The Experience Strategy Podcast: Retail Transformation

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What will it take for in-person retailers to remain successful in a world increasingly dominated by Amazon? In two words: Transformative Experiences! In this episode we offer predictions and guidance for retailers who are ready to earn the economic power of guiding their customers on meaningful and impactful transformational journeys. 

Voiceover: [00:00:00] Welcome to the experience strategy podcast, where we talk to customers and experts about how to create products and services that feel like time well spent. And now here are your hosts experienced nerds, Dave Norton and Aransas. Savis

Aransas: welcome to the experience strategy podcast. I'm Miranda Savvis. So Dave, the last year and a half has been.

An insane time for retail. Mackenzie's latest us. Consumer sentiment research shows that a whopping 77% of customers tried new shopping behaviors in the past year. And they were primarily driven by these really functional jobs to be done like value and convenience. The thing is. Retail isn't ever going to beat digital shopping experiences when it comes to the functional jobs and the work that we have done, I [00:01:00] think proves without any shadow of a doubt that these companies, if they want to win and retail, particularly in person, they're going to have to get better at doing higher value jobs like emotional.

And transformational jobs to be done. So today let's dig into what it would take for retail to drive higher consumer value in the coming years. It's their moment. This is a golden opportunity and it's really such a unique time for them to change the value proposition. All right, Dave, I know you are chomping at the bit to talk about retail transformation specifically, but before we do that, let's start with a bit of a primer on what we even mean.

When we talk about the transformation economy in general, how would you describe. [00:02:00]

Dave: So the transformation economy is something that has been going on for some time and is growing fast. And it includes all of the things that you think about when you think about personal transformation. So can I move to a place where I can lose weight?

Can I stay healthier? Can I have greeter financial?

Aransas: Sorry to interrupt you, but is it stay healthy or get healthy?

Dave: It's getting healthier. Thank you for that. Absolutely. Can I get healthier? It's any type of experience where you have a goal that you're trying to accomplish

Aransas: and Richard, can I get freer? Can I get smarter?

Can I go transform my identity. Yeah. And I think to me, it's important to when we talk about this to describe it, not just as the personal transformations, but also organizational transformations and societal transformation. So it's really. It's

Dave: change. [00:03:00] Yeah. And it's, and I was just going to suggest that it's both a goal and change that's occurring at the same time where I know that I have to make changes.

I can't just accomplish the goal without making changes in my personal life. Two things exist. You're doing transformational work on yourself. Or through the help of others. And this sector of the economy is just growing leaps and bounds. And there's just lots of opportunities for companies to play in transformations.

Now it's worth noting that Joe pine and Jim Gilmore in their Seminole book, the experience economy mentioned transformations as a new and distinct. Economic offering. So they actually argue that transformations are distinctly different than experiences, but I like the idea of transformative experiences.

I liked the idea that, uh, we're creating [00:04:00] experiences to help people to transport.

Aransas: And I do think there is the, in, in the experience economy, they talk about these as a hierarchy and that transformation is the level beyond experience. And so that's where I think that Mary's up in my mind is that yes, experiences drive a greater economic value.

People are more willing to invest in them. They are even more with. To invest even more in a transformative experience. Absolutely. So, Dave, you Lance Baton Betancourt, Joe pine, James Gilmore. Co-wrote a recent article called the new you business. How to compete on personal transformations for the Harvard business review in that you outline the principles for successfully compete.

In this space, as you reflect [00:05:00] on that, why is now the time to tell this story?

Dave: That's a good question or ANSYS in it. I think it's because so much has changed in people's lives because of the pandemic and all of the things that have occurred when you're dealing with a pandemic, you're dealing with all the change that's going on.

You start to think about what are my priorities, what do I want to do differently? How do I want my life to change? So that I'm happier and healthier and stronger, and my family is more connected. And so this is a great period of time for all companies, but I think in particular retailers to start thinking about their role in helping people to translate.

Aransas: Yeah. And I think we did a tremendous amount of research on that and monitored consumer sentiment around transformation over the past two years. And [00:06:00] those numbers have steadily increased people. As you said, have reevaluated what matters to them. And as a result, have a clearer picture of where and how they want to change.

