Feb 15, 2019 10:41:32 AM
Bob speaks with Matt Rhodus, Director & Industry Principal NetSuite about the new survey we conducted and the trends in retail pointing the way forward for retail in 2019.
Bob: I want to introduce you to Matt Rhodus, Director and industry principle for strategic initiatives at NetSuite.
Matt: Yes. Thanks for having me, Bob. Glad to be here.
Bob: That is a mouthful. What does that all mean?
Matt: Yes, fair enough. Yes, I'm part of our go to market strategy team here for NetSuite. I’m part of the team that sits down and really digs in and understands where are we going to take ourselves, you know, to grow the needs of the business and make sure that we're staying focused on the needs of our customers as well. So part of that strategy team here and I'm sure as we get into some of the discussion here, I can share a little bit more about the specifics about what that means and, you know, and how our customers are benefiting from that.
Bob: I know that you have a long history in retail. I don't know if this starts before Staples but, what do you have to do with retail and where did it all start?
Matt: So it actually goes pretty much all the way back to high school. I was a blue shirt at Best Buy for almost six years, you know, through high school and into college and so...
Bob: You were a geek then, is that it?
Matt: I was. Actually, I was in one of the pilot stores for when the Geek Squad even first came out. I was kind of date myself there a little bit but, you know, I've been in retail since the first job I've ever had. And after that I was in college getting a degree in business management and also CIS or Computer Information Systems and decided that, you know, technology was the field that I wanted to go into and parlayed that into going to work for as a consultant for a software company that was actually doing some work for Best Buy.
And that's kind of what got me in the door there and implemented software at retailers for close to a decade and then shifted over to kind of help, you know, strategize and build product and sell the software. I jumped around to a few different places throughout the years, but it's always been focused on retail and in the retail space and strategy within retail. So, yes, I'm going on almost two decades here.
Bob: Yes, well, you're younger than me. But that's pretty much my story. I put myself through college, selling shoes and then growing a retail brand of 54 locations and then growing a franchise coffee operation to 135 across the U.S. And so, yes, retail is kind of in my blood and I think just understanding how it all fits together is what's the fun as you're trying to figure it out.
Matt: Yes, exactly. You know, and retail is an interesting animal and I find that once it's sort of in your blood, it's sort of hard to do anything else, you know, anything else almost seems dull by comparison. So, you know, people kind of tend to stick with it.
Bob: Yes, that's very true. You helped spearhead the whole survey that we looked at, this disconnect in brick and mortar...well, not just brick and mortar but retailers who think they're providing one thing and we were trying to figure out where are the disconnects. And I think we got some pretty great information out of that, huh?
Matt: I completely agree. I was glad to be a part of it and in full transparency, you know, you did it all on your own, we didn't influence in any way shape or form. There's still a fundamental issue that isn't being solved here that retailers need to start focusing on. I think that was a brilliant way to highlight that gap.
Bob: Well, and I think that some of the things that really got me were that retailers, in general, think we're making our customers feel more confident and more comfortable in our stores and yet the data pointed to just the opposite. People felt more stressed, more alone, and more confused when they come into a store. Did anything else stand out to you were looking over at the results?
Matt: That was the big one. Also that the consumers just were not adopting this technology that was being deployed in the stores because it just didn't serve the right need, you know, by just, you know, thinking that I could take something that's traditionally an online technology and throw it in the stores and think that a consumer will walk into the store and understand what to do with it, how it applies to why I'm in the store, what is this meal providing to me from a value-add perspective, you know, is another kind of key thing that I that I took away from that.
And I've been saying for almost every talk that I do around the retail store experience, you know, that you can't build a retail store experience for just one type of consumer. I mean, you can bucket them in all types, but ultimately, there is the consumer that that wants to come in the store because maybe they're a tactile person, but they don't want to talk to anybody. And then there's the person that comes into the store because they have no idea, no clue what brought them there and they want your help, right? So, you know, you have to kind of think through both, otherwise you're always going to alienate some portion of the person you're trying to bring into the store.
Bob: Yes, I think that's a great point. I work with a lot of different types of retailers and I think that we have kind of new dynamic that there's this, "I want to do it myself so I need to know what to buy. You know, how do I use it and when do I use it?" And then there's also these "do it for me" customers. And it's like, "I don't really want to know all this kind of stuff, can you just make it go away?"
Matt: Yes. And we've trained our consumers this way because obviously, we've been spending so much money online and consumers know that they can go online. So actually, the way I interpret that, or the way that I view that, and I think about this in my own life when I walk into a retail store, and what I'm expecting out of it is, I'll know pretty quickly whether that sales associate is going to be value-add to this transaction or not, right? And if they aren't providing some element of benefit other than, "Hey, look over here. Everything over here is 30% off." Yes, I can read that sign. Thank you very much. And, you know, kind of following me around like that, that's not providing any value-add, right?
