Making Space – Real Time: A Bed Bath Mash-Up, Dick’s House of Sport & A “Back to Starbucks” Review

Foreign.

Welcome back to Making Space Real Time.

I'm Chris Neeson.

For most brands, the store is where everything they say about themselves finally shows up.

And it's where they get judged fairly or not.

That's why I spend so much time walking stores and it's the thread behind everything we do on this show.

A few interesting stories seen from the floor with a guest host.

We'll come prepared and hopefully react to each other's perspectives in real time.

Sometimes we'll agree, sometimes we don't.

And that's part of the fun.

Making Space Real Time is presented by the association of Retail and Consumer Professionals in partnership with Omnitalk.

So for this episode, I had a guest fall out last minute.

And to help me out here today, Chris Walton is once again jumping back in to help us make another episode of Making Space.

So, Chris, I want to welcome you back for your third rendezvous on Making Space.

Thanks, man.

Yeah, it's like the guy.

It's like Godfather Part 3.

This is my third episode with you.

The more I try to get out, the more you pull me back in, Chris.

But I'm glad to be here.

It's fun.

Yeah.

It's either you can't get rid of me or I can't get rid of you.

I'm not sure which one it is.

Yeah, yeah, yeah.

It's a codependent relationship at this point, right, Chris?

That's the best way to put it.

I think so.

Yeah.

But hopefully we'll be able to move beyond the codependency pretty quickly here.

But yeah.

Thanks again for hopping in to help me out.

Oh, wouldn't miss it, dude.

Wouldn't miss it.

This is actually my favorite show to do every week now it's becoming my favorite show even though I'm probably not going to be doing it as much in the future.

But like, I really enjoy doing this podcast with you.

Yeah, we'll watch what you say.

Right?

Very nice.

Before we get into today's stories, I'd like to start by welcoming outform as our sponsor, helping to bring today's podcast to you.

Outform is an award winning global innovation agency transforming customer experiences through technology and creativity.

You can follow Outform on LinkedIn at www.LinkedIn.com company outform as they shape the future of retail.

So thank you to outform.

All right, Chris, how do you say we get into this?

Oh, I think we should, man.

Congrats on the sponsor already.

That's awesome.

Huge news for you.

Yeah, that's wonderful.

Outform's been great to work with and we're excited to have him on board.

All right, so today we're going to discuss Dick's House of Sport both as a testing ground and a shop in shop story which are both key to the format's success.

We're going to talk about Starbucks which is closing 250 more stores and that's getting the headlines.

But I actually wanted to dig into what's happening with the stores that they're keeping.

But we're going to start today with a mashup and who doesn't like a good mashup of three home brands under one roof?

The Container Store, Bed Bath and Beyond and Kirkland's.

All right, so here's the quick drop on the backdrop on the Container Store, Bed, Bath and Beyond and Kirkland story.

The setup is and I think many will be familiar with this because there's been a lot of news on this in recent months, neighborhood intelligence.

I love the name.

The former Bed Bath and Beyond Inc. Now has Kirkland's in the Container Store under one everything home umbrella.

Here's the pitch.

One visit for any home project with goods mixed by room solution instead of side by side.

The first of these co branded stores opened in Fort Worth in May.

There were 22 more conversions that followed quickly in June.

And their goal is to have about 100 done by the end of year.

The goal, and this is something that I found really interesting is that they want to lift their per square performance per square foot performance from $220 per square foot today to $500 per foot by the end of a two year period.

So a pretty lofty goal.

And as I was preparing for this episode, more news broke.

Their CFO Brian LaRose resigned after six months enroll and they said they were bringing on an interim CFO who is going to help speed up their integration.

There's a lot to digest here, I would say.

You're telling me.

Yeah, well said, Chris.

Well said.

Yeah.

Quite a, quite a bit to digest.

Yeah.

So I did what I always do.

I'm going to I headed out to one of the stores and we had one of the stores that converted in June, or at least that's what the press release said.

And as I visited the store I started to question whether or not it actually started in June.

But let's, let's get into that and we'll start with what I saw.

So you know, I'm standing outside the store.

I actually got there a bit before it opened on a Saturday morning.

And to me it still reads as Though it's a container store from the parking lot, I don't know that you would know that a whole lot else is happening.

Now, as you get closer and walk up to the front of the store, you start to see some window decals and other signage that starts to hint at Bed, Bath and Beyond.

There's a large replica coupon that Bed, Bath and Beyond is famous for as soon as you step inside.

So you start to realize that Bed, Bath and Beyond is definitely part of the equation.

But as I walked into the store, I was very surprised to say I didn't feel like all that much had changed, really.

The format itself felt like it was very, very similar to what I had seen in the past.

Now, there were some bright spots with them not changing things.

Things like closets, office supplies, kitchen.

They were all roughly in the same spot where I had found them before.

They were highly organized.

The planograms were fantastic.

They were highly in stock.

So there was a decent first impression.

But I didn't feel like they had done all that much to actually deliver upon some of those early promises that I mentioned about room solutions, things not being side by side.

And so I wanted to dig into those a bit and then begin to see how you think about it.

If you've seen the store yourself, the first thing I'm going to talk about is this might have been one of the more operationally strained stores I've walked this year.

Now, keep in mind, I'm getting there right as it opens.

So there is potentially a transition period from opening to maybe an hour later.

But there was no way they were transitioning out of what I saw.

If I had to guess, there were 500 to 700 boxes of freight sitting on the sales floor, and they were everywhere to the point that certain parts of the business were not navigable.

I would think that Alpha would be core to their business.

I felt like I was doing the 300 meter hurdles, trying to get into that space, but getting over and around and, you know, moving through different things.

And so I, I'd start there.

