This episode features an interview with Garrick Brown, Director of Advisory Services and Business Development at Lockehouse Retail Group. Garrick is one of the United States’ leading retail real estate analysts. On this episode, Garrick discusses why he thinks the retail apocalypse is over, how retail has grown into a hospitality business, and why consumer expectations are higher than ever.
This episode features an interview with Garrick Brown, Director of Advisory Services and Business Development at Lockehouse Retail Group. Garrick is one of the United States’ leading retail real estate analysts. On this episode, Garrick discusses why he thinks the retail apocalypse is over, how retail has grown into a hospitality business, and why consumer expectations are higher than ever.
“Ultimately retail is kind of a hospitality business nowadays. It's so difficult to deliver on all three of my big motivators, which are: value, convenience, and experience. But we are now in the experience economy fully. And if you want to survive, it's so critical that you know that the experience is what builds your brand. It's what builds loyalty. And it impacts every single part of your store from operations to maintenance, to service. And it's so critical that everyone on your team from the buyers to the warehouse guys understand that is your basic credo.” - Garrick Brown
Time Stamps
*(0:14) About Garrick
*(1:26) How Garrick’s career has evolved
*(7:50) The Retail Apocalypse is over
*(14:25) Segment 2: Across the Goal Line
*(16:09) The three reasons customers come to stores
*(21:56) Garrick’s view on the role of facilities
*(28:50) The economics behind facilities
*(30:18) Segment 3: How We Do It
*(33:50) Talkin’ Tech
*(40:12) Segment 3: Future Forward
*(42:40) COVID related shifts
*(46:18) Garrick’s advice for thriving in retail
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Sponsor:
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Links
Emma: Welcome to elevating brick and mortar, a podcast about how operations and facilities drive brand performance. This episode features an interview with Garrick brown director of advisory services and business development at lock house retail group Garrick is one of the United States leading retail real estate analysts.
On this episode, Garrick discusses, why he thinks the retail apocalypse is over. How retail has grown into a hospitality business and why consumer expectations are higher than ever, but first a word from our sponsor. Wouldn't
Garrick: you like to rest easy, knowing that your brick and mortar locations are offering the best possible guest experience.
It's time to partner with service channel for peak facilities, performance checkout service channel.com to learn more.
Emma: And here's your house, industry and FM technology thought leader and chief business development officer at service channel said Shetty.
Sid: Hello everyone. Thank you for joining us.
Really appreciate it today. We have with us Garrick brown Garrett. Welcome. Great to have you on.
Garrick: Thanks for having me. I'm really excited to be here. And
Sid: I really appreciate it. Thank you so much. So let's get started. Let's set the stage for our listeners and get them a little background on you and your organization.
what is your role what are you
Garrick: responsible for? So I am the COO and director of business development for lockouts retail. We're a full service commercial real estate firm that focuses solely on retail, retail space. So whether it's leasing sales, property management and so forth. And, you know, basically as you know, I run the operations, but I also work directly with our clients, advising them.
My background is as a real estate economist. You know, I kind of fell into the industry about 25 years ago, but basically my background was analytical and economics and just applying those to different retailers or landlords strategies for their space. And so that's, that's the gist of what I do.
Sid: tell us a little bit more about that journey, right?
How did you. And up in the space
Garrick: and industry. Well, that's a funny one because nobody really grows up saying I'm going to become a commercial real estate analyst. Nobody in this space is there because it was, it was about our plan. It's just, luckily in my case, it was fortunate accidents. Uh, you know, I went to school and pursued two things, creative.
And economics. And the ironic thing was, is that I was working as a freelance writer in Kansas city in the mid nineties. When one of my clients, I did technical work for asked me if I knew anything about commercial real estate, could I help her husband who was a broker. You know that they were doing a analytical report on the market?
I was, no, I have no clue, but I can do it. I'll just approach it like a journalist weirdly enough. So I had a little side gig there and three months later I've got a Tuesday and the phone rings and it was the folks at Grubb and Ellis. And they're like, Hey, would you like to work for us full time? And my, my big question was, do you have a dental plan?
