Retail Rundown – May 04, 2020 – with Ilan Tito and George Minakakis

Julia Raymond:
Today we’re joined by guests, Ilan Tito and George Minakakis. Ilan is a partner at Chameleon Collective, where he specializes in eCommerce and merchandising, George is the CEO of Inception Retail Group, where he works with private equity firms on portfolio companies in the consumer space. Both guests today have significant direct experience in executive roles for large retail companies. I’d like to thank you for joining today.

George Minakakis:
Good to be here.

Ilan Tito:
Happy to be here.

Julia Raymond:
Great. So the first bit of news we’ll talk about is Google’s announcements. So recently, to help merchants better connect with consumers, Google has made it free to sell on its shopping platform. This is huge news launched last week, and search results on the Google Shopping tab will now consist primarily of free listings, regardless of whether the merchant advertises on Google or not. Google Shopping also kicked off a new partnership with PayPal to allow merchants to link their accounts, which will speed up the onboarding process and allow merchants to start selling sooner. Ilan, I wanted to pass this to you first. How will access to a free selling platform helps small to midsize businesses during this pandemic and beyond? Or will it not? Do you think there’ll be quick adoption?

Ilan Tito:
I do think there’ll be adoption. So I think what essentially Google is doing is trying to eliminate all friction from the onboarding process for new merchants. So people that haven’t tried it in the past, so if they have a PayPal account, they can easily get on that way, they can sync up their inventory and manage it through Shopify. I believe they have other on become platform partners as well, and making it free is, of course, greasing it even further. So they want to get as many as they can onto their platform. They want the data to be as up to date as possible in terms of product information and inventory.

Ilan Tito:
From a merchant standpoint, it’s interesting, because the listings are not all on page. So they’re still going to be promoted products in here. So presumably, of course, those are going to be front and center. So it’ll be interesting to see what organic really does and how it performs in this context. As a particularly a small business and now, given the time we’re currently in, it could be interesting to test things out. So there’s no cost, very little barrier now, so see how products do, see what the ROI potential could be and then put some advertising money behind that too to promote it. So I think that could an interesting way to move on it now that kind of other barriers have been lowered. But ultimately, this still is, I think, an advertising play for Google, and then there are other ramifications from a competitive standpoint. But really as far as the small to medium-sized business owner, it’s an opportunity to get on and learn.

Julia Raymond:
George, do you agree it’s a bit of an advertising play for Google?

George Minakakis:
Definitely. I think when you look at the whole category of being online, COVID-19 has opened up a door, tragically opened up a door. There are a lot of retailers out there shuttered, some of them are going to need a lot of help, and this is a great opportunity for them. Now, I’m quite blunt about these sort of things. Not every business is going to survive. Everybody may try it, but the survival rate today is questionable for a lot of retailers, small and midsize, as they come out of this.

George Minakakis:
But at the end of the day, yes, Google definitely, this is a great play for them. Amazon has been dominating for some time. It’s a different venue. I really question Amazon for on a lot of levels. When you look at the consumers and their reactions to online shopping, integrity of a seller has always been in question. So Amazon has always been criticized for that as of late. I think this is an opportunity. If Google is serious about this, other than just the advertising, is what are you going to do to improve all of that?

George Minakakis:
Ilan was talking about frictionless for the retailers or sellers. Well, it has to be frictionless for the consumer as well. And that trust factor, it’s so important today. Because you’ve got a lot of trial happening right now. I saw some stats that suggested the US is currently at 15% e-commerce, it can go to 25, maybe 30. Well, that’s doubling down on that pretty quick. So clearly, it’s a great capture or a great entry for Google to capture part of that, because not everybody’s going to jump into Amazon. I think I saw something that Amazon gets about 50 to 60% of the initial searches. Well, that leaves-

Julia Raymond:
Right.

George Minakakis:
… low hanging fruit for Google. Being a search engine, a powerful search engine, I think that they’ve got a good opportunity. But let’s see how good they become at this.

Julia Raymond:
I think that’s a great point. But will it be enough? You said, the competitive advantage could be creating that trust for customers that Amazon has missed out on a little bit. Is there any other competitive advantage you can think of aside from the fact Google has been around much longer?