So when we think about this as relates to jobs to be done, how does understanding. People's wish for transformation influence how companies think about jobs to be

Dave: all companies in general need to be focused on jobs to be done. I was just looking back on some. The research that's been done on retail by a lot of companies over the last year or so.

And most of that research has been around this idea of the new normal that we have to be able to deliver digitally or to the home. We have to change the way that we think about retail spaces. [00:07:00] And a lot of companies are focused on

Aransas: convenience. We have two. Um, it's like these very low level things.

Dave: Yeah.

It's like blocking and tackling is I've got to add this new channel. How do I do it? Oh, let's do the functional job for them. Let's get things to them. And then they're going to say, we need to do a better job of doing the emotional job, um, for. So we need to make them feel welcomed when they come into the store or something along that line, or they might think we need to get the social job done for them.

They need to be able to share online. They need to be able to connect. They need to be able to shop for family and friends. All of those types of. But I think there is a great opportunity around the aspirational job to get done, which is the first step in developing transformations. And one of the things that we talk about in the HBR art article, people [00:08:00] buy today because they aspire to become something as retailers, think about what they're going to do with all that square footage that they have, their new delivery channels, their goals.

And we have a tendency to think that it's, this is only for the brands that are aspirational brands. If I buy a tux, for example, then of course the, the retailer that I buy the tux from is in the transformation business, because all of a sudden I look like James Bond, right. A lot of. Confused me for James Bond over the years, every day.

And, but it's not just for the high end product. I think all stores need to be thinking about what they can be doing. Let's be clear about this. They're not going to be able to do everything around transformations, but they should know the role that they're going to play to help people to [00:09:00] transform their lives.

And if they do that, they're going to be able to individualize. Personalize those experiences for their customers. And when you start to individualize or personalize experiences for customers, you develop a deeper connection and then you can begin to compete on things other than the functional job to get done in

Aransas: the article.

You guys outline that as the first stage of understanding. This work and getting really clear on the jobs to be done and allows us to begin to sharp and shaping our focus. And then in there you talk about defining success along the way, identifying the barriers. Who do you see out there? Who's doing this well in the retail sector right now?

Dave: Well, w what's interesting is that. I recently went through a mall here in Utah, where I live, [00:10:00] and I was surprised by the number of transformation experiences that are in the mall. Now, obviously malls have been struggling for decades, so they have to invent, they have to reinvent themselves this particular model that I went to had a.

Video game location. It had entertainment venues, it had spas, it had counseling centers, diet management centers, tons and tons of engaging and transformative experiences. So I think that you're going to begin to see in a lot of venues, like malls, that that space is going to be used for things that are basically transformative experiences.

When you do. Shop today. It feels a lot like you're going through a warehouse and. Nobody can do a warehouse quite as good as Amazon where you don't even have to go through it. You just have it sent to you. One of my favorite [00:11:00] stores right now is Scheels from an experience strategy standpoint. Now they focus on sports on a hunting.

They compete in somewhere between Cabela's and Dick's sports, and they've done like Cabelas and other sport hunting. Type stores. They've done all of the things that kind of attract people into the retail space. They have the big taxidermy theming, right? I know Aransas you'd love big taxidermy and stuff like that.

That's your

Aransas: favorite type of thing all the time. Yeah.

Dave: And so they're doing that, but they're doing so much more.

Aransas: So there's gimmicks is what you're saying. I

Dave: think that there's more that's going on. I think they actually are helping you to aspire to be a better person. There's a lot of Patriots. Things that they're doing in there.

There's different activities you can [00:12:00] do that can improve your skills and so forth. So I think that they're doing some great things there. One retailer to pay attention to.

Aransas: Yeah. It's interesting that you bring that up. I guess if I were to look at that, what it sounds like to me is that there are skill builders in place in there, which are certainly along the lines of transformation.

I can become a better fisherman. I can become a better. Bore killer. I don't know people hunt, and even I can become a more prosperous member of society because when you mentioned the patriotism and in a sense, what it's saying is, Hey, this is a place where. You can be proud and to prosper and be recognized for your unique gifts in society.

I went to a mall the other day too. And what I got to see was a mall that itself has, I think always stood for [00:13:00] transformation. I was thinking about it. It was the first indoor. Mall and America it's called north park. It's in Dallas, Texas.

Dave: So

Aransas: it's, it's the only mall I got excited to go to because it is such a stunning piece of.

