Latest / The Retail Podcast / Morrisons, Shein & the Realities of Retail Leadership | Five Things Friday

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Morrisons, Shein & the Realities of Retail Leadership | Five Things Friday · The Retail Podcast

• 0:00
  Hello and welcome back to Five Things Friday.
• 0:02
  Now, Laura and I again, actually let's do an introduction because
• 0:07
  you may have not watched last week, you may have never watched
• 0:09
  the retail podcast. You're thinking, who is this
• 0:12
  person and who is Laura? So I'm Alex, I'm from the retail
• 0:16
  podcast. Hi, I'm Laura, I'm a Scottish
• 0:20
  lassie and I am based out in Australia and I'm a technology
• 0:24
  advisor to mid market and enterprise brands.
• 0:28
  What we're going to do is look at 5 things that we have
• 0:32
  experienced or a top of our minds over the last five days.
• 0:36
  I've been in the UK, in London, at the World Retail Congress.
• 0:40
  If you don't know the World Retail Congress, it's where CEOs
• 0:43
  go to learn. So it's an incredibly, you know,
• 0:46
  sort of boutique conference. It was in London's Park Lane, so
• 0:52
  very exclusive. It's full board members, it's 4
• 0:56
  CEOs and it's, you know, CEOs present and it's CEOs across the
• 1:00
  world. And every year it's in a
• 1:02
  different location. So I think it's like it's been
• 1:05
  Madrid, Rome, Paris and London. And next week, next year we'll
• 1:11
  be in Berlin. But let me get into what was
• 1:13
  really interesting. So one of the CEOs that was I
• 1:17
  thought, you know, he, he, I think he was, he was the closing
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  talk on on the last day and, you know, tough gig because a bunch
• 1:25
  of executives all that they all want to get back out, check
• 1:28
  their emails. So I think, I think it was a
• 1:30
  difficult slot to fill. But he did a great job and you
• 1:34
  know, he is now the CEO of Morrisons, which was a
• 1:38
  struggling UK supermarket grocer, but he's ex CEO of
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  Carrefour, which is a massive European and Latam grocer.
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  So they're, they're, you know, 5 billion, I think Mark Caple or
• 1:53
  more really big. But the reason I, I've, I've
• 1:56
  gone with him, he spoke about something called, so basically,
• 2:00
  you know, whatever sport, football or Aussie rules
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  football, UK football, American football, he's the guy that
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  comes in when you're not performing, when, when your
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  team's like at the bottom of the, of the, of the division and
• 2:12
  they need to go up. Apparently he's, he's the guy
• 2:15
  you call. And the reason you call him is
• 2:18
  that he has a strategy called and I don't know if he created
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  it, but he created it when as in did, I don't know McKinsey or
• 2:28
  BCG or someone come in and give it to him.
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  But anyway, he's claiming this as his own.
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  And it's the 555 principle, which is focused on three
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  pillars, trust, service and experience or, you know,
• 2:42
  shopping experience. And you know why 5 Because, and
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  he said this, he wants him, his executives, his shop floor, his
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  headquarter head head office staff, to be able to put one
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  arm, one hand up and say, you know, the top five things that
• 2:58
  they're focused on at any one time.
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  And I'll just quickly run through the, you know, within
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  that what they are. So for example, how do you
• 3:08
  create trust? He's always about, you know, it
• 3:12
  has to the price has to be clear and accurate in in the fruit
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  aisles. The vegetables always have to be
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  fresh and you know, have flavour, which which is crazy
• 3:23
  that we're saying that. But anyway, not all, not all
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  fruit and vegetable, it's fresh and tasty private label, right,
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  has to be showcased as best in the market rather than as cheap
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  alternatives or cheap basics, right.
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  So there's all that premium, you know, whether you call it
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  premiumisation promotions have to be clear so they don't run
• 3:45
  out of stock. e-commerce deliveries have to be pick up.
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  So well, you have to have e-commerce deliveries, which I
• 3:51
  think most grocers do now. And pickups are quick, are quick
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  and complete. I'm not going to do that.
