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EPISODE 064 : 06/02/2022

Michael LeBlanc

Michael LeBlanc is the Founder and President of M.E. LeBlanc & Company Inc. and a Senior Advisor to Retail Council of Canada and the Bank of Canada as part of his advisory and consulting practice. He is a ReThink Retail Top 100 Global Retail Influencer and president of Maven Media which produces a network of leading podcasts including Remarkable Retail with author Steve Dennis.

Host: Ned Hayes and Ashley Coates
Guest: Michael LeBlanc

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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

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Audio Transcript

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 [00:00:13] Today, Sparkplug is happy to welcome Michael LeBlanc to the podcast. Michael is the founder and President of M.E LeBlanc & Co. Inc. and a senior advisor to Retail Council of Canada and the Bank of Canada as part of his advisory and consulting practice. He has been added to Rethink Retail’s top 100 global retail influencers list in 2022 for the second year in a row. Michael is also the president of Maven Media, which produces a network of leading podcasts, including Remarkable Retail with author Steve Dennis and the voice of retail. Welcome, Michael. We’re so happy to have you today. 

Michael LeBlanc [00:00:49] Well, thanks so much for inviting me to be on the podcast. 

Ashley Coates [00:00:51] Yeah, happy to have you. Let’s start off, Michael, with having you give us a little background and career history. I know I gave some information, but we’d love to hear about it directly from you. 

Michael LeBlanc [00:01:00] Yeah, well, like I said, thanks for having me on. Veteran retailer, really 25 years in the retail business, started at the brand and product management level in business to business and then transitioned over mid 1990. I bought a book from this company. Maybe you’ve heard of it, Amazon. And I thought this could change the world. This is pretty cool. So at the time I was working as the head of marketing for Black and Decker Canada, so I was on the brand side, not the retail side. So I’d started working with retailers on the other side of the table, so to speak, and getting to know the business. But then I thought this Internet thing, this could be something, it could change things. And at that point in my career, I’m like, Hey, let’s see if I can go pursue that a little bit. And up came an opportunity to Levi Strauss here in Canada, who was trying to figure out what we would call DTC direct to consumer. Now they call it customer intimacy at the point. Get to know the customers better, maybe sell direct to them. Very early days and we were all trying to figure it out. And oftentimes, as is the case, I’m in Toronto, Canada. Canada is often used as a pilot location globally because the market as more similarities and differences than, say, the U.S. market. So they’re very much similar. But it’s small enough that if it goes south on you, figuratively, not literally, you know, it’s not such a bad thing because it’s a small market that is very much like a very, very big market. So jumped over to Levi Strauss and had some fun there, sold the very first pair of blue jeans in the world for Levi’s. Fun story there as we worked and worked and worked a lot. Remember, this is the mid-nineties. This was figuring out how to take a credit card. This is hard and there is no Google at the time there is AOL and much other things. It was hard to generate demand. Not in the conventional way you and I talk about it today, day one, day to day three, no sales go by. So I called up a friend of mine and said, Would you buy a pair of jeans online from me? And that’s our first sale. And then we went to fulfill those jeans. And I guess this is a flash forward to supply chain challenges. I went to the closet where the inventory was. There’s no inventory. It’s all gone. So we had no product. It had all been sold to Sears, I think. So I drove to the Sears store down the road, bought a pair of jeans from Sears, brought them back and sold them as a story of the first pair of jeans. Just an interesting start to the e-commerce and then moved to Hudson’s Bay, which was the century’s company that wanted to get into the Internet. This was 98, 99 and built out really what was what we’d call today multi-channel. I mean, what I say and listen, we need to take orders. We need to take returns to the store. We need to do pickup. When you do many of the things we’re talking about, curbside pickup. That’s back in 2000 when we launched, it was too early probably and we couldn’t hit the critical mass to keep that side of the business going. And there’s other challenges with the business. So jumped over in the media side and then wound up at an organization called the Shopping Channel, which is basically the U.S. version of a QVC or an HSN, a live television shopping. What a blast, 24/7 live TV studio around the hall, communicating with the producer and then the producer where communicate with the guest. And I’d be saying, hey, try saying this. And they would try saying that. And then sales would go up or down or sideways. So that was a real blast, did that for seven years, met a lot of super interesting people with Joan Rivers of the world and work with them and Suzanne Summers. A lot of these celebrities that show up and do quite well, actually, and then from there moved on to private equity work and then moved to the Retail Council of Canada, which for your US listeners would be the equivalent of the NRF. So the association that really represents retailers nationwide and spent three years there as a senior vice president. So then I got to see retail at a very high level and advocacy as the voice of retail. So I did a lot of communications work, some of the advocacy work, I was the advocacy lead on retail cannabis for example, mostly communications, membership, marketing, but understanding that so many complex issues within the retail world that you need to understand and then decided to go out on my own. So past bunch of years been doing what I’m doing here, which is three parts consulting, advisory, media and then public speaking. So the evolution of my podcast, I have multiple podcasts. I only had one pre-COVID in the before time, I had a podcast, thank you COVID my career, traveling the world and speaking on stages I quickly assumed would be on hold until maybe 2022. This was in March and turned out unfortunately I was right. But it gave me the opportunity to do a bunch of other stuff. And that’s what brings us here today. 

