Jim Inglis With Inglis Retailing

Intro: [00:00:04] Broadcasting live from the Business RadioX Studios in Atlanta, Georgia. It’s time for Atlanta Business Radio brought to you by onpay built in Atlanta. On Pay is the top rated payroll and HR software anywhere. Get one month free at Onpay. Now here’s your host.

Lee Kantor: [00:00:31] Lee Kantor here, another episode of Atlanta Business Radio, and this is going to be a good one, but before we get started, it’s important to recognize our sponsor on pay. Without them, we couldn’t be sharing these important stories today on the Atlanta Business Radio. We have Jim Inglis with Inglis retailing and the author of Breakthrough Retailing Welcome Jin.

Jim Inglis: [00:00:52] Thank you.

Lee Kantor: [00:00:53] Well, I’m excited to learn what you’re up to. Tell us about your firm. How are you serving, folks?

Jim Inglis: [00:00:59] Well, English retailing is a consulting firm, and we focus on the home improvement retail industry, basically working internationally with home centers all around the world Japan, Australia, South America, Europe. And this comes out of my work history where in my career I was executive vice president of Home Depot and during the very aggressive growth years of the company. And so we focus on helping at home centers in other parts of the world who would like to emulate Home Depot and become the dominant player in their market, just as Home Depot has become the dominant player in the North American market. And so that’s what we focus on. And fortunately, in most cases, whether it’s in Australia or or Europe or South America, typically we work with either the number one or number two retailer and in each of those markets.

Lee Kantor: [00:02:08] So now is the home center retailing is at a different animal than other types of retailing.

Jim Inglis: [00:02:14] Well, yes, it’s it’s a it’s a it’s a specialty type of retailing where if you, for example, if you think of a Home Depot, it’s a big box store, has a lot of merchandise, but essentially everything in that store is focused with one mission. And that mission is to provide maintenance, repair or remodeling for the home. And so it doesn’t, you know, you won’t find a lot of other products that you might find, say in a Wal-Mart, which would be a general merchant general merchandise company, but rather it’s a specialty retailer and that is focused specifically on being a solution provider for the homeowners.

Lee Kantor: [00:02:58] And then when being a big box is a different kind of strategy than the maybe the smaller box that attacks the same market like an ace hardware.

Jim Inglis: [00:03:08] That’s right. I mean, what you see in the United States is really two extremes. You have three really big box warehouse stores Home Depot, Lowe’s, and in the Midwest, there’s a third called Menards that control the the biggest dollar amount of shares in the market. But at the other extreme, you have the small neighborhood store, which is the ace type store. And it it’s a very viable retail format in itself because it is local. And in fact, it’s very highly, highly rated when you come to when you do. Market research like J.D. Power gives Ace Hardware a very, very high rating. So. So they don’t control the major dollar amounts because they’re much smaller stores. But there’s there’s two two extremes in the marketplace. Typically, the the customer that’s looking for maybe repair and maintenance might find it very convenient to go to an ace hardware, whereas if they’re doing a bigger project, a remodeling project, then most likely they’re going to to need the assortment and services of of of the big store. The big box store.

Lee Kantor: [00:04:23] So then the customer for the big box store is not only the consumer, but sometimes these other kind of service providers.

Jim Inglis: [00:04:30] Yeah. In fact, if you look at the current Home Depot statistics, forty five percent of the business done in a Home Depot is done with professional customers. And these these are professional customers who essentially are doing the same. Three things that the homeowners are doing repair, maintenance and remodeling. So there’s a certain synergy between the homeowner who’s looking for the same products, the same type of pricing and assortment and service that the professionals looking for. And as a result, a big box store like a Home Depot can can can very well serve both of those markets.

Lee Kantor: [00:05:11] Now, when you’re going into do your consulting with one of these firms overseas, is the marketplace similar in America? Like is this just people take care of their home in a similar manner and then they go to these kind of places in a similar way, like it’s just the same thing, but different in another country.

