Wendy 00:09

Hello, everyone. I'm Wendy Liebmann, CEO and chief shopper at WSL Strategic Retail and this is Future Shop. This is where I talk to innovators disruptors and iconoclasts, about the future of retail.

Wendy 00:29

Today, the topic is how to create a modern customer experience at retail or should I say in WSL speak, a modern shopping experience. I mean, those of you who hang out with me here on a regular basis know that I am absolutely obsessed with the idea of how do we need to think about building a modern retail culture in this country, but actually, why not all around the world. And that's what we're going to talk about today. My guest is Justin Lafoe. He was most recently executive vice president of marketing and merchandising for Trader Joe's. And prior to that, when I met him, he worked for the Walt Disney Company for over 25 years starting as a small boy as a frontline cast member. I never asked him maybe he was dressed up as Mickey, I don't know you'll tell me that the minute Justin. And ultimately he was Senior Vice President of Merchandising and Retail, where he led the teams responsible for merchandising, retail commercial efforts, and everything from the Disney parks and resorts to the cruise lines to the stores to.com He was instrumental in transforming the physical retail flagship destinations around the world and Hong Kong and Shanghai and Tokyo and Disneyland in Paris. So an extraordinary career which continues, but who better to talk to about delivering a modern magical customer shopper experience than Chester? Well, welcome Justin. Future Shop.

Justin Lafoe 02:00

Hi, Wendy. It's so wonderful to see you. I'm absolutely obsessed with you. So it's great to be here with you today. I did start all those years ago and an interesting role at Disney, I was a doorman at a hotel. That was my first gig.

Wendy 02:13

I was thinking about the first time we met. And I think it was when I was asked to come down and make a speech at Disney in that auditorium. And I think it was around the 2008 recession. That's true. You know, this is the Disney Experience world, I got up there, I don't have the best voice in the world. And all of a sudden, I'm singing the Mickey Mouse Club song, I do not know where that came from.

Justin Lafoe 02:35

I think it was the mouse ears that we put on your head with your name on it that probably did that to you. So look out.

Wendy 02:41

I think about all the work we did together. And you know, the thinking about reimagining Downtown Disney and then the localization work around appealing to the Hispanic guests from Brazil or Mexico and all the flagship work. And Disney is clearly recognized as a company that understands building customer experience. So when you think about delivering a modern relevant, I'm gonna say customer experience at retail today. I mean, so much has changed. Well, digital COVID, all of that. How do we need to think about that? How do you think about it today?

Justin Lafoe 03:17

You know, first, I think you have to really get a common language and define what modern is in this context, because retail is changing so rapidly, like you mentioned, obviously, technology is a huge factor. And the thing that we spend the most time talking about, I think and how it's affecting retail. But I think even bigger than that is the major generational lifestyle shifts that are happening to the customer, the consumer. And that was all accelerated during COVID. The heart of this question is really the existential challenge that I think most retailers are facing, how to keep their products and experiences relevant. And to keep pace with technology and these ever changing lifestyles. And I think to deliver a modern retail experience, the retailer has to be an expert in technology. Again, that's almost a given. But even more so in their customer. And I think that's a little less than you taught me all those years ago. on the customer side of the equation. I think the most important thing to keep your eye on is these major trends that are affecting the generational shifts with millennials, Gen Z's alphas who are becoming the primary shoppers, and they're shopping with their values more than anything. So I think that values piece is going to come up a lot as we talk today. But I also think there's a big piece that gets lost in the shuffle. And that is the employee experience. And so when I think about the customer, I think even more so about the employee and what the employees buy in as in the culture and the experience of it and what we're doing to pay attention to that. So you have to have as much energy focused on creating that cultural foundation for your employees.

