Legendary Leadership with Les Mandelbaum: The State of E-Commerce and Retail



AMA Toronto's most recent quarterly Legendary Leadership event happened on March 10 at the Umbra Flagship Store in Toronto — just before the pandemic struck. Aimed at giving the community direct access to members of Canada’s Marketing Hall of Legends, this event series offers insights into a Legend's success, and how their ideas and contributions to marketing and brand building have made an impact in the marketplace.

The featured inductee was Les Mandelbaum, president and co-founder of UMBRA. 




Mandelbaum was joined in conversation by Walter Rhoddy, president, Rhoddy Marketing Group, and moderated by Tom Yawney, founder and director of business development, The Influence Agency. Discussion focused on current and future trends in the retail, marketing, and design industries, and about building a brand in Canada that lives on the global stage.






The State of E-Commerce and Retail

The talk began with how to adapt to the speed of change in today's retail environment. Mandelbaum likened it to trying to ride a horse that's moving in two directions at once, pointing out he feels Umbra will be a 50/50 split of in-store and online business by the end of 2020.

With 70 per cent of Canadians now having smartphones, the panellists pointed out we don't have to look any further to see why there has been a huge retail shift over the last 15 years. The ubiquity of smartphones and their easy access to online shopping has dramatically impacted commerce, retail, and purchasing decisions. They highlighted the phenomenon of 'showrooming' — visiting a store, examining a product, and then buying it online at a lower price (sometimes while still standing right there in the brick-and-mortar location!) — as just one example.

They also emphasized the shifted power dynamic between consumers and retailers because of social sharing and the power of positive and negative online reviews. "The power is now in the hands of the consumer," said Mandelbaum. "It's never been more important to ensure your customers have a positive experience every time."

Rhoddy was quick to emphasize, however, that while tactics and techniques may have changed the fundamentals remain the same. "We still need the entrepreneurial spirit and business acumen," he said. "Whether it's brick-and-mortar or online, you're still trying to create a compelling product or service and package it in a way that engages consumers."



Mandelbaum drew on his own experience at Umbra to highlight the need to empower people to innovate in their area. At Umbra, separate groups are tasked with coming up with original products within category areas, such as bathrooms, kitchens, or bedrooms. The best ideas from each group then go to weekly product innovation meetings for broader discussion.

"We probably go through 10,000 ideas to get to the 100 new products we release each year," said Mandelbaum. "That's products that meet our mandate to be original and true to the brand."

He also pointed out that no matter the resources brought to bear on innovation, it's ultimately not up to you or your team. "The consumer, in the end, decides," said Mandelbaum. "Sometimes they love what you don't, other times they don't love what you do."

Rhoddy cautioned against chasing trends or becoming too enamoured of the latest technology, tactics, or buzzwords in the desire for innovation. "Go back to fundamentals," he encouraged the audience. "What are we actually looking to achieve? What are the potential challenges for the brand now, but also two to three years down the road? Avoid the temptation of pulling from someone else's playbook."

"If we see a trend, it tells us what not to do," Mandelbaum concurred. "That's not where great ideas come from. Strive to create trends yourselves."


Taking Products to Market

The panellists all agreed the disruption from e-commerce has been enormous for traditional retail. Mandelbaum highlighted that as a direct-to-consumer play, e-commerce requires a major social media and video presence, as well as a lot more ancillary materials — such as a higher number of product photos and engaging product stories — than would have previously been required. Free delivery, especially of big or bulky items, has also incentivized online shopping.

"And the power of reviews is huge," said Mandelbaum. "If you don't maintain a 4+ star review, you drop off the map." He pointed out that because reviewers who are sent products to review (rather than purchase for themselves) may not match target demographics, it's easy to be sabotaged by bad or inaccurate reviews, which has led to a lot of retailer anxiety.

"It takes 40 years to build a brand, but just a minute to destroy it," he said.

In the face of such challenges, Rhoddy advised a return to basics and a focus especially on the tactics. At his agency they use three lenses:

•    Awareness: does anyone know about the product? Is that something that needs working on?
•    Engagement: is the consumer connected to the brand? Are they already potentially considering it?, and
•    The sale: how can the buying process be as easy as possible?

"You also have to build plans that can change on the fly," said Rhoddy. "You have to build a plan you can re-evaluate with your client in near real-time. There could be major changes by the time you launch the product, and once it's in-market, you could need to do something else to keep the product relevant and attractive. Planning cycles are so much more compressed than they were even five years ago—that's been our experience."

Mandelbaum also spoke about the increasing role that data and analytics are playing in his business. He highlighted many of the advantages that analytics provides, including the global nature of the data as well as how granular it can be — whether you want to sort by individual regions, or by product features and price points.

"Products can also have a whole new life online," he said. "We have some products that are very successful online, but not in stores. And retailers can cut out a lot of middlemen by going direct to consumer."



Predictions for the Next Five Years

As the evening wrapped up, the final question was about predictions for retail and e-commerce over the next five years.

Rhoddy felt more experiential, thematic brand experiences would be central to success. He argued brands at risk of failure would be those who can be strongly commoditized. "To succeed, you'll need a strong brand story," he said.

"There will be a lot more retail closures in the next five years and less and less brick-and-mortar overall," predicted Mandelbaum. He pointed out that while real estate values and rents continue to rise, there's no accompanying bump in retail pricing or volume of in-store sales. There are just too many consumer-focused online channels now that keep prices low and convenience high. And, he pointed out, these e-retailers are multiplying and highly competitive.

"America is the most heavily over-stored country in the world," said Mandelbaum, "and that was before e-commerce. I think 50% of those stores could go away and you'd be at the right level. But," he added, as a caution, "Canada is the number two over-stored country based on stores per capita…"

Mandelbaum argued that e-commerce will be increasingly supported by brick-and-mortar showrooms instead of traditional stores, and echoed Rhoddy's prediction about the role experiential marketing will have in promoting online business.

This sold-out event featuring Canada’s Marketing Hall of Legends inductee Les Mandelbaum, the president and co-founder of UMBRA, was one of series of Legendary Leadership events AMA Toronto had planned for the 2020 season. In response to the Covid-19 crisis, the association has postponed or modified all activities and events. AMA Toronto and the American Marketing Association continue to offer programming and support to the marketing community through online events and courses. Please visit ama-toronto.com and ama.org for updates and information.  

This article was brought to you through the partnership between AMA Toronto and HeadStart Copywriting.


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