So
Sid: the right way to make a career choice.
Garrick: Yeah, next thing I know it really well. I get to think for a living, which is awesome. Uh, I get to write extensively. I get to speak extensively. I would have had no clue in school that this even existed, but, uh, it turned out to be the. The best stroke of luck that I had my career ever
Sid: love it.
That's great. And you and I had some interesting discussions about the state of the industry and the economy, right? It's been a whirlwind couple of years. Can you share some, um, interesting or surprising stat about where we are today?
Garrick: Well, the turnaround for retail has been mind blowing for anybody who was under real estate side of the business in 2020, especially the first six months.
You basically became a grief counselor, whether you were talking to tenants that were clients or landlords, you know, after years of that retail apocalypse, storyline. Don't get me wrong. We we've had all sorts of disruption from e-commerce the last 15 years. It's just made it a really challenging marketplace for certain categories of retail and certainly key retailers, but we hit 2020 and it felt like there was a real apocalypse happening.
You know, we set records for store closures. We set records for chain bankruptcies. We had months on. Where nobody was paying rent or some cases we're able to pay rent. It, it was quite bleak. Now coming out of that, we thought, or at least, you know, I thought, is this an economist? You know, we'll probably see.
Some of the chains that did well during the pandemic ramping up through growth, simply because so much of the carnage was small businesses, but, you know, you could see as market share in that environment. And so if you were, you know, fast food, for example, which the, of all the restaurant types, you know, th the damage for restaurants literally depended on where.
Right. If you are sit down model versus a drive-thru take out model, who was two different stories? Well, we figured the fast food guys would be in strong growth mode. And of course the dollar stores have been in aggressive growth mode for 15 years. But what's surprising is, is it's kind of across the board.
I mean, we've got apparel players. Or an aggressive growth mode and just tracking the numbers, you know, going into this year with all of the updates, because a lot more players up their growth plans just in the last few months, this year, again, you know, right now I'm tracking. About 11,000 planned openings across every retail space using sector from restaurants to discounters, to apparel, to health clubs, and gyms, you know, some of the categories that were hurt the most by the.
It is overwhelmingly the big chains, you know, the big multi-site operators, although we're even on the restaurant front, we're saying record levels, business formation, a lot of it's businesses that went under during the pandemic that are rebooting, but it's really mindblowing. I haven't tracked this much growth in the market for.
Almost 10 years. Yeah, really it's 2013 was the last time I saw an equal amount of growth. The difference this time. Is that even then we had chains that you knew were going to be right-sizing and downsizing because of the impact, e-commerce their debt levels, cetera plant closures that I'm tracking now.
And there's still some chains that are in consolidation mode, but they're at their lowest level that I've tracked in almost 15 years. It really well, I think it speaks to a couple of things. One is. COVID really, really ripped retails of lead bandage off all at one. Players that were on the edge. Many of them went over the edge, you know, a lot of players that we're going to slowly right size, and maybe they were going to close 20 stores a year for three or four years.
Suddenly they just said, all right, we're close to a hundred. We're going to get it over. You know, and obviously e-commerce has monstrous growth. That's coming back to earth right now. Like, what I think has happened is I think that the age of the retail apocalypse is over. And what I mean by that is if you look at say apparel 10 years ago, 2% of apparel in the United States was sold online.
It was about one. In 2019, right before the pandemic. Now it's about 45%. And the question you have to ask yourself is, do you believe that we're going to live in a world where 70% of apparel is sold online? You know, I don't think so. Is it 60% 50? I think what's happened is e-commerce is boost means that we're going to have normalizing growth numbers out of e-commerce in the future while at the same time, if you're a retailer and your big problem was that in the year 2000.
1600 stores and you've had 20 years of trying to adjust to, well, what happens if 40% of my business ends up being online? How many stores do I need? Well, the damage of COVID the closures, the bankruptcies that accelerated that process. It's like we got, you know, four years. Of consolidation done in the span of nine months, really?