• 3:57
  Was that was on trust. I mean, you can sort, I think
• 3:59
  you can Google it in terms of the five elements for trust,
• 4:03
  service and shopping experience. But from all early indications,
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  it's working for Morrisons. Is it a turn around?
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  I think it's too, too quick to to call it.
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  But I just thought really interesting.
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  I actually saw him twice. He's he's because he's French.
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  I also saw him speaking at the French embassy at NRF.
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  And you know, I, I just, you know, it, it feels like he's
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  Aceo going places. And I really love this sort of
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  really simple methodology of 555 and it seems to have worked at 2
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  grocers. The other one that was
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  interesting was a sort of panel conversation that foreign
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  intense purposes had some senior people in there about the, you
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  know, the, the, the big thing, you know, why inclusive
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  leadership matters because with everything that, let's be
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  honest, all the politics that's happening in the US, are we
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  drifting back to an agenda that was very alienating and
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  isolating. But it feels like, especially in
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  the UK, the retailers are saying, hey, and I think this
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  was part of the 555 actually. Oh, no, no, no, it wasn't.
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  They, you have to have the representative and it's really
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  simple, but you have to have a representative of your customer
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  base within your board or within your chief exec group.
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  And you know, whether or not that's true or not, because
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  still something like 80% of women's clothes are made by men
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  or are made by businesses that have male orientated boardrooms
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  making decisions on what's best for, you know, the whole
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  inclusive realm. I thought was an interesting
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  article and you know, when I, I did my write up on it, it did
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  it, it got quite a good, it was quite well received.
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  And then, and then I've put all of the like, you know, there's
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  like all of the takeaways that are in there.
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  How many were there? I mean, it was a cracking old
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  talk. There was 15 points that I took
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  away in terms of, you know, and you know, data should inform,
• 6:19
  not define talent strategy. But the best 1 I loved was the
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  fact that, you know, a lot of board room decisions or when
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  they're thinking about who we're going to recruit into senior
• 6:33
  positions, they're looking at experience rather than potential
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  in, in the majority of cases, not all cases, but in the
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  majority of cases. And so, you know, you really
• 6:44
  need to look at people's potential.
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  And then the one thing that I think I probably suffered
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  through my whole career because I did it so, so poorly, it's
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  meant it is getting a sponsor right, Getting someone in the
• 6:59
  business who can sponsor you who I, I just was really naive to
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  that because no one had ever told me right?
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  And so I can imagine and, and all of them were sort of
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  agreeing, you need someone in your business.
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  Actually, once someone said to me, you need two people from 2
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  parts of the business who will fight your corner when senior
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  directors are making or business leaders are making decisions on
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  who's going to lead the business.
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  And so anyway, I'm, I'm, I'm, I'm one for empowerment and, and
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  equality across all groups, not just gender, but the one reason
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  why gender comes in. Let's get one thing right and
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  then worry about getting, you know, like if they're still, you
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  know, one in 10 recruits in the UK were met, sorry, were female.
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  We still need to get to parity, then look at how we create.
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  So that that was for me really interesting.
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  And then I guess the last sorry, go on.
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  You know, you know, you know, Alex, on that point, right?
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  Like, I feel like a big part of the problem is for the last few
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  years when we've been talking about gender, we've kind of
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  isolated it away from men. And it should have been a joint
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  conversation, you know, And I do feel like recently I have seen a
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  wee bit of a, a pull back to quite obvious, like male panels
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  or male startups that are just in like, you know, I would
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  rather see the truth than have some women plotted in there as
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  plants and fake. I want to know the truth.
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  I don't want as in a picture just to, you know, look like
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  it's real. But I do think that the
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  conversation to go forward has to be men and women together.
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  And like what you said, there's lots of ways inclusivity, but I
• 8:50
  think this is the main one we have to tackle first, right?
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  Like then everything else can, will, will, will come.
• 8:56
  Good. So yeah, no, I really obviously
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  I'm a female. I love that to hear.
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  Yeah, the men. You don't have.
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  Conversations. Because I've spent so much time
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  interviewing female leaders and asking them what advice would
• 9:11
  you give yourself when you're younger?
