Kate Fannin: “We Should Measure ROE — Return on Experience”

Kate Fannin: “We Should Measure ROE — Return on Experience”

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Brian: [00:01:53] Hello, and welcome to Future Commerce, the podcast at the intersection of culture and commerce. I'm Brian.

Phillip: [00:01:58] I'm Phillip, and I actually need a haircut, Brian. If you're watching on the YouTube, it's been {laughter} a little bit of a journey. I don't think I've cut my hair since,  I met our new guest here and new friend of the podcast. But one thing just set up the conversation real quick, Brian. You know, have you ever met somebody and you're like, these are my people?

Brian: [00:02:19] Yeah. Yeah. I know what you're talking about.

Phillip: [00:02:21] You and I had a meet cute like that once upon a time.

Brian: [00:02:23] We had a great meet cute. It's true.

Phillip: [00:02:25] The lore there is that Brian in a backroom poker game, once corrected how I was shuffling. And that's how we met. And then I proceeded to take all of his money. So shuffling or not.

Brian: [00:02:37] No, you lost that year. It was the year after that that you won. {laughter}

Phillip: [00:02:41] We can talk about that later. I think that's incorrect. But I did meet our people, and it's very nice to be able to do this over dinner. We broke bread together. And when I met Kate Fannin, it was, like, one of those things where a person who,  at the time,  Kate was working at a brand that I hold very dear in my heart and sort of feels very close to me, but to meet somebody who has worked for most brands that I hold very close to my heart and has a incredible track record, is a retail realist and a consummate consumer. Cannot wait to introduce Kate to our audience. So welcome to the podcast. For the first time, Kate Fannin. Hopefully, first of many.

Kate: [00:03:21] Oh, yes. Thank you so much. I am so honored to join, and I agree. When we met, it was instant. And I loved our riffing across the table and just we kept going and going. So I love that we connected so quickly, and I cannot wait to get into it with both of you.

Phillip: [00:03:40] I love anybody who has a catchphrase in their pocket at any given time. And I think when you sort of landed a bunch of your big ideas on me, I was like, "Oh, here's somebody who thinks really big in a brand that I consider to be sort of cultural," and it looks like you've done that for the arc of your career. So catch us up a little bit for people who don't know who you are. What have you been doing? What are you working on now?

Kate: [00:04:04] Sure. So, I mean, I started out basically in the mall, and I loved it from day one. And my friends at the time, even my parents, said, "You know, you can't make a career out of shopping." Pretty sure I can. Yep. So I loved it, and I went sort of the traditional route through marketing because that was the closest thing at the time. There wasn't consumer experience. So I got my BBA, my MBA in marketing. And at that point, there wasn't much to go into in the space. So I worked for automotive. I went into Ford Motor Company and learned a lot. That was back in the day where they said, "Here's your keys. Here's your mat. Here are your dealers. Head on out there." So it was in my twenties. That was very daunting, especially in the San Francisco Bay Area. So that was fantastic. But, again, that was kind of pre MapQuest even. I had a folded up map.

Phillip: [00:05:06] Wow.

Brian: [00:05:07] Yeah. {laughter}

Kate: [00:05:07] Highlighted and circled and, yeah, took my Mustang SVT, and I drove down there.

Phillip: [00:05:13] Wow.  

Brian: [00:05:14] Fun.

Kate: [00:05:14] It was a blast. Yeah. I had a great time, and that's when I started relationship building and understanding the focus of dealing with different ages, different ethnicities, people who had been in the business a long time. So I found my affinity in that sort of, alright, dot connecting, getting to know people. Can I install parts in a car? Well, a heater box, sure. I can change oil, but that's about it.

Brian: [00:05:43] Nice.  

Kate: [00:05:43] So after that, I really wanted to jump into fashion, apparel, beauty, the things that I love. And I'll be honest, I chose San Francisco. That's back in the day when you got to choose what city you wanted to go to because I knew the Gap was based out there. And sure enough, I started working for the Gap, And that was back in the Mickey Drexler days, so it was super fun. Oh my gosh. And I mean, they were on fire. And that was all these great collaborations, Sarah Jessica Parker, etcetera. And I had a blast. I started out as a planner. Whooo. That is not for me. Woah.

Phillip: [00:06:22] {laughter}

Kate: [00:06:22] A lot of numbers. That's a lot of things that nope. Not for me. But, again, I learned and sort of moved around into different areas. So I was in product training and motivation and these other categories, and it's a global company. So that was my first experience of global and understanding that retail and consumer experience is different, very different across the globe.

Phillip: [00:06:46] So that's mid to late nineties. Is that correct? So the promise of the Internet was that, you know, the Internet would provide this next lever for brands that weren't global to be global or for brands to reach into markets that they otherwise couldn't. And we know almost every new promise of new channel takes a lot longer than you think, costs a lot more than you'd like, and doesn't deliver in the exact way that you expect. How did that play out in your mind there? And was the Gap in your time there, were they thinking about new channel expansion, or was the mindset really just about, like, "We control our experience. People come into our space. We control the context."

