What's New in 2022 for Retail with Retail Store Tours Founder & CEO Dan Hodges
On this Authentic Avenue podcast episode, my guest is Dan Hodges. He's the Founder & CEO of Retail Store Tours, through which Dan leads corporate leadership teams, boards, affluent tourists, global travelers, and more through experiential tours through the world's foremost retail landscapes.
Today, Dan and I talk about why he got into that business (which started with conference tours, if you can believe it, at the National Retail Federation Big Show), including how it grew from one tour in NYC to a global phenomenon.
We also talk about Dan's timely entry into China in the fall of 2019, and how his experience there led to outsized growth (not business slowdown) during COVID.
Finally, we move to what Dan knows best. What do you not see in a retail store, despite what you look at?
And: where is the cutting edge of retail headed in 2022?
You'll learn today.
Follow Dan: https://www.linkedin.com/in/daniel-h-814a1114/
Check out Retail Store Tours: https://retailstoretours.com/
Check out the World Retail Forum: https://worldretailforum.com/
Enjoy! Full transcript below. And, we've got video:
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TRANSCRIPT BELOW (powered by Descript; accuracy not guaranteed):
Adam Conner: Hi. Dan, how are you? It's good to talk -- it's been a while
Dan Hodges: Been a while, Adam. It's great to talk to you. And, uh, it's a wonderful time here in New York in the fall of 2021,
Adam Conner: we, uh, met last, actually more near my neck of the woods in Alexandria, Virginia. We did not do it on video. Viewers is the first time you'll see this on video.
And if you are a Adam Conner, extraordinaire you'll have seen or heard our conversation on a past podcast where we talked a little bit about the retail. Uh, as it was understood, I believe in that time, in the fall of 2019, I'm pretty sure is when that was, but a lot has changed, uh, both about the world and the industry.
And I do want to ask you a little bit about that, Dan, but, um, more to what's immediately interesting to me first, this is something that, uh, you have founded and built from the ground up. So let me start with that story in that perspective.
Dan Hodges: And did it because the feedback I've been getting has been, uh, really consistent and very, very positive.
So the idea that retail store tours actually came from, um, um, I was conducting a session with a retailers at the NRF and we had just successfully completed, uh, what's called expo tours, which is a, uh, a tour of the big technologies on those terminal floor. And I asked for feedback and the feedback I got was Dan, this was great.
Don't change a thing, which is shocking. Shockingly good feedback. Yep. But there was a retailer from Australia. He was, uh, from old words in Australia and he said, Dan, I think what you need to do is get us out to see the stores. That's what we really need. We're okay with the show floor, but get us out to see those doors.
I said, okay. What does that mean? And anyway, but that it actually came from him and I said, you know what? That's actually a, really a really good suggestion. So I really came from that retailer who was a vice-president he's still in the business at Woolworths in Australia.
Adam Conner: So you started this idea because an interrupt, by the way, it stands for national retail Federation.
I have that. Right, right. Damn. They got a big show every January. So it's actually coming up. Yep. I've been to that show like three. Um, let, let me back it up that place mat house for like four days is nothing but booths and keynotes and presentations. It can be very overwhelming. It's a highly sensory experience.
It's like Las Vegas, the lights never turn off and you never know what time it is. So I get it. If somebody is there for a couple of days and you lead them through a great tour, curated of the floor, that can be very helpful, but you're in the middle of the. Throw the biggest retailers have all their flagship spaces.
So I also get what the war was. Woolworths guy is saying is like, we just do the stores. Now, when he asked you that, first of all, I imagine you were flattered by that positive feedback of like, don't change a thing with what you're doing today, but I mean, in your head, wasn't there a moment or two. Okay.
Just traipse people through random retail stores. Like how did that actually come together? Because what they were essentially asking for was for like you to just walk them through a store, nothing would be bought. It would be, I don't know, to me that seems like an odd experience without having curated a company like you.
So what'd you do then? Like what's w how did you plan out? Okay. I'm going to answer this one worst guys request, like, how did you even start thinking about that? Great. So
Dan Hodges: sometimes. What you knowing what you don't know is that is a blessing. And so I knew in this case that, uh, I really was not an expert in this area at all.