I'm, I. I'm not quite sure what was going on.

You can ch.

Sometimes you can chalk up a visit to say I got there on freight day and I just caught him at the wrong moment.

But this is the kind of thing that it felt like those boxes had been there for a long time and they were part of the fixture package because there were simply so many of them.

When did you go, Chris?

When did you go visit the store?

Because I went yesterday, so I'm Curious.

I was there about two weeks ago.

Two and a half weeks ago.

Two weeks ago, yeah.

Well, it hadn't changed.

There were still that many boxes on the floor.

So it wasn't like they were working through freight.

They're working through a remodel.

I bet, I bet inside the store is how I'd, how I would characterize it based on knowing that there was that gap in terms of when we both visited.

Yeah.

That's interesting because, you know, this was described as a June conversion and here we are, October.

And you know, I even talked to one of the associates and I'm like, oh, you got a lot of freight on your hands.

And she just kind of smiled and giggled and said, yep.

And like it's sort of like, like, sort of like this is our run state.

This is what I've been dealing with for the past handful of months.

And so we, we got some problems on our hands.

Yeah, yeah.

It's like, it's like telling Gorbachev he's got a birthmark on his head.

You know, it's like, it's like the same type of idea.

Like, yep, it's there.

And they don't, they're just like, we're dealing with it, we're doing what we gotta do.

Yeah.

So, you know, beyond that, the layout, you know, they, they talked about room solutions and I just don't think that there was all that much done to actually change the layout.

I mean, bedding, which is now a larger part of the assortment, sort of was hidden behind a seasonal wall.

Laundry and cleaning, you know, next to trash.

And I'll say that trash, like trash cans and those kinds of things still had a pretty prominent placement in the store.

You know, so I think about what I saw and I had two recommendations and there's.

I wanted to talk these through with you, but, um, the first one is I mentioned ELFA before and I mentioned the closet solutions that they have.

My entire home is outfitted with Elfa.

So, you know.

Oh, really?

Yeah.

Now this is 15 years ago, but I mean, every closet we have and they've been a wonderful solution for us.

I walked into each of those spaces.

You know, they've got a walk in closet, an office space, a pantry, you know, they're all set up and so you can see the space itself.

But there's not a single hint of visual merchandising done to try and actually inspire the guest to think about what this could look like.

In my actual home, there was a walk in closet with about 40 linear feet of Wall, I would say.

And they had staged one handbag, one pair of shoes, and two empty storage bins to show the customer what the space could actually look like in their building.

And so it's possible this was a work in progress, but every single space looked like this.

There was just not a bit of inspiration.

And so that's one place that I would start.

The second thing that I would do is the custom spaces studio is still sort of off to the side.

I would bring this to the center of the store and actually center your entire experience around this design hub to help showcase to people what's possible in their space.

Just right now, again, we saw a ton of cardboard boxes.

There's a lot going on.

I think there's a lot more that could be done to actually begin to inspire the customer that's coming into the store.

And I think what I saw is probably doing the opposite of inspiring the customer.

So I'd love your reaction to what I just shared.

I'm curious if you feel that the three brand stories can really share one footprint, um, and how it sort of came to life for you.

Yeah.

Okay.

So that's.

This is great.

This is great.

We're gonna have a lot of discussion on this.

It's gonna be a good discussion.

So I think, you know, my first reaction to what you said is when I step back and I look at what's going on in that store, they.

They are not done with bringing to life the conception of what those three brands under one roof looks like.

And the reason I think they're doing it, the reason I say that, is because they're trying to do it on the cheap.

I mean, this is a capital constrained company, and they're trying to force this remodel on the cheap.

I mean, you and I know from working at retailers, if you're doing this the right way, you'd have all those boxes staged in the parking lot somewhere.

The parking lot configuration of that location is pretty crappy too, so it's hard to work through for them.

So that's probably another factor going on here.

So they're only able to do so much at this time.

And so, yeah, I think we do have to give them a little bit of a shot for saying the store converted in June, because it hasn't really converted yet, you know, and the timeline is open in terms of when that's going to be done.

So I think.

I think my thing is I've got to.

I'm going to reserve judgment on the overall look and feel of it until I feel like, you know, they're at that point where, okay, now all the boxes are gone and the, the floor is set the way they want.

Right.

Because they probably have a conception of how they want to mix that portfolio.

And you know, who knows, maybe they are going to move things to the, you know, to the, to the, to the center of the store or you know, do things in a different way.

So, but my question for you is, let's assume that some concoction like that happens.

Do you think there's potential here?

Do you, did you walk through that store and see potential in those three brands or those three conceptions of retailing coming together in a way that could work?

And then I want to get your opinion, then I'll tell you mine.

I'd say no.

You say no.

Okay.

Yeah.

I mean, and why?

Well, first and foremost, I mean, I never even mentioned Kirkland's.

I, I guess I didn't even really.

Yeah, Kirkland's was hard to even understand where that was going to play in.

Yeah, I agree with that.

100 Based on what I saw yesterday.

Yeah, yeah.

I mean, listen, the store format can be better like, and it could, it probably will be better.

You're right.

We're seeing something that's a work in progress.

I have a lot of questions about what's happened between June and now that we're seeing what we're seeing.

But you're also right that the foundation of that store is the exact same fixtures.

They're playing with the same kit of parts that they've always had and trying to in some ways fit a square peg into a round hole.

Yeah, right.

They're force fitting it.

Yeah, yeah.

And so it'll be better than what we saw.

Absolutely.

Will it truly be a room, solution, space that is sort of a one stop shop for everything you need to do in your home?

I don't think so.

And you know, I, I be concerned and I'm sure they have the same concerns that there's a lot of other retailers that are probably able to do this better and deliver a more comprehensive offering.