George Minakakis:
There is, and it has to come from seller, the retailer themselves. How good are you going to be in supply? If you do some searches on Amazon, I think our Ilan would admit some of them, you could be three, four, six weeks before you see a delivery of something. Well, I think that somehow you need to clean that up. If you’re just throwing product out there and you’re ordering it from China or somewhere else and whenever you get it and you ship it out, that’s a problem. That doesn’t create a lot of trust.

George Minakakis:
What drives this is convenience and speed and the accuracy of the order. All of those things is that something that Google is going to have to get right with their merchants. I’m not sure what standards they’ll have in place, but someone’s got to put standards in place to this if you want to win in the end. If Google and Amazon are going to compete against each other, I’m sure that’s what Google wants, you need to be the better player.

Ilan Tito:
From a competitive standpoint, to me this is like a direct frontal assault on Amazon. The timing of this is very, very deliberate. So Google has a very long history in product search, going back I think 20 years now, with Froogle, I believe that was their first kind of foray, and it started off free. And then they combined paid with it, and bottom line is consumers prefer organic results. So if you look at Google’s ecosystem, basically less than 10% of clicks are paid for. I think around half of them are actually not clicked on, half of search results.

Ilan Tito:
We’ve seen what Google has done with content, and I think the reason that penetration of no clicks is so high is because they’ve brought all the content onto the search result page, and the traffic that used to go to the publishers and other sites, they’ve kept. They have not been able to do that with commerce, and that’s gone to Amazon. George’s point of 50% plus or 50 to 60% of products are just starting on Amazon, Google lost that. They let Amazon really build that and take that away from them and so they want it back.

Ilan Tito:
This, I think, is their way to do it in a time, right now, where consumers are probably frustrated with Amazon or the most frustrated, say they’d ever been in the last number of years. Amazon shifted to really prioritizing essentials. They’ve shut out a lot of, especially, small businesses that have shipped “non-essentials” and so you can’t even get a lot of that or it’s very long lead times. So they’re capitalizing on that built up frustration, trying to regain market share effectively that they’ve lost.

Julia Raymond:
That was a good point you made about less than 10% of clicks being paid for. Seems like they’re missing out a little bit on some possible revenue, so we’ll see if they recoup that. Do you think, Ilan, consumer intent will… they’ll start their purchase on Google versus Amazon or is that something that will take years to get people to switch?

Ilan Tito:
I don’t think it would take years, but I also I think, to George’s point in terms of tools and the experience, they’ve got to make it better for the consumer in terms of the shopping experience. Part of that is inventory and the catalog, that’s more relevant. So maybe more of the long tail, more about discovery, more interesting things and then capitalizing on what Amazon is not good at. Amazon’s got a huge amount of strengths, but they’re not going to always get over 50% market share. That’s just not sustainable. So I think this is starting to chip away at that. Google is certainly able to really focus on the consumer need, and we’ll see if this is the first wave in that respect. But I think if they do, I think consumers could shift very quickly.

George Minakakis:
Yeah, you’re right. Google has the biggest opportunity they have to become that one stop shopping solution. So if they can pull that off and convince the public that does the searches that that’s a great place to be, they’ve got a good shot at it. But it’s going to take a lot of innovation and adapting to the merchants and to the people who are shopping. Because right now, I see that the public, like I said earlier, they’re experimenting. Anyone who has never shopped before online is trialing it right now, and that experience is going to determine what happens next.

George Minakakis:
But once they’re back out and shopping with a little more ease and comfort, if Google’s done a good job upfront and retained customer base, then you get traction. But without that opportunity being… investing in time and innovation right now, you could lose that opportunity. So it’s theirs to lose. It’s Google’s to lose right now. Amazon will be Amazon, and I don’t think anybody’s going to be able to change. But it’s a good opportunity for Google not to tap away just from Amazon but from others also.

Julia Raymond:
And perhaps create more visibility for the sellers around the data? Do you think that they’ll compete directly with Amazon there since that’s been an issue for them?

