Latest / Sleeping Barber - A Marketing Podcast / SBP 241: The PostPod - Lessons from Omar Roubi, The Rise and Fall of a Promise

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SBP 241: The PostPod - Lessons from Omar Roubi, The Rise and Fall of a Promise · Sleeping Barber - A Marketing Podcast

• 0:00
  SPEAKER_00: Welcome to the Sleeping Barber Podcast.
• 0:03
  SPEAKER_02: Omar's wife had said it's a shitshow from day one.
• 0:06
  SPEAKER_02: Like that, that's so fascinating.
• 0:08
  SPEAKER_02: That there's so much energy, so much interest, so much desire, so much passion, and then no matter what, it was almost doomed to fail from the beginning.
• 0:17
  SPEAKER_00: Welcome to the Sleeping Barber Podcast, the place for business leaders to get the best and most credible information on marketing, strategy, and innovation.
• 0:26
  SPEAKER_00: Your hosts, Mark Binkley and Vasily Storos, share their experiences as they gather insights from the world's leading experts.
• 0:34
  SPEAKER_00: Now, on with the show.
• 0:36
  SPEAKER_01: Okay, it's time for the post pod.
• 0:39
  SPEAKER_02: The post pod with V and Mark.
• 0:43
  SPEAKER_02: Talking about Omar and Arctic Canada.
• 0:46
  SPEAKER_02: Uh such a good conversation.
• 0:49
  SPEAKER_02: Like that's the case study is crazy in so many ways.
• 0:52
  SPEAKER_01: It's a case study that just keeps on giving.
• 0:55
  SPEAKER_01: If you think about it, like we tried to structure this across the four Ps.
• 0:59
  SPEAKER_01: And we had, I don't want to say a billion questions, I'm more I'm exaggerating, but we had a lot of questions under each of them because each of them warrant their I would argue it warrant their own episode, really.
• 1:10
  SPEAKER_01: Totally.
• 1:10
  SPEAKER_01: And it it just shows you how much actually went wrong.
• 1:15
  SPEAKER_01: And you can't just say or point to one thing and and say, oh, it was the real estate.
• 1:21
  SPEAKER_01: Oh, it was the it was the supply chain.
• 1:24
  SPEAKER_01: Oh, it was the wrong size shelf.
• 1:27
  SPEAKER_01: Yeah.
• 1:27
  SPEAKER_01: It's it's a cascading effect that one decision triggered on another, triggered or another, and got to this point where after, what was it, four years or three and a half, they were they were out, completely gone.
• 1:39
  SPEAKER_02: Yeah, they're it like it's even the we we briefly skimmed over things like leadership and just the emotional state of people.
• 1:49
  SPEAKER_02: Like even that is such a fascinating thing.
• 1:51
  SPEAKER_02: But on one hand, there is a lot of things that went wrong.
• 1:54
  SPEAKER_02: But on the other hand, if you think about what it took to get them to to work together, and even in those kinds of conditions where things are not going right and they're still able to get stores open, and like it's pretty incredible thinking about the effort that goes into it.
• 2:11
  SPEAKER_02: It doesn't always come out as an end result that you want.
• 2:13
  SPEAKER_02: But the strategy part is such an like making the right choices and like is is really critical because there all that energy is going somewhere.
• 2:24
  SPEAKER_02: It's just like sh his Omar's wife had said, is a shit show from day one.
• 2:29
  SPEAKER_02: Like that, that's so fascinating.
• 2:32
  SPEAKER_02: That there's so much energy, so much interest, so much desire, so much passion.
• 2:36
  SPEAKER_02: And then no matter what, it was almost doomed to fail from vegetating.
• 2:39
  unknown: Yeah.
• 2:40
  SPEAKER_01: And I I'm I swear, man, like it's still one of those things, even after we've spent time, like you and I have talked about Target before.
• 2:47
  SPEAKER_01: It's not the first time we're talking about it.
• 2:48
  SPEAKER_01: I think it's the first time we've together we've gone in a little more depth, and we had Omar to help with that.
• 2:54
  SPEAKER_01: It it still fascinates me at the decision making that happened.
• 3:01
  SPEAKER_01: And I don't want to point fingers, but someone somewhere got really excited about the prospect of coming to Canada and saw, like, say, all the real estate available from Zellers, you know, moving out that hey, here's our opportunity.