And the one thing that I haven't touched on and I didn't actually dig into this much, so probably a shame on me for this is I didn't look at the actual products all that much, but I'd have to bet too that there's a huge opportunity that they're never going to be able to compete on price for with any of those other retailers that are doing this or doing something similar.

And so I don't think the assortment is going to be wide enough or wide ranging enough because their stores aren't all that big.

And if you don't have the right product and you can't deliver it at the right price, I'm not sure how good the business is going to be, no matter how great the format becomes.

Yeah, right, right, right.

Okay, so I'm gonna go a little bit of a, I'm gonna throw you a little curveball here.

With a caveat though, I, I actually, I actually, believe it or not, I actually saw some potential in the concept.

Okay, with what the big caveat being old school potential.

And I'm gonna tell you what I mean by that, Chris.

Like, oh, okay.

The store was still coming together like we said, but I think it showed me the ability to do things early on that are hard to do in other retail formats.

You know, the great thing about, the great thing I always liked about Bed Bath and Beyond is if you did it right, you, you could shop there in a well stocked environment with upscale product that you couldn't find at other places in addition to value based product that you could find there as well.

Which is why I always like them in comparison to Walmart, Target and even ikea.

IKEA can't get the name brand housewares brands either.

Or even like, you know, the, the registry goods that you can find used to be able to find at Bed Bath and Beyond.

But with all that said, I still think it's an uphill battle because you can get so much of those things online nowadays, and that's the hard part.

And so when I think about AI coming to the forefront and changing the online experience even more so in the next five years and making furnishing your home even easier and less time consuming.

And it's going to be an uphill battle, but I kind of give it a puncher's chance.

Like the thing that impressed me the most yesterday, and I don't know if this was there when you were there two weeks ago.

I walked in, they had seasonal right in the front door and it was banging.

It was good quality product.

Their towels were good quality product, a good value, much, much better than what I get down the street at Target, for example, Chris.

And so I was like, you know, if they can merchandise this thing, if they can make it look a certain way, can they hit those numbers?

I don't know, they're lofty.

But I think I would say you got a puncher's chance at this point.

And I don't want to bet against Their CEO, because that guy seems to have the Midas touch in a lot of ways, depending on thinking about all these capital restructuring the guy's done, so.

So I'm always leery about betting against him, but, you know, with that said, I think puncher's chance, but I. I don't think I'm.

I'm not long on it because I just think it's.

It's an uphill battle given the dynamics of what they're facing and the product categories that they're.

They're in for the most part.

All right, so you're.

If you were a teacher grading this mashup, you might give it an incomplete at this point in time.

Yeah, that's a good way to put it.

And if I was forced to give it a grade, I think I'm probably in the C range.

I don't.

I.

You know, I'm not.

I'm not down on it.

I think it just needs more time and more incubation period.

Yeah.

I think, to your point, we might have seen this while it's still coming to life, and it's difficult to judge until you've seen something that's a bit more finished and less rough around the edges.

Yeah, it was very rough around the edges, that's for sure.

Yeah, exactly.

If you could find the edges.

Right, right.

Yeah.

Right.

Yeah.

Right, right.

Yeah.

All right.

What do you say?

Do you want to move on to the next story?

Yeah, let's do it.

Yeah, let's do it.

This next one's gonna be good.

All right, so the next one is Dick's Sporting Goods.

House of Sports, specifically.

You know, this is a format where I see constant testing as core to its success.

And they're a retailer, at least at this point in time, that seems to have mastered the dynamics of shop and shop experiences.

And you and I have had several conversations about shop and shops here on recent episodes, so I think this will be a good continuation of that.

So a bit of setup from me.

So Dick's comps rose 4.9% in the last quarter, and House of Sport was called out as a continued growth vehicle.

House of Sport is a lab.

You know, it's really built to outdo Dick's own core stores and to test what they can translate into the full chain.

Latest numbers.

I saw that they had 41 of these open already, that they're opening pretty quickly.

And they say that they're going to have, you know, 75 to 100 of these opened by the end of 2028.

And I think we're actually going to get our second one here in Minnesota.

Brand partners are leaning in, you know, gymshark's first US Wholesale deal launched in House of Sport.

And while I've not seen this yet, lids shops have arrived in 46 Dick's stores.

And, you know, by now, or maybe in a few weeks, they're going to have another, about 100 of them open.

You know, the broader backdrop of why I wanted to talk about this is that, you know, more and more retailers are leaning into shop and shops.

We recently talked about Kohl's expanding Babies R Us.

We had an interesting conversation about Best Buy and the Meta Labs and all the other testing that they're doing.

So, you know, I think I thought it'd be good to talk about a retailer that in many ways, especially in their House of Sport format, seems to be dialed in, and then maybe have a conversation about how we think about that more broadly across retail.

How's that sound to you?

Yeah, sure, let's do it.

All right, so, you know, I visit.

We have a House of Sport here in Minnetok at Ridgedale is the mall.

And.

And, you know, I don't have a running list of which stores I've visited the most, but I'd have to say that this store is probably in the top 10 or 15 of stores that I've visited over time proximity.

There's always a ton to see, there's always a ton to learn.

And so, you know, I went back again and, you know, I've got some things that I wanted to share with you.

And then we'll dive deep and hear what you had to say and just figure out, you know, is there applicability to what they're doing across retail and things that others could potentially learn from them?

So I'm going to start this by saying that I'm going to acknowledge something that, as we think about other retailers, is a huge benefit for Dick's.

I mean, right now, they're coming at this from a position of strength, and I don't take that lightly.

And what I mean by that is brands want to work with them, brands want to invest with them.

The company is obviously investing.

And so as I think about, oh, you know, House of Sport is doing a lot of great things.

