Transcript
Jenni (00:00):
When you have a company that you actually really believe in and you're proud of your organization and the way it's being run and the way the values that comes through to your merchant, that comes through to everybody you're dealing with in the industry. We're still selling to people. People are people, and guess what? People like authentic people. Authenticity really, really, really matters.
Mike (00:37):
Hey, retail fans. Welcome back to Retail oriented. I am your host, Mike Fowler, the VP of Retail Strategy here at the Sales Factory, and today I am really excited to welcome a special guest, somebody that I've known for almost 20 years and a lot more hairstyles than that. She's a great friend. She's the former president and owner of Empire Level and the current SVP of Business Development here at the Sales Factory. Help me welcome Jenny Becker. Jenny, welcome to the show.
Jenni (01:06):
Thanks. Thanks for having me. I'm excited to
Mike (01:08):
Be here. This is going to be a fun conversation because Jenny and I have got a lot of history together and she has got a wealth of knowledge because she's seen this industry and retail from a lot of different sides. So we're going to kind of dive into that today, but can you first start us off with just kind of your background? How did you get into it? I know it was a family business, so can you walk our listeners through how do we get here today?
Jenni (01:29):
Sure. It's hard for me to believe that I've been in this industry for as long as I have because it was never ever the plan. Went to school and got a degree in education in literary studies, got my master's in education, was a school teacher, wanted to become a school principal, was working on a PhD to become a school administrator. Never did I think I'd get involved in the family business. I had worked there summers in the factory making hand tools and in 1997, my stepdad said, come and try it. You'll be 25 in a year and if you hate it, go on and do what you were going to do. And so I said that seemed logical to me. I was always about trying something new. I learned every facet of the business. I first worked in supervising in the factory and then moved into purchasing and I did a rapid fire throughout our whole business and a year later there was no way I was leaving.
(02:28):
There was no way I was leaving. You hooked. My stepdad was golfing every day and I was working 60, 70 hours a week and I'm like, oh, he is really a smart guy. He got this go and I fell in love with it because I fell in love with the people. I'm Midwestern girl, born, raised, and I loved people who made stuff with their hands. They were my favorite people and I really felt like a true family business, not just my family, but we had moms and daughters that worked generations in the factory, cousins, everybody knew each other in some way or another. The people that produced our tools average tenure 20 years, 25 years for a factory, it's so rare. I loved that. It felt like home to me and I liked the competitive nature of what was happening in the industry at the time. We were underdogs competing against huge companies, global conglomerates. We were hanging in there and I loved the
Mike (03:31):
Winning, not just hanging in there,
Jenni (03:32):
We were doing it. We were like the Rudy of the hand tool industry where they shouldn't even be able to compete and they're showing up and they're still doing it. And so it was twofold. I loved the idea of just making things still real things, tangible things, and then those tools were used to build other things like it felt really good, but I also liked the competition.
Mike (03:57):
Yeah, that's fair. That's fair. You and I have both been around this industry for a number of years now. We won't age ourselves by going into the exact details there of the length of our relationship and the length of your tenure at Empire, but you've seen a lot of change in the space in that time. Kind of walk us through some of the major evolutions that you've seen in this industry over that period of time, up till today.
Jenni (04:23):
As far as selling into home improvement retail, I got in right at the time where change was happening in a major, major way. Our business manufactured the craftsman level line and square line. Since 1929. We had been doing it. We were one of the first vendors that produced Craftsman tools. I mean, back in the day, it's the Sears and robot catalog that my grandma always had out. That was the retailer to be a part of, and so our business grew with that business. By the time I was involved, Sears was in decline, and we've kind of all seen what's happened
Mike (05:03):
There. Well, some of our younger listeners and viewers may not have even may know Sears. Yeah, exactly.
Jenni (05:09):
He may have heard about it. And so 80% of our business was the Sears craftsman business. When I got on board,
Mike (05:19):
That's significant, and
Jenni (05:19):
It was declining quickly at that point. So what are we going to do? We had to really have a plan, and so the idea was to build our own brand stronger and start competing in the retail space that was evolving around Sears, and that's actually how I got to know the Sales Factory. They were a big part of that story for me, but what we saw happening was big box retailers like Home Depot and Lowe's getting more powerful every day, and it didn't just impact Sears. There were mom and pop hardware stores all over the place that you could go and sell and have decent business with, and those were consolidating too. So we saw the consolidation of power and purchasing power within home improvement. It was the heyday of that, right as I got involved.