Wendy 04:51

So that's so interesting to me, because I think about we just took 20 of our nearest and dearest on one of our Retail Safari® to visit one of the retailers in the Midwest, in the retailer, Hy-Vee, their employees were so engaged, so happy to see you. And you felt like that notion of sort of coming home. And I was struck also because we recently in like an REI store where that whole experience of sort of being part of the coop and the community is so important, that notion of those constituencies of both consumer customer shopper, whatever we guessed, whatever you want to call them, and the people who serve them, is the other piece. It's so powerful. How do you see that today? When you think about what do we need to do to bring those two groups together, the consumer and the employee?

Justin Lafoe 05:48

Well, let me first come clean about something. I am a strong believer in the physical retail experience. So I think everything everything's got to center around the place that you're creating. And guess what, it's not digital. I spent most of my time at Disney creating these places where brand and storytelling set the stage for compelling and innovative products that were enhanced by exceptional customer service. And so I think that that's the heart of what retailers need to be concentrating on. And essence. This is where all those constituents are present, the customer, the employee, the brand coming alive, to tell a story and fulfill a need or a want. And I really believe firmly that the next generation of retailers, the ones that kind of survive this digital Amazon, post mall apocalypse, will be the ones who figure out how to deliver a truly immersive and authentic brand experience in a physical space, places that are enhanced by technology, but not overburdened by technology that doesn't really solve a shoppers problem. And I think we get really fixated on the latest buzzworthy technologies and stores. And that's all they are. They're bugs where they you know, they become a maintenance nightmare. And they're not solving shoppers problems. Where I think it goes wrong where retailers have kind of overreached is really this last decade of channel blurring, where brands are trying to reach everyone everywhere all the time, to drive that year over year growth. And in doing that they lose their way. They dilute the experience and thus the power of their brands and products by putting way too much emphasis on digital and direct to consumer.

Wendy 07:24

So that would say how do I as a retailer, or more importantly, as a brand, become more selective about where I sell my goods and services? Is that what you're saying?

Justin Lafoe 07:36

That's exactly what I'm saying. And it's resisting the temptation for that for driving those year over year comps based on more stores. You know, I had the fortune to work for two companies who are primarily physical retail destinations. Disney as we've been talking about, but also Trader Joe's who believes very strongly in the in store experience. And as you notice, still doesn't have Instacart, you know, as part of what they're doing, because the store, the place is where the magic happens. And I think the employees and their buy in makes that special for the customer experience.

Wendy 08:09

I think that was interesting. During the pandemic, I must say that for us personally, and our family, going to the grocery store, personally and going to the grocery store was where we got to talk to people where we got to spend time where, you know, it was that sort of I don't mean laying on of hands since we weren't doing it. But it was that personal engagement, and really did reinforce to me even more that digital is fine and efficient. And I get things off my list. And I can do a lot of homework and all of those things. But when I want to really think about that overarching experience where I walk away and say, Hmm, that's the place I want to go back to again and not just go riff off somewhere else. That's very compelling. To me, the thing that it also made me think about was, you know, the discussion, the back and forth a lot about the Disney Magic bands. And it was like, oh, no, too much technology. No, no, that's not us. But of course, it was a solution. And it facilitated the experience. So it worked. Right.

Justin Lafoe 09:11

Yeah. And that was about really understanding individuals and what their tastes and preferences are. And so while technology enabled it, it was at the heart of it, it was really solving a problem the guest had.

Wendy 09:21

Yeah, you know, the other thing that strikes me in all of this is that, you know, we've seen the last few years not to trash anybody but the sort of icons, retail icons of experience, who are now struggling, I think about Starbucks a lot because that notion of third place, and the place that you would go into it three o'clock in the afternoon, and you'd smell the great coffee and you'd hear the jazz or whatever, and you stand in line for three or four or five minutes and maybe sit on a couch or whatever. But it was a very immersive experience. And then it became very commoditized

