The Future of Retail: An Interview with Doug Stephens, Founder and President, Retail Prophet

DS: Absolutely. And I mean, let's face it, and this is part of the reason, quite frankly, that I started doing about 12 years ago, what I'm doing now, this focus on the 5 to 10 year horizon, is primarily because after having spent 20 odd years in the retail industry, I knew firsthand how short sighted this industry was, and what a sort of quarter to quarter, earnings report to earnings report, reactionary sort of business, retail really was. And I felt the need for this notion of keeping an eye on the horizon in order to gauge what's coming at us. And partly because the decisions that we make today will inform that future, they will inform the success of our company 5 or 10 years from now, but if we have absolutely no concept of what that heading looks like or where we are actually sort of moving toward in the future, then we could be making all kinds of strategic errors today with no thought for that future.

SS: Yeah. And most businesses are very reactive to the present. To your point, I think the plague sweeping across all businesses is this short-termism, the myopia that exists simply because of the need to meet the promises to the analysts. About retail, it's historically, I'm gonna say a risk averse business, but you make the point that this pandemic is a catalyst for change. So are we looking now, at this period of creative destruction, to use that term, before we even see a revival? I mean, some of the prognostications, if you will, that you make in your book are, I would say, extreme - like you are calling for a virtual reinvention of the business. Is this an extinction event for retail mediocrity, that the only survivors will be those that are creative enough to make it through to the other side?

DS: Yeah, I think so. Somebody asked me the other day, they said, "Define who you see as being the winners and losers, who are the winners and losers going to be in the retail industry coming out of the pandemic?" And I think what they were sort of getting at in the question was, "Tell me is Hudson's Bay gonna be a winner or a loser? Is Macy's gonna be a winner or loser?" I think they were sort of asking me which categories or which brands are going to survive this crisis. But I sort of, I took a different approach to answering the question, because quite frankly, I think it's not about your brand. It's not about your category. It's not about what you sell, it's not even about the channel through which you sell it. It's about your fundamental philosophy and view of what retail really is. And I believe that there are two camps out there. And they may not even sort of qualify their thinking in these terms. But I think that you could divide it along these lines. There are those for whom retail remains an industrial occupation. That it is fundamentally that the occupation of retail is fundamentally about sourcing a product in one place, getting that product to another place, and ultimately, in moving that product through distribution into the hands of a consumer. Retail as we have known it for thousands of years. But then there's an enlightened group that realize that we as a society have now crossed the digital threshold entirely: how we work, how we communicate, how we educate, how we entertain ourselves, and of course, how we shop, has now fully moved across into the digital era. And that retail is no longer an industrial occupation. In fact, we live in a world now, where I think most people would agree that anything we want, we can have it, we can find it, source it, have it delivered to us. Our primary concern as consumers is no longer you know, "Will we be able to find the things that we want? Can we have access to them?" We have an abundance of choice. And we have an abundance of access. What we are looking for in the digital era, my belief anyway, is that we want content. We want inspiration, we want information, we want a melding of commerce and entertainment. And all of those things now can be delivered to us by companies that recognize that we have now moved into the digital era of retail, and it is no longer an industrial occupation focused on the movement of product. It's just not that thing anymore. (10.45).

SS: Yeah, it's interesting. It's not a retailer reimagining themselves. It's the entire category reimagining itself. That in fact, it has a different as you say, objective, and it's interesting, some of the areas you explore in your book, which I found fascinating, the idea of the store, and we're gonna get to this a little later, the store as a media channel or thinking about media channels as stores. It's an interesting chapter in your book. I do wanna talk about the consumer before diving into what that model, that new retail model you talked about looks like, because I think we all know that coming out of this pandemic, we've had a changed outlook on life. I mean, the longer this goes on, and the truer that certainly is. I mean, we have this pining for the old routines, but we know that there's no return to absolutely the way we were. What are the ramifications here for retail in those changing attitudes? I mean, one stream of thought is that shopping may no longer be the pastime it's been viewed as ever since the end of World War Two. But what's your best guess right now as to where the consumer mindset is coming out of this pandemic? Will it be back to normal shopping habits? Or apart from the adoption of ecommerce we'll have just a different attitude toward buying things, I guess, is my question.

