B (2:31)

We actually were the first to operate in the common area to do over a million dollars selling $40 it kits. Wow.

A (2:39)

From the. From the kiosk.

B (2:41)

Yes. Carts and kiosks. And then we started automated retail because we realized that there were consumers who really didn't want to talk to you or I, John. And so we started automated retail, launched those store in store airports, in Macy's and then in shopping centers.

A (3:01)

When you talk about that, what does that mean?

B (3:03)

Well, people call it vending.

A (3:05)

Yeah, vending.

B (3:06)

But we call it automated retail because there's really a difference between buying a Coke in a Coke machine and buying an acne treatment or some kind of skin care in an automated retail machine, actually.

A (3:19)

Or AirPods at the end.

B (3:20)

Exactly.

A (3:21)

Yeah.

B (3:21)

So. So it was kind of AI before AI, right?

A (3:23)

Yeah, sure.

B (3:24)

Yeah. So I've been really blessed. And my husband and I sold that company. My husband tried to retire, wrote a book, and I started International Retail Group.

A (3:34)

So my question is, let's go. I don't want to skip over it because let's go back to the automated retailer. What it was. Were you guys coming up with new concepts that could go into these machines or were you just like going to trade shows and like, wow, that's a really good idea. Let's grab that and place it.

B (3:47)

So listen, we were really. We were really blessed to meet a gentleman. His name is. Okay, name names. So his name is Gower Smith. He started Zoom Systems and he actually invented automated retail. Came to us, said, listen, we love your product Proactive. At the time, it was the number one selling acne treatment product. We were the only worldwide distributors.

A (4:06)

Wait, wait, wait. Proactive, the acne stuff?

B (4:09)

Yes.

A (4:09)

What was your relationship to that?

B (4:10)

We were the only worldwide distributors for retail. For Proactive.

A (4:16)

Wow. Because that was everywhere.

B (4:17)

It was everywhere. And we were blessed to be partners with Guthy Ranker, who really saw the future, and we launched it in shopping centers.

A (4:26)

Now we got to back up again. Right? Now we got to back up again.

B (4:28)

Yeah.

A (4:29)

So how did you become. Okay, so that's a massive product that you had a sole exclusive on for distributed. For distribution?

B (4:37)

Yes.

A (4:37)

How did you get an exclusive distribution Right. For that?

B (4:40)

Well, listen, my husband will tell you. The long story short is that they wanted my husband to go to work for the company. My husband is a consummate entrepreneur, has been for years, very successful. He flew down there and they said, yeah, we. No, he wanted to do. He wanted to do another one of their brands that Was it. Excuse me. He wanted to do another one of their brands. He flew down there, met with them, and they said, no, we don't want you to do that brand, but we'd like you to do proactive. And he goes, oh, well, what's proactive? And he said, you know, the acne skin care treatment? He said, yeah, I'm not gonna do an acne skin care treatment. And they said, well, okay. And he said, well, by the way, how much are they doing? They said, well, almost a billion dollars. And Max said, throw me in the briar path.

A (5:22)

Yeah, I'll take it.

B (5:23)

So we became their exclusive partners. We opened almost 500 locations.

A (5:30)

And these are kiosk locations?

B (5:31)

Yeah, kiosk carts and kiosks. We also did store in store with Hudson Bay. We opened them in four countries, and then Gower came to us with automated retail. And we thought, no one will buy acne treatment without us. You know, we need to talk to them, right? We need to talk to them about their skincare. But let's face it, there's a certain amount of the population, even today, who doesn't want to talk to you or I. But they want to buy it. They don't want to buy it online, they don't want to buy it in store, but they want to buy it somewhere. And so when they see these automated retail machines, they're like, oh, my gosh, you mean I don't have to talk to anybody? I can press a button? And now it's AI driven. Back then, it wasn't right.

A (6:11)

And I have it instantly and I have it instant. So you guys had proactive vending machines?

B (6:16)

Yeah, we had them in military bases, airports, Macy's, and we had them in three countries.

A (6:23)

Oh, my gosh.

B (6:24)

Yeah. Wow. Now you can buy everything from automated retail. Right. And so we were really the first to do that, to put things besides chips and Coke in vending machines.

A (6:35)

Did you. So did you have to retrofit these machines? Did you go to the manufacturers and.

B (6:38)

Say, no, Gower did that. He manufactured one machine. But I'll tell you, we had a heck of a time convincing people to put these machines in their shopping malls.

A (6:47)

Yeah.

B (6:47)

So they put us under the stairwell. They put us next to the bathroom until we started doing 25, 30, 40,000amonth out of these machines.

A (6:57)

Holy smokes.

B (6:59)

And so, yes, yes. So at our height, we had over 1500 machines.

A (7:07)

Why don't you see? Because I'm just trying to think of this right now. I don't like. You see them at the airport, right? That's like the only place.

B (7:13)

Now you're starting to see them in shopping malls again. Now. Now the developers and the shopping center executives are starting to see that there is a real case for people wanting to buy product who still don't want to buy it online. They don't want to talk to someone, but they see an automated retail machine. Oh, wait a minute. You mean I can just tap my card? It'll dispense. I can hear all about it on the customer interface. I can watch, I can watch these videos about it. So there's still people who want to do that. And we have been pounding the pavement trying to get them to look at these machines as a real viable retail strategy. Part of unified commerce.

A (7:55)

Well, let me ask you this. As, as retail, as re, as brick and mortar retail seems to die every day. Where are you? I mean, I don't know where I'm at with it because it seems like, you know, I, I was in the mall here, Galleria, not too long ago and it's, it's really starting to look a lot like the Meadows Mall over there. It's, it's quietly getting quieter and quieter. So is there a, is there going to be a bounce back? Is there a future?

B (8:19)

There is a future. And there. And let me tell you something. I just launched a new brand with a client at the Forum Shops and this is our, this is her second store. She's a brand new entrepreneur, brand new brand into retail and she's really excited. She has an online presence. But there still is a case for operating John and Brick and Mortar and B and C malls and I hate to say it online, but I will like Meadows, like Sunset. They're local malls. But E malls are still doing really well and I still have a lot of brands and retailers that I work with who still need to be in brick and mortar and pop ups is another thing they still need to be doing. So pop up for a weekend, for three months, for six months. Make sure that that's your demographic. Right.