You know, for 15 years straight, we were dealing with while overall retail might grow by 3% a year e-commerce was growing by five times. 'cause they normalize. Now, if you're a retailer, we really are starting to see things like the digital native brands that are saying, okay, we have our online growth all set up.
If this point the way they continue to grow the brand is to open these embassies of the brand to open physical stores. I mean,
Sid: essentially, Also hearing you saying, I love the statement about how these brands are opening. know what you said, like embassies of their brand, Which means that there's confidence that opening up a physical store, a physical space is still one of the best ways to connect with your consumer.
And with that comes the fact that. Those physical spaces need to represent your brand really, really well. and you got to do all the right things to explain what you think of your consumer. The other thing I'm also hearing is that the proportion of e-commerce to in store purchases, the size of the slices have changed, but the pile so got bigger.
Our consumers also spending more today than they did before, or
Garrick: we've had this very strange 18 month trend for physical retail because no one was spending money on services. You know, it probably the easiest thing to just point to would say, you know, for example, grocery stores during the pandemic were the big winner, largely at restaurants expenses.
Right? Well, that's normalized. Uh, but if you just look across the spectrum with nobody, you know, people not going on vacation with them, not eating out with them, not going, uh, to health clubs, uh, and pursuing retail services. You saw this shift of spending on retail, hard lines, soft lines. Create a double digit growth.
And, and remember know, like I said, for the 20 years before the pandemic retail was averaging about 3% growth year for the last 18 months. And it varies depending on the category, virtually every category, it was double digit growth and some of them at different points, we're talking about 20, 30% growth.
And that's not just year over year where you're maybe comparing, say, 20 21, 20 20, which is problematic, right? Because nobody, nobody bought any apparel and April and May, 2020 to speak up, you know, but if you compare it to the pre COVID numbers now, unfortunately I think that's coming to an end. The March retail sales numbers still were positive, but there are some categories that year over year we're turning negative data.
The most recent, you know, total dollars spent versus say February, 2020, right before the pandemic that are still positive, but what's slowing down is because one category of re. As biked into huge double digits and that's gas stations. So the problem that we're facing right now is that the gas prices are starting to take their toll on consumer spending is still gonna remain positive.
I think. At least the next six months, but you know, there are some dark clouds on the economic Verizon that I'm a little bit concerned about, but you know, right now that's part of the reason for the turnaround is that it, you know, it took a peril, probably they were like the last two to feel a rebound, but.
Starting about a year ago, as people started going back to work in person, you saw suddenly just a huge amount of money going back up, pent up, demand people, you know, realizing, you know, I got the COVID 20. I need to go buy a new wardrobe. Right. You know, all that stuff,
Sid: right? So this is a great segue into our next section.
Right. And we better move our next section or our producer. Emma is going to be sending you messages in all caps. So, um, so let's talk about some big picture objectives, Garrick and. Teams can move them across the goal line. We're
Garrick: gonna go inside. We're gonna go outside, inside, outside. We're gonna get them on the one more.
Once we get along, we're going to come on the other, we're gonna go, go, go, go. I'm not gonna stop.
Sid: What are you seeing in terms of customer expectations of brands as it relates to customer experience and what are brands doing to deliver these experiences?
Garrick: Well, you know, this, this is always one of the challenging points of retailers, customer expectations, almost always just grow, you know, whether it's, you know, I mean, at this point, you know, if you, if you, I remember the first time I bought something online and the nineties, I was ecstatic to receive it three weeks later that doesn't fly anymore.
You know? And obviously we've seen Amazon doubled their real estate. And the last two and a half years, so that they're, they're actively trying to make same day delivery. The norm, not, you know, not just in the densest markets, but everywhere, at least in the continental us. So instant gratification, instant gratification.
And you know, and here's the thing is I think it's really critical. That every retailer reminds themselves of the basics. And to me, most basic thing you have to remember is consumers come to your store, really your shopping center. If you're a landlord it's similar, but only for one of three things. If you can deliver on all three together, you've hit the trifecta, but that's almost impossible to do.