George Minakakis:
Yeah. You know what, it’s a good question. The other question that I have to add to that one is how many of these sellers will be both on Amazon and on Google? Playing both sides.

Julia Raymond:
Right. Why not?

George Minakakis:
Right? So I don’t know what that number is going to look like, but I anticipate… But then does Google start to favor and does Amazon start to pay for those that only participate and are loyal to one outlet or one online platform versus multiple? So that could change things too.

Ilan Tito:
I think that there are also few platforms that are starting to come into the mix, which are also going to be a threat to Amazon and potentially Google. But Instagram going… a social network trying to get into shopping directly. Shopify just announcing that app, which they formerly used for order tracking is now shifting into multi-brand commerce, and essentially it’s checkout for all Shopify sites. So I think there are a lot of aggregation plays, and we’re going to see more and more of that in this time period.

Julia Raymond:
Aggregation plays, more consolidation maybe. It’s interesting because I just have one last question I wanted to throw out there. Because when we hear about marketplaces, the top three, it’s Amazon, Tmall, Taobao, they’re accounting for two thirds of the $2 trillion GMV. But there’s other marketplaces out there. Do they stand a chance, especially now that Google’s entering the market here?

George Minakakis:
You know what? Competition is healthy. It’s always healthy, and there’s always a winner and a loser in this. So I think time will tell. But again, it comes back to, how do they innovate further? How do they adapt to the broader competition? Look, Google is a big dog. They’re coming into the play and they’re not coming in small. They are starting fresh, so you don’t have… it’s not like you don’t have to worry about them, so they don’t have to get another big dog on the street that they need to compete against. My view is there will be fallout, question is who. Whoever doesn’t enough deep enough pockets to invest in innovation and grow to and adapt, I think that’s where the failure would start.

Ilan Tito:
I agree, but I think there’s definitely room for opportunity, especially in niche, plays and we’re seeing a lot of success there. Look at the sneaker market, look at used clothes or vintage or whatever term you want to use to describe it. But all the sites are really doing well now, they have been and it’s accelerated now. So I think if you really target, if you have a value proposition and you’re focused on really serving a consumer with that value proposition, there’s always opportunity for them.

Julia Raymond:
After a rough month of March, the online sales of apparel and North America and Europe are getting back on track. Online fashion sales in the US fell 30% year over year during the month of March, largely due to the COVID-19 pandemic, according to a report by Nosto.

Julia Raymond:
Fortunately though, the US is an increase of 24% for its April 2020 online fashion sales. When we look at the UK, they had an increase of 34% in the month of April and France on increase of 57%. Germany is also seeing some of the highest increases in year over year visits, sales and conversion rates, but also has the biggest decrease in average order value. Sweden is seeing decreases across the board, unfortunately, with conversion rates and AOV’s sliding in the month of April. So to round this out, just last week, the French prime minister said that nonessential merchants could open beginning May 11th, while smaller shops in Germany were granted permission to open May 4th. George, do you think year over year increases in online fashion sales are attributed more to these irresistible deals retailers are having right now, or is it consumer settling into a new life at home?

George Minakakis:
Well, I think it’s maybe a little bit of both happening here, not just one. But they are settling in at home and adapting. So bringing my old world back to the present… It takes about 30 to 60 days to shape new behaviors. So when you think about that, we’ve been… Depending on the country, here in Canada, I think we’re at day 42 of what I call isolation, and Europe has been longer. So with that, those shaped behaviors very quickly. If you can’t go out, you’re shopping online. I hear a lot about how that’s shifting.

George Minakakis:
What you’re going to see when more numbers come out, you’ll see that online fashion has been growing as a result [inaudible 00:18:28] because those fashionistas out there, they want to buy their fashion. So they’re still buying it online, offline, they’re going to do it. So you’re seeing that. The challenge going forward is, can they hang onto that as retailers open? I believe that the percentages that you’re starting to see in e-commerce, I don’t think they’re going to erode that much, because we’re still going to be in an era here where people have to wear a mask, they may be wearing gloves, maybe in queues, social distancing.