A (9:09)

How am the retail at Forum Shops? That's the most expensive square footage in the world. I heard.

B (9:14)

Yes.

A (9:15)

Is that true?

B (9:15)

It sure is. But also they see 52,000 people a day. Yeah, I mean literally it's, it's, it is the creme de la creme on the strip. So it just is when people want.

A (9:27)

To do a pop up store. Let's get back to that. So what's the idea behind the pop up store? Like, like when you go to talk to, obviously you Know the people that own these retail centers are not looking for a three month lease. So how do you negotiate with the landlords when you're looking to buy?

B (9:42)

Well, because what we're trying to negotiate is we're trying to get an understanding. A lot of brands that we work with just really want from a marketing perspective to understand what the consumer thinks about the product. So maybe there isn't a long term strategy, maybe it's a short term strategy for them to really understand does this product make sense to go in retail? And you know, I have to go back to get the Ranker. I have to say that Greg Ranker was brilliant. All of those stars that you saw on that use Proactive, they used Proactive. He read magazines, he found people that had pimples and he told them about, he was brilliant. But what he also did is he found out, hey, is this product going to work for you? So it was really about the branding. So when you do a pop up and you go to a shopping center executive, I tell them, listen, this is not going to be a long term strategy. We're just testing to see how the consumer feels about this product. We really want hands on. If it works out great, we may open a hundred stores with you. If it doesn't, then at least we know you know what the consumer thinks about the product. But like with my new client that just opened at Farm shops, we tested in three different shopping centers before we understood what kind of center she needed to be in.

A (10:55)

When you go to those landlords about those pop ups, what kind of markup are they giving you because you're doing such a short term lease?

B (11:00)

Well, here's the deal. I think it all depends on your relationship. I've been negotiating real estate. I've negotiated over 20,000 leases the last 30 years. So I think perhaps, and I don't want to cut off my nose, just wipe my face here. John, great questions by the way. Yeah, I have nothing because I negotiate so many deals. Perhaps may I get a better deal maybe. I just did two long term deals with a client in Hawaii and listen, it's a give and take, right? It's a give and take. Is it short term, is it one year, is it two years, is it five years? So I think depending on the term. Listen to me, I, it's, it's a battle sometimes.

A (11:39)

Yeah.

B (11:39)

But I, it's all about relationships, right? And so the relationships that I've developed with them, I think I get my clients the best deal. And is there a big markup? You Bet. But it's all about supply and demand.

A (11:51)

Yeah.

B (11:51)

If there's no open locations and they have one, are they going to mark it up 10, 20, 30 times? Sure.

A (11:58)

Yeah. So last location, it's, it's funny here in this building we, we own most of the buildings that our companies are in, but we don't own this one. We don't own the one next door. And the one next door, when we were first growing, this is maybe eight, nine years ago, it's that vacant for like four years was a restaurant. And I was like, to the guy that owns that building, I was like, I want to rent this space. And he was like, no, it's going to be a restaurant. I'm like, it's been an empty restaurant for four years. And so what I ended up doing was I started sending him a fake rent check on the 1st of every month. And then what happened was after, like, just because I want him to physically see, of course, money he was throwing away by leaving that vacant. And it only took like three months and then he gave it, you could have it.

B (12:37)

So you know what, you made such a great point. I tell the landlords, here's the deal. Would you rather have some rent or no rent?

A (12:44)

And you can feel free to show it to another tenant while rent.

B (12:47)

Yes. And when you do a pop up, they may lease it from underneath you because now someone sees what the space actually looks like when it's occupied. So I tell them, listen, don't charge this tenant too much. You're betting on a long term relationship with this tenant. And if you're going to charge them too much, first of all, they're not going to take it. And secondly, you're going to be looking at this space six months from now.

A (13:08)

Yeah.

B (13:08)

Right.

A (13:09)

So if somebody comes to you and they have a product they want to take to market and you're looking that, are you, are you strictly doing contract? Are you doing consult for Equity? What do you do?

B (13:17)

I, I consult with them. So I do everything from A to Z. So if you're.

A (13:21)

No, but are you taking equity in these brands or. No, no, strictly on contract.

B (13:24)

Strictly on contract. I've done that, I've been there, I've done that, I've owned all my locations. And now what I'm really interested in. Now listen, if someone came to me and it was a phenomenal brand, they said, hey Linda, you interested in investing? I'd be foolish not to. Right?

A (13:38)

Yeah.

B (13:39)

And, but at this point, the last eight years, I've just really been so busy helping them launch into retail. I also write all their operational manuals. I hire and train their employees, I coach and mentor with them on how to operate in retail. So.

A (13:54)

So you're the CEO integrator for hire.

B (13:56)

That's what you are. That's it. And I do it globally. I'm also considered a top retail expert worldwide. So there's a group of about 300 of us that have that designation.

A (14:08)

What makes up that? What makes you that?

B (14:10)

Who knows? No.

A (14:13)

I shook the right hands and there's a 39 course on the Internet.

B (14:16)

I took it by a group or an organization called Rethink Retail and they, and there's qualifications. You're nominated for that, for that designation. So, okay, I can put it on my resume, John.

A (14:31)

That's all. That's.

B (14:32)

And I love this group. They're so incredible there. I get to network with other people who do what I do in the retail industry. And, and we share best practices and we share what works for them, what doesn't work. So it's really been a blessing for me the last couple of years.

A (14:48)

Well, I think just in talking to you in the few minutes that we've been talking now, I'm starting to see the reason for this book, which is you, obviously. Well, no, no, just your, your credentials, your experience, what you've done. You know, you can't come to you and say I got $10,000 in a dream.

B (15:01)

Right?

A (15:02)

You, you are only working with well funded brands that understand what they're doing. So is to help the $10,000 and the dream people. Yes, that's the goal.

