Industry veteran John Torella discusses great department stores around the world and what makes them popular, as well as the future of the store concept and why it has died in North America. J.C. Williams Group’s Lisa Hutcheson also chimes in.
John Torella is a Senior Advisor with J.C. Williams Group and Lisa Hutchison is the Managing Partner and Strategist at the consultancy.
A transcript of the conversation can be found below.
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Featured during this interview:
- Lisa (Phillips) Hutcheson, Managing Partner at J. C. Williams Group
- John Torella, Senior Partner at J. C. Williams Group
- J. C. Williams Group
Transcription
Craig Patterson
Welcome to the Retail Insider video series. I’m your host, Craig Patterson. And we’re joined here today with two special guests, John Torella. He’s a senior advisor at the J.C. Williams group in Toronto and is a specialist in both marketing and branding. And we’re joined here again, of course with Lisa Hutchenson as well. She’s managing partner and strategist at J.C. Williams group. Welcome both of you.
John Torella
Thanks for having us. Thanks. Great.
Craig Patterson
This video interview was sponsored by Salesforce. Salesforce just recently held its Tableau conference in Las Vegas and launched some new products around AI. For more information, visit salesforce.com.
And we’re going to have a conversation here today, something that I’m very interested in and something that we’ve been discussing for a little while here on the Retail Insider video series, as well as in articles, we’re talking about department stores. This is something which we’ve seen, I guess, almost, I don’t want to say die in North America, but pretty close to it. While at the same time we’ve seen department stores thrive in places like Asia and Europe, under different business models that are a bit more exciting. So I wanted to talk to some people here at J.C. Williams group. And you know, John, you’ve done some traveling, you’ve got to see some really interesting department stores. But we’re gonna first talk a little bit about the past and some of the challenges that we’ve seen there. So, in Canada, we’ve had stores in the past department stores, Eaton’s, Simpsons, Woodward’s, Morgan’s, Sears, and Kmart. Those are all gone. Actually, I think the only one we have left as terms being a traditional department store is the Hudson’s Bay department stores. So let’s talk a little bit about the past and maybe some mistakes that were made with these department stores.
John Torella
Well, you know, I come from a kind of unique perspective, because I spent a number of years as the CMO at Eaton’s and Craig, I got really a deep understanding of the culture of department stores. So here was this Canadian 100 year old department store, you know, cities, suburban, rural locations. Its own call center, own delivery. junior executives, from schools, all over the country, you know, a hostel where young women could stay for a while as they got into their jobs. You know, they had their own brands, Etonias Viking, that were leaders in their class. And so I tried to think about what was it that were really inherent strengths? And I think, fundamentally, was this concept of good, satisfactory or money refunded and, you know, we all heard the myths of people buying stuff using it, sending back. But, you know, from cradle to grave, they satisfied a whole bunch of needs built on this trust go. That was a cornerstone. The other thing they had was just a deep sense of the country, and Canada. And, you know, John David would make a point of, you know, we need to be true to our roots. So, a lot of really deep strengths. Absolutely. So when I think back well, what, what were the weaknesses? What were the barriers, what eventually led them to their demise? And I’ve thought a lot about it. And it seems to me that fundamentally, at least, Craig it was, they just lost sight of the customer. And they tied tended to generalize about the customer. And I can remember many meetings talking about all the customers so price conscious, you know, I was service and so on. But the thing that we really realized ultimately is the customer is not one thing. And if you didn’t recognize those segments of differentiation, you are in trouble. So that was certainly one issue. And second was they really didn’t make the investment in technology. They didn’t see you know the digital revolution that was coming and attended all we’ll be putting on the back burner. Another big issue and I think finally It was just a an old fashioned out of date leadership style, command and control my way or the highway merchant Prince, all of that kind of stuff. And the young people that were coming into the company, they didn’t buy that. So there was really little appreciation by diversity, little compassion, you know, no respect for certain groups. So I think ultimately, all of those things kind of mushroomed into just out of touch.