They're either coming for the valley. Or they are coming for the experience or they're coming out of convenience. And the disruption of the last 20 years was e-commerce seizing upon that convenience. Right. Which meant if you're a brand new. How do you best compete value or experience? Those often are two at opposite ends of the spectrum.
Um, but one thing I'll say is if you want to compete on value, your challenge is, is that you have to create scale. And you have to be huge to be able to generate the kind of value, say a Walmart or target can do almost nobody can get to that point, which leaves you with experience. And so much of the retail apocalypse story, the brands that were failing before the pandemic were those brands in the middle where they weren't luxury.
They weren't this. They didn't stick out from their competitors. That's never going to change. And I think the important thing, especially for a lot of these players are growing is, is don't lose sight of that just because you had a couple of good quarters, you need to continue to innovate in the way that you.
Customer expectations and experience for most of them is, is a big one for the physical store. Certainly on the e-commerce side. It's it's that convenience expectation, the instant gratification, fast shipping times, but in store, you have to remember that. Experiential retail. Isn't just, you know, apps throwing or barcades, you know, customer service is the first, most important type of experience.
And I think one of the challenges that retail's had, especially I think the growing influence of private equity wall street, if you just look over the last 40 years, We've kind of ignored service with a lot of chains, you know, retail wages until recently, if you adjust some for inflation actually went backwards over the last 40 years.
That's a challenge, you know, having good service translates into good experience and you know, you, you tend to get what you pay.
Sid: Right. I always think of, myself as a consumer, when you walk into a physical space and feels warm and clean. It looks like the brand cares about what I experience.
It's almost the equivalent of looking at someone and them giving you a smile. You feel welcome. And if you walk in and the person who's supposed to be in customer service, doesn't give you a smile back. It's the same feeling as if you're, when you walk into a space and you walk into the lobby where.
The door won't open, right? The tiles are broken, the carpet is stained. So it's the same thing. And brands need to invest in those physical experience experiences, because like you said, experiencial retail is not just about, ax throwing or things along those lines. But it's also about what it makes the consumer.
Garrick: Well, and, and, and that side of it, you know, that gets down to everything from merchandising to the architecture and design of the store, to the lighting and just really a whole bunch of facilities issues. I don't want to name names, but you know, there was, there was a large, big box retailer that would bankrupt a few years ago and liquidated, and they were a leveraged buy out retailer, which for those who might not know what a leveraged buyout is, is when private equity, borrows money, they purchase a retailer.
But the. Debt on the retailer to pay back. And it meantime this, this particular retailer, their private equity owners had taken out billions in profits. They didn't invest in e-commerce. They didn't invest in upgrading the stores. They didn't even really invest in maintaining a lot of the facilities because they were extracting wealth.
That retailer eventually went bankrupt or we billions, which of course the private equity guys didn't have to pay because it was on the retailer's neck and they ended up being liquidated and thousands of jobs were lost, but I just remember going to one of their stores as they were doing their liquidation sales and.
Something as simple as looking at the floors and realizing, wow, okay. They haven't kept this facility up. I mean, this is a dirty uninviting store and that should be a no brainer. You know, if, if the goal of running a retail organization is to survive and thrive, as opposed to. Sometimes these weird financial plays have nothing to do with retail at all, but that's a whole nother podcast.
Sid: Yeah. You know, it's like when you walked into that, store and I think I know what the story you're talking about, but when you walk into that store, the writing was not only on the. It was also on the floor and the ceiling and all the fixtures, because it showed, it, showed the age and it was not, it wasn't taken care of, which brings me to the next question.
Right. It's a perfect segue to what you think the role of facilities. the value they bring to the overall brand and the organization
Garrick: I think this is the principle. That often gets forgotten by retail organizations. You know, it gets viewed as, oh, this is something we just have to do. It's, you know, we just leave that to our operations folks to work out. If you stop thinking in terms of your facilities, being part of creating that experience for your consumer, I think that's a big.
