The Retail Journey
Welcome to the Retail Journey where we will cover important topics, interview industry stakeholders, and address emerging trends as we journey through our mission of helping our listeners thrive in retail. Your hosts for this show are CEO James Harris and CGO Charles Greathouse.
The Retail Journey
Embracing the New Omnichannel Retail Landscape with Spark Strategy
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Discover the transformative power of an integrated store and online strategy as we explore the journey with Reid Thornton and Adam McFain, the brilliant minds behind Spark Strategy. From their serendipitous beginnings at Walmart to the innovative solutions they crafted for the retail giant, Reid and Adam share about the transformative power of an integrated store and online strategy. Reid recounts a chance encounter with Walmart's chief merchant that led him to Arkansas, while Adam reflects on his transition from the University of Arkansas football field to Walmart’s merchant training program. Celebrating Spark Strategy's third anniversary, they discuss the significance of the merchant mindset in retail strategy.
Hello and welcome back to the Retail Journey podcast. My name is Charles Greathouse.
Speaker 2And I'm James Harris, and today we're talking to two very good friends, reid Thornton and Adam McFain. Reid and Adam are co-founders of Spark Strategy. It's a consulting firm that helps their clients by identifying growth opportunities, assisting with assortment strategy and development, perfecting the pitch from a merchant's perspective, e-commerce strategic direction and probably a lot more than that. Welcome to the Retail Journey.
Speaker 3Thanks for having us.
Speaker 2James.
Speaker 3Yeah, yeah, thank you.
Speaker 2Before we jump into retail. What brought you all to Arkansas? What brought you to Walmart? Who are you?
Speaker 3Yeah, so I was in college. I went to Colorado College in Colorado Springs and the chief merchant of Walmart, John Fleming, was actually an alumni from my school, so he came to the school to kind of do a chat, talk to students about Walmart. And I went to a private or a liberal arts college and a lot of people didn't like Walmart that went there. So I think I was one of three people that stayed afterwards to talk to him.
Speaker 3I got a business card and came down to Arkansas for the merchant leadership program, so buyer trainee in 2009.
Speaker 2Nice go Bronx.
Speaker 3That's right. We need all the rooting we can get.
Speaker 4Yeah, I'm in Arkansas born and raised. I was here in uh, fort smith, arkansas, and then went to the university of arkansas for college. Woo pig yeah, big I was uh. While I was there, I was at the walt narts uh business center and then also, you know, played football there. You got to kick some footballs on the field in front of a 80 000 fans. That was that was uh, honestly, less nerve-wracking than sitting in a podcast.
Speaker 1Because I'm actually having to talk.
Speaker 4But no, no, that was good. And then did the merchant training program as well. I interned at Walmart while I was in college and then accepted a merchant training program offer from Walmart and was there for five years, Went through the buyer training program, then became an associate merchant and then ended my career as a merchant.
Speaker 2Awesome. And when did you all start Spark Strategy?
Speaker 3So about three years ago actually, we just had our third anniversary.
Speaker 4All right, may 1st yeah.
Speaker 3So our third birthday just happened. Everything's been going great. We love it, we love Arkansas, we love Walmart, we love retail and sales.
Speaker 4We still bleed blue.
Speaker 2That's right, absolutely right. The business has been potty trained, that's right. We're in toddlerhood, so let's get into it. What does merchant mindset mean to you all?
Speaker 3Yeah, so we actually founded Spark Strategy on the.
Speaker 3You know, we were merchants ourselves and so we know how to approach retail.
Speaker 3We did it, you know, for years on end at Walmart and so we actually saw an opportunity just to help people be more successful retail and by doing that, we wanted to be the, you know, making the life of a merchant as easy as possible, and that's really what we do.
Speaker 3Um, because we sat and I see we know what they're going through, we know what's expected of them and we know what really good suppliers look like, and so our goal is to help all of our clients be those best in class suppliers for them, making the merchant's life as easy as possible, because they have a hectic day as it is and so the more the easier we can make things for them, the better everyone will be off. And so we've really enjoyed doing that, and our whole company was founded on the merchant mindset. Like that's. That's what we look at every situation we're in, every new business, every new category. It's like if we just got a new buying job at Walmart, how would we approach it? How do we walk stores, competition, what data do we have? How do we learn more about this and every situation we encounter, we take that same approach.
