Shanghai and New York. And I'm very fortunate to have with me a very special guest, Lance Itkoff, who is the president of Grafton Apparel. And Lance, why don't you introduce yourself? Well, you just did. Oh, my gosh. You just did. So, no. So for those listening in that may not know exactly what Grafton Apparel is, we have 132 stores across Canada under the Tip-Top chain, where we have 90 approximate stores, and then we are the only national retailer of big and tall apparel in Canada, where we do business under the George Richards and Mr. Big & Tall banners. And that makes up the 132-store profile. Great. And I look forward to learning more about how you've overcome the COVID and what your company's up to now. Yeah. Like a lot of us, we're asking the question, what's going to happen post-COVID? A lot of markets are opening up in North America, where there is a new normal, I call it a new reality.
And so we conducted research about three weeks ago in the marketplace. Well, actually, we've conducted four series of studies over a period of two months. We conducted a study for the banking industry, one for the food service industry, one for the consumer packaged goods, and now the final study is for the retail sector. And so we're going to aggregate some of those insights and share those with you to see how the evolution of consumer behavior over that period of time.
I can't get the...
See if I can move this.
There we go. Sorry about that. Just anchor it that whatever we do and how we approach the marketplace is all based on the blink factor, creating those emotional connections. And a lot of what's happening in the marketplace today, the insights we gain are, is the fact that a lot of anxiety is impacting the way consumers shop.
What is this new reality? To do that, we've conducted research. We want to understand the current and future retail shopping behaviors and identify what are the physical and digital aspects of the customer journey that has been influenced by COVID-19. And coming out of the pandemic, what are those behaviors going to be? Are there different behaviors based on the different age groups? And we'll share with you some quite unique insights involving coming out of that study. And then finally, what are the risks for retailers? What are the things you need to do to ensure that your customers, when they enter your store, visit your store, that you're doing the things that remove those anxiety points, the fear that they have about contracting the disease.
So Lance, I'll ask you the question, how has COVID-19 impacted your stores?
Wow.
Tell you what, I'm 56 years old, and I had been doing this for 30-odd years, and nothing that I had ever experienced, nothing that I ever learned, nothing that a mentor ever helped me with would've ever prepared me for what the challenges were in a situation like this. And it's just been an unbelievable and inspiring experience to see a group of over 1,000 employees come together, understanding that we're in a fight together,
and to be able to do some of the special things that the team has been able to do. As you know, most like everybody else, all of our stores shut down in the middle of March, and we've been following the provincial guidelines for reopening, and at this point, about 115 of our 132 stores are now back up and running. Only the mall-based GTA stores are still yet to open. So we've had to rethink everything that we do and how we do it, whether it's the personal protective equipment that we provide for our stores, the cleaning protocols, the disinfecting protocols, the things that we know that are in the in-store challenges. Whether it's about reconfiguring our office space for when we actually do go back to work, because we're all working remotely on web platforms. Whether it's the way that we flow and procure merchandise with the disruption of the supply chain straight up and down the line. Whether it's the way we structure our leases
with our landlord partners. Every single corner of the business has been basically turned upside down and forced us to re-look at it. But the interesting thing is it just serves as like a laser-focused reminder of what our job is. Our job is to be able to serve the customer. And this has been a real wake-up call for a lot of retailers who haven't been laser-focused on the customer, and that's a journey that you, in particular JP, have been a huge architect with us on over the course of the last three or four years as we really reinvented the company, where we went from an inward and backward-looking company to an outward and forward-looking company that listens to the customer. So it's been unbelievable. There's huge mountains of work to come, but I can tell you, I'm thrilled with the response of the team, the effort of the team If I could tell you in the last three or four weeks since stores have opened, based on our
expectations, we're doing a good clip better than what we had expected. So I'm extremely optimistic and hopeful, and actually surprised with some of the business that we've gotten back already. And now it's just that new norm for us and how we rethink everything top to bottom. Fantastic. And we'll talk a little bit more about that as we go into the research results. So, during the pandemic, what has been consumer attitude and behaviors? And again, this is 8,000 consumers, 4,000 in Canada, 4,000 in the US. The study was a North American study. If I had to sum up what respondents were telling us is really make the environment safe for me to shop. And that environment needs to be safe for the employees working and for the customers shopping. And that has been a consistent theme through the four sets of studies we've conducted. And actually, brand loyalty and willingness to shop is predicated
by how retailers have treated their employees. So employee engagement, employee treatment, protecting the employees, ensuring that they're safe is paramount.