• 3:14
  SPEAKER_01: Someone really sold this idea to leadership in in Target to kind of go all in.
• 3:20
  SPEAKER_01: Where we've uh Nordstrom did Nordstrom come around the same time?
• 3:24
  SPEAKER_01: I think it was there, yeah.
• 3:26
  unknown: Right?
• 3:26
  SPEAKER_01: And Nordstrom, yeah.
• 3:29
  SPEAKER_01: Similar times, and I wanted to bring that up, but like Nordstrom took a totally different approach and it outlasted Target in the market.
• 3:35
  SPEAKER_01: Yes, it's they're no longer in Canada either anymore.
• 3:38
  SPEAKER_01: But I think it just shows you that there are still enough nuances when you're moving to different regions or different countries in in the world that you have to do a layer of due diligence that it just seems again, maybe maybe the next iteration is actually getting someone from Target's leadership team at the time on the podcast to talk about this.
• 3:58
  SPEAKER_01: But there was too many decisions that were missed that impact their ability to build any longevity.
• 4:05
  SPEAKER_02: Yeah.
• 4:06
  SPEAKER_02: Nordstrom, it was an interesting one as well.
• 4:09
  SPEAKER_02: And it is a different approach.
• 4:11
  SPEAKER_02: It was a more like uh test and learn kind of thing.
• 4:14
  SPEAKER_02: Because they they open one location and they open another location, and they were more selective of the locations and all that.
• 4:21
  SPEAKER_02: From what I'm remembering about that one, I think it might have been because of logistics was a challenge for them.
• 4:28
  SPEAKER_02: I think.
• 4:29
  SPEAKER_02: I don't know if that's true, but but one thing that is different when you just mentioned like entering a new market, it's easy to say Canada's got whatever it is, 40 million people now, something like that.
• 4:39
  SPEAKER_02: Yeah.
• 4:40
  SPEAKER_02: Um which is the equivalent of like some of the US states, like I think California?
• 4:46
  SPEAKER_02: Yeah, California.
• 4:47
  SPEAKER_02: We're close, we're almost the same, which is crazy when you think about it.
• 4:50
  SPEAKER_02: Or New York or Texas.
• 4:51
  SPEAKER_02: Like I've Florida is close to the same size as just Canada.
• 4:54
  SPEAKER_02: But the population distribution is spread out along pretty much the border.
• 5:00
  SPEAKER_02: So giant geography, really thin line of population.
• 5:04
  SPEAKER_02: So that from a logistics point of view, that's why that warehouse thing with Target was so interesting.
• 5:09
  SPEAKER_02: Because they they put only three warehouses to cover that whole physical space.
• 5:14
  SPEAKER_02: It makes sense from a population point of view, probably to have three warehouses, but from a geo geographical point of view, yeah, harder to actually deliver on the promise when you have to ship containers like hundreds of miles across borders, some of them French, some of them English, some of them with giant rivers that, you know, like the St.
• 5:35
  SPEAKER_02: Lawrence that has to, you gotta get stuff over, and like you know, there's all kinds of logistical complications there.
• 5:41
  SPEAKER_01: I've been I've been meaning to ask you this, and it's very uh and I love the fact that we kind of went through all four Ps.
• 5:47
  SPEAKER_01: I want to talk a little bit on the promotion side of the marketing side.
• 5:51
  SPEAKER_01: Whose responsibility would it have been to raise our hand and say, hey, we're investing this amount of money on trying and on just you know getting the message out there, but the experience consumers are having is terrible.
• 6:07
  SPEAKER_01: Who's whose responsibility is to kind of raise their hand like, hey, we we should not be out in the market talking at all about us right now?
• 6:14
  SPEAKER_01: Because instead, like we were getting ads all the all the time.
• 6:17
  SPEAKER_01: Yeah.
• 6:18
  SPEAKER_02: I I don't know who like I and who did or who didn't do that, or I I but I think like in some ways being at the end of the line, end of the line meaning marketing.
• 6:31
  SPEAKER_02: Like we're the ones that are promoting something that has to be true so that when the customer shows up, which could be today, it could be tomorrow or a month from now or a week, you know, a year from now, um, being at the end of the line and really the first interface of response, like we're you know, with social, like you get instantaneous responses in a lot of cases.