Ashley Coates [00:05:02] Well, that’s fantastic. And when did you first become interested in retail? What do you think even led you into this industry. 

Michael LeBlanc [00:05:09] Retail has been described as this accidental career, and I think that fits for me. Retail is the thing we all participate in one way, shape or another as consumers. I came to it because it’s a B2B marketer. I discovered I had more affiliation or affinity to consumers understanding of how consumers behave. So my first leap was when I was at Levi’s, what you and I would call a vendor in the ecommerce space. I deduced that vendors would not be successful. It’s more easily understood today 20 or 25 years later, but back then, the great disintermediation, there was a lot of talk about that, that retail was going to go away. And why would you go to retail? Why would malls exist when you can buy direct from everyone? But I quickly deduced or bet that retailers would be where the game is at. So I went into retail to do e-commerce basically, and that continued and just kicked me off doing a broader array of things, but started really with ecommerce. 

Ned Hayes [00:05:57] Right. Well, you work with many retailers through consulting and through the Retail Council of Canada, so you probably have a pretty good picture of the current retail landscape. So from your perspective, what are the hot button issues right now? What are people worrying about? 

Michael LeBlanc [00:06:11] Yeah, it’s a great question. If we step back and try to understand what just happened, this great acceleration of the COVID era was characterized and continues to be characterized to some degree by what I’ve called this dickinsonian world of best of times, worst of times. So depending on what you sold, where you were, who your landlord was, these could be epically good days. We see that reflected in US sales numbers, but one level beneath those blockbuster U.S. sales numbers has been tremendous winners and tremendous not so much winners. For example, grocery is flying right now, growth that they’ve never seen before. But it’s all coming out of food service when we’re not even in restaurants. There’s been a tremendous shift. Now that’s probably a temporary shift. Let’s all hope that’s a temporary shift. Some things are less temporary. So retailers today are in one of two camps, some in the middle, which is a surge of demand. In other words, I’m trying to keep up and actually it’s a matter of supply chain and keeping goods on the shelf because they’re not trying to generate demand. They’re trying to generate the supply to fulfill the demand. Others are hoping demand comes back. Now, some of that demand is through no fault of their own or in some ways nothing they can do about it. You need tourists. You need people to go back to the office. You need commuters, you need all of these things. So first and foremost, retailers, whether they’re in the United States or whether they’re in Canada, are wondering now how this all starts to settle, what the post-COVID era looks like. And it’s really a fascinating time. And for many of them, they’re trying to understand, as we all are, the difference between from a consumer perspective, short term accommodations to a very unusual time in our lives, to long term structural changes in how we live our lives and how retail is structured that really they need to be thinking about over the long run. 

Ned Hayes [00:07:43] Right. Well, I think you just called it the great acceleration. 

Michael LeBlanc [00:07:46] Yes. We moved forward in all aspects in the U.S., for example, we probably move forward e-commerce two years. We probably moved forward in Canada five years. We were behind for a whole bunch of reasons in terms of adoption and many other things move forward. So what’s implicit in that, though, is a lot of this was coming anyway. It’s just moved forward and then many things have just been accelerated and moved forward. There’s a few things that are net new and I would call out work from home as very, very net new. And I think a structural change that has tremendous implications, not just in how retailers work themselves internally, but where their stores are located, how they function, how e-commerce grows and develops all these things. So we’re all trying to get our heads around that. And what we hope now is the post-COVID era, but certainly many of the trends we already saw happening were accelerated the year, a couple of years, three years, five years depends on where you are.

Ned Hayes [00:08:35] Right. So of those changes that happened, which ones do you think are the best changes that will change the future of retail in a positive direction? 

Michael LeBlanc [00:08:43] When I talk to retail leaders, the one thing that they look back to the early months of the COVID crisis and not many good things to be said about those times except the agility and the decision making prowess and the speed of motion. Many retailers probably yourselves, are we moving fast enough? Are we being agile enough? Are we taking advantage of opportunities? Are we making decisions fast enough to keep up with the market? And I think many retailers were very pleasantly surprised about how they very quickly changed, how they made decisions, the rapidity of the decisions, and I think the long lasting implication of that is a move to more agile organizations, both culturally and people and process wise as well. And I think that’s one of the big long term benefits. The growth of e-commerce, I would say is a benefit other than in some cases is a negative, but in some ways volume solves some sins. I’ll give you an example. Curbside is something that is very important to retailers because it allows them to compete across the country with the biggest of the big. They can have product ready for you in an hour and a half. It’s very convenient and many retailers were iffy about it. Basically, retailers were thinking, well, I think this is a very expensive way to do traditional store retailer. That mindset has shifted into not all, by the way, but that mindset has shifted. And this is a very strategically smart way to compete with very deep pockets fists of stone competitors. So let’s not stick our chin out and compete like for like let’s figure out how we can compete. And that’s where volume helps. So when you go from 20 orders a day at curbside to 200, now you can build an infrastructure. It allows you to build an infrastructure, get very efficient, build some expertize. So it all reflects on a broader movement or bifurcation of retail where at a very high level you’ve got experience or efficiency or value and luxury. And these are the four areas. And as Steve Denis, my partner in Remarkable Retail, often says, it’s the death in the middle. If you’re somewhere in between, not picking a point on that, it’s not exactly 100% pristine, but you could be in trouble. 

