The following is the interview with Bob Phibbs, an internationally recognized business strategist, customer service expert, sales coach, marketing mentor, author of three books, and motivational business speaker with 30+ years of experience in retail. Named one of the top retail influencers of 2018, Bob is the world’s leading expert on brick-and-mortar retailers. He is also an American Express merchant advisor, IBM retail futurist, and RetailWire BrainTrust partner. Among his clients are such major retail players as Omega, Yamaha, Bernina, and Lego.
Bob’s website and blog The Retail Doctor has been named Best On The Planet For Retail in both 2017-2020 by Feedbuzz and was listed on over twenty retail influencer lists in 2018, often as #1.
— You’ve spent 30 years in retail. Why have you chosen retail as your career? Was it your childhood dream? Did you have an unforgettable trip to a shopping mall as a kid?
It was not a childhood trip to a shopping mall. It was much more basic than that. I put myself through college selling shoes in a mall. That's what I did. I got my degree in Conducting with a Minor in Business. When I got out, I went through with my student teaching. There were 30 boys in high school trying to play “Stairway to Heaven” on untuned guitars. There was not enough gin on the planet for me to keep that job.
But I was good at selling and making goals, so I went through with my student teaching. My part-time job became my career. And I built this group of stores from five to fifty-five, the biggest one in the US, before leaving them fourteen years later.
— What is the funniest or the most irritating stereotype about brick-and-mortar retail?
Where do I start? “Retail is a dead-end job,” “anyone who works in retail is a loser,” “part-time,” “brick-and-mortar’s dead,” “no one's going to a mall right now,” etc. I think that stereotypes have always been there. And I believe it shows in upper management who typically do treat employees as disposable. They just thought that the lowest price and more selection would get them profits — and it hasn’t happened.
The retailers and brands that I’ve worked with understand that it’s about the human component. So people come to me for “How do we do better with the human component?”, not necessarily with the technological side.
— Do you mean “personnel” or “customers”, or both when referring to the “human component”?
It’s about their employees and the way they, in turn, treat shoppers.
Because ultimately retailers have to value their shoppers. They aren’t some kind of a drone that’s just going to follow a 20% off coupon and come to their store and give them lots of money. Most have realized that shoppers have a choice and that retailers really can craft a branded shopping experience. Those who don’t or don't want to do their best in that are going out of business left and right now.
Today is the time that most retailers can decide and change all that — and some are. And some are crippled by too much debt and they still have the old thinking that employees don't matter, that retail is a dead-end job. I bought my first house working in retail at 24. I know plenty of people who make 100 grand working in retail because there is some kind of an incentive, a bonus or a commission. They’re having a great time. It’s about realizing that there's a path forward to that life, and I think that smart retailers will understand it and change accordingly.
— Do you think that those retailers that have already understood it have already changed something? And those who didn’t have no future? There’s nothing they can do.
I wouldn't say there's nothing. You know the advantage right now is that it's pretty easy to go chapter 11 in the States and close 200-300 stores which were “bloated” and weren’t making money anyway. So retailers might get a fresh start. The question is whether the CEO is going to be able to do that or not. Or they're going to just continue to kick the can down the block and say “Oh, well, let’s get funding to go for another couple of years and let somebody else enable it.”
— In his recent interview with Competera, Paco Underhill told me that “retail has always been, particularly here in the US, about birth, life, death, and compost.” If it were you who would choose a metaphor about retail, what metaphor would it be?
Well, that’s usually used about different businesses. They’ve got a life cycle. I don’t think that retail as a category has that. Retail is going to be around. Retail’s not going to go away. I mean people are still going to go out in the stores. It’s still the driver of one in four jobs in America.
Online is not profitable. Curbside delivery is not profitable. All the technology and widgets people are trying to come up with — who's going to pay for it when retailers already aren’t getting margin because they've been discounting so hard? So, you know, as retailers go through that life cycle and some are exiting and more will exit and trim down, we will hopefully get it balanced. But there are too many places to buy too much the same thing right now. And that's been true for two or three decades.