• 6:53
  SPEAKER_02: I think there is uh a well, probably a responsibility for everybody along the chain to say, like, hey, these things are not right.
• 7:02
  SPEAKER_02: But definitely when it comes to the marketing, like we should probably say we're not gonna we shouldn't spend this money.
• 7:07
  SPEAKER_02: That's what I mean.
• 7:09
  SPEAKER_01: Yeah.
• 7:09
  SPEAKER_01: And it didn't like at the time, it didn't feel like that was the case because I remember the first couple of years, they had proper advertising cycles, they were advertising back to school, they were there for holiday.
• 7:21
  SPEAKER_01: Like, and it it was one of those things that, you know, again, the experience didn't match what the communication was.
• 7:27
  SPEAKER_01: And I wonder if one thing that permeates, especially sometimes in some marketing or in some organizations where markets like, well, if I don't spend it, I'm gonna lose it.
• 7:35
  SPEAKER_01: So they're just in hey, full out, let's just spend mode.
• 7:40
  SPEAKER_01: And again, that's where like the the question comes a little bit to say that if we want to stand up and and be at those decision-making tables, should we be the ones then offering back our budget?
• 7:52
  SPEAKER_01: Say, we should not be spending any money right now because the operation side of the business is not working, and we're creating poor experiences for our customers.
• 8:01
  SPEAKER_01: So take this money, put it back into other areas because communication is not the right strategy right now.
• 8:07
  SPEAKER_01: And I don't know if that that happened.
• 8:10
  SPEAKER_01: Maybe it did happen, but it just my consumer hat did not see that.
• 8:14
  SPEAKER_02: Yeah.
• 8:15
  SPEAKER_02: Yeah, maybe they gave some of it back, but not all of it.
• 8:18
  SPEAKER_02: And that's where I think like you have these situations within any business where um you don't want to take on fault, right?
• 8:27
  SPEAKER_01: Like, no, of course.
• 8:28
  SPEAKER_02: A lot of people don't defer blame, right?
• 8:31
  SPEAKER_02: And or will defer blame.
• 8:33
  SPEAKER_02: They don't want to take on the blame.
• 8:35
  SPEAKER_02: And so, you know, like I can imagine being in some of those boardroom scenarios, and and again, this is you know, us dreaming about like what happened, not that not that we have any insight, but you know, as a logistics person, yeah, yeah, no, the shipping is like the the containers are on their way, the ship, you know, it's in the store.
• 8:52
  SPEAKER_02: In the store, like in the case of what he's saying, that's in the store, like it's not my problem.
• 8:56
  SPEAKER_02: Like, yeah, you know, then deferring it, and then the people on the floor on the store logistics, the back warehouse thing maybe going, well, you know, the the the front end staff isn't actually the ones bringing the stuff out.
• 9:08
  SPEAKER_02: We need, you know, they're the ones that know what's missing, what's not missing.
• 9:11
  SPEAKER_02: And then the front end staff going, Well, it's not our fault.
• 9:14
  SPEAKER_02: The shelves are too small.
• 9:15
  SPEAKER_02: We can't actually put stuff there.
• 9:16
  SPEAKER_02: Like, what am I gonna do?
• 9:17
  SPEAKER_02: Put stuff on the floor, and then and I think that's actually what they did in some cases.
• 9:21
  SPEAKER_02: They put stuff on the floor, yeah.
• 9:24
  SPEAKER_02: Piled up clothes on the floor, and you can pick from the floor.
• 9:27
  SPEAKER_02: Like, so there's you can kind of see where like you're trying to find a solution and make the best out of what you have.
• 9:34
  SPEAKER_02: Totally.
• 9:36
  SPEAKER_02: And and everybody's right in that sense, but also everybody's wrong in that sense.
• 9:40
  SPEAKER_02: And I think when it comes to the marketing part, you go, okay, well, we're gonna make a promise here, and it yeah, and we shouldn't.
• 9:47
  SPEAKER_02: Like, we should just not say anything at this point.
• 9:50
  SPEAKER_02: Shut up right now.
• 9:52
  SPEAKER_02: Because actually, if we're talking about ROI, you're not gonna get it.
• 9:57
  SPEAKER_01: Yeah, yeah.