So as I mentioned, we've done four studies. The first study we did was for the banking industry, and it was done March 20th. Really, that was when the reality of the pandemic hadn't really become real. But it hadn't sunk in that this was something that was going to be long. We asked consumers, "Are you optimistic that this pandemic will be away complete in three months? Or are you pessimistic that it'll be six months or longer?" And you can see here at the beginning of the pandemic, there were more optimistic consumers. But there was a switch on April 15th, and I think that's due to the realization that this pandemic was going to last significantly longer and have a greater impact on the economy. And you can see in May, when we did our third study for the consumer packaged goods industry, again, it went up by half a point. And then where we are today, May 20th, you can see that it continues to rise.
Why is this important? You need to understand that we look at demographics and personas based on shopping behavior patterns, age groups. You need to look at and add a new filter, and that new filter is about, are you in a pessimistic market environment where you take San Diego, LA, Atlanta, Chicago, New York in the US here, Toronto, Montreal, Vancouver. These are markets that have been ravaged by the pandemic. Most consumers have very different behaviors, needs, anxiety levels versus markets where the COVID-19 has had little impact. And so I think you really need to start looking at your strategies. Which stores do you close? Which stores do you open? How do you train your staff? Needs to be predicated on what type of customer attitude and behavior is happening in that marketplace. And this gives you a sense.
And obviously, as you look at cohorts and you look at age groups, the older the consumer, the more vulnerable they are. I think, though, that there is a myth, and the myth is being validated, debunked, if you like. The reality is that the pandemic is impacting all age groups. The biggest rise in Canada of the COVID-19 has actually been in the age group 25 to 34, and this was the group that thought they were impervious to contracting the virus, and the reality is not the case at all. And so you can see here that as consumers are going back to shopping, that the older consumers will have a significantly higher level of anxiety. And so understanding how to treat your customers when they come to your stores, understanding that there's a lot of apprehension about shopping in the malls, even though I'm going to share with you that consumers want to go back to shopping.
We also asked them their financial impact of the pandemic, and you can see here significant impact. From moderate impact to major impact, the pandemic has reduced jobs, it's increased the cost of living, it's made it more difficult for companies to operate. There's been a lot more layoffs. Sales have tanked. Retailers are having trouble paying their rent. These are all factors that are leading to this level of anxiety. So I want to ask the question, how has your leadership and team staff managed COVID-19?
Lance? Yeah. Thanks. I got to tell you what. No matter how good you think you are at being a listener, it really tests how good you are because the effect on the entire leadership team, especially when we had no choice but in the early days of the closing of our stores to temporarily lay off 100% of the store staff, and we basically had a continuity staff only in head office. It really challenges your ability to listen, and it forces you to really grow. And in terms of the leadership team And what we've had to do, we've had to listen. But I got to tell you, I think out of the
pain of that period, which all of our associates have been recalled, everybody's back at full pay now. So thank goodness we're on the back half of that disruption. But it really reminds you that you have to listen. You have to listen to your people. You have to listen to your team. You have to listen to your customer. So in terms of managing from a leadership standpoint, I would say it's been about listening. From the staff, I tell you what, I've never been more inspired in my professional life than the way that our associates have responded throughout this whole thing. I got a story this morning about a customer who had phoned our MetroTown store in BC about a son, that he was in a remote location, he needed a suit for a virtual prom. He was flying home. He had a layover in the airport. Our store manager drove to the airport based on trying to profile him over the phone, brought the suit and the shirt and the
tie out, it all fit perfectly. We have pictures of it. The fact that we have a staff that does that under normal times is inspiring enough. But the fact that we have a staff that'll do something like that, to drive themselves to an airport to meet a customer on a layover to make sure that they get that suit to look and feel great in for that prom celebration during a global pandemic is the kind of thing that is just, for me as a leader, it just makes me fortunate to be a part of, and it's inspiring. That's great. That is a great story. And I know that your staff are extremely engaged and supportive. Seen that across prior to the pandemic and during the pandemic. Absolutely.
So when you look at online shopping, what was the impact? And what we see here is that online shopping skyrocketed. We asked the question, how much has your shopping shifted due to the pandemic? Order online through Amazon, order online by a retailer and deliver it to the home or pick up at the store, physically shop at the retail store, order by phone and deliver it to the home, or order by phone and pick up at the store. So, interesting insights. One, obviously ordering through Amazon played an important role. They've staffed up significantly their network. But also ordering from the retail's website and delivering to the home, you can see significant increase in consumer behavior. And we see that across the entire industries, from banking to food service. What COVID-19 has done is, is accelerated pre-COVID behaviors of how consumers shop. It has just accelerated how they do that. But again, you can see here in order online by retail website, picking up in the
store played still an important role in those markets where the pandemic didn't have a significant impact, or that it was the class of trade, like hardware stores or supermarkets, where the consumer could buy those groceries online and pick it up at the store. But I want to highlight the 18 to 24. One of the things that's quite unique with this segment is order by phone and deliver to the home. And by phone, we mean could be mobile device, and it could be home phone. And you can see that this group of consumers are very much tied to their mobile device. And so as you look at strategies of coming out from COVID-19, you need to ask yourself, what is your mobile user experience? Are there areas of improvement in how your customers interact with that device? Can you make it easier, fewer clicks, easier navigation, better price comparing? These are really important factors for the 18 to 24. And actually, when you look across, you can see that other segments,
the mobile device still remains an important tool in making their purchase decisions.