So what I did was I found a colleague of mine who is an expert, and we basically spent two to three months walking. The neighborhoods of, of, uh, of New York, Hudson yards was not even American dream or even accurate, but Soho, no, the Oculus, uh, Westfield world trade center and Brookville. And after about about a month, uh, it became clear that there are actually very, uh, explicit narratives that you can, that you can derive from these stories and lessons.
And so what I, what we did for the first round was we created, um, you know, six stops at different locations and different venues. And for the most part, you know, we got it about 85 to 90%, right. Because we asked for the retailers what they were looking for. We found the stores. We found the people that were interesting.
And then since then it's just been evolving. I mean, everything we've done has been based on feedback from the market. So it's, these aren't really my ideas. They're just me listening and then trying to create the best experience possible. So are then executing the strength. Adam was, I knew what I didn't know, and I knew nothing about this.
So I decided to just spend three or four months walking the streets of New York in different retails and figuring out, well, what is it?
Adam Conner: Let me ask you a question about like where the rubber would actually hit the road there. So at the end of the day, and by the way, in that previous sentence, you're talking about retailers were asking you, these are the tour guests, I would guess, uh, asking about other retailers being the, the hosts that you would walk through.
Um, did it ever cross your mind that people might find it strange that you would just be like walking through the retailer and talking about them without them knowing? I mean, what sort of prep went into those three or four months? You'd have to go around and like ask, Hey, can I walk through your store once a week?
Um, that are potentially competitors of yours. Like how did that work? Well,
Dan Hodges: that's a great question. Um, and so it got about, about a month in, I started approaching retailers and I have the exact same. It was a bit of a panic where I'm like, oh my God, you know, I'm going to these retailers and I'm asking them to bring in other retailers and isn't that a problem.
We quickly went to about three stores and they said, are you kidding me? You bring them in the store and we'll sell them. And, um, and so. It was just the opposite of what I thought almost opposite. And then when I spoke to, um, Sateesh, who was the COO of, um, Sephora now he's the CEO of, um, uh, container store it says to teach.
Can we, um, would it be okay if we went into the Sapporo stores and, and your pupil gave demos of the product? And he said, bring them in, damn bring them in. And in fact, um, Sephora is I call it the most dangerous of store tour. And the reason is when I have female executives, I literally will lose the entire group in Sephora.
So I've had to actually make that the last stop whenever I do these I'm including beauty category. So yeah, just the. I had really no idea. And then when I actually asked that question, Adam, cause I, I had a lot of trepidation on that. I thought, oh my God, now what about no one wants us? It was just the opposite.
Adam Conner: That's what would go through my head at least. I mean, if I'm thinking, and maybe I put it into the perspective of a different industry, because I'm thinking, all right. If the retail location is meant to be where everything is presented in. I immediately, my head was like, well, you wouldn't work. You wouldn't walk a Coke person through a Pepsi factory, but that's not the right thing.
The real thing is like, you wouldn't walk a Coke person down the shelf, the grocery store where the Pepsi bottles are. You certainly would because that's free and public domain information, essentially at that point. Um, good note on the Sephora, by the way, I, uh, did a little bit of business with Sephora for my first job.
And, uh, yeah, I mean, I'm not their key demo, but it is a compelling experience. Through there. Uh, you can just ask, um, anybody who, you know, listeners, viewers who the fan of the
Dan Hodges: brand and so forth as a best practice. I mean, they do everything right. They hire people that are kind of vibrate them on empathy.
They train them, they use technology, they have unique value proposition. It's truly a model for really retail excellence throughout the world. And you don't have to be in the beauty business. You just have to be in the people business. And essentially everybody in retail is, and the people that. So learning their lessons is pretty key.
And the last point is that from an ROI point of view, about 30 to 40% of the people that we take on these experiences go back and play in the store. In fact, on our first tour, we had someone buy $14,000 worth of jewelry. So, you know,
Adam Conner: it's just right there. That seems like a pretty considered purchase to make immediately
Dan Hodges: these people have huge networks and they're having them around the world.