And obviously, you know, it can be something as simple as just making sure that, you know, your displays and your, your lighting, you know, that you're promptly taken care of. Light bulbs to go out or that you're making sure everything runs smoothly. If it's an escalator elevator system, whatever, that, those, those just seem like no-brainers.
But I think that it's, it's really important for organizations to understand that. You know, something as simple as a dirty floor that impacts the consumer's experience that impacts whether or not it, and right now would it, w w if you look who are the most successful retailers, they're ones that build lifestyle niches know.
Restoration hardware, for example, you know, which literally when I was in school, I worked at restoration hardware for a few months. It actually was just a really cool hardware store with some furniture back then. Now it's a lifestyle brand. I mean it's, and, and, and here's the thing, you know, I'm going to get wonky.
Economic side of this, there was a great book called the experience economy that a couple of economists, uh, Gilmore and pine guys, I really look up to, they wrote in the mid nineties and they kind of foretold everything that's happened in retail the last 20 years. Although it wasn't. Then bring in the e-commerce side of it, but it was simply this, it was that if you're a retailer and you're trying to get top dollar for what you do.
Okay. You're up against the discounters. The only way to separate that out is to build an experience. And, and what they argued was is that we would see basically the erosion of the middle. From both sides over the next 20 years, because you know, on the one hand you've seen some retailers saying we're going to boost our offerings.
We'll build incredible loyalty from consumers. You know, we'll build incredible price, loyalty. I mean, if you look at what people are willing to spend on a, from unsafe couch at restoration hardware versus say a more middle of the road, Non lifestyle, branded furniture store, and I get it. The quality is probably way better and so forth, but the reality is is that people pay more for experiences.
And if it's more of a commoditized good, which is where the discounters side, the value side is. Price is what dictates consumer loyalty, right? So, you know, you, you might be an incredible discounter with, with bringing people in with your pricing, but if you start to lose that price advantage, a lot of those consumers, aren't going to stay with you.
Whereas, you know, if, if you talk to people that are just diehard, RH folks, they'll walk through. To, to go and check out a brand new restoration hardware.
Sid: Right. truly believe that even in the discount stores, the demographic of the customer base that is, you know, shopping there.
Even, they still have expectations of what the store should look and feel like. I mean, it doesn't have to be fancy You know what to expect when you still want the location to be clean and safe and welcoming.
that those are not things that a customer should have to compromise on. It doesn't have to be, covered in marble just needs to feel like you can't. About what the consumer feels when they walk in your biggest value might be having products at value.
You still want the customer to walk in feeling like you care, right?
Garrick: Yeah. You know, you should never have the situation. The second customer, just, just the dirty story example. Okay. That, you know, and, and again, I don't want to name names, but you know, there was a iconic department store that I grew. Every every year as we're getting ready for school, that was our back to school clothes, clothing source.
They were on top of the world in the eighties. They've since gone bankrupt and there's very few of them left, but the reality is if you went into that particular. Anytime really in the 10 years before it went bankrupt, you could tell the financial problems were playing out and it, they weren't maintaining the facilities.
They didn't have enough sales crew and you would go into these environments that frankly felt depressing. And, and you're never going to turn around. Uh, challenge retail or challenge concepts without that basic investment, you know, it doesn't matter how low you slashed the prices at the end of the day, even on the value scale, nobody wants to shop in a pressing dingy or dirty environment.
Sid: That's right. Because there's always another business around the corner that does it. Right. and if you want to compete, you have to make your consumer want
Garrick: to walk into your. Well, and like you said, it doesn't all have to be marble either. You know, I think that, that, that's one of those things that, I mean, one of the challenges for all these brands are growing right now is the inflation issue.
Well, construction costs are up 30% year over year. Right now they've actually gone down from if they were peaked in January and up 40% year over year. Um, but it means that. In creating those settings costs more significantly more today than it did just 12 months ago. And that's going to be with us for a little while, but you know, part of it though, is, is the materials you use are so wide range of, of things that you can use to create these welcoming environments.