Speaker 4Yeah, I would say. You know, we founded Spark Strategy on the merchant mindset and what we really try to do and bring that approach is just strategically think about everything and if we can put ourselves in that merchant's shoes we can help deliver a strategy that meets their strategy and really partner with our suppliers to think and be ahead of the game and really be working upstream so that we're bringing and delivering. You know exactly what the merchant needs.
Speaker 3I think Adam hit it like our name spark strategy right. So we want to bring a strategic mindset to every situation. You know as buyers. We saw a lot of suppliers come and not have a strategy and that's the worst thing you can do. That's the easiest way to have a really bad meeting with a buyer or make their life so complicated that they don't even know where to start to do business with you.
Speaker 3So that's kind of why we put it in our name? Because we want everything we do to have a strategy around it, Because if we do then we're going to have a lot better results.
Speaker 4Yeah, I think one thing that having a strategy really makes you do is focus, and you know, being a buyer and seeing presentations of 100 items, I don't even have that much space in my modular for all of your items right, this is what you can do, but what do I need?
Speaker 4Right. How do you consolidate that and how do you have a strategic approach to what items Walmart really needs to be carrying and why they really need to be carrying it? So it's all about the story. Every item should have a story and when you're telling that story, it should really make sense for the Walmart customer and it should really make sense in the buyer's assortment as well.
Speaker 1Yeah, I can recall you know suppliers coming in and it's clear they did not understand my mindset as a merchant and those are tough meetings because it's like, yeah, I can tell you put a lot of work into this and I can tell you weren't thinking about my customer while you were doing that. So to have, when you have partners as a merchant that know what it takes to navigate category strategy and the puts and calls that you have to make as a merchant, it goes a really long way.
Speaker 3I think it goes to the point like I'd much rather go into a line review with 10 items that are really well thought out than 100 items that weren't thought out. I mean, and so many people have that idea that if we show them all of our capabilities, they'll just they'll find something they like and like. Buyers don't have time for that. You just get lost. Yeah, it's lost, and you're not having a good meeting, You're not having a good discussion on why it makes sense or doesn't make sense of what challenges you may have. Um, so yeah, we, we always prefer to go in with a very focused strategy because at the end of the day, you know people aren't going to get a hundred items bought anyway, so why waste everyone's time thinking about it?
Speaker 2So how do you advise somebody who has been selling in the a hundred item you know manner for a while? Maybe they've had some success at different kinds of retailers smaller, regional, whatever the approach isn't going to work with Walmart. But their confidence is in that approach. That isn't working. It's not in what you're advising. How do you help them come to a point of confidence on? These are the 10 items I'm going to walk in with.
Speaker 4Yeah, I think the key thing is the suppliers that we work with. They are the experts in their area, right? They've probably been doing it for a very long time. What we bring to the table is really putting that merchant hat on. We can go walk the modular walk what's in stores today and try to dissect what the merchant's current strategy is. Obviously, the merchants probably shared a lot of that with us as well, so we can try to go in the direction that they're going. And so I think taking that pared down approach and really having the true story behind each item is going to allow the supplier to be more successful. Because, as a buyer, I used to ask suppliers okay, I can buy three of your items, what three are they? And sometimes suppliers couldn't even answer that because they would have so many items and they just there's they wouldn't know that's brutal, or they're disappointed because they wanted five.
Speaker 3They would be always disappointed, no I think we tell new clients to lean into your strengths. What are you the best in class at? What are the best things you do and what do you do better than everyone else? Let's lean into that. And then where's the opportunity at Walmart? And how do we find successes for everybody, for suppliers, for Walmart, for customers, for everyone involved? Because if people focus on their strengths, I mean that takes them a long way.
Speaker 4I think that's one thing that Reed taught me was he was really good at finding supplier strengths when he was a buyer and really making sure that they played in their sandbox or stayed in their lane. And as a supplier, you can grow in your sandbox. As long as you have putting Walmart first and helping them grow by staying focused, everybody wins.
Speaker 1Yeah, yeah, totally. So I love the store walk because so much is very different in a fluorescently lit, chaotic environment than how you picture it while you're building the deck or product development. Having those innovation cycles and the store is definitely really important, but you guys also crush some omni-channel strategic thinking. In fact, you have some of that claim to fame, adam.
