned Hayes [00:02:40] Well, I’d love to start with your book that was published in 2019. Harry was right all along. So first of all, who is Harry?
Andrew Busby [00:02:48] Yeah, it’s interesting. I ask people this and I’ve got a few interesting answers. One remember was Harry Potter. No, Harry Potter. Don’t think I had too much to do with retail, but no, to answer your question, Harry was Harry Selfridge. So the founders, I think most people know, is the founder of Selfridges in London. She’s still there to this day on Oxford Street. And to my mind, it’s one of the iconic stores globally. It’s an example of fantastic retailing. But the reason why I used that as the title was, if you go back to what Harry Selfridge was saying back in 1909 when it opened, so was London. 12 years ago, he was saying things like that. He wanted to create somewhere where people could come and they could commune, they could socialize, they could perhaps meet their friends. They could have something to eat or something to drink. But above all, he wanted them to keep the memory of that and yeah, hopefully buy something. But what he said was if they didn’t buy something on that occasion, hopefully they had such a great time, but they’d want to come back and buy something the next time. So in other words, doesn’t that ring true? Doesn’t that sound like we could be saying that today? Now, bearing in mind I this in 2019 or published in 2019, just before the pandemic, and none of us knew what was about to hit us all. But looking back on it, I think an awful lot of the things I was saying there and with Harry Selfridge more than ever, holds true today in terms of retailing, creating a fantastic space that people want to go and spend time in. This is what people are talking about now in retail. So for me it’s really fascinating. It’s kind of like nothing new under the sun. But there is, if you see what I mean, we’ve gradually evolving and we’re getting better and better.
Ned Hayes [00:04:27] Yeah, right. And that’s a contemporary example. In the US we might think of Nordstrom’s. So when I was a kid or Nordstrom’s and you would shop for the day, you’d have lunch at their cafe, maybe you’d even listen to some live music that was playing on the grand piano there. There was a whole experience. It’s really interesting that we’re now gravitating towards shopping is not just a dip in pop out because you can do that on Amazon, right? But the retail physical shopping experience is an experience that has sounds and smells and. And interactions with actual physical people. What a concept, right?
Andrew Busby [00:05:03] Yeah. I mean, retail is very much a human activity. We’re all social beings and we like to interact in that way. And that’s why it’s sometimes raising eyebrows when people talk frictionless. Well, actually, if I’m buying, let’s say, an expensive watch or a car or a suit or any big ticket item, I actually want, in a way, friction there. I want to spend a lot of time. I want it to be an easy experience, but I want to spend time there. I don’t want to just get in and get out is interesting. I heard that this is the site that targets some of their stores. They’ve introduced stores that are go to entrances. So one is labeled EAS. So that’s when you want to make it easy, get in, get out quickly. The other one is labeled inspiring or inspirational, where you want to spend a bit more time and so forth. And I thought that was great because it’s so elegantly simple.
Ashley Coates [00:05:52] That’s fascinating. So in the book, Andrew, you do have a positive outlook on the future and you certainly say there needs to be a deliberate shift in mindset or approach to retail in order for it to survive. But why do you have a positive outlook? And I’m curious if the pandemic affected your outlook at all.
Andrew Busby [00:06:09] Yeah, that’s a great question. I mean, I’m an optimist anyway. I think with retail, certainly because retail is constantly evolving retail businesses and retail is extraordinarily resilient. I think the challenges that they’re facing right now are it’s an overused word, but in the true sense of the word, unprecedented. So if we think back to 2008 and the global financial crisis, this is far worse and we’re nowhere near getting to any sort of maturity with this. Inflation in the US is currently running at 8.6%. By the way, you’re a little behind us. So you know we’re winning that race gradually.
Ashley Coates [00:06:42] Sure.
Andrew Busby [00:06:43] Thank you. Yeah, we’re doing our bit. The cost of living crisis is rising costs for retailers. Of course, we know the impact of the war in Ukraine and then linked to that, the global supply chain. So it really is. But then when there is a threat, there’s always an opportunity. And I think for retail they look at it that way. But the other reason that I’m optimistic is it’s constantly evolving. And I think what we’re going to see you mentioned the pandemic and has that changed my view? It’s cemented that even more because what I think we’re going to see earlier today, somebody sent me something which is something in Australia where I think it was, oh forgive me, I think it was Aldi have opened a wine bar or cocktail bar and they’re serving up retail prices in this and unbelievably cheap because they know their customers are really hard up and they’re really struggling. So that’s not technology innovation, but it’s still innovation. So what I think we’re going to see as a result of the pandemic is an acceleration of innovation within retail, particularly with technology enablement, which I think is incredibly exciting.
Ned Hayes [00:07:43] Well, I know you’ve mentioned, at least in your book, that retail is a sector like no other. Could you expand on that concept? How is retail distinct and unusual?