Mike (06:06):
So that was kind of phase one of evolutions that we've seen in our career lifetime. What was kind of the next phase? Thinking about e-comm was not a thing when we started, and so now we're seeing all these digital platforms and marketplaces. Have there been other big things or talk a little bit about e-commerce and when that emerged because that was really starting to emerge towards the end of your tenure at Empire.
Jenni (06:31):
Yes. I mean, I remember back not about business, but right at that time, Amazon was a book dealer, which I loved. I am an avid reader and I used to buy books on Amazon all the time. That was it really. At that point, people knew it was going to take hold, though there was a lot of talk for years. It reminds me a little bit of the talk about AI right now, what's exactly going to happen, right? We know it's going to be big. What's exactly going to happen with it? And e-comm was the same way. I remember as we first started having to help retailers, home depot.com, Fastenal, we had to help them with their e-comm platforms as far as giving them the right product information and the right product descriptions. And I remember my stepdad being like, this is such a waste of time.
(07:24):
If people want a tool, they just going to go to this store and get it. This is just a complete waste of time. And I'm like, well, dad, these retailers seem to think it's pretty important, so we got to do our part and partner. I sold the business in 2015 and by then we were all ordering everything, ordering stuff online and including tools. And I mean, I don't see that going away. I also don't see the retail, the brick and mortar retail space going away. Sure. What we've seen is this connection between I'm looking on my phone, I'm looking on my tablet, I'm researching this. I'm finding the better price. I'm standing in front of a set at Lowe's while I check to see the price at Home Depot. There's a lot more power in the consumer or the professional contractor consumer today with all that information. It's sort of like it all goes downhill. Manufacturers lost a lot of power to these big box retailers, but big box retailers lose power to consumers today. And so it's kind of what comes around and goes around and the powers dynamic seems to be shifting more and more to the individual, which I don't think that's a bad thing actually. I think that's an okay thing, especially in a country like ours. That's all
Mike (08:42):
Right. That's an interesting observation because it's kind of who has dictated the trends in different categories and dictated the direction of the marketplace has changed a lot since we've been observing this from manufacturers to say, this is what we're making and this is what you're going to get to retailers saying, Hey, we need this because our consumers are telling us this. And now all the way to the consumer, which is saying, all right, Mr. And Mrs. Retailer, you don't have what I need, so I'm going to Amazon. And it's changed quite a bit and who's dictating terms, so
Jenni (09:16):
Speak in the marketplace. Exactly. I have 10 choices from my iPhone, so you better cater to me because I got lots of choices out there. That's the power of the consumer
Mike (09:27):
Today. Just thinking about the evolution of the marketplace in your time, how has the relationship between manufacturer and retailer changed, if at all?
Jenni (09:38):
I've seen that shift into, I think a nicer place than it was for a while. The brick and mortar, large brick and mortar retailers back in 2000, they could call the shots and they loved to pit manufacturers against each other and negotiate the best deal that, I mean, who wouldn't? It makes good business sense. I get it. Back in the day of shootouts and line reviews that would last all night long and everybody had to be there and go in and out of the room and negotiate back and forth, and you'd see people sweating and some people's whole business was on the line because of how much volume those retailers could do. There was a huge differential in power and the manufacturer felt it and sometimes resented it. I mean, nobody likes to be controlled that much, so it felt like a fight. You were going into a boxing match.