Speaker 4We do, we do.
Speaker 1Let's hear a little bit about what's it right. What's it look like to bring a strategic voice to life online as well as in store?
Speaker 3Yeah, I think it might be funny to tell the story of how that all happened too, yeah.
Speaker 4You kick it off.
Speaker 3At the time, you know, store buyers and dot-com buyers were different, different offices, different strategies, different goals. Nothing was aligned.
Speaker 1What was this?
Omni Channel Strategy Success
Speaker 32016. So 2016 and prior. And so at the time, obviously our store team was a little frustrated with the dot-com team because, again, there were no. You know, we weren't aligned on what the strategy was, and so our dot-com buyer actually left the company. And so me and my team at the time said, hey, this is a great opportunity. Let's just volunteer. Let's just say, hey, we're going to take this on. It's going to be tough and we don't have all the answers, but we're just going to figure it out. And so we did that in 2016, and we were kind of like the hamster in the wheel, like the guinea pig, if you will. Nobody asked us to do it. We kind of just signed up for double the work for no extra pay.
Speaker 1Yeah, was this before or after you got?
Speaker 3Buyer of the Year you got buyer of the year before before, okay, cool, so definitely, uh, it definitely. It definitely helped us well and I'll be real the first year we did it.
Speaker 1We didn't know what the heck we were doing.
Speaker 3Chaos, different different accounting, different ways of looking at inventory sales etc.
Speaker 3Everything was different, brand new systems, didn't know anything. Yeah, um, and honestly, we didn't really take it to the next level until adam joined my team as an associate merchant and you know I'll tell a story a little bit. But he always says, like you know, I learned stores and dot com at the exact same time. Before that, people either learned all stores or all dot com. They didn't speak both languages, if you will. So you know, as a young guy at walmart, he was able to learn both at the exact same time. So it's like someone learning two languages. You know, if you learn it when you're a kid and you talk it at home and versus a different one in school, you're fluent, fluent in everything, and that's kind of how Adam was fluent in retail and he really took us to the next level when we volunteered to do that.
Speaker 4You hit it on the head. Being able to speak both languages and learning that from my early days as a merchant really helped me because I'm able to make the connections. And you know, you can think we used to say like, oh, there's in-store, there's features, but online there's SBAs and you know catapults and there's all these different things you can do and they kind of do the same thing, but they're totally separate, called separate things, and operate a little differently.
Speaker 1So a retail linguist, basically.
Speaker 4Yes, and you could call me that. I like it.
Speaker 2And from the supplier side. I was working with you guys during that period of time and you know it was. We saw the direction where it was going, but the technology was evolving, the systems were changing. Nothing had really been documented or processes really created. Yep Right. So, every day we're just trying to hack something together, but within like three months of you saying, oh, here's the process, here's how we're going to do it, it started to flow and, um, I mean, it was. It was pretty quick turnaround.
Speaker 3Well, and also just made meetings more productive as suppliers too, because instead of talking a while, something's wrong, oncom or whatever Adam and or Phil on my team at the time would you say, hey, let me open up my laptop and we'll fix that right now and like that's what being Omni is all about. And then also having the conversations. You know there could be a super cool item that somebody has, but it definitely doesn't make sense in stores, like we could have a dot-com strategy right here and now. Let's figure out how to sell this thing, let's partner together so that we all win. And so I think that really just helped our business and our business knowledge of thinking about the whole business, stores and dot com and using that merchant mindset to say, ok, where are the opportunities for this supplier, these items? You know or this category.
Speaker 1What did that kind of immediacy do to innovation for you as a merchant?
Speaker 3I think it gave me more tools in my tool belt. You know once, instead of having just 4000 stores at my disposal, with you know long term changes.
Speaker 3Yeah, every change is expensive. Yeah, exactly, and you might have four feet of space for a whole category. You could have, you know, a lot more, but when you have com, you had all the tools at your disposal in terms of assortment and selling and like. That's where the customer can really win, because they can buy whatever they want. Yeah, you know, we have the best of the best of that category, but there's a lot longer tail that a lot of people are looking for, so it really helped us out.