Ashley Coates [00:10:35] So I’m curious, Michael, is there any specific retailers right now who are really exciting, you ones who you think are showing us what the future of retail will be? 

Michael LeBlanc [00:10:45] Yeah, it’s a little bit of a hard question for me because it’s like picking my favorite kid a little bit because I know I’ll call out three or four and then I’ll get calls in three or four going, Hey, how come you didn’t pick me? Because I’m really good too. Listen, there’s a lot of people doing really, really smart things. We’ve interviewed some of them on my podcast, certainly in Canada here, Canadian Tire is just amazing retailer that Mark Twain quote, their death was predicted when the big box hardware stores were going to come into Canada. And they’ve just thrived. It’s such a great, well-run organization in the U.S. I have a lot of admiration for everybody from the Aviori there are men’s wear activewear. We interviewed Joe Kadula, who’s the CEO of very smart, very savvy organization and a lot of organizations that are turning themselves into being very nimble and trying to figure out which way is up. Ulta. Ulta is a very savvy organization. And, you know, there’s just so many great examples, almost too many to mention, because as soon as I start talking, I’m already those, I’ve already mentioned some. I’ll be in trouble from the others. But Canadian based Lululemon, fantastic. The clock that just keeps on ticking. So lots of great examples. 

Ashley Coates [00:11:45] Yeah, well, thank you for those. Absolutely. So we’d love to hear more about your leading podcast, The Voice of Retail. Can you tell us about this podcast you’re on twice a week, is that correct? 

Michael LeBlanc [00:11:56] Yeah, that’s right. So the Voice of Retail, I’ve almost had 300 episodes amazingly, it came out from a discussion over coffee around a boardroom table with board members, the Retail Council of Canada. So these are senior CEOs, executives, retailers here in Canada, many of them saying, hey, where do you get your information and how do you figure out what’s going on and where? I wish there is a way. I travel a lot so I can’t. This podcast thing could be something, a big light bulb goes off over my head literally, and I’m like, I’m going to start a podcast. And it first started with me reading the news basically, and then I said, okay, now let’s get to interview format. So now it is an exclusively interview format twice a week, Mondays and Fridays. And my lens is fairly broad actually. I interview mostly everyone I talk to has something to do or something to say about retail, but that can be a very broad interpretation. So for example, last week had a great episode with bestselling author Dan Pink on his new book, The Power of Regret. Today I just interviewed Stephen Pauls is the former governor of the Bank of Canada talking about finance and economics, maybe a little closer to home. Other times I’m interviewing senior executives, CEOs. I do a lot of retail interviews in the cannabis space, which is one of the most interesting retail spaces in the world. But we can talk about that at length because the retail cannabis space in Canada is the home of tremendous retail format innovation. I often put it up as examples, so I often talk to retail cannabis leaders about how they’re thinking, about how they’re differentiating. 

Ashley Coates [00:13:15] And we’d actually love to hear a little bit more about your interview with Daniel Pink, if you don’t mind. He’s the author of To Sell is Human. Maybe you can give us a little overview of what your conversation was like, that might be a good follow up to this podcast episode. 

Michael LeBlanc [00:13:28] Yeah, Dan and I met 20 years ago. We met at a conference and I was volunteer helping land speakers for conferences, and I read his first book, I think The Whole New Mind, which is one of his earlier books. And he was speaking and I approached my say, Hey, would you mind speaking at our event? And he did. And then we wound up getting stuck together in Niagara Falls, Canada, in a snowstorm. And he needed a fly out of Niagara Falls, U.S. And they weren’t flying, he needed to get home. So I drove him back to where I live in Toronto, near the airport. So I had an hour and a half with him and we’ve stayed in touch ever since, so I was very excited to see his new book. So The Power of Regret turns your impression of regrets, there’s no regret. I’ll live life with no regrets completely on its head, as Dan often does. He basically says the power behind regrets is understanding them and using them as a force for good. So he then goes and classifies regrets into four different types of regrets. The biggest type of regret as he classifies it is the regret of boldness. And he created an online platform where 16,000 posts of their regrets. So that was his raw material and over and over and he classified these regrets and boldness stood out as number one. And he gives many examples of a gentleman on the train, he’s next to a young lady, and they get on well together for half an hour. And then she gets off the train. She says, Hey, why don’t you come have a drink? And he says, No, I got to go on. And for the rest of his life, he says, I should have got off that train. What would have happened? And Dan says, Listen, if you think about it, what’s the worst that would have happened? You get off the train, maybe you didn’t connect and you get back on the train. So there’s many, many things that being one example, but this classifies regrets. It’s a great read, as Dan Pink books always are just hot off the shelf, and I’d encourage anybody to have a listen or to read the book. 