DS: It’s a great question. And I think we...and I touched on this as well in the book is that when we think about the future, we often think about it in absolute terms. Will we choose now to shop online instead of going to stores? Will we now work from home versus working in offices? You know, and I think part of that is because the media feeds off stories like that. This sort of absolutist view of the future. The truth is, the future is rarely absolute. It can be fractional, and it can still change everything in our lives without necessarily having to be absolute. And so what I mean by that is, we tend to think that everybody wants now desperately to return to life as we knew it. Well, we know from research that that's not true. We know from research that for some people, the pandemic has actually brought them closer to the life that they aspire to in the first place. You know, working from home, spending more time with family... that this is indeed a preferred lifestyle, that not every person enjoys that morning commute into the office and spending 20 minutes around the watercooler talking about what they watched on Netflix last night. There are people who would far rather wake up in the morning, have a cup of coffee and sit down and get to work in relative isolation and peace. So there is that piece of it. We also know that there are people for whom physical shopping experiences are really important, and for some people less so. So we live in a world of dichotomy for sure. What we can say is this. And again, oftentimes, we have to look to the past in order to understand the future. But what we can say is this. After the SARS pandemic of 2002-2003, China's economy, and particularly their retail economy, was completely reinvented as a consequence of consumer spending this inordinate amount of time having their shopping habits changed, with retailers stepping up, and delivering to consumers through online channels. Companies like JD.com which are now one of the largest retailers in the world were essentially born out of the SARS pandemic. So, is it likely that we are going to spend a disproportionate amount of our spending now online? Yes, it's quite likely and we are likely not to revert back to the way things were. We may use stores very differently going forward. I don't think that stores are going to become less important. But I do think that we are going to use them very differently than we do today. (15.0)

SS: Well, and that's a pretty clear picture that you draw in your book. And it's absolutely fascinating. But you also talk about what I would say is a fairly apocalyptic vision (easy to say). On one side, you've got what you call apex predators, as you call them, Amazon and Walmart, etc. And on the other, you've got these big former retail giants - Kroger, Target, Costco, Towers, et al, playing catch-up, creating their own as you describe it in the book, which is fascinating, many marketplaces. How does that battle play out? And again, you've just described a situation where there's no return to normal. People now are conditioned to buy digitally. Why would they go down to the shopping center if they don't have to? And that basically defaults then to what you're describing as the apex predators owning larger and larger chunks of our lives. But then you've got also these other big traditional retailers, as they say, trying to compete. How does that battle as they say, play out?

