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22:37

What’s Next in Frontline Retail? with Bob Phibbs – The Retail Doctor

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Episode overview:

We’re all experiencing the same storm, but we’re doing it in different boats. This may be the best metaphor for explaining the retail experience over the past 12 months. US retail sales in November 2020 were up 7.1% year-over-year. However, while grocery was up 11%, apparel was down 27%.

Retail clearly isn’t going back to the “normal” we knew before 2020. So what will it take for a retailer to stand out in 2021 and beyond? Will brick-and-mortar stores survive this disruption, or will customers be pushed to more digital shopping experiences? What role will frontline employees play in executing the next generation of retail strategy?

JD makes an appointment with The Retail Doctor, Bob Phibbs, to find out what comes next for frontline retail. Bob is the world’s foremost expert on brick-and-mortar retail. He’s an internationally recognized business strategist, customer service expert, sales coach, marketing mentor, author of three books, and motivational business speaker. Bob knows what it takes to rock in retail because he’s spent 30 years in the trenches of retail ups and downs. He’s been a corporate officer, franchisor, and entrepreneur who fought his way to the top.

Hear how leaders at O’Reilly Auto Parts and rue21 are preparing their frontline teams for what comes next in retail during Axonify’s Big Ideas Session at the NRF Big Show on January 21, 2021.

The 80 Percent is brought to you by Axonify. To learn how you can provide communication and training to your frontline workforce that actually works, visit axonify.com. If you have a frontline story you’d like us to explore on a future episode, let us know at podcast@axonify.com

Join the #FrontlineForward effort by visiting axonify.com/frontlineforward to access free training content, download the 2020 State of Frontline Employee Training Report and subscribe for the updates.

About the Guest(s)

Bob Phibbs Headshot
Bob Phibbs

Bob Phibbs, the Retail Doctor®, has helped thousands of businesses in manufacturing, hospitality, service, restaurant, and retail since 1994.  His clients have ranged from multi-national luxury brands to small businesses. With over 30 years of experience beginning in the trenches and extending to senior management positions, Phibbs has been a corporate officer, franchisor and entrepreneur. His speaking presentations are designed to provide practical information in a fun and re-memorable format. His newest product is SalesRX.com, his online virtual sales training. Follow him on Twitter @theRetailDoctor.

About the Host(s)

JD Dillon, Chief Learning Architect

JD is one of the most prolific authors and speakers in workplace learning today. His practical approach integrates science, technology, storytelling and pure common sense to enable employees, improve performance and drive business results. For 20 years, JD has executed strategies for global organizations, including The Walt Disney Company.

Episode Transcript

JD Dillon:

On this episode, we explore the role frontline employees will play in the rapidly changing retail landscape. We’re joined by Bob Phibbs, the retail doctor, who shares his insights on what comes next in the (not so distant) future of retail. That’s coming up next on the 80%.

Speaker 2:

When you give your frontline retail associates the tools they need to succeed, your business succeeds too Axonify is hosting a “big idea’s” session at the National Retail Federation’s big show on Thursday, January 21st. Hear from leaders at O’Reilly auto parts and Rue 21 who have discovered that the key to unlocking your competitive advantage is your frontline team. Learn how they are preparing their frontline associates for what comes next in retail. Click the link in the show notes or search for Axonify in the NRF agenda for more information. Together, we will move the frontline forward.

JD Dillon:

How will traditional retailers survive in a digital world? This question has been debated for almost 20 years now. The prognosis already didn’t look great in 2019 as a record 9,300 stores closed their doors in the U.S. Then shopping fundamentally changed in 2020. Essential retailers like grocery and hardware stores recorded record sales last year. E-commerce grew 45% in Q2 alone, but other retail segments, including apparel and department stores were hit hard by lockdowns and saw sales decline as much as 30%. What does 2021 have in store for retailers? What can they do to survive this continued disruption? And what role will the frontline play in the not so distant future of retail? There’s only one person you can call for this kind of diagnosis. The retail doctor.

Bob Phibbs:

You either see opportunity in the chaos, or you just become part of it.

JD Dillon:

Bob Phibbs is the world’s leading expert on brick and mortar retail. He’s an internationally recognized business strategist, customer service, expert sales, coach, marketing, mentor, author, and speaker, whose insights have been featured by Entrepreneur, The New York Times, and The Wall Street Journal.

Bob Phibbs:

But it still comes down to… Understanding that what people want to do is they want to feel something before they want to buy something.