Often what I see some brands do. Just putting all the onus on the store design, but then somewhat letting the facilities side of, of it's skimping on that. And that's a big mistake. Like they go hand in hand, you know, I look at it as the architects and the designers, eight design, this, you know, hopefully beautiful space that consumers are going to love, especially if you merchandise it well, but it's facilities that maintains and it keeps it.
And you know, you, you can't splurge on one and skip on the other. It just doesn't work now.
Sid: Couldn't agree more. They're the ones that are preserving the physical space and thereby preserving brand, and that's important. So moving onto the next section, Garrick, talk about tools and strategies.
I want to hear how one should do this is how we do
from the perspective of your role, what is the relationship between. Store operations, construction, finance, and facilities. And how do you think successful teams work together towards the same goal and desired results?
Garrick: Well, I tend to see this with the smaller luxury retailers tend to do the best job of not getting cited.
The real challenge, especially for the big chains. Is that more often than not, they have these deep dark silos where the operations folks don't necessarily know the finance folks or the construction folks. So the real estate folks, I mean, look, most large chains. I can tell you on the real estate side, their industrial real estate folks, the people who look for.
Their distribution centers and, or their e-commerce fulfillment centers are siloed from. The storm, both. That's a challenge across so many organizations. You know, when I look at say the Botega, Benita's the Gucci, the Louie Baton, you know, usually you see those folks. Working together, knowing who each other is.
And, and, and you see some teamwork. I think, I think that is the biggest organizational challenge that retailers face is. You've got to find ways to break down these silos. You'll get far, far better results if you actually. Create successful teams than just having these groups working independently, not knowing it a left hand, not knowing what the right hand is doing.
And unfortunately, that's, that's the challenge. I think just, just comes with being in big organizations.
Sid: Right. And it goes back to the point you were making earlier about how there's this massive push, you know, with real estate construction store opening. All of that funded right. And built out. Right. And then.
In many organizations, they just leave it and say, Hey facilities. Now you go figure it out. Right. And that's usually a very bad strategy because, are you actually building out your store in a way that is conducive to maintain, you know, that you hear stories of, retailers, building fixtures with lights in them.
But there's no way to get behind to the lights because there's no, there's nothing that allows you to change the bulb. Simple, small things like that. If you, if you don't keep maintenance in mind, know, you end up in a situation like that where you don't have facilities at the table and facilities deserves to be at the.
Garrick: Well, and I, and I'm, I'm hearing that, for example, right now, there's, there's a whole bunch of new AI fueled security systems out there. Not just, you know, like the Amazon go technology, which, which is out there, which by the way, if you've been to, um, you know, Amazon go or the new Amazon fresh stores, they have hundreds of cameras.
Up above you that when you walk in AI tracks you, right. So that you can, you have that just take out technology. So once you, you know, you scan in, whether it's you use your Palm or you use your phone, it tracks you and it figures out what have you picked up? What are you taking out? What'd you pick up?
What'd you take put back. Well, Those systems alone, you know, are starting to spread beyond Amazon, Amazon selling that technology. Other stores are starting to buy it, but you know, there's also systems out there that tap into AI that for example, read body language. So. Loss prevention off potential shoplifters depending on their body language behavior.
But, um, I'm hearing from friends of mine. Facilities organizations is a lot of these are really extensive. And if you're not putting the operations and facilities, people together with the construction people. Putting this stuff in, and you started having these stories of, well, you know, the cameras were put in and you know, now we can't get to them to fix them or causes a problem with this or that, you know?
And again, it's just the challenge of people being siloed and not working together on teams with a clear path forward together.
Sid: Right. I mean, cause. There are so many different things being tried out right now where it shows. And even what I'm hearing are even restaurants like retail are trying new and different technologies to engage the consumer, everything from drones to deliver food, to robots in the restaurant to do serve you drinks or bus your tables.
You know, it's interesting. Similar to, you know, the cameras in, you know, in stores that have this no waiting in line, kind of concept this walk in and walk out those pieces of equipment actually. Tied directly into your sales and your revenue and not having a camera functional has a direct impact on loss prevention on editors and point of sale.