Justin Lafoe 09:57

Yeah, I think unfortunately for Starbucks. That's pretty probably a great example, about what we're speaking to my take, having only experienced Starbucks as a customer, by the way, a very frequent customer is that COVID rapidly accelerated some of these things that were already going on to their stores in the background. You mentioned third place, right? Howard Schultz coined the phrase, and it really made sense to me, it was the place that you want it to be. And unfortunately, it feels like Starbucks is a barely recognizable version of itself today. And long gone are those days when you wanted to visit the store, spend hours talking with your friends studying for a test, and you know, drinking two or three handcrafted beverages, but they were able to capture this essence, because of that in store experience, because you were immersed in coffee, you could smell taste, listen to the music and feel the vibe. And I think that that has obviously changed. Starbucks now feels completely transactional. You know, from a destination standpoint, which is far from their roots, those lifelines during COVID, which were their mobile app, and the drive thru, were probably absolutely critical for their survival at that time. But they've made going into the lobby going into the store a completely irrelevant experience. They've replaced that with the ability for convenience, and then the commoditization of their products. And I think that's very dangerous for brands, you may achieve your year over year growth, but you're losing something along the way.

Wendy 11:30

It's very interesting. You say that, because I was thinking about you the other day, a friend of mine who lives the other side of town, Manhattan, said she hadn't been out walking all day. And I said, Well, where are you? She said, Well, I decided to walk to Trader Joe's, which is the other side near me. And I said, Oh, okay. And she said, I needed a destination. But I also needed a happy destination. But I needed to be I'd be locked at the desk and the computer all day, I needed to walk in and see interesting things and product and people being kind of strange. And you know, those sorts of things. And I thought about that, in that context of that very clear definition of what the place is that you're talking about the value of physical retail in that place.

Justin Lafoe 12:13

Yet retail at its very best is about community, you know, it's the place where you go to be entertained, to hear a story, to experience products. It's a sensory journey. And I think again, when retailers get it, right, you know it, you see it, you feel it,

Wendy 12:28

you've had the luxury the life of working in a destination where people save up their money and come and in an everyday place where people need groceries and getting feeding the family for dinner and getting stuff off their list. What did you learn a Disney and not trade secrets and Trader Joe's about that level of how do I engage the everyday customer who walks or guest who walks in the door?

Justin Lafoe 12:55

So many learnings over the years. And I think the guiding principle for me was always how you move up kind of that hierarchy of needs, you know how you go from transactional to this truly immersive experience will transformational type of experience. And by no means is that one size fits all you have to understand the customer's motivation and what they need at the moment. And knowing who the convenient shopper is who wants to just get in and out and who is looking for removing friction and barriers to their shopping experience. And you do that through large scale format retail locations that can handle a lot of people. And then you might have people who want high levels of service. And they want to really spend time with a sales associate and talk about the product and understand the features and benefits of the product. And you want to pull them off to the side and you want to a quieter environment, you want a more relaxing environment where they can take the time to deliberate about the products. And then you might have places where some of the things that I got to work on a Disney that I was most proud of where you completely blur the lines between a traditional store and what entertainment is and creates a space or a place that you don't even realize you're in a store. And I think that's what Disney did so successfully with Star Wars Galaxies Edge, when you can create $250 lightsaber by the way to have them behind me and never go to a cash register to pay for it. You're working with a cast member who is delivering a storyline and you're so excited and attached to that product. I think that it's not a one size fits all proposition by any means. But understanding who your customer is and meeting them where they are at that moment whether it's fast and get out or spend some time and really immerse themselves in the story.

Wendy 14:38

What's also intriguing about that is that I think about you know when you walk into many big box retailers now or any you know small that you can scan and go or you can check out at a register. So now I can make the choice for myself as to which I do, but that by itself is a way of designating Who I am at the moment, right? And then I can, as a retailer, if I'm sensitive to that, I know that right I know they're in a hurry, make sure they got the bags, make sure they can get out or the person who's coming to talk to me. So that paid self as a sort of a flag that we can respond to as retail people or brand people.

Justin Lafoe 15:17

You're absolutely right choice is at the heart of that. And I think about how resistant I was initially to self checkout. You know, I felt like it was transparent to me that the retailer was doing something to manage their labor differently. Now, as a customer, I'm almost annoyed if I have to stand in line, you know, and have a cashier, check me out. So I think that choice just becomes a hygiene factor over time. Just expect that.