JD Dillon:

Bob knows what it takes to rock and retail because he spent 30 years in the trenches of retail’s ups and downs. In 2018, he was named one of retail’s top influencers.

Bob Phibbs:

With an untrained workforce, we do what we can do to hold them accountable, which is simply task management. I am nothing more than a robot, and if that’s what it feels like, then you really have to look at why do we have people working in the retail store?

JD Dillon:

Don’t worry about your insurance because we’ve got a referral for our consult with Bob Phibbs: the retail guy.

Bob Phibbs:

Okay, let’s do it.

JD Dillon:

Let’s start with some background. Somehow I get the feeling that retail doctor isn’t a formal medical credential?

Bob Phibbs:

I was going to be a teacher. So I kind of had that in my head growing up, but I was really a very introspective little guy and music became my voice and I found choirs and I learned how to conduct. So then was like, I guess I’ll be the music teacher. And then I went into student teaching and 30 high school boys trying to play stairway to heaven on untuned guitars is like… There’s not enough GIN on this PLANET for me to have this job! So my part-time job, I had put myself through college selling shoes and footwear, became my career. And I took a little group of cowboy stores in the eighties, in Los Angeles, from five locations to… I think when I left, it was 55. It was actually a great time, great time to be in retail. I got the highest increase of sales, South Coast Plaza: number one mall in the world.

JD Dillon:

Bob’s career path took a leap forward when he expressed the same front-line forward opinion that many of our previous guests have shared: that employees come first before the customer.

Bob Phibbs:

At one point, I met in a meeting, then all the employees were there and the owner says “what’s a company’s greatest asset?” and I said, “Oh, it’s employees”. And he’s like “WRONG” and I’m like “wrong?”. And so he goes around the room and no one has the answer. And he finally comes back, its customers thinking like, “of course I was so smart”. So I went down to his office afterwards and I said “You know, we built this company based on our employees because they’re the ones that have the skills to engage a stranger, they’re the ones that I’ve gone through and taught how to build rapport, and to sell the merchandise and customers can go anywhere and they’re not loyal… I’m out in two weeks… and I quit.”

JD Dillon:

It’s this combination of practical experience that gives Bob a unique perspective on the prevailing nature of frontline retail, specifically how great retailers can take advantage of the opportunities emerging within this disruptive time.

Bob Phibbs:

When we come out of this; and I know a lot of people listening are still going to be, some being locked down, and this… It’s scary, but make no mistake, the vaccine being rolled out as a huge change for all of us and we are fully expecting that when people can get out, they’re going to go out and droves. The winners have said, okay, well we’re looking six months out. How are we going to get ready for that? And I think the losers are still caught in masks and sanitization and it’s duck and cover and let’s just hold on and see if we can do it. And so you either see opportunity in the chaos or you just become part of it.

JD Dillon:

The future of retail is already playing out in different parts of the world. Retailers must recognize the larger role they play within their communities. So they can be prepared as people return to public spaces in force.

Bob Phibbs:

I’m just looking at what’s going on in New Zealand, JD, right now. The New Zealand people came out in droves to restaurants and retail. I have to believe that’s the same phenomenon here. What we want to look at is what is bringing people to want to come to that place? What do large numbers of people do when they come out of this? And I think we have to go through and say: if we don’t do that, what happens to a community in general? Right? Because retail provides those gossamer strands between people who don’t know each other for courtesy, consideration, and empathy. If we don’t have that, I think we just devolve into a nation of angry people being played by algorithms on social media and other places, which let’s face it, there’s a certain amount of truth to that right now, but there’s no buffer. There’s no seeing another person and understanding what it’s like and know having somebody treat you nicely, we are in that world.

Bob Phibbs:

And the only way to be more civil and to be more caring and to have that hope and gratitude is really to go out and get challenged, to realize that you want to dress better when you go out and see somebody and you want to feel something when you do it. And then you went to award people that do that. So I absolutely believe we could change the world by the people working in shopping and retail, but it still comes down to understanding that what people want to do is they want to feel something before they want to buy something.

JD Dillon:

This includes understanding how brick and mortar retail can work alongside e-commerce as people begin to have more choices with regards to how they shop.

Bob Phibbs:

I go into a store to shop, to discover, to see what’s new. I go online to buy. So I need my HP 54 printer cartridge. I’m probably just going to order that online. I don’t have to go into staples and say, excuse me, do you have printer cartridge? Oh, they’re over here, let me unlock them (cause they’re $35, it might get stolen), and take it out and take me to the register, and anything else? No? I probably don’t need that.