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  And most of them say, I wish I had a voice earlier on in my
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  life. I wish I didn't listen to the
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  voice in my head that kept telling me that I didn't have
• 9:23
  permission to speak in meetings. And then I, and I said, I find
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  it really difficult as a bloke because, you know, you don't
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  want to be seen as pandering, like, oh, you poor thing.
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  But ultimately you're well aware that there's a disparity, right?
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  So you're aware that there's something not right.
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  But you're like, how do you like sensitively approach the subject
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  without being patronising or, and, and, and the thing that I
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  think most men are really, I think the younger generation
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  rather than my generation. Is it mansplaining?
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  Is that is that the term? Am I mansplaining?
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  Right? And I'm like, oh, man,
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  seriously. They've even created a word for
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  when men are sort of like, you know, talk down to women.
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  And I was like, ah, OK, all right, I can't fix it.
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  But I can definitely say, hey, look, it's not right when it is
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  like all things. I want a world that, you know,
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  is good for my kids. And anyway, it was a really good
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  talk and I, and I felt, as you said, it was, it wasn't, thank
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  God, it wasn't five men talking about diversity, right?
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  Or, or it wasn't like a really a closed group.
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  It was an, it was like the, the female leaders, all of them
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  thing. And, and it's something that
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  also, you know, women very rarely support each other in
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  business as well. And so that's another thing.
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  But anyway, I don't want to focus on that too much as in I
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  think the other two things we are like a week or two weeks
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  away from shop talk. I just interviewed Ben Miller
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  who's head of content and he, so I'll hopefully get that out
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  there. And it was really good shop
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  talk. You're lined up to be a
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  phenomenal talk. If you go, there is a CDO from
• 11:27
  LVMH and I forget the lady's name, she is awesome.
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  She will for me. I mean that will be the
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  highlight keynote because I saw her at Web Summit and she was
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  phenomenal. So if you're at Shop Talk
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  Europe, make sure you go to that talk.
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  It was phenomenal. And then I will be at at Shop
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  Talk for a day. And then I will also be at NRF
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  Asia with our good friend Reef. Again, if there's one talk you
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  go to, it's got to be the one that I'm hosting with the CEO or
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  family. Ma.
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  Oh my God, what an incredible man.
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  But anyway, Laura, why don't you take us through your top 2?
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  OK, cool. So the first thing I'm going to
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  talk about is Sheen. A couple of weeks ago, I was
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  reading the Australian Financial Report review, Australian
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  Financial Review and it reported that Sheen has clocked about 12
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  billion and Aussie sales in the last year.
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  So that was up to December 2024 is up significantly on the year
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  before, up by like 980 million on the year prior.
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  So and they only entered this market in 2022.
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  Need to put that in context because I know a lot of people
• 12:43
  may be listening or from the UK and the US.
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  So we've got about 28 million people population in Australia.
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  We have the group called the Accent Group.
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  So they have multiple brands in their portfolio.
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  They have about 900 stores across Australia and they've
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  been around for a long, long time.
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  Their their brands and their sales are sitting at 1.6
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  billion. So you've got someone like Sheen
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  who's in what three years that are that are Pureplay and
• 13:11
  they're doing 1.2 billion. So it's it's pretty crazy.
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  And listen, it touches on a few points, right?
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  Like someone I posted about this and someone called it digital
• 13:22
  hypnosis. You could call it the, you know,
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  the they're really mastering that demand.
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  They're definitely putting us lot of money into the sponsored
• 13:31
  ads on Google. They're everywhere and they're
• 13:34
  building aggressively building out that influencer strategy.
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  But I think for me in in this market, we've made a wee bitty
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  noise. And I know there's definitely
• 13:42
  some retail bodies quite concerned about it.
• 13:44
  But as and the most recent what Trump has done on the tariffs,
• 13:48
  the de minimis was at $800, right?
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  So you didn't, you didn't really pay anything when it was if it
• 13:54
  was under $800, you were hey. Is dividend anonymous on tariff?
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  Is that is that OK? Is that like the proper way of
• 14:04
  steering? Tariffs, yeah.
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  Like it's like, well, you're not going to pay, you didn't pay
• 14:08
  anything right on that product if it was under $800.