Kate: [00:07:27] Yeah. It's a great question because it was new. The Internet was still kind of coming out there. And context and content, I consider two very different things.  because the store environment, it's really important to understand the context, why you're going in. Is it because your friend is wearing that? Is it because I saw the commercial? That's when there were still commercials. And that's really important for the experience piece of it. Versus online, at least in the beginning and still now, it's about content. What am I putting up there? How quickly can they consume it? How quickly can they convert? Is there an experience there, and does it match my store experience or should it? In the beginning, we had to be consistent. Whatever you did in the store, you did online. That's very much changing as online becomes a little bit more of commodity or replenishment. I jump on there, I know my size, I'm just gonna get more of whatever it is. It's really hard to do when you need an experiential type of, "I don't know what size I am in the shoe. I need to go try it on." That's when you had to go into the store. So I think navigating this sort of offline to online is a very interesting time to be in retail.

Brian: [00:08:45] Totally agree. Yeah. It's interesting. Context used to be king and then content became king. And now it feels like it's swinging back the other way all over again. Context is becoming more important yet again. Context is what everyone's trying to achieve right now, except for the context, perhaps, isn't the context you set, but the context your customer is already in. And being able to understand that context is essential to the next generation of digital experiences. And so replenishment is one form of context for an online purchase.  There are other forms of context as well. Interestingly enough, it's probably pretty category dependent because, like you said, for certain things like shoes, you kinda really need to try it on to know if the 9 and a half is right or the 9. Right? There are other things, like furniture. We're starting to see or home and furniture. There's a lot of emphasis on helping people be able to view things within the context of their home. It's really hard to do that even in the real world when you're planning out the design of a home. And so, like, our friends over at Kravet, which is an independent textiles company, they're investing heavily in the digital showroom, which is in the context of your home or an actual room where you can actually lay out everything and see it all at one time, which is is really hard to do in real life.

Kate: [00:10:23] Well and you don't know how comfortable that couch is. It might look fantastic, but I need to sit on it.

Brian: [00:10:29] Mhmm. True. True. Yeah.

Kate: [00:10:30] In the luxury space... So when I went from, as I call it, denim to Dolce, went from Gap to Neiman Marcus, it was quite a difference. And, I mean, that is from sort of cool jeans and such to you could be paying thousands of dollars for just a handbag. So the luxury aspect, you definitely need to experience. I want a salesperson to help me. I want somebody to lay it all out. I want a beautiful packaging or a bag or the tissue. I want, I think, Phillip, you talked about an experience where they just brought you a cup of tea, and what a difference that made. If you bring me a glass of champagne, oh, I'm sticking around, {laughter} and I'm gonna buy something.

Phillip: [00:11:12] So is Brian.

Brian: [00:11:13] Yeah. True. True. True. True.

Phillip: [00:11:16] I said this sort of almost return esque content that I post. I post sort of lament poetry from time to time on LinkedIn or something, which is like, the things that we lost when we went to digital. And I think one of those was the shared responsibility that we have in a society to return the shopping cart to its place of belonging. That is a thing that we lost was the thing... What do we owe to each other? And I think another thing of what we've lost in digital is the invitation to come and stay a while. And to be here. This is a place you can be. If you wanna be here, you can be here. And the mantra of digital has been,   faster, slipperier, quicker, and more measurable. And I think that that, to be honest with you, maybe that was a missing modality in physical retail for a long, long time is a factor of convenience that you could get in other types of product categories and consumer goods that you just couldn't get in in others. But, yeah, tell us more about that shift. Was that a big mind switch over for you? What did you learn in moving to Neiman, and what did the future hold for you there?

Kate: [00:12:28] Well and as you've just mentioned, when you move into a luxury space or you move into something more experiential, you can't necessarily do a hard ROI. I did this and I wanna see this. That's why I really focus now on return on experience, ROE. Does anyone have it really down to a science? Not yet. But give a little bit of time, and that's something that I'm digging into. And by the way, I should credit Jane Lauder. She's the one that brought that up. But I really want to start digging in. And so working with brands and companies, you have to look at it that way. Luxury is very different than going into a Texaco, which PS, I also worked at a Texaco back in the day. And I think everybody, every kid should have to work in either food service, convenience, or the mall. Well, it's not a mall today, but something where you're in a service and you're standing on your feet for a really long time. Because you understand a consumer perspective from that side of it. So I think that's really key, and that's something that I like to bring back and why I spend so much time in stores.

Brian: [00:13:37] Yeah.

Kate: [00:13:38] As Brian and I have talked about, I really get frustrated when people call stores retail. So companies I've worked for, they say, "Well, is this online or retail?" Last I checked, online is retail. So for me, it's bricks or physical space versus digital, and I think that's why we came around to the great word of phygital. And I'm gonna change that too because there's technology in stores. But is it right? Does it need to be there? Does it kill your experience? It might. And the fact that, like your furniture example, you can do makeup try on in a store, but I wanna touch it. I wanna smell it. I wanna feel it. You can do makeup try on at home on their site, but I need to know what the texture is of this.