So what happens is one Brazilian goes back and tells 300, you know, and then over two or three years, you have 300 people showing up at that store based on that one visit that we made. So, you know, some of this stuff isn't intuitive, but it's certainly impactful.
Adam Conner: Sure. How many of those. Tours that you were leading through the streets in New York.
Did it take before you thought as a founder? Not only am I on to something, but I'm doing it uniquely better than anyone else. I got to run with this a hundred percent. Full-time I can't look back. I mean, was that like that from the start? Or was this something that you had just heard at a conference and done a test of and it was on the.
What made that trip? What was that aha moment that was like, oh no, no, this, this is a life,
Dan Hodges: two things. One was, we realized after the second day of our first tours in 2017, that even though people are from the same company, like Coca-Cola or Walmart or Carrefour, they want different things. So the CTO wants to know what's the technology.
The CMO wants to know why are they getting, why are they coming in this. The board members and the CEO wants to know was the business Paul. So what we, what we've done is we've incorporated that feedback, so that on the general tours that like anyone can just go on a general tour and we're mindful of the technology and Sapporo or apple or beta.
And so we, we pretty much covered that and that really the energy thing that the, that makes me so excited about this and. And subside to talk to you about this is that we first talked to people, we say, well, what do you would, would you like to take a store tour? And they say, store tour, why do I need a store tour?
I say, well, you don't, but 95% of what you're looking at, you're not saying, and they look at me and say, well, thinking less, what kind of a sales pigeon
Adam Conner: is that? Yeah, you think I'm stupid or
Dan Hodges: arrogant or whatever. And then, and we're certainly not arrogant. And so, um, After about two hours to say, oh my God, 95% of what I was looking at, I wasn't saying, and I'll never look at it again
Adam Conner: and you take a bow and you say, you're welcome
Dan Hodges: for another one.
And they do
Adam Conner: come back with it with other boards that, you know,
Dan Hodges: but they from, from what keeps me motivated is that, um, I see the lights go on in their imaginations and. They're looking at things they've been looking at for years, and they're not saying it the same way anymore. So to me, that that is, and I've worked with the top brands in the world around the world.
And whether it's people that are new in the career or people doing this and leading multi-billion dollar companies for, for 20 years, it's the same thing. The lights go off and they, and they stay on, they stay on, you know, they, they don't go off after this. So it really is. So huge amount of work, uh, to, to get those types of experiences and those stories and those responses, but it's worth it.
And all of our business we've done around. We've had about 10,000 people take these it's all word of mouth. We do very little advertising. Um, so that's a good, uh, maybe a good idea.
Adam Conner: So you have been running the New York game several years. You have all these tour guests come through. They love it. They're seeing the 95%.
They're spreading the word via word of mouth, maybe. So that's great for you to keep advertising costs low. But by the time that we first chatted again, listeners, viewers, if you're paying attention at home, that's August of 2019 around there, I think sometime in the fall you had started to explore areas outside of New York, specifically China.
Now I say it's an opportune time to have done. So just because of what ended up happening around the world within six to eight months after. Can you explain to me why you went to China in the first place, and then we'll explore what you saw and how that's proliferated beyond China's four walls.
Dan Hodges: So what I was getting in general singles was China is amazing.
You have to go to China, you have to see this innovation, but who knows what that meant. So fortunately I was able to. To meet, um, the, the CCFA, which is the largest, uh, retail association in the world. And they are the retail, the restaurant, the convenience store association. And I spoke to Kevin Pang, who is the, um, who is the, who is the CEO or managing director or secretary general.
And he said, come over Dan. And I'll, I'll set up a, um, uh, you know, some of the top retailers in China, Alibaba. And then I also had met Sharon. She who runs China for us at the design show in New York. And she said, dad, come over and I'll show you what's going on in China. So I spent, um, or around the, you know, we're awake there listening, uh, launch show, um, Shanghai and Beijing, and they were right.