George Minakakis:
If you don’t mind me saying so, I just did some research around a 2,000 square foot store and the dynamic of building out a store like that. You’ve got 70 to 80% of the square footage going to a back room, change rooms, display cases, merchandising and cash wrap. Well, that leaves you anything from 30 to 40% of the retail space to deal with customers. If you need two meters, in European metrics, two meters of distancing, that’s two square meters. So that’s a lot of space.

George Minakakis:
You’re running into each other in a retail store environment, that that’s tight. If you’re sensitive to that, e-commerce becomes even better for you. So you may go into a store to browse, you’re not going to shop, and you’re going to go back online and you’re going to shop from there. That’s how I see this change happening. What happened 10 years ago when we started with the term showrooming, I think it’s going to come back and full force here, because consumers are not going to be comfortable knowing that retail space is tight.

George Minakakis:
Larger retail spaces may give you more comfort, but e-commerce, I don’t see that, for fashion, eroding anytime soon.

Julia Raymond:
Right. Ilan, what do you think? Especially to George’s point, it takes 30 to 60 days to have new behaviors. Do you think these are sticky behaviors, and we will see, what George saying, some more showrooming that will come back things like that?

Ilan Tito:
I think I have to aggregate what’s going on in terms of the blip. I think it’s a combination of a bunch of different things. First of all, for omnichannel retailers, it’s offline sales moving online. So you’ve got to understand what’s really incremental versus just a shift in channel. Then I think there’s genuine new demand for, call it, more pandemic relevant categories. So whether it’s stay at home wellness, lounge wear type stuff, that’s definitely getting an increase, and that part is a good part temporary, maybe from a wellness standpoint and other things. There could be lags or long longevity.

Ilan Tito:
And then there’s all the discounting that’s happening. So discounting, that’s conditioned behavior, so discounting stops, the sales will stop. There’s probably, unfortunately, going to be discounting that will be necessary for a long time with all the excess inventory and shipments which never really hit stores and that, so it’s going to be a good 12 to 18 months of kind of Black Friday every day, I think. So I think the challenge is to tease all that apart and really understand what is new demand, what’s incremental versus shifts and versus temporary.

Ilan Tito:
So I think some of it can certainly be longer term, I think the overall penetration of e-com will increase and this will accelerate. It has been increasing, this is just going to be an accelerator. The store experience will also be very different, I think, longer term, and there will need to be adaption the 30 to 60 days. I think we’re going to be continually doing that even when people are off of lockdown and going out. It’s going to be a completely different shopping experience, and that’ll change and have to be adapted to both from the retail side and the customer standpoint.

George Minakakis:
How does a retail brand that does both really well, how do they survive that discount world in a physical world where the cost is substantial to operate and you’re dealing with less traffic? People don’t go in shopping by themselves, they… sometimes it’s a group of two or more. Now, how do you that’ll play out?

Ilan Tito:
It’s really a challenge. Just looking at how some brands and retailers have tackled it, some of are literally holding their shipments to next year. Not many people could do that, especially fashion. So that’s one way to tackle it, don’t sell. Temporarily remove the supply. But the reality is that’s not going to be feasible from a number of standpoints for the vast majority. So I think you have to try to be as intelligent and isolated as possible about it, and you don’t do it on a global level to everybody; you try to communicate super well about it, what is discount and the fact that this is now and what the reasons are for it. You don’t do it across the board, and maybe you do it in different ways.

Ilan Tito:
Brands have been doing this for a while with flash sales and using some brands online as more of a discount channel. But I think you just have to really think about all your different outlets and what you do. Especially now as econ penetration is growing, marketplaces are becoming more relevant, international marketplaces are becoming more relevant, I think it’s just… it’s taking a lot of time to be much more strategic about it. But I think it’s inevitable that it’ll be here for a while.

George Minakakis:
I want to add something to that too, is that we know that there are a number of retailers out there right now who were closed and they are planning bankruptcies, their own bankruptcy, and restructuring. This is an opportunity for them to exit out of bad situations or over storing. Whatever the outcome is for each of them, I do believe that much of that is going to play out in their favor by being able to move more volume to e-commerce.