And how fast can you actually find service providers to go and fix the issue? You know, and you've got all these brands that if you don't think of. Ways in which you can maintain those assets and maintain those pieces of equipment. You're going to find yourself in a weird situation where you've got a hundred cameras, but you've got like a blind spot because four cameras in one section don't work and you don't have a service provider who can come in fast enough to resolve the issue.
How much is that hurting you? Because the cost, the consumer doesn't know that it's going to walk out
Garrick: well. And the thing is, you know, and you started talking about robotics for anyone in facilities has got to get ready for the robotic revolution that is already begun. It's going to. Significantly ramp up in the next few years.
I mean, if you just look at venture capital fundraising, which has set records in 2020, if more from 2019, about $80 billion in the U S was raised for BC funding, mostly for new tech verticals, right. That more than doubled in 2020, it doubled again. In 2021. So that by 2021, it was like 320 billion and change.
If you just look at Westman invested in robotics in the last five years, it's over a hundred billion dollars. And if you look at what's happened with our labor issues, you know, uh, during the past. Of course we, we had, you know, just all sorts of people, horribly impacted, but those who could work from home we're okay.
Unemployment is almost stacked. The pre pandemic levels at this point, it's, it's back in the mid threes. We have 11.9 million available jobs as of the last reporting from the labor department, which is a record and. We had about 4 million people drop out of the workforce during the pandemic that haven't come back yet.
We have a worker shortage and what 3 million took early retirement, 3 million were just people 62 or older that said, that's it. I'm done. So we have this really intense worker shortage. Yeah. Remember our first rate's been declining each decade, going back. Well, we had a little bit of a surge with the millennial generation.
Before that you have to go back to the baby boomers and immigration, which accounts for about the other. Of our usual population growth has fallen off a cliff in recent years. So even if we had a recession, let's say in a year from now, and we saw unemployment go from the threes to the say, sevens, we're still going to be short workers.
So, so that's why, especially in the fast food arena you were seeing, like, I believe Jack in the box announced the other day that they're testing robots and you know, you're going to see more and more of these things impacting the way the facilities are run, whether it's flippy, the robot burger flipper, or robot waiters in the restaurant arena, or, you know, you're going to see, you know, the facilities needs of these self checkout Isles.
Completely different than the standard. So you've got this huge amount of capital. That's creating new tools, new robotics, and then you had this real need in the marketplace. So this is going to really impact the way people operate facilities going forward. And I think facilities managers really need to pay attention to.
Sid: That's that's phenomenal. I, 100% agree for our last segment. Let's look forward to the future of our industry. That's the
Garrick: future, the future.
Sid: But before we look to the future, let's talk about the past. From your perspective, how has the industry evolved over the past
Garrick: 10 years? Well, it's interesting because, you know, we had so much of it.
The last 10 years was about how do we become army. And that really is back. You know, when I say that the retail apocalypse is, is over, I view that entire era of that storyline through the lens of the, okay, we've got too many stores and we need to build e-commerce simultaneously. And the disruption that, that caused the brands that it killed, the brands that, uh, But pulled out the ones that led the way I think that story is over now.
I don't think that's going to be the big challenge going forward. Don't get me wrong is e-commerce still a disruptor. Yeah, but there's not a lot of categories of retail left. It hasn't disrupted drug stores would probably be the biggest one where there could be a lot more distressing. That's always proven to be challenging because the laws vary state by state, what you can do to, uh, e-commerce pharmacy versus in store there's limitations.
But, but for the most part, every other category has already had the lion's share of the disruption done. I think the thing that's going to take center stage in the next decade. It's really going to be all about dominating on experience and, and doing really finishing the omni-channel homework of making, making things seamless because.
You know, if they love you and your brand, they want that seamless experience. And they could care less where they get the goods from, if it's a sore or if it's online, if they went online and, you know, warehouse didn't have them, but you send it to them from a store. If you go to a store and they procure something online for you, consumers don't care.