Um, the Chinese or, or doing things different. Um, and it was really worth, it was extraordinarily worth the, uh, the visit, the insights. And what's interesting is as I was in, in China, we've got, um, of a request from one of the largest, uh, consumer packaged goods companies in the world to do a VIP, uh, tour for them in the beauty category and checking.
So, uh, we got us and validation that this was a good idea. And we got our first, our first deal, which has been a repeat deal, um, ever since. So it's interesting because, um, the Chinese have a different approach. Um, we visited the T 11 supermarket and that particular particular supermarket was, was built by software engineers who built the supermarket to write the code, to run a single.
So, you know, perspective was just amazing. And, um, what was interesting was that when the pandemic broke in the first quarter of 2020, um, I called upon the Chinese, um, retail leaders to provide guidance to the U S as to what, how they were dealing with the pandemic, which in March of 2028, through July of 2020, Not a lot of fun for retailers.
So, um, it was interesting because that particular connection led to, you know, creating the world retail forum, which is really a vehicle that we created as a short term gap to help people, um, learn together to recover stronger. And that resulted in thousands of executives, forever world joining us every week.
And sometimes we were doing two or three for our guests. During the early days. Cause it was so, um, mind boggling. So what was going on and there was really no information available at that time. So it's interesting, Adam, how one trip to China and the pandemic really sort of catapulted us in, in a big way in front of the, the, the global consciousness of retail decision makers.
So you never know, right?
Adam Conner: You never know. But you did know what your business model was for years and years prior to that pandemic. And as you said, March to July of 2020, of course, that was the pinnacle of the not fun time to be a retailer, but also probably the pinnacle of the not fun time as a business proprietor whose main product was walking through an in-person experience in a retail store.
So I got to ask through 2020, what were some of the things that you did to, I don't want to say stay afloat. I imagine you have a thriving business, but like your main thing was disrupted.
Dan Hodges: We leaned right into it because we decided that there was a need for global information and there was, and so we created a sponsorship opportunities for the world retail forum, but not at first, we were just doing it as a, as a good middle market adjustment.
And then what's interesting is that the pandemic created a problem, but also an opportunity. And that, you know, we have, uh, about 30,030 to 40,000 videos and, and, and, um, Photos of stores around the world. So we created the concept of virtual store tours and from March until even the current day, we'll do virtual store tours.
And, you know, here's the plus and the minus minus is that we're not really experiencing Soho and, you know, with the five senses, there's nothing like a store tour. However, we can, we can do a, we can cover a category like fashion or beauty or sustainability. On a global basis through a virtual tour. So we can literally go 20 to 30,000 miles of traveling in two hours and basically see the best of any category around the world in almost real time.
So there, there are pluses and minuses to that, but the virtual, I think we created the virtual store tour. I think, I don't think, I think we did. And, um, it's been usually impactful. We did something in the grocery sector with the top five CEOs in the United States. And after the experience, I said, you know what?
I always thinking about going to China, but I don't have to anymore. So, uh, so that kind of feedback
Adam Conner: is great. Yeah. I would say if you can get in front of that capture some of that. Well, it's not the love. Let's talk about, let's talk about love for the retail sector here for a moment, because I'll fast forward through all of that, uh, through the, through the not fund into what is now, I'm guessing probably for you, uh, incredibly fun.
Cause you built all that brand equity. And now you're in a world where everybody's back in the store and you are just a month or so out from the big show that started at all and RF in the first week or second week of January, I'm forgetting when it's always early
Dan Hodges: January, it's the 16th sort of the 16, 17 and 18 in New York.
Adam Conner: All right, listeners, viewers, if you were planning on going and your boss is getting on you to expense those tickets, you better get on it because it's closed.
Dan Hodges: And at the NRF, we're doing American dream, which we can talk about Hudson yards and salvo. So those retailers that go to the, um, the interrupt big show or visit us anytime during the year, we'll have an experience that will be a life experience at those three locations.
Adam Conner: So now we're looking forward to. And retail's ever changing of course, but we're going to have a year where the foot traffic and the innovation within the industry, my guests is going to accelerate even harder than I did in 20 and 21 may be combined. You're at the cutting edge of that. What do you see?