Jim Inglis: [00:05:30] Well, you know, the desire is the same. You know, the homeowner wants a better standard of living. They want to take pride in their home. They want to improve their home. And so yes, the desire and the need by the homeowner is the same, whether you’re in Japan or whether you’re in South America or whether you’re in Europe. Now there are certainly significant differences in each of those markets. For instance, if you go to Germany, you find that there’s not as many single family homes that are privately owned. There’s a lot more renters in those markets. If you go to South America, you’ll find that you don’t have as large a middle class. You also find that the homes there are made of cement instead of wood. And so that creates a whole different product mix and sometimes a different complexity and doing the do it yourself jobs. So each market is unique in its own way. But but the basic need of the customer is the same. And so really, the principles of how to drive a high productivity business really remain the same. The tactics the tactics may change depending on the legal situation or the economic situation or the type of construction that’s used or the competition that’s there. So or the culture of the local culture. So the tactics may change, but the overall strategy is really very similar.

Lee Kantor: [00:07:05] Now does the overall strategy that Home Depot kind of relied on to get escape velocity when it was starting out and through your. With the organization, does that transfer to other organizations that aren’t necessarily, you know, retail even or even in the home market? Well. Like from a culture standpoint, you know, being so customer centric, those kind of areas, I would think transfer those are industry agnostic.

Jim Inglis: [00:07:38] Sure. I mean, if you ask, you know what, what is the success of whom do you go? And you know, why is it the largest home center business in the world? And it is. It’s by far the largest home center business in the world and also the most profitable. If you if you trace that back, you trace it back. Well, it is the culture and it’s a culture that is highly customer centric. And so certainly, if you take the same principles that were established by Home Depot of of developing a company with a culture that in fact is customer centric and customer focus, and you empower your people to take care of those those customers and you not only empower them, but you, you educate them. And not only the how, but the way of taking care of those customers. They’ll they’ll they’ll they’ll take on that mission and they will fulfill it. Well, certainly, you know, regardless of whether you’re in the home improvement business or the furniture business or the or the, you know, the clothing business, those principles are still intact. And of course, my my book is called breakthrough retailing. But the tagline is how a bleeding orange culture can change everything. And that’s what my whole book is about is how important that culture is in in creating the environment that allows rapid growth that allows you to dominate the market and that that domination comes by simply being the best store for the customer.

Lee Kantor: [00:09:15] Now how how are those retailers like Home Depot dealing with the online merchants that I don’t think we’re there when Home Depot started?

Jim Inglis: [00:09:27] No. You know, when when Home Depot started, it was it was a pure DIY. Do it yourself business, you know, called stack it high and sell it low. That was that was the model. And over time, a lot of things have changed. The population has changed. There’s more people want services and the DIY market is still very important, but so is the professional market. And and then, you know, the next evolution, of course, is the whole digital world with the with the e-commerce and Home Depot. I went through a period where they when they first got involved with the the digital world in e-commerce and they made a lot of mistakes and that the the the e-commerce business was set up sort of as a freestanding business separate from the stores. But they quickly learned that that it’s not a separate business, it’s an enhancement of the existing business. And so what you find today is that is that at Home Depot, they call it interconnected retailing that it’s really well to use the words of of the CEO. The internet’s the front door of the store. In other words, people will start their projects at home looking at the internet. They’ll do their research on the internet. But as they as they begin to put that project together, they want to touch and feel the merchandise, or they need some additional hands on help with their project and some advice or some design, or they need some delivery. And so what you find is that the internet isn’t a separate market. It’s not a competing market. It’s just an additional tool that gets the customer engaged with the business. And while the while the internet’s the front door of the store, most of those people ultimately find their way into the store and and a typical project may go back and forth many times between the physical store, between the call center and back to the back to the to the internet again. So it’s not it’s not two different businesses. It’s one interconnected business.