Speaker 1Yeah, I love that Well, just as a merchant even being able to think outside the box and have some fun and see how customers respond while actually driving sales, Whereas in-store you have too much fun, try too many things, you're getting chewed up by markdowns, Markdowns and inventory line.
Speaker 4Yeah, totally try too many things you're. You're getting chewed up by markdowns and inventory. Yeah, totally no, I think reed reed kind of hit it on the head there with the more tools in your tool belt. We learned so much from managing the dot-com business that helped us in stores and we had so much knowledge from the store business that helped us online. Um, we were able to know what would work, what wouldn't work. We were able to test things online new retails before we did a rollback or whatever. We're like hey, if we rolled this back on and we just did a test online, what does it look like? You know, it gave us a lot of tools in our tool belt and Walmart's ever changing, ever evolving, and their tools are even better now. You know everyone has gone on the channel, so all the merchant teams are working that way and everyone is speaking the same language. So that transition that happened, I think believe it was in 2020. It was difficult at Walmart at that time, but it was the best thing that could have happened for Walmart long term.
Speaker 1Yeah, it was a hard move. I remember when I was running Flight Deck trying to get you guys like all right. So you're the only ones here that know com, like the actual buttons, what needs to get done. Are we doing this right?
Speaker 3And you guys were like no no, here are all the things that are wrong with this trial.
Speaker 1Here's the things that need to change.
Speaker 3We've got to tell you all the things and then walk away after that 30 minute meeting and say, all right.
Speaker 1Charles, go fix it.
Speaker 4Sorry, we had a team Flight deck was my favorite tool, so yeah, good job, yeah, that's fun.
Speaker 2Those are good times. So you all spent most, if not all, of your buying career in general merchandise. Um, you know, general merchandise doesn't have quite as much data available. Um, so if we're going to sell in a new brand in, you know, food, we've got IRI, Nielsen, whatever to to really help build a story there. What kind of data points do you all cobble together in those categories where you don't have, you know, syndicated data to work with?
Speaker 3And I think that's where merchants can really be. A merchant, you know, without data telling you what to do, you have to figure it out for yourself. And I think that you know number one thing is getting to stores. Getting to your stores, getting the competition. What are people doing? Cause in GM there's always somebody doing it better than we are in a given category. Somebody whether it's a specialty store, you know something out there is doing it better.
Speaker 3So taking, you know, just like Sam Walton said, like steal shamelessly from people. What are they doing the best, I don't care what they're bad at, what are they really good at? And how do we steal from that and like build that and use it ourselves. It's kind of like some of the ways I think about, because it's also like you know, merchandising is part half art, half science, if you will.
Speaker 3You know, when you don't have as much data, you need a lot more art, which means creative thinking, like thinking outside of the box, new fixtures in stores, new ways to merchandise, like really, just, you know, blowing stuff up and that was the funnest thing about being a merchant is like I have something broken. Let's blow this thing up. You know, what can I do? How do I test new ideas, new things, new ways to interact with customers in the category and that's why merchandising so much fun and honestly, the GM side, I think, is more fun. There's a lot more creativity and just a lot more. Like you know, there's not as much sensitivity to brand on some categories and so you can just make really great items at great values that customers love. Yeah.
Speaker 4Yeah, no, I think the art and science thing was something I learned my first week as a trainee and it's stuck with me since that day because it's so true, in the food and consumable side there's a lot more data, you can use a lot more science. But then, um, the art side for GM is where where it's fun, like we, that's what I really enjoy right Is finding new ideas, developing new items. Right, working upstream with suppliers to say, hey, we think there's a white space here, let's go develop something to fill that white space. And that's where suppliers can win and get you know their foot in the door or whatever with buyers is because they're bringing innovation. You know, merchants are always looking for the next best thing, they're always looking for something new, and so if you can be the supplier that can deliver that, they'll want to partner with you long term.
Speaker 1Yeah, what's the? Oh sorry, go ahead.
Speaker 4I was just going to say, and then the last part of that was you know there's not as much data, but you know that's where you do get creative and you can use what's working at other retailers right. You know, whichever supplier you may sell you may be selling to Amazon, you may be selling at Target or wherever but you have insights that you can learn from those other channels. It may not work for the Walmart customer, but you can learn and grow from that.