I want to be cautious to say that, you know, some of the other retailers that might come up in the discussion may not have the same tailwinds that Dick's does when it comes to brands wanting to work with them.

And so what they're accomplishing may not always be something that others can replicate, just given the desire to work with them in that investment structure.

Because none of this is easy, you know, and that includes staffing.

Right.

I mean, as I think about what happens in these stores, a lot of it happens unbeknownst to the customer.

You leave one day and if you came back the next morning, the store could look entirely different and you'd be none the wiser because it happened while the doors were closed.

And so, you know, as I think about that, that's something that isn't all that easy for others to do.

And so, you know, I want to be cautious and just say that if you're not coming from a position of strength, going back to the Kohl's conversation, it might come to life in a much different way.

Yeah, but to that point, though, Chris, I think the other thing I'd add, though, is you make your own luck, you know?

Yeah.

Like this House of Sport idea, which has been around for a while.

I mean, that.

The Minnetonka story, which I've been into a lot, too, you know, it's been around for a good few years now, and it's, you know, dry.

It's over driving more, you know, it's.

It's accelerating the growth trajectory for dicks overall.

And so somebody had to take a bet on that, you know, and that's what's getting the people to, like, to work with them, want to be a part of it, because the concept itself is smart, and that took vision and thought to pull off.

And so you make your own luck.

That's how you get a tailwind.

Right.

That's an important point.

Yeah, absolutely right.

You're right.

I mean, so that's.

I should have mentioned that.

That's probably incredibly true.

But at the same time, if you don't have that luck right now, what are you going to do to try to make that luck?

Right.

Yeah.

Right.

Yeah.

Which the point I would make is you have to have a vision of where you're going.

Right.

I mean, that was kind of the cold.

That was kind of the crux of our Kohl's argument, too, is like, what does Kohl's want to be when it grows up in five years, when it hits that next, you know, evolution?

What is it looking like?

Because as you and I walked into it, it was really hard to tell what that vision is, you know, despite just putting in more shopping shops.

Right.

Like, because that was.

That was the point I took away from you, is you put as many shopping shops as you want.

But if you don't have a cohesive story that you're trying to tell your customer, it's not going to work to the degree that you want it to work.

And I think that's the beauty of what I saw at House of Sport on my latest.

You used two words, vision and cohesiveness.

That's exactly how it feels.

It doesn't feel like they're doing 30 different things.

It feels like it's all part of one vision, you know, and as I think about that, there's certain elements that get a lot of the maybe news and the things that you see and the people want to talk about.

You know, how they use digital to enhance the space.

It's not just about movement and content.

It's about actually using some of the digital screens to actually educate the guest.

I mean, I can lift up a sneaker off of the wall and it's instantly, one, playing music, two, talking me through the product features they've implemented running mannequins that begin to again, bring motion to the space and start to maybe allow you to begin to visualize yourself doing that exact same activity.

Although I'd probably run a bit slower than the mannequins.

But I think it goes further than that.

And one of the things that I wanted to focus on is that I think one of the things that really sets them apart is the small things.

And those don't always get talked about.

And I'm not sure that they're the sexiest of conversations, but the way that they.

The space is almost like a chameleon.

Like it's constantly shifting, but it's all shifting and connected in a way that completely makes sense.

You know, it's not all that exciting to talk about swimwear in Minnesota in early October.

We're probably long past our swim season.

But you know, as I think about what I saw in my recent visit, you know, they had an amazing swim shop that was brought to life all the way through September.

And then as I walk in in early October, you know, other retailers even have a really wild like clearance section of swimsuits.

And you have other retailers that have walked away from it completely.

And what did House of Spork do?

They consolidated it.

It was on a non dominant wall, but it was still prominent and it still felt like a meaningful assortment.

And we all know living in Minnesota, a lot of people are already starting to think about what that winter vacation might be or even that spring break by me.

And so, you know, they, they're thoughtfully think, do they contort and tweak and adjust the sales floor that it still feels like it's meeting the needs of each of the different customers that might be walking through their store.

On top of that, you think about the scale of a house of sport.

Like it's a, it's no small feat.

Like it's quite an operation.

And I don't think I ever walk in there and see a floor plan or planogram that's left unattended to while I'm a customer walking the store.

I feel like every day when I walk in, they have showed up for me so that when I show up, I'm getting the full experience, I'm not getting a part of the experience.

I really feel like they just seem to have discipline dialed in a way that many others don't.

And so, you know, if I think about the lessons I'd share for other retailers, when I think about what they're doing, I mean, the first one is the discipline.

The second one is have a clear point of view.

Even if that clear point of view is fairly narrow, having a clear point of view matters because it makes that entire experience that much better for the customer.

And then on top of that, and I've not touched on this, but be seasonally and locally relevant, like NFL rivalries is an example of this.

Like front of store right now.

It signals to you that it's fall, it's football season.

Not that we probably don't know that, but, um, you know, they just seem to have it all dialed in every single time, every single day, and that consistency matters.

So based on that, you know, I'd love to hear from you.

You know, what, what are your thoughts on what I said and what do you think about what other retailers can actually learn from this?

Yeah, I mean, I don't, I, I think I wholeheartedly agree with everything you said so far.

I think the, the interesting thing about Dick's, which is why, you know, I brought up though you make your own luck, you know, reference, because I think that's true.

Because the interesting question to me that I think about when I look at Dick's and I, and I step back from everything you just said, is it's a really big store, you know, it's a massive store.

I mean, I, you know, I wanted to say it's a big ass store because it really is, it's huge.

And so when I think about them making their own luck, how many retailers over the last 10 or 15 years, Chris, have gone the opposite way and tried to make their Stores smaller.

So while.