Lisa Hutcheson
Yeah. And I would agree, particularly from, you know, sort of the past, there was this real sense of community where some of these brands, and were there role within each of the communities, you know, some of them were in Toronto, some of them were more focused out west, and smaller communities. So but then to your point is, I think that evolution is what we still see happening today, brands that don’t brands concepts that don’t pivot, adapt, listen to where the customer is, they, they fizzle out, and they become irrelevant. And I think that’s, you know, sort of what we keep seeing happening over and over again,
Craig Patterson
And also a lack of investment, I remember before Eaton’s had shut down in the late 1990s, you could just sort of feel this almost slow death, it didn’t seem like there was a lot happening with the stores. They weren’t that exciting. And also, another thing I recall, is in the 1970s, and 80s. And even before I was born, Retailers, like Eaton’s has a decent selection of actually higher end designers. And this is something that we saw, I think after the recession of the early 1990s, it seemed like all the stores lost those as well. And I think that created a bit of a lack of excitement. I think on top of that, in terms of the positioning of the stores.
John Torella
We’ve got to learn from the past, if we’re going to really address the future. And so that’s kind of switched to the future. And we love to take a global perspective, we’re part of a global Ebeltoft group. And so we always think, where do we start? Well, let’s start in London. And let’s talk about Selfridges. And let’s talk about Harrods. And I just absolutely adored going to Harrods and the food hall and you went in there. And that was an experience like no other. And this love of food and the diversity of the food and the ceremony of the food and, and the staff. That was it was you could spend an afternoon there and just love it. So that was always our first tour. And then Selfridges. And in my humble opinion, if I had to pick one department store, the future would be Selfridges. And why? Because they have this incredible sense of the contemporary customer. They’re just one step ahead. You know, whether it was cosmetics or fashion or their windows, or events or activities or advertising or publicity, they were always leading that customer was always a place to go and learn and go.
Lisa Hutcheson
Yeah, I would certainly speak to both of those but Selfridges even just you know, some of the experiential elements we’ve seen them do. They were highlighted in our book a few years ago, from an experiential point of view with the fragrances you know, some really exciting things and I think that that’s a really important element today for department stores is to create that sense of experience and drive drawing the customer.
John Torella
I remember going into the kitchen area, and they have a they have a, they had a table and the heading was the Italian Sunday snack. And here was this table set up with food on it. Pasta and the Ravioli and the desert and the Antipasto and they they went to that degree to involve the customer and to excite all of your senses so it wasn’t just a plate and a glass it was filled with wine you could see it I loved it.
Craig Patterson
I said these stores look nice as well that’s I think one thing that’s important is that they’ve got you know interiors that are at least a bit upscale interesting. There’s there’s visuals right?
John Torella
Yeah, merchandise presentation. Huge departments and you know, they had a taste level and a coordination and in a way of presenting style and fashion that was untouchable. So on to the city in my opinion that best demonstrates the department store that future, Guess who? Paris! Paris? Galleries Lafayette, I mean, on and on and on. And I had the opportunity to spend a week there at Christmas this year. And it reinvigorated my belief that there is a role for this department store if you step up to it and boy, those stores, they were done. The display outside, lighting, the graphics, the people, there was just a buzz. When you went into those stores. You felt special I mean you were greeted, you were treated with respect and humanity that was just so untraditional Retail. So, Paris.
Lisa Hutcheson
Having a view of the Eiffel Tower is is not a bad thing either from an experiential point of view and really drawing upon that.
Craig Patterson
I agree Paris has some amazing stores. Le Bon Marche, which I think is an LVMH brand also La Samaritane which opened during the reopen during the pandemic. Part of I think DFS, a major the one thing I’ve noticed that that seems to be a bit in common and we’ll go through some more stores here as well in in Europe and in Asia, is that there? There aren’t necessarily that many locations and they’re probably expensive. This is not kind of a Zellers or serious type of store. This is more of a towards what we would have in Canada a Holt Renfrew type of price point maybe not quite that expensive, in terms of its overall positioning, though.