(10:29):
I feel like what happened is retailers got programs that were cheapened. If you were going to negotiate us that hard, well, you're going to take cost out of your product. Maybe you could have made something domestically, now you're going to go overseas. And the programs that the retailers got weaker and their comps went down and they went, oh, what are we going to do about this? Why? Oh, we actually need to partner with the manufacturer to give the consumer the best program. And so I saw that shift. It actually didn't take very long. I would say right as the oh eight crash happened, there was this, Ooh, we better work together. Feeling that went on all
Mike (11:16):
Hands on
Jenni (11:16):
Deck and data became super, super important where if you could come in and present to the merchant solid information about why things were happening the way they were and where the price point progression should be and what brands are going to the consumer's aware of and clamor for, what features and benefits they care about with data, if you could present that you became such a valuable resource to that retailer or to that merchant that they were willing to longer term partner with, you go, yeah, maybe we don't need a full online review, but let's just do a business review in your category because we need partners. And you can see that pretty clearly still today, where there are certain brands that are aligned with certain retailers and now they have long-term good partnerships. It's harder to break in sometimes because of that. It just feels less one-sided today than it was and offering a better program because you're working together with the retailer.
Mike (12:24):
So that 2008 timeframe you mentioned, that's when data really came into the fold as really important, that same timeframe, really understanding the consumer and talking to the consumer and then working together with your merchant was like that was the new found solution and equation that was working out in sales, right? Because that's when it was starting to lift sales is that's when the recovery started. Exactly. And really in earnest is because when those partnerships started, is that fair to say?
Jenni (12:57):
Exactly. I would say in 2002, you'd go into on a sales call to a retailer, and it was all about your product, right? You'd line it out on the table. It was features, benefits, why this product is better, which is important. That's not unimportant, but that was the whole discussion. And by 2009, you'd go in, you'd have that discussion, but then everybody would pull out the reports and you'd show how sell-through was happening, how turns were happening. If you did a price test say and lowered the price by $2 in a certain region, let's analyze what happened. It turned into a lot more business conversation almost secondary to product. Now, if your product was absolute crud and it was falling apart, yeah, no, you're going to have that conversation, but it really became more of a business partnership as opposed to I am selling goods out of my bag.
Mike (14:01):
And that, as you said, is still the case today. And so it's important for manufacturers that are out there watching or listening to this, that is the relationship that you're striving to develop with your retailer. A lot of manufacturers still think it's selling the products out of the bag. Here's the price for this one, here's the price for this one, here's the benefits. Can I have the business? And that's not really what works today, at least in big box retail chains especially. So I think that's important for our listeners to just kind of keep in mind and earmark, especially if you're trying to break in, there's a different expectation in some of these retailers than maybe the way that you've gone to market in traditional distribution centers or mom and pop or anything like that. It's just a little bit different and a different game plan is required.
Jenni (14:48):
Innovation still matters. Awesome. Totally still matter, but you better have the business case behind it of what it's going to do for the merchant if they're going to give you shelf space, they want the return on investment. So show 'em how that's going to happen. So you got to be really on your A game. You got to have the great product, you got to have the innovation, but you have to have the business acumen too when you go into those calls.
Mike (15:15):
In this kind of time period that we're talking about, we've seen some really powerful brands that have gone away, retailers, brands, manufacturers, and we may have already kind of talked about this, but are there any of the other things, intangibles that it takes to survive now because it's not getting easier. It requires more, as you just said, you got to have the cool product that is solving a consumer problem, but you also have to have the business case and the marketing and everything to back it up. What are some of the things that are required
Jenni (15:47):
To make it? Yeah, those are all very tactical things and those are the basics. You have to have those things. I think there's some softer things too that help with withstanding the weather, if you will, authenticity in your brand. That sounds hokey, especially in this world of everything so fake, right, and choreograph. But when you have a company that you actually really believe in and you're proud of your organization and the way it's being run and the way the values that comes through to your merchant, that comes through to everybody you're dealing with in the industry, we're still selling to. People are people, and guess what? People like authentic people. Authenticity really, really, really matters. And I think we've all met people who are really passionate about their business and genuinely care, and you want to be around them. It gives you energy. You can't fake that.
(16:48):
Running your business in a way if you're an executive or an owner or a leader in a way that's genuinely authentic and getting out there and communicating that I think is really, really important. I think learning, being willing to learn and change and sort of pausing your own thoughts for a minute and going, oh, okay, I'm going to listen to other people. Maybe I'll reject it, but maybe I'll learn something new. You're never stop learning, and if you feel you know it all, if you feel you know it all about your product category about business, you're going to fail. So you got to be open to learning, changing, growing.
