Digital-First Marketing — The customer journey starts online, so make sure you are targeting the right audiences and providing the information to move them closer to purchase.
Agile Inventory Management — Many retailers have been able to reduce inventory levels during the pandemic, and running leaner inventory has Gross Margin and operational benefits. But most importantly, it lets you stay in-step with consumer trends through smaller buys, lower initial allocations and faster replenishment.
As part of our series about the future of retail, I had the pleasure of interviewing Richard (Rick) Maicki, managing director in Berkeley Research Group (BRG) Corporate Finance specializing in performance improvement. He has more than twenty-five years of business experience, with approximately fifteen years of consulting experience plus direct management roles within industry. He has extensive experience leading and advising Fortune 100 companies, with a focus on retail and consumer products companies.
Mr. Maicki has managed numerous retail performance improvement assignments in a wide variety of channels. He has implemented strategic and operational change by improving key performance levers and identifying savings opportunities. In these roles, he has focused on driving tangible bottom-line results supported by the process and organizational changes to sustain the improved performance.
Mr. Maicki has managed global supply chain network design and implementation; driven improvements in distribution and logistics, category/merchandise management, product development, and store operations; and led SGA cost-reduction initiatives. He also has served in interim management roles to help directly drive transformational improvements.
Before joining BRG, Mr. Maicki worked at a turnaround consulting firm for four years in the Retail Performance Improvement practice. Prior to that, he held industry positions with an American specialty retailer of crafts and fabrics and a home video and video game rental shop company, where in various roles he led strategy, distribution/logistics, and procurement function. He also gained valuable experience in creating and launching startup retail companies. He started his career in the retail practice of a major strategy and operations consulting firm.
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 have always had a passion for problem solving and an entrepreneurial spirit, and my career path helped me build the skills necessary for the consulting role I have today.
I was as an electrical engineering major as an undergrad at the University of Michigan, but always had a plan to move to the business side. My first job as a sales engineer allowed me to see many different manufacturing plants and develop an understanding for how our products help solved our customer’s technical or manufacturing problems. I also learned a lot about how companies functioned and realized that most companies, even profitable ones, had challenges and opportunities to improve.
Those experiences drove me to business school at Kellogg (Northwestern University) and that’s where I learned more about consulting — helping companies solve business problems. I took a job with A.T. Kearney and learned basic consulting skills. I shifted to a retail and consumer focus and from there, I had opportunities in industry jobs which helped give me front line management experience. I also started my own experience-based retail company and then came back to consulting with Alix Partners before joining the team at BRG to build out our Performance Improvement Team.
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?
Early in my career we had a project with a client that was struggling. I was leading a team of eight consultants. Our project had tight timelines and high expectations for results, which we achieved. The client was quite happy, but during my project review it was pointed out that while my team achieved the desired results, the client viewed me as a “bull in a china shop.” I will never forget that phrase. Since then, I have paid more attention and altered my approach to working with clients and team members. You can still get the results, and often need to push hard to get them, but you can do so by communicating the goals and timelines effectively, all against the backdrop of each team member’s situation and perspective.
Are you working on any new exciting projects now? How do you think that might help people?
Retail/consumer has always been a fun sector to work in, as consumer trends and buying behavior is constantly evolving. Right now, the pace of change has really picked up, making it even more exciting. In June 2020, we documented our thoughts on “Retail Sur-Thrival,” which detailed how to not only survive the pandemic, but to thrive in it. Today, we are working with clients on how to keep up and get ahead in today’s fast changing landscape. Some examples include helping them think through and develop the right omni-channel capabilities (digital and physical), re-aligning the store activities and staffing to better serve customers. We also help retailers establish the inventory management and distribution/logistics capabilities that allow them to have the product in the right place at the right time within an efficient cost structure.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Retail/consumer is a demanding sector — for the most part there are no “off days” and success is driven by understanding the details of both the data and the practical operations. To thrive, you really need to balance both. When reviewing data, look at the big picture first and then look at the profile. Avoid looking at averages alone … then tie the data to practical operations. An 80–95% solution that can be implemented is better than a 95–99% solution that cannot be executed.
Developing your own work routine that you stick to (as much as you can) will keep you in rhythm and will help you stay on top of all the various activities you need to complete. It will help keep you grounded and your priorities in check. In addition to working hard every day, make sure to take time out once a week for you and to plan longer times to decompress.
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 had several business mentors throughout the years, and through consulting I’ve had the opportunity to see a wide range of management styles which have helped inform and shape my approach to managing teams, projects and people.
I think the core of my success is due to my parents who set such a great example of being the best you can be at what you do and working hard with the highest integrity. They instilled a strong work ethic in me: “Work hard, then play hard”. My swim coach was another influential person as he taught me you can always get better through hard work and that beating the competition starts by improving yourself.