B (15:11)

You know, and what's really interesting, John, first of all, I really appreciate you having me. I've been listening to your podcast and they're incredible. You're really bottom line, which I love.

A (15:18)

Thank you.

B (15:19)

And you, you say it the way it is. Right? So here's what I'm going to tell your listeners right now. I am not an AI expert by any means, but do I use ChatGPT? I sure as heck do. I love it. But here's what I'm noticing with brands and entrepreneurs and even longtime retailers is that AI, it has such a place in helping to do those things so that you can allow your employees to actually do what they're meant to do. And that is to be consumer facing, to help your customers to drive the top line and the bottom line. It's not to be sitting in the little back room writing schedules or saying, why am I running out of these blue shirts? And I have way too many of the red shirts. And why aren't my customers coming back? I heard Michael on your podcast and I'm like, I love Michael Rugman. He's a very, very dear friend of mine. And thank you for the introduction he made with you. But he mentioned something that I've been saying for 30 years, and that is, do you know the lifetime value of your customer? And you know what? Many retailers don't even talk about it. So when my friend Sharon came to me, who was my director of marketing with akm, and said, Linda, what do you think about AI and retail? I mean, would you like to write a book together? Because she's an AI expert. I'm not. She does it in marketing. And she said, we can collaborate and really help people to learn how to implement AI the right way and not to spend a lot of money and what makes sense for me. So really, this book, if you look at it, John, the book, you don't have to read it chapter by chapter. If your first pain point is inventory, then go to the inventory section and read that. And we also give you the companies. So we don't profess to know the every company, but we give you the names of companies that maybe you can work with to help you monitor your inventory and, and learn how to monitor theft and, and not order so much and have a warehouse full of product that you're never going to sell. Right.

A (17:20)

You know, it's so funny that last night I was on with a different podcast and this gentleman had just written a book as well, and we were talking about. He's like, well, yeah, I used AI to help me write the book and mine was written that's coming out November 11th. Mine was written three years ago, so.

B (17:33)

So you wrote it?

A (17:34)

I could, yeah, it was, it was a siege and we're talking. But. But here's the thing. I know people out there that will hate on people for using like AI to help write books. And I'm like, you don't understand it like AI. I wish I would have had it to write it. People are probably gonna read my book and be like, man, this should have been written by AI. This isn't good enough. Because what you can do is use it to extrapolate information from you and then that in a way that's palatable and readable to the reader. So I, man, if you're out there and you've got a lot of life experience that gives you a great perspective on any subject, you know, go into ChatGPT and say, your, your job as a Professional ghostwriter. Interview me for as long as it takes to generate a 12 chapter book. Well.

B (18:16)

And instead of taking you. So listen, I have another book coming out probably next month and this is a book that I've been writing for five years because I'm not a writer. I'm boots on the ground. I'm in retail. Do I write? Yes. But do I write books? No. So listen, Sharon and I collaborated on this. I'm gonna be completely frank. She did the bulk of the writing and then I brought in the retail piece. And working with clients and what do I hear their pain points are? The pain points are inventory. Most of the people I work with, when they come to me, they have a warehouse full of inventory that they're never going to sell through. And when you're a small brand and you have $100,000 of inventory sitting in a warehouse that is going to sell, that means you did what? You ordered too much. You didn't know what the clients wanted to buy.

A (19:04)

Yeah.

B (19:05)

And now what are you going to do with it? Discount it.

A (19:08)

I'm doing a consult for equity deal for a brand, a buddy of mine, just literally who's been doing the legal work on this deal forever. It just kind of fell into his lap. And the guy's got half a million dollars worth of inventory. Did not. I mean, their strategy is just wrong. I mean, I. Five seconds. I'm like, your strategy is just terrible. And he essentially is inheriting half a million dollars worth of inventory because this dude's just out of cash. He ran in cash and runways is that is at the end of it. So. So yeah, what's going to do is.

B (19:37)

That he's going to discount it. So. Which means you're eating away at your margin. So I tell my clients, what's your margin? What is your margin on the product? Like? Well, I think it's 50. And I'm like, you think or do you know, how do you mark it up? How do you know what to sell it to your customers for? Right. So you're dealing with the same thing. So I tell them a, I can help you with that can help you drive Min Max Systems so that you don't fall below the minimum, you don't go above the maximum. I mean, for you and I, that may be second nature, but for people ordering, they don't know. They don't know what to do.

A (20:13)

You know, we were, I was in a meeting yesterday. We're having a little bit of an issue with one of the businesses that we own because we're completely vertically integrated in any way, shape or form. If anything that happened with real estate we own that goes from the agent side to the customer side. And one of the, one of the things we own because there's so much mail that happens in brochures with real estate is a digital print shop. And unfortunately, when the market tends to slow a bit, a lot of agents will pull back. And the first thing they pull back on is the PR is print is mail.

B (20:40)

Sure.

A (20:41)

Like you probably don't get as many flyers in your mailbox as you were a year ago.

B (20:44)

Right, Exactly.

A (20:45)

You probably don't get as many. So all of a sudden we're like looking at, yes. Yesterday I'm talking to the COO of that company that runs it and it's like, you know, he looks at me and he goes, well, right now, cash flow is far more important than profitability. And I said, I 100% agree because we were buying a bulk to get a 30% break on paper. But we've got to buy like four months of paper at one time. And so now we've got shelves of certain stock that's not getting and it's coming back. And I'm like, stop ordering at the brakes for right now. We got to get back. Because we need to manage the cash flow a little better.

B (21:17)

Exactly.

A (21:17)

Because we don't have the money to order four months worth of paper right now. Because I'm a firm believer that every business we own has to stand on its own. I do not, Rob Peter. I do not. It's got to stand on its own legs or it's not. It's not worth it.

B (21:30)

Well, and think about that. I mean, how many business owners don't know if they're profitable? How many don't do a monthly P and L?

A (21:36)

They can't read a visit. They can't read a balance sheet.