We also asked them, during the pandemic and post-pandemic, what are the categories you're going to shop? And obviously, during the pandemic, things like drugstore, grocery, and mass merchants did very well. The most recent stats that I saw from Walmart, they had the best quarter ever. Because they filled a need of reducing the number of places consumers shop. I can go to Walmart and do my groceries, I can buy my clothes for my kids, I can buy shoes, I can get electronics. I can all one stop. There's always this concern of the hassle of lining up and queuing and waiting to get, as retailers limit the number of customers in their stores, that loss of productivity for consumers doing their shopping before they actually enter the store is a huge factor in how many stores they visited. Coming out of the pandemic, you can see the categories that are fashion, Lance, your categories. There's a little bit less real
appetite for shopping, although you can see shoe stores and apparel. There is 17% of consumers who will spend more, shop more post-pandemic than prior pandemic. And so that just shows you that the pandemic has accelerated current shopping behaviors. These behaviors are also going to continue post-pandemic. The opportunity for retailers is to give them a great reason to visit your stores, ensuring that you've got the right offers and promotions, ensuring that your stores from a ... safety and security standpoint are reflective of the needs of the customers, which we're going to get into later on in this presentation.
And when you look at consumer shopping, one of the questions that we asked them is, "If your preferred product was not available in the store, if you didn't have that product, what would you do?" And this is consistent with the CPG research we did, and this is a big kind of red flag. And the red flag is this, is that if you're out of stock, if your stores are not selling the merchandise that customers are looking for, you are actually driving them to your competitor. You're driving them to your competitor platform, like Amazon. So it's really important that as you reopen your stores, that you have the right level of inventory in your stores to allow the consumer to complete that shopping, purchase decision in the store, not moving them to an online experience.
So I'm going to pass on, how did you fare with online sales during the pandemic, Lance? I tell you what, it was unbelievable. Really, almost immediately, we saw the significant uptick in e-commerce activity. The thing that's actually surprised me the most, so let's just say,
the rate of increase was more than two times what we had planned for e-commerce under our normal planned period for March, April, and May. The thing that really surprised me the most is when our stores started to open up again, is that strength was fueling strength. I don't know whether it was the consumer sentiment coming back or whether it was awareness,
but our e-commerce stayed just as strong even after the physical stores started to open up. It's almost as if one is fueling the other, and we've all known that the customer likes to bounce back between the physical location and the online. We actually have two fairly unique businesses, one being Tip Top, who is a tailored resource, where your team helped us architect the notion of the fit room and really walking in looking like $0.10 and walking out looking like a million bucks. That's a very experiential process, and one that you can't fully replicate online. And then we have the Big and Tall stores, where there are a lot of specific needs of the fellow who's either tall or big, that the store experience really helps. So for those customers, they're reengaging immediately in the stores, but for the customers who are repeat shoppers that know what they want, they're banging it out online. So they're both chugging along.
So, I would tell you that the biggest surprise wasn't how much our sales increased, but how they're staying there right now, even as the stores come online. Yeah. It's interesting, in our panel, 35% indicated there was no e-commerce. We had 45% e-commerce website delivery only, so no BOPIS. So there was nobody in our audience that had BOPIS or BOPIS only. So that's an interesting insight.
So we asked the question, "Which retailers really handled well COVID?" This is an important question because it really is a leading-edge indicator of sentiment. And obviously, the brands that had the most interaction with consumers, you think supermarkets, drugstores, mass merchants, and banks, they've had a positive perception. Perception was that these retailers were supporting the consumer in their most dire needs, which is basically to have sustainable food and shelter and protection and health. And so, that doesn't mean that fashion apparel and other classes of retailer didn't have a positive impact. It was that they were less relevant for that moment of crisis that was happening in the marketplace.