Andrew Busby [00:07:52] Well, the reason why I’ve got that view is, unlike other sectors, we’ve got an emotional attachment with our favorite retailers. We don’t have an emotional attachment with the fuel companies, the energy companies. We go to fill up our car with gas. The only emotion that we show there is that we’re furious and angry about the price of a gallon of fuel at the moment. So utility companies, telcos, we don’t have that emotional engagement that we do with. You mentioned Nordstrom earlier. I would add to that, I mentioned Target, probably Neiman Marcus, perhaps Walgreens, Wal Mart, all these names. And more than that, retail is distinct from the other sectors in that it is part of our communities. So in the UK here we call it the High Streets, Town Center, Main Street in the US. But it’s a similar concept. In the center of town center, the community is primarily made up of retail and hospitality. Now that is starting to shift and change. There’ll be more wellness, there’ll be more domestic residential dwellings. So the mix is going to change, but fundamentally the years and years which relied on retail. So retail is part of our community. It does frustrate me when and I’m sure you’ve heard this people talking about, oh, the death of physical addresses, the high street, the death of Main Street, and they bring up these pictures of boarded up units and empty shopping malls across the United States and so on and so forth. Well, it’s evolving, but like anything else, the weak aren’t going to survive, but is like you need to perhaps cull the herd from time to time for the good of the herd. The strong will go on and they’ll thrive, right?
Ned Hayes [00:09:25] It’s an evolutionary process. The stores that are not really tracking consumer demand, that aren’t really being responsive, are not going to survive. The ones that are, like many of the people who listen to this podcast, are people who are going to thrive and go to even greater heights. Absolutely. Yeah. So to think about the day job more, you’re the global industry leader for retail and software, and I think the tagline is helping businesses realize their digital transformation objectives. So what are these objectives? Why do people come to you to be transformed?
Andrew Busby [00:09:54] Well, yeah, we talk about the truly connected enterprise. In a nutshell. It’s. So, as we know, is completely dependent and reliant on data. However, we also know retailers really I mean, obviously we operate across multiple sectors, but we’ll keep it to retail for purposes of this. But as we know, the retailers struggle to liberate that data, to turn the data into value. That’s our day job. That’s what we do. We liberate the data to deliver value for the retailer. And what that equates to what I mean by delivering value. So to be a bit more specific is being more responsive to customer demands. We know at the moment that consumer behavior is very unpredictable, hard to predict. So we need more and more of that data. So we allow organizations to integrate. And so, you know, as we know, I mean, I know from my days in retail, we’ve got all sorts of different systems. We’ve got mainframe, we’ve got the cloud, we’ve got hybrid cloud, we’ve got on premise, we’ve got ERP, we got CRM with all sorts of sources of data. And when I was at Kingfisher, we always used to talk about one version of the truth. Retailers are still striving for that today. So that’s what we do. We allow them to integrate those systems, allow them to talk seamlessly with one another, and then draw the data from that to then use it intelligently to provide whatever it is they want to do, either for their people or for their customers. And that can be enhanced customer experience. It can be making sure, perhaps, that the experience is absolutely seamless. I’ve mentioned that word earlier and I think it’s applicable in the sense of making sure that if we’re engaging with a retailer by walk into a store, by being, as I am now, or my laptop or it could be, I’m on my smartphone or any number of other or through a QR code that it’s a consistent experience. And that retailer knows me and they know me very well because I’ve been happy to provide more of my personal data in exchange for value in return. But that all sounds fairly straightforward and very simple, and people might say, Well, yeah, of course. But under the covers, the majority of retailers, that’s still a big challenge.
Ashley Coates [00:11:58] Thank you for that overview. So moving from the general to the specific, can you share some client success stories with us?
Andrew Busby [00:12:06] Yeah, we’ve got quite a number of great retail customers across the US. Unfortunately, on many occasions I’m just able to describe them at the more generic level. But one that I can go into a little bit of detail about is Tractor Supply. So Tractor Supply, I’m sure you know them just over 2000 stores across pretty much all the states. It’s for what they describe, I think, as casual farmers and the outdoor life and so on and so forth. And they’re doing incredibly well. They’re opening up more distribution centers, they’re opening more stores, and they’re really focused on the experience that they give their customers. And they’ve been a customer of software AG for some years now. And what they’re using our integration and API tools. So that’s predominantly product is called wet methods, and they’re using that to connect the experiences. As I was mentioning earlier, they’re connecting those customer experiences across whatever it happens to be. So whether it’s in-store, mobile, so they’re trying to make sure that their customer experience is consistent every time. I think is some of the really great retailers or even when you look to go into hospitality, perhaps you want to have that consistent experience. Not only that, you will have a great experience. So Tractor Supply is a good example. Another one which in a customer for some years, which I can’t go into some detail, but they use our integration. The same product is Walgreens Boots, so a huge organization obviously and they’ve been a customer some time and the third that I pick out would be here in the UK. But again, a name which would be known in the US and Tesco who one of the, the largest grocers and largest grocer in the UK and they’re a little way behind some of the US grocers. But even so I still think it’s 65, £66 billion. So what’s that about 1985, 90 billion in dollar turnover. And they use one of our products called Iris, which is all about process mining. This goes to some of the trends or the challenges I was talking about earlier, the cost of living and rising costs for a retailer. So one of the trends that I’m seeing now across all of retail is that they’re all wanting to drive operational efficiency. They want to get the best, the maximum out of what they’ve got because they’re seeing rising costs and they know they can’t pass the ball on to their customers. So they’ve got to do something about their internal efficiency and that through the process, mining is one of the things Tesco are doing through their back office operations of now they’re rolling it out across the stores. So when I look at not just the technology but the business outcome and the benefits to the business and how it’s transforming the business, that’s when it gets really exciting.