There's a level of, I'm capable of understanding what's going on in here. You know, when I need to engage you it's because I have a legitimate question and I don't need you to divert me to something else [inaudible 00:06:53]. So it just comes down to, you know, the how and what a retail associate is there to do and what are you arming and enabling them that actually makes that sales associate more value-add to that consumer in the store. Because you're right, most of the time they can just do it themselves so, you know, you kind of have to find a way to make that sales associate more valuable.
And the technology that exists today, I can get just as much information on my own as you're probably used to arming that sales associate, unless you're a brand, right? Unless you're a brand and then your training that sales associate on that brand. But, you know, in just general retail or any of those categories it's, you know, "I can get this information myself. So what are you arming that associate with that I don't have or making it easier for me to get it so I don't have to go do it myself?" And if you aren't thinking that way, then you're thinking about it the wrong way.
Bob: Yes, I would agree. I think the thing that I'm being contacted more and more by brands is, you know, we've thought our golden stake was going to be product knowledge, and if something is wrong and I'm like fed up because now you have to really train three things, I think, in an associate. It's how do I engage a stranger, which frankly, no offense, millennials, but you just don't have that skill. It's just not there. And then how do I discover the shopper? Meaning, how am I curious about what it is they bought in? I don't care that you want a box of number 12 nails because you can probably find that on your own.
But I'm just curious, like, what's your project today, then suddenly, the whole world opens up and it's not just a box of nails, there's a lot of other things you're going to need and maybe my expertise could actually help you out. Or maybe you read somebody's blog that this one product is the bomb and you're coming in saying, "I need that." And can they have that discussion that says, "Well, would you be interested in something the same or better than?" Because most people would go like, "Well, sure, I'd be interested in that."
But to your point, I'm going to check out if you're a player within about 30 seconds, and you tried. You're either going to help or you're going to hurt my chances. And if I get that impression that you're not going to really help me, then I'm going to ignore you and treat you like crap. And that's horrible because ultimately it's not the associate's fault, right?
Matt: Right. I couldn't agree more. I could not agree more because none of us are experts at anything until we're taught that way, right?
Matt: So, the companies and the retailers that are employing them need to make that type of investment in them. And I know we could go into a whole hour-long debate about the growth or not growth of the physical retail environment and how important it is and it's not going away and, you know, you have to invest in this area.
And going back to the report for a second, I think one of the pieces in it that I quoted almost instantaneous once I saw the report was, you know, that notion that, you know, retailers are thinking that they're making the store more inviting, but 20% of consumers think that it's less inviting. So, you know, but yet how many of the retailers are still leveraging a physical environment in the sale or in the transaction? So it's like it's clear as day then where the focus needs to be and how you need to prop up that sales associate to make a difference in this equation and hopefully retailers will begin to adapt.
Bob: Absolutely. And I think the other thing that stood out for me was this idea that millennials don't want help. The survey said it was actually just the opposite that maybe the centennials are the ones that don't want help. And millennials actually do but they want a connection. I think that keeps coming over in the data that they want a connection and this feeling that, you know, if it's just going to be online, just putting on, you know, a VR headset isn't going to make the difference in personalizing it by dropping my name and in algorithm isn't going to do it.
But if I really do feel something, now that's the opportunity. I think that most retailers have, and let's face it, NetSuite has an awful lot of, you know, we call them omnichannel, or brick and mortar and, you know, every other kind of variation, but big brands who certainly want to be where the customer is at all times. But I think the one thing that keeps coming back is the gold mine really is the store because ultimately if you do something that makes somebody feel that they matter more and I'm less confused and I'm more confident, then the trust is there with the brand, and ultimately people who feel they matter buy more. I mean, that's kinda good.
Matt: Yes. Again, I couldn't agree with that any more completely. And how I would also kind of look at it is, you know, one of the biggest issues that a retailer can have is obviously a stock outage. And, you know, everything being centered around just trying to make sure that there's the right amount of inventory at any store at any time. But you would be surprised what a consumer in a store will forgive you for whereas the consumer online just will not.
And if you have made that connection and they believe that your brand is in this journey with them or they're inspired or whatever that sales associate is able to do to get your consumer into the brand experience, you'd be surprised what they would be willing to do. And that's where something like omnichannel comes into play where, okay, maybe I don't physically have it here, but okay, I'll wait a couple days to get it. And I appreciate this experience and all that kind of stuff. And, you know, that is what then props up those technologies just kind of putting it in the store.