We also asked a question, "Post-pandemic, if you have a limited amount of money to spend, where are you going to spend that money?" And obviously, eating in restaurants and bars, very important, and this is again consistent with the foodservice research we did, we conducted basically a month and a half ago. But what's really, I think, encouraging for retailers is visiting retail stores and malls was the second largest percentage of things that consumers were looking forward to. And so you will see a resurgence in the markets that open up of consumers coming to your stores. You can see a resurgence of them going to the mall. The opportunity is to convert that foot traffic into sales in your stores, and then there's a variety of other things. Down at the bottom is business travel. So you can see that Warren Buffett sold all his shares in Delta and American Airlines. I think he saw the writing on the wall that we will see a significant
reduction in business travel and going to business meetings with people working from home, and the advent of Zoom and other video conferencing platforms, just like we're doing today. And so I think those markets, those categories, are going to be heavily impacted. But there's reassurance here that the consumer does want to come to the stores and shop, that they make that a priority. It's part of their sociability. It's part of them reconnecting with friends. It's them reconnecting sense of energy and the sense of relief
So we talked at the beginning of the research that really one of the things we noticed that there was this new way of looking at customers, and that new way of looking at customers is, are they optimistic or pessimistic consumers? And what we've laid out here is these two new personas, and these optimistic consumers tend to be younger. They tend to be in markets where COVID has had less of an impact. They tend to shop more online. They're looking for novelty and experiences. So again, a continuation of what was happening before COVID-19. The pessimistic are much more value-driven consumers, and one of the insights that came through our numerous studies is expect consumers to be much more value-driven coming out of COVID-19. Expect that consumers who normally don't buy on price, expect consumers who are not looking for deals, expect those customers to start changing their behavior. Again, it's a fear of
is there going to be a second wave of the pandemic, which is happening right now in Florida and some of the other states. Is my job secure? These are all levels of anxiety that are driving consumers to look for value. So when you start looking at opening your stores, understand there is power in delivering that value. And in our study, in the full report, we go into deeper details of those factors. So I'll pass it on to you, Lance.
What did you learn here
now that your stores are open? I tell you, the
amount of stories that we've heard about issues are very, very minimal. The stories that I'm hearing about is how cooperative the customers are with the new norm in the stores, how appreciative they are with the safety and PPE protocols that we've put into place. Because at the end of the day, if you're in this for the long game, the most important assets that you have are your people and your customers. And if you're not doing right by them now, then it's going to come back on the negative side in multiples. So we've taken very strong measures to ensure that our teams are safe and that our customers are safe. We haven't mandated for our customers to use PPE, but we've made it available for them. And we have all of the safety disinfecting supplies for them. I really haven't heard one kind of conflict, and I'm hearing more appreciative stories than I'm hearing of anything. But it's kind of interesting because people want to get back to some semblance of
normal. Mm-hmm. Yeah. The ones going into the malls are the ones that are actually feeling comfortable engaging, so they have a leg up anyway. Yes. And malls tend to attract younger consumers demographically anyways. So, which is a great platform.
So let's see. One of the questions we asked, and this is before Floyd and Black Lives Matter, we wanted to find out, is there an undercurrent sentiment happening in the marketplace that will have a lasting impact on the market, on consumer behavior? We asked a whole series of questions, and what was startling is government debt will lead to higher taxes. There's a significant concern that all this investment in job security and ensuring people can meet their rent. There's a concern that there's going to be a payback period. There's going to be a time where this is going to have to be paid back. How we shop in retail stores will change forever. 70% identified that they don't see us going back to the old way. The new normal requires us to take seriously sanitization and customer safety and staff safety. I think it's an important point because when we've done these webinars, there is a sentiment. There's a group of you that's on the call today that's saying,
"Let's just wait and see. You know what? The media is really blowing this out of perspective. Three months, four months from now, it'll all be over. At Christmas time, we'll be back to normal. So let's not over-invest. Let's not put too much effort in coming to the market." I think that would be a big mistake. Absolutely big mistake. Obviously, in certain other categories, and including retail, that means investing in new technology, touchless technology. But again, as you look here, one of the factors at 63% is economic instability leads to massive social unrest. So what you're seeing here, and I think this is really important to understand, is this COVID-19 has really disrupted the market from a middle-class growth spectrum. The middle class is shrinking. It's accelerated the shrinking of the middle class, and that leads to really inequality in the marketplace. It could be ethnicity equality, or it could be income
equality, or it could be accessibility to healthcare inequalities. This pandemic has really highlighted these issues, and there's a role retail plays at reassuring consumers. There's a role retail can play in the way you communicate to them. And again, all that's covered in our study. So what can we do as retailers to provide that hope? What can we do to reassure consumers and reduce their anxiety? As Lance indicated, consumers come to stores to shop as a way of retreat, sense of experience, escapism. And that plays an important role of why they're in the stores, not just to buy products.