Phillip: [00:14:27] Sure.

Kate: [00:14:28] So that's another place that kind of has done a where does technology go? Where does it have the right place? And analog is definitely back. I don't think it went anywhere. Even during the pandemic, online did not outperform stores. And I think people... In some categories.

Phillip: [00:14:48] Sure.

Kate: [00:14:49] And I think people forget that the human factor never went away, and it's very much back.

Brian: [00:17:24] There's no such thing as drive thru luxury, and that's sort of how a lot of brands treat digital. If they're luxury, they treat it like it's a drive thru that you can optimize for getting people through with the menu.

Kate: [00:17:40] Right. And meanwhile, navigating 18 pop ups.

Phillip: [00:17:43] Well, I think that's the issue. Right? The typical playbook that we put together online is sort of like this weird... It's a balance between the the rules that we're trying to break for digital that create our own experience and then the context...  Sorry, Kamala. {laughter} The context of in which we exist, which is all that is and what came before. We are in that time where ecommerce has to be done a certain way or else you have to retrain a customer. If you look at what Zara has done, they sort of put a flag... Which is not luxury, but you're planting a flag in the ground to say, like, "We're purposely doing something different online that is its own form of brand marketing that makes people really angry." Like, "Why is your site so hard to use?" "Yeah. Well, you keep going back to it." And I know the team there. It's like they measure things just like everybody else, but they've decided they're gonna train a customer to do something very differently. So I think that there's this unhealthy tension there. The return on experience thing I wanna come back to, Kate. A certain kind of a marketer would ask, what's the attribution model? How do you do an attribution model on return on experience? And then what's the payback period?

Kate: [00:19:02] Yeah. It's a fair point because how do you? It could take years. I mean, I know some Gen Z that, you know, they save up all year to buy the Jordans. They will not shop for other things. That's a year long customer journey. And I think there is a difference, and I think this was on one of your previous podcasts about journey versus trajectory.

Phillip: [00:19:25] Mhmm.

Kate: [00:19:25] And the fact that I like to go through the whole experience versus I need to go get this. So, I mean, there's the other piece of that, the ROE is, when do you close the deal? I think I've told you my car analogy, which I love in person is, what's it gonna take to get you in the car today? Can't really do that online. I mean, you can pop up a "We saw you're leaving. Here's 10% off." K. Might bring me back, might close me for that. But part of the experience is how you got me there. And so what did we do? Was it the cup of tea? Was it knowing my name? I'm always impressed when I go somewhere and, "Kate, how you been?" That's impressive. The service piece... So my next place was Nordstrom. So another brand that, wow, they pride themselves on service, and it's part of their DNA. And that's a huge reason people keep going back. So the loyalty piece of this is another must have for the experience. You will continue to buy when you have a great experience. Now there's a big difference between, am I trying to acquire? That's some of our smaller brands. Right? And DTC, I'm new to this. So how I get you in versus engage you? And that's where I love to focus and concentrate is the engagement piece of it because that can be instant or it can be a long, long time.

Kate: [00:20:58] And then you come into the conversion and then the loyalty. I want you to come back. What's it gonna take to get you back? All of that is part of the experience, for sure. So whether you are Texaco or you are Chanel, you need to think of all of the elements of this. And that's why we've talked about the two way marketing these days, which I don't even call marketing anymore. I call it engagement. I mean, one way marketing was commercials, billboards. I'm throwing it at you. Now that we have social media, I better be listening. What are they telling me? How do they wanna experience my brand? Is it all online? Then I better have a really great online experience. Is it in social? Okay. Then my posts and content are key. Do you wanna talk to a human? They're telling us this. If you're not listening, you're dead in the water. Just sending me a mail piece, which I support, and catalogs are coming back.

Phillip: [00:21:54] Me too.

Kate: [00:21:55] Yay, J. Crew for bringing that back, and a lot of the other brands are. So I think we're moving back to, I think, Gen Z and younger, they appreciate the quality that goes into marketing experience, all of it.

Brian: [00:22:08] It's so important. I think this is huge. When we say experience, I think what we mean is we have to engage more than one or two senses in order to actually get people to understand what it is that we're doing. If you're just dealing with text and images, you better be a world class storyteller in those mediums because it really is asynchronous communication. It's a fiction. It's something that's not real. And so the reason why it's I think it's so essential for brands to have more than just pictures and images to sell is because if you do wanna have a lasting relationship, you have to be able to communicate and play the same language game as your customer. We often forget in digital that data is not the experience as our friend of the show, Andrew McLuhan, has said recently, or tweeted recently, as the map is not the territory. And I actually do think the phygital word actually has a homophonic quality to it. You actually literally need to be able to fidget with things...

Kate: [00:23:20] Yeah. Yeah.

