Retail Podcast 609: Phil Thorne What People Do In Stores Matters

Phil Thorne, Quorso

Bob Phibbs interviewed Phil Thorne, MD North America and part of the founding team at Quorso, about what a consumer is looking for from retailers, how retailers can hold on to employees, and more on this episode of Tell Me Something Good About Retail. 

 

 

Bob: Today, I got the opportunity to talk with Phil Thorne, CFO, and part of the founding team at Quorso. Welcome, Phil.

Phil: Bob, great to be here.

Bob: So what is Quorso and what does it have to do with retail?

Phil: So, Bob, we’re one of these tech vendors in the retail space. And unlike most tech vendors who are probably focused on the e-commerce side of things or computer vision, those types of fancy things, we’re focused on the plain old simple brick and mortar store, and in particular teams within those stores. So, Quorso is really about two things. The first thing it’s about is for big complex retailers taking all the data tasks that they’re sending to their stores and really simplifying it into personalized prioritized actions. But the second thing, which is just as important, is trying to engage those teams to take the right action, so like guiding them through the right actions that they can take, but also really importantly, tracking, measuring the impact of that, so people know what is and isn’t working within their store and you can rapidly scale success.

Bob: So when you were in fifth grade there in the UK, was this what you wanted to do all your life and you found your passion, or was there a story behind how you came up with this?

Phil: It’s slightly different in the UK. We don’t get fifth grades or any of those things. But I suppose like everyone, or almost everyone, I think about 70% of people, yes, my first job was in retail, but I’ve been one of those people who’s actually covered retail more from the outside looking at. A bit of background of how I got into this, so I spent the majority of my career before Quorso really focused on what I would call a strategy in corporate finance around retail. And the interesting things about that is we would go into a retailer and we would spend three to six months with them, really trying to understand their business, understand their strategy, understand their financials, and package this all together, either to raise some money, or to do some M&A, or something like that.

And what was so interesting was at the end of those types of engagements, I’d come to the end of it and I’d have someone from the operations team or someone from the strategy team turn around to me and say, “Thank you so much. We’ve learned so much about our business by doing this.” And it created this ongoing lightbulb for me, which is, “Hang on, how am I doing this type of activity? Are you learning about your business through doing that?” There’s a big disconnect between the center of spending all their time trying to gather information, do company results and all the rest of it, and not focused on really understanding what’s happening in the business. And at the same time, it’s serendipity, isn’t it, how you come across these things.

But at the same time, Julian and Dan, who founded Quorso and brought me on as the founding team, were coming to exactly the same realization in McKinsey that there’s all this information, all these things that they were creating, but really what matters is the actions that people are taking in the business to actually drive it forward, and anything retail, that’s the people at the front line. And there was this huge disconnect between the center and the field, and the disconnect was not just in data, but recording those actions as well, which is why Quorso was founded and why we’ve been doing what we’ve been doing ever since.

Bob: That’s right. And so tell me, what do you think is your prescription for retailers, particularly they’re on the high street, that are struggling, what do you think are a few things that several of them could do, but don’t have that?

Phil: Well, for people in the high street now, obviously, I cover bigger retailers but I think it’s exactly the same things, and many things, Bob, actually, that you post about every single day, which is...

Bob: Imagine that.

Phil: Imagine that. Retail is not that complex of a business at its very heart. It’s about people and it’s about merchandise. And it’s about engaging not just the right products in front of the people, but the people within your stores to be doing the right things. And this is the thing that I think we’ve learnt so much when we’ve been about Quorso . We can do as fancy analytics as we want, it’s what people do in stores that matters the most. And whether that’s improving the merchandising, whether that’s upskilling teams, whether that’s by training people and salespeople to do the right things, that’s the thing that we see massively driving people’s businesses.

But the problem is why are people not engaging people to drive those businesses? And I think it’s because retailers have got obsessed with the prescriptive in some respects. They got obsessed with looking at the latest report or sending out the latest task. And even people in high streets are probably thinking to themselves, “How do I do these 100 tasks to get to this output?” The most important thing is not just to do the tasks, but the next week to come back and say, “What was the impact of those things?” And that’s, I think, one of the missing pieces that we see a lot in the engagements around retail is people are always being told, “Do more, do more, do more.” They’re never taking a step back and saying, “This is what I’ve done and this is what drove the impact of it.”

