Author Jim Inglis of Inglis Retailing On The Future Of Retail In The Post Pandemic World

An Interview With Orlando Zayas

Your brand is your most important asset, and it resides in the mind of the customer. There is a tendency for retailers to try to manipulate the customer with misleading or phony promises. Most customers do not trust most retailers — and they shouldn’t. Every decision that is made should be reviewed and should consider how it will impact the brand image of the company. Too often each department in a company operates in its own ivory tower to achieve its own selfish KPIs. When this happens, the more important goal of delighting the customer is somehow forgotten.

As part of our series about the future of retail, I had the pleasure of interviewing Jim Inglis.

Jim Inglis is a world-renowned expert with sixty years of experience in the retail home-improvement industry. He served in executive positions with The Home Depot for thirteen years and is currently the President of Inglis Retailing. Inglis has helped shape the industry worldwide as a special adviser to the boards of leading home-improvement retailers across the globe and in 2015, he was honored with the Lifetime Achievement Award from the Global Home Improvement Network and the European DIY Retail Association. Inglis is also the author of Breakthrough Retailing: How a Bleeding Orange Culture Can Change Everything.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

I attended Compton High School, growing up in South Los Angeles. Yes — I am “Straight out of Compton.” Upon graduation, I needed a job and started working as a retail clerk in one of the first home center type stores on the West Coast. I met my wife there and together we realized that we needed to prepare for the future. So, we both continued working while I spent the next 10 years achieving an MBA in marketing. I assumed that once I had a marketing degree, I would work for a large consumer goods manufacturing company. But by then, I had become the general merchandising manager of our stores and found that I loved the dynamics of the retail world — and have remained in retail for the last 50 years.

Can you share the most interesting story that happened to you since you started your career?

I was contacted in 1983 by Pat Farrah, who was one of the founders of The Home Depot and offered a job in this new retail company that was starting a business with a handful of stores in Atlanta and Miami. I was based in San Diego, so I began to research what the industry vendors and trade journals were saying about this new retail concept. The unanimous opinion within the industry was that the stores were too big, the prices too low, the growth too fast. It was all being done with smoke and mirrors. The consensus was that The Home Depot would never be successful. Those were pretty good arguments for me to stay in San Diego. However, I took one trip to the newest Home Depot in Orlando Florida and said, “Wow — I want to be part of this.” Like they say, the rest is history.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson or takeaway you learned from that?

I have spent the last 20 years advising the boards of retailers in foreign countries on how to grow their retail home improvement businesses. It is very easy to misunderstand the clash of cultures that can become obvious as one engages in international business. Sometimes, these moments can be humorous. I recall when my Japanese client decided to enter the Thailand retail market. I met with the Thai team and discovered that the management were all Japanese. I told my client that they needed to immediately hire a local agency to find the best merchants and store operations management from the existing successful competing retailers in Thailand. My Japanese client was shocked that I would suggest such a tactic. I was told this would be impossible because it simply would not be polite. This took me by surprise and left me unsure of how to respond. It illustrates how easy it is to assume that our culture and our values are the same as those of people outside our own domestic world. It is a valuable lesson. This even applies to simple things that we would not normally pay attention to.

I took a German client to a nice restaurant in Atlanta where he saw the mandatory sign in the bathroom that “all employees should wash their hands”. He was very concerned and asked me, “Jim, don’t you think everybody should wash their hands?” On another occasion, a client from Eastern Europe was totally confused when he was exiting our hotel and a passing American asked him, ‘How are you?”. My client was very confused when the man walked away without taking the time to stop and listen to his answer. It is very easy to assume homogeneity, instead of understanding diversity in cultural matters.

Are you working on any new exciting projects now? How do you think that might help people?

I am involved in the building material industry. This has led me to become active in a project with World Vision to reach out to manufacturing and distribution companies in our industry to encourage them to donate their surplus inventories, customer returns, buy backs, and seconds to our storehouse program. This allows us to redistribute these needed goods to the urban poor and those in need of such supplies resulting from natural disasters. This is a win/win for the companies and for those in need.