Speaker 1Yeah, and that was my question is taking that. You know you've got a lot of gut. There's a lot of this. All right, let's figure out the white space. We don't necessarily have history to say it's going to work. Again You're doing new things. What's the role of e-com when you think about the as an omni-channel merchant? Are they really using com as that testing ground to go collect data? Or you know how often do you have to like, hey, there's not going to be data here, because com is just going to be different. You put it in an aisle in a Walmart, it's going to be different than online. So how do you think about that? Test online, get in store journey.
Speaker 4I think the cool thing with online is it's trends happen faster online so you can capture trends earlier in the process than you can in stores because of the lead times. One cool story was just, you know, the hoverboard trend.
Speaker 4It was a category that Reed was able to yeah, it just popped, but we were able to see all that early online. We had no hoverboard vendors in store, we didn't have a relationship with anyone that made hoverboards, but we saw it on Walmart Marketplace. We saw the data, we saw the numbers and then we chased that into that trend and we took a category that was $0 at one point to you know, $100 million over the course of three years. That's fantastic. And with that point it's like we would have never seen that data if we weren't managing the dot-com business and we also wouldn't have been able to make connections with some of the suppliers in that space. And so we brought in a supplier from Walmart Marketplace into stores and they're still in stores today.
Speaker 3One thing I'd add on that, though, is that when you running stores andcom, you can treatcom like a store. So, on a given search term as a buyer, you can build that modular online and you can put items in front of that customer. Like we used to always say, modularize your search terms just like a store. If you know, in a four foot category or whatever, you want the best of the best. When somebody searches for something, what are the best of the best times you want to get in front of them so you could have a brand new item or something that's never been done before. If you're getting it in front of the customer when they're looking for it, They'll tell you if they want it. You know sales will pop, and so, like I think that's the big thing of the merchant mindset is, stores and com are actually very similar. You know you can do the exact same things. You get the best of the best from the customer when they're looking for that item, that category, and I think that's one reason we had so much success is that we took everything we knew about stores and said, okay, let's just apply this online and let's go.
Speaker 1Yeah, let's go yeah. So the customer behavior is very similar. The things you get to do are very different.
Speaker 3Yeah, definitely a little different. A lot more flexibility online. No fluorescent lighting, nobody crying.
Merchant Insights and Retail Opportunities
Speaker 1No announcements. It's about time for some lightning. Can you go lightning round? Anything else you guys want to share before we get into a lightning round?
Speaker 4I don't think so. I could talk about this all day. So let's go lightning round.
Speaker 2Okay, um biggest failure in retail. Ooh.
Speaker 4I'll let you go first. Nice way to go?
Speaker 1No, I think. I think as a merchant, if you're not failing, you're not trying hard enough.
Speaker 3So you have to be okay with failure and you have to welcome it with open arms, because if you got to push the limits to find success, so you know you mentioned when we won team of the year, we were trying everything. Nothing held us back. We had leadership support to test to do new things and so you know I I love the story of when I was a very early on buyer, just buying bike accessories, and we 3d helmets were the big craze and we launched mohawk helmets and all this stuff that are now on kids everywhere and I thought I had a helmet that looked just like an eyeball.
Speaker 3It had like the big like the pupil, the blue part, the iris or whatever, and then the red veins going through and I was like this is the coolest helmet ever. It had like a 5%.
Speaker 2It was complete trash and I still to this day.
Speaker 3I was like man, that helmet was really cool, but you know, customers didn't think the same way.
Speaker 1They were the only one who bought it. That's awesome, that's right, those are fun.
Speaker 4I think I completely agree with Reed, like if you're not failing, you're not trying hard and the key is to fail fast, right, how do you fail and then move on and get better? So I'd was uh, after the hoverboard trend, we were trying to find you know what's, what's coming next, and, um, I thought it was adult electric scooters.
Speaker 4And I thought, and you rode one into the podcast I did I was just ahead of my time, so I I did made a place, a big bet, for, you know, an ae event online, um, you know, for black friday, and that was a pretty big markdown.
Speaker 3Yeah, that was. Uh, that cost us a couple hundred thousand dollars, adam. So, that was great. But, you were on the right trend. We were just a little too early, too much of a trendsetter.