DS: Yeah. And it's an interesting question, and this is part of the reason that I reject this idea that is being circulated in some circles, that everything we're seeing is simply an acceleration of stuff that would have happened anyway. It's kind of like, "Ah, no big deal. I mean, we're just seeing 10 years of change in 14 months, no big deal." I don't see it that way at all - at all. I think that the pandemic actually provided circumstances that have not just accelerated the future of retail, but have also altered it completely. And I think that we tend to look at companies like Amazon and Walmart, and you could add Alibaba to this, as being sort of the beneficiaries of this boom, this windfall of online commerce. But here's the interesting thing: Amazon actually lost market share in global ecommerce in the front part of this crisis. And the reason was simple, was that the rest of the world was catching up once and for all. Retailers got the memo and said, "Oh, my God, we need to build capabilities here, we need to be able to transport our offering to consumers online." So if you're Jeff Bezos, while yes, you were counting your increase of $13 billion in net worth, you were also worried that you were losing ground. And so I believe that this is now going to force companies like Amazon to now move into a new era of their own evolution. And this will involve them now moving into sectors that are incredibly lucrative and open to vulnerability and disruption. Sectors like education. And we saw in sharp contrast through the pandemic, the vulnerabilities of the education system worldwide, that we could transfer information to students, but inspiration was more difficult to translate online. So education is fair game for these apex predators. Banking, a huge opportunity. In fact, Alibaba actually owns Ant Financial, which is the 15th largest bank in the world. Insurance, another vertical that is open to attack. Healthcare. Amazon has launched nine concerted efforts over the last three years to break into the health care market consummating with an online pharmacy. So once these companies begin to actually move in a concerted way into these categories and occupy this sort of space in our lives. So imagine five years from now, you're not just ordering running shoes and electronics from Amazon. They're your child's education platform. They're providing additional health care, insurance and health care services. They are your insurer, your bank, your credit card, your savings account. And I believe that that's the end game for Jeff Bezos. In his mind everybody gets one bill every month, and it's payable to Amazon and it covers virtually every aspect of your life. So if you're a retailer, now you have to ask yourself, "How on earth do you compete with that?" If Bezos puts a bubble over every consumer that they never have to leave in order to get anything they want - how on earth do you draw that consumer out of that ecosystem and get them to come to your website or your door? And so what we are seeing, and you mentioned it earlier, is this chain reaction now where large national retailers, be it Costco, Target, Hudson's Bay, Kroger in the United States, they are feeling the heat too, and are now building out third party marketplaces just in an effort to try and keep up with this inordinate expansion of Amazon and other players. (19.56)

SS: HBC announced that it was creating its own marketplace a month or so ago.

DS: Absolutely. And the reasons are pretty fundamental. A third party marketplace gives you the ability to scale up your offering very, very quickly, with virtually no capital investment, certainly not a heavy capital investment. And thirdly, sales through third party marketplaces can actually be more lucrative from a profitability standpoint than selling that same product in your own stores, just by virtue of the math. So yeah, we're going to see now companies saying, "It's not good enough anymore to just be a grocery store, or to just be a building material store - we have to build out a mini-marketplace of our own, in order to give consumers new reasons to come to us." And so if you're a Nike, if you're a Lululemon, or any other brand in the marketplace, now you are facing this massive expansion of supply into the retail market, massive expansion and growth of your competitors. And you have to really ask yourself again, "How are we going to draw consumers out of those ecosystems?"

SS: And not to mention the fact that that if you do that you can bundle things so that it's advantageous to the consumer from a price perspective. I wanna leap into this discussion, because you're edging around this concept of new retail you describe as being this system of ecosystems, which I think you've just been describing. And the other interesting term you use is habitats, I found that it's quite a colorful term for what you're describing. So effectively have we got then a battle of the habitats forming - on the one hand, all these third party marketplaces which may or may not line up vertically?

DS: Yeah, it's a good question. And this sort of goes back to this notion that we hear kicked around a lot in the retail industry around omni-channel. And I mean, every morning, I read some article that talks about the race to omni-channel - retailers trying to become omni channel. In fact, omni-channel is a zombie concept in my opinion. Omni-channel was never really designed or intended to be a consumer facing strategy. It was a recognition, if anything, on the part of retailers that most retail companies had these two divisions - they had all these nerds that worked over in ecommerce and all this retail people that worked over on the physical side of the business, and never the twain shall meet, they didn’t talk to one another, they didn't share data, and they certainly didn't have a single view of customer or inventory. So omni-channel at it's inception was a recognition of that broken structure and an effort to knit together those two pieces of a business. It was never designed as being, you know, we're gonna reinvent the shopping experience by being omni-channel, at least in my opinion. And then in 2015, Jack Ma, who is now the chairman of Alibaba, came up with a term called New Retail. And at the time, I think a lot of people might have just accepted the, you know, what he was saying as being a matter of semantics and sort of said, "Oh, yeah, yeah, new retail, I get it omni-channel. Yeah." But it really wasn't. What Ma was saying is that there really are no channels anymore. That we as consumers don't operate in channels. We don't sort of say to ourselves anymore, "I'm going to go online and do some shopping." We are shopping now in moments, right? So I watch a video on TikTok. And that becomes a shopping experience. I read an article on Facebook and that becomes a shopping experience. I connect to a QR code in a magazine to get some information and that becomes a shopping experience. So Ma recognized that consumers now just sort of bounce around from moment to moment in their life. And at various moments, there are needs that they have and that retailers need to be available to them in those moments to serve those needs. And at the same time we need to build now what a friend of mine Michael Zakkour calls...and Michael wrote a book on new retail - he calls sort of power sources. So...and delivery systems, new technologies to allow for experiences and new retail formats, physical retail formats. All of these power sources now are the things that power this new retail landscape. And what's interesting is that if we were having this conversation, Stephen, even five years ago, I would have told you that a lot of what we see in Asia is a knockoff of what the innovations that we have created in the West. The winds of change are blowing East to West, and Amazon is now starting to take pages from Alibaba's playbook. (24.58)