• 9:57
  SPEAKER_01: Yeah, it's man, it's just one of those like it's very easy to look at that and say marketing is the least to blame in all of this when you think about all the other Ps that you know weren't going in the the right way.
• 10:09
  SPEAKER_01: But I think you're right in the context that there is a shared accountability across all areas.
• 10:14
  SPEAKER_01: And I think, again, how do we make sure that we on the marketing side are really close and understanding the operational side of the business and not just continue to live in our own bubble that is just advertising, right?
• 10:29
  SPEAKER_01: And I think it it shows great maturity to be able to stand up and saying, you know, while we appreciate that we have this investment and this budget right now, we don't believe like it's best spent communicating.
• 10:40
  SPEAKER_01: We need to be investing in other areas or or whatever the case may be.
• 10:45
  SPEAKER_01: I just I just know that naturally we're just spenders.
• 10:48
  SPEAKER_01: So it's like, oh, you gave me a million, I'm gonna spend it to the dime.
• 10:51
  SPEAKER_01: And I'm gonna tell you you didn't give me enough.
• 10:54
  unknown: Yeah.
• 10:54
  SPEAKER_01: We rarely are the ones giving back money.
• 10:56
  SPEAKER_02: So interesting too that um thinking about because I was just gonna say Google is gonna tell you you're not spending enough.
• 11:03
  SPEAKER_02: Like you could be, you're missing out on all this uh opportunity if you just put more money into the machine here.
• 11:09
  SPEAKER_02: So where that thought went was with Omar talking about leading versus lagging indicators, and so revenue being the lagging indicator in this case.
• 11:17
  SPEAKER_02: Yeah.
• 11:18
  SPEAKER_02: So interesting thought, like because we're also fixated on all these dashboards.
• 11:21
  SPEAKER_02: He didn't bring up any CPM impression numbers, CTR number, you know, none of that.
• 11:28
  SPEAKER_02: He did talk a little bit about awareness, uh, buzz, hype, like customer sensitive things.
• 11:34
  SPEAKER_01: Yeah, yeah.
• 11:34
  SPEAKER_02: So interesting thinking about that because it's you know the things we see every day could be amazing.
• 11:42
  SPEAKER_02: Like the clips are through the roof, our reach is skyrocketing.
• 11:46
  SPEAKER_02: We've got like amazing pickup in the press coverage, and then none of that actually matters to the business outcome, except in reverse, where if if it's like people are using, you know, they expect more pay less message as a point of proof, it's only amplifying the the truth to them, which is that uh I am not expecting more and I'm definitely paying more.
• 12:08
  SPEAKER_01: It's what it's why I love the promise to the customer framework so much.
• 12:12
  SPEAKER_01: Like this is a if we wanted to apply like a framework or a model frame to this, like this is the epitome of that of that framework, understanding that hey, we're making a promise, a promise to the customer in our communication strategy that we cannot hold up physically, like in in actuality.
• 12:31
  SPEAKER_01: So the it the two things are disjointed.
• 12:33
  SPEAKER_01: It's not repeatable, it's routinely creating poor experiences.
• 12:37
  SPEAKER_01: And and again, when Umar was talking about like the the thing that we push on, what's the one number?
• 12:42
  SPEAKER_01: And he talked about the legging into gifts of course, you're gonna look at revenue, you're gonna look at but he said customer sentiment was one the the first one.
• 12:49
  SPEAKER_01: And then the second one was um uh the logistics, the stock rate, I think.
• 12:55
  SPEAKER_02: Stock rate or stock uh or logistic efficiency or supply chain efficiency.
• 13:00
  SPEAKER_01: Supply exactly, supply chain efficiency.
• 13:03
  SPEAKER_01: And that shows immediately like your your mind is kind of to sorry, what you're trying to assess right there is like two different parts.
• 13:10
  SPEAKER_01: Like, do I have the right supply?
• 13:12
  SPEAKER_01: Am I getting it into the stores in a in a in a good order?
• 13:16
  SPEAKER_01: And how are the customers reacting to that?
• 13:18
  SPEAKER_01: Not the revenue they're driving, not the it's like how are the customers reacting?
• 13:22
  SPEAKER_01: And I think that's an interesting lens at at the end of the day, where you know, those those could be two levers that you look at.