Bob: Well, don’t you think that partly, Phil, comes from people not holding anybody accountable, and we have so gotten caught on tasks, that’s what always gets me. I was in a furniture store not that long ago, and this young woman had a clipboard, and I was looking at something, and she goes, “Excuse me,” as she had to read the tag to write down on her clipboard. And I just sat there like, “Wow, so someone is managing this process and the directive has been, ‘You need to go through and make sure whatever this accountability is, and that’s how you’re adding value to the system. Meanwhile, no one is looking at you just pushed a customer out of the way who was looking to buy this item.’”

And thanks for your general good regard of my posts on LinkedIn. I think the danger of so much retail is it is continuing to devolve into it’s just a transaction. And the more that it’s just a transaction and not, “Oh, this is lifetime of a customer,” we don’t even talk about that. You don’t even hear that anymore. It’s a matter of, “How much can we cut back on our employees? Oh, isn’t it great that we have a labor shortage?” Now, we can say, “Oh, sorry, we’re making... Nobody, wants to work. Oops, we’re bad.” And we’ll do curbside, and we’ll do self-service checkouts, but really not realizing those are all the things that makes a customer numb to going to your store. Don’t you think?

Phil: No, I couldn’t agree with you more. This is one of the many perspectives that we put here. We actually talk about this in a difference between two things. There’s a difference between compliance, which effectively everyone in retail is being asked to do at the moment, versus engagement. And I think focusing on something like engagement and encompasses of that word is so much more important. What does engagement mean? Engagement means engaging your employees. How do you engage your employees? You engage your employees by helping them master. Everyone wants to master being better at their job, even people in retail. They’re not just they’re transactionally, they do want to get better at their job.

I’ve got an anecdote I’ll give you on the second. You’ve got to give them purpose around the customer as well, but engaged employees. And Sam Walton said this, and he was one of the best people in saying, “No, the voice of the associates is the voice of how your customer will treat you.” And every retailer needs to realize that is this is the front mind effectively in all sorts of respects between what you are doing and the brands that you’re giving out to your customers starts in the store employees and then goes to your customers afterwards. Everything else around that is a little bit peripheral. Those people in those stores are what is driving your business. And they do just an anecdotal, the engagement side, but just because you mentioned the compliance checklist. One of the things I love seeing is the type of things we see being written in Quorso and what people have done about it and then the impact that they’ve seen of it.

So I’m talking about one from yesterday, but there was a home-improvement retailer who the guy saw he needed to do something in his paint display. Now, if you thought about this on how originally retailers will do is like compliance checklist, check your pocket display on paint, make sure that it’s fine, or something along those lines, refill it. And most people probably put a half-hearted job into refilling it because, “What’s the point? I can check off on my checklist that I’ve just refilled this merchandise.” But this guy stayed after work to make sure that his merchandising of this paint looked great. So it came in all the right levels, all the right colors, and was a really great visual display because he thought, “I’m going to see whether or not this can actually have an impact. Two weeks later, we’re showing him he’s tripled his sales, and he’s become one of the best sellers of paint in the business around it. Those types of things are important. I’m not saying that just in the general nature of our software, but telling people what they’ve done, what impact that’s had is so important for motivation around these things well and then you just checked off a checklist task.

Bob: Well, and to your point, just the opposite, I never showed you zero reward. I never look at, “How did we sell three times more paint? I don’t know, I guess everybody wanted more paint,” right? Instead of going, “Holy crap, somebody took an action on their own and let us know.” I think that’s pretty groundbreaking. We just heard the report, this is being recorded in the middle of November. And the US, they just talked about a record number of people have quit in their jobs in October. And people love to say this, but I think we are also in the age of the MVP, and is the minimum viable person. We have so demoralized the crew. We have so gone through and slapped on some acronym training magic. Be you or whatever it’s gonna be, we’re from people who don’t understand engagement, who aren’t customers, who’ve never sold on the floor that we have made this, “How do I get through the day without being fired or having a customer yell at me?” And I don’t think that’s the fun place to work. You see it nicely, Phil, but you also see the people where it does work, right?