Ned Hayes [00:14:39] So those are really fascinating client stories. You’ve had some real success. I’ve been very impressed in the United States with the story of Tractor Supply because it seemed like such a niche company that really hit their nest really well and expanded from that beachhead in a big way, and also built on the narrative of what kind of lifestyle people strive. So people strive to be vegetable gardeners, people strive to buy the overalls or to have the bandanas. And it’s a very, very kind of American feeling of wanting to build that narrative. So I’m curious what part narrative or storytelling has to do with how you build engaging experiences.
Andrew Busby [00:15:16] It’s all it’s absolutely all about storytelling and engagement. One of the things that I cite as an example of that, I was at a conference in Amsterdam speaking a keynote at a conference a few weeks ago, and I said, one of the three main takeaways from this. I said, Right. So if you’re a retailer, retail traditionally has been quite poor at learning from other sectors. So think about for a second the airline, which probably at the moment isn’t a particularly great example. The same thing is affecting us here. The UK and Europe is in the US as well. Anyway, I’m sure they’ll recover from it, but airlines for years and years and years and we’ve just got used to this. Understand the customer segmentation through loyalty so they know if you’re a VIP customer, they know if you’ve flown first or business or whatever, and certain perks and advantages accrue from that. Well, why does that happen when we walk into our local supermarket as an example? But another thing that I’d say to people, to your point about the storytelling and the experience is what sounds counterintuitive. So explain. Look at things like art galleries and museums and the way that they curate. And people can look at me and think, Well, hold on. Think about the last time you visited one of those places around every corner. There’s something new and wonderful, and you’re constantly on the lookout and you’re wondering, you’re curious what’s going to be around the next corner. What a wonderful new piece of art, all sculpture or whatever it happens to be. Am I going to find? So it’s a constant journey when you go to these places or curiosity and so forth. And what I say to people, Rita, is, look, think about that when you’re thinking about your stores, think about how your customer is going to not just physically navigate your store, but think about the emotion and the I mentioned earlier the emotional engagement that they’re going to have with your brand.
Ned Hayes [00:17:01] Right. Well, one of your recent blog posts was all about customer service and how that emotional engagement is important, because some retailers think of service as optional where it’s just commodity pricing. So can you explain further to us why customer service still matters and matters in a very important way?
Andrew Busby [00:17:19] Well, yeah, absolutely. And I think this is still yet to play out. I think there’s a lot of possibly psychology involved in this. On the one hand, with the current cost of living crisis and so forth, it would be reasonable to presume price is going to become everything, at least value is going to become everything. But I don’t think that’s the case because we know people are still prepared. Obviously, it depends on the demographic, but people are still prepared to pay that a little bit more. So that’s look at within the hour or even 10 minutes food delivery. We’re starting to see a slowdown in that. But the fundamental premise of what I’m saying is that I think at a time when people are really struggling to meet their household bills and so on and so forth, they’re paying more for their energy to pay more to put fuel in their cars. We’re paying more for everything, practically. Then I really feel not only do I deserve the best service because you’re charging me a premium price, the part about the brand or the retailers rising costs is, well, that’s your problem, not mine. My problem is I’m seeing my household budget, my monthly budgets dwindle quite rapidly, and it’s continuing to. So if I’m going to part with my hard earned cash with you, Mr. Retailer, whatever you need to earn that more than ever before, you need to deliver absolute best customer service. But the last time that you had needs to, I don’t know, phone your broadband supplier or your energy company or your bank or whatever happened to be. But I’ve noticed probably the customer service at the moment, just at a time when we need it to be the best, is probably the worst we’ve ever known. And I think something needs to give and I think we need to be more expansive about this. We’ve made some to be more vocal as consumers about this. Now, I mentioned the airlines, and that’s a good example of this.
Ned Hayes [00:19:03] To your point, the customers are not just looking for the fastest or the cheapest option. They want to engage with a brand that they have an emotional affinity with so that customer loyalty, that engagement still matters in this world. That’s what you’re saying, right?