Ned Hayes [00:15:07] Well, since we’re talking about books, I’m curious, what are the favorite books that you’ve read recently? It sounds like you’re a big reader. 

Michael LeBlanc [00:15:14] I’m blessed at this podcasting gig because a lot of people send me their books and I get to read them and then talk to them about them. So Dan Pink right now is a big favorite of mine, of course. Steve Denis Remarkable Retail, probably the best retail book written. And that’s how we got together through both his writing, but fantastic book. Rishad Tobaccowala, if you don’t know Rishad Tobaccowala as an author, he is one of the biggest, most important thought leaders today and of course spans well beyond retail, very interesting cat. So, yeah, there’s so many books. I just read a book called Exponential and interviewed the author all about new ways to think about marketing literally every day. Again, this book that just came out from Stephen Poloz The Next Age of Uncertainty How the World Can Adapt to a Riskier Future. Fascinating book. So really enjoying that. So those are some of the highlights. But boy, I just look behind me here, let me see Brad Stone, second book on Amazon. We interviewed him on Remarkable Retail. That was a great book, The Last Supper, which is a Canadian book on the future of restaurants. Very good book. Corey Mintz talks about the future restaurants. So if you have any listeners who want to learn about his perspective around restaurants, and I called him the new Anthony Bourdain. Anthony Bourdain’s book, Kitchen Confidential, was a breakthrough book in the industry, pulling back the covers and seamier side of the business, the reality of the restaurant business. Corey Mintz takes it one step further, and it’s the right time to read that book, because that industry, the restaurant industry, has got to go through tremendous change. And that’s everything from what we call hospitality included. And no more tipping, tipping included to as Corey talks about in the book, and you’ve got these Michelin star restaurants that can only function economically by volunteer labor, which in that business is called staging. You stage to go work as a chef in restaurants with these folks don’t have one or two, they have ten. It’s basically free labor. You’re interning another way, and he said that the industry fundamentally broken. The economics don’t work, and that’s not getting any better. But his book is a nice little guidepost to that industry. 

Ashley Coates [00:17:03] Thank you for those, we actually have a book club on our team, so we might read some of those next. 

Michael LeBlanc [00:17:08] Yeah, every two weeks I do a livestream with Retail Council of Canada, the members where I talk about trends, but every week I present Book of the Week. So every week I present a new book. So there’s about 100 of them. 

Ashley Coates [00:17:21] Thank you! We will mind your lists. 

Michael LeBlanc [00:17:22] Yeah, by all means. 

Ashley Coates [00:17:23] Also, Michael, do you have any favorite episodes on Remarkable Retail? Are there any episodes that we absolutely have to hear? 

Michael LeBlanc [00:17:30] Thanks for bringing up Remarkable Retail because that’s a new partnership. I guess we’re in four seasons now. It’s hard to believe it’s our fourth season now. A Remarkable Retailers podcast with Steve Dennis based out of Dallas and of course is bestselling author, great speaker. And we started that back to the COVID era and the both of us. Matt Actually on the speaker circuit, I knew of them, he knew of me and then we were very like minded and I said, you know, one day we should do a podcast, but I don’t really have time for that as we both traveled the world. But when we were less traveling the world, we said, Let’s get that podcast gone. And we’re in our fourth season now. And I’m really happy with I mean, we’ve had some great interviews. I mentioned Rishad Tobaccowala, I had him on both. Sometimes I have him on both podcasts because they’re so great. Brad Stone again, I mentioned him. He was the author of the latest Amazon books. Scott Galloway, we just had Scott Galloway on. Daniel McCarthy, your listeners might not have heard of Daniel McCarthy, but man, what a popular episode in his analysis of cost, customer acquisition and the finance fantastic. 

Ashley Coates [00:18:23] We interviewed him. We have this interview coming up being published soon. So yeah. 

Michael LeBlanc [00:18:28] Yeah. Listen, one of my most popular interviews. Steve knew of him, I did not. I knew a little bit of him, but how great was that interview? Fantastic. One interview we did, that was one of my favorites, but it wasn’t as heard as often. So this is a great opportunity to share. We interviewed Steve Saathoff and Karen Katz, former CEO, chairman of Saks and the former CEO and chairman of Neiman Marcus about the state of luxury retail. And Steve came from Neiman’s and he was at Sears and I was Hudson’s Bay. So we just had a great discussion, was a great vibe with four of us together. So that was a great episode. Now we also do solo episodes, so our podcast isn’t generally just interviews, so Steve’s responded coming up with titles, not just the content, the fault in our stores. One of my favorite episodes, Shift Happens and today’s episode is a really good one. The Stores strike back again, again. So it’s all about the upcoming renaissance of retail stores. So lots of content there for everybody to enjoy. 