While the industry was zigging, dicks was zagging, they were going the other way.

And so that.

That raises the question to me is, like, how applicable is this?

Because this is a category you have to remember, too.

This is a category that everyone thought was dead for physical retailing.

Like, you know, it's a category that rapidly moved online.

And so it tells me that there could be something to the psychology of, you know, what, Amazon, you may have the everything store, but we can approximate it enough in the real world to still win the physical trip with confidence.

And I think that's something to think about, because then I start to go, okay, what other verticals could do this, Chris?

Could Toys R Us find a more successful path by going bigger than it ever was?

Like, is that an option?

I don't know.

I think it's worth thinking about because we've seen it work.

We've seen it working outdoor, like Cabela's comes to mind.

Right.

Shields is another one that.

Shields, Yep, yep.

Shields, yeah.

In the same.

In the same industry.

Even furniture, ikea, and now Wayfair.

Wayfair finally got the punchline, the joke that they need to make their stores bigger and they're expanding them as well, which is something I advocated that they do for the past 10 years.

You see it in the wine space, total wine, same thing, right.

And now you're seeing it in sporting goods, or you got multiple examples of it in sporting goods.

So, like, it's an interesting thought experiment to me to ask, where else could this work?

And so as I was thinking back, I was like, okay, can it work in toys?

I said that already.

Could it work in beauty?

You know, is there a beauty superstore out there?

I don't know.

What does that look like?

Who's got the guts to put.

Pull something off like that?

I think it'd be really interesting to see because somebody could probably conceptualize that really, really well.

And even electronics, like, you know, like, you know, Best Buy is trying to get smaller.

You know, my question would be, what happens if you went bigger Best Buy and made it, like, more flagship and more cool and more interesting?

For every trend, there's a counter trend, Chris.

That's what I'd say.

And the inclination has always been for people to go smaller.

But I think part of what you're saying in terms of the merchandise you're seeing, I think having more space allows more flexibility in merchandising and.

And allows you the ability to create a more cohesive point of view, whereas with like, say, Kohl's again, they're forced and constrained inside that.

Inside that box.

Or even Container store forcing constrained inside that box.

And oftentimes you walk in those stores and you feel like, man, this is so damn cluttered, I don't even know what I'm looking at.

Yeah, I think that's one of the beauties of what they're doing, is that a store of that size could absolutely and many times does feel cluttered, and it just never does.

Like, every distinct space seems to have a clear point of view.

And your idea of them zagging while others were zigging, or maybe I have it the other way around.

Yeah, right.

It doesn't matter.

Yeah, it's a good one, because you're right.

They've sort of moved in the opposite direction of a lot of different people.

And what are all retailers trying to figure out?

How do I get more people to experience my brand?

And I think what they've done with House of Sport by bringing more ideas, more concepts, more brands, more vision, a bit more clarity together is they've given people more and more reasons to actually show up in their physical stores.

And, you know, I think the interesting thing for them will be, is how does this translate in the.

Into the broader fleet of stores that are a bit smaller, that don't have the.

Quite the space, that are sort of stuck.

Not stuck, but sitting in their current format.

You know, that's not an easy transition to figure out.

How do you bring a lot of this to life in some of your existing fleet?

But I think based off of what they've shown us in House of Sporked, they're probably as capable of it as anyone.

Yeah.

The other interesting thing is you always have to.

You always have to innovate against yourself, too.

Right.

Like, you always have to make your model better.

So, you know, I wouldn't be surprised if over time, especially if they're building another store, Minnesota, like you said, that the existing footprints start to kind of wind their way down and get shut down, and they start to move the business into these bigger stores because, you know, it's.

They're potentially.

I don't know, they're potentially even easier to scale and operate because of the size if they can get the volume in the box and you can staff them correctly.

So, yeah, no, very interesting point.

And, yes, I believe there's another store coming to Blaine, Minnesota, in 2028.

To Blaine.

All right.

Blade.

Yeah.

National.

National Sports center, next to the, like, world's largest soccer complex in the Western hemisphere.

So they're gonna have an awesome audience once they build that thing.

Good Minnesota drop there.

I didn't know that.

I don't get out to Blaine very much, but I might have to make it.

Being a soccer family, we find ourselves at the National Sports center probably a bit more than we'd like.

And headset dicks, too, quite often.

I was.

That's another point, as you were saying.

Yeah.

I was like, I know how much.

You guys are into soccer.

Yeah, absolutely.

Right.

All right, so let's move on to have a discussion here about Starbucks.

You ready?

Let's do it.

Oh, God, yes.

One of my favorite topics, Chris.

I can't wait for this one.

Well, that's good to hear.

All right, so next up, let's talk about Starbucks.

So they're closing another 250 stores, but I'm really more interested in what they're doing with the stores that they're keeping.

So let's set this up a little bit.

We're about two years into Nickel's turnaround.

Focus on rebuilding the third place.

With comps up about 8% in the last quarter, with a fourth straight quarter of growth, closures are getting the headlines, which they often do.

In late September, they announced 250 more stores closing, which is about the same as what they closed last year, about 1% of their U.S. stores.

They've also talked about new builds being smaller and cheaper and that they're walking away from pickup only stores as they feel like they've been too overly transactional.

But again, I wanted to focus on the back to Starbucks remodels that are happening in about 1,500 stores this year.

Here's what they say is changing.

Softer seating, layered textures, local art, hardback books, and greenery.

Oh, yeah.

Gotta have greenery.

Oh, yeah.

Well, we'll talk about that maybe here in a second.

On top of that.

Yeah.

On top of that, you got a redesigned espresso bar, digital menu boards, and more defined app order pickup space.

And the goal being customers stay longer and feel at home.

With some early reads that they've suggested showing that this is leading to longer visits and more frequent visits.