• 13:28
  SPEAKER_01: And the lagging integrates be kind of if those two things are healthy, then revenue should come.
• 13:32
  SPEAKER_01: Profitability should come, or you manage for your EBITDA and things like that.
• 13:38
  SPEAKER_01: Freddie used to always say, you know, drive bottom line and manage your top, no, drive top line and manage your bottom bottom line.
• 13:45
  SPEAKER_01: So like I could see how those two things could could work together.
• 13:49
  SPEAKER_02: Weirdly, you're talking about frameworks, the mental physical availability fits really well on top of the supply chain and or physical availability and supply chain, and then um mental availability being customer sentiment, like as the leading indicators.
• 14:02
  SPEAKER_01: Absolutely, yeah.
• 14:03
  SPEAKER_02: Yeah.
• 14:05
  SPEAKER_02: Um what did you think about the price part?
• 14:09
  SPEAKER_02: Is there anything there that stuck out for stood out for you?
• 14:12
  SPEAKER_01: Just you know, I I asked I asked Omar on on the on the interview as well.
• 14:18
  SPEAKER_01: Like, there's so much that you can't control as well.
• 14:21
  SPEAKER_01: Like the the dollar moving over two years as an example.
• 14:24
  SPEAKER_01: Like that that has an impact on you know your pricing strategies and things like that.
• 14:30
  SPEAKER_01: But I think that I don't want to call it the problem, is the perception Target had and then how they were being priced in the stores also created like this unique, I don't know, the I guess a unique experience because we go to Target.
• 14:45
  SPEAKER_01: Yeah, you have good prices, but it's a little bit more.
• 14:48
  SPEAKER_01: I don't think I'd ever call Target premium.
• 14:50
  SPEAKER_01: Is that maybe I'm wrong?
• 14:52
  SPEAKER_01: No, they're not.
• 14:53
  SPEAKER_02: No, it's not like I when I say premium, I think like Gucci or Prada or something.
• 14:58
  SPEAKER_02: Okay, me too.
• 14:59
  SPEAKER_01: All right.
• 14:59
  SPEAKER_01: So at least let's align what we what we you and I believe are premium.
• 15:02
  SPEAKER_01: It's so but it actually was it felt that it couldn't even hold to like Walmart, even though the pricing side was, which is again odd.
• 15:13
  SPEAKER_02: Yeah, yeah.
• 15:16
  SPEAKER_02: Yeah, and I I I do think there's something there about like you go to Target because because of the products they have there, and the price are really like the everything is really centered on that expect more, pay less thing that's been they've been building that for years and years and years.
• 15:33
  SPEAKER_02: The the the partnerships they have with designers and all that kind of stuff, and yeah, and as soon as you start paying more and it becomes a bit more of a pain in the ass, and you're starting to get less of that thing you go to Target for, yeah, it becomes um, yeah, it's it's dissatisfying as a as a shopper.
• 15:54
  SPEAKER_02: So the pricing part, like you you need, yeah, you need to convince me a little bit more on the why I should pay more for uh for things I can kind of I can't really get at Target anyway because it's not on the shelf.
• 16:08
  SPEAKER_01: It's not on the shelf.
• 16:09
  SPEAKER_01: Uh and I don't know.
• 16:10
  SPEAKER_01: And I was racking my brain if there's like one, if it's one of these peas that really was the juggernaut or the one that really caused the most problems.
• 16:19
  SPEAKER_01: And you just can't isolate one.
• 16:21
  SPEAKER_01: No.
• 16:22
  SPEAKER_01: You can't isolate one.
• 16:23
  SPEAKER_02: The one thing that kept coming back to me was this clock idea, and that the the the lease deal was the thing.
• 16:29
  SPEAKER_02: The lease deal and then the terms for I think it was the part of the terms for the Canadian expansion with the Canadian government to have the approval to to buy out those other stores was is the hiring part within a certain amount of time.
• 16:42
  SPEAKER_02: So the number of stores they had to open and then the number of people they had to hire were like the two points they were trying to uh shoehorn this deal into.
• 16:49
  SPEAKER_02: So there's this uh artificial, and I mean it's real, but it was an it was a manufactured um pressure end state that they were they were going for that put the pressure on them to deliver all the stuff.