— That’s true. But I thought what Paco meant here was that people go to buy something when someone dies, when they celebrate someone's birthday, etc.
People aren’t going to a store because someone died. People are going to a store because of hope. We go in because “I wanna get the boy,” “I wanna get the girl,” “I just got married,” “I’ve just had a kid,” “I just got divorced,” “I’ve just moved to a new location,” “I’ve just lost 50 pounds,” whatever.
People go to a brick-and-mortar store with hope. And that’s what’s important.
Most retailers don’t understand that. They have no idea how to deliver a branded shopping experience that builds on that. So, most are just a warehouse of somebody else’s brands. That’s just not going to fly in the post-COVID-19 world. Especially when, in the short term, at least, people have to wear masks — and it’s like when we’re going to a medical office. It adds a creep factor to the whole experience. That’s just not going to be conducive to opening your wallet. So, retailers are going to work even harder to be able to deliver that rewarding customer experience.
— Your website reads that you have stepped into the fight to give brick-and-mortar a fighting chance. Why? Why do you think brick-and-mortar needed saving?
Because a lot of bean counters have been hired to extract value out of legacy brands.
J.C.Penney should still be here today, but it’s made some huge missteps along the way, not the least of which was moving from New York to Dallas to get cheaper. In the 1980s, they lost their best people who understood trends, coordinated merchandising, and had all the skills that made J.C.Penney an amazing brand. Because someone said: “We can do this same thing for cheaper.” You can’t. Other brands have gone through it and said: “We can cut down a number of employees.” Sears started this back in the 1980s where they cut out a lot of their employees.
The fewer employees you have on the floor, the less help you do, and the fewer people are going to feel like the brand gives a darn about them. When they go into a store, and the fitting rooms are full of clothes, and there’s dirt on the floor, or employees are just sitting around talking — ultimately, that’s not conducive.
I am willing to fight for the idea that brick-and-mortar retail is the future. It’s the hub everything works off of.
And if you continue saying it’s all about having people shop on their phones, you probably are going to be left behind. Because quite simply you can’t boost sales on an app. A person who comes into a store can respond to a great merchandise on display, a great experience with an associate, and ultimately be captured by a brand’s whole world.
If you are not willing to do that, if you are going to have bean counters who say that you can get away with a quarter as many people on the floor, that’s fine. But you are not going to be able to maintain your store for long that way, because ultimately you are just … Well, let me give you an example. Somebody comes in and asks:
- Do you have a green pen with silver?
- Yes, I have it. It’s right over here. Anything else?
- No, that’s it.
I could have done it on Amazon. I didn’t need to get into my car and drive to the store. The obvious thing you should ask me if I’m buying a green pen is: “Why green? Are you writing on note cards? We have note cards over here.”
Somebody would be thinking “How do I build this sale?” But we don’t do that anymore because we are so afraid of selling. God forbid that anybody mentions sales at all at a retail store. “Oh, we are not trying to sell anything.” Then what the hell are you doing here?
Because everybody sells. Everybody’s selling everything. And if you're that afraid of it, the merchandise can't do the hard lift. And so what we are running into right now, at the end of May, is that we are going to go to the mother of all clearance sales where all the merchandise is 70%-80% off. Meanwhile, untrained employees are going to sell all of that: “Oh, that’s a great buy. It used to cost $100, it’s only $20 now.” Except you don't need an employee to do that. That's why it's 80% off. What you need is someone that can sell it at $100.
So we have screwed up the whole model of how retail works so much that shoppers are waiting until the next deal. Until brands realize that's not the way forward, I think we'll see more bankruptcies.
— Yes, but there are some winners, too. Those who know their brand values and can entice customers and even price higher because of their brand name, right?
So, who do you consider is in this league? :)
— [Pause] You got me :) It's hard to distinguish the absolute winners right away.