I am also releasing my first book, Breakthrough Retailing: How a Bleeding Orange Culture Can Change Everything. The book is the inside story of how The Home Depot grew from its first few stores in 1979 to become the largest home-improvement retailer in the world today.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

Everybody needs a ‘North Star’ to provide a direction for their life. This transcends the current events and crisis on everyday life. For me, this has been my faith in God’s providence. This has helped me to focus on doing the ‘right thing’. While I have worked long hours and spent many days and weeks in foreign business travel, this polestar has helped keep my priorities in the right order for God, my family, business, and community, in that order.

None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?

I have been mentored by so many incredible people in the business world that it is difficult to zero in on one person. However, in reflection, I conclude that my ability to be mentored goes back to my mother’s confidence in me that created a strong work ethic based on the assumption that if I worked hard, I would succeed. When I got my first job, my mother’s first question was, “Is this steady work?” She instilled in me a thankfulness that I could get a steady job, and not assume an attitude of entitlement. I entered the workforce ready and eager to learn. Thank God for the great people who guided me. I remember Rene Samuels who taught me that, “The world needs not so much to be taught, as to be reminded.”

How have you used your success to bring goodness to the world?

The most important thing I have done is to be a role model for my children and grandchildren so that they will be a blessing to others in the future. I have, of course, been active in many non-profit causes such as City of Hope, World Vision, The Atlanta Union Mission, and Help The Persecuted. Additionally, I am currently on the advisory board of the Center for Biblical Leadership at Palm Beach Atlantic University and hope to impact the community and more importantly, the students.

Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?

Change is the only constant in retailing, and technology has been one of the strongest drivers of this change. It is hard to consider just how much more difficult it would have been to endure the lockdowns of the pandemic without the availability of goods and services via the Internet. The online trend certainly did not begin with the pandemic, however, the pandemic accelerated its use and forced laggards to finally embrace new realities and opportunities. E-commerce was pioneered by pure online retailers. However, it is now fully integrated into an interconnected model by successful omnichannel retailers who have married online and offline retailing into a seamless system of making it easy for the customer to research and purchase products.

In the home improvement business, a significant number of online orders are picked up at the store. This process will become so transparent and seamless that the distinction of online versus offline penetration will be so interconnected as to become somewhat irrelevant.

The digital revolution goes beyond simply providing products. While retail stores have experienced a digital evolution, the marketing function has experienced a much more profound digital revolution, especially regarding how to communicate with customers. This has seen the rise of social media as perhaps the most important motivator for consumers to select their chosen retailers and products.

In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?

The physical store will not only survive but also will thrive. Brick and mortar stores will continue to be the primary way products will be distributed. With that being said, it is true that online sales have grown every year and will continue to grow in the future. The pandemic year of 2020 was a period of extraordinary growth of online sales but was an outlier year in total sales penetration. The overall trend has been and will continue to be that while total online sales increase, the long run trend will be that the percentage increase in volume will decrease each year. This will result in a flattening of the growth curve where online sales will represent a significant portion of the retail market but not most purchases.

Same day delivery is convenient and needs to be a service of both the online and physical store. It is no longer exclusive to purely online retailers. And while same day service is a good service, there are many other reasons that a customer may choose to shop in a physical store.

The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?

The term “Retail Apocalypse” is a red herring. It is a great headline, but very misleading. Thousands of stores have closed, but thousands more have opened and will continue to open. The e-commerce business has certainly had an impact in affecting the viability of certain retailers, but it is not the main reason so many stores have failed. The main reason stores fail is that they are bad stores. Let me explain. Good stores continue to grow and expand. The largest number of store closings have been in stores based in shopping malls. The reason they have failed is because the mall itself has failed. Roughly one third of the malls in America do about two thirds of the mall business. This makes most malls unprofitable and the stores in them not viable.