What are you excited about? And what's the story that retail store tours is going to be telling.
Dan Hodges: Yeah, well, two things that they answer. The question for us is in speaking with some of the, uh, large package goods company, um, they said to me, in March of this year, they said, Dan, what are you doing in Brooklyn?
I said, nothing. I said, well, what should I do? Why would I go to Brooklyn? They said, well, that's where we get all of our ideas for innovation, new business models and technologies. And so I spent several months in Brooklyn in Atlantic avenue, Williamsburg, industry Sydney, and Dubbo. And they're absolutely.
So, what we did was we launched basically four tours from Brooklyn because it's so unique and it's so special. So those are the, those are the areas that we, um, you know, that we focused on the, some of the areas because we're real time because we're on the ground. Um, probably one of the areas I think is the most exciting.
Um, and it's, I haven't really seen it talked about much maybe because it's still evolving in the early days, but I'm saying this the grocery industry, um, really rapidly evolving or rapidly thinking about evolving, let's say. And so, um, we're seeing. Companies like Walmart and Kroger get into the medical business.
For example, Walmart has opened up clinics and you can go to your Walmart and get a medical operation or medical diagnostics rather treatment. Um, they have an optical department that's, it's sometimes freestanding or next to it. Kroger's is doing that. Um, we're seeing some of the supermarkets on the west coast create a whole mind and body experience where, where you can actually have.
Go to the store and get nutrition and fitness sort of life coaching. Um, and that's happening on some of the supermarket chains in the west coast, in California. So it's evolving and the, the, the, the pace of change is, is just accelerated. And I think it's it for the most part it's, it's like near the early days of the internet in 95 and 96, we all kind of knew it was important.
We didn't quite know what that meant. In this case, um, with the health, the need for an intermission, the sort of evolving DIYers, the, uh, the grocery store, those who are, are, are embracing. It are really making that a central hub of people's lives and fundamentally changing grocery. And again, you'll see this over the next five to 10 years, but we're just seeing that happening right now in New York and in different places around the world.
So. And, you know, there's, there's all the talk about technology and they're always, uh, from, from now until, uh, long past when we're gone. But the most important factor in retail is the human touch and technology can, can improve the human touch as it does with apple or with Sephora. But, you know, if you're, if you're skewing to one direction, Just be mindful that for 200,000 years, we've been very successful with each other, interacting with each other and building networks and so forth.
So, um, it's always armed to be when you're in this technology, uh, sort of, uh, area that we're in right now, if you kind of think that, that the technology is everything and it is really. But the human touch is, is the bottom line for retail sales and those companies that invest in their people, again, like apple Williams-Sonoma Nordstrom support.
They're seeing, they're saying bottom line results that, that the industry is, is really MBSS. So it's really, it's really important to us to get caught up in reality versus getting caught up in, um, sort of the moment.
Adam Conner: Let me ask you a question before we get to the ultimate one day, just, which is mostly based on the word that I like to talk about here, which is authenticity.
And that is first for the people who are still 95% blind based on what we were talking about earlier. What's a common thing or two that somebody walking through a store sees, but doesn't see.
Dan Hodges: Sure. A good example is beta. Um, and even Norby is, is the founder. He was a chief engineer for now. And so when you look, when you go into beta or this could be Tiffany or Nordstrom, um, these people that you're dealing with, they were hired because of their kindness and evaluated based on their empathy and the people in beta, no over 700 products in terms of what they do and what their functionality is, which you don't see in beta is the fact that, that, um, that maybe I have the Dan Hodges, a sports massage.
I invested my time and energy and, um, and I paid beta rent to, to have the Dan Hodges massage gun in, uh, in beta. So as you look as a consumer, you look at, oh, there's that massage slash gun. But what you don't know is that there are sensors above that are saying, oh, well, there is a male or female that's spent, you know, X or Y minutes.
You're the gun. Um, there was a male or female that picked up the gun. And put it down and use it and collect the data. So there's a lot of data, uh, that's going on and, um, and it, it can make you a better, um, a better entrepreneur, a better person with product. And then based on that data that I collected beta, and there are many models, allures a model like that.