Mike (17:33):
Also to some extent, that vulnerability and desire to learn and not know it all breeds authenticity. And one of the interesting things that I've kind of talked about on the podcast and in other arenas over the past years is trust and authenticity breeds trust. I've heard it said a couple of different ways, but trust is the number one economic driver in the world because people do business with brands and retailers and people that they trust. That's just in our nature. And that doesn't need to mean that you align perfectly on everything correct, but they trust you and they're going to spend their money with you when they trust you, and that's huge. So authenticity will breed that, but it's not a short game. You got to be thinking in the long term.
Jenni (18:22):
It boils down to do what you say you're going to do. When you make a commitment in business, whether it's to a merchant, whether it's to your employees, whether it's to a vendor, it doesn't matter. You try to honor that commitment every time. And it sounds so simple, but it's not right. I mean, business gets complicated and things get muddy, but honoring and doing what you say you're going to do, those are just some basic things that human beings want to do business with you when you're like that.
Mike (18:52):
Yeah, and a lot of times what I've seen is it requires sacrifice in the short term, but you're playing a long game and playing the long game. Building that rapport and trust and partnership with your retailer is what's really going to pay off down the road, right? Yes,
Jenni (19:06):
Yes, yes.
Mike (19:07):
We've been talking about the past, how to survive. What do you see coming down the line from the standpoint of manufacturers specifically and how they're approaching their relationships with retailers and with consumers? What do you think the future of manufacturing looks like? Are there some things that you see on the horizon out there? Maybe not exactly how they're going to go, we don't know the future, but as key things to be paying attention to
Jenni (19:33):
The Covid pandemic, give manufacturers a little pause around the world. I think supply chains were disrupted here in the States and in Europe. People were worried about some basic needs that we have and were we going to be able to get medication or whatever it was that we needed.
Mike (19:51):
We all remember the toilet paper,
Jenni (19:53):
Right? Running around, going from store to store to try to find toilet paper in what should be the most advanced country in the world seems a little off. And maybe this is a little bit of my personal bias coming from manufacturing and loving it. I do think people are going to be looking a little more locally around the world to make sure that they can supply people with what they need in their area. And so I'm hoping that there's some sort of a revival of manufacturing in the United States because of that. And it isn't necessarily about competing with other parts of the world as much as it's common sense to make sure you can provide what you need for a civilization. That's a business opportunity, and I'd like to see more upstarts in manufacturing talking about that and saying that's why they are going to start a particular business or expand their manufacturing.
(20:52):
We'll see if that happens, but I'd like to see it happen. So that's sort of a wish and a prediction all in one. Also, logistics are expensive. We're talking about fossil fuels and the cost of oil and the idea that we can manufacture in one or two places and then spread it all over the world. There's a shortage of truck drivers, more local production eliminates some of those logistics issues too, so there's an opportunity there. I also see this seems like modern technology, but now it's old technology. I remember when we got our first 3D printer in our product development team, oh my goodness, it was so exciting that we could produce prototype parts in a day and put together new concepts that we could touch and feel and look at. And now that technology has come so, so far that I think you're going to see more and more individualization of product like customizing things because you can today, I think changing and innovating, that cycle's going to be quicker and quicker and quicker because of technology. And I think that's a good thing. I think that's exciting. It keeps us propelling and moving forward and always having to think of what's next. So I think if you're a product designer and engineer today, it's a really fun time to do that. You have so many more tools in your arsenal to play with and bring things to market.
Mike (22:27):
It's important to keep the consumer in mind when you're developing these products too, because you're right, lead times and product development cycles are changing and shrinking dramatically. There is a tendency to say, okay, I've got a cool idea. I'm just going to put it out there in the world and not vet it and test it. But it's still really important to get your idea in the hands of real end users and see how they're reacting, see what their needs are because they'll react in the marketplace with their wallet. And if you miss that step, you're going to have a big disconnect and
Jenni (22:59):
Eventually you'll lose their trust. What is this? They don't understand me. And just because you can do something does not mean you should.