Lee Kantor: [00:11:35] And but at the heart of it, it’s like you said earlier, this customer centric approach where you’re just trying to serve the customer in any way they want to be served and give them an experience that is memorable and that is reliable and predictable. That’s different than some of these online operators where they never interact with the human being and they’re just buying an item, you know, in order to save 50 cents. But some customers would rather have a human being interacting with them.

Jim Inglis: [00:12:06] That’s right. Well, you know, your internet business, like I say, it’s the front door of the store, but many times the customer needs that, some additional help. So they actually end up as their next step coming into the store. But also, you know, if you look at, for instance, the internet business at Home Depot, over half of the product. That the customer actually start makes the purchase on the internet. They actually go to the store to actually pick it up. So it’s not, you know, the store, the store, the store is, like I say, an interconnected piece of that internet and that customer is is going to get great service. And you know, if you look at if you look at there was a there was a survey by Forbes magazine just very recently and they were interviewing customers to find out what was their attitude toward internet retailers. And they came to the conclusion that that Home Depot was the number one trusted brand for the internet. So you can have a good experience on the internet and you can have a bad experience on the internet.

Jim Inglis: [00:13:13] And one of the things that Depot is doing now is they’re investing literally billions of dollars in the largest logistic systems so that they can provide the best delivery. The other thing that that you realize is that when people buy on the internet, three times as much return goods are done on a purchase from the internet than are purchased in the store because people don’t know until they see it, until they feel it or they try it on or or they buy too and see which one they like. So your returns are three times as much. Well, the advantage of having both the internet and the store is the customer can then quickly and easily bring that back to a store because the stores in the case of Home Depot are very convenient to virtually 90 percent of the customers in the United States. So. So there’s the internet. That’s a very cold, distant internet. And then there’s the internet that’s interconnected with the local store, and there’s a world of difference in service between those two extremes.

Lee Kantor: [00:14:16] Now, is there any advice for a retailer out there? And maybe it’s not an enterprise level, but even a mom and pop that they could be doing right now that could, you know, make a difference in their business?

Jim Inglis: [00:14:28] Well, the most important thing is to understand how does the customer see your salespeople, the people that interact with your customers? Do they see your salespeople as competent? Do they see them as dependable? Do they see them as trustworthy? And do they see them as caring? If they do, then they will take those attributes and they will apply them to your brand and you will become the preferred place to shop the preferred destination store. So it’s so critical that your people believe in your mission. You know, people think, Well, I’ve got to advertise to let people know about my store and my mission and what I do. But the first people that you have to market to is your own salespeople. They have to believe, and if they believe, then your customers will believe.

Lee Kantor: [00:15:32] So the first step is to really get the culture right. I mean, if you have the culture right and the mission is obvious and everybody’s on board and everybody’s rowing the same way, then you have a chance.

Jim Inglis: [00:15:44] Bingo. That’s that’s the bottom line.

Lee Kantor: [00:15:47] So now does that is that the same way in order to create the brand loyalty you need and to be that top of mind provider is that it starts with the people again because that’s foundational.

Jim Inglis: [00:15:59] That’s correct. You know what, what we what we always said at Home Depot was that is that what we expected was not we didn’t we didn’t say, Well, our people are inherently better, but rather we have ordinary people. But they perform at an extraordinary level because they’ve bought into the mission because they believe in the company. And and so what you find is, is that the leadership of the company sets values and demonstrates behavior that creates a culture that is in fact mission driven. And when those employees buy into that mission, you end up with extraordinary performance by ordinary people. And you know, another another statement that I’ve heard is that great people are everywhere, but it’s the culture they are in that determines how they will be perceived by the customer.

Lee Kantor: [00:17:02] Now, do you see a kind of way out of this supply chain issues that we’re dealing with now? Is this something that we’re going to be dealing with for months and months? Or you think that there’s a light at the end of this tunnel?