Brian: [00:23:20] In order to actually, like, experience. Yeah. I think there's just so many things that you're saying, Kate, that just resonate with the mindset of Future Commerce.   and I think there's a lot of DTC brands right now that would should be taking cues from you. That's probably where I think you'll end up spending a long a lot of time consulting coming up here as brands that sort of found resonance and were good storytellers, found a way to get in front people and take that sort of content type approach to building a brand, they're gonna need to look to people like you who understand how to start to bring about those contextual moments. And I'm excited to see how you can bring that to a lot of these brands that did find a lot of value in bringing content to people.

Kate: [00:24:12] I appreciate that. What I'm finding is the people that I am talking to, riffing with, consulting, is that they usually are very you know, they're one silo, if you will, and their expertise in one thing, whether it is digital, "I'm an expert in this," or "I just love making the makeup. There's a founder behind it, but I don't know how to scale it. I don't know if I need a store or website or do I need to be on TikTok or Instagram or both? Maybe I need to be back on Facebook because I'm targeting Gen X." Thank you for mentioning in your recent article. Very few brands or companies are targeting us, and it's a shame because there's a lot of dollars there and there's a lot of influence. So I think it's really important that we be careful with our segments. In most of these brands, it is, you know, kind of the boomers who have blossomed, which is awesome. But then there's Gen X, which is a little bit forgotten. Millennials, I feel like are starting to get a little bit forgotten. It is all Gen Z and Alpha, and those are all great to target, but you kinda can't do that anymore because it goes along with, I liken it to sort of omnichannel. I don't refer to it that way anymore. It's channel agnostic. I don't really care where you shop with me, just shop. And that's the key now is I don't care if you're 11 or if you're a 111. Buy my product, and let me make it an experience that you enjoy. That's the key.

Phillip: [00:25:46] I'd love to to ask a few pointed questions. On that note, you're making a really interesting point. I've heard a lot about the great wealth transference. Like, boomers are retiring. Some of them at their oldest are starting to leave a legacy behind, an inheritance of some sort. So this is great. In the next 15, 20 years, supposedly, this great transference of wealth to people that are still in career age that can put it to work. I don't think that we've talked about the knowledge transference of that and the power transference of that leadership. So if senior leaders and senior executive leaders are also starting to move out, that means that the next generation to take hold are Gen Xers. And I talk to a lot of Xers.   I'm on the cusp, born in 80, so I'm sort of at the very, very tail end. There's very few folks like yourself, Kate, and maybe me towards the further end of it that remember and grew up in a world that was not connected. And I think that increasingly understanding and having an intuition around how to meet people in a context that isn't purely online and purely digital is a dying breed and a necessary skill to have today, especially as people are starting to feel online fatigue. And so I think that that's such a key point on the experience piece is understanding how people connect offline. That seems to be a dying art. People don't remember how to do it.

Kate: [00:27:21] They don't. And I think that's why some younger people don't know how to make eye contact. And I think, you know, coming back to how do you engage with a fellow human? Whether it's a store person or somebody you meet across the dinner table, that's really important, and putting your electronics and your devices aside. And I think that's part of the experience too when stores started to do "Scan your phone here or look at..." Why would I wanna look at my phone? I'm in the store.   Excluding pandemic when nobody wanna touch anything and QR codes blew up. I get that. But we're back to touch, feel. I don't really need my phone in the store unless I was in a Barnes and Noble this weekend, and, yes, they still have stores.  

Phillip: [00:28:07] Yeah.

Brian: [00:28:08] They're on the way up.  

Kate: [00:28:08] And I wanted to to look at my list of books so that I could go, "Oh, yeah. I already read this one," or whatever. So there is a right time and place for technology, and I think we'd all agree that tap to pay, that's a good thing. I don't really wanna deal with the register.

Phillip: [00:28:24] Totally.

Kate: [00:28:24] But people are paying cash again because the credit card fees are being tacked on. But I think there's these moments of physicality and analog that are truly coming back, and that's part of the experience. That doesn't mean that, and I don't want it to come across that online is the devil. It's not. There's some phenomenal things about online, but this human experience is so important, especially if it's a sensorial type of product, whether it's the couch or the eye shadow. I mean, that's sensorial.

Phillip: [00:28:59] I'd love to get to sort of the last phase of your career arc and then what the new next phase is. But just I have to ask. In that intervening time, you've been through multiple organizations that I would characterize as sort of ecommerce as a facet of marketing versus ecommerce as a revenue channel versus ecommerce as an IT aligned organization. That seems to be something that wasn't figured out in the last 20 years, but is maybe getting figured out now, especially at the larger scales. Where do you sit in that conversation?