Mike (23:08):
That's just good life advice. That's just good life. That's just good life advice, wasn't
Jenni (23:11):
It? At Sales Factory, we talk a lot about this process, which if you've listened to any of our stuff, I'm sure you've heard about it already, but which is know your prime prospect, know what they care about, know what problems they have and how you can solve them. And you always have to ask those questions as part of the product development process. And if you do and you test it out every time, you're going to have success upon success
Mike (23:39):
As a small business, as a family business, as you're trying to keep pace and compete at this pace. What does that look like for them? Do you think there are any unique challenges there that they need to be aware of? I love the idea of more startup manufacturers in this country, but how do they do that? What is the approach and where are the pitfalls? I
Jenni (24:00):
Guess coming from a family business and now I'm on the board of some other family business and I'm working here, which is a family business. So I think family businesses are great. There's also a ton of pitfalls that you can fall into. Kind of goes back to the just because you can, maybe you shouldn't, which is just because their family doesn't necessarily mean they should be part of the family business. I mean, it's classic, right? It's the age old issue with family businesses is making sure you have the right people in the right seat with the right skills. It doesn't mean you can't share the wealth of a family business with family members, not in the business. There's plenty of ways to do that, right? But you really have to be careful about who you're bringing in and making sure that the talent is there and thinking about the business piece first, because if you don't, your business will deteriorate and then you can't help the rest of the family.
(24:58):
So some of those decisions are very difficult. I have two siblings. They were not involved in our family business. It just wasn't their thing. They weren't cut out for it. It wasn't their thing. They had some other opportunities from the family business, but they weren't involved in it. And my stepdad, he had some siblings that same thing. They weren't involved, and I think that's part of why we lasted as long as we did. It's fun to have that family business and a small business is the same way, right? Yeah. You get to be buddies with your employee. Everybody knows each other so tight. If you can't step back and be that person that can make those critical judgements, hire someone who can.
Mike (25:36):
Yeah, it's a business first.
Jenni (25:37):
It's a business first. It's like being a parent where you're whining kid and you just finally want to give them what they want. That's not always good for them in the long haul, right? Sure. Yeah. So it's similar to that where you have to think about the long-term impact as opposed to short-term comfort.
Mike (25:55):
We've kind of talked about manufacturing in the US as well as outsourcing and taking things overseas. How do you make those decisions in a good, sustainable, ethical way? And then how do you approach those decisions just from a business standpoint, this makes sense, but this doesn't, and where do you start to draw those lines?
Jenni (26:17):
My experience with that was tough. We were a vertically integrated manufacturing company, so we didn't make our own packaging, but we made pretty much all the components in every piece of our product for a long, long time. As things got more and more competitive, we had to ascertain what were actually our core competencies. Just because we were vertically integrated didn't mean that we were competitive at every facet of, so we really looked at our operations, our equipment, our human skillset, and said, what are the things we're super good at world class and what are the things that we know there's people that are better at this? And so we sort of put things into those two buckets and then started looking for partners that were very strong, where we were weak and wherever that was. I mean, we did business in Mexico, we did business in Taiwan, we did business in China, Korea.
(27:14):
We had partners all over other partners in the United States that were manufacturing. Just like any relationship, sometimes you'd start with them and it all seemed great and then six months in and you got to be willing to move on and find partners. I'll say our extrusion supplier out of Texas, we partnered with for 35 years. Their core competency was very straight aluminum extrusions, which is important in our product line. And they weren't the cheapest, but they had a core competency in something that was vital to our product. No different than finding the retail partner that works for you and you can grow with Finding those vendors that you can actually have a partnership with is vital. They become part of your team. And I had some very bad experiences where companies I worked with were deceitful and ended up in legal battles with 'em, and none of that is fun. So finding, doing your due diligence, doing your homework price is important, but it's definitely not the only thing. Finding people that you feel like you have things in common with and can have honest conversations with. Really, and I talked to some of the owners of those companies still today. They become friends of mine for life, some not so much.
Speaker 3 (28:38):
That's fair.