SS: Well, I was going to ask you that a bit later on. But let me jump into that right now. Some people do say that the future of retail just look at China and what's going on there. It's almost impossible as a North American consumer to relate to how the Chinese consumer shops across media, as you describe it, and largely on their mobile device.

DS: Yeah, absolutely. And the rails of commerce are incredibly well oiled in China. There's very little friction in terms of my ability to shop and particularly buy and pay for things in the moment, because so much of that activity is centralized into a very few channels. So primarily, WeChat is one of the primary avenues for commerce. Everything that you need is there. You can hail a taxi, order your meal, buy a few things, pay your rent, buy an airline ticket for your friend to go to New York, all without ever leaving WeChat. So it is a system that has been designed, really, without even thinking about conventional retail channels, conventional methods of payment, or shipping and delivery. It's a model that was created for the digital age. And so to your point, yes, I think that if we wanna divine the future, five years from now, in North America, we should be looking at what was happening in China five years ago and never gave us a hint.

SS: Yeah. Well, and the other aspect of it that strikes me is how important social commerce really is in China. And of course, we're seeing moves by Facebook now to take advantage of, as you put it in the book, shoppable media, using social channels to buy things, interact things, connect with influencers, and click on something in a live streaming event and buying it in real time with complete, frictionless commerce. It's quite a futuristic picture you draw.

DS: It is indeed. And I think one of the overarching messages there is that what we've seen in the Chinese market is a complete collapsing of the boundaries between entertainment and commerce - that so much of the entertainment landscape there has commerce sort of embedded into it. Commercial opportunities, opportunities for consumers to connect with, as you say, key opinion leaders or influencers in the market, to connect with specific products that may be kind of embedded within a movie or a television series. And all these things - Alibaba is a great example because they have this ecosystem that's made up of video production, and shipping, and commerce, and banking, and payments. And so all of these things are stitched together very elegantly, so that consumers can watch a TV show that's produced by Alibaba, they can shop that TV show while they're enjoying that entertainment, and they can pay for it all, using Alipay. It's a complete ecosystem. And this is what we mean when we say an ecosystem of value. That's precisely what Alibaba has developed. SS: So I wanna come back to North America, because it does seem such a leap to emulate what's going on in China. China doesn't have the retail footprint, as you pointed out in the book that we do in North America, and particularly the U.S. But now going forward, as you start to see more and more stores go under, you're gonna see, obviously, this remodeling, if you will, of the category, and you describe very well in your book, you devote a significant chapter to it to describing these various, what you describe as store archetypes. And I found that quite interesting. So that the opportunity here for retailers is to really attach themselves to one of those archetypes and deliver something that the apex predators cannot. Is that a fair summation?