Michael Kors was a premium brand until they went public. Then they ended up getting all the merchandise with sale prices all over the place to press the whole idea. My niece would go to buy Michael Kors at an outlet store. She’s not going to pay them again. They’ve already taught her that’s all about the price. That wasn't Michael Kors when he started.
A lot of other brands are at that same place where the bean counters are saying: “We've just got to get something going.” And the thing is that when you do value the brand, people are going to spend the money. That's really hard. That's why brands like Ralph Lauren pulled a lot of their merchandise out of department stores because they were tired of the promotional aspect of it. Or Hammit handbags — they won't work with a brand that puts their merchandise on sales.
So there are other brands that are saying “enough.” If brands don't pull back, then they follow what the other guys are doing. And now there's no differentiating your product. You are just assured you are just a handbag, you are just a pair of shoes. And that's a punishing place to play.
— Do you think there’s a place for a technology that can tell you which products you can price higher than your competitors and which products you can price lower than your competitors, and you still will maintain this right reception?
I think finding the right price is always tough. Certainly, there’s a lot of AI solutions that can go through and compare and contrast your pricing compared to others for you to be able to maximize the value on your pricing. I absolutely believe that. But the devil is in the details. Because in systems like that, do you have the infrastructure that can relay that in real-time to the sales floor or online so that you don’t get caught up with mismatches?
— Yes, it's possible. Check out Competera. It’s easier for online retailers than brick-and-mortar stores, but it’s possible.
So, it’s much harder for brick-and-mortar companies. They are saying they have price tags that are digital on their shelves so that they can go up and down based on people. But it’s not very nice.
— Sure! That’s not how it should work.
But I’ve seen all that, scanners, facial recognition, it’ll match to your customer profile, so it might show you a different price than to somebody else. It’s out there.
— I see. Just a quick story that happened to me today. I went to a store to buy some cheese. And while I was looking at more expensive brands of cheese, an employee suggested that I should check out cheaper options as well. That felt weird.
That’s what is so terrible. Because she’s selling for her own wallet. For all you know, there was better cheese over there that takes some nine months to make it. So it doesn’t hit your taste palate with “Oh, my gosh!" That’s a lot more subtle and much better because you can have it with wine. Therefore, if someone actually understood that and explained that to you, you probably would give it a shot instead of settling for something cheaper. It’s like saying “Any food would work. You can have a hot dog or sausage. It’s just food. It doesn’t really...” Well, it does. Right?
— I agree!
Did you end up buying cheaper cheese?
— No, I bought the expensive one. It tastes like pizza.
Oh, interesting. It takes more work.
— That's right. Let's look at the bigger picture again. With everything going on now, what lessons can brick-and-mortar retailers learn from the lockdown?
I don’t think that anyone would have thought that the whole country could be locked down for months. That wasn't in our mindset, that wasn't possible. Much less the idea that people are touting so many things that are supposed to happen in a brick-and-mortar store right now, i.e. to be clean. I don't know how they are going to pay for most of it. Because it all sounds good, but you know retail is a mass activity: masses of people coming into stores, malls and movie theatres, etc. And they discover something they didn't know that they wanted. That's how retail works. So understanding that the flow could be cut off again, I think, was a wake-up call for a lot of people.
I believe the other one is the cavalier attitude towards customers: oh, there’s going to be 100,000 shoppers coming in next month. What if they aren’t? And it's going to be slow to rebuild right now. We're not expecting a quick rebound. We are expecting people to gradually come out. They’ll gradually get more comfortable and tell their friends, but realistically traffic is expected to be down 30%-40% in the next couple of months. So if you understand that, then I think the lesson comes down to “it's time to give up on the old way we used to do retail” which was “I can’t find something” => “Oh, it’s over there. Let me know if you need anything else. I’ll be back. I’m just a disengaged salesforce.”
The other thing that has changed is that unemployment, at least, in the States was only 3% in February. It's much higher now. So now is the time that retailers can upgrade their entire staff. You don't have to put up with bringing somebody back who was negative and who hated working in retail and hated your product, thought it was too expensive, etc. You can actually get a group of people, train them and make that difference.