B (21:38)

Right. They don't know how to put together a balance sheet. So when I work with my brands, I'm like, the first thing we're going to do is to P and L. We're going to see if you can afford to do this.

A (21:47)

What are your cogs? No clue.

B (21:49)

And pay me. And I think when they look at it, they don't understand that, listen, all of this impacts how successful you're going to be long term. And so this AI for me is not going to take the place of you or me. But what it's going to do is it's going to help you and I to be more successful at what it is that we're doing. So we wrote this book, and I hope people will look at it. We wrote it for retail success, but we meant it for any brand or entrepreneur that really has. That really is struggling with how do I implement AI in my. You're going to have to. Long term. People think it's a fad. It's not a fad. I had somebody two days ago. Well, this is the stupidest book I've ever heard of. And I'm like, they said AI is a fad. And I'm like, yeah, it's not a fad.

A (22:41)

Okay, I got it. How old, how old was this person?

B (22:43)

Older.

A (22:43)

Okay, thank you. Your email at the AOL email address. That's how you know. That's how you know.

B (22:49)

Or even sometimes Yahoo.

A (22:51)

Yeah. Either way, seriously, you see that?

B (22:52)

You're like looking at it. I'm like, listen, you have to implement AI regardless. And so when we look at like CRMs and emailing your customers and driving that lifetime value of the customer, AI can really help you do that. And integrated seamlessly and not a lot of money. Companies are spending a million, $2 million to implement AI. They don't need to.

A (23:14)

Well, if you don't, if you don't have, if you don't have a digital CFO in your business, you're nuts.

B (23:21)

Yeah.

A (23:21)

I mean, you should be able to take all of your numbers, all of your purchasing, all of your everything and dump it into. And say, where am I leaking?

B (23:27)

Yes.

A (23:28)

And you can just a real quick prompt. You're a Ph.D. level CFO that has, has passed the, you know, CPA exam and just find where I'm leaking.

B (23:38)

Exactly.

A (23:38)

And they will go through. And it's amazing. We had, you know, we just ran. This is like, this is a big business. Like simply Vegas is a big business. We do about $2 billion in real estate sales here a year. About 4,000 transactions. It's a big business with a lot of moving parts. And I took all of the data from all of our sales, from everything that we're doing to all of our expenses, and I loaded it in and it. And it gave me. I mean, I would have had to pay consultants to come in and go through that. And almost instantaneously, it was like, nope, you're not keeping up with inflation fast enough. This is, you're being outpaced here. You've got to raise this, you've got to move this. You can't do this anymore.

B (24:15)

See?

A (24:16)

And it was all right. And then we had to make some moves in our business to Kind of because we were, we were too slow to adjust to inflation.

B (24:23)

Well. And I think that's part of when you're looking at, especially now with, you know, things being so volatile, people not understanding the cost. Right. Of doing business. It's high. And so what you did was absolutely what every brand and every business owner should be doing now. What makes sense today, what doesn't make sense? Get rid of what doesn't make sense. Right. And concentrate on those things that long term can bring you profit if you're not profitable and driving top line sales. How long are you going to be in business and how long are you going to keep bleeding money? That's why I tell my clients, you're bleeding money. Stop it.

A (25:01)

I love back when I was in the restaurant business, right? And we would go in and look over menus and it's the same thing with any retail. Like, like item a cost you 17 cents to make and you sell it for $2. Or the bar business, Right. For example, the bar business. Like when I first took over a bar once in Atlanta and the bartenders were constantly upselling alcohol. Oh, would you like this? And I was like, stop. If somebody orders a vodka tonic, you pick up that plastic bottle of vodka and you pour them a vodka tonic. Because I make way more on that $3 drink than I do on the $4 drink.

B (25:35)

Yes.

A (25:35)

Because the booze are way more expensive. Like, stop. Like this is about profit and I'm about that. And people don't understand that in their business. They sometimes they get so enamored with this product and they don't realize that because they just want to sell this one because it's what they fell in love with or what they started with.

B (25:51)

Exactly.

A (25:51)

They don't realize that this one over here is way better.

B (25:54)

Well, and the other thing I think in, in my business, I literally, we have to look at like conversion rates like in the barn. Like, people don't really understand how many people walk through the door. I mean, it can be simple or it can be complicated. But a friend of mine wrote a book on conversion and it's a brilliant book. And I had a call with him and I said, oh my God, this is what I've been practicing. How many people walked through the door? How many people did you sell? And the people that you didn't sell, what could you have done to sell them? AI, you can drop all of that in. They can tell you what time of day it was, what they looked at, what their dwell time was in front of, what product and Then you can really hone in on what can you do to change that conversion rate from 20% to 50%. Right, I know.

A (26:41)

That's so. So. Well, let me ask you this as a marketing expert, what you are, what I'm. What budget? What's the minimum spend people should have as a percentage of total budget for marketing? What do you think?

B (26:54)

Well, listen, I think it all depends on where you're doing the marketing. For me, here's what people do, and this is such a great question that you asked, but the first thing that people cut when business is bad is what? Marketing.

A (27:10)

Stupid. Yeah, it's terrible.

B (27:11)

I think you should be looking at marketing as at least 10% of your overall budget, if not always. Always, Always. And here's the deal. When business is going bad, do not cut marketing, raise marketing. Are you doing it online? And here's what I'm going to tell you. We had at one of my new client stores, we had an influencer night. The. And we invited in all the top influencers here in Las Vegas. We gave them a gift card. They were brilliant. 12 of Las Vegas's top influencers, they came in the store. They were live. They were buying product. And what better way to market your store? There are ways that you can market your store that don't cost a lot. But do not ever cut your marketing budget. And please don't ever go into business and not have a marketing budget.

A (27:59)

Yeah, it's like, I always know. You can always. Here's a secret. Talking about restaurants again. You can always know when a restaurant's about to go out of business. You know how, how when they put an open sign out, when the open sign goes out, like the flashing open sign, you're like, oh, man, they're done. They're so cooked.

B (28:14)

But, you know, I never thought about that.

A (28:17)

It's true. Watch.

