SPEAKER_01: 0:10

Welcome to What's in the Box, the brand new podcast brought to you by Box Technologies, powering retail with purpose. Boxtech delivers innovative and market-leading customer engagement solutions that turn business ideas into a performing reality. From design and integration to ongoing support and maintenance, we're with you every step of the way. Now, this podcast is a little different to what you might be used to. It's audio only, and I can say, hand on heart, all my guests have been very happy about that because they don't have to do their hair or their makeup or anything else they might want to do. And it's um pretty much unscripted. We just like to talk retail. And you can expect around about 20 minutes. We don't go on and on and on because we're busy, our guests certainly are, and we're sure you are too. So let's get right into it. And I'm delighted to say that my guest today, he's a strategic advisor, keynote speaker, and best-selling author, focused on growth, innovation, and the impact of digital disruption. He is widely considered one of the foremost and most influential voices in the retail industry. His groundbreaking book, Remarkable Retail, How to Win and Keep Customers in the Age of Disruption, is a perennial international bestseller and his provocative ideas, we like provocative, his provocative ideas on the future of shopping and consumer behavior are regularly featured in the media. In his role as a Forbes senior contributor and as co-host of the award-winning Remarkable Retail podcast, his new book is Leader's Leap, Transforming Your Company at the Speed of Disruption. During a storied and diverse career as a C-suite executive at two Fortune 500 retailers, and most recently as a consultant and member of several boards, he has worked with dozens of brands to catalyze and design their transformative journey to remarkable results. As a sought-out keynote speaker, he has delivered inspiring talks on six continents, sharing his unique perspectives on what it takes to reignite customer growth in a world of constant change and shifting consumer preferences. He is currently the president of Sagebury Consulting, and prior to founding Sagebury, he was the chief strategy officer for the Neiman Marcus Group, where he also led the company's customer insight, loyalty, and multi-channel marketing efforts. I think I've covered most of it. I'm delighted to welcome Steve Dennis. Steve.

SPEAKER_00: 2:39

Hey Andrew, I think we've taken up most of the 20 minutes with that introduction. Yeah, I'm sorry about that.

SPEAKER_01: 2:46

I didn't want to leave anything out. But no, thank you so much. Thank you so much for um uh for coming on. And certainly your your podcast, Remarkable Retail, has, I think it's fair to say, a huge following, and I would recommend it to uh to anybody listening, as well as listening to what's in the box. Now, you're just back from New York. Uh you're based in, I should say, you're you're based in um Dallas. Uh back from New York.

SPEAKER_00: 3:16

Why I don't know, but I am.

SPEAKER_01: 3:19

And you are I think it's fair to say you were in New York at the same time as the NRF conference and expo was taking place. Um but let's just kick off with some of some of your thoughts and uh so forth on your few days last week uh in New York, uh in and around NRF.

SPEAKER_00: 3:40

Well, at the risk of stating the obvious, the overwhelming focus of the expo floor and the overwhelming focus of most of the content sessions was around AI. Not to the exclusion of other things, but but it was very clear that kind of all things AI was the dominant focus. And a lot of my conversations in the hallways and over dinner had to do with what's going on with AI. I don't think that's terribly surprising. I think that's going to be what we're seeing at conferences for the foreseeable future. The I guess two things I would say about it. One is it is hard to imagine that the promise of AI can possibly pay off the way, you know, relative to the amount of hype it's getting and relative to the number of startups as well as major technology companies that are that are focusing on it. So loath to predict that we are about to get to a bubble, uh, but I do think minimally there's going to be some disillusionment that will make its way into the zeitgeist over the coming months. And I certainly wouldn't be surprised if there wasn't some sort of, I mean, I don't like to predict what's going to happen in the stock market, but I think we look at the valuations, the amount of investment going into startups, and it's just really hard to work out how that's going to sort out well on average. But clearly there will be, there will be some leaders. Uh, the second thing I would say is, and talking to some retailers in particular, my sense is many are finding kind of the pragmatic uses of AI as opposed to the more aspirational uses. By that I mean applying, and some of this is pre-gen AI, pre-agentic commerce, but seeing real results in terms of taking cost out by automating processes, whether that's customer service, marketing, uh, graphic production, and the like, maybe not quite the yet, but we'll see yet some of the more transformative uh kinds of things. You know, conversations around eugenic commerce and the potential disintermediation of brands, I think that is a real issue and thing to watch. But I didn't get the sense that anybody was was super worried about that in the in the short term. But clearly the pace of announcements, partnerships, collaborations only seems to be increasing. But I do I do worry that there's a little bit more hype than than hope if we step back and and look at it.