Phil: Yes, and I think this is the reason why people are actually having to wake up to this now. When you’ve got difficult labor markets, when you’re noticing the trends that are changing, there are certain things where the writing is just on the wall. You have to do more rounds, store colleague engagement, because frankly, otherwise, you’re either not going to have employees, but also think about it this way. This is the best source of actually improving ROI within your business, not the fancy tech, or not the computer vision and things like that. These are people that you have on the ground and the impact that they can have on your business is very material.

And I just talked about someone who’s taken an action three times in sales. Those are simple things that you can do with people who are already there. The thing that I find so bizarre about it is that retail is a business that understands people, that understands consumers like no actor. And that is the whole nature of its job is to understand people. But fundamentally, it understands people, it understands their motivations, their engagement, and all the rest of it in terms of shopping decisions. The people we’re selling it, the people in that business are people too. And it’s got to do as much to understand them as it’s doing to understand the people that it’s selling to as well.

Bob: Well, I think that’s why you’re on my podcast because we are a kindred spirits, and I don’t think we’re all going to become second life and wanting to be metaverse, but it sure is eaten up a lot of pixels. I don’t think that curbside is here to stay and everybody wants it. I think some people do. I think there are people who have the luxury of being able to say, “We all want to work remotely because we don’t want to go in anyway,” but a lot of the world doesn’t have that luxury and does want to go into a restaurant, or into a retail store. And they want to feel something different than I would if I was scrolling through my Instagram feed, and that rats to the cheese algorithm that social media is now being targeted and how awful it is, is the very thing that made all of us addicted to it. But at one time, we were addicted to that one coffee house of ours, or that one store you went to get your kids toys. And are we on a cusp of that again do you think? Do you think consumers are coming out of a pandemic, are looking for that kind of experience, or is it really going to devolve into a click and collect world?

Phil: No. I think I can tell it anecdotally, and I think we can see it a little bit in the data as well, which is, anecdotally, we’re having this conversation, but the majority of people I speak to enjoy going somewhere. They enjoy the social interaction of going shopping or going to a restaurant. I can talk for myself, I’ve got that interaction. I love going to my local fishmonger, I like talking to him about the types of things that he’s brought in, I like talking to him about the types of things that I can cook with it. I love speaking to my local shops and my larger shops cashiers, seeing how their day is. It’s a fundamental social interaction, which is what we’re all about.

And I think the challenge, as I would put it, is that retailers, or all of us, in general, just look for that shiny new thing. We forget about the main thing. I think as much as we can say about Jeff Bezos in different ways, the one thing he said, which I think is so crucially important is lots of people ask, “What’s going to happen over the next 10 years?” That’s a fool’s errand to start predicting what’s going to happen in the next 10 years. The more important question is what’s going to stay the same. And I think we’ve seen enough of retail through generations to know convenience and experience are two things that all shoppers are going to want.

We’ve seen enough in this pandemic. You’re noticing even if you’re agreeing in BOPIS curbside mall online delivery, in a biggest wave of e-commerce that we’ve seen, the biggest experiments that you could have seen for digital, 90% plus of transactions still hits the store. They still were delivered by a store. They were still delivered by human beings and people within those stores. So the store is still going to remain at the very center of retail. And because of that, people are still going to be at the center of retail. Retail employees, the second largest number of people in the US, it is one of the most crucial areas of people, in general, in this society in business. And it’s about time that we started focusing on them properly because for all these reasons that we’ve mentioned, they are consumers themselves, but they are what drive our business.

Bob: No, that’s exactly right. And think I was talking to a reporter the other day, and they were talking about, “What is the future going to be?” And I said, “There’s probably going to be less stores, just physically, because we’re overmalled in America and overstored.” However, I think what’s going to happen is the people that work in retail, they’re going to be elevated from, “Anybody can do this faceless, no one, to much more of a ambassador influencer, and yes, salesperson.” I think that this conceit, this hubris of saying, “We can just keep piling more tasks on people, and they will do it,” only goes so far because you can’t be both customer-centric and be an order picker. I’m sorry. If you’re going to be taking everything out of your stores to fulfill online, and now I’m telling you, “I know you used to work on the floor, but for an hour or two every day, you’re going to be picking orders,” you’re just shooting yourselves in the foot because the very people who could most engage your customers are the ones you’re tasking to a job where they don’t get to do that, right?