I think the other thing is just to realize that this is a great chance to rebalance the retail equation. There are just too many places to buy too much the same thing. I hope that both designers and retailers will realize that their brand has got to stand out from everybody else’s, whether its an online or brick-and-mortar store. Being interchanged with other sellers like “Oh, you sell low-price denim or whatever” — it's a punishing place to be.
I love how Levi’s CEO Charles V. Bergh said: “We’ve been through it all ... the Spanish flu. No other apparel company can say that.” They’ve been through ups and downs and they're still a premium product and not a promotional brand. I think they're going to be fine.
But a lot of them aren’t.
So realizing what that unique thing that makes your brand important is will help a lot of brands to go back to the table. Because another promotional offer is not going to fly.
— How important is technology in retail, in your opinion? What are the areas that need an immediate technology injection? Which areas will never be digitized? Why?
I think everything will be digitized. I think even me as a speaker will be digitized to a hologram at some point. I think everything can be digitized, there’s very little that can’t be. But here’s a thing. You can digitize a try-on experience with your magic mirrors and all that stuff. But it’s not the same. You know a sale is not complete until you’ve really tried it on.
So this idea that digital technology is a replacement — no, a lot of times it's a thing you’ve added in the middle. You can try on all kinds of makeup now, right? But you're not really trying it on. You’ve put another step in the sales process. It's almost like you put a thumbnail, a preview pane of what you might get and now you're deciding on it until you actually put it on your lip. Until you've actually put it on and said “Oh, it actually keeps my face smooth,” until you’ve actually tried that jacket on and said “Wow, that makes me look taller,” the sale isn’t complete. So those kinds of things to me are a distraction.
I think the ability to understand your inventory better in real-time, to know how much is in your stores is great. But, again, the devil's in the details. “Buy online, pick up in-store” sounds great. But what often happens is that I order something and an hour later they tell me they don’t have it. That's not how it should work.
Contactless payments are great. Adoption certainly is going to go up on those and cash is certainly going to go down. But in reality, sales don't happen as well as they could because you haven't understood that technology is a tool, but it's not the beginning and the end of everything.
Like in shoes, where Volumental is a great example. They do 3D scanning of your feet and actually can show that these shoes fit this person well. They can actually say “This Nike is going to fit you really well.” And if it doesn't, shoppers tell the app they didn't buy it. So the company is constantly tuning that and it makes your salesperson smarter.
But make no mistake: the salesperson’s job is still to get two pairs of shoes out the door, not one. The guy that’s missing a shirt is missing the pants or the belt or the suit, too. The woman who only buys the scarf and doesn't get the accessories to go with it means that as a salesperson you probably didn’t do your job.
So the more that you can use technology to be smart about what's going on, to understand what's really selling in your area online and you can bring it in your store and understand like, well, it’s a big trend we should know about — that's great.
You can be finding out when Kylie Jenner is talking about something on Twitter and it's blowing up and you have it in the store, you can suddenly change that around in real-time — that's fantastic. But the execution is what's really hard — to actually do that consistently, on a regular basis, when we are taking so much more time with people as you have to constantly clean after they use the touchpad glass and dozens of other things. And you also have to pick up online orders.
There's only so much you can do. If you are going to give an associate on the floor ten jobs, they are going to take a task over helping somebody any time. And that's not where you make money: doing an inventory or shipping something to somebody is not where you make money. You make money by building the sale with people in front of you right now.
— If you could have lunch with any retail businessman who has ever lived, who would it be? Why?
I would go with Peter Glen. He was one of the top merchandisers of the 1980s. I was able to hear him in the mid-1980s and I was so taken with his take on how display in merchandising can make a difference. He was also a positive force of retail. He passed away in 2001. But his legacy of understanding that it's about making the customer’s day and how we entice somebody in a visual means, I think, really made an impression on me. So I’d just love to know what he would look at if he could still look around 20 years later. Cause stores never looked more beautiful, but what would he see in the next generation of merchandising? I think that would be interesting.