SPEAKER_01: 6:10

Yeah, yeah. I mean, I'm hearing that all the time. And the message though, I I wasn't in New York last week, but I was keeping a fairly close eye on what was being said. But it seemed that a lot of uh the content and the speakers were saying that, oh, we're we're moving now from hype to reality uh and really looking at those pragmatic applications. I always I always say, and it's kind of like for me that there's there's two parallel universes. One one is conference world, and the other one is the real world. And and yeah, I know it's not quite like that, but but you get you get my point that what's said at a conference, you you do have to kind of take quite a healthy dose of salt to pinch your salt in the side. Well, it's something.

SPEAKER_00: 7:00

It's always worth, and I say this about lots of things, it's always worth asking when you hear statements like that, man, who benefits? Qui Bono, I think, in in Latin. And when you're at conferences and you've got the major tech providers and you've got companies that want to get some Wall Street credit for being at the leading edge, it's in their interest to make it sound like it's more realistic than perhaps it is. So I'm not saying they're necessarily or everybody is mesh misrepresenting, but I do think you have to take it with a grain of salt. But I do see in working with some clients and talking to others, there there are definitely things that have moved out of the proof of concept phase into more real live applications. So I think there is a measure of truth to that. But I but yeah, I would be, I would be careful. I think your your the uh reality distortion field that sometimes exists at conference at conferences is very much something I've seen for many, many, many years. It's not a new phenomenon. It just happens to be, you know, it's moved from metaverse to retail media networks to to uh agenda commerce, maybe.

SPEAKER_01: 8:02

Yeah, yeah, exactly. You know, how's your metaverse projects doing? So yeah, so AI, we'll just continue on that for a little bit. It seems to me that it's kind of now that there's AI for the retailer for the business, you know, what benefits does it bring to the business and therefore their their shareholder value and so forth. So AI for the business and their investors, and then AI for the employee, and then AI for the shopper, for the customer. Now, for the latter, I just wanted to get your view on because we hear a lot about AI for the for the business, for the retail, in terms of efficiency, you know, forecasting, inventory management, demand management are obvious examples. But I'm not sure I'm yet seeing any groundbreaking benefits for the average shopper in the street, you know, that that that they're gonna really say, oh wow, it it's really improved my experience. But I'd love to get your views on that and whether we're yeah.