How have you used your success to bring goodness to the world?
Throughout my career, I have been involved with different non-profit organizations. Early in my career, I was on the Board at the Children’s Museum of Cleveland. My business skills helped a small group of board members turn around the organization and establish a platform for future growth. Currently, I am involved with a group, OMNI, that has established a school (grades 1–9) in Zambia. OMNI also conducts annual medical mission trips (in non-pandemic years) and is in the process of establishing a gender-based violence shelter, rehabilitation and training center to support the local community.
Helping non-profits execute their mission is a great way to use your business skills to better the world.
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?
The pandemic accelerated the shift to online buying and pushed older consumers, who had been slower adopters, to buy online. There are few keys to understanding this shift:
- It is clear that online buying will shift back towards brick and mortar, but remain elevated vs pre-pandemic levels. Some great new options for retail that we’ll continue to see include:
- Appointment-based shopping. This drives personalized attention that results in high conversion, larger baskets, and deeper connection with the customer.
- Virtual shopping. This allows personalized attention, with the convenience of online.
- Same-day home delivery. This provides convenience for the customer when they want it fast, but don’t want to go to the store.
Each of these, if supported by the right processes and systems, can drive profitable sales going forward.
2. Understand how your product segment will respond post pandemic. How important will the new purchasing methods be for customers? Will they be regularly used or will they be specific to occasions? Thinking through these questions will guide the resources and processes you invest in each channel.
3. Understand your capabilities and costs to provide each service to customers. This will allow retailers to profitably operate while meeting the customer where and how they want to purchase.
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?
Customers will return to physical stores, but they will also continue to use different purchase methods. Having physical stores will allow for a deeper relationship with the customer. As shared above, there are a number of ways to leverage the store network to drive sales and build customer relationships. In addition, stores will also become an extension of the fulfillment network. Many retailers had ship-from-store capabilities pre-pandemic, and many more added the capability since the outbreak. With the capacity constraints on shipping, having product available in stores and capabilities to fulfill orders, whether that is shipping from a store, curbside or same day home delivery, will be an advantage going forward.
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 pandemic clearly had a varied impact on different retail segments. Those deemed “essential” and those with product categories that supported the pandemic lifestyle (e.g. Peloton) benefited from the rising demand. The tide will undoubtedly shift back. The retailers who were and will be most successful are those who adjust most quickly to the new trends and can meet the customer where they want to purchase. Retailers that were able to establish the capabilities to serve the customer in new contactless ways have enjoyed success and built consumer trust. Moving forward, understanding your internal costs and driving to efficiently provide a set of purchase options to the customer, based on their needs, will be critical to success.
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?
In the current economic environment, there is a bit of a flight to value and convenience. Success going forward has two parts: branding and operational capability.
On the branding side, today’s customer, especially the Gen Xs and Gen Zs, care what a brand stands for. Brands are a reflection of their lifestyle and beliefs. Clearly defining and carving out your brand positioning is essential — meaning something to your customers will regain importance as the pandemic winds down. Staying authentic and true to your brand will build trust and loyalty.
On the operational side, as I mentioned above, understanding the different purchase occasions and what is important to the customer in each, then aligning the operations to meet the expectations efficiently, is the trick. Customers may be in rush, have limited time and want the convenience of home delivery one day, and then may want a personalized shopping experience the next. Stores and store associates can be a viable part in serving the customer and building the relationship with them.
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.
- Digital-First Marketing — The customer journey starts online, so make sure you are targeting the right audiences and providing the information to move them closer to purchase.
- Personalization — Stay connected through specific messaging based on a customer’s unique connection with the brand, leveraging local associates to maintain and deepen the relationship.
- Wide Range of Purchase Options = Omni Channel, in today’s world. Carefully evaluate customer needs, focus on the purchase options that will meet their needs going forward, and then institutionalize them.
- Agile Inventory Management — Many retailers have been able to reduce inventory levels during the pandemic, and running leaner inventory has Gross Margin and operational benefits. But most importantly, it lets you stay in-step with consumer trends through smaller buys, lower initial allocations and faster replenishment.
- Alignment of Processes and Systems, and cost structure to services offered from distribution centers to stores and home delivery.
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. 🙂
Listening to each other and assuming the best in others as opposed to the worst.
I am increasingly concerned with the division in our society, particularly as it is portrayed in the media. We are being pulled apart by narratives that are re-enforced in the media and through social media. I think for the most part, we all want mostly the same things for our country and the world. We may have different ideas on how to solve the challenges we face as a society, but for the most part we see the same problems. If we take the time, with respect for each other’s points of view, to listen and understand and even modify our own views… we likely come up with better solutions, together.
How can our readers further follow your work?
This was very inspiring. Thank you so much for joining us!