Real estate and the art installations are spectacular and inviting. And I go to see the decor and to walk on those floors. They really they're remarkable and it was so busy and bustling and it's the most traditional mall. It was the first. And yes, it has many of those experientials spaces, but it is integrated with traditional retail.

And I think it's probably thriving because. It has kept service at its center. It has kept the, the mix at its [00:14:00] strategic heart so that you're combining these experiential spaces, these transformation spaces and the traditional retail, and yet even the traditional retail was integrating moments of experience and transformation went to the doc Martin store and they had a red carpet set up now.

On one hand, it was probably just to manage volumes so that there was social distancing in place, but the way they delivered on it made it feel as though you were getting access to a private club. And it was very cool the way they did it. And they monitored access. They limited entry to two parties at a time yes.

To maintain social distancing, but. Uh, sensibility that's something really special was happening behind those lines. And it really just elevated the entire experience. And I was so [00:15:00] struck by the fact that they started at all. And while my hometown suburban mall down the street is now a weird mix of warehouse.

Uh, a dying movie theater, a discount department store, and a boat ton of empty dead space that will, before we know it, be converted into an Amazon plant, like the vast majority of suburban real estate right now, this space. Packed with people and it was packed with energy and life. And I really do think that they have endured because of the aspirational and transformational aspects.

Dave: They do a great job, obviously with the emotional job to be done. You clearly saw the social job to be. Yeah, but they're also doing the aspirational jobs. And so people want to come to [00:16:00] those types of spaces. They want to come to spaces where you're not just doing one job to job, but you're doing three and four jobs and different types of job categories.

So I

Aransas: have an idea, Dave, in the Harvard business review article, you and the team outline the steps for. Delivering on transformational jobs to be done. And for designing these offerings, what do you say? We play with that here. And I don't know, I have not been into home Depot in a little while, but to me that's a category that feels just so ripe and ready to deliver on this need.

Why do you think,

Dave: talk about an industry that focuses on the functional job? Right.

Aransas: So what do you think the jobs to be done are here if you

Dave: had to? So the first step is to ascertain the jobs to be done. Now [00:17:00] it's obvious with home Depot, that it's about finding the particular widget or item or tool that you need from a functional standpoint, let's think about.

What home Depot is doing from an aspirational standpoint, the consumer is trying to transform their basement. For instance. Which is a very important transformation that they're trying to go through and in doing so they're also trying to change the way that their family is going to interact within their home.

So there's actually more than just the physical transformation. There's also the family transformation that's occurred. And

Aransas: I'll say even from a transformation standpoint, and I'm going to just enter Jack tier based on an consumer interview. We did recently the man I spoke to really saw the upgrades to his home as a way [00:18:00] of becoming closer to his family and a way of.

Becoming an adult in a sense, and growing into a new identity, a new chapter in his life. And I think in terms of timing on this for companies like home Depot, they've seen such an extraordinary surge in business lately driven by probably these aspirational jobs to get done because people spend all this time and there are houses and they were looking around these walls in their.

As we said before it, I don't know that this space represents who I am now. So I want to transform my space to better reflect the me. I have become an unbecoming.

Dave: Absolutely. If you're going to do an aspirational job for a customer, you actually have to do the job. It seems obvious. Right. But what does it is constituted in an aspirational job to get done.

First, you have to understand their current situation. What [00:19:00] do they know? What don't they know, what do they need to know? Then you need to be able to guide. Towards a goal that is elevated in this case, becoming that adult that you described, who has certain skills that the family can rely on and it can change the home.

That's the goal that elevates. Then you need to be able to provide new knowledge along the way, moving them toward that transformation. And of course, and we talk about this in the article. That transformation is going to evolve and change over time. So you're going to define success along the way. You're going to come up with new milestones, new markers along the way.

Now I think that home Depot does a great job of giving doling out advice. You can typically find somebody to help you figure out how to. By a particular thing and use it [00:20:00] maybe for your sprinklers or a particular nail or something along that line. What the opportunity for home Depot is to understand the individual's specific situation and then continue to progress, help them to progress towards a future state.

And some of that work is going to be done in the store, but some of that work is actually going to be done in the home and. Home Depot have a presence in the home to help that individual on their journey. I think there's a great opportunity.