SPEAKER_00: 9:12

Well, I'm I'm seeing some. I mean, some of it, and it's kind of interesting when you think about, I'm sure many of your listeners will be familiar with the innovators' dilemma and a lot of people being very worried about what was gonna happen to Google in the new world of AI-driven search and the like. It's turned out so far anyway, Google's done a pretty, pretty good job. And I think part of what's happening, this idea of answer agents, you know, going from search, which is people would just put kind of generic, not generic, but very light queries, best restaurant or something like that, to I'm having my 20th wedding anniversary, I want to spend less than so much money, more Italian, less this, whatever this, you know, very directed kind of queries, and having that come up with a much more often, not always, much more useful answer. And to the extent retailers are able to, which I'll point on that in a second, but to the degree that retailers are leaning into AEO as opposed to SEO or GEO, I should say, instead of SEO, you know, there's a marriage there that I think can be really powerful. So because of Google's dominance in search, a lot of people are already automatically, whether they're going into AI mode or not, are getting AI-informed search and getting better answers for the most part. So from that standpoint, I absolutely think we've seen a pretty big shift. And I think folks are starting to realize, say, using Chat GPT, the ability to get more useful information and to kind of automate aspects of what they might have to do by going to a store or spending a lot of time on the internet and or going to different websites. So I think that's happening. One of the things I learned, the thing I was going to mention, the thing I learned at the conference, or hadn't really thought about very much, and I still still think this is a big gap and will need to be addressed for this really to take off, is just because traffic is coming in from an AI-driven search, say on Chat GPT, into a website, doesn't necessarily mean the retailer is positioned to take that traffic and make it as personalized and relevant as you would like. So a number of the startups that I saw, as well as some of the bigger companies talking about it, were how to enhance the data to be able to take that traffic and actually pop up. So I'll give you a very quick example that one company talked about, which was people will search for Taylor Swift's football jersey. Well, you know, Taylor Swift doesn't have a football jersey. Her fiance has a football jersey, but maybe people can't remember Travis Kelsey's name or whatever. So if that query comes into, I'll just say Walmart, I don't know if this would work on Walmart or not, you know, the website doesn't know what to do with that because there's no, you know, they may bring up Taylor Swift's album or something, right? But it's not going to get you, like the intent of that query is not to get Taylor Swift's album, it's to get Travis Kelsey's football jersey. So anyway, there's a lot of work that is going on to be able to marry. So you can have this traffic go up into websites using Gen AI or Agenda Commerce, and not necessarily have it pay off the way it's supposed to. But I suspect, if only because I heard so much activity about this, that that will get sorted out. The degree to which it gets sorted out and enhanced, and how quickly that happens and how consumers will settle into just staying with Gemini and Google or leveraging ChatGPT or Claude or any of these other LLMs, I know I that's above my pay grade. I think there's a lot still to happen for this to be as profound as people, some people are expecting it will be.

SPEAKER_01: 12:55

Sure. Yeah, yeah, yeah, yeah. Okay, why don't you say move move on? Although it's kind of in a way linked with what we've just been discussing about AI, and that's something that I'm I'm fascinated, and that I'm talking about how in the future we are going to engage with brands, with social media, and so on. So what I'm referring to is at the moment, it's a smartphone. And it's been a smartphone since 2007. We're seeing, we're seeing now we're seeing, and I'm reading more and more about the next what's coming next is going to be more about wearables. And obviously, with uh what the obvious example would be uh uh meta glasses and and and voice. And I just wanted to get your your view on that as to whether you see that it is it's going to be, you know, we're not gonna have a a screen and we're not gonna be touching and and and and so forth. It's gonna be a completely different way of engaging.

SPEAKER_00: 13:57

Hopeful over the long term. I don't see any significant breakthrough in the next couple of years. I'll just remind people, and I'm not gonna name names, but several quote unquote thought leaders who were very, very big on voice commerce five or six years ago hasn't happened. Wearables comes up every two years as the next big thing. So I would, you know, and I'm I'm kind of in Scott Galloway's camp that any anything you have to put on your face that makes you inherently less attractive to romantic partners is going to have a difficult adoption rate. And anybody remember Vision Pro? So but I, you know, I think clearly battery life, you know, the the power that can go into a smaller and smaller device. I mean, technology is moving in in such a way that will make some of the barriers or is making and will continue to make, presumably, some of the barriers go away. So I I think it will happen. I'm just, it's not something I think is going to likely explode in the next year or two. That doesn't mean people shouldn't experiment it with it and and and pay attention. I mean, all things, you know, screens are getting smaller, devices are getting smaller, and you want to be where the customer is in the moment that they're they're you know, that nanosecond where people go from doing whatever they're doing to wanting to wanting to engage in commerce.

SPEAKER_01: 15:16

Yeah, yeah, yeah. Now, one retailer, one US retailer, and you're I I guess almost uniquely positioned to comment on on this, and that's uh something that's uh been in the news over over here as well, because it's very significant, and um, and that's of course what's happening at um SACS Global. And again, I'd love to to get your views on on that because it it's probably uh uh bigger, broader than just simply that business. So I did read earlier today I think uh the court have approved a$400 million refinancing package. But I suppose not uh uh specifically maybe about that business, but uh is that a lesson for all departments or models?