They just want that seamless experience. There's a lot more that could be done on that.
Sid: Right. Right. Exactly. That's very interesting. Any, any COVID related shifts that you think are here to stay going?
Garrick: Obviously, I've kind of talked about the e-commerce site and now more normalization, the pain of retail, which getting the bandage ripped at once this put it in a much healthier spot.
I do think consumer behavior, especially with fashion and. You know, I think we've seen that casual Friday is every day. Now, if you just look at who does well in apparel, it's, it's the leisure wear. It's the athletes or the active wear casual wear. It's a little bit of a rough go. You know, supplement suits, for example, right now, although I do think that coach has its own world and time and place.
Uh, I don't think that that changes because I think the way we worked has permanently changed and, um, hybrid. Sure. There's going to be more and more people. Coming back to office. That may be haven't, but it's going to be so much more hybrid from here on out. So that's not a good news, good news for the apparel brands.
But I also think that focus on home. I don't see that necessarily going away because I think a lot more of us can be working from home. And I think that's all great stuff for home-related retail, everything from the, do it yourself, big box guys to the restoration, hardwares in the furniture and furnishings segment the at homes and so forth.
So I think that category got a big boost. One thing I'm still waiting to see is how much telemedicine does there. Doesn't stick around. So that's just something just because we were seeing more and more medical users going into retail, shopping centers. And, uh, you know, I still think that there's runway for growth with that, but, uh, those would be the big ones.
I mean, what w what I find interesting right now is the rush to normal. That in a lot of ways, things are snapping back is if nothing happened, there's a few dif differences. Uh, you know, we're recording this in early may. And my understanding is that June and July of this month may set records for number of marriages.
Huh. Interesting. You know, I, I think when you have extreme times unit with extreme outcomes and I'm just glad. We're moving into, uh, whatever this new normal is.
Sid: Right. It's good to see things coming back to normal, but with, you know, some of the things that may. As get through these challenging times as well.
I mean, I think that there's been a lot of innovation adaptation and both businesses and workplaces, trying to figure out what the future looks like. And a lot of different companies have tried new things. And I think that some good has come out of it and those good things I think will hopefully stand the test of time.
We'll we'll see. But I think, um, as we look to the future, you know, it'd be. It would love to raise a toast and say, let's hope for the best. Right? This has been a fantastic conversation. Garrick, as we wrap up, what advice would you give to our audience? So they may have the biggest impact on brand performs.
Garrick: Well, I think it's critical to remember that the experience is every single level from, from the second, really from the second it consumer sees your store and is walking towards it to go inside. And it's so critical not to be siloed and to emphasize. The experience first and foremost, whether it's in dealing with your salespeople, your customer service folks, your facilities, folks, your maintenance folks that ultimately, you know, ultimately retail is kind of a hospitality business nowadays.
You know, if you want to differentiate yourself. Uh, and, and most, most chains simply are not, not going to have the scale to just make it all about discount and value. And even if you. It doesn't mean that any of this is less important, you know, that's, that's where it's, it's so difficult to deliver on all three, you know, my big motivators, which is value, convenience experience, but we are now in the experience economy.
Full stop. And if you want to survive, it's so critical that you know, that the experience is what builds your brand. It's what builds loyalty. And it impacts every single part of your store from operations to maintenance, to service. And it's so critical that everyone on your team from the buyers to the warehouse, I understand that is, that is your basic credo.
That's what I would advise people first and foremost, always start with that.
Sid: Love it. Um, Garrett, this has been fantastic. I've truly enjoyed this conversation. Thanks for taking the time to chat with me today. Um, can you tell the audience where they can find you?
Garrick: Sure. Well, you know, I've got my own podcast, uh, Sid that, uh, I do with bill Janek and connect, set them.
It's called the retail dry, uh, it's on all of the major podcasts stores, or you can drop me a line directly at Derek G a R R I C K. At lock house.com and that's L O C K E H O U S
Sid: E. Love it. Thank you so much, Greg. Really appreciate it. We'll talk soon. Thanks said
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