George Minakakis:
I think retailers are in for some interesting challenges right now.

Julia Raymond:
That’s a good point, moving volume to e-commerce might be one of the only options left for some retailers. When it comes to luxury category, is the only option for them to discount when traditionally they would rarely, if ever, offer discounted product?

George Minakakis:
Because I have been there. I think luxury will slash their wrist before they discount. Look, when I lived in China, I’d go into the luxury stores, and you don’t have a Chinese bought. Everybody had a brand, a favorite brand, everyone. For the most of them, it was a tee shirt. They wore their brand, they did. But I think that what you’ll see is maybe they’ll create some lines that are more favorable in price, but I don’t see them discounting. I think that would erode their brand and that would be going down the pericardium path, and I think that’s suicide for them.

George Minakakis:
What they’ll have to do, they’ll have to take their experience much higher and they’ll have to take that e-commerce experience much higher. So if you order something, what other goodies have been placed in the box when you receive it? It’s going to be those element of surprises that get the luxury consumer excited.

Julia Raymond:
Wow. I haven’t thought about that until you just said. That sounds like an interesting idea.

George Minakakis:
It’s going to have to take that path. I really believe that they’ll be more successful giving something away versus giving money away.

Julia Raymond:
What do you think, Ilan? Do you agree?

Ilan Tito:
Yeah. Talking to luxury, they’re not going to come out discounting because of this. So it will, as George said, go into, how could the customer be delighted, serviced in a different manner? The big luxury groups have balance sheets and can withstand probably this for a while.

Julia Raymond:
We won’t see any Chanel bags at TJ Maxx unfortunately.

George Minakakis:
Really, really well then.

Julia Raymond:
Right? Uh-huh (affirmative). Yeah, that’s true. So I wanted to switch over. When we talk about being customer-centric and offering great experiences on e-commerce, that’s important, but we’ve also seen some interesting moves happen in-store. So there was an announcement recently from Best Buy. They shift to curbside pickup model during March and April, and they just announced plans for allowing customers to schedule one-to-one in-store consultations in about 200 of its US stores. So the electronics retailer will assign an employee to shop with each customer while staying socially distanced, and Best Buy employees will wipe down any products the customer wants to try, before escorting them to the register and later out of the store.

Julia Raymond:
I also want to mention that curbside pickups surged a whopping 208% between April 1st and April 20th compared to a year ago in the US, that’s according to Adobe analytics, and curbside pickup saw its best numbers during the 2019 holiday shopping season, yet questions remain whether the trend would carry on into the off-season. We’ve seen it has. So Ilan, I’ll pass this to you first. I’ve seen small local boutiques doing this, where they offer the one-to-one consultation, but not a major retailer. So is Best Buy going to be able to scale this effectively, yes or no?

Ilan Tito:
I think they can. I actually really like the model. Basically, they’ve been turning more and more into a showroom to begin with. So they’ve been one of the very, very few on the electronics front that’s actually been successful offline. So I think this, if done right, could really underscore their value proposition and really bring their expertise and product knowledge and service to bear, and they’re effectively doubling down on it. That being said, they have to adjust their cost structure and to staff appropriately and probably also their assortment and how they think about their assortment.

Ilan Tito:
Because ultimately, from a scalability standpoint, what they could do in theory is you have lower priced items and a certain part of their assortment, which is only bought online or pick up in store. You can make appointments to go see a CD, for example. And then everything else, like the higher ticket items or above a certain threshold, you make an appointment for it and you get special personal service. I think that could be a really interesting model.

Julia Raymond:
To help offset the costs?

Ilan Tito:
I think beyond the cost mitigation, [inaudible 00:33:14] cost mitigation that needs to be done, but I think that that’s just an opportunity. I think that that’s just a more relevant model certainly for now and coming out of the pandemic. But probably even for the last few years, that’s a more relevant model than just a big box retailer.