Aransas: So let's outline this as a project so that we can ground people in something really clear.

So we're looking at people who want to upgrade their basement, right? And these people want to upgrade their basement so that they have a. Better place to connect with their family members to play and have, have [00:21:00] recreational time with the. So what would success? What are some examples of what success along the way, examples

Dave: of success along the way would, are fairly straightforward.

Do you understand how to frame it? How to add the drywall, how to put in the different, um, components, the wiring and the lighting and so forth. So those are the functional markers.

Aransas: Those are the functional markers. To me, the thing that so many companies miss in there is the opportunity to say what really matters to you about this space, right?

And to get really clear about the individual's goals within there. And I think that's something companies like home Depot who are enabling the functional elements could do a much better and more meaningful job. I like

Dave: where you're going with it. Absolutely. That should be part of the upfront diagnostic that occurs where you're trying to understand that particular [00:22:00] piece.

And so you're defining success along the way. One of the things that's going to happen is they're going to actually finish the basement at some point that's that's success, and then they're going to want to use their skills in new ways. And do additional projects. So there's going to be new six.

Aransas: Like you're a guy who knows how to frame a house.

Now you're a guy who knows how to install drywall. You're a woman who knows how to lay carpet. So what do you do next? I think that's so true because it's not, then it becomes not just about the single project. It becomes about the sense of personal capabilities. And individual strengths that you've supported, not just for one project, but as a proof point for all the change that's possible now in your life.

Dave: Absolutely. Absolutely. The next step in the process is to identify [00:23:00] barriers, right? To understand what's going to slow them down. And most experienced strategists are very aware of barriers. They talk about pain points. They talk about sacrifice management. But when you're dealing with transformation there's management.

Yeah. So what are the sacrifices that I have to make in order to engage with your company? Does it take a lot of time? Do I have to remember a lot of things? Do I have to bring somebody along or bring documentation along? Do I, do I have to log in? All of those could be examples of sacrifice management, which most experienced strategists are going to pay attention to when you're dealing with transformations and an aspirational job to get done, there's an additional barrier.

And it's one that, you know, very well, which is motivate. How do I stay motivated throughout this process? Does home Depot have a role to play in helping me to stay on track, [00:24:00] to feel confident, to give me kudos along the way? I think that's a barrier that more and more experienced strategists are going to have to address and understand if they're going to design transformations.

Aransas: And so if I'm the person traveling along this journey of I'm going to read, I'm going to redo my basement and. In this case. I think one of the big barriers, I don't know how I'm afraid. I'll get it wrong. I've always hired a specialist to do these things. What, what does home Depot need to understand in order to successfully compete?

One

Dave: of the, one of the problems that a lot of companies have had in the past when they've tried to support customers more holistically in the way that we're describing is that they have tried to do it all themselves. And that's not what we're arguing in this particular [00:25:00] article. We're actually arguing that home Depot has a key role to play and they need to understand the journey that the customer is going on.

They need to understand the goals and so forth, but they need to actually. Be part of a, of an overall group of solution providers that can help the consumer down the path. And the, so in my

Aransas: case, maybe they want to provide a social network of other people who were updating their basement. So we can encourage one another and share best practices.

And they want to team up with a school that teaches me how to do this in a really effective way or. Uh, professional support line where I can learn how to use. This flooring device, is that right?

Dave: Sure, sure. And they want to recommend other companies, apps. They want to recommend best of [00:26:00] breed technologies that are out there.

They want to have partnerships with basement builders who maybe are in the business of helping people, guiding people. And maybe you just pay them to come in for

Aransas: a day. Exactly. And do this train or provide transformative support at scale. They don't have to be the expert in everything. They can still be the expert in the functional job to be done.

And through partnerships, they can become the expert where you source for the aspirational and transformational.

Dave: That increases that trust. And it also makes them become across as far more authentic to the people that rely on them. And that creates a virtuous loop as well. The next thing that they. Need to understand.

And this is very different [00:27:00] from the way that companies have behaved in the past is that they need to engage each customer as essentially a partner each. Has his or her own expertise has certain tools and not other tools has access to certain things that are important to them. And so they're going to know things and want things that are going to be different.