Ned Hayes [00:19:20] Well, you and Steve, it usually really seem like you’re exactly on the same page. Some great insights there, but I imagine you must have some disagreement. So I’m just curious, are there areas that you disagree in terms of your perspective on retail? 

Michael LeBlanc [00:19:34] Well, ya added that last condition point, I was going to say we’re not exactly agreeing on who makes the best ribs right now. He’s in Texas and I got to get down there. We’re going to do a tour, so I make a pretty good smoke rib. So we got to go down and resolve who makes the best racket ribs. But no, really, I was looking through the question. It’s very hard for me to come up with anywhere where we don’t fundamentally agree. And of course, Remarkable Retail is a very strategic look at retail. It’s at a high level. There may be some moving parts here and there we have different experiences, but it’s hard for me to come up with a point where we disagree on anything. It’s a funny thing to say in some ways, but we’re very, very much aligned, which is what makes doing the podcast so much fun and why we started it in the beginning. Hey, we think alike, so let’s get on a mic together and do some interviews and chit chat with some folks and see what comes out. 

Ashley Coates [00:20:17] Well, I want to talk a little bit about technology and retail today. Where have we seen the biggest advances in technology and retail over the past two years, from your perspective? 

Michael LeBlanc [00:20:27] You know, it’s an interesting question for a couple of reasons. I view the last two years in one way as a lack of innovation. Why would I say something like that? Well, at some level, things that are called out is what happened during the COVID era that was innovative, is curbside and all of these things. There’s very few that I can put my thumb on that weren’t there before and back to what I said before accelerated. So I think we’re about to go through a three year supercycle of innovation driven by we just spent two and a half years just getting through it. And maybe it was the sledgehammer of closures and lack of demand or the shock wave of demand. But retailers, by and large, except the very large, could just do everything they could to keep the ship going. And sometimes the ship going was record amounts of sales, but just keeping goods on the shelf was a lot of work. Or we got to reserve capital because the sales just aren’t there and we can’t create tourists that don’t exist and we can’t create office workers that don’t exist, that we can’t create so forth and so on. That being said, underneath it all, what I think are some of the most important advances is cloud computing and AI. And I think there’s this intersecting forces. AI Cloud computing, 5G, virtual reality, robotics and machine vision. Now each of them in one way is discrete, but they all function around each other, particularly AI. If you think of AI at the center of that circle, power is machine vision, and power is what robots and robotics can do in warehouses. And power is incredible marketing and all these things. So these intersecting points, I think we’re at a technological renaissance. There’s so much going into many of these things. I think there’s some red herrings out there, too. We’ll see how that all sorts out. But I think those are very, very important. And it’s not like they went into space or went into hibernation. But again, for many. Every resource possible is going in the business. But now we get to breathe a little bit and we get to say, okay, has the consumer changed? How has the environment changed? And the pace is, no question, accelerated. So these things which may have been optional are now mandatory. 

Ned Hayes [00:22:20] Right? So things have really accelerated, as you said, and things like some brands are really taking advantage of those changes. Can you name some brands that are getting it right? 

Michael LeBlanc [00:22:30] Well, we’ll probably name the same brands. I think the big brands like Amazon and Walmart are doing it right. They’ve got both scale and they benefit from massive resources to leverage those behind the scenes. Again, there’s many retailers from Canadian Tire to the warehouse improvement stores to Home Depots of the world, the Lululemon’s. Many of these are using technology behind the scenes in everything from supply chain to loss prevention to merchandizing assortments. And you’re seeing that success and they’re being primed for success. Warby Parker is one of the digitally native vertical brand that now has stores and is raising money. They’ll go open more stores, which is super interesting, but where and how they’re going to focus. But there’s already as I mentioned, Joe is doing a great job. Ulta. So many of these brands are doing great work through difficult times, but they’re able to carve out enough resources that they continue to move forward and we’ll have a great leap forward potentially in the years to come. 

Ashley Coates [00:23:21] Well, I know that you mentioned specifically A.I., Michael. So what are your thoughts on AI in retail and how brands can best use AI and machine learning to create a better customer experience overall? 