So I knew I had to do more than just walk this one.

And so I did a bit of field research and sat in a store for more than an hour.

It happens to be, I believe, what you might consider your home store, or at least one of my.

That's my local Starbucks.

I am there multiple times a week for Chris.

Multiple times a week.

Well, that's good.

We're so we're going to have seen the same thing.

But at the same time, I. I also did walk a couple of other stores that are maybe a bit closer to home for me, just so that I could see how it might come to life in different environments.

I compare and contrast.

Yeah, well, your home store is a rather large Starbucks, and so it maybe has some luxuries that some of the other spaces don't.

So, yeah, you know, the first thing that I applaud and I think, you know, before I even go through everything that I've said, it's the digital order board.

You like that?

Love it.

I love it too.

Yeah, I love it too.

I first saw it at the MSP airport maybe a month earlier.

But seeing it there, I mean, one.

I mean, I walk in the store and it hit me in the face in a good way.

And it was immediately clear to me.

I mean, I did the math, I counted.

There was 19 different orders on the board.

Which one?

That tells you something already.

I think it was five.

I think it was five o' clock on a weeknight, like a Monday or Tuesday night.

Geez.

So again, five o', clock, 19 orders.

Wow.

Yeah, Caffeinated America.

And the bright side for them is 12 of those orders were already ready.

So their success rate of having them prepared for the customer was pretty good.

On top of that, they'd added a bench beside it, which I don't think was there before.

Again, they've designed the weight into the space.

You know, on top of that, the entire interior system felt like far more than a furniture refresh to me.

Again, you know, burnt orange and cognac.

Leather chairs.

Oh, yeah.

Terracotta walls.

Cognac.

Yeah, yeah, right.

The art was there.

Oak tables, everything sort of low profile, encouraging the customer to maybe stay a bit longer.

And I distinctly noticed some linen curtains that were hanging from the ceiling that were kind of separating some of the spaces.

And an associate walked by and I asked her about them and she's like, yeah, we completed the remodel like three weeks ago.

I mean, I suppose it's been a month and a half now since I visited.

And she said, we just added these yesterday to sort of enhance the experience and maybe create a bit of distinct space for each of the groups of customers.

This particular location has a larger footprint, as I mentioned.

And so what I saw were, I think somewhere in the neighborhood of 12 or 13 distinct spaces for people to gather from groups of two to groups of 10.

And while I was there, nearly every one of them was actually being utilized again, we're talking 5 o' clock on a Monday or Tuesday.

You know, I counted 30 some different people in the space.

Definitely made me getting some photos, because I am going to write about this and have that come out about the same time that we publish this actual version of Making Space.

But, you know, there was 30 some people in the space and it was everyone.

It was teens doing homework, it was groups of girls who looked like they'd come from a sports practice hanging out.

I saw two guys in suits having what seemed like a pretty serious conversation.

And on the other side of me, there was a group of, you know, seven women in their 50s or 60s in the middle of a pretty lively chat.

So I saw a lot of what Starbucks has described coming to life in the space that I was in.

I'd say the only two things that maybe felt like Mrs.

While I was there is.

I mean, the first is my WI fi continued to buckle while I was there.

So now maybe you've not experienced this, but I did.

And my experience is my experience and you do not want that to have happen if you're actually sitting there and need to get some things done.

And then the last thing is I mentioned greenery and local art.

There was art, but I couldn't tell you if it was actually local.

You know, as I think about it, maybe it wasn't, but if it was, you know, what are you actually doing to highlight that it is create that bit of connection with the community above and beyond.

And so, you know, those are small, minor things to call out at the end of the day.

I think the refresh felt very different from what I had experienced in the past.

But I want to counterpoint that before I turn that over to you and say that this store, maybe it goes back a bit to the Dick's conversation when we talk about the size of the store.

I mean, this environment is a luxury.

Not all of the stores are of the same size.

And so I did walk a couple of smaller stores and one of them had been refreshed.

But, you know, it didn't quite feel the same because they didn't have the space.

So what.

What it felt like in those environments is that they had replaced the tables and chairs and done nothing else, and maybe that's all they could do.

Again, it was a pretty cramped space, but it actually made the space feel more crammed because the furniture is larger.

And so it might have actually been counterproductive in that smaller space.

And then secondly, I went into a third store that had not been converted and you could tell the difference, and so you could tell the difference.

That's good.

Yeah.

It felt more sterile in those older.

A lot of metal chairs, a lot of metal tables.

It didn't feel as comfortable.

It didn't feel quite as inviting.

And so as I think about the two other spaces that I saw, I think that what they're trying to do here is starting to resonate.

And not one of these stores didn't have a crowd of people inside of it.

So, you know, I think I've probably already led the witness here a bit around what I'm thinking about this.

But, you know, I just ask you whether you're starting to feel that back to Starbucks vibes on your visits.

I am, Chris.

I am.

I am.

I am sensing the back to Starbucks vibes on my visit.

You know, I think you can feel the comfy aspect coming to life.

You know, that is my local store, and I can tell you that there are more people sitting in it than there were prior to the remodel, too, which I think is good.

I love the digital menu board as well.

I agree with the points on greenery and local art.

The other point I'd bring up that's small is, like, some of the furnishing changes.

I'm guessing they're going to want to go back and, and redo.

Like, I think about the cabinets behind the espresso machines, for example.

Like, I'm seeing the.

The employees leave, the baristas leave those open most of the days, which I don't think they were intended to do because it's just too laborious to open and close them every time when they're going and getting different things to make all the drinks.

So that was one thing.

I think that as they start to refine this refresh over time nationally, they'll start to figure out how to improve.

But I'm.

I'm a little conflicted with this one, though.

So, like, I like it.

