The Future of Retail Over The Next Five Years, with Marc Gingras, CEO of Foko Retail
I had the pleasure of interviewing Marc Gingras. A serial entrepreneur, philanthropist and angel investor. Currently he is the CEO of Foko Retail, and sold his last company, Tungle.me, to Blackberry in 2011.
Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?
First, I became an entrepreneur because I wanted my own business car (laughs). I had some co-op work terms with some companies, and I realized if I were going to go up the ladder it would take me forever to get one. So at the end of the day, I figured out the best way to circumvent that was to have your own company. So from there, I started my first company.
But when it came to the retail to space? The different startups I’ve had over the years were all about enterprise software, or software for professionals. And at its core, we were always building something around communication. And after selling my last company [Tungle.me] to Blackberry, I came out of it, and I was looking at different industries, and I was seeing that the retail landscape was going through a bit of a transformation. Even back then people were saying it was the retail apocalypse, and that brick-and-mortar was going to die, and that just didn’t make sense to me.
But I did believe there needed to be a change in the role of the brick-and-mortar store: where before brick-and-mortar was more of a distribution point, and it was becoming more of an experience point. But to create the right experience, you need better communication between the idea and the execution of it.
So that’s what we looked at, and we noticed there was an opportunity. Because I think when things are being transformed, or there’s an “apocalypse,” there’s an opportunity out there, and that’s when we seized it.
Can you share the most interesting story that happened to you since you started your career?
I learned very early on in my career that you start with sales. I had started a company with Fang [Yang, CTO of Foko Retail], and we were more of a service company, building different e-commerce websites for companies. We were called by someone who had built an e-commerce website, but it wasn’t functional. And so he reached out and asked us to fix it. We looked at what he had, and said, ‘yeah, we could fix it,’ but he wasn’t using a technology or platform that could help him expand. It was roughly a $25,000 contract to fix it, but the way we approached the problem was more like, ‘Hey, we can solve your problem, and it’s going to cost you this much, but you won’t be able to grow. If you want to change and have something that’s going to scale, we recommend that you use this other type of technology, and it’s going to allow you to scale a lot more, but it’s going to cost you $250,000. But here’s the advantage, and here’s the timeline,’ and so on.
Essentially, don’t look at what people are asking for. Understand their situation better, and help them get to a better standing.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
The first startup I had we ended up selling to a U.S. company during the dot-com bubble before it went bust. We were hiring a lot of people to help us deliver on what we needed to do, but when the bubble burst we started to kind of sink, and we didn’t have the capital to sustain our people, so I ended up having to lay off our entire team — 50 people. And that was really, really hard.
At that time, I couldn’t fathom letting them all go. So I told them, ‘We have to let you go, but let me try to find a company that’s going to hire all of us.’
So within three weeks, I found a company that would hire our whole team, but I didn’t take time to do due diligence on the company, because I was just excited that we were all going to stay together. So they hired all of us, and six months later they ran out of cash.
Essentially, I had to fire the same people, in the same boardroom, six months later.
Maybe now that’s funny, but it was very painful then. After that, I went to do my MBA to figure out the finance side of things so I could make better decisions in the future.
What do you think makes your company stand out? Can you share a story?
I think we try to have a team that cares about what they do so much that they’re willing to go the extra mile, and so when we talk to customers, often times they come back to us and say, ‘Hey, you’re so lucky to have so-and-so on your company, because they answer the problems we have, and they’re there to support us, etc.’ And that’s happened so many different times, whether it’s feedback from our salesperson, whether it’s an account manager, whether it’s one of our operational people — they’re always there, and the feedback we’re getting is that ‘your team is responsive to what we do.’
That, to me, is really the core to our success.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Sleep. People say that an entrepreneur needs to be working 24/7, and drinking a shitload of coffee. But actually, I think it’s the opposite.
A good entrepreneur knows, from what I’ve experienced, to work when you’re the most productive and get the most done within the amount of time you’re allocating to it.
Early on I’d spend a lot more time chit-chatting and not necessarily focusing on what would actually move the needle.
I’ll give you an example: with my last company, we moved into an office with a security system, and they wanted to charge us $100 a month for it. And to me, that just made no sense, because I had the same system at home and was only paying $20 a month. I remember talking to my CFO at the time and thinking we needed to do something about it. And he basically looked at me and said, ‘You can spend time trying to save $80, or you can spend time trying to make this company worth $10 million more. Where do you want to spend your next hour?’ And that just triggered something in me.
Like it or not, I think an entrepreneur is on 24/7 in terms of their brain, but I think it’s more important to spend 30% of your time to get 90% of the job done, and then move on to the next task. It’s focus that’s the most important part.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
The yin to my yang! I’ve been lucky to find a partner from a business standpoint at my first company: Fang, our CTO, has been with me throughout the different companies I’ve been involved with, and he’s someone I can 100% depend on. I always say, ‘He’s the brain, I’m the mouth.’ He can get shit done from a technology standpoint that I can sell.