Um, and their, their goods to the, this is not unique just to beta. There are other models of developing like this, where you pay rent, you collect data. And they, they, they drive traffic to the store. The store becomes almost like a, um, not a play, but a center of experience. And so, um, so these are things that, you know, if you're walking by the store, you'll say, okay, looks like they're selling electronic stuff.
What's next. And it's like, no, no, no, no. You know, look at that person. Look at what's behind the person. Look at all that technology in the ceiling that you're probably don't even aware of. Look at all the data that's been generated and all the insights. And I have to tell you that when, when you have a best practice where you use technology and the human touch, our biggest challenge with places like apple or Sapporo or.
Um, is that we can't get them out of the store. It could become so engaging that nobody wants to leave. So, so the bottom line is, um, when, you know, you'll look at lighting and we'll, we'll say, well, what about this lightening in this door and what the lighting is good. What did you know that that lighting of the properties of lighting keeps people in the store 70% longer?
Did you ever feel the, uh, when you're in the shopping center or a store, the air circulation. Because the use of the use of, of having robust air circulation keeps people awake and alert. Have you ever noticed that when you're walking in a shopping center or at a store, that there are chairs, what happens to people?
They get tired. What happens when you have a chair? They become less tired when they become less tired, they spend more time in the store. Have you thought about the fact that there is coffee and food and store? What happens to people they get hungry. So there's, there's a million things that are going on that, um, you know, like in Soho, for example, we talk about clusters.
There's a Korean streetwear cluster. And so what happens is once one cluster gets available, um, it creates a satellite for. And if you're walking through so well, you'll say, okay, well, that's that store over there? And that says store over there. No, there is bathing ape, which is a Korean streetwear company next to another Korean street where company X to another Korean.
So what happens is nothing is random. And so once you distinguish the patterns, um, you start saying a good example on green street is the Louis Vuitton store. They do a pop-up store next to their main store, every, um, every quarter. And that is like, uh, millions and millions of people throughout the world await when that pop-up store is unveiled.
The last pop-up, the store they had was they created a pool in an, a, in the store. So you felt like you were at the bottom of the pool. So there so many tricks and so many techniques that are being used, so that as a, as a, a person with five senses, um, when you're, when you go there, all of your assessors are activated.
The last example is the, um, the, the affiliate beauty Chanel on, uh, in Soho. When you go into that store, you say, oh my God, this is really, it's really not for me because I'm a male and I don't. I don't put makeup on, at least not yet, but, um, um, but then when you look at the brilliance of the store, they've actually created a place where you can, you know, pink lipstick out or apply, um, foundation or mascara or any of the beauty, uh, attributes.
And you can do it self-serve or you can do it with expert help. So the, the level of intelligence and research that goes into creating these experiences in this tourist, And whether you're, um, you know, a big company or a small company, whether the beauty business or not, you look at the thought process and the thought process drives these experiences, which are measurable, which are viral, viral, rather at unforgettable long-winded.
Adam Conner: Well, it was a complete one too, so, okay. Couple things, listeners zeros. If you're in New York, you can go to any of those places that Dan just mentioned. Um, if you are not, you can try and pick out wherever you are, how other things are going on in the store that you may not see, even if it is technology coming out over the ceiling.
And for me personally, I'm curious as. Where my data profile lives elsewhere. What do I look like as a shopper? How much time do I spend, uh, looking at, you know, whatever, uh, toy there is on the shelf? Yeah. I'll shop for toys, I guess, in this scenario. But anyway, I am fascinated by that world and it's, it's cool that you began this just from somebody at a conference saying, Hey, lead me through a store.
What an interesting niche that has developed and now to again, be at the cutting edge. Uh, it's just a cool, cool, cool story for me to hear from you. So, Dan, I really, really appreciate the time here. I'm looking forward to everything retail has to offer in 22, looking forward to your insights there as well, and, uh, best of look for the business.
Dan Hodges: Hey, take a tour tour is the most fun you'll ever have in two hours.
Adam Conner: There you go. Thanks very much.
Dan Hodges: All right. Thanks.