Michael LeBlanc [00:23:34] Yeah, it’s a super question because there’s two sides of AI was interviewing an AI specialist out of MIT and she was saying, be careful because essentially AI can have you make bad decisions faster at bigger scale as much as it can create good decisions at a big scale. So it can go in both directions if you’re not careful. We all know as we come to learn about biases that are built in AI programing, AI needs to learn. And does it learn these biases? I think where today it’s hard to find a consumer facing example where AI’s really benefiting. I think we’re early for that. I mean, we see it in chat rooms as soon as I detect an AI I’m zeroing out, get me to a live person because it never, I don’t know, maybe the experience of one, but I’ve never had a great experience with an AI bot really that isn’t basically triaging me in a call center. However, all that being said, the real interesting things are happening behind the scenes. I think there’s tremendous power happening in robotics, robotics and supply chain. I think there’s tremendously interesting things happening in loss prevention, keeping our customers safe in the industry. That’s where you have pick a store literally right now as I’m speaking to one of our biggest shopping centers is in lockdown. We just came out of we had a big occupation in the city of Ottawa, and now there’s a lockdown with a gun situation in the shopping mall. It’s been open 2 hours. Well, that’s thousands of cameras and thousands of cameras linked to AI, which detect anomalies faster than anyone. Now, there’s still the humans behind them that make the decisions. Do we shut the door? Do we do this? Or they look at patterns. Movement patterns can tell so much from so many different places that say that’s an unusual movement pattern. Look at that. That should trigger you to do something. So I think there’s a lot happening behind the scenes to keep customers safe. And I think there’s a lot happening and a lot to happen in terms of customizing or at least personalizing or tailoring offers to consumers based on massive amounts of data that is all pulled together. The early days it’s kind of algorithms rather than AI. Is it AI or is it just a cleverly written algorithm? I think that’s part of the future, is to make retail offers more relevant. So how are the supply chain power merchants to make better decisions? Power forecasting, which is the sweet spot of AI strength, power forecasting in terms of enterprise, campaign management, these things will come online. And I think stepping back, I’d put AI in the bull’s eye of that circle of intersecting technologies. We’re still underestimating the power of AI and its implications, and we haven’t yet seen everything we’re going to see. We’re probably in on a scale of 1 to 10 experts tell me word about a two of AI right now. Once we hit a six, it could be judgment day and it could be all over. It will probably be pretty fun until then, until the AI starts thinking on its own, becoming self-aware. That’s a Terminator reference joke for it. But I do think that in AI we’re in very, very early days. It’s already starting to flourish and it’s already starting to power. Very interesting things and a lot, a lot more to come. 

Ashley Coates [00:26:17] Also, our sponsoring company, SnowShoe, specializes in customer loyalty solutions for independent retailers. How about your thoughts on customer loyalty these days? Does it still matter in a world of commerce and being able to check prices on a whim and compare and all of that? 

Michael LeBlanc [00:26:35] Yeah, I love the questions about loyalty because I spent my time in Hudson’s Bay from e-commerce. I moved into CRM, I was director of Enterprise Campaign Management, and we had a huge loyalty program. We had 9 million people in that program. So we spent a tremendous amount of time on the power of what you can do with both loyalty programs and customer loyalty. The short answer to your question, it matters even more now than it did before. Customer Loyalty. Brand loyalty matters now. When choice is a click away, what is it that’s going to keep you now? Loyalty can be seen in many dimensions. There’s very few customers that are singularly loyal to your brand. It’s hard to find any so many customers, even the most loyal, when we did research back at different retailers, even the most loyal customers were giving you 30 $0.40 on the dollar of their wallet share. But you could always grow that customer loyalty is now paramount, but you’ve got to be really good at it. Good programs are not good enough. You’re not great at customer loyalty if you’re not really focused on it, I think it will have a declining marginal impact on your success, whereas before 20 years ago you would do loyalty programs and they would be pretty effective. Now I think you have to develop that expertize, have partners who have that expertize and really generate loyalty and a little bit of it’s art and science. Some of it is that why people go back to shop? Why are they loyal to certain place? What creates their loyalty? And the Subo returns, for example, returns is often seen as one of those things that creates challenges in retail. But I and many retailers have a different perspective. Returns on opportunity to build loyalty. A return well handled increases loyalty, not decreases loyalty. So there’s lots of moving parts, goodness knows you get lots of returns happening, what is a 16% on average now in the U.S. returns? That’s a lot of opportunity to build loyalty. So the all these moving parts so complex, so find a great partner that understands all those moving parts and how it affects customers. 

Ned Hayes [00:28:21] Well, I’m curious, what kind of innovations have you seen in loyalty over the last few years? Are there any programs that you’re seeing that are really changing the game of loyalty? 