Now, if you look at what other tools retailers have, what have we trained consumers, if you think of the retail networks that were active, were supermarkets, mass merchants, and drugstores. What did we train consumers to do during those periods? Safe distancing, limiting the number of people in the store. Those behaviors need to continue as we move out because they are key behaviors that reinforce that the operation of that store is providing a safe environment for me to shop. And although it's a pain to wait in line in the queue, we've all accepted that behavior because we know that the benefit of that behavior outweighs the hassle.
So we looked at it across our three spectrums of what we call our ideal omni-experience model, which is what are the processes we need to look at, the messages, communication, and the structure. I'm going to share with you, we did a whole barrage of attributes that we evaluated and wanted to get input from consumers.
So you look at aggregate, all of those attributes, safety first is the most important thing. If you want to ensure customers come to your store, and you want to ensure that there's a positive experience with your customers, that they feel welcome, you really need to have safety as your first approach. Strict sick employee stay-at-home policy, and I know in Canada, we've got great social infrastructure for that. In the US, depending on the markets, not so. Really important. Shopping carts are sanitized after every use. Really important to communicate that. I was at, this morning, doing my shopping at Whole Foods, and they have someone dedicated there to clean the carts before and after. That's a really important statement. It's those little details that communicate that you're committed to a positive, safe experience for your customers, and that you value their safety. Customer safe distancing procedures, and what we've seen and
continue to see is directional signs on the floors, demarcation of where you wait when you're checking out. All of these things are really, really important. Supermarket chains have put acrylic shields in between the customer and the staff for both the customer and the staff. Obviously, providing hand sanitization and masks. At my Whole Food, as you enter, I always carry a mask, but if you don't, they're going to provide you one. Now, obviously, staff wearing protective gear, new store layout supporting safe distancing. That's more prevalent in stores where you have waiting rooms or long queues. Limited number of customers in the store. Touchless in-store payment, and that's 68%, and I want to stop here because technology plays a really important role across all channels of retail, from banks, food service, mass merchant, drugstore, grocery, fashion, apparel. Consumers now do not want to touch
pinpads. So the short-term interim is to always constantly clean that pinpad, but long-term, you need to really look at touchless technology and integrating that touchless technology across all your moments of truth. So if you're a retail that's been using interactive screens as part of your demo, if you're a telco, understand consumers are very reluctant to touch those screens. And obviously, at the bottom, order online and pick up in store. So BOVIS is a viable tool. It's a great strategy. It was a great strategy before COVID-19 of driving incremental sales to your stores. Again, COVID-19 has accelerated that initiative, which is actually a positive for retailers.
Just going to move here this poll. When you look at message, when you look at communicating inside your stores, on your website, in a variety of other medias, fair treatment of staff is really important. Obviously, physically showing that by having them wear masks and protective gear and having them feel confident that the customer journey and their engagement is a safe environment is really important because they are representative of the brand. Online portals and customer support to answer questions about safety. I want to check to see if the store, what are the store hours, or have there been any incidences, issues like that. Provide helpful tips, advertising campaigns supporting their social commitment. And we've seen that also is that a lot of retailers were smart, and they engaged in social programs, either producing masks for the healthcare workers or delivering food to the elderly. Those are really, really important
elements of your social engagement. And what that's precipitated is that you may now start thinking differently about what is your social causes and how do you reflect those social causes in the way you market yourself.
And as part of that social stewardship, providing financial assistance to employees Product donations to healthcare workers, financial donations to the less fortunate. These all play really important in consumers, and right across all age groups. And obviously the younger the consumer, some of these are more prevalent. For example, providing financial assistance to employees. Older consumers put more weight on that factor, but right across the spectrum, aggregated total sample, you can see here that these play a really important role.
In the structure model of driving sales growth, it's really important, I reiterate, the drive that the items are in stock. And why that's important is that if this item is not in stock, there's a high probability, depending on the retail category, that they're going to go to Amazon and make that purchase. And all you're doing is driving a behavior that already has been accelerated because of the pandemic. Price promotion are really important for this segment. So providing them another reason, a value proposition of why they come to the store is really important. Again, because consumers are spending more time on your website, make sure that your website is easy to navigate and buy. As you go further down, you can see, again, touchless home delivery. So if you deliver products to the consumer's home, how do you make that touchless? Do they have to sign for something, or can it just be delivered?