B (28:18)

I'm gonna watch it now. And now I'm gonna call you another.

A (28:20)

When you see a restaurant that didn't have an open sign, that all of a sudden it's got an open sign, you'll be like, oh, my God. Yeah. Yep. They're done in, like, absolutely. Within three months. Let me ask you this. When it comes to marketing dollars, what is. What is the minimum ROI through any channel to make that channel effective for any product?

B (28:37)

Well, listen, not a lot of my clients track their ROI on their blasphemy. I'm telling you, they don't. For us, we said, listen, if we don't get at least a 20% return on what we're spending Try something else.

A (28:55)

Yeah.

B (28:56)

I mean, literally, we were so blessed for the 20 years we were in business with Guthrie Ranker that they really taught us, like, listen, test it. Test, test, test, right? And if the test doesn't work, go to something else. Don't keep testing. Don't keep beating yourself over the head expecting that it's going to change. So try something else. In today's market, and you probably know this, John, because you owe so many business. Here's the deal. The consumer is fickle, okay? And let's just call it the way we see it. Today they're going to buy in your store. Tomorrow they're going to buy on TikTok. The next day they're going to buy on Instagram. Then they're going to go to online. Then they're coming back in your store. And if you don't have what they want, guess what they're going to do? They're going to pull out their phone right there in front of you and they're going to order it from someone else and say, look. So you have to be today, any business owner, whether it's retail or not.

A (29:45)

Yeah, brick and mortar is harder now.

B (29:46)

It is hard. But here's the deal. Here's what Gen Z says. I travel all over the world speaking at conventions. As a matter of fact, I'm speaking in one in Turkey in two weeks on what does the consumer want today? They want an experience. People say, well, nobody's going to the shopping mall. Here's the deal. 80% of consumers still buy in store. 80%, John, still buy in store. It may not be you.

A (30:11)

I would. No, no, no, no.

B (30:12)

It may not be, but 80% for most things.

A (30:14)

I would rather go. I'd rather go to.

B (30:16)

Well, you're a tall man. I mean, I can't imagine.

A (30:18)

I can't buy clothes online.

B (30:19)

No, you can't buy clothes online.

A (30:20)

I can't buy clothes offline.

B (30:22)

Here's the deal. The clothes from clothes that come from other countries don't fit me the same. They're smaller, they're bigger, they're whatever. So people still want to come in store, but here's what they want. Gen Z, I was just at a conference a few months ago and we had a panel discussion with four Gen Z's. They said, here's the deal. We want you to recognize us. We want to have an experience in your store. So what does that mean? It doesn't. It means give them a bottle of water, have a place for them to sit while they shop, still converse with Them. How many times do you go into a store? I probably shouldn't name this, but how many times do you go into a store and nobody's there ever? Or they yell to you from the back of the room, welcome in. If I hear anybody ever say welcome in again, you might as well say, I don't want to help you. I'm going to stand back here on my phone and shop yourself by saying, welcome in. It's the most horrible thing you can say to anybody.

A (31:16)

You know, it's so funny. I use. Now that I think about it, I use this example a lot when I'm coaching real estate agents because I tell them on the phone, the worst thing you can say is, how you doing today? Because people are so you get programmed to patterns, right? You're in patterns. And every time you walk, I'm on this people. When I walk into a retail store, like, I see them coming, I see them coming, here they come, and here they're coming. And I'm just waiting for them to get close enough where I can say, I'm just looking.

B (31:39)

I'm just looking.

A (31:39)

Like, they could walk up and say, you're my millionth customer. You get a million dollars. And I'd be like, nope, not so. Just like. Because I'm not even looking for it. So how do you work with people in a retail store to get over something that's so programmed to have that hand go up? What's the question?

B (31:54)

I love this question. I. I work with my clients and we script everyone because we have to understand consumer behavior. Right. So here's the deal. You never address someone the first three seconds that they walk into your store. And guess why? Because they're going to do exactly what you just said. Because you're expecting us to pounce on you.

A (32:12)

Yeah.

B (32:13)

So we. We wait three seconds, let them walk in the store, and then we coach our salespeople to say, hi, welcome to Parker. Joe, have you ever been in before? And so what we want to do, I don't interrupt. Yeah. And what we want to say is listen. And if people still say, I want to look around, great. Is there something you're just looking for? Can I point you in the direction where those articles. Otherwise, why don't you just shop around? I'll be back in a few minutes to answer any questions that you have. Now, wouldn't that make you feel so much better than someone never talking to you again? How many times do they say, hi, welcome in, and you walk around the store and you would have bought something, but you didn't. Because they, they didn't ever come back and talk to you. They're texting on their phone, they're talking to their co worker about the date they had last night or. Right.

A (33:03)

Well, let's, let's talk about that because I think that's. And I can see where retail will be a huge problem. I mean, maybe not at Gucci, where they're working high dollar commission, but in your average retail store. I feel like. And Michael and I talked a bit about this, but I feel like ever since COVID Right. There's been this sense of apathy that's just running through everyone of like, man, close enough, good enough, whatever. And how do you, how do you motivate a store full of not necessarily the highest paid employees at most retail shops.

B (33:33)

Right.

A (33:33)

To stay engaged with the customer and not do what you just said?

B (33:37)

Well, you know, we talk a lot about this. I've had a couple of friends who have written books on the customer engagement. And for me, it's all about setting the expectation in the beginning that this is what you expect. And it's leading by example. It's boots on the ground. It's the directors of operation, the regionals, the CEOs, the COOs. Not just dictating what to do, but actually working in the store with people. Listen, your frontline employees should be revered. They are the ones that make the cash register ring. Not you sitting in the office, but them. I am a huge proponent. And overpaying people, paying them more than what minimum wage is. Paying them a commission for what they sell and rewarding them for doing a great job. Those are the people that make the cash register ring. Those are the ones that should be being paid the most and revered. And listen, they have enough issues. They're beat up by customers every single day. So you need to really reward them. So we do a lot of training on scripting. How do we address objections? How do you deal with an upset customer and let them make decisions?