Andrew Busby [00:19:18] Yeah. And I think going back to what we were discussing earlier, that’s one of the things I think that retail is different and it’s resilient because it’s relevance and it should be relevant in our lives.
Ned Hayes [00:19:27] Okay. So are there any companies that you see or technologies that you see that are really helping retailers build on consumer loyalty or to engage customers in more intelligent ways?
Andrew Busby [00:19:38] Yeah, there’s still emerging me if you remember, five years ago, probably if I go to all sorts of retail conferences around the world every year up until the pandemic, January meant New York, Jacob Javits and RF every year. And we heard an awful lot about artificial intelligence and how that was going to completely change everything and so forth. Well, I don’t know about you, but I think it’s not that intellectual overhyped.
Ned Hayes [00:19:59] Yeah.
Andrew Busby [00:20:00] Well, overhyped says yell, and I’ll come on to another technology that I think is overhyped. Hey, I still needs to learn quite a bit. Think of the sorts of experiences that you get, and I’m thinking of personalization if we think of personalization as a maturity curve as being Mt. Everest. I think we’re not even at base camp yet with personalization. Think of all the what I call ambulance chasing. You go on to a site, I won’t name them, but we know who they are. It’s also the name of a river and you buy something and then you are bombarded with emails the next week saying, Do you want to buy another one of these barbecues or printer ink cartridges or whatever happens to be? That’s not adding any value to my life. What I want you to do, Mr. Retailer, is, for example, look at my social media feed. I use it quite a bit. I think an awful lot of people use social media, whether it be Tik-Tok, Instagram, Facebook, Twitter, you name it, whatever, and all the other flavors. If you were to intelligently trawl back over the last two or three years for my feed, you would probably know pretty much everything there is to know about me. So why hasn’t that still to mature? Other technologies, I think actually iottie. I didn’t mention when I was talking about the suffrage proposition, but it’s one of the three pillars that along with business transformation and integration and APIs that I mentioned, because Iottie is just another form of data gathering through sensors or whatever happens to be. And I think it’s had a fairly slow burn in retail, but a bit like the humble QR code, which before the pandemic was virtually dead. RFID that took a long time to take off. I think it’s time has probably come and we’re going to see a lot more of that. Another one, would you use the word overhyped? But I’ve got to mention it because it seems to come up in every retail conversation these days, and that’s a metaverse. Now, for those who know me, they’ll probably know I’m fairly cynical about that, and I’ve gone on record as saying that. And that’s because, yes, if you’re a gamer, it’s a fairly short step to the metaverse. But what’s happening at the moment is the metaverse is still ill defined, it’s still being developed. It has no standards, it has no real security and so on and so forth around it. But everybody’s suddenly talking about it. What they’re really talking about is VR, various flavors of VR. They’re not talking about something new Internet 3.0. However, having said all that, what I am saying to retailers is you need to keep an eye on it a bit like we were saying five, six, seven years ago with AI, if you don’t get into that, you’ll never catch up. Because I’m constantly learning with the metaverse you need to be keeping an eye, because if the metaverse, as we think we understand it, doesn’t evolve in the way that we think it will, the technologies underlie, it probably will. And they’re all going to be there, but it might be. There is something different that you see what I mean, right?
Ned Hayes [00:22:47] Absolutely. Yeah. So these are some fascinating future technologies. Thank you for giving us that kind of gaze into the future. What will matter for retail down the road? I do have one last question, and the question is, what would you want your legacy to be? What would you want to be remembered for?
Andrew Busby [00:23:05] You asked me to write my own. What I try to do through my writing and through my speaking is to be what I call healthily provocative. What I mean by that is there’s no point in going to a conference and speaking at a conference or producing a piece of written consent, which is basically being safe because it’s adding no value to the conversation. So what I say is if I go to a conference or whatever forum or event happens to be, then I’m not necessarily wanting or expecting people to agree wholeheartedly with me. But if they take away something and say, Well, oh, that’s interesting, I hadn’t thought of it like that. I’m not sure whether I agree, but I’m going to think on that. That’s a different point of view. Then it takes the conversation forward and it takes a debate forward, and that’s what I’d be wanted to be remembered for, having an opinion on things, telling it as I think it is, but also having a little bit of a contrary view on things just to add a different, hopefully new perspective to the conversation.
Ned Hayes [00:24:02] Fantastic. Well, I really appreciate your time, Andrea. It’s been a pleasure to speak with you. And I look forward to recommending your book and reading Why Harry Was Right.
Andrew Busby [00:24:12] That’s great to be. I really appreciate that. It has been a pleasure.
Ned Hayes [00:24:17] Sparkplug is a wholly owned property of SnowShoe all content and copyright 2021 Sparkplug Media.