JD Dillon:

Preparing for what comes next will require traditional retailers to look past some long-held traditions. Especially the practices that were previously considered core differentiators that just don’t work anymore in the new marketplace.

Bob Phibbs:

We can’t own product knowledge anymore. Nowadays you’d want to start it online. You would have looked at reviews. You would have found all this stuff out, right? And then you would have gone to the store. Maybe if you’re out and around, you would have bought it. But in the old days, in the nineties, the only place to get that information was the store. So all the store said is: it’s all about product knowledge and every marketing director since that is that it’s all about product knowledge. Well, the reality is this consumer has more knowledge. And so the employees are pretty much left with “can I help you find something?” Which is a throwback to, what’s been bad about retail since, I don’t know, cave people. If we don’t fix that, if we don’t find a way to say it matters what somebody feels when they shop with us. I think brick and mortar loses its advantage.

JD Dillon:

And over-reliance on product. Knowledge can also lead to a negative customer sentiment when it’s not combined with a real understanding of what customers want from your brand experience.

Bob Phibbs:

Most of us have assumed that confidence came from product knowledge. The problem with that is you can get a real hubris around that. And if you know what I’m talking about, you’ve gone into the photography and you’re buying a camera and the guy just makes you feel like crap. And unfortunately, it can be really off-putting. So instead of giving confidence by product knowledge, JD, I can win anybody over into a conversation. Somebody being passionate about looking at what is the customer experience matters to just say, Oh, we have a net promoter score of X. I think misses the big deal because the people that walk out empty handed is all I care about. If you think what it takes for me to go through and leave my house the night before, I’m half watching game of Thrones, I’m on an iPad, I’m searching stuff, oh, I’ve got to that store. I go down, put on the mask and I roll the dice that I’m going to feel better when I walk out of here with this product that I do walking in. If you respect that, then you’re not willing to just say, well, it doesn’t matter.

JD Dillon:

Brand experience that can act as your primary differentiator, you first have to prioritize the retail associate experience.

Bob Phibbs:

I’ve worked with retailers who essentially don’t want even learn the name of their employees because they’re like, well, they go through them so quick. If your employees are looked at as disposable, if you aren’t going to give them training, what they’re going to default to is selling what’s cheapest. And why is that important? Because right now margin is everything. If you’re gonna have lower traffic, you gotta make it up some way, but they’re afraid that they’re gonna lose their job or get sick or your store is going to close. So, what they’re going to sell is when you’re having your half off sale, they’re going to say, Oh well buy this and the problem with is that the reason you have that employee is to sell it when it’s full price, not when it’s half off. With an untrained workforce, and we do what we can do to hold them accountable, which is simply task management. “I need you to move those from here to there. After that, I need you to pick these five orders from there. I need you to move into shipping” and now you’ve pretty much just turned off JD’s mind because he feels like “I’m a drone. I am nothing more than a robot”. And if that’s what it feels like, then you really have to look at why do we have people working in the retail store? Because the only reason they’re there is to make somebody feel that they matter because people who feel they matter buy more.

JD Dillon:

One of the best ways to show your associates that you trust and respect them is to invest in their development.

Bob Phibbs:

Training. Doesn’t happen like checking a box. “We train” not “we trained”. That’s the way I kind of say it. It’s not a thing to get through. It’s something that really makes a difference and gives you that competitive advantage.

JD Dillon:

Modern retail training should focus on the human skills associates will need as they engage customers in new ways and attempt to further differentiate your brand, from the competition.

Bob Phibbs:

For example, I know that there are apps that you could use right now that when somebody has a question about something and I can tap on an app and I can say, here are the three big benefits, but, if you can’t even get in the conversation to begin with, you’re going to need training about how do I build rapport and get someone who’s weary, right? Cause we’re all going to be learning our social skills again. We haven’t been using them. So how are you going to get them to drop their guard and be willing to browse in your store? That’s going to have to be trained because your own employees have been afraid that they’re going to be furloughed or they might catch something. They’re going to have to mentally make a shift as well to me opening my arms wide and saying “Hey! We’re glad you’re here”. I always think that training is the first place I would start.