Kate: [00:30:29] Yeah. I think a lot of that has to play together nicer than it used to. We used to have very siloed departments, marketing, merchandising, technology, online. And that's starting, I think it's a little late in the game. I wish it had started sooner about this whole online being a separate division. It needs to integrate with the whole retail piece of it. And technology is another pillar of that. So after Nordstrom, where I was really fortunate to I headed up marketing for beauty there, but I also got to be a beauty editor. So I was picking trends and going backstage at fashion week, and that was the first foray into this balance of you can't predict a trend and then try to market it. I mean, the trend might be yellow eyeliner. I can't market that to a Nordstrom consumer. So we really had to balance that out of what can somebody latch on to, but we can also "That makes sense." So that was the first foray into kinda pulling together. And then from there, when I went to Estee Lauder Companies, I got to be on the wholesale side and how they work with the retailers. So I was glad that I had that perspective of how does this look on the counter? How is this being promoted? And versus just we wholesale. And there's also a whole difference between a freestanding store and a retail partner. Very, very different in how you promote, how you work with them, what is your partnership. That's a whole other topic. {laughter} But then the technology piece of it. So when I was at Lauder, I was in marketing for a few years, and then I moved into sort of this consumer retail experience space that was just starting to become a space. And how do we balance that with marketing and the field teams? I have a love for the field teams because I've been there, and they are on the front lines. And it's a very hard place to be in the consumer and then communicating with corporate. But I took a total left turn, and I went into IT for the last few years. And part of that was the blending of QR code in the store, into NFC, into NFT. That wonky turn into the metaverse.

Phillip: [00:32:46] {laughter} The meta what?

Kate: [00:32:48] Right. Right. So looking at the how technology blends into this is really important and where it's relevant. So that's why I always call myself a retail realist. I will be the first one if somebody says, "We need to do this and..." Have you asked the customer? Do they really want that? Do I want my giant face on a screen in a store? I can tell you right now, a Gen Z or Millennial... Probably not. Probably not. They're cultivating their own trends and they have their own communication channels. So let's be very careful how we collect their data. That's another piece of it. You can't shop with me until I get your, you know, name, age, rank, Social Security number. I mean, come on. I just wanna shop. So,  and fun side note, how I kind of got started in retail and shopping. I shop with my friends, and they tell me, "Kate, please stop profiling the store. Can you just shop?"

Phillip: [00:33:52] Oh, give me an example of that. What's the good, bad, and ugly on that? What's the thing you look for?

Kate: [00:33:58] Oh, I immediately am looking at will they talk to me? Is there a person that will say, "Welcome. Thanks for coming into the store." Or are they stuck behind the counter or worse on their phone? I have a real problem with that. I checked out this weekend somewhere, and she was waiting at the register. The customer was, you know, getting their discount. The salesperson was on her phone, and she literally had it up and was looking at her face.

Brian: [00:34:24] No. No.

Kate: [00:34:26] Yep. I have a real problem with that.

Phillip: [00:34:27] Ugh.

Kate: [00:34:28] Yeah. So I also look at the the visuals, the dynamic. Are there four things hanging? I already know I can't afford it. Is it messy? I do not like messy.   and also, is there some type of a lot of different things? Is it a coffee shop mixed with a bookstore? Is there an experience there? Do they know who they are? What's their personality? One of my favorite towns to shop in is Cold Spring, New York because it's small, small retailers.

Phillip: [00:35:03] Totally.

Kate: [00:35:03] And wow, they know my name. And I go there quite often, and that's part of the reason. It's my fun getaway. So you've got this whole experience piece where they know me, they know my sizes of things, and I think you're gonna see a lot more. And we already are seeing this development of real estate, if you will. There's the small town, which is coming back and I love it. And then you have this whole concept of taking over an old brewery, Arnold Dairy. Denver has one, and then San Antonio has a great one. It was the brewery, and they've made it this shop, live, work. It's just this cool, authentic piece of it and using your property in a different way because we know people aren't really going to a mall anymore.   Although shout out to North Park in Dallas, still a killer mall. But for the most part, you have to have an experience with it now. It can't just be walk into my Spencer Gifts and, you know, go through the posters. Remember that?

Phillip: [00:36:09] Oh, yeah. And the lava lamps and the gag gifts.

Kate: [00:36:15] Yes. Yes. Oh, and people are listening to albums, and I'm so happy to see that there is a come around.

Brian: [00:36:21] Tapes. Yeah. I know. So many things about what you just said that just strike a chord with me. First of all, I was at a dinner the other day, and I was talking about how I think it's so important to be in person and how dinners that I run are part of that and that's how you met Phillip. I think that's huge, but I was, like, "Yeah, we need to get into each other's smells." And I think that if you aren't so close as to be able to smell someone... Honestly, and this is another thing. I mean, in an okay, this is important to you given work we haven't even got to..

Phillip: [00:36:53] Work in fragrance and all that.

Brian: [00:36:54] Yeah. Yeah. The incredible fragrance brand that you've been a part of. But walking into a place that doesn't have some sort of scent plan involved into a store, the best retail has some sort of scent. And no scent is literally like being naked. I think this is interesting. People don't, a lot of people don't realize this either. What you smell, people can figure out what's going on with you. There's data involved with that. And what you picked to smell like is essential for, yeah, it's like having clothes on.