And further down, brand socially and financially support the community is still very important at 41%. Lance, how does this reflect your thoughts in the marketplace? No, I agree. Especially when you talk about the implied promise that you have, especially when you're running a brick-and-mortar experience, is that you're going to have what the customer wants when they want it at a price that's a fair price for them. So your first two call-outs, boy, they're never more important than right now with all of the additional external threats. And the interesting thing is where, I think that if you had done this
sampling a year ago, you probably would've seen the commitment to employee safety probably registering closer below social engagement. Yeah. And how that has shot up in importance. And as you said before, that's not changing anytime soon. Those protocols, the assumption has to be that we're living with a new norm. If something happens, and there's the magic potion that makes this all in our rear view mirror, we'd be happy to see it. But we don't live in that world right now, and we have to assume that that's going to continue. So at the end of the day, our challenge as retailers is do we have what the customer wants? So bullet number one, you can come up with the greatest idea in the world, but if it's not there, they're going to get it somewhere else. Absolutely. And you're going to train them to shop to online-only retailers, which is kind of a kiss of death. Being out of stock in an item is the
best work that you can do for your competitors. Yeah. Absolutely. So that all boils down to, the research report that you can download after this session is extensive, and I think it's about 50 pages. But I've kind of summarized them here for expediency's sake. Obviously, accelerated online shopping habits, and that includes mobile. And so if 40% of the people that are part of this session didn't have an e-commerce platform, it is vital that you look at your online platform. If you don't have one, there are a lot of great ways of getting to the market quickly with Shopify and Magento are just two of the platforms, and Amazon has a marketplace. But you really need to, and if you have an online platform, you really need to look at what is that user experience. Are you delivering a superior user experience online? There's a fundamental shift in mindset and lifestyle. So understand that you need to look at your consumers
with an additional lens, not replace the lenses you have, but additional lens. Maybe it's a focal, closer look lens, which is to look at your consumers from an optimistic and pessimistic point of view because their behaviors are very different, their needs are very different. And if you can answer their needs and be respectful and demonstrate empathy, then you've got customers for life. Luxury and fashion retail may see a slow return to normalcy. So that doesn't mean that you have to give up. In the case of Lance in fashion apparel, it means that every time they come to the mall, you really need to give them a compelling reason to shop your store. And it could be new fashion, new selection, obviously a promotion. It could be a variety of other things. Responders are split in two groups, eager to experience, convenience driven. That was the other insight we had was that understand that there is a segment of the consumers who are coming to the malls who are looking for
an experience. So all of that experiential design, store design, and layout still remains an important factor. Now, that's tough when you consider that you're technically out of business for four months, and that has a huge impact on your bottom line. So it's hard to reinvest in your stores, but understand that that remains a really important factor. And then obviously convenience, touchless technology, the idea of shopping seamless, removing those friction points, those remain important. Promotions along with discounts and offer to attract customers to the store remain really important. So let's think of your promotional strategy. Now, obviously, reliability and social responsibility are key drivers, so look at what you're doing, how you're treating your employees, what level of safety do you have in place. Those remain important. And that kind of aggregates at a high level. Lance, any additional thoughts?
You know what I would tell you is that I think it's embellishing what I said before. I think that your call-out was that these new thought processes or these new protocols or these new norms are not going away anytime soon. So the quicker we embed the new thought process of how we're dealing with the immediacy of this situation, and then we embed that into how we look forward into the forward-looking decisions is the important thing. Because it's easy to say, "You know what? I'm just dealing with this in the here and now. Let me get through this, and it goes back to normal." You and I might have been talking about a year ago, a whole sales choreography built around a set of circumstances that right now we want to be thinking about something else. And it's not going to go back. And if you think that the customer is hesitant to engage in touch interactive right now because of what's going on, what is the
effect of that going to be? And how has the tide shifted from touch to touchless? Mm. So if we're not embedding these things in our thought processes as we're moving forward, then we're going to be the ones falling farther and farther behind.
Yep. I agree. I think the big mistake would be to think that this was a temporary blip, in 2020, and that we're going to be back to a normal state. This pandemic has accelerated a lot of the behaviors that were festering. It just brought them and forced consumers to embrace them at a much faster rate. And that includes delivering a superior customer experience. Because now consumers are thinking twice about going to a physical store. They're thinking, "Can I buy this online, or do I need to go to a store to purchase it?" So if they're coming to your stores, ensure that experience from the staff's sales choreography engagement to in-stock to the promotion to the merchandise mix and assortment are superior. If you were putting a lot of attention to them before the pandemic, you have to put that much more effort and attention post-pandemic. So that kind of concludes our session, Lance. I'm just going to open it up.
Is there questions by the audience that they would like to ask us? I think there's a chat button at the bottom of your screen that you can ask us, both Lance and myself, any questions you may have. Again, this webinar has been recorded, will be shared in a couple of days. I think on Monday we'll be sharing the webinar and the research reports, including the keynote that we've shared here.