Bob Phibbs:

And then number two would say, what tools do they need to do better? I think the promise of an endless aisle that I can go in and yeah, you can order anything from us on a kiosk. But if it’s just the same as I would have at my office, whether it’s on a zoom call or a monitor or something, what’s the unique reason why the hell am I going to your store if all I’m going to have is that same experience? I still say the gold standard is still your people. It’s making sure that you engage, empower, and then hold them accountable. It’s about a branded experience, and unless we hold it to that, I think you are really subject to having somebody clean your clock whether they’re going to do it by online, are they going to do it by opening up by you, or any number of things. Unless you have a brand that experience, I think there’s going to be trouble waiting for you as we come out of this.

JD Dillon:

Human skills may be the priority, but associates still have to know your products. However, this must evolve from basic trivial knowledge to a deeper understanding of how to sell products in ways that maximize revenue and differentiate your in-store experience from your e-commerce offering.

Bob Phibbs:

Think about you, go to the hardware store and you go into the display of hoses and they start at $7.97 for a special buy this week and they go all the way up to 60 bucks. Are you going to buy the $60 one? No, of course not. The difference though, is in a store. If somebody just helped you and just ask a question, so, oh, you know… what kind of holes you’re looking for? Well, I water my garden and the last one I have broke every year they break and they’re just so heavy I’ll just go with this cheaper one. Plenty of you just said, but you know, the reason why they break is because they get hot and it builds up steam and they break really easily. You know, this one, that’s 60 ways. Just what it weighs right now. It’s as light as a feather.

Bob Phibbs:

And when you add the water to it, it’s half as fatigue to water your garden with, but you, at least looking at it. Probably can a website do that. Not so easily because you’re clicking on a hose. And now you see the hose seven 97, 12, 1860 (Dimensions). And here’s the problem with all of that: the guy (the gal) who came up with the $60 hose is one who should be rewarded for the future ,but instead, because we don’t do that, we have the $7.97 hose that we’re selling the crap out of them because somebody says, well, you know, these turn really well, but is it really customer focused? So I would encourage you to be thinking about what has to happen. If you’re just customer focused, you can build on that product knowledge because you talk to somebody for just half a minute. Could you boost your sales and would people like your business better? I think so.

JD Dillon:

This level of knowledge and skill will fundamentally shift the value associates provide to your customers, your business, and your community.

Bob Phibbs:

There’s no advisor role in retail for most retailers anymore. There’s a “I can ring you up over my pad. Anything else?” “Get our loyalty card or self service checkout” but I just don’t think we’re going to go out of our houses for that. And as a community, as a country, we need to be able to do that, to get people to do that because that’s what drives commerce. You know, one in four jobs pegs directly to brick and mortar retail. So, when people are like “Oh, malls are going, who cares?” Well, you better care because that sales tax fixes your roads and pays for your schools and a million other things. So it’s, everybody’s problem to try to fix this. Let’s not forget online is just not that profitable. There’s predicting an unbelievable amount of returns. This holiday season up to 40%, we’ve developed this whole renting idea when you buy something instead of buying it. But if I go through the purchase, if I go through and I find this and I discover it, and someone encourages me whether to take it on, to pick it up, to try it on, and explain just a little bit; I don’t want a 20 minute conversation, but if you just give me 30 seconds and say one thing about it, I’ll remember the story of how I bought it. Not just the product.

JD Dillon:

By empowering your associates with the right blend of human skills and product knowledge. You can help them uncover upselling and cross-selling opportunities because they’ll be tackling the entire job, not just the initial product the customer was looking.

Bob Phibbs:

It’s really the demonstrating, asking the question “can I help you find something in a hardware store” versus “what’s your project today”. In one, you have to tell me the specific item and now I take you to aisle 14 on the bottom and I show you there. But when they say what’s your project day, you open a wealth of information. I’m building a deck. I ran out of nails. Oh, deck (ding, ding, ding). They’ve told me everything I need. “So you have the stain for it, right? Are you going to light it? Tell me about your plans?” The guy’s happy he’s making his deck, why wouldn’t he talk to you? So many people look down on retail like “Oh, what a nothing job”. It is a skill. And I think when you look at most CEOs, they trace their origins back to having worked in retail, where they learned it’s about somebody else first, not you, but if we don’t train those items, how do I confidently be able to say, what’s your project today?

Bob Phibbs:

But we don’t do that. We don’t train that young man and we wonder why people continue to ridicule a job in retail. You know, I can tell you before, COVID I know plenty of people making over a hundred thousand dollars a year working in retail because they’re bonuses or commission or incentivized. Not just cars, they understand it’s clientelling, it’s showing somebody respect, it’s staying in touch. If you just want to sell virtually without those skills, I think you’re really limited kind of that same thing. Like, Oh, “we have these two for one” and “for 20% off this coupon”. I just don’t think that’s the way forward for most of your listeners.