John Torella
LVMH is really interesting in what they’re doing, and I think it’s, it’s kind of a way the department stores are going to go. What they’re saying is, we don’t even want to be called a department store where we’re a really life style, life enhancing store. And if we’re going to take that position, it’s really going to influence the way the store is laid out. So they are moving from department, menswear department, for example. No, no, no, we don’t want, you know, piles of suits and piles of shirts. What we want is end use. So move from department store to end use. So if you need business attire, here’s everything you need for that. If it’s activewear here’s what you need there. If it’s leisure wear, and that’s absolutely brilliant, because that’s the way you shop. You know, their home furnishings department, it wasn’t mattresses and sofas and tables. It was dining room, living room. Kitchen, outdoor, deck. Absolutely brilliant.
Craig Patterson
John, you were in Italy a few months ago, I think was it over the Christmas holidays?
Lisa Hutcheson
Paris over the holidays, Italy just before that.
John Torella
Yeah. Italy every year. That’s my culture. My heritage. I mean, you go there not just to look but to be seen. And the people are, you know, I mean, they dress absolutely stunning. You just walk through that store and you’re kind of head turning everywhere you go. And then you have to go to the dining room. You know, you have to go to have lunch there because it’s a ceremony you know, you start with the Aperitivo and you know, Primo and Secondo and Dolce and you know, it just goes on and on. It’s so sensual in every aspect of it. I just adore it. I guess you could go on to Spain, Barcelona, Madrid. You know the Spanish with tapas and and their absolute deep passion for food. Their department stores make up big thing of the food floors are stunning.
Craig Patterson
That’s right. One thing I’ve noticed we were searching for images for El Corte Ingles. And very often what people will post on Google images is photos from the restaurants that are located in the store. So you will see some photos of say we were looking for photos at the Fashion floors and whatnot. But very often people are posting what they’re eating. Another interesting thing about that chain as well as I believe it’s the only real department store chain in Spain. Although at this point in countries that’s not unusual. But for many years, it’s been really the only player that I think Spain has had.
John Torella
I don’t know what this fascination is about photographing of food. But I have two sons, and one is in New York and one is here and they travel a lot, and they’re always sending me these pictures of these meals they’re having, what am I supposed to do with this? Envious? Yeah, I guess so. Okay, let’s finish up the tour. And again, a place I’ve been a couple of times Tokyo and Mitsukoshi. Department store there. And Craig it is really a department store, like no other I’ve ever seen. It’s credible food floor. You can eat there every day for a month and never duplicate, you know, a theater full line theater that they make a thing about customization and personalization. So you know, your custom made suit or jacket or whatever it is. The Japanese are just fanatical on on detail. You know, the Bonzai, department layout, those special packaging. You just want to take the packaging and fret about the product. They’re so great. Anyways,
Craig Patterson
Hong Kong as well, I think we had Lane Crawford. And many of these cities have a lot of crossover, some of the Japanese stores and whatnot. Even Chinese are in cities like or places like Hong Kong.
John Torella
Bonnie Brooks. She was at Lane Crawford. And she invited me to go there and do a presentation to her staff. And, again, the luxury of the shopping experience. You sit down, you know, the Capuchino or an Espresso is brought to you, she told me that her staff spend as much time in people’s homes as they do in the store. So if you’re a good customer, they’re coming out to your home, and seeing your environment and understanding your closet and what your needs are having this really fixation on going the extra mile per thing. Go the extra mile, do all little things well, that nobody else does. And that will differentiate us. Wonderful, wonderful sense.
Craig Patterson
It’s fascinating that Bonnie Brooks, you know, had that vision and that was something implemented at Lane Crawford, which is a much more expensive store than Hudson’s Bay. But here in North America, we don’t really seem to have this exciting Retail on the department store space in the same way unless maybe you include Mexico City. But United States and Canada, you know, it seems like we’re not we haven’t kept up have we.
John Torella
No and I’d love to be able to put my finger on why like, it’s just something whether it’s given the leadership, or the visionary pieces of it or just a deep sense of of satisfying, you know, the and needs of their customers. There’s just something about it. So here we are, we want to get a sense of the future. Where do we look? And our belief is, look to Asia, look to China, look to what Alibaba is doing. Intention is doing. And Craig, they have an ecosystem that connects the Store of the company with the customer. And they are so far ahead. In technology, whether it’s AI or artificial intelligence, augmented reality, they are getting deep information, data, but most importantly, insights into the needs of the customer. So what they’re saying is, okay, Lisa, if we know you, and we probably know you, in many ways better than you know yourself, because we’re tracking your purchases. We’re tracking your behaviour. We’re tracking your social media. And so what they’re doing is say, we’re going to build off that understanding to satisfy more of your needs. So what are they doing? Education, banking, on and on, and this reservoir of insights just opens up as the customer needs met or unmet. They’re moving quickly into them. So I think, again, if if our Canadian department stores or international department stores, go to Asia, you’ll get you’ll get a sense of where it’s all going.