Michael LeBlanc [00:28:29] Yeah, I’ve seen programs that do a very good job of intersecting and cross-shopping and cross-selling loyalty, building loyalty that actually increments sales. Great loyalty program moves away from being a coffee card program. Buy a coffee, get a stamp, buy a coffee, get a stamp, which essentially doesn’t do anything for the business. The incremental programs where they’re tied in to vendor inducements, where they’re tied in to moving people away from promotions on shelf. Optimum, which is Loblaws program in Canada, one of the biggest in North America, does a fantastic job of deeply understanding the consumer and then motivating, not just repetition, change of existing behaviors, but starting to motivate cross-sell across shop behaviors and really grow the association with the brands. And in this complex world where many brands own other brand house brands, they start to cross-sell even across the banner. So great work there. There’s some great work happening in the retail cannabis space and loyalty. Think of the retail cannabis industry. I know in several states in the U.S. it’s legal and in Canada, it’s legal nationwide. What’s interesting about it is they’re basically all more or less selling ostensibly the same thing. And how do you differentiate yourself and how do you learn in an industry that it’s gone from 0 to 3 billion in two years? It’s an industry that didn’t exist in the legal market with a lot of brands. It didn’t exist. The brands are all new. So building loyalty to you and your brand, it’s an area to watch. You’re now seeing retail consolidation in Canada where there’s almost too many stores and now other stores are buying other. So retailers are asked instead of how do I build loyalty to my location when I basically have to walk by for other stores that sell the same thing to get to me. Boy, that’s a challenge. So it’s a fascinating spot to watch and learn from. 

Ashley Coates [00:30:04] Yeah, we see a huge consumer preference for convenience these days and many brands are able to deliver on that convenience. And then in contrast, we’ve seen in independent retailers the rise of in-person curation and in-person customer service. And those tools can really help build loyalty. So which wins customer service or convenience? 

Michael LeBlanc [00:30:25] Yes, my answer is yes. 

Ashley Coates [00:30:27] Yes. 

Michael LeBlanc [00:30:28] Basically, I go back to how I see retail is this bifurcation. So on one end you’ve got experience and the other you’ve got efficiency. Not exactly linear. In other words, you can be a little bit of both, but for some things, people just thrive on convenience. And I think for some, commodities could be commodity, could be what you’re selling. May perhaps there’s low emotional engagement on the product. It’s very convenient. And other times, again, I’ll pick on retail cannabis, but then I’ll talk about other things. There are some formats of stores you walk in and you think you’re in this different gold super, a different planet. It’s so clever. It’s really experiential. You pick up either a red basket or a green basket. If you’re carrying the red basket, you don’t need people to talk to you. If you’re calling or carrying the green basket, you want associates to come up and talk to you about what you’re looking for. Very experiential. Some consumers hate it. They just say, Listen, I know what I want. I don’t need you. I just need you to basically dispense and give me this, this and this. Oh, I go to a touch screen, I tap it, and then they call my number and I get it from the counter in 3 minutes. That’s what I want. It is this bifurcation of experience or efficiency. So in between that the hardest game to win, I would say you’ve got companies like Amazon, Walmart, they have fists of stone. You stick your chin out to these multibillion dollar companies and try to beat them on efficiency. It’s going to be tough. It’s very tough to win. Other retailers, lots of retailers can win with their physical presence and can play in efficiency, but it’s very tough to out efficiency Amazon basically, it’s very hard to do that. So don’t play the same game. You’re going to play a very different game. As you say, midsize or indie retailers get to know the customer, make all the offers, build community, do all those things, have a great assortment. I mean, the fundamentals of retail haven’t changed. I still want to shop from a store that has interesting products priced right that bring a merchants perspective. The other far end of that is I’m going to go to a store that has so many things. I’m going to find everything I want. There’s a time and a place for that. I shop at both. I just bought some gloves. YouTube barbecue show. I was watching another YouTuber and they were these no cry cut free gloves. So they’re apparently you can run them across your hand, not cut your hands off. Hey, listen, I went to Amazon. They were there at 13.99, press the button and they were at my house the next day. Perfect. I’m not going to go walk in a bunch of stores looking for them. Other times I will. So that’s where this bifurcation or as Steve Denis often calls it, the boring middle. You’re in the middle, you’re not doing any of that. That’s where you’re going to struggle. 

Ned Hayes [00:32:45] Right. Well, when you talk about efficiency, one thing that we’ve seen with our customers is they have a lot of shoppers who are now ordering on an app or ordering around their phone and just picking up when they used to come in the store and more time browsing. So do you think that kind of pickup world has shifted the world of efficient purchases for good? 