George Minakakis:
I agree. The interesting part about this is that… it hit the nail on the head, is that Best Buy was the first to respond to showrooming, and they did it very well. When everybody else was scrambling, trying to figure it out, they responded. They’ve just basically taken this to the next level. Now, in all fairness, having come from a very full service environment.This is personalized selling and this costs you money. It takes a lot of time to go through this exercise. So you could be with a customer… Where in the past, somebody is walking by an aisle, you can just direct them to where it is and you leave them alone to shop, but now the idea is in appointment, you’re going to take care of all their needs, you’re going to ask a lot of questions about lifestyle and what they’re looking for and what they need it for and you’re going to try and upsell them and add-ons. That’s an exercise and it’s skillset. As Ilan said, these skill sets here, they need to be developed.

George Minakakis:
It’s scalable, yes, over time, but to develop those skill sets takes a lot of time and it could mean very different hiring practices as well, because it’s… I’m not going to say it’s car salesman, but you may have to hire from a luxury retailer or a premium retailer who does a lot of personalized service to get that. But the bridging between e-commerce and the physical store, it’s a great way to do it. Hopefully, a lot of other retailers will pick up on this and recognize that it’s a great opportunity to grow your revenue over time.

George Minakakis:
But once you’ve built that relationship, it’s a matter of trust. Because I’ve used a Best Buy’s home service where they’ve come in and evaluated things, and it’s great. They train each other. So two people show up and they train each other. One will train the other while they’re doing the work here and trying to sell you on products and services. So basically taking that model and extrapolating it into their stores. But I think the capital… It’s an investment, and you have to do a lot more selling with each customer too, because if that’s your model, you need to do a lot more selling with each transaction in order to make it pay out. So we’ll see how they make that work.

Julia Raymond:
Is it sticky?

George Minakakis:
Yeah. I think if you do it well, absolutely.

Ilan Tito:
I think it’s much stickier than not doing… You’re building a personal rapport. It’s going back to kind of a personal shopper type relationship. That really instills loyalty if you do it correctly. One other consideration, a big one, is just the footprint, the store layout would need to totally change. The real estate would need to be reevaluated doing this at scale [inaudible 00:36:39]. You don’t need the same size, it needs to be more like a living room or just a more lifestyle oriented. So really everything ultimately would need to be rethought and reconfigured to do this at scale, but they have some time to test it out and they need to.

George Minakakis:
Yeah.

Julia Raymond:
So almost like you’re walking into someone’s living room and you can see it, you can visualize this new entertainment system more easily in your house, or whatever it is. Do you think they might take a path like that where the store is divided into small sections? Is that what you’re thinking?

Ilan Tito:
Yeah. Something along those lines. Also, AR on top of it could be super interesting and also [inaudible 00:37:27]. Maybe even going into VR, the e-commerce to the store experience and you really utilize each channel for what it could do best. So certain things could be done, I think, effectively layering on AR or maybe certain things virtually. Just what work and what would be enough to sell or make a transaction online. But then ultimately, certain things need to be experienced, like to hear the best quality speaker or certain things that you just absolutely need to experience. That’s when you have these personal shoppers to take someone through it and make an appointment.

George Minakakis:
Who else better to do it than Best Buy? With everything else that’s happened to retailers over the last decade, they bounced back, they made the right choices and they’re making the next innovative move here as well. So who better than an electronics firm to be able to pull this off with that level of technology. Maybe somebody comes in with their layout of their room and they draft it out and they put AR on them or VR and show them how it’ll look. It’s unique. But that experience has to be unique, otherwise… I think if it’s just one-on-one only, everybody can copy it. So it’s not just Best Buy that has an advantage, but if Best Buy leverages technology, like Ilan says, then all of a sudden you’ve got a great play model.

Julia Raymond:
Are there other categories where this would fit well, aside from electronics?

George Minakakis:
Restaurants could use it. They need a lot of help. I don’t know. I think there are opportunities. Furniture stores definitely could play it out that way, appliance stores, but… Best Buy dabbles in that, although I don’t think they should. They should stick to electronics that they’re doing. But there may be some… Again, in terms of the overall service, yes. What small boutique stores, to me, definitely. There is an opportunity there. I want to mention, but as I mentioned earlier, you’ve got such a small footprint to deal with. Personalizing it gives you that advantage of being able to close a sale and bringing customers in. That way, you’re not just dealing with browsers, then you’re dealing with customers who are actually looking to buy. That’s an important step, an advantage that you can create.