Customization is always going to be a part of what you're trying to do. Now, the easy cop-out for this is to give no advice or no help whatsoever. And just say, here's a widget. You said you needed a widget and that's not going to get you anywhere. What you need instead is to have more of a collaborative approach to working with customers, where you engage with them and you understand them.

And of course, you're going to need technology. And you're in need integrated technology and smart people to really help [00:28:00] you to deliver on that. What I like about the home Depot near me is that they hire a lot of veteran people who have been contractors or tooled around. In their hobby shops for years, and they're able to engage with me and really assess where I'm at, when it comes to building something.

And that's really powerful, but more companies need to think in those terms, if they're going to be successful.

Aransas: Yeah, I think too, one of the things that was really compelling about the Harvard business review article was the looking at the ways companies can use data with a lens toward these transformational jobs to be done, to help them really target the different moments in the journey for the customer and respond to those needs specifically.

So if before. Home Depot was looking at just the spend and using that as the key [00:29:00] marker of engagement. What shifts now of home Depot looks at the progressive journey. And if they're learning at the outset that people have a goal to transform spaces, then what markers can they collect through their data to show that transformation is continuing or that people are.

At risk of lapsing and their journey and offer sources of support in those moments, better understanding that there is a transformational job to be done. And of

Dave: course, at least in, in home projects, it can be really obvious to the company. What kind of progress people are making, because you can see if they're buying a bunch of lumber and nails or screws, they're in the beginning stages.

If they're moving on to paint, there's a good chance that they're progressing forward. So you can identify those markers along the [00:30:00] way. I think it's also important though, when we talk about data, And, uh, as it relates to transformative experiences, that because transformations are supposed to move you from one point to another point that you really should try to figure out some way to assess where they're at at the beginning, and then assess where they're at.

At the end, there needs to be some form of pre post evaluation. And that's very different from the way that most retailers today.

Aransas: Yeah, I think too, while we've talked about the importance of the jobs to be done, the thing that we haven't talked about, and maybe isn't quite as obvious is the really important point in that article about charging for outcomes.

How might home Depot do that? And they're going to have a pre-post in order to understand that to your point, but how else might they begin thinking about their business smart? In [00:31:00] relation to transform

Dave: H it's going to be a challenge to charge for outcomes for most retailers, because they're charging for items they're charging for goods, principally for goods, but there are things that they can do.

And they're already leaning towards this when they have somebody come and bring your refrigerator. And install that particular refrigerator. They are at least charging a service fee. What they could be charging instead is a transformation fee. And I think companies are going to find incremental revenue to begin with through those types of add on services.

That's where they're going to start. And eventually they'll be. Whole new business models around those. I think about what best buy has done with the geek squad, where you really are charging for transformation, your computer doesn't work, and then it's going to work or something along that line, the home Depot's [00:32:00] making steps in that direction.

Other retailers will be making steps in that direction.

Aransas: Yeah. And I think those partnerships are going to be a big part of that as well. Absolutely. It's through those services that they integrate and that gives greater credibility and trust to not just the parts, but the whole, I love doing this with you, this so much of what we talk about.

It's easy to get lost in the ideas of. And so to ground some of these principles in something that, that most of us have some familiarity with at what feels like a simple warehouse shopping trip into a home Depot really can be transformed into something much more meaningful and much more valuable and much more distinctive.

But I think for in-person retail, Companies are going to have to get great at elevating their value through experiential and [00:33:00] transformative jobs to be done, or else they can hand it all over to Amazon because they're going to out functional. Then every day, they know that I ordered dog food today, and I'm going to need a faster delivery on dog food.

Because it's functional. Then I do that pair of shoes that I want, but isn't actually needed for survival. Their algorithms have taught them that. So they're going to respond and I'm getting my dog food within 24 hours. My shoe is on the other hand, take three to five days, right? Like they, they have the data, they have the tools, they have the resources to figure out how to be better at functional anyone else.

But in-person retail. If they're going to win a sheriff, the wallet it's going to have to be great. At these higher level jobs. Dave, thank you so much for chatting with me. Congratulations to you and the team on [00:34:00] the really excellent summary you've created with that Harvard business review article. For those of you listening, if you want to hear more about this topic, check out a video.

Dave and I made with Joe pine recently to dig further into this, you can find it@ourwebsitestonemantle.co. Thank you so much for listening. And we look forward to bringing lots more stories about transformation in future episodes. Thank

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