Kate: [00:37:42] Right. Even going into a Home Depot or automotive. I expect to smell some fuel.

Phillip: [00:37:47] Yeah.

Brian: [00:37:50] Totally. Totally. What is this place? What is it about? What am I gonna learn here?

Phillip: [00:37:57] You've met a guy, Brian, who's, like, he smells like Acqua Di Gio, and you know everything you need to know about him.

Brian: [00:38:02] Totally.

Kate: [00:38:02] {laughter} Yes.

Phillip: [00:38:03] You know everything.

Brian: [00:38:05] I got you.

Phillip: [00:38:06] I know when you went to high school.

Brian: [00:38:07] Like Fierce back in the nineties. If he was wearing fierce, you're like, "Oh, okay."

Phillip: [00:38:12] I know it. I know what the thing is. Yeah.

Kate: [00:38:14] Yeah. Yeah. You totally do.

Brian: [00:38:17] But the second thing you've talked about and near and dear to my heart, I believe that there are key small towns throughout America that deserve investment from key brands, and they have not figured out how to leverage those small towns yet. And there's retail in those towns that could be unlocked if there was a way to get after it, like small pop ups, training people to on your product, connecting with people in the town. There's a way to do this at scale that brands haven't figured out yet. And I'm not saying it's every small town, but there are key small towns that fit certain profiles where the community is actually vibrant. There's actually a nightlife to the town, and it's real.

Phillip: [00:39:08] You live in one, Brian. You live in one.

Brian: [00:39:09] I do. I live in one. I see it. In the town that I'm in, it's a small town. It's, like, 13-15000 people, and people are out later here than they are in Seattle, which is dead by, like, 9 or 10 PM. Like, completely dead.

Phillip: [00:39:23] Yeah. That's because it was an autonomous demilitarized zone for a good portion of the pandemic. {laughter}  

Brian: [00:39:30] True.  

Phillip: [00:39:30] But it's yeah. I wouldn't be outside either.

Brian: [00:39:32] Yeah. Mad Max. Mad Max on second Avenue. That's why. Anyway, I love your point about how smaller towns, independent retailers, there's a huge benefit and opportunity to model and also connect with those types of experiences.

Kate: [00:39:50] And there's a service element. When you call those stores, guess what? A human's gonna answer the phone. That is a huge, huge difference that versus press 1 if you... I'm out. And I see that when my husband calls for car parts. Every place he calls, somebody's gonna answer it, and they're gonna be an expert on that.  Same with in Cold Spring, these smaller towns. Jackie's gonna answer the phone when I call her store. And even if I'm not buying anything, there's a relationship there. And is she capturing my data? This goes back to ROE. Sure. She's probably gonna get it when I pay at checkout. She's gonna get a little bit of it, but what she's really going to capture is how I like to shop. And she'll say, "Kate, we got something in that you're gonna love." That is how I return on experience.

Brian: [00:40:41] What's so crazy is at large retailers, this is something that the best employees would do naturally.

Phillip: [00:40:51] Instinctively.

Brian: [00:40:52] Instinctively. Yeah. Totally. But they actually have to kind of go outside of their KPIs to provide that to them, and I always tell that story about my father and the relationship that he had with the wine steward at his local Costco and what that meant to him and that wine steward ended up coming to my dad's funeral. That was a real relationship. They shared tasting notes over text, and I guarantee you that wine steward spent way more time than he should have with my dad. But the impact is I am a second generation Costco shopper and will be, and I'm passing it on to my kids. That relationship inspired three generations of shopping from Costco.

Kate: [00:41:34] Exactly. That's like Nordstrom is the only retailer where I have their credit card, and there's a reason for that aside from me working there. It's their service level. Their customers are at the top of their inverted pyramid as they call it. And that's genius because that's the most important person in your business model or should be, certainly.

Phillip: [00:41:58] Yeah. I think that's something we... One thing I'm a little wary of is this idea of personalization at scale where it's disingenuous. And this is where the next phase of critique of what brands are working on right now is, like, well, it's a cool magic trick. Maybe a little parlor trick to know everybody's name and when they walk in. I just had this this morning, Kate. I was at a local place that I go to all the time. Someone I didn't know greeted me at the door, and they said, "Hey, would it be a party of two today?" I said, "Yes." And they said, "Okay. Right this way, Phillip." And I'm like, hold on. How did they know my name? And it gave me a second, then I realized I have my Starbucks cup in my hand with the label facing out, and they saw, but you gotta respect the hustle. Here's the problem is when AI is broadcasting signals at scale for everybody all the time, that becomes diffused. And it's not as exciting anymore, and it's definitely not unique anymore. What is the next level of actual human and personal level interaction, especially as we're having to service so many people? I think our worlds are very complicated now in trying to track human relationships.

Kate: [00:43:13] So look how far we made it through without saying AI.

Phillip: [00:43:16] {laughter} Dang.