Ilan Tito:
Yeah, I agree. Fashion definitely could be done, especially at the higher end. The higher the AOV, the more conducive. But if you look at what Reformation has done with their stores, you really can make appointments, really spend time helping someone shop and also understanding what they don’t want to speak to someone about, understanding their size, the whole magic mirror bit and then giving them a real elevated luxury experience in the stores, or a lot of the men’s brands doing it on the men’s side in terms of clubhouses or different terminology of… Essentially, it’s a bit of a showroom of with a personal shopper interlaid on top of it. So a lot of the digitally native brands have been doing it as they’ve opened up physical manifestations. So I think it’s reevaluating it, but doing it for everybody.

George Minakakis:
The only other point on this is cost and the price that the consumer is willing to pay for this level of service. Again, you get the social distancing piece that you have to play with it and depending on the square footage of the location, Best Buy may be able to get away with it because of their current space, but a lot of other retailers can’t. So you’re minimized in terms of how many customers you can deal with at one time. So you need to drive that transaction, because if you’re dealing with less traffic, or is it your experience and your product line and your service good enough to pay more for? That’s going to be a big challenge. Because if you’re just working on the same average sale and low transactions that you currently have, it’s great as a conversion tool. But if it’s not growing your revenue in this environment, it may not be any better.

Julia Raymond:
I was speaking with a couple of retailers, I know top of mind for them when it comes to reopening the stores, is how do we make it feel somewhat normal again? Perhaps this is one of the solutions, because you don’t go in and see a bunch of people wearing mask, with a gate at the door for how many people can be let in at a time and things like that. Are there other ways you think retailers could make it feel closer to normal when reopening occurs?

George Minakakis:
You know what? There is one way. It’s an ethical issue. It comes down to, if we believe that anybody who’s had the virus is indeed immune and can’t spread it, then hiring or just scheduling people who’ve already had it becomes an easier way to make things normal in the store, at least halfway normal. I know it’s being discussed with different governments offering to provide employees with a certificate or a card that they’ve had the virus. It’s an ethical issue. It becomes an HR issue, it becomes a human rights issue. But if you’re looking that to make it that simpler environment that the public feels more comfortable in, that’s one way to do it. I’m not quite convinced it’s the right choice, but it is… I know it’s being kicked around.

Julia Raymond:
That’s an interesting one.

Ilan Tito:
I think the other issue is the definition of normal. I think that changes, and I think that there’ll be a permanent change to that. So safety and cleanliness will be top of mind, I think, for a very, very long time, and I think it becomes incumbent on retailers to make it clear here that their environment is safe and clean and got to communicate that in a very, very clear and non-threatening way to the customer. I think that becomes the new normal. So that just has to be incorporated, I think, into things for the foreseeable future.

George Minakakis:
Ilan, I agree with you a hundred percent. But the challenge for the retailers, depending on how much merchandise you are displaying and what kind of retailer you are, as those browsers or shoppers come in and touch things, how quickly can you clean and sanitize things? I think that’s such a challenge as well. It’s not your employees who have touched it, it’s your customers who are touching things.

Ilan Tito:
Yeah, completely. I’ve been thinking a lot about this and then just reading too, but you can go to crazy extremes. But clothing, for example, you have disposable clothes that could be used for sizing and you don’t let anyone touch anything else, and you have touchless payout and… It could be done. It really could be done, it would just require an inordinate amount of change.

Ilan Tito:
The thing I’ll say is, this is a time classically of innovation, when things are really ugly. If you look back historically, some of the most innovative companies are really born at this time. So I am confident that the minds in this country, in this industry and beyond, globally, will come up with interesting solutions to really address everything.

Julia Raymond:
Absolutely. I’ve seen the memes going around: Facebook, Pinterest, all of those companies we know and love were developed during the recession around 2008. So I think there’s hope. George, Ilan, thank you both for joining today. I really appreciate your time.

George Minakakis:
Thank you.