So I have a question for you, Lance. Yeah. So when you look now, you're going to look a year from now, right? So we're 2021. By then, hopefully they'll have discovered the vaccine, because they say it's going to be 18 to 24 months. This is a question, but what do you think your biggest accomplishment that you want to accomplish? What are the things that you're going to be very proud that you've accomplished in that one-year period?
Keeping our team together and providing all of the things that are required to keep them safe, to keep them healthy, and- Mm ... and to keep them in a position to continuing to support themselves and their families. Because if you're looking at the short game, you're going to be thinking about assortments, you're going to think about deliveries, you're going to think about expenses. But if you're thinking about the long game, it's about your people. And as I said earlier, we're hearing these stories about some of these just heroic things, and I call our stores our first responders. They're our front line. When you hear about some of these things that they're doing, if the focus isn't about your greatest asset, which is your people, you will fail. So if I had anything to say now, next year, a lesson learned in the past that I didn't value them high enough, all of these things going forward,
we redouble our effort to commit ourselves to our people. That's great. I have another question here, Lance. Let me read it here. Will an organization have to take to rethink their future operations of their brick-and-mortar business? That's a question mark. Will this be the perfect time to reinvent themselves? So really, is this a time where you take a step back and say, "Okay, now's the time to reinvent"? There's a great book by Joe Jackman called "Reinvention," that talks a lot about that. What's your thoughts? Well, I tell you what, if we're not always thinking about that, and not just during a global pandemic, we're in trouble, right? You have too many times where people wait until they've spent years looking inward and backward and lost sight ... of their people and their customers, their greatest assets, and then they wake up one day and said, "You know what? We need to reinvent ourselves." For us, the journey that we
started with your team a couple of years ago is, okay, this asset had probably been ignored for a while. It got a little inward and backward-looking. How do we look outward and forward? But the reinvention never stops. It's not simply about a one-time reset, and you've been a champion of this. It's not just the changing of tables and walls and layouts. It's the changing of your behaviors, your sales choreography, and these kind of things have to be re-examined on an ongoing basis. And that, to me, is the key, not just sitting back and saying, "Hey, is it time now?" Well, I got to tell you, if there were those companies that weren't examining it all along, they're going to have a pretty tough time right now with the capital constraints that they have of saying, "We're going to be heroic by reinventing our brick-and-mortar experience." Mm. Right? We reprototyped 10% of our portfolio last year with
the new
design and sales choreography that your team helped us build. We did 10% last year. Is there going to be a little bit of a pause while we rebuild our capital structure? Absolutely, everybody will. Yeah. But we're on that journey, and that journey is not a static one-time reset, and then three years from now, four years from now, five years from now, we're continuing to go back to that same dance. It's about a reinvention on an ongoing basis. So, candidly, I'm thrilled with where we are and where we started this process, and that that lives on going forward, and we're not one of the ones that wasn't listening to the knock on the door all along and just continuing to do what you're doing and looking inward and backward. And now you're going to be faced with a heap of troubles. Yeah. Well, you can look south of the border. I think one of your, would be defined as your competitor there, just looking at filing for
Chapter 11. Yeah. You know what? It's the people that had not been listening before are being disproportionately affected in this market right now. Yeah. The second question, if there is a second wave and another shutdown happened, what would you do differently this time around now that we have hindsight? That's a great question. I'll take that one. I was just on a call with our 132 store managers this morning, and one of them asked that same question. And my answer to them was, "I don't know. I'll listen. I'll listen to what the new standards are. I'm going to take the lead from the provinces." But each one of these things has been a first-time experience for all of us. So on the what if, if there is a second shutdown, we're going to do exactly what we did. We're going to prioritize our people over commerce. We're going to do what's required to ensure the health and safety of our people and our customers, and then we'll roll with the
provincial guidelines of when it's safe to go back in the water. Yeah, absolutely. There's another question here for Lance. What do you feel are the opportunities to connect emotionally with customers, put them at ease re COVID, reassure brand promise, find new ways to connect and relate to them in the new normal? Well, if you want to connect with the customer emotionally right now, you're going to create a brick-and-mortar experience that puts them at ease at a time when they've never been more ill at ease. Mm. So by doing the proper things, by walking the walk, by showing the way with the proper PPE disciplines in store, the disinfecting, the handling of merchandise, the handling of the customer, the whole choreography of the instructional signage within the store. When the customer sees that, they're going to be put more at ease, and that's going to drive that emotional connection. Then you could take that as the base,
and with the level of service that our stores have always delivered, that kind of connection that I spoke about when one of our managers met a customer on a layover at an airport, our guys know how to make that emotional connection because we worked with your team, and we came out of the other end with our words to live by, right? We believe every man deserves to look great. We fit your body, we fit your budget, we fit your style, and we fit you with the confidence that you get when you look and feel great. That is the emotional connection, that fitted confidence. Our guys know how to do that. The difference now is it's almost like battle time, and we need to take care of the first things first, which is the health and safety of our own people and the assurance of the health and safety of the customer in the store. You know what's interesting? What COVID did, Lance, is flip the paradigm where the
consumers and the retailers were not putting a lot of, and I'll exclude you out of this conversation example, but they were downsizing stores. They were reducing staffing models, if you look at the department stores, what was happening in the mass merchants, right? The reality is the new model is you've got to take care of those individuals that are in the store with the proper protection. You got to ensure you have enough staff to respond to the customers in that store. And so that paradigm, COVID, what it's done is it flipped the paradigm that now employees are important. They're an important facet to customers knowing that you are a respectful retailer and that you appreciate the role your employees are playing, putting their lives at risk in a physical environment, meeting with customers that they don't know, who could have the virus. 100%. Mm.