• 17:02
  SPEAKER_02: And I think that the compacted timelines and the like insane volume of stuff they had to do within those timelines um is the thing I think that starts eroding the quality of the decision because you're like, oh fuck, it's good enough.
• 17:17
  SPEAKER_02: We just gotta get it.
• 17:18
  SPEAKER_01: We just gotta go.
• 17:19
  SPEAKER_02: We just gotta get this done because then if we don't get this done, then this isn't gonna get done.
• 17:22
  SPEAKER_02: And this and I took a and then there's also like the the revenue expectations around like, well, we're gonna open up these stores and it's gonna be you know X number of dollars per square foot in sales based on our historical models that we've got.
• 17:36
  SPEAKER_02: There's that pressure and that short-term pressure that and the thing that I kept coming back to is like we all have these short-term pressures every quarter, every month, every weekend, every quarter, comps year over year, whatever the thing is.
• 17:50
  SPEAKER_02: And so, um, you know, how hard is it to make quality decisions in isolation of these pressures?
• 17:58
  SPEAKER_02: And and what do you what kind of scenario can you put yourself into where you're not uh forced to make bad trade-offs just to make a tr make a choice?
• 18:07
  SPEAKER_02: I don't know what that is, but it's it's like I don't know, is that why you do the offsites?
• 18:11
  SPEAKER_02: Is that why you do like the annual planning?
• 18:14
  SPEAKER_02: Is that you know, I I don't know what that is.
• 18:16
  SPEAKER_01: I know I you'd hope that those things help do that to to do that, but you're right.
• 18:22
  SPEAKER_01: Like, yeah, I I don't know.
• 18:23
  SPEAKER_01: I I think there's a lot more to this story, and I I don't want to just be rambling right now, but it honestly just puts me in such a pensive state because there's just so there's so much to this case study that you know I every time we we have an opportunity to talk about it, my my mind races, and I'd love to go deeper, understand more of those the decision because I want to believe that leadership wasn't completely obtuse.
• 18:48
  SPEAKER_01: Like it's not that.
• 18:49
  SPEAKER_01: Oh, sure.
• 18:50
  SPEAKER_01: Yeah, I'm with you, right?
• 18:51
  SPEAKER_01: They yeah, like they saw this, but there were probably real reasons why they either couldn't move faster, they couldn't make changes, say, to that lease agreement, and they were forced in that direct like looking at that lease agreement already has like red flags.
• 19:05
  SPEAKER_01: There's no way someone didn't raise them as like key concerns.
• 19:10
  SPEAKER_01: Hey, maybe we should reassess this, but maybe there's pressure from other areas that obviously maybe we don't have that information.
• 19:16
  SPEAKER_01: But yeah, anyways, it's such a rich case study.
• 19:19
  SPEAKER_01: I get excited every time we get to talk about it.
• 19:21
  SPEAKER_01: So I appreciate what um Omar's lens on on this.
• 19:24
  SPEAKER_01: And I think we have to hunt down someone from that old leadership team next.
• 19:28
  SPEAKER_02: That'd be pretty fun.
• 19:30
  SPEAKER_02: Yeah, yeah.
• 19:31
  SPEAKER_01: Put them in a high seat.
• 19:32
  SPEAKER_02: Yeah.
• 19:32
  SPEAKER_02: And like, and last thought for me too is like, I know we talk about you you opened up with the big M little M marketing, and and for me, it's just such an amazing, like the extremes are always great places to learn from, like extremely good or extremely bad.
• 19:47
  SPEAKER_02: But things that are just kind of in the middle, we're like, uh in this case, it's such an extreme case on the mostly on the bad end.
• 19:57
  SPEAKER_02: Of across and like looking at big M marketing across the four P's, it's such an amazing, rich, like you said, a rich source for learning.
• 20:07
  SPEAKER_02: It's great, it's so good.
• 20:09
  SPEAKER_01: It's so good.
• 20:10
  SPEAKER_02: Yeah, yeah.
• 20:11
  SPEAKER_02: Okay, well, thanks, V, for uh breaking that down.
• 20:14
  SPEAKER_01: It was that was good.
• 20:15
  SPEAKER_01: No, thank thank you, and thanks to all of you listening.
• 20:18
  SPEAKER_01: Thanks for keeping us in your ears.
• 20:19
  SPEAKER_01: Stay sharp, everyone, and don't be a target.