And I’ve been lucky to have surrounded myself with people who have really strong business acumen in different areas, from long-standing friend and investor Pierre Donaldson, to some other entrepreneurs.
Are you working on any exciting projects now?
We’re always cooking up ways to solve the many problems faced by retailers and brands, and help them stay competitive despite the ever-shifting landscape of the industry. We’ve got a big project in the pipeline for the fall, but you’ll have to stay tuned for that!
How have you used your success to bring goodness to the world?
We can always do better.
Success I would define as what my parents did, and not what I did. I’ve had some success from a business standpoint, but they’ve had success in terms of changing the lives of millions of people.
They started a not-for-profit [SOPAR] 40 years ago, and they’ve helped about four million people, some of the poorest people in India, get out of poverty. That’s an achievement, and that’s something to look up to.
Can you share 5 examples of how retail companies will be adjusting over the next five years to the new ways that consumers like to shop?
Retail is evolving at a rapid rate, as evidenced by the spate of store closings currently sweeping across the US and the rest of the world.
Amazon gets the majority of the blame: they’ve become a ubiquitous one-stop shop, doing away with the need for many traditional retailers. But returning items will always be a pain when it comes to e-commerce, meaning Amazon will never truly be able to compete with retailers working with the try-before-you-buy business model.
Convenience is key to Amazon’s future success. Expect even more offerings from their Amazon Basics line (the company’s generic house brand), Amazon Prime (I have a friend who buys everyday items like batteries and groceries through them, even though he lives next door to a convenience store, thanks to their two-day shipping), and Whole Foods (who already offer click-and-collect and, soon, curbside pick up).
Realistically, only a few big-box retailers will be able to compete (i.e., Walmart and Target), so other companies will inevitably go the opposite route, offering increasingly personalized shopping experiences and endlessly customizable products.
Some big brands — predominantly in the world of footwear, like Nike and Adidas — are already doing it. But so are startups, like Indochino (the made-to-measure menswear store, who plan to open eight new showrooms by the end of 2018) and Revols (who make custom-fit wireless earphones).
So expect one-size-fits-all to only apply to the off-the-rack essentials, and everything else to become more customized and personalized as retailers vie for the attention of increasingly particular shoppers. (According to a recent survey by Segment, 44% of consumers said they’d return to a store after a personalized shopping experience.)
That’s where predictive analytics comes in. A lot of retailers are already data mining — either in-store, based on previous transactions, or through visits online — but they may not know how to leverage it properly to create optimal business growth. But with predictive analytics, retailers can get a clearer picture of their consumers by analyzing their data, and using those insights to improve everything from direct marketing campaigns (through social media, e-newsletters, and online advertisements), to inventory forecasting (based on the proximity of shoppers to a given location and previous buying patterns).
And speaking of stock, America has too much of it. (According to McKinsey & Company, the retail space per capita in the U.S. is 15 to 20 times that of other major markets around the world.) Developed countries are overstored, to say the least, leading to dwindling brick-and-mortar sales and decreased customer traffic.
To combat that, retailers will increasingly reduce their footprint in the future to keep costs down by cutting the number of products readily available, and the square footage needed to house them. Stores will look more like showrooms (as is the case with Story, a concept shop with a rotating collection, that was recently purchased by Macy’s) with more refined offerings (Target and IKEA’s small-scale urban expansions come to mind). And big-box locations on the fringes of society will look more like inventory hubs, offering suburban consumers click-and-collect options, and operating as a warehouse by connecting with other stores to keep transportation costs down from store-to-store.
Lastly, expect retailers to give customers a better in-store experience through retail execution that merges art and science.
The days of hunches driving product creation, displays and promotions are over. So is omnichannel, come to think of it.
Customers are everywhere, whether they’re shopping online while at work, or browsing through a physical store, and checking out product reviews on mobile, at the same time. To deliver a truly seamless shopping experience, retailers will focus on the whole package rather than distinct wholes, making stores as brand consistent as their digital marketing endeavors, and crafting experiences customers can’t find anywhere else (either through limited-runs of products, or pop-ups, events, etc.) to stand out from the competition.
Retail is finally catching up to the digital age, making data-informed decisions, customized products, and personalized experiences that feel well-curated and incredibly specific. Not every retailer is going to survive the next five years, but at least those that do won’t be redundant.
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. :-)
Gandhi talked about becoming the agent of change you want to see in the world, and I think that’s important. People need to realize that they can become the instigator of something that can be changed in the world, no matter what it is.
So if I were to start a movement, it would be about helping people realize that. Because if you can learn that, nothing can stop you.
How can our readers follow you on social media?
This was very inspiring. Thank you so much for joining us!