So without that experience, you know, what would happen is they walk in, "Oh, you don't have it? Okay, I'm either going to go to the person outside the mall or across the street, or I'm going to go on Amazon and I'm going to buy it." So you need to have something like that to then make these technologies like omnichannel and some of the other things that we've mentioned and talked about worth it for the consumer to use while in that store because now they're, you know, inspired or engaged in your brand.
Bob: Well, that's a great point. I think the other thing that people are being challenged with as well is this idea of mobile payments. And everybody would like to say, you know, "What about Amazon Go? It's so revolutionary." Look, it's not that revolutionary in some ways because you ultimately have to take out your phone, open the app and sign in. Which is not that much different than, at the end, you open up your phone and you have to sign in to pay for it mobiley. They're still trying to think how can it be as simple as a swipe of a card, which is why so many cards now have, you know, the swipe technology. Somebody was showing me their American Express the other day with a little Wi-Fi signal on the back so that you knew what it was.
Bob: It seems that simplicity is where we're trying to get back to. Would you agree that...?
Matt: Yes. I do. You know, maybe another way it's said is just removing friction and kind of getting back to the kind of those simple basics. And, you know, it's an item, and a transaction, and a payment. So I mean, it is absolutely getting back to that element of simplicity for sure.
Bob: What do you think one of the best or most worthwhile investments you've either made personally or you've been part of with a brand? What do you think?
Matt: Besides my Costco membership? Joking aside. I mean, for me, probably not that my life isn't stressful and complicated enough with retail, but I do also look at and understand retail and invest in retail...oh, real estate, sorry. So I've been involved in real estate for a good many number of years. And so I'd probably say that some of the retail or...I keep saying retail...real estate investments that I've made over the year have been probably the most fruitful for my life, you know, my wife and I, for sure. But around retail, I'd have to say, definitely my Costco membership.
Bob: It's good you made that comparison.
Matt: Yes. Yes, definitely.
Bob: So I want you to think that your buddy or your wife's friend, they come to you and they say, "Oh, meet us at Starbucks because we want to tell you about something." And so you go there and they say, "Oh, we've got this idea. We're going to open a retail store." What would you tell them?
Matt: How would I even condense this down to a one-liner? But, you know, I guess if I were to really kind of come down to brass tacks it's, you know, you always need to obviously focus on the bottom line to keep your job, but you need to focus on the customer in order to make sure that you exceed and that you get ahead. And, you know, balancing those two equations is always where the devils are in the details.
But, you know, it isn't about the bottom line for growth. I mean, you focus on that in order to make sure that you can pay your bills and kind of keep going forward. But if you only focus on the bottom line, your retail endeavor is never going to grow. You have to think about and put your mind and your thought in the consumer and the consumer experience if you ever hope to succeed and actually get ahead at the retail game.
Bob: I totally agree with that. I think that's the...In fact, I said that to a group of retailers not that long ago. And I said, "You know, I'll bet that when you first opened your business or you bought the business, you would have done anything for a customer that walked in the door. You'd be like, 'Oh, I have it, I'll find it, I'll do all this' and now you've been around for 5, 10, 15 whatever years and we get kind of lazy about it. It's like, 'Yes, I don't have it. Yes, I can't..."
Matt: Correct. Yes.
Bob: And let's face it, retail's pretty punishing right now. There's a lot of players out there that are looking at nanoseconds of interactions, not minutes or days.
Matt: Exactly. Yes.. And kind of going back to maybe a little bit of that frictionless, I guess, is and maybe that's where frictionless is a bad thing where you don't even try anymore to delight or, you know, you just follow the playbook and if you can order it on your tablet then fine, if not, sorry.
But, you know, that is certainly not what got the likes of Nordstrom, you know, is still where they are, Amazon certainly not where they are and, you know, certainly in the department store game, we have no brighter star than Nordstrom right now and in the e-commerce game, there's no brighter star than Amazon, and customer service is the pretty much their sole focus, you know, but there is a point where obviously you can't do that to a fault or you'll drive yourself out of business. But, you know, it is how you actually gain that trusted advisor status.
Bob: Well, and I think they also realize how high the stakes really are for everybody. I think that's the important thing that I think a lot of times, certainly with some smaller chains or individuals, you can say, "Oh, you know, shop local or something." And then it's almost like I have to put up with bad service to shop local. I don't think that's fair. It's got to be table stakes. If you're a coffee house, you've got to be as good as Starbucks and better, right? If you're going to be as good of a yoga leisure store, you've got to be as good as Lululemon or a Ted Baker or somebody, right?