JD Dillon:

It’s important to remember that you can’t truly motivate and empower your associates from the corporate office. You need the people who are right there alongside in the store every day to bring these concepts to life. You need your frontline managers to show them just how much they matter in their everyday interactions.

Bob Phibbs:

So I was checking out the grocery and I had some blueberries and something and I’m going through the line. And the thing won’t scan, the woman calls her, her manager and the manager comes over and she goes “hi, Jane, how’s it going today?” She goes, Oh, it’s going well, Barbara and I can’t get the blueberries to scan. I’ve tried it this and this way. And she goes “well, may I give it a shot? And she goes “well, sure”. And so Barb comes over and she goes, you know, what I have to do is this and this and then she does it and it scans it. And she goes “that did the trick, thanks so much for calling me over” a wishes a great day to me. And to her. That’s a hell of a culture to have that happen – Just respect and information. But in so many cases, what would a cashier have ended up with? The manager comes over “what’s wrong” “It won’t scan” “Give it to me” *scans (ding) *leaves, right? Then we wonder why people quit and people don’t like working in your store. So I think what Apple has, and I think Starbucks has, and Lulu lemon has, and container store has, and I can go on and on. What they all have is this commitment to empower their employees and to make them feel like they matter first. From that, they give it to their customers.

JD Dillon:

The frontline manager role has been undervalued for a very long time. To recognize the importance of the role they play within your organization, they need the opportunity to stretch and grow.

Bob Phibbs:

I think that’s the other challenge that we have is that there is no path for smart people to move up the ladder anymore. We are looking at a lot of managers that are disposable, and we aren’t valuing what they know and, and have, or we are challenging them to use their gray matter and connect dots and synopses. We have made them task managers. “This came down from corporate” “This has to be done”. We’ve dumbed down the experience to say “well, if we don’t do it, they can’t”. I think you’ve crippled the culture as well. Hire smart people. They’re out there, reward them and encourage them, but you’re going to have to train them. It’s not just shadow them for a week, you really have to have a program. I started in Broadway department store in Los Angeles in 1978. And you had two weeks before you ever got on the floor. I mean, think about what a luxury that was… two full weeks of 20 hours each week that you went through and role-played and did different things.

JD Dillon:

Retail isn’t going back to normal. Many of the changes that have been adopted since March, 2020 are here to stay. Retailers must seize the opportunity to re-imagine their practices and invent their own path forward rather than looking for someone else to point the way for them.

Bob Phibbs:

I think the challenge for many retailers is they have been working with fewer people since March or, you know, it depends when they opened up etc. We cut past the fat and the meat and into the very bone and soul of the organization. I think most people going to have to be comfortable hiring people again and realizing this is a great time for me to look at opening a new business. I’m not reopening my old business. I’m actually get a chance to become somebody different. And maybe this is the way we did it, but maybe we can do it a different way now. And that creativity is what I’m tapping on in 2021. Retailers are going to have to realize no one is betting on you. It’s going to be up to you to be able to block out the noise and just come up with your four walls.

Bob Phibbs:

The other thing that we’re all looking to is how are we going to get to one shopping basket that will follow us? Which means I go into a store: there’s my one shopping, I go online: It’s the same shopping basket, I go to an app: It’s still the same. I don’t need to keep logging into all this. The logistics around all of that to connect. Those is something that people are going to be looking at in 2021 because it’s less friction for the customer and then just realizing that most of your competitors aren’t going to do squat to do anything different. If you have an attitude of being grateful for what you’ve got, being grateful that today, somebody walked in the door to give you the opportunity for their money, I think you’re going to be fine.

JD Dillon:

Thanks to Bob Phibbs for sharing his insights on how retailers can leverage their frontline teams to build their brand experience in 2021. You can learn more about the retail doctor in the show notes. If you haven’t already, be sure to subscribe to the 80% on your favorite podcast app, you can also find all of our episodes online at axonify.com/podcast. Thanks for joining me for this story. I hope you were able to take away a few practical insights you can use to improve the way you support your frontline team. And I hope you’ll join me again for another story about how we can help frontline employees do their best work every day and make a difference in their organizations and communities. Remember that together, we can move the frontline forward.

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