A (34:46)

Yeah. Well, I think you're starting to see big corporations realize that value ladder. It needs to be flipped a little bit because again.

B (34:53)

Yeah. And using AI to know that data. Like you said, John, but, but again.

A (34:59)

They'Re getting rid of. You know, you look at self checkout as kind of being phased out because I think companies have realized maybe we're losing our human touch. We're not talking to our customers enough. We're not touching the. We're eliminating the experience. We're commoditizing our experience. And I think you're starting to see that. And it's funny, with AI all of these big corporations, the first thing you want to do is get rid of the lowest jobs, which are the most customer facing jobs. They're the ones that, they are your brand. Let's try to eliminate those jobs.

B (35:26)

Those should not be the ones that are eliminated. And self checkout was never meant for the employee to stand there with their arms crossed at the cash register and not talking to you and stare at you. And Sergio, they should be bringing you up to the self checkout saying, let me show you how this works. Do you have any questions? If you don't have any questions, fine. But how many times can you not find anybody there? That's why Aldi is doing away with them. That's why Target, because it's the highest theft right at self checkout. And it's where we complain the most about no customer experience. I asked someone the other day in Albertsons, I'm gonna tell you right now, I am so upset. I go in there in the morning, there's nobody there. At the self checkout, if you have a problem, you have to walk all the way to the back of the store, the front of store, trying to find someone to help you. So you know what I do? I leave them there and I walk out. So the other day I literally asked the employee, are you paid to just stand there or are you paid to actually help us when we have a problem?

A (36:22)

Yeah, it's like, I don't know. Here's a question, here's a question. When you go to the gas station on that rare occasion, right, that you put your card up to the beeper and then the thing says, for whatever reason, doesn't register your card properly, and it says, see cashier.

B (36:34)

See cashier.

A (36:35)

Have you ever seen the cashier in your life or do you just get back in your car?

B (36:38)

Just get back in your car. You cancel it.

A (36:41)

I will not see the cashier, my friend. I am off to the next gas station.

B (36:44)

You cancel it and you leave. I mean, that's what it is. I went to a store the other day and they discontinued a product that I love. So I asked someone, I said, hey, you guys sell a lot of these. Why don't you discontinue these? You know what they said? Well, I don't know. Corporate made that decision. I said, is corporate ever in your stores? No, but they made that decision. I said, well, could you let them know that, that all of us that did. I come in the store and they said, yeah, we've let them know they don't care.

A (37:08)

I know. Here's another. Well, here's another thought. So I think in the right, there's been a. I will say this. There's been a rise of. And maybe it's traction, maybe it's the US model, maybe it's all those books that are coming out, which I love, but there's just been this rise in sops for business. We gotta get very. We gotta be very sop. Everything's gotta be structured and we have to do this. And here's scripts and all that you said. And I think some of those have gone too far in situations. I'll tell you. I'll tell you a story.

B (37:33)

Yeah.

A (37:34)

So. So I had a. A pool. So I need a pool guy. My pool got retired, so I'm like, all right. You know, I. I don't do the. I know a lot of people think I do the. Hey, I own. You know, we sell 4, 000 homes flex to try to get better deals. I don't do that because I'm like, if you're especially somebody cleaning your pool, you're working. I just. Want me to pay you, right?

B (37:49)

Sure.

A (37:49)

I don't need a deal. I just need a good job. So I'll go online and I find this place that has like 45 star reviews. I'm like, cool. I call them, like, yep, no problem. And then they send me. I. I like put my information in online. And then I get like, like the text message with the calendar link. And I'm like, okay, probably using high level to manage this. Fine.

B (38:05)

Yep.

A (38:06)

So I get a count. So do the calendar link. And then I get a call from the calendarly link. The call. Then I talk to them, tell them what I need, and then they text me another calendarly link to set up the appointment for the guy to come look. Okay, all right. Calendar, like number two guy comes out, looks at everything. I'm like, man, I see pool service. He's like. I'm like, I think my salt cell probably needs to be cleaned. I just need pool service. Guy's like, okay. And he goes, okay, you'll get the bid via your email. Okay. So then the bid comes in. It's like a bunch of stuff that I don't even need. I'm like, I don't need this.

B (38:36)

I just want.

A (38:37)

My pool's fine. Just need the pool cleaned. Says if you want to make revisions, let us know. Type it in. Unless. Type it in. Send. Three days later. Now I'm on day nine. Now you're trying to get my. Trying to get my pool clean. The bid comes back. Yeah, I'm like, approved. And as soon as I click approved, now, I get a link to another calendar link for an onboarding call. I'm like, like, you know what? No. So I pick up my phone and I call the guy and I said, I'm on day nine of just trying to get my pool cleaned. Like, do you guys just want to just come clean my pool? Give you the money and we'll just, like, you do what you do, and I give you money, and that's. That's how this works. And I love this. And the guy says to me, the guy says to me, he goes, we have our procedures. If you don't wish to follow them, I can cancel the order.

B (39:18)

What?

A (39:18)

I said, cancel it? Yeah. And so then I did what I should have done the first place was go to my little network of agents that know everybody. And I said, I need a pool guy. I got four text messages. I got a guy. He answered the phone the first time. I'll be there tomorrow. Came over, cleaned your pool, Looked at it, and cleaned the pool.

B (39:33)

So here's the deal. This is what I. I love that story so much, John. And here's why. Here's what I tell my people. Do not oversell. And listen, if people want to buy, let them buy. If they say, listen, I just want this shirt, don't keep trying to upsell them. Ring them up and say, listen, here's my card if you ever need anything else. By the way, I do have a nice shirt. Da, da da da. On their way out, egg it up. Let them go. Stop letting people not buy. That's what your person just did. Do I help my clients write, right? Standing operating procedures? Yes. Do I help them write a chain of command? Yes. But here's what I tell them. These are written in sand, not in cement.

A (40:11)

Amen. Amen.