Phil: Yes. I suppose it’s no surprise to anyone to hear that. I think the latest statistic we saw in it was the amount of stuff that someone in a general grocery or general stores had to do has increased 30%. Now, they were already overworked. This is an industry where 90% of them say that they work longer hours than they’re scheduled to do so. And their amount of work has increased 30%. That’s undoable. And I suppose that comes to the nature of what do you ask the store to do? What technology do you give these people? What processes do you give these people? Because completely, as you say, the whole element of the direction that we’re going to, the area that you can probably get excited by technology, whatever technology that’s going to be, is that it can take work off the regular rote work off those store colleagues. And it should be focusing them on the things that matter most, educating their other employees, satisfying the customer, being these brand ambassadors as you were just mentioning.

And I think the area where you can get excited at the moment is for a long, long period of time, business type technologies have probably been mostly send you another spreadsheet, or send you more analytics, or get you to do another task, or get you to do more. And I think what we’re seeing, and it’s really navigated probably from the consumer side more than anything else, when you think about the latest app that you’ve picked up and you are onboarded onto it within seconds, the amount of things, in our daily lives, that improve because we can get online banking quicker, or we can get to a service on a taxi quicker, or something along those lines, imagine those types of things coming into a store where they can think, “Okay, I can get to replenishment quicker, I can get better inventory quicker because I don’t have to think about those things. I can think about the things that really add value,” and that should be the promise that you’re giving stores around the technology. There’s too much conversation about whether or not that technology replaces them. The best type of technology is going to augment them.

Bob: Well, I think about technology, I was at a shoe store the other day, and I asked if they had a certain size, and the young woman checked her iPad and goes, “No, we don’t.” And I was like, “Okay, well, I was in the shoe business, that’s how I put myself through college in my 20s, which was more than a few days ago,” and you would never have said that because you would have immediately said, “Well, okay, so I have this, I’ve got this and this. Fine.” And there’s some technology...we had ValuMetal on the show a couple of weeks ago, and they are able to actually show people, “Well, if this fits, then so do these, and it takes the guesswork out.”

But I said, nobody’s taught them that your goal is to make the damn sale. That’s what makes me scratch my head. It’s almost like we are embarrassed that people should come and buy from us. And I hear it in the trades. It’s like, “It doesn’t matter if anyone buys from us. They’ll buy it online.” As soon as I walk out that door, I’m anybody’s game. I can go to Amazon, I can go to Zappos, I could go to Gucci, fill in the blank.” How? The conceit that I had a good experience with Jane. And now, I leave the store, and I remember Jane, so I’m going to go online and I’m going to find that, I’m going to order it because Jane was...I think that’s a tall leap, isn’t it?

Phil: Right. It’s a shift in culture and it’s a shift in perspective, but there’s a perspective and a culture that retail has had in the past and retail can have again. If you look at 20, 30 years ago as Walmart was building itself, or as many retailers were building themselves in town and outside the town, even as you speak to people of that generation who went into stores, they have that type of experience. And there are employees coming into retail who want that type of experience. That’s why they’re leaving retail. They’re leaving retail because they don’t think they’re mastering elements of business. And people don’t come into a store or don’t come into a career and say, “You know what I want to be? I want to be a task checklist person. I just want to check off everything that I’m doing. I just want to make sure I replenish that shelf and it’s done.”

They want to come in, and they want to master their skills. They want to master their class, they want to be business people. And so what is there to lose from doing this? Yes, it’s a shift in perspective, yes, it’s about engaging people in the right way, but I do fundamentally think and I do think retail is waking up to this, and retail is saying, “This is the direction we have to go in,” because otherwise, to your point, there’s going to be less and less stores, there’s going to be less and less people going to them. Because if your experience in the store is no better than your experience of a delivery being sent to your door, you’re going to choose the latter rather than the former.

Bob: Absolutely. That’s what I say. If I make a trip to the store, it damn well better be worth my time. Well, we’re going to continue in just a minute, but first, a word about our sponsor CoreLogic. And we’re back. And before we continue, we love CoreLogic and our loyal listeners. So if you do me a favor and give us a five star rating after the episode, I’d sure appreciate it. So it says in your profile, Phil, “On the side, Phil frequently delivers renditions of his poetry and serenades us with a song on the rare occasion that the office falls quiet.” Did you pick this up when you were studying at Oxford or...I don’t know.