DS: That's a very, very good summation. And to sort of shed a bit more light on it. So the point I make in the book is I really just don't think that there's going to be any surplus market share to be had in this future that we are going to emerge into. I don't believe that there's going to be any room anymore for brands that have just sort of plotted along in a mediocre fashion and managed to do so based on the fact that they may be a specialist in their category, they may be local to consumers. They may have been a convenience play in the past. But I think a lot of those opportunities are gonna dry up largely because Amazon is attacking them. Amazon is now moving local warehouses within proximity of consumers to get beyond the next day shipping threshold and perhaps get down to hours or minutes in terms of their shipping capability. So there's going to be no surplus market share to be had. What every brand needs to do now is it needs to really define its purpose in this new world. And the term I use in the book is that purpose is the new positioning. But I don't mean positioning from the traditional standpoint, like, are we luxury, are we discount, are we convenience based, are we experientially based? What I mean is is a pretty simple litmus test. And the test is this question. If your brand is the answer, what's the question? What's the question that you happen to be the definitive answer to? And that sounds like a pretty simple question. But I've asked it of executives at Fortune 500 companies, and oftentimes you don't get a clear answer. (30.59)

SS: Well, they don't know their purpose. Yeah.

DS: They really don't. Or they have differences of opinion internally as to what that purpose is. And so...

SS: Well, I'll tell you what it is, for most companies it’s to make as much money as they can. That's why.

DS: Yeah, exactly. Yeah, they're not sure of what the tactics or strategy are, but they know what the outcome needs to be. And so with that in mind, what I tried to provide was some clarity around how you can go about making that decision as a brand. And so I provide in the book a format of 10 retail archetypes, or archetypal business purposes, or positionings, that retailers can look at, understand, and maybe identify with and move their brand towards. And I won't go into all of them, because of course, we don't have time. But basically, the way they split out is into four competitive categories. One is culture - brands that really trade on their ability to tell deep cultural stories, and involve consumers in those stories or movements. And so here, you will find brands like Nike, a real deep storytelling brand, or Patagonia, a brand that really espouses high values in terms of environmental responsibility. The next quadrant is entertainment. And this is where brands may not necessarily sell anything that you can't find somewhere else if you looked hard enough, but what they really do is they put a remarkable theatrical and entertaining experience around their products. And so there I point to a couple of brands that are really...well, that do a great job of doing that. The next quadrant is expertise, that you simply have the highest knowledge in your category. And when consumers are in trouble, and they need answers, you become the beacon that they follow. And the final quadrant is product, where a brand simply focuses so intently on the engineering of its product, that it's the product itself that really differentiates them vis-à-vis an Amazon or any other competitor. You have to dominate in one of those quadrants.

SS: At the minimum, yeah.

DS: At a minimum, you have to dominate in one of those quadrants, and optimally, you dominate in one quadrant, and you differentiate your offering in two other quadrants, to provide a really stable position from which to compete.

SS: I'm presuming here, partnerships start to play a role. It's hard to imagine any retailer to be all things to all people but if you have the right partnerships with other brands or manufacturers, it's a lot easier to deliver, I suppose, against that kind of model that you're describing.

DS: And it's a matter of also really knowing who you are. So if we take the example of Patagonia for example. In the book I called Patagonia an “activist brand”, a brand that puts social or environmental cause right at the center of its business. In fact, it bakes it right into the revenue model. So they are an activist brand. But they don't just stop there. They also have differentiated products. So their products, in keeping with their activist position, are differentiated by virtue of their recyclability, or the fact that they're made from recycled materials, low impact manufacturing processes. So we have a differentiation in their product. We also have a differentiation in their expertise. They make it very clear on their web site, that they don't just hire people who are willing to work weekends at minimum wage. They hire people who are enthusiasts - who absolutely love the outdoors, fall in alignment with the social cause or the environmental cause that Patagonia represents. And they bring those people in, and they teach them the relatively unsophisticated world of retail. But they come in with that energy and enthusiasm. So now you have a brand that has a strong archetypal position as an activist, they have differentiated products that support that activist position. And they power it with people who are enthusiastic about the things they sell. (35.22)

SS: You also give another example in the book of a camera store, I can't remember the name of it right now, which similarly will hire people with strong expertise in photography, and people go to that store in large part - and I think you recount your own experience to take advantage of that massive product selection as well.