SPEAKER_00: 16:12

I think there's a lot of lessons there. I've been gone from Neiman Marcus for 18 years or something, but you could see aspects of this emerging even back then. You know, if you're not at the risk of stating the obvious, if you're not paying attention to how customer needs are changing and how distribution is changing, you're very likely to get into a lot of trouble. And I think in Neiman Marcus and Sacksfifth Avenue's case, I used to say, because I believed it, and I think it was true at the time, that I wasn't as worried about the high-end department store world as I was the moderate department store world. And the main reason for that was just the uh, you know, the sort of generic version of, or not the jerk version, but the lack of differentiation that the moderate department stores had, just having so many competitors. But luxury was more insulated because of the narrowness of distribution. But a couple things started to happen, and it's not about the internet. A lot of people say, oh, you know, Sachs and Niemann's should have really embraced e-commerce early on. We embraced e-commerce very early on. We, when I was there, not because of me, but when I was there, we had probably the highest e-commerce penetration of any major retailer. So that is not the issue. The primary issue is twofold. One, not shifting their business model to be more attracted to younger customers. There is very poor customer acquisition there. And that's a whole other podcast as to what that's about. But that that's one. But the main thing that really happened was competition from their own vendors. And we were very dismissive of that competition when I was there. It wasn't as any significant, you know, so significant. But all the things that have led to the growth of direct to consumer, and by direct to consumer, I mean e-com brands own e-commerce as well as their own stores. You know, all those things. Walk around a mall today and just count how many of the stores in a mall outside of the anchors are vertically integrated brands. And, you know, so that you could see that trend coming from a million miles away, enabled by e-commerce, enabled by smartphones. And so not, you know, it's difficult to respond to that. So you've had this massive contraction. It was inevitable. I've written about this for years. It was inevitable that Sachs and Neimans needed to get together. The problem is, and the reason why it was also inevitable they're going to end up in bankruptcy, irrespective of the crazy financing that they did, was they have to close stores. And not to get into the weeds too much, but the nature of anchored department store deals are very long-term leases with developer contributors, and you just cannot typically walk away, and it's very difficult to negotiate your way out of that. So you really need in the US the Chapter 11 protection to be able to do that. So that's what's going to happen. I don't think they'll liquidate. Um, there's a lot of complications because of some perhaps misrepresent some misrepresentations that have gone on and some of the people they're they're partnered with, but it's somewhat inevitable. I think we ended up where we did. I hope they'll be able to come up with a sensible reorganization plan. But it's going to be a much smaller business. Unfortunately, a lot of the smaller vendors are not likely to get much recovery of any from the money that they're owed. The Chanel's LVMHs, they may also be left having to take a hit, but they'll be fine because they are so profitable. So it's not a happy situation, but you know, they're not at existential crisis. But a lot of the smaller brands that don't have their own stores or don't have a major e commerce presentation, they're going to lose potentially quite a few points of distribution. And if they don't get any money out of the reorganization, they may very well go out of business or have to retrench in a very significant way. And that's that's very unfortunate.

SPEAKER_01: 20:09

Yeah, yeah, yeah, indeed. We are, unfortunately, because I I would love to carry on talking for hours and hours we can talk about retail, but we're pretty much out of time. So all I wanted to ask um finally is where can, because I know you do an awful lot, as I mentioned in the introduction, you do an awful lot of keyno speaking at conferences around the world. Where where the next uh few months, where are you going to be? Have you got uh many on the horizon? Where where can we uh hear you if we're gonna be able to do that?

SPEAKER_00: 20:39

Two that are public at the moment, one of which will perhaps have occurred by the time people hear this is at Shop Talk Lux in Abu Dhabi doing a few things. And then I will also be at Shop Talk Las Vegas in March. Got kind of an interesting thing that I'm teasing a little bit. It hasn't been quite announced. So may do a couple of things there, but one in particular that I would say watch watch LinkedIn. I imagine we'll be uh talking a bit more about that in a couple weeks.

SPEAKER_01: 21:05

Sounds great. Okay, so my thanks so much to Steve Dennis. Absolutely fascinating. That's all from What's in the Box for now. New episodes will be dropping every two weeks, so please stay tuned. And if you want to find out more about Boxtech, please follow the link in the description. And thanks so much again to Steve, and thank you for listening.