I think it's a move in the right direction.

I think it's what Starbucks needs to do.

But I think it's only one piece of the puzzle, because we talked about the new Met, the new digital menu boards.

I love the other thing I love about it, which we didn't really talk about.

I love what it does for the employees because the customers walk in now and they are.

They're like, oh, my God, they have that many orders that they're working.

I need to give them a break because I was in there on a. I was in there on a Saturday.

I think I took a picture of this and put it on social media, on LinkedIn and there was like literally at least 50, maybe not 100 orders in queue and they had lost that.

Somebody didn't show up for work and people were just able to understand what was going on without having to get snippy at the employees.

So I think that's, that's a huge benefit for the digital menu board.

I think I had not thought about that.

I had not thought about the psychology associated with that.

But that's a really interesting point.

Yeah.

Because it changes the whole dynamic of where's my order?

Why is it not here?

Oh, I can see because there's a thousand people in front of me.

Right.

You know, which is a real thing.

So like, so I, so I like that.

But at the same time, when there's that many orders happening digitally, it signals for me when I got into an hour long, pretty vociferous debate, pretty heated debate with somebody from Starbucks prior when I wrote an article.

This was a, this was a while ago now, probably, it was probably within the last year, but I said the majority.

However, you know, as much as you want to comforify, if that's a word comfy the Starbucks, I'm going to make it a word comfory the Starbucks experience.

Most your customers don't care, you know, and that's proving itself out.

Like if you have a hundred orders on your online.

And they're all online orders, Chris, there's not that many people in the store and they're all just waiting in that order little area.

And a lot of them are just.

The other thing too is a lot of them just left.

Like they didn't even pick up their order because they just got so frustrated.

Oh, really?

If you have.

Yeah, they did.

I was like, who are all these orders?

Like, I'm sitting here, I ordered 25.

It took, it took me 30 minutes to get my order.

I was like, I said to people next to me, I'm like, It took me 30 minutes.

I ordered mine 30 minutes ago.

Where are the people whose orders are sitting here?

Because they must have ordered like 40, 50 minutes ago.

And they're like, they probably just left.

I heard a lot of people just come in and say, you know, I'm not waiting, I'm going to leave.

So if you have that many online orders, you've got a different problem.

You do.

And you have to recognize that Starbucks.

So you've got to figure out what to do.

You can't disinvent pickup at this time.

So You.

But you've got to come up with a better long term answer than just better furniture because over time people are going to get pissed.

You know, people aren't going to give you, I'm not going to give you the space to wait 30, 40 minutes if that consistently happens.

Like, it's just not going to work.

So you've got to come up with some way to create slack in the system to ameliorate the volume flows that are coming through your average location.

Yeah.

If I summarize what I heard you say is a lot steps in the right direction, but a lot of work to still be done.

Yeah, it's going to take more.

It's going to take more than just comfy chairs and a new ambiance, you know, as much as it might work and pull people in to sit longer.

But, you know, my question is when all your volume's going online, like that's gonna work on the margins over time.

Yeah, yeah, no doubt.

Last thing on this one, and it's a bit out of left field, but I saw something on Starbucks this morning that I thought I'd just toss in here is, I think it's actually effective the day that we're recording this.

But I saw that in China, Starbucks is now requiring customers to purchase, to actually sit in one of their stores.

And, you know, I thought about that.

I mean, one, I think I naturally probably purchased something even if I didn't really want something then, just because I feel guilty using a space that I haven't bought something in, but.

Oh, you definitely do.

Yeah, but I thought that was an interesting thing.

And, you know, it talked about how they're trying to recover some of that, you know, growth in mainland China.

And I just figured I'd toss that in there because I just wonder how long it'll be until that becomes the case here in the US as they look to recoup some of the sales that maybe they've lost over time.

Well, and that's really interesting too, Chris, because the other dynamic over there, they've got Luckin Coffee over there, which is basically like the Uber, uber online pickup cheap coffee scenario, which I tried out in New York and I really liked it because, like, that's all I want is like, I want a solid coffee that I can get in and get out as fast as possible.

And so we'll see how that.

It hasn't really taken hold over here, but that's who they're competing against there.

So they've got to figure out a way to thwart that I'm guessing.

I don't know.

I don't know the Chinese coffee market all that well.

I know a little bit about it.

Enough to be probably more dangerous than I should be.

But.

But, like, you know, but that.

But.

But that's the dilemma that they're creating for themselves, too, for someone to sneak in here and take their space.

Which is why I think you have to defend.

It's smart for them to do this, the comfying thing, because they've got to defend both fronts.

Right.

They're getting attacked on both sides of this.

Yep, Absolutely right.

All right, good discussion.

I figured there'd be some good conversation, and I was happy to be able to get out to your local store to do a bit of field research.

Yeah, right.

Yeah.

It's a good story.

It's a good start.

They do.

Yeah, absolutely.

All right, we're going to shift gears and we're going to move on to the checkout and have a little fun here.

And, Chris, I'm going to let you go first.

Okay.

I'm curious, Chris, have you.

I mean, you are, like I always say on this show, you're in more stores than anyone I know.

Is there a recent visit that you've made to a store that resulted in something unexpected for you?

Yeah, there is.

There's probably several.

I could probably go on forever, but if I were to name just one, I'm going to call out something at Old Navy, and I'm going to.

Yeah, and I'm going to mention the queue.

The queue.

I'm probably someone that cares about the queue more than most, but, you know, and I've had some tough words for the Old Navy queue in the past that was disjointed.

It didn't make a lot of sense.

You'd have cheese puffs next to a hair tie next to.

Right.

Yeah, it was very disjointed.

Yeah.

Yeah.

And they've reimagined it at least in a couple of stores here locally.