Brian: [00:43:19] Phillip.

Phillip: [00:43:19] It was my fault.

Kate: [00:43:21] I mean, it's a drinking game now. When you say AI.

Brian: [00:43:27] Yeah.

Kate: [00:43:27] Yeah. So, I mean, I think that's part of it. So my career has taken me geographically all over the place in the US, but also these different mindsets of how you work with the customer. Is there a difference between a consumer and a customer? You bet. I pride myself on kind of being both. I definitely consume, but I look at it through a customer lens, which they are two different things. So, yes, I worked with a phenomenal fragrance brand at ELC, and that's Leila Beau, beautiful, authentic brand. And they're very focused on keeping it authentic, which I think is super important. They're very diligent about where they open stores, also very important part of the experience. The relationship is part of it too. What's next? Do we know? Maybe not. Will AI be relevant? Absolutely. But at this stage, especially related to shopping, retail, consuming, let's be very careful about diving into it too far. Like you said, Phillip, can you do things at scale? Sure. Can you have the human engagement at scale? Not the same as me shopping with Jackie in Cold Spring. No way. And so AI has its place, but we can't just peanut butter it across everything and sort of, yeah, we can scale this anywhere, which is why I love working with the smaller brands, which sort of takes me into what's next for me is I'm careful using the word scale, but that is something that I would ask these brands or smaller companies is what is your vision for scaling? Is it you wanna be global? Okay. That's very different than "I wanna open a second store." Is it that I started online and I don't know my foray into the physical environment. That's very different. "I don't know how to promote my brand. I love it. I created it, but how do I promote it?" K. Then we have to talk about who are you targeting, but you can't decide on your target until you know who you are, which means storytelling is key. And sure, AI can write out your story if you want, but is that authentic? Not really. So it comes back to how do you want your customer to experience your brand? And that's what I want to help people do is let's evaluate it. How is it now? Let me go into your store. Don't tell anyone. It's a little bit of a secret shop, if you will. Or give me your product or your package, and I'm going to talk to you about it as a consumer. And it could be something from Home Depot. It could be a piece of furniture. It could be a lipstick. But I will tell you how I experience it as a consumer, and then we can identify what are the areas of improvement. How can we make this better? Cause I'll tell you what, if your product, your experience, anything is not solving a pain point, then we really need to evaluate if you are relevant. It needs to be solving something. And the solve could be just really fun, or "I just wanna have space to hang out." Okay. That's a solve. And then, you know, what can we do? How can we execute against this? And so that's where I'm really focused. And I think overall, what I like to say is that people buy things, but they pay for experiences. Those are very, very different, and you can't lose sight of them.

Phillip: [00:47:07] Total mic drop. But on that front, could you give us sort of a hypothetical of where a perspective new client of yours might be and where they're trying to get to and what are some of the motivations or tactics or things that you might employ to help get somebody from, like, an a to b. I might think of, you know,  an ideal customer of yours who's coming in with specific kind of a challenge and what you are uniquely positioned to try to solve for them.

Kate: [00:47:39] Sure. So let's use, for example, a small beauty brand. And maybe they've been around for several years. Maybe they're brand new. Maybe they have a founder. Maybe they just had a need or a niche that they wanted to fill. But what I would do is, what is your story? What is your current consumer experience? "Oh, we just sell online. That's it." Or on Amazon. Okay. That's an experience. But what are we wanting to do? Is it increase your sales, your customer base, capture data, scale, move into a global or new market? Do you not know what your packaging is? Have you evaluated your product from a consumer perspective recently? Sure. You can look at your comments, but put it in my hands. I will tell you, it's not very good. You know? Or it's awesome. The efficacy or the payout or whatever the product is, but your packaging doesn't depict this. We have a real opportunity here. Or I go into your store environment, and it's amazing, but your website is not. Do you even need a website or just need a landing page and I wanna send them to the store? Let's not spend time on the things that we're not going to capitalize on. Or is it, "Well, we do something that's not even a consumer product per se or it's a piece of equipment that we put into a store environment to make the experience better." Is it better? Did you improve on what you wanted to? And, yes, you can get consumer insights and do those kind of projects, but they're going to be big and costly and probably gonna hear what you wanna hear, and that's why I'm a realist. You know, I will tell you what's amazing, what is not, where the opportunities are. You don't need to go down this path, or you have a key, like an amazing hero product. We can link sell it to a few others, but you don't need nine, so let let's let's talk about what is your ultimate goal, your ultimate objective, and how can we make it better?

Phillip: [00:49:51] Wow. I think and this is the perfect time of year. It's the perfect, I think, time economically, and I think opportunistically for a lot of folks who are like, "We have lots of these types of investments we've been wanting to make and strategies we've been wanting to employ, and we just don't have internal teams that have the bandwidth to be able to focus on it. We need someone to help us through the process." If that's you, Kate Fannin, we'd love to make the intro.   Tell us a little bit about the new consultancy and where people can find you online, how they can get in touch with you.