— What interview question would you like to be asked and how would you answer it?
I have two that come to mind. The first one would be: “How can we get all of your knowledge as the Retail Doctor?” I’d say: “Sign up for my Online Retail Sales Training where I’ll teach you all the ways to develop rapport and build a connection with a customer and then actually sell the merchandise.” So that's my business side of it.
The second question would be: “What's my definition of a great shopping experience?” My answer is:
A great shopping experience is when I want to walk into your store and feel for those few minutes that I'm the most important guy in the world. I want to walk out feeling like I was grateful that I met you today, exchanged a connection that will make me better, and bought something that will make my life feel even more magnificent.
If you hit that out of the park with me, I'm going to buy it. That's my mantra when I go shopping. Sometimes I have to settle. But other times I've been to luxury stores and it was like “She did the job, I'm buying a $1,000 pair of jeans. Holy gosh! I can’t imagine I did that.”
It was Wilkes Bashford in San Francisco. It’s a beautiful townhouse, 6-stories tall. I just finished the keynote. I was feeling my oats. I walked in. They had some art books and some clothing. And I thought: “Oh, that’s a cool brand. I don’t know who this is.” I took an elevator, and a woman went in. We were chatting politely. I thought she was nice. She asked me if it was the first time I was there. I said: “Yeah.” We got out on the fifth floor. She said: “Since it’s your first time, would you like a quick store tour?” And I realized she worked there. So, we looked around and got over these jeans. She said: “We sell a ton of these jeans to a lot of tech guys.” I looked at the price and said: “I’m not going to buy those.” She went: “Oh, no. They really are ...” I said: “I don’t care. I’ve sold jeans. Jeans are not worth this.”
To make a long story short, she got me into a fitting room. The jeans fit. The tailor just happened to be there. He pinned the bottoms. Then she said: “Let’s go downstairs to pay for them. Would you like a quick tour of the rest of the store?” So, we went through the other floors. It took us maybe ten minutes. We got down to the bottom. We were chatting about me as the Retail Doctor. She was telling me about what it must be like to go around the world, how she loved retail. And I said: “I guess, you’re going to be sending me these jeans in a couple of weeks.” She went: “Oh, no, they are right here.” She reached over the counter and there were my jeans, ready to go. And she said: “It’s been a pleasure working with you, Mr. Phibbs. And I’m going to look on your blog.” She listened to all the things I’d said all those 20 minutes before. Her name is Cathy Ubell. I said: “You are amazing. You are a sales professional and I appreciate that. How long have you been doing this?” She said: “35 years.” And I said: “It shows!” I wrote a blog about her, sent a note to that company saying: “You can build a business on this attitude.”
That’s what I want to see post-COVID-19. We need retail salespeople that don’t apologize, that help us treat ourselves, and ultimately move past that fear of “Oh, I know these are expensive. But we have these on sale. You can’t afford them anyway, right?”
Cathy Ubell stayed with it — and she made the sale. I really appreciate that. Cause that’s what a salesperson does. It’s somebody who’s there to inspire you. For me, it was like “I hate these. I won’t buy these.” And then I was walking out with them. It’s a great story, because, again, you can build a brand on that.
But how many people have trained someone? How many people worked with a woman like that, unpacked it, and went “Wow, that’s how it works.” It would be like a film student looking at a Scorcese film saying “Oh, that’s how it works.” But if you are not a student of retail, if you are not a student figuring it all out, then I think you settle for crumbs when you can have the whole feast.
So, there’s a lot of room for brick-and-mortars to do better. I’m hopeful about brick-and-mortar retailers making it through to the other side. I think there are enough young people out there that are figuring it out and trying to make it. And as long as we have a human connection about it, there’s hope and I’m fearless. I think that's what most brands need to remember: you are not in the markdown business, you are in the hope business.
Thank you, Bob!
*This interview was conducted by Jane Kuhuk, PR Manager at Competera, in late May 2020.