And it's a bit of a beauty destination.

I'm not going to suggest that the beauty destination is perfect and they still carry some of the ancillary categories like hair accessories, snacks, jewelry.

But at a bare minimum, they've given each of them a distinct space.

And the beauty presentation looked good.

It was clear, visible, it seemed.

Back to the Dick's House's sport conversation.

There was a point of view that seemed to be lacking previously.

Yeah.

All right.

So that's a great point, though, Chris.

Oh, sorry.

That's a great point, though.

Like if you're, if you're going to put a.

If you're going to put an area in the store, make sure it's merchandised.

Yeah.

Make sure you're putting your best foot forward.

From a merchandising perspective, that's just a calling card of good retailing.

Right.

I mean, that's kind of my big takeaway from this podcast so far is like, yeah, you got to merchandise your.

Store, and why not do it in the very last place that you're going to make an impression with the customer?

Right, right.

Because a lot of times that's the lasting impression that they leave you with.

So.

Yeah, and it's funny when you say that, because a lot of times people don't really do that.

They just outsource that to somebody else.

Yeah.

All right.

Chris, have you had any store visits recently that exceeded your expectations?

Oh, wow.

The tables have turned, Mr.

Powers.

I'm gonna, I'm gonna surprise you on this one, my friend.

I'm gonna.

I'm gonna go with Walgreens.

Walgreens?

Yeah.

Really?

Okay.

Yeah, Yeah.

I, I had to go pick up a script on a Saturday Pharmacy.

Again, this is a common problem in retail.

I'm seeing it all the time.

Short staffed.

They didn't have somebody working the register.

Pharmacists had to work the register.

And he was pounding through it.

He didn't miss a beat.

I said to him, dude, I'm like, you're working the register.

He's like, yeah, man, we can't get anyone staff in this store on a Saturday.

I was like, well, fair play to you, man.

You're doing a great job.

Thanks for holding it together and got through the line.

And the other thing I'd say, too, and you know, I've been tough on Walgreens on my weekly podcast a few times, but, like, overall, I think Walgreens has one of the better omnichannel experiences from a pharmacy perspective.

Like, I never have any hiccups with anything that I try to do via their mobile app.

And it's.

And it's a really great experience.

And so, yeah, so I wanted to give.

I wanted to give a shout out to Walgreens, Chris, in answering that question.

All right, next one for you.

What's one store you've been wanting to walk but haven't been able to yet?

Well, this is perfectly timed because last night was the season opener for the Minnesota Timberwolves, and.

Oh, yeah, right.

For anyone that's a Timberwolves fan, they killed it last night.

First of all, Pretty exciting season with the addition of LaMelo Ball and all that.

And you know, the store that I want to walk is Adidas.

First full price brand concept store here in Minnesota at Malvern.

Oh, yeah, yeah, yeah, yeah.

Know, and you know, they describe it as having an elevated Anthony Edwards shop and me having two teenage sons.

Big fans of Anthony Edwards in this house.

So I can't wait to walk that store.

Yeah, yeah, I want to check that out too.

Maybe we even go together.

We should try to check that one out together if we can.

Schedules.

That would be fun.

And I. I heard some inklings that Adidas is going to have a pretty good earnings report coming up here, so we'll see.

It sure sounding like that.

Yeah.

Like they're kicking butt while Nike is not kicking butt.

If that.

That is the way to put fairly.

Yeah, that's a perfect way to put it, I think.

Stealing some share, it sounds like from old Nike.

Yeah, absolutely.

All right, last one for me.

Do you and your family have any fun Halloween plans or is Halloween not a thing in your household?

Oh, my God.

This actually was.

This was actually a.

A boat of contention from me between me and my, my misses Yesterday.

Well, I had thought because this was the first year the kids were going to be able to go trick or treating on their own, like, we don't have to go with them.

So I was like, okay, I'm just gonna sit back, get a beverage, wait.

For the people to knock on the.

Door, hand out candy and relax.

But turns out, turns out we're having friends over and we're doing a whole thing, so, like, my relaxation concept's not gonna come to life.

So.

So, so yeah, that's our Halloween plan.

The kids are gonna go out, the adults are gonna stay back, which will be fine.

It'll be fun.

But, you know, it's a little bit different than I conceived of it, Chris.

But.

But hey, I'm flexible.

I'll roll with the punches.

Neuroplasticity.

Yay.

Yeah, we're kind of in the same boat.

I was always jealous of the parents when my kids were younger and I saw them in the driveway and their kids were nowhere to be seen and they were just handing out like fireball shots to parents as they went by.

I'm like, they've got this thing figured out.

Yeah.

I was even thinking like, hey, we'll go for a walk and like, take some of those fireball shots at all the friends houses down the road and, and see.

But yeah, well, maybe we'll do that with other people.

Now too, which is okay.

It'll be fun.

All right, Chris.

Well, this was a ton of fun.

Thanks for jumping back in with me.

I thought some really good discussion on some interesting topics.

That's a wrap on episode three of Making Space Real Time.

I want to thank our producer, Jake Niemi.

This show is presented by the association of Retail and Consumer Professionals in partnership with the Omnitalk Podcast Network.

If you enjoyed this one, a like or review really helps.

We're also actively seeking sponsors, so please reach out to me directly.

And also, one last thank you to Altform for their sponsorship and support of this episode.

You can find me on LinkedIn or retail in Real Time on Substack.

And Chris, where can people find you?

Oh, they can search Omnitalk Retail wherever they get their podcast.

Or they can also follow our work@YouTube.com omnitalkretail awesome.

Thanks again for jumping in on board with a guest following through and helping me last minute.

We're three episodes in and we're only getting started.

Thank you for the continued support and I'll see you on the floor.