Overexpansion in poor locations is also a major reason for so many store closings over the past few years. I would also add that the retailers who are growing and adding more stores tend to be value-driven formats that have cost advantages over their online competition. There is a false assumption in the busines community that online sales are more cost effective due to their virtual presence. This ignores the incredible cost of capital expenditures required in technology, warehousing, and logistics to fulfill online sales. There is also the working capital tied up in the long tail of e-commerce as the retailers attempt to out SKU Amazon. It overlooks the fact that moving sales from offline to online changes the labor equation from ten-dollar hourly retail employees to fifteen-dollar hourly warehouse employees. An additional reality of pure online retailers is the increasing cost of advertising as more and more online retailers try to get the consumers’ attention, especially considering all of the competing noise from other retailers on Amazon, Facebook, and Google. It is the pure play online retailers, not the omnichannel physical stores, that are of questionable viability.

Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?

Customers will shop and be loyal to companies they trust. The main message of any successful retailer today must be one of trust. Item/price promotions have short life cycles, while trust relationships that are maintained can result in lifetime loyalty.

Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.

1. The customer is in control. In the past, the manufacturer was the channel captain. Then, the large retailers became the channel captains. Technology has put knowledge and power into the hands of the consumer. Pricing is transparent and must now be justified. Service levels are known and shared on social media. Products are evaluated and recommended or criticized on the Internet. I have a client in Germany that has a group of people who monitor social media on a constant basis to feel the pulse of their customers. Market analytics have become important in directing the innovation of new products and services. The Home Depot has purchased BlackLocus, which was its data analytics provider. Lowes is now investing in a similar in-house service. It is critical to understand consumer trends, attitudes, and behaviors to make good merchandising decisions.
2. “Speed to Market” is critical. Innovation is mandatory as the competition for new products and services accelerates. This involves a certain amount of risk taking. Failure can and should be expected as new innovations are tried and proven. Jeff Bezos is quoted as saying, ‘One area where I think we are especially distinctive is failure… we have plenty of practice.” People are important. I am referring to your employees. AI and other technology will continue to change some aspects of customer service. However, whether it is people behind the scenes making products and services available, or people interacting with the customer directly, it will be the quality of people in the company and their motivation to serve the customer that will determine success.
3. Servant leadership creates great cultures. When leadership demonstrates the right values and behavior, it creates a mission-driven culture that results in extraordinary performance by ordinary people. The Home Depot’s corporate office is not called “headquarters”. Rather, it is called ‘The Store Support Center”. The company has a chart in each employee break room that shows the corporate organization as an inverted triangle with the customers, followed by the store, and lastly, showing the CEO at the bottom of the inverted point of the triangle.
4. Retailers must evolve from a product-oriented business to a service-focused business of providing solutions. The advent of the Omnichannel retailer is an example of this trend. The Home Depot was at the forefront of the DIY movement, but with the aging of the American population, is now focused on providing project solutions through independent professional tradesman and Home Depot’s own ‘Home Services’.
5. Your brand is your most important asset, and it resides in the mind of the customer. There is a tendency for retailers to try to manipulate the customer with misleading or phony promises. Most customers do not trust most retailers — and they shouldn’t. Every decision that is made should be reviewed and should consider how it will impact the brand image of the company. Too often each department in a company operates in its own ivory tower to achieve its own selfish KPIs. When this happens, the more important goal of delighting the customer is somehow forgotten.

Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I believe the biggest problem in America today is the poor quality of our educational system. This is the core issue that leads to inequality. It is a reason we have a plethora of college graduates who feel entitled and a shortage of qualified tradesmen. We need to provide better education that can lead to better paying jobs and increased standards of living. It would be wise for the business institutions to take a much larger responsibility for establishing the education and training programs necessary to create the next generation of productive people.

We see fledgling examples of this today where businesses are supporting local educational programs, but there needs to be a much more significant private business infrastructure developed where the job of preparing people for productive lifestyles is no longer dependent on inefficient and bureaucratic governmental institutions. Such investment by businesses would be a win/win for all concerned.

How can our readers further follow your work?

You can find more information on my work at www.breakthroughretailing.com.

This was very inspiring. Thank you so much for joining us!