Kate: [00:50:30] Sure. And I think, you know, to your point, the CX consumer experience, a lot of those teams are being cut if they even have them. You're right. What are they doing? What are they bringing back to the organization? How are you measuring that if at all? The unfortunate part is if they do bring it back, can you implement any changes against it to improve it, especially a larger company? So I'm happy to work with larger companies too because they lose sight of these sort of boots on the ground. And again, send me to your store. I'll tell you exactly how the experience was. That's some of the issue with sending a leader, if you will, a corporate person. The store prepares for that, just so you know. It is all perfect. That's not a real experience. Or maybe it is. And I go back six times and say, "My gosh. David talked to me every time, and he sold me something every time, and gave me my cup of tea." So that's where I really add the value is I've clearly worked in retail for a really long time, both the luxury space, apparel, beauty, even automotive. I have been boots on the ground, lived in major metro areas. So those differ too. New York is its own thing, but San Antonio is its own very different thing.

Phillip: [00:51:58] Very different thing. Yeah.

Kate: [00:51:59] Yes. And you need to be respectful, and that's something I'm also very cognizant of is I'm respectful of your brand, the product, that you have some passion behind it. That's where I focus. I mean, I can't not tell you... Back to the profiling piece. I can't not enter and experience and come back and some of the so the consulting piece, during pandemic a lot of businesses struggled, and so local businesses here in Westchester County. And so they didn't ask me, some of them. I went to them and said, "Can I help you out?" There's a local pub. I said, "Let me help you with your social media because people still need to come here." And as we know, people drink in good times and bad times. So that's a piece of it. Some of it isn't a product per se. It's a service. And what is the service you're providing? Another person I worked with is a facialist. She said, "I can't get anyone in here, Kate. Nobody wants me to touch them." So then we need to change how you're promoting this and what you can do, you know, the benefits you're offering. So you have to look at these in all different ways, and I truly hope that that people allow me to do that. I'd love the opportunity, whether it is a large scale company, a large scale business. Is it a single grand? Is it DTC? I would love if conferences would ask me to evaluate because I've been to many, and, wow, they could use some improvement. There's some dusty stuff going on out there.

Brian: [00:53:30] Oh we agree. Okay. So this episode's being released on that holiday, that holy day of retail, if you will. When people are listening to this, it is Black Friday.

Kate: [00:53:42] When I was growing up in retail, in the mall, etcetera, my favorite day to work wasn't Black Friday. You know, that was a good one. My favorite day to work was Christmas Eve. And because, as I call it, it was wandering man with credit card. He would say, "I don't know. I didn't get anything yet. Just just help me out." And at the time, I worked at the Body Shop and literally, wandering man. "Yeah. Just put together a basket and whatever." So it was I loved that day almost more than Black Friday because Black Friday to me is an observance. It isn't so much as me getting out there as I want to see what's going on. I'm probably not shopping in the traditional way. I like to be bombarded, honestly. Who's hitting me up on Instagram? Who's sending me the emails? And did I already get some? Of course. And now it's Black Friday month I'm realizing.

Phillip: [00:54:41] Yeah.

Brian: [00:54:41] {laughter}

Kate: [00:54:41] So, I mean, really, you can buy at any time, and I think that's the key in the marketing folks are saying, "Put the best discount out early so that they don't feel duped when they come around to Black Friday and say, "I just bought this two weeks ago.'" So I think it's more of an observance, and I mean that in sort of the religious way as well, that we observe Black Friday.

Brian: [00:55:06] You observe it.

Kate: [00:55:07] As consumers and as a retail fan. By the way, I literally have a baseball hat that says customer on it because I joke, half joke, and say, I wear my customer hat. So it's literal. I have customer hat.

Phillip: [00:55:24] My new favorite person. I love this.

Kate: [00:55:25] In fact, I should wear that into a store on Black Friday.

Phillip: [00:55:27] {laughter} I am your customer.

Kate: [00:55:31] I am your customer. But yeah, ultimately, I love all of it. And I'm just so passionate about retail and helping brands and companies improve their experience. And I'll reiterate, people buy stuff, they buy things, but they pay for an experience. So, please KateFanninConsulting.com. I would love to talk to you, no matter size of your brand, your business, your company, your service, whatever you're offering, I wanna help.

Phillip: [00:56:02] And we would love to connect you deeper, Kate, with others. It's been such a pleasure to get to know you. Can't wait to have you back. We're gonna get that on the books right away. And thank you. Thank you for listening to this episode of Future Commerce, and now we want you to lend your voice conversation. So Kate Fannin Consulting, check out Kate. But, also, drop us a line. Let us know what you think about this episode, Hello@FutureCommerce.com, and you can find more episodes of this podcast and other Future Commerce properties at FutureCommerce.com. Thanks for listening.

Kate: [00:56:31] Thanks so much for having me, guys. It's been a blast. Now we need to go shopping.

Phillip: [00:56:36] Let's do it. Thanks, Kate.

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