Phil: I will admit. I used to be a little bit of a choir boy when I was younger. You probably can take it from a little bit from the conversation. I have always been a data and analytics type person, hence the business that we create. But there’s also so much of life, which is about the social, and things like poetry, things like music are things that we have in every single different society and are part of us being human beings. I love not just the studying analysis side of things, but I love when a retailer writes great copy, or writes a great ads, or brings people in in that way because it’s realizing that there’s not just the science of business, there’s the art of business as well, there’s the art of convincing people what is important, what’s not important, the art of bringing people in. And a lot of that time that comes from language or comes from areas that people don’t necessarily directly think for business most of the time, but come from the arts, as I would call them.

Bob: Touches the senses, that’s it. Well, I’m a conductor. I got my degree in conducting and had my own choir and orchestra for an awful long time, so I totally get that. And I was always a creature of trying to figure out whatever I could do that would be new and interesting. So I didn’t really work in the tech side of it, but I remember one time they were talking about pheromones, the smell that you can wear in colognes and how it made people like you better. So one I remember for many months I wore this one cologne and I couldn’t quite tell, and then it was about colors and there was like, “Oh, hot pink is a color that makes people more, I don’t know, fungible or something.” And luckily, it was in for guys to wear that and I’d try all that. And we’re all trying to find that secret that lets people let their walls down to come in. And I think that happens in poetry, happens in music, and it also happens in retail, right?

Phil: Yes, absolutely. As I just said, people can look and try to adapt to these different tiny things that they want to do to try and improve themselves, try and be better than they were yesterday. And I think one of the things I also think is the elements of what we describe as the scientific method, which is observing the world around us, trying to make some sort of intervention in it and seeing whether or not it was successful or not is one of the most radically important things that has happened to human society is generated most of the progress we see today. And human beings just automatically do that. We automatically say, “I’m going to just make this little bit of a test, this little bit of a tweak, did it work or not?” And that’s what’s so important about the nature of how we work in business, how we work in retail, how we work elsewhere is, “What are the little tweaks that we’re doing every day? What are the small differences that they’re making?” Because as these small differences accumulate, they add up to very, very big numbers at the end of the day.

Bob: That’s the curiosity factor that makes a difference. So how’s the way you’ve thought about retail changed in the past few years? Is it markedly different than when you began or?

Phil: I would say if you’d asked me 15 years ago how I thought about retail, I think I would have thought about it very much in a way that I think many people in central teams probably think about retail, which is I change a number in a spreadsheet, and this will certainly happen, won’t it? And we’ve got this growth trajectory, this 5% growth will happened because I put it in the budget and because I put it in the spreadsheet. I think the big things that I and we have learned about retail is, I would say, two things. One, just how noisy and volatile big retailers can be under the surface and how much opportunity there is in reducing that noise, so to say. And if you could get even your...areas where people are performing at the bottom up to even where they are performing average, you could probably double the profitability of your business. But it’s about finding those and giving the right motivation around doing those things. And then the second thing just in terms of the whole conversation that we’ve been having is business is made by the actions of people on the frontline and what people do within the business, rather than what people say. And so everything that you can do to motivate those people to take the right actions, engage them in the right way, it’s going to have profit to your business.

Bob: I couldn’t agree more, my friend. Well, we are towards the end of our time together. You’ve been gracious to join me all the way across the pond. And now, the title of the podcast is “Tell Me Something Good About Retail.” So, this is your moment.

Phil: Tell me something good about retail?

Bob: Tell me something good about retail.

Phil: The great thing I would say about retail is that as the world is opening up, retail is going to be the social interaction that everyone has. And despite what anyone is saying about the metaverse, or online, or all these fancy new things that are doing, the heart of retail is still the brick and mortar store. It creates so much social enjoyment from people going shopping, it creates so much employment, it creates so much social good in the world. So people should invest in it and people should think about it properly.

Bob: I love that. Well, that’s a great place for us to end. Thanks for joining us today, Phil.

Phil: No worries. Thank you very much for having me, Bob.

 

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Key Links

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Quorso

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Phil Thorne

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