DS: It's a company called B&H Photo and Video. And it's a company that's been around for decades, I believe the company started off in the 50s in New York City. And if you get anywhere close to the rabbit hole of photography, you pretty quickly hear the name B&H get kicked around online. They have a high degree of respect; they have a tremendous reputation for knowledge. And what's interesting is that when you go to their web site, unlike what you might find at a Best Buy, which is sort of like a stock image of a bunch of people in blue polo shirts, and they say, "Here's our Geek Squad team," this sort of nameless, faceless, amorphous group of people. When you go to B&H's site, they have individual bios of all of their resident experts. And these are people who have spent decades as photographers, professional photographers, videographers, sound technicians, and they’re really at the top of their game. And so that is a fundamental difference in how you value expertise. Is expertise a commodity that can be sort of delivered by anyone? Or do you actually hire experts? And that's precisely what B&H does. And that's why photographers from around the world will order things from B&H where they would never dream of ordering from either Amazon or a Best Buy, or someone like that. So yeah, it really means identify what your strength is, and go so deep into that strength that Amazon would never even dream of chasing you down that hole. It's just not worth their time or effort.

SS: I wanna explore in the few minutes we have remaining here an article you wrote recently saying that discovery is dying. It's the very element that makes shopping enjoyable, you say in the article. What did you mean by that? That discovery is dying?

DS: So yeah, and I sort of, you know, I was reflecting on iTunes at the time. At the time I wrote that article I was sort of thinking about iTunes and the degree to which iTunes didn't just change music and the way we consume music. I think it was a catalyst for really how we consume everything. Because what iTunes did - what it legitimized because you could argue that it was actually, that it was Napster that did it, that Napster sort of dislocated an album and produced the ability to download individual songs and share those files. iTunes legitimized that and monetized it and brought it into the mainstream. But in the process, what we lost was a sense of discovery, because, in the olden days, I'll date myself here, in the good old days, you would go and buy an album, and you would take it home. And oftentimes you were buying the album because you had a favorite song that you'd heard on the radio and you wanted to buy that song. But guess what? You got 12 songs on the album. And oftentimes, it was listening to the other 11 songs that really gave you an appreciation for the thought and the story behind the album. And it really gave you insight into the artist or the band that had produced the album. And along the way, your musical sensibilities might have changed somewhat. Like, if you only listen to one song off the white album, the Beatles’ “White Album”, you would never have experienced some of the really weird or less commercial stuff that consequently really changed the music industry, and had an influence on other artists. That now that “iTunesification” of our lives is reaching into other aspects of our lives. And I think we're paying a price for it. On Facebook, I am now deluged by algorithms, providing me with more and more reinforcement of the stuff I already like. It's just feeding me more of the products, more of the news stories, more of the discussions that I already have a predisposition towards. When I shop on Amazon, all the recommendations are based on stuff I've already bought - it's all latent. And again, it's just algorithms saying, okay, "Doug likes this. So we're just gonna feed him more and more and more of it." What I'm losing is a sense of serendipitous discovery. And oftentimes, we could find that serendipitous discovery in the real world. We would go into a store for one thing, and lo and behold, we'd walk out with two or three other things that we never even imagined buying that day, because they were availed to us through an organic process. It wasn't an algorithm driving us toward this one product. And so I think that what it opens up is a massive opportunity for retailers to say, "Look, it's not that we're issuing technology, it's not that we're turning our back on this, we understand that AI and big data can be very effective. But we also have to inject some surprise into this, we have to provide consumers with the odd thing that is tangential, that is just surprising and delightful." And I think that retailers that can do a great job of that can really flourish as a consequence, because I think we're hungry for discovery. (41.23)