B (40:12)

Not in cement. So listen to me. If your employees come up with a better way, a better process, better policy, a better. Listen to them. They do it every day. I don't. I help you with my 30 years of experience. But if they. And I tell my employees, if you have a better way, tell me, because I want to implement it. Your standard operating procedures are written in san, not in cement. So change them as the consumer changes and as. And as policies and procedures need to be changed.

A (40:39)

All right, well, then that brings the next question, which is you obviously believe from that statement in empowering employees to solve customers problems.

B (40:45)

I do.

A (40:46)

So how do you balance the line between empowering employees to solve customers problems and then taking advantage of that?

B (40:52)

So I think what you have to do is, I love this quote by Reagan, you know, from 100 years ago, you know, as president who said, trust but verify. So this is what you use AI to do, right? So here's what you do is you write programs, you have AI help you that if there's too many discounts, too many refunds, people know how to refund on their own credit card, right? So you have to trust but verify. So you train your people to look at data to trust but verify. So I'm going to tell my employees, listen, you cannot. We don't take refunds. We only do exchanges. But here's the deal. If you've got a customer standing there yelling at you in front of, do the damn refund and give them their money back, okay? But you don't give them cash if they paid with credit card. I mean that, that, that. Right? So then the manager's job, or the CEO or the CEO, whatever is weekly. You go over the numbers. You have AI write you programs and say, hey, tell me how many employees have gone above the right? So now we're just looking at statistics. So you have to enable your people. But here's what I tell the employees. I say, listen to me, I'm going to give you the ability to do this. If you go above and beyond or if you start refunding to money or if you put your hand in that cash drawer when you should not, then here's what I'm going to tell you. It is a felony to steal from a company.

A (42:10)

Yeah.

B (42:10)

So set the expectations. Let them know what's expected of them. And then if they go beyond that, I tell them, listen, then we're going to see you in a pretty little orange suit, you know?

A (42:22)

Well, you know what's funny?

B (42:23)

Don't threaten. But, but let them know what's, you know.

A (42:26)

Yeah. What's this take? I think some people take that too far, though. Like, for example, there's a sushi bar in Henderson here that I will remain nameless because I'm never trying to trash anybody's business. But let's just say over the years the sushi bar is either the best place and then it gets sold to somebody else and then it becomes the worst place. I think it's like a used car lot where the guy, the main guy, sells it to people and then waits for them to crash it and buys it back cheaper, builds it up and then sells it For a lot. Then they crash it.

B (42:49)

Yep.

A (42:49)

I think he's probably bought it back two or three times. But anyway, right now we walk. We walked in the sushi bar for the first time in several months a couple weeks ago. As soon as we walked in again, now they have a sign out front. I'm like, oh, they're, that's new. They're struggling. What's going on? And when we walked in, they've eliminated seating at the sushi bar. Oh, and this place is the, it's in the middle of the restaurant. It's in the, it's a, it's a U shaped middle of the restaurant. And now there's tables wedged up so everything has to go through the server. And my wife goes, looks at the hostess who had gone now from being Japanese to American. First sign. You're in trouble at a sushi bar. And I was, and it was like. And she, and she goes, what, what happened to the sushi bar? And she's like, oh, it was the chef's choice. They just, you know, everything, you know, table service. And I looked at it, just sat on my Gidget and I said, okay, let me tell you what's going on. So being the restaurant business, as long as it was, I can tell you exactly what's happening. This place is going downhill. It's losing money like crazy. Their cost of goods is going through the roof because they're not selling enough to hide the mistakes. The owner assumes the sushi chefs are stealing, giving food away to people. So now he wants everything to go through a ticket system into the kitchen. Oh, I said, that's what, that's what's happened. Yeah, that's what's happened. So here's what, so here's the deal. You have a, you have in food is still retail, I think.

B (44:06)

Oh, it's definitely retail.

A (44:07)

So you have, you have an owner of a retail business that has a cost problem that is now trying to solve that problem at the expense of his customer.

B (44:14)

Yeah. And you know, so many businesses do that. And I don't really understand that thinking. I mean, I just really don't. Here's the deal. At the end of the day, if you don't have customers, you don't have a business.

A (44:25)

No.

B (44:26)

So why not ask your customers why? I tell everybody, when they say, well, we've made this decision. Okay, who did you talk to? Did you survey your customers? Did you let them know? Did you say, listen, we're having a bit of a challenge. Do you think that, that, that you would still come and sit at the sushi bar. Or how do you feel about if we raise our prices a little bit? Right? I mean, seriously, be honest with the customers. They'll tell you what they want, right? Like you, you're not going to go sit. You're not going to go to this restaurant anymore because they're not serving food the way you want it. So in order for the retailers, whether you're grocery or whether you're a restaurant or whether you're a store or a business, talk to your customers first. I always tell people, survey your customers. Ask them what they think. What can we do to better serve you? I mean, it's not, it's a simple fix to almost every problem that you have. If you don't like what our assortment is, tell us what we can add in.

A (45:21)

I think, I think people are terrified of what they're going to say.

B (45:24)

Well, I think they're terrified.

A (45:25)

Like, I, like, I know it sounds weird, but I have a filter on Google, right? Whereas if anything, any simply Vegas or clear title or streamline home loans or any of our businesses pop up anywhere on Google, I immediately get an email.

B (45:41)

Really?

A (45:42)

And if it's a review anywhere, especially if it's a bad review, I'm on it in like two seconds. I'm, I'm instantaneously on that. And sometimes it's, you know, crazy people and. But sometimes, sometimes it's legitimate, right?

B (45:53)

Sure.

A (45:54)

And I want to know, right, because even though I might not be intimately involved with that particular transaction, if the brand that we have here we spent 15 years building, and we protect it at all costs, no one hears above the brand. And I want to know exactly. I think a lot of people, especially when they are intimately involved in the transaction, it's their product, their store, their management, their staff, they don't want to hear it because now it's a reflection of them.