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  They've. So basically if you were selling
• 14:14
  to the US, you could do it and unless it's high luxury, you
• 14:18
  didn't have to have that, that tax, you weren't hitting that
• 14:21
  tax threshold. Now they've reduced that to 0,
• 14:25
  right? Which basically means even if
• 14:27
  you sell some $30 into the US, you're going to get hit with,
• 14:31
  you have to make a payment, right?
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  So the challenge is, is now the likes of she, Sheen and Timo are
• 14:38
  going to focus on other markets, right?
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  So little old Australia is probably going to get targeted
• 14:46
  right more aggressively from these these kind of, you know,
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  massive, you know, dominant forces of machines and the team
• 14:55
  you. So yeah, I think it's just
• 14:58
  something that as it's almost like watch what customers do not
• 15:04
  what they say has been a lot of noise from the past before this
• 15:09
  report was announced that, you know, our customers want more
• 15:13
  quality. You know, they're going to
• 15:15
  support their Australian brands. It's not really true whether
• 15:18
  that be cost a lesson. They're doing this for them.
• 15:22
  And you know, and and with respect to that, there's a lot
• 15:25
  of like, you know, we're in a cost of living crisis, right?
• 15:28
  Like it's very expensive out here for a home and you know, it
• 15:33
  it it's a challenge. So but but it's it's very much
• 15:37
  happening. And when you could just put it
• 15:39
  on the comparison of that big accent group, it's pretty
• 15:42
  significant. So that is the first one
• 15:46
  probably touches on a little bit of a point of that loyalty,
• 15:49
  right. Loyalty as loyalty is really not
• 15:54
  real. Loyalty's changed and you have
• 15:56
  to give the customer what they want.
• 15:58
  So they're definitely bringing that experience.
• 16:00
  They're bringing that gamification.
• 16:03
  And yeah, like that's how they're building that, that
• 16:07
  loyalty. And the customer demographic is
• 16:10
  so crazily skewed. This is, this is getting, you
• 16:13
  know, you're getting the boomers, you're getting them
• 16:15
  millennials and you're getting the young, the young.
• 16:17
  And so, yeah, Sheen, first one, I think we're going to, I think
• 16:23
  it's just the way they can do things, the speed to market, the
• 16:25
  way they can innovate is just second to none, right?
• 16:28
  It's it's, it's significant in three years, what they've done.
• 16:31
  The other one is actually a little bit, it's actually
• 16:35
  marketplaces my second one. So when I talk to when I work
• 16:41
  with a lot of retailers, talk to some boards, everyone's looking
• 16:46
  at growth strategies and it's almost like I came from eBay,
• 16:50
  eBay sponsored me to come over to Australia.
• 16:53
  I've got, I know marketplaces pretty well.
• 16:57
  So when I hear this, I kind of go, oh, what aren't we there
• 17:00
  yet? But I think it's really
• 17:01
  interesting that yeah, I think marketplaces are where the
• 17:06
  customer is at. Not all places are equal.
• 17:09
  We all know that there was a surgeons of everyone was a
• 17:12
  marketplace doesn't work. I think the main one being let's
• 17:16
  talk about Amazon massive. I think the the last thing I
• 17:20
  heard, which is probably hopefully not more than this,
• 17:23
  but it was like $0.60 to the dollar and online sales were
• 17:25
  spent via Amazon in the US Crazy.
• 17:29
  So if you're really looking for demand creation, you've got to
• 17:34
  go where the customers are and they're on Amazon.
• 17:36
  So locally I definitely see locally and globally, Amazon's
• 17:42
  definitely back on the table as a growth, a strategy one for
• 17:45
  getting going to the USA like you know, getting into the
• 17:49
  American market, using a partner to get there.
• 17:52
  And locally as well, if they're not on it, they should be as the
• 17:57
  highest, you know, the traffic is the highest to it's stealth
• 18:01
  in Australia. It's been a lot.
• 18:03
  It's took a lot longer to get where they're at.