Wendy 15:41

Yeah. You mentioned this earlier on about thinking know who your customer is know who the shopper is, in all of this. And you mentioned values. And we think a lot about that, in that experience. When you think about I think about Target issues and Anheuser Busch isssues and Disney's issues and Nike, you know, how do I create a place that stands for something? And how far do I stand for it?

Justin Lafoe 16:07

I think about how hard it is for any company to kind of navigate these waters today. And the examples that you just mentioned, we did see this on full display in the last year, among others when it comes to LGBTQ plus topics. And yes, I was there at Disney and had a bit of a front row seats to what was going on and playing out in the last year or so, as an “out” senior executive who lead our pride BERG. I think that the conversations and the perspectives are rapidly evolving, and retail brands or any brand need to continue to be crystal clear on what their core values are. And making sure most importantly, that their words and actions and their products and services are completely aligned with those values. And they're essentially walking the talk. And I think where some brands got in trouble in those last year is when they started to backpedal too much because they were trying to please all the constituencies. And that's dangerous,

Wendy 17:07

Really important when we think about building engagement, loyalty, if that's even a word these days, and building a customer experience where people trust you in delivering that experience,

Justin Lafoe 17:17

Retailers start out pure, right, particularly if there are startup brands, when they have a really clear vision, and really clear mission. And their core values are clear, they go out and they hire new talented people who are completely aligned with those values and hungry to pursue those goals. That's in its purest form, right. But I think legacy companies, it's a little trickier for them. And staying in touch with your customer is the most important pieces, we've been talking about knowing who your customers are meeting them where they are. And there's so many ways you can do that. Now, particularly, of course, with social media, it provides an instant window in an instant feedback loop back for everything that's going on. But the real challenge is what do you do with all these insights, you know, you can have all this data, mountains and mountains of data. But if you don't know how to synthesize it into your products, your customers, your employee experiences, then you find yourself overreacting to everything that comes your way. And straying further and further from your core values. And I think this is just a product of the polarization that is going on in society, it's making it almost impossible for retailers and brands to articulate a consistent set of core values, that is going to please all of their customers, right. So to stay in touch, I think it's critical to invest in those data and analytics capabilities to keep a pulse on things. But don't forget the human touch, have a mechanism to interpret that data. And sometimes it's as simple as observation, spending time in your operation, talking to the employees talking to the customers, and understanding what their experience is. I'm convinced that if any CEO actually called their 800 number for any of their businesses and went through their phone tree, and experienced what you experienced trying to get through to any of these big companies, things would change. But I bet they don't experience their own service like that.

Wendy 19:09

I think about that a lot. Because when we do our retail safaris and immersions one of the things we do at the very beginning is often give the team's homework assignment. And the homework assignment is actually gets them to remember that they too are shoppers, and real people with every day needs and that as shoppers, they wouldn't put up with some of the excuse the expression crap that they deliver to their shoppers, exactly what you're saying now, which I think is really interesting. So our view of always, you know, get out of the office virtual or real and get up to the selling floor wherever that happens to be. That also spoke to me you have an extraordinary global view to how you take a brand and products around the world. And I wonder about that a lot in terms of trends. citing brands across the globe, where you think about the cultural differences, then China and France, us all of those things, and what you've learned from that, as you then have to deliver the kind of essence of a brand in other cultures, whether it's across the country, to your point about division, or whether it's across the world.