Jim Inglis: [00:17:15] Where the light might be a train coming at you very fast. It’s a serious, serious problem the the supply of product. Not many of our products are in fact produced outside the United States, and even the products that are produced in the United States quite often use component parts that are produced overseas. And so what we had in the past, we had a situation which the the the smart retailers, the smart companies bought into this whole idea of of just in time management, just in time supply chain. And this was started by the automotive industry that said, Hey, you don’t have to have an investment in inventory. You use just in time supply chain. And that’s been the modus operandi for like the last 20, 30 years. And it’s been taught by every consultant and every every professor that just in time is the smart way to run your business. Well, what’s happened with this COVID situation has proven that, well, there’s a downside to that. And just in time may change to a strategy of just in case. Hey, just in case we better have a Plan B, just in case we better have a Plan C, we better have, you know, diversification we may meet. It might be ideal to buy from all your product, from a company, from Country A, but maybe you should have a backup in Country B or Country C. You’ve got a supplier A that could supply 100 percent of your product, but you better have Supplier B and Supplier C in line so that you can. Have assurance that you can, in fact, get products, so I think the biggest thing that biggest change is going from just in time to a just in case mentality. And I’m not saying by that that we should stop buying, that we should stop having free markets and we should set up tariff barriers like Trump wanted to do and like Biden is doing. I think that’s counterproductive. I believe in open markets, but at the same time, diversity within those markets.

Lee Kantor: [00:19:43] And do you think that that’s going to cause maybe an increase in manufacturing in areas that there weren’t manufacturing before in order to kind of be that Plan B and Plan C.?

Jim Inglis: [00:19:54] Absolutely. I mean, today you see a lot of a lot of manufacturing is moving from China into Thailand and to Cambodia and to Malaysia. Yeah, you see, it’s already happening.

Lee Kantor: [00:20:08] Sometimes the market, kind of when they have the most to lose, they’re the ones who take the most action.

Jim Inglis: [00:20:14] Well, that’s right, I mean, and all of. You know, a problem is, is the is the mother of invention.

Lee Kantor: [00:20:24] Well, congratulations on all the success. The book, though, is written for the people in retailing is that the the market for it or anybody in business would learn from some of the things that you went through in your career?

Jim Inglis: [00:20:37] Well, the book is is actually a very large book. The book is over 400 pages, so this is this is a typical business book is about half this size. So this is a big book and and the reason it’s really two books on one. The first half of this book is the history of Home Depot. How did it get started? Who started it? How did it get started? What did they do that that that changed the marketplace? And how did they become the largest company in the world? How did in home improvement retailing? How what problems did they come through because they went through some very dark periods as well? And and then, you know, how did they how did they right the ship and and continue the incredible growth they’ve had? So it’s a great it’s a great history story. And how many people are involved with the Home Depot? Well, all the people that work there, all the people that sell the Home Depot, all the people that buy it home, people. So anybody who’s interested in the story of Home Depot, that’s the first half of the book. The second half of the book is as as as I mentioned earlier, I’ve been teaching other retailers around the world how to emulate Home Depot, and in doing so, I developed 10 principles that each company needed to understand and needed to implement to be the dominant retailer in their own market. And so each of those 10 principles is a chapter in the book, and that constitutes the last half of the book. So the first half of the book is a history book. I think it’s an interesting history. And then the second half of the book is really the principles that that you can apply to create a high productivity retail business. And of course, that business doesn’t have to be in home improvement. It could be in any business because the principles are universal.

Lee Kantor: [00:22:25] Well, Jim, thank you so much for sharing your story. If somebody wants to get a hold of the book or get a hold of you for some consulting, is there a website?

Jim Inglis: [00:22:33] Yes, it’s breakthrough retailing. One word breakthrough retailing.

Lee Kantor: [00:22:38] Well, thank you again for sharing your story. You’re doing important work and we appreciate you.

Jim Inglis: [00:22:42] Thank you, Lee. I appreciate the opportunity.

Lee Kantor: [00:22:44] All right, this is Lee Kantor. We’ll see you all next time on Atlanta Business Radio.