B (46:18)

But it's, here's the deal. You can't take the good without the bad. And if your customers are upset, then fix it. Do whatever it takes to fix it. That's what, that's what I tell my brands to train their employees that listen, you don't want an upset customer in your store yelling and screaming at you, so you do whatever it takes to make them happy. Some people you just can't make happy. So do whatever it is that you can. Send them some flowers, send them some cookies, say, I'm so sorry that whatever the case may be, whether you're right or wrong, they're right.

A (46:51)

What's your Worst customer interaction you've ever dealt with.

B (46:54)

Oh, my God.

A (46:55)

If you had to think of one.

B (46:57)

Well, if I had to think of one, I would say that it was. It was someone, you know. Many years, I haven't had a lot of bad transactions because of bad customer experience. Because if a customer is upset, you know, it innately. Right. But I had someone, you know, at proactive who literally, it was. It didn't happen to me, but it did happen to my husband, who was screaming and yelling at me. One of the employees there, and my husband just happened to walk up at the time, and they were, like, berating this employee, and it was a man, and she was a young woman, and she was trying to explain to him, listen, I'm really sorry, but he would not stop. My husband literally chased the customer out of the shopping center.

A (47:42)

Oh, my gosh. I would say my worst.

B (47:43)

Was your worst. My worst one is I haven't really had a worst.

A (47:46)

I gotcha. So this guy wasn't yelled at, screaming. This was just the most mortified. Ever been dealing with any type of customer in any business.

B (47:52)

Really?

A (47:52)

Yes. So I'm running a restaurant in St. Louis, Missouri, and it was a corporate restaurant. And one of our cooks there was a guy named Mike Duda. He's not listening to this because he was, like, a white Rastafarian dude, right? Was a ginger Rastafarian. There's such a thing. This is the Grateful Dead. Smoked weed all the time, I'm sure. And anyway, cuts his thumb really bad in the kitchen, right? And we bandage it all up, and he's like, no, I'm fine. I'll go back to work. Bye. Bye. And they wear gloves. So you're like, it's okay. And about an hour and a half later, one of the. One of the servers comes up to me and goes, hey, these guys at table, like, 40 are really mad. And I go, what's going on? And I go, she goes, you just got to go over there. Okay, so walk over there. And I look over, and they've got this big plate of chicken wing bones from the giant plate of wings that they've just consumed. And on the bottom of that plate is the bandage for miss.

B (48:41)

Oh, no.

A (48:42)

And I took one look at it, and I was like, oh, don't.

B (48:45)

My God.

A (48:45)

And they. They were. They were shockingly cool about it, But I was like, how much do you want?

B (48:52)

Yeah, that's right.

A (48:53)

I mean, what do you want? Like. Like, what can I get you?

B (48:55)

Is there another band aid in there?

A (48:56)

Yeah. What can I get you. No. And then I walk back in the kitchen. I'm like, hey, dude, you know, how's your thumb? And he's like, oh, it's better, dude, to quit bleeding. I'm like, where's the bandage? He's like, but. Yep, you. Yeah, you. You served it, dude.

B (49:05)

So how did the customers. I mean, did you.

A (49:07)

They were just like, dude. And I'm like, obviously, I've got this meal, and you're not paying for anything else. And here, let me actually get the next, like, five meals. When you guys come in, did come back.

B (49:18)

And they came back.

A (49:18)

They did come back to their.

B (49:19)

No bandages the next time.

A (49:20)

No bandages next time. Yeah, but that. That was the most mortified I think I've ever been in front of.

B (49:26)

Yeah, I. I can imagine.

A (49:27)

Because what do you. There's nothing to say.

B (49:29)

No, there's really nothing.

A (49:30)

Nothing you can say there.

B (49:31)

And I think sometimes, you know, you just made such another great point is that sometimes there is nothing you can say. Yeah. So. So. So say, I'm sorry. What will it take?

A (49:43)

Yeah, that's right.

B (49:44)

I mean, literally, I love that I may implement that into my.

A (49:47)

The hands just go up and. What do you want?

B (49:49)

Sorry. Yeah, Yeah, I love it.

A (49:51)

If I was you, I don't even know what I would say right now. So what do you want exactly? What do you want to do? All right, well, the book is out everywhere now. AI for Retail success on Amazon. How do they find you, Linda? Where do they find you?

B (50:01)

So they find me on My website is ww.irg-retail.com. they can find me on LinkedIn. Linda Johansen James @lindajoe12 for Instagram. I'm very active on social media media, and they can buy the book on Amazon and they can do a digital hardcover, hardcover, soft cover. And I'd love people to write a review and listen, tell me what they really think. I mean, this was the feedback from the customer. Yeah, I'd love to. Good, bad or indifferent? I. I would want the feedback because we really did this book to help people to really understand how to implement AI. Yeah, it's like, in a simplistic way.

A (50:41)

Well, go out and buy the book, guys. AI for Retail success. And if you were listening today, you should have got a bunch of takeaways if you're in any type of business. But I think the main thing is, is unless you have a Wharton MBA and 25 years of experience in retail, you got holes, you got places you can't see in your business. And AI is designed to help you find those blind spots in your business and help you solve them. We'll see you next week. Hey, it's John Gafford from the Escaping the Drift podcast. And big news. My new book, Escaping the Drift is coming out November 11th. You can pre order it right now at thejohngaffer.com There are tons of bonuses, tons of giveaways. Get the book. If you are somebody that feels like you might be drifting along, this is for you. If you know somebody that feels like they might be drifting along, this is for you. Available everywhere, all bookstores, everywhere, Amazon, Barnes and nobles, the whole nine yards. But pick your copy up right now at thejohngaffer.com and get a bunch of the awesome bonuses I've thrown out because I promise you, I put my heart and soul into this thing. I want it to help help you change your life. Pick it up everywhere. What's up everybody? Thanks for joining us for another episode of Escaping the Drift. Hope you got a bunch out of it, or at least as much as I did out of it. Anyway, if you want to learn more about the show, you can always go over to escaping the drift.com you can join our mailing list. But do me a favor, if you wouldn't mind, throw up that five star review. Give us a share. Do something, man. We're here for you. Hopefully you'll be here for us. But anyway, in the meantime, we will see you at the next episode.