Justin Lafoe 20:21

I've been very fortunate to work for a company like Disney, who has put me on assignments all over the world. And I've worked on a lot of these great projects. And I think it has given me some great insights. One of the things I used to like to say, because we would go into another country where you're working with another teams, local team, and they would tell us how different everything is, you know, everything's different here in this country, you know, and the truth is, although nobody wants to hear it, the world of retail is pretty flat. It is pretty flat. You know, people have two arms that go in a shirt, and you know, they, when it comes to the basis of retail, whether it's home goods, fashion, apparel, accessories, cosmetics, you've got these big brands that are so present in all markets, that it's starting to feel the same. But I think it's important to actually represent regional, cultural, and of course, seasonal differences, and how you translate a portion of your product locally. And that may be how you curate your product, how you buy your product, or how you design your product. One aha moment I had at Disney was after spending a lot of time in our Asia parks and Disney's Asia parks, I started noticing how big Lunar New Year celebration was a Chinese New Year. And I started making me think about, well, you know, the Asian population, the United States is one of the most one of the fastest growing populations. And yet, we weren't doing anything to service, this important cultural moment, and the United States. And so, over the course of many years, you know, we sort of pivoting and started adding this to our January, February celebrations in the parks. But to do it right, we actually went back to Hong Kong to Shanghai, and worked for those design teams to make sure that we were fully leveraging what they were already doing, and not creating another US version of this for our Asian guests in the US. And I think that was a big learning, you know, for me, and the number of times that I saw these things translate in both directions, but also made sure that they were culturally relevant and authentic, it was pretty special.

Wendy 22:23

That is your right aha moment. Because you think about this country and the diversity, I think about the work we did with Disney. And we were looking at Hispanic guests and different in California than they were from, you know, in Orlando, because where they came from, and the sort of sensibility that says, whether I've got 8000, drugstores or grocery stores or big box retailers of some form, the ability to understand that and take that learning to make that place feel very special, and a place that recognizes me and my culture. Even in a country, one country like America is a very powerful learning and insight, I think in building that kind of engagement and experience.

Justin Lafoe 23:08

The immutable truth is that a brand like Disney has to be themselves wherever they go, right? In the sense of those core values, their customer experience, they want to create their products, their storytelling, they're going to deliver Mickey everywhere. But there also has to be that wiggle room for how you deliver those products and services, how you localize that into those different cultures, and how you expand the portfolio to be culturally relevant. It is a fine balance. I think.

Wendy 23:36

The other thing I think about you this is sort of where you started, and I think it's a really valuable way to think about the ending is, how do you think about the quote unquote, cast members, the employees? Is it a hiring practice that says, in order to deliver a customer experience that feels true, I need to hire people, I mean, I need to have different kinds of criteria for hiring as opposed to I just need a body in the store. Easier said than done these days.

Justin Lafoe 24:09

You know, my experience with Disney, obviously, very well known for the Disney look and the parameters that we put around the type of cast members that were hired, how I was hired in the 90s. But that has to evolve, it has to change, it has to remain relevant. And I think what's more important is for employers, retailers to create environments where people can bring their authentic selves to work, trying to fit the mold of what the ideal employee cast member crew member might be. It's tricky. You know, today, people are individuals. And as I mentioned, the shifting lifestyle changes of millennials, Gen Z's and alphas who are not only making up the future customer base or the future employee base, we have to be in tune with that. So I think going back to that cultural piece, you know, creating the right culture environment is a of briefing to do with the survival and relevancy of a brand, because you have to have the buy in of the employees who are going to deliver that customer service or that product.

Wendy 25:09

Yeah, it is that and you've talked about that a lot over time, as we've sort of grown together. That notion of the, all the constituents, you know, the customer, the guest, and the people who work there representing the values of the brand, and being able to create that experience that feels very true. This is really the secret sauce today, right to mesh, the two together that says, This is what makes this place different. And this is why I want to be in this physical place, which you and I strongly believe is, remains the future of retail in many ways.

Justin Lafoe 25:46

Just think about during COVID, right, there was so much energy and even now talking about work from home, and the anguish that employers are going through right now getting people to return to campus, the retail employees and stores were largely there the whole time, they were holding the culture together holding the experience together for the customer. And I think if we spent more time talking about the in office experience, the campus experience for the employees and invested in that experience, built that cultural base up again, we wouldn't be having this conversation about return to office, people would be going back because they want the community, they want to be part of something.