Any other questions? Because we're going to wrap this up. I think we got 10 more minutes. If no one else has a question,
we will wrap this up. Let me see here. See if there's... Check my dashboard here.
Give me a quick second. Yeah.
So there's another question.
It's a great question. We'll wait for Lance to come back. Think he was taking an emergency call.
When you get the research report, you'll
find in greater detail a lot of these tables. And if you need those tables broken down by age group, by male, female, Canada, US, we have all those tables well-established. Let us know and send us an email and I'm more than happy to share that information. And if you like, as one of the participants in our last session wanted to know in their market, specifically in their region, what is the level of pessimism versus optimism, we can share that also. Hey, Lance, we got a couple of more questions for you. Yeah, no worries. You know what? Some of the risks of the work from home protocol.
Yeah. That's why I'm at the office today. Okay, we have some senior leadership on the call, and you have talked to the value of your team and the need to protect them. What advice would you provide similar leadership to help their teams get through this? Talk to your people. Talk to your people. Maybe it's just my DNA. I started my career as a salesman. I talk to people. I'm a marketer.
Call your people. I can't tell you throughout the shutdown, I talked to at least five associates a day that were on temporary layoff. If you show up, your people are your people, and they're going to understand when you have to do some things that are the very tough calls. But if you then run and hide and only come back out when everything's hunky-dory again, you're going to lose that engagement and that respect from your team. Talk to your people through the toughest of times, and they'll carry you through the best of times. Mm-hmm. That's the advice I'd give to anybody. That's a great piece of advice. And one last question, which milestones have to be taken to get retail companies back on track? What milestones do they need to take? Your thoughts? What milestones? Yeah. Be faster. Be faster in your decisions. Walk away from the things that aren't working faster because the customer is going to be more demanding in every
facet of their decision-making because they've learned to live for two, two and a half months without. Mm. Right? Yeah. To reengage them back in, you have to give them what they want, when they want it, where they want it, at the right price. Mm. It's the old retail adage, right? Give the customer what they want, when they want it, at the price they want it at, and the size they want it at. The threats are ever more apparent now, both external and competitively, so that if you're slow to moving and you keep your target fixed, that target is just going to age up faster and faster and faster. Mm-hmm. So you need to continue to look forward and not just look where you are, or else you're going to fall faster and faster behind. Yeah, absolutely. And I would say that the milestones have to reflect the emotional needs of your customers and your staff. So ensuring that they're safe, ensuring that you have the right
sanitization protocols, slowly moving or rapidly moving your technology to touchless. Those are all things as part of milestones, and obviously technology takes 12 to 18 months, so I would jump on that journey now because it's learned behavior. So if I go to a supermarket and they have touchless technology, and then I come to your store and you're a fashion retailer or you're a shoe store operator, you're going to be penalized. You're going to be seen as a brand not in tune with realities of the marketplace because that consumer is coming with learned behaviors from other retailers. It's really important to look at those facets that are technology-driven or store layout-driven that take longer to implement. Look at those facets and put a plan in place so that you can meet the needs of the customers as the market needs of the customers are met. Yeah. Absolutely. Yeah. In that, Lance, I want to thank you very much for joining us on this
session. I know how busy you are as your stores are opening up, and I appreciate your input and firsthand experience on COVID-19. And the audience, I want to thank you very much for taking the time. If you have any additional questions, you know where to reach us. Thank you very much. Thanks, Lance. Thanks, JP. Bye now.