Speaker 1I have a new one, okay, which is a little game of what's my merchant thinking? So I'm going to say a phrase and then you tell me what they're thinking. I'll start with you I'm not a marketing expert, but uh, what? So they're looking at your packaging and they're like oh, I'm not a marketing expert, but and then they this is terrible. Yeah, yeah, it's like always, followed by marketing, uh, marketing advice, uh, reid, hey, uh, yeah, I think we should definitely put this on marketplace oh yeah, that means I'm not interested.
Speaker 1Yeah, okay, absolutely not.
Speaker 3Well, and it was funny, we used to have a joke of like when someone would show an item and say what do you think about it? And we said, oh, we think it's a great dropship item. That was before. Marketplace was even in our tool belt, so we're like that's a great dropship item accountability for anything exactly. You own everything until it arrives at the customer. Bring it in if it sells it sells, we all win.
Speaker 1That's great. Yeah, hey, I'm. Uh, I want to bring that into 1p. What's that mean?
Speaker 4what's my merchant thinking they love it, if they want to bring it into 1p. They want, they want a piece of it, they want to be a part of it and they want to invest in that item totally, there's so much nuance online because both of those are walmartcom places.
Speaker 1One of them is like yeah, I have no belief in this. Which you can prove them wrong, Totally Happens. And then 1P is like all right, I'm ready to take some ownership, which is like the step before you're.
Speaker 4Yeah, they're willing to put skin in the game with you, and that's the first step.
Speaker 1Yeah, thank you. That was our first. What's my Merchant thinking lightning round?
Speaker 2What's the biggest learning from 2023?
Speaker 3I think the biggest learning there's so much opportunity you know we were talking about just the economy and how things are going and like Walmart is thriving, you know and like there's so much opportunity for everybody to be more successful at retail. I think there's a lot of like dark clouds out there and thinking like, you know, recession talks and this and that, and, while that may be true, like the customer is still spending and the customer is spending at Walmart.
Speaker 3And so there's so much opportunity. In every category you walk, even if you ask any buyer, no buyer has a perfect category right. Something's not working Like. Even if you take all the averages, there's something at the bottom right. So there's just a lot of opportunity for everybody to do new things and be more successful.
Speaker 4I actually had opportunity written out on my paper, but I'll switch and pivot and I'll probably say like relationships matter, um, there's a lot of really great people here in Bentonville, just in retail in general, and you know, building trust with your merchants, building trust with your, your partners, like relationships really do matter and that goes a long way, you know, more than just a working relationship.
Speaker 1Yeah, we're grateful for you guys and the partnership we get to have. Yes, get to hang out and see each other at the office. Absolutely, it's been fun for sure.
Speaker 3I think I knew James when High Impact was a team of one.
Speaker 2It was like just you right? I think you did that's so awesome. Come a long way. High impact has come a long way. I'm leading myself, doing awesome things, so it's good, okay. So last thing books, media content, whatever that you're into right now.
Speaker 3I'm a big believer in just the Motley Fool, so I don't know if you guys know this, but it's a company that helps people think about investing and thinking about being good people and doing great things in the world, being foolish. I'm always reading about companies what's working, what's not. Even if it's something that's not retail, you can learn from what's going on out there. So I'm listening to those podcasts, reading those articles all the time. I'm a subscriber, obviously, and they help me pick some stocks along the way.
Speaker 1So it's a pretty good resource.
Speaker 3Yeah.
Speaker 4I'd say, from a book standpoint, reading the Go-Giver, that's been a fantastic book you know right Reading the go giver, that's been a fantastic book. Um, and then also just from a from a media content perspective, the morning brew. Get that email every morning, read through it just so I'm up to date on what's what's going on in the world and what's happening. Um, yeah, that's a classic.
Speaker 2Uh well, I really appreciate it, guys. I've been looking forward to this, um, knowing you guys a long time, worked with you a long time, plan to work with you for longer, absolutely and really, really, uh, grateful you came out today.
Speaker 3Thanks for having us. We had a blast and, like I said, we could talk about this stuff all day if we had the time, yeah, if you ever need a another episode, we'll come back.
Speaker 1I love it.
Speaker 2Awesome. All right, and thank you for listening. You can listen to or watch all of our podcasts on our website, highimpactanalyticscom, or wherever you get your podcasts, and we thank you for listening.
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