Wendy 26:23

As a last thought on that one, in our Des Moines adventure, we went to a wonderful place, which was called Western salvage, and it was a salvage warehouse where they took, you know, architectural salvage and repurposed and whatever. But when you walked into the store, this was not it separate when you walked into the store, the first thing you saw was a large coffee seating area, you could also get a drink at night, but they're sitting on the corner was a group, a knitting circle, there on the other corner was a group of friends catching up on the day, there was a group of us hanging around. I mean, it was just it was before you even got to the shopping part, and buying a piece of furniture or something. It was just You just wanted to be part of it. Right? You just wow, that's so big fear of missing out if I wasn't in the knitting circle or something, it was relatively cool. Somebody was having a wedding there than I mean, it was just one of these places, you could smell the retail, I mean that in a really positive, embracing way, it was the best of all of things, I would never have expected to have seen that in western salvage, or whatever it was called. So anyway, so let me ask you last question, you know, best retail experience as a shopper worst retail experience as a shopper may putting you on the spot? Well, maybe

Justin Lafoe 27:37

I need to go to Des Moines, Iowa, I guess. Not this week. Well, you know, I thought a lot about this one. And I've got to say, I really like what CAMP has done, you know, their name has been out there for a while. But when you think about what they've been doing, they found a way to deliver a physical retail experience that has this educational fun component at its core. And I think that they've been able to solve for what is one of the hardest things for retailers, and that's repeatability. Right? How do I get people to come back and do this over and over again. And they've been doing it with their programs that they do, or the programming and events they do. And so we're gonna continue to keep an eye on what they're doing. Because I think that is a model for other retailers. You said the worst right?

Wendy 28:22

Well, only if you feel so inclined.

Justin Lafoe 28:24

Well, unfortunately, there are so many, we might want to save that for another podcast.

Wendy 28:31

Okay, we could do that we can have one of those trashy, what is the worst and whatever. I'm encouraged actually, by how many good experiences there are. And even my mission, my next mission is to figure out how do you do it in, like, 8,000 - 10,000 stores, right?

Justin Lafoe 28:47

scalable

Wendy 28:49

That's right. How do you scale it? How do you scale and experience and you know what? Sometimes it's as simple as it used to be, you'd walk into Walmart, and there was the Walmart greeter. He said, Hello, how are you? What are you looking for? And those things that seem so simple and yet complicated these days. So anyway, you and I can continue to think about how we build these extraordinary modern customer experiences. And if anybody's going to do it, it's you. So I thank you for joining me today.

Justin Lafoe 29:20

Thank you, Wendy. This is wonderful. It's been great spending time with you.

Wendy 29:24

Cheers for now. You know, as Justin said very clearly, if we are going to be building a legitimate, modern, relevant customer shopper experience at retail, we have to begin with understanding our shoppers. He said I told him that I'm not sure that I did. But somewhere along the line we need to understand that's where it begins. If we don't understand our shoppers, and what their needs are at that moment. We cannot build a relevant experience for them that engages them and drives them back to our place and he was very focused on the fifth physical place and how digital is not an alternative. It's a solution to enhance the experience.

He also talked about the importance of the people who deliver that experience the people who work with us, for us, whether it's in companies, or on the selling floor, that in order to engage together to build that relevant customer experience, you're not just thinking about the people who spend money with you, you're also thinking must think about the people who work for you in that. And he talked about very passionately about values, you know, standing for what you believe in as a company, and delivering against that. And if troubles come along the way, then standing strong for it and saying, this is who we are. We recognize who our core customers are. And we think this is a value that's important to them, because we listen to them. not such an easy road these days. But I think what Justin said from his extraordinary experiences from Disney to Trader Joe's, that that ability to whether it's a destination that people save up for, or it's a store that people go every day for their groceries, that that is an integral piece for building loyal, continuous engagement with shoppers every day. And that's part of what the future of retail really will look like in the coming weeks, months and years. So that's it for me today. I'll see you in the future. Lots more to come. Stay tuned. Cheers for now.