Matt: Yes, absolutely. I actually have almost a reverse anecdote on that because there's actually a local coffee shop that my wife and I visit that is not Starbucks even though we do have...I'm very loyal to Starbucks so, you know, no shade towards Starbucks whatsoever. But there is a local coffee shop and, you know, he took over like an old house that's a kind of live-work, one of those old style live-work units. And he hit all segments of demographics, he serves a little bit of food with some tables in the front. He's got in the back part, I guess, which would have been like the old school dining room, he set up a little kids playroom.
It's a detached garage that he turned into a quiet study area that you go back and he's got little pods set up and you can sit there and drink coffee and study. He fenced in the backyard, so you've got some outdoor seating. And just like every time I'm there, I'm like, this guy got it figured out. I mean, you know, he knew that he's in an area with a lot of families, we're right by a university, and he's, you know, "Okay, I'm going to make the space for all these people to co-exist," because you're in a Starbucks and it's like you're jammed in with all of these people.
And, you know, he made separate spaces for each of those types of consumers and is offering, you know, a similar type or a better experience but a similar product and coffee and pastries. And I think that's just such a great example of where, you know, he kind of sat down and thought to himself, "What would the consumer experience be like at Starbucks? What can I do to be better than that? And, you know, made a place for each of the type of people that traditionally come into these coffeehouses and if they went to Starbucks, they wouldn't get that personalized experience.
And, you know, in this case, you know, I'm kind of using that coffee example, I'm like, "There you go." It, you know, probably cost a little bit more to build out, obviously. But the windfall is it's always busy. You know, in a world where Starbucks and Dunkin' Donuts are an easy drive away, you know, this guy, and as I've talked to him several times throughout the years, he's just done so well and is always busy. And, you know, it's because I think in my mind, the way I've equated, is he's really focused on thinking about, "How can I create a better consumer experience than Starbucks when I can't compete on other aspects like Starbucks can?"
Bob: I think that's a great point and that's what a great entrepreneur does, right?
Matt: Yes. Absolutely.
Bob: So tell me a little about NetSuite. So some of our people that don't know, what exactly is NetSuite and how does that help retailers?
Matt: Yes, that's a great question. So, you know, NetSuite is a unified cloud single system to run your entire business. We're everything from your inventory and supply chain management to your core financials. We are your website, we are your point of sale, we run all the systems necessary to keep a retailer going and are able to do that in a single unified system. So all your data is kept in one single place, you have real-time visibility across everything. A NetSuite is as natively omnichannel without having to worry about integrations or having multiple systems or disparate systems.
It’s very difficult to create a unified and consistent, let alone authentic, shopping experience if I'm always buying yet one more tool in my toolbox to try to incense or to, you know, drive the consumer to a particular channel. But at the end of the day, consumers don't care about channels, they don't even care about the word omnichannel or even know what it is, they just want a consistent and unified shopping experience.
Well, it costs even more money if each of these channels and each of these systems are some other technology or some other system because you're kind of always having to pass data back and forth or duplicate data or, you know, one system supports this but another one doesn't. So having a single unified view of that that allows our retailers to offer up a solid foundation of items inventory order and customer across all consumer touch points and, you know, leverage our technology for those touch points, the value prop that I can best clear and summarize that is, you let NetSuite worry about the technology, you let NetSuite worry about those systems, and then you do what you do best, which is either, make great clothes, or build a great product or, buy and sell the products that you do. You run your business and you let us take care of the software.
Bob: That sounds pretty good. So, you know, the title of my podcast, "Tell me something good about retail," so...
Matt: Yes, you know, honestly, the way I look at is what's more relatable and more exciting than retail? I mean absolutely everything in the world needs to be bought and sold. And so, while your retail is as old as time and can ultimately be some sometimes the most frustrating, as far as adopting new technologies, it is always evolving. And the retail landscape today is very different than it was 3 to 5 years ago, it's incredibly different than it was a decade ago, and doesn't look anything like it used to 20, 25 years ago.
I can't think of anything more relatable and more exciting than retail. And today is the most exciting time for retail because there is just such great technology out there to help create an amazing consumer experience. You just have to or need help in making sure you're using it in the right way.
Bob: Well, that's right. And like you said, it starts with the customer. Without that, without engaged employees to be able to be brand ambassadors, then ultimately, you're probably shooting yourself in the foot because you might have shiny objects but when customers don't feel they matter, they pretty much rail on you on social media or they end up saying, "I'm going to just stay online."
And I think that's the challenge that everyone who's listening to it needs to take seriously because quite simply, I don't have to make a special stop after work or leave my house for any particular reason. But if I want to, I dang well better have your brand tattooed to my butt, so when I sit down and get in my car I know, oh, that's my favorite place. That's right, that's where I'm going. So Matt, tell me how can they find out more about you?
Bob: Excellent. I will put those links in the transcription on the site. And again, I thank you for being with us today, Matt.