Michael LeBlanc [00:33:04] Yeah, I do think it’s been accelerate. I think it was already there. You have people who just want an efficient order. And I did a curbside yesterday. I drove up to the store and I knew what I wanted. I tossed it in the trunk, open the trunk and I’m gone. The next day I went back to the store because I was looking for different things. I went into the store. I think you could be very efficient by solving that issue for the customer. Come to the store, still participate in the supply chain, right? This is where the fun is. The customer is basically part of the supply chain. They’re coming to your store to pick up the goods. Theoretically, your store is convenient to locate. It doesn’t work for stores in the middle of shopping malls, by the way, so it doesn’t work for everyone. But at the same time, how do you think as a retailer to cross merchandise, maybe it’s in-store pickup and how do you get them into the store? Because as we all know, you have to be careful that customers don’t cherry pick your assortment and say, I’m just going to buy the cheapest thing that’s on the front page of the flier that is perhaps a loss leader and not get into the store and see the other things. But shopping is not just about buying things. It is cultural, it’s social. It is an experience. I was reading a Pew Research. This is pre-COVID. I’m sure it’s even more pronounced now. They were talking to young people and they said, I go shopping because it’s a break from social media. That was before COVID, I can imagine now. So it is social, cultural, it’s fun and it’s experience. It’s all those things too. But it’s also I just want to buy this kit and have somebody throw it in the back of my car and go on to my next thing to do. It’s all of those things and more. But again, shopping is just not about buying stuff or else everything would go direct to home delivery and nothing would change. But the reality is most people, many people live in both worlds. And I don’t know about you. I’ve been married 25 years trying to figure out what to get my wife for Christmas. I go to a store for inspiration. I walk around. I don’t go to our website. I hate websites for that. They’re terrible at it. Clicking around, trying to figure out, I’ll go to a great retailer, an indie retailer and say, What’s popular? Got any ideas for me? Or I just look for inspiration. All has an important role to play. 

Ned Hayes [00:34:53] Right. Well, if we could look ahead 5 to 10 years, where do you think retail is going? Could you gaze into the crystal ball for us? 

Michael LeBlanc [00:35:01] Well, it’s funny, right? Five or ten years away, I can’t even think sometimes what it’s going to look like in six months. Some days I’m surprised. But I think you’re going to see experience go to the next level with what it’s called anticipatory retail. I think whether it’s a subscription service or even the AI back to our conversation about the role of AI. It’s not there yet, but it’s getting to the point where it’s got enough data and it’s smart enough to basically know what I want next and just deliver it to me. Call that anticipatory retail. So I think efficiency will get more efficient. In other words, not just scale. I think the economics fundamentally don’t change though around there’s some businesses that benefit from scale and some businesses that simply do not. The unit economics don’t work. So I think in the future, five years, you’re going to see a shakeout. You’re already starting to see it. There are some business models that just don’t work, that just don’t make money because the unit economics, as the governor of the Bank of Canada told me when I was talking about new trends in economics, he said, Listen some of these things don’t change very hard to change unit economics. So I think you’ll see this settling out, but I’m very optimistic about it. So many interesting things that we should probably talk about the metaverse, which right now is probably more a hustle than anything else. launched the first store in Second Life 20 years ago, been there, done that. And it’s funny I two schools of thought about what this metaverse is. I think it’s a hustle. Listen, let’s get our 3D printers out, put our goggles in and walk into a store and make a decision said No one. That stuff is still years away, if ever. In virtual reality. You noticed I didn’t bring up virtual reality. These things come and go like QR codes. By the way, who would have imagined QR codes would be so important two years ago? There’s the thing. The little ugly little QR code. RFID is going to be hugely important. Retailers will win on supply chain and they’ll win. Back to we were talking around loyalty and what we were talking about and relevance. There will be less and less tolerance for messages, communications programs that are just not relevant. And I think that’s where retailers, conversely, can win powerful supply chains. And thankfully, there’s a great leveling the playing field around platforms. You can be a mid-sized retailer and a very sophisticated, powerful platforms thanks to things like A.I. computing that you could never imagine you could afford, or only the purview of the biggest of the big the multinationals. And that’s my experience going back to 2000 when I launched e-commerce for Hudson’s Bay, it was a seven figure stand up just to take a credit card online. It was hard and expensive. Now you hook up to one of these great online platforms and you’re up and going, and then you get to compete on your guile and your cleverness and your merchandizing acumen, all of which isn’t easy, isn’t getting easier, but you can win there. 

Ashley Coates [00:37:26] Well, Michael, thank you so much for this conversation today. It’s just been wonderful hearing all of your insights. We do have one last question for you, which is what do you want your legacy to be? What do you want to be remembered for? 

Michael LeBlanc [00:37:37] It’s such an interesting question because you turn your mind to a legacy. I think initially I was probably thinking I’d be seen in the light of a and still a pioneer in e-commerce as I was in e-commerce in the mid-nineties. And there’s not a lot of people who are in it that early. So that was part of it. Now I’m more, I think a chronicle. I chronicle the industry. I really enjoy that talking to super smart people and learning and telling their stories. If you look at all the podcasts and all the work I do, it is helping retailers tell the story of the retail industry and hopefully people will look back and go there’s a lot of stories that were told and careers perhaps that were built or revelations that were had thanks to the time I shared with very smart people like yourselves. 

Ned Hayes [00:38:16] Really appreciate your thoughtful answers and this great conversation today. Thank you, Michael. 

Michael LeBlanc [00:38:21] Oh, my pleasure. My pleasure. Any time fun to be in the other side of the mic every now and then for sure. 

Ned Hayes [00:38:27] Spark Plug is a wholly owned property of SnowShoe. All content and copyright 2021 Spark Plug Media.