Craig Patterson
There’s a grocery store there as well. I can’t remember the name of it where, again, a tie, it’s highly experiential, they can cook the food for you right in the store. You can bring it home with you it sounds I mean, the experience is there one way or another.
John Torella
And reading just recently, Alibaba, they have now taken their six companies and separated them. So now they’re each aligned as a company, but competing with one another. And so you’ve got this sense of tension going on within the company, you know, to move the banking and remove the travel and remove the education element. You know, you’ve got a young daughter, she’s going to have to decide where to go to the university, where to go to school all over the world, we can help. Fascinating stuff.
Craig Patterson
People see this as possibly being some of the characteristics you see in the department store the future, because I don’t think department store is going away. It’s just going to change.
John Torella
it’s gonna stop being called a department store. It’s gonna be a lifestyle, like life enhancing store, forget about departments. That’s not where it is. That is where they all can be.
Lisa Hutcheson
It definitely has to be more lifestyle to make more sense and diversify.
Craig Patterson
I don’t think we’re really seeing that in North America, in which case, in theory, we may not have department stores in a few years.
John Torella
Well, I’ll tell you where they are today. Yeah, they’ve got to change. And you know, they’re resisting change. I don’t think they appreciate, you know, the future is a long time coming. But when it happens, it happens fast, and it’s happening now faster than ever. You know, one of the topics we’re working on is just the metaverse, you know, and where’s all of that going? When you have this merging of digital and physical, and the implications of that? It’s a different world and the uncertainty of it all and the confusion of it all, you know, the borderless aspects of business today, the biggest and the best, you know, that go anywhere in the world. There’s nothing stopping.
Craig Patterson
It’s a matter of, I guess, reinvention, or perish, for the department store concept.
John Torella
That’s our bottom line.
Lisa Hutcheson
Yeah it, definitely is. And I think it’s a lesson for all retail, but we’re seeing it, particularly as it relates to department stores.
John Torella
So we thought we’d finish off with just, you know, if we were writing an outline of what department stores of the future have to be thinking about, we thought, well, first of all, you better have a vision that’s unique, and different and special. And you know, you better than have an infrastructure of a team, a leadership group that embraces that vision up every day and says, Okay, you know, let’s stay the course. And we’ve got to have to support that vision, a point of view, you know, I can remember having a conversation with Fred Eaton, when he was running Eaton’s and was at its peak, eventually lost interest in it. But he said to me, John, department stores are a school of life, and you better be a student of life. And that always stuck with me, you know, so if you’ve got this vision, you got to have a point of view, you got to have fixation with being unique and special. And then your team, and it better be a team got to be excited enough, top down. You know, and the things we’re talking about getting rid of that old merchant prince command and control and start to think about compassion and empathy, you know, respect, celebrate diversity within your group, encourage, you know, discussion points of view, and then you know, you better make an investment in technology and big tech, because those tools are going to be integral to success. And then just do it. rephrase what you said, reinvent or perish. That’s what it’s about.
Craig Patterson
This has been a great discussion on department stores. I gotta say, thank you so much to both of you. We got John Torella, Senior Advisor at J.C. Williams group specializing in marketing and branding. And Lisa Hutchinson, you’re the managing partner and strategist at J.C. Williams group. Thank you so much, both of you for joining us here today.
John Torella
Thanks for the opportunity.
Craig Patterson
And thank you so much, everyone, for joining us here today. I’m Craig Patterson. I’m the founder of Retail Insider. I’m also the publisher of Retail Insider Media. Thank you so much for being here. Whether or not this is you’re watching us on YouTube or whether or not you are listening to us on one of our podcast channels. Be sure to subscribe, take care and bye for now.
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