SS: I do wanna ask you, in terms of Canada, there are two companies that have done very well here. And one is Shopify. Now Canada's most valuable company, more than a million merchants. Scott Galloway, you know him, calls them the anti-Amazon. So they see themselves as the rebels fighting the Galactic Empire. And then on the other side of it, on the other side of that digital divide, if I may express it that way, you have Canadian Tire, which has had a fabulous year, and yet is very bricks and mortar based. Where do you see those companies evolving? Or how do you see those companies evolving given these forces of change that you've been describing for the last three quarters of an hour?

DS: So I think Shopify is a remarkable company, for sure. And I actually have spoken to Harley Finkelstein many times over the last couple of years, and frankly, over the decade that I've now known him. And when you look at Shopify, on paper, the merchants of Shopify combined, actually if you were to put them all together into one marketplace, they're actually the second largest marketplace in North America, just behind Amazon. So the gross merchandise volume that has been pumped through those millions of merchants on the Shopify platform is pretty staggering. I personally think that the next move, and there may be those at Shopify and outside of Shopify that would disagree with me here. But I believe that the next move is to provide some sort of cohesive shopping experience for consumers across all of those Shopify merchants. To actually make them a cohesive, shoppable marketplace that really could power tremendous amounts of discovery, because you find brands in there and products in there that you don't find on Amazon. So yeah, I believe that that would be the next logical evolution. I'm not suggesting that Shopify would try to develop a revenue stream out of that, that they would necessarily be taking transaction fees or anything like that. I'm not going there yet. But I do think that there's room to curate those merchants into a shoppable selection. When I turn to a brand like Canadian Tire, I think that Canadian Tire to me is a lost opportunity. I feel that yeah, and you're quite right, they've done very well. They've done very well through the pandemic, largely because they've been allowed to be open, where so many other merchants have not. So that has played into their favor. But the challenge that Canadian Tire has is a resistance on the part of its franchisees to fully engage to a uniform level in terms of online sales and delivery. And so they've come a long way, I don't dispute that. Canadian Tire has evolved to a point where they can now provide ecommerce and logistics services to consumers to a greater extent certainly than they could even five years ago. But it's not up to the level that it needs to be at. And frankly, service levels in their stores are not, in my opinion, where they need to be at either, but it's not just my opinion. Go online and look at online reviews of Canadian Tire. And many of them are dismal. Canadian Tire has thrived because it did a very good job decades ago of putting stores in proximity of consumers. And all across the 401 corridor, coast to coast, Canadian Tire was there to serve consumers. Over the long term, they are going to have to make some very significant changes to both their in-store experience and their online capabilities in order to withstand the kind of change that is coming. SS: If any retailer has the resources to do it right now, I suppose that they would be as long as they have the vision of course, that's always key to everything here. Doug, we're out of time. And I just wanna thank you so much for the time you've given me today, two terrific books, I read back-to-back. So I'm looking forward to the next one actually. These are interesting times.

DS: They certainly are. Well, thanks for having me, Stephen. I really appreciate it.

That concludes my interview with Doug Stephens. As we learned, the pandemic was a tipping point for retailers. It certainly left the retail landscape littered with shell holes. But it’s also changed the contours of that landscape. Depending on how inventive retailers become, there are two possible future scenarios. The dystopian scenario will see the retail business ruled over by a platform ecosystem oligopoly led by Amazon and Walmart. In which case, it’s going to be very hard for smaller retailers to lure shoppers away from their giant AI-driven “habitats” where they can find most of what they need at bargain prices. The other rosier scenario is a retail renaissance where many innovative store formats will flourish. More customer-oriented retailers will begin to offer a more compelling and distinctive experience that the platform ecosystems will have a tough time replicating, no matter how much new technology they throw at it. The shopper will be the ultimate winner, with more choice and greater convenience than ever, while also re-discovering the joy of shopping.