Mike (28:39):
That's totally fair. I think I'm hearing kind of a common theme through this conversation, which is something that we haven't really touched on the podcast yet, and correct me if I'm wrong, but I'm kind of hearing that there is trust in the core of relationships on all sides of your business and developing that trust, whether it's manufacturer to extrusion vendor, manufacturer to consumer, manufacturer to retailer, and all around that, developing relationships that have authenticity and are developed on trust. That's where you can start to find some sweet spots and you will see it down the line in the development of your brand sales, sustainability and being able to make those decisions that are challenging, but lead to trust and doing what you say you're going to do on all sides is where it really starts to come together, is that
Jenni (29:35):
Absolutely. And especially if you're a small or a medium sized business, if you're a really large company, you can hire all the people you need. You can go buy your aluminum extrusion company and now you're vertically integrated. If you're a smaller mid-size business, finding allies, finding partners, developing them, it's imperative. I got to know Sales Factory. I didn't have a full marketing team at Empire, and I got to know Jed, the owner of Sales Factory, and after he tried to sell me his services for a long time, but once we started working together, it's the perfect example of that kind of partnership where he became an integral piece of my business. You were there, you saw that happen. It was a partnership that really made a difference. We trusted each other and we were honest with each other, and it was a genuine relationship. I really encouraged small to medium sized businesses to go out and find those allies.
Mike (30:41):
And here we are 20 years later, still sitting at the same table having talks about it. So that's pretty fun. I never let any guests go without a couple of hot seat questions. Oh boy. So unfortunately, you got to take a couple hot seat questions. Way this works is I'm going to ask you a question. You're just going to give me the first thing that pops into your mind, right? So kind of rapid fire response. First one is we know Wisconsinites take their cheese very seriously. Who has the best kds? Ooh,
Jenni (31:06):
That is very, very, very, the best kds are, I'm from Waukesha, Wisconsin, so it's a teeny town outside of Milwaukee. There is a restaurant bar called Tallies right down the road from our house. I'm going to say they have the best curds I've
Mike (31:22):
Ever had. Nice. Go to tallies, go to Talley's, check 'em out. As a manufacturer turned marketer, what's one piece of advice you'd like to give from the other side of the desk? So if you could give a piece of advice to manufacturers out there, anything that comes to mind, what would it be?
Jenni (31:36):
Don't snub your nose at marketing and think it's just an added expense that just dips into your bottom line. It is a key way of connecting your product to the consumer, but make it real. Make it authentic. Don't make it smoke and mirrors.
Mike (31:53):
I like that. Make it authentic. Guys, last one on there. I kind of made a little pivot as we were talking because my original rapid fire question was, you're a kick boxing instructor, so who in the retail world out there would you want to punch? But I'm going to also ask you a follow up. Who would you want to hug? Because we've talked about trust and building relationships. Who do you want to punch and who do you want to hug?
Jenni (32:19):
A specific retailer itself?
Mike (32:21):
Yeah, whatever pops through your mind.
Jenni (32:23):
We had a long standing relationship with Home Depot. We were in from store one, and so I'm going to say my answer to both is Home Depot see that because it depends on the point. I learned a lot by trying sell them and work with them and partner with them. And sometimes the lessons were tough and that would be the punch part, but the hug part would be at the end of the day, I mean, I really feel I learned a lot from them, and it's been exciting to see from the days of Bernie Marcus to now what's happened with that business.
Mike (32:56):
I think that's probably also true in life. All of the good relationships that you have out there. At some points you want to punch 'em, and then other times you want to hug them. Hopefully the majority is hug. Right? Yeah,
Jenni (33:06):
It's
Mike (33:07):
Awesome. Well, Jenny, such a pleasure to talk with you, so thanks for coming on. Thanks. Thanks
Jenni (33:11):
For having me. It was great, Mike. Appreciate it.
Mike (33:13):
So there you have it. I really enjoyed that conversation with Jenny. I hope you did too. We learned about small manufacturers outsourcing trust in relationships, the past, present, and future of retailers. So we hope that you gain some insights from that conversation, a little bit of the history of this industry, and maybe it'll spark some conversations for you and your team about how you're going to handle the future and what's coming down the road. We hope that was really helpful for you. We would love to hear from you. If you have any questions or clarification points, drop a comment right below this video. Or you can send me an email at mike.Fowler@salesfactory.com. And don't forget to hit the like button. Subscribe and click the little bell icon so you always know when there's a new episode of retail oriented coming out. And thanks so much for tuning in. Remember, when you're thinking about the retail channel, it's all about selling in and selling through.