• 18:05
  Still got a way to go. So they've been a bit of a
• 18:08
  creeper, but they're the number one trafficked commerce site
• 18:15
  markets. I mean, what, what, what's
• 18:17
  really interesting, I, I was, I was listening to the, the, the
• 18:21
  CEO of Sachs of 5th, which is like Neiman Marcus, Barney's,
• 18:26
  it's like a whole bunch of department stores in the US that
• 18:28
  have just all come together and their joint venture is them
• 18:33
  Amazon and Salesforce in luxury, where it's exactly what, what
• 18:38
  you're saying in, in the, in the sense that everyone complained
• 18:43
  and it's so funny, these CEOs, they were going, we know that,
• 18:46
  you know, Amazon, I was like, really, Amazon's going to be the
• 18:49
  place where you go to buy luxury.
• 18:51
  And I was like, well anyway, but what was interesting.
• 18:56
  No, it like I've seen what they were they're doing right.
• 18:59
  So they've they've tried to break luxury for a while and now
• 19:02
  they're going back again to do it and there'd be more.
• 19:04
  There's definitely determined. I think it's like I even seen
• 19:09
  another one, someone posted about a bike brand called Canyon
• 19:13
  that sells $3000 bikes and they've got a storefront.
• 19:17
  And the conversation was interesting.
• 19:19
  Like some people were going, oh, it'll be brand damaging.
• 19:23
  And you're like, well, they're holding tight on the price
• 19:25
  point, right? The eyeballs are there and
• 19:29
  you're giving them choice. If they want to buy through
• 19:31
  Amazon, if people like and they like Prime and they like to use
• 19:34
  it, let them do it. If they come to your website and
• 19:38
  you offer a different service and they're, you know, and they
• 19:40
  want to come there, you, you will acquire customers that way
• 19:43
  too. But it's well, they are.
• 19:46
  It's weird. I've been thinking about this
• 19:48
  for a while and then in the last week I noticed the sax play.
• 19:51
  So they're trying to go more luxury and as well, I think the
• 19:56
  difference is this time they're trying to not be a discount
• 19:59
  luxury retailer. They're trying, you know,
• 20:02
  they're all so they could arguably be seen to be
• 20:05
  supporting businesses. But again.
• 20:08
  They're a frenemy. You need a strategy.
• 20:10
  You need to know when a you know what's that song?
• 20:13
  You got to know when to hold them, know when to roll them and
• 20:16
  you walk away, know when to run as you cannot go in blind to,
• 20:21
  but you could argue and put. You down as a country music
• 20:26
  lover, Kelly? Rogers You could argue that
• 20:28
  there's no not much difference between a marketplace to TikTok
• 20:31
  and Instagram now, right? They're all.
• 20:34
  They're all. Yeah, it's your social, it was
• 20:37
  part of your social strategy, right.
• 20:39
  So if you've got a social strategy, what what is that
• 20:42
  marketplace? I mean, just going back to the
• 20:44
  sax thing, Amazon is saying, oh, sorry, sax are saying that they
• 20:48
  will wall off the sax environment within the Amazon
• 20:52
  world. So you're getting this truly
• 20:55
  exclusive Amazon where you're not going to get all of these
• 20:58
  other products coming into your feed.
• 21:01
  It is just the SAX feed, but you know, fulfilled by Amazon, which
• 21:08
  I was like, OK, all right, let's see, is this a Shopify?
• 21:12
  Are they are they creating now shop windows into walled areas?
• 21:17
  Sales and average partnership, yeah, as well.
• 21:21
  Yeah. Like there's definitely
• 21:25
  something in it like I think eBay when I was there what 15
• 21:29
  years ago tried to break into fashion.
• 21:31
  They all want to win in this fashion.
• 21:33
  And this is now going to be probably third time round.
• 21:36
  And you know, I think the it's just finding the right approach
• 21:41
  to it, right? But but the customers you need,
• 21:45
  what do we say? Like we talk about that Omni
• 21:47
  channel strategy is be where the customers at on Amazon, where do
• 21:51
  you like it or not? Was there anything that you
• 21:53
  wanted? I know we've done our top five.
• 21:55
  Is there anything you wanted to add as it like the icky 5th?
• 22:01
  No, I think that is that says done 5 and this calls 5 things
• 22:09
  Friday, so I'll hold my other one.
• 22:11
  Next week.