05: Why most retailers are no good


John: I’m here this afternoon with Keith Stanley, Keith is one of Australia’s preeminent and most charismatic of marketers. He trained at Harrods in London, was Ikea’s first national marketing manager in Australia, ran global marketing for Flight Centre and has also had stints as CEO of the global travel business Stella Travel, now part of Helloworld and also ran NRMA Travel. I’m also proud to say Keith is my partner in Komosion. Keith has led customer centric thinking I think in pretty much every marketing role he’s ever had and today as well as learning a bit about Keith and his remarkable life and some very interesting hobbies, we’ll explore with him the past, present and future of marketing as he sees it. So Keith welcome to customers matter.

Keith: Thank you, John.

John: Tell us a little bit about yourself Keith, where did you grow up and where were you educated?

Keith: So I was born in Jamaica in the West Indies and educated both in Jamaica and in the UK and enjoyed the time and the particular flavour that the Caribbean has in a view on life and particularly with people.

John: So tell me about your first job at Harrods. I mean you grew up in Jamaica how did you come to be in London and what did you do at Harrods and what took you there?

Keith: So I was studying electronic engineering and had completed my first year and got a summer holiday job at Harrods. I suddenly realised how boring engineering was and how wonderful being connected to customers was. And when it came time to go back to university I had rather a long discussion with my father of which I’m not sure I came off the better but I stuck at my course and continued on at Harrods. I joined their executive training scheme and this was quite an intense programme over two years doing both tertiary study as well as doing different jobs in different departments. I ran accounts for sunglasses and gloves and worked in the pet department, the food departments, the receiving banks and so forth.

John: You mentioned you particularly liked the people part of Jamaican culture, is that something that you got to play with when you started to work in retail, was the people stuff important?

Keith: Well doing calculations on engineering factors compared with actually selling to people was let’s say the people part was a lot more appealing. At Harrods I kept winning the top salesman of the day, top salesman of the week, I just love dealing with people. And we met a lot of celebrities there, the shop was closed down sometimes to cater to people but it was just the sheer variety and the pleasure of seeing someone getting what they want, that customer centricity was in my blood even in those early days.

John: So from Jamaica you found yourself in London and not that long after you found yourself in Australia, how did that come about and more specifically you found yourself at Ikea in Australia.

Keith: Yeah, well I was fortunate enough to meet my current wife who was studying flute with one of the great flautist in the UK and we got married and went and spent a couple of months in Jamaica to see if we could live there, realised that in those days Jamaica was not much of a place for a classical flautist. So we decided to come onto Australia on my father’s bidding and landed in Melbourne in 1980 and within two weeks I had my second interview at Ikea and got the job. I’d applied for one job and they said I was overqualified so I forced them to take me on anyway and started there just before Christmas in 1980.

John: Ikea is a remarkable retail success story globally and I know you recently led a product team from Flight Centre on a tour of one of its stores. What’s made that business so successful and what did you point out to the product marketers when you took them to Ikea?

Keith: So I think Ikea was years ahead of its time and still is in retailing, true proper retailing and really understanding the customer journey as they go through the shop. Little details like I remember when a bookcase was made an inch shorter in order that it would have less damage on the pallet as it was shipped around the world. And little details, enormous attention to detail which I believe is extremely important in serving customers. Also the use of room settings, the real live situations that they created to assist the imagination of customers and really get across the point of who the room was for. Before a room was done at Ikea a full profile of the person that lived in that room was created. That profile was then pinned up at the front of the room and every item that we took into the room we had to make sure that that person on the profile fitted it. That level of detail is quite rare in retailing and that’s why it was a great education.Q When you took the Flight Centre crew recently to a modern Ikea what did you point out and what did you observe, what had changed and what struck you?

Keith: The range in Australia has increased greatly but also they’ve targeted owning the kitchen area and bathroom which they couldn’t do when I was there. But it’s the attention to detail so we went to A-mart before that just to contract, on A-mart there was a table that the staff were interested in, there was no measurements on it, there was no description of what the product was made of. And that kind of attention to detail is what makes Ikea a great business. The way that lead-in prices are treated, the posters, the signage the way the rooms are designed and positioned, in every corner there’s what we used to call a banana room which draws your attention to it. So that the rhythm in Ikea was here’s some inspirational ideas, here is options that these ideas can be made up of and then here’s your planning area which is about the detail of all of the different pieces and how you pull it together. Every single area in Ikea has that rhythm and that’s what I was pointing out to them. It’s unfortunate that often when you go into retailing unless you’re passionate about retail you just absorb what is being planned for you but in Ikea I learnt and I’ve held it all the way through my career this idea that really understanding what’s behind it, why is that there, why is that that height, why is this this. In entering that enquiring mind you’ll find that most
retailers are not very good at what they do.

John: What was your journey after Ikea and how did you end up a seventeen year veteran at Flight Centre and I guess how did you and the company evolve over that time?

Keith: So after I left Ikea I set up my own business, it had a really cool name, it was called Retail Detail. And I contracted a lot to Westfield Shopping Centres and they would ask me to go and meet with potential clients, we’d meet with the clients and I would help them design their retail business, often inexperienced people. With the discipline I’d learnt through Harrods and Ikea I had the knowledge to share with them. One of the clients was a Mr Skroo Turner and he was late for the meeting I will say but we got on like a house on fire right from day one. Even in those early days and this is ’91 he was planning multiple
brands, he only had a hundred and twenty shops at the time and asked me to design the next brands for him which I did. And then at the end of that year he said look could you take over all of our shop design fitout and then about six months later I took over the marketing fraternity. And a couple of years later he bought my company and then said okay you’re now global marketing manager I want you to do this, this and this. And that was the start of one of the best educational journeys working for one of the most inspirational leaders in retailing I’ve ever come across.

John: How has Flight Centre evolved from that time, those early days, and during your time there what did it go from to become?

Keith: So when I first started it only sold international airfares, that was it, if you wanted something else you were sent to Harvey World Travel or somewhere else. So the evolution was every shock that hit the world be it SARS, be it the Gulf Wars, all of those things, Screw had this incredible ability to morph and evolve and I was lucky to be part of the team that took the challenges that he set for us and make them into reality. So we first took on the domestic air and we did a deal with an ancient company called Ansett and that saved them that time round from sure failure. We grew that business, the next shock was another war and from that we took on land products so we didn’t just do air. We evolved each year a new brand so we created student flights, travel associates and some of the corporate brands that we eventually developed so all of that was evolution. So the company moved from being simply retail, it bought wholesale businesses so it did an end to end kind of arrangement, broaden the brand, my job was to make sure each brand was targeted at different customer targets. And then on a global basis making sure that the brand elements that were crucial to identification of the brand in the UK, in Canada, in the US and South Africa were the same although adapting to the local markets. So it’s quite an interesting way when you run a global enterprise where you have to be very clear about what’s important and what needs to be local. And we had a lot of robust discussions on where that line was and it built it into the fantastic business that it is today.

John: So in your time the company went from one business with a couple of hundred stores in one country to being a business with operations in how many countries and how many stores?

Keith: Well if you include the licensees there’s something like 54 countries and I don’t know
somewhere 2000 stores and offices plus the whole backend, a whole air division that contracts that, a whole land division that buys and now most recently buying actually the ground operators in the country. So it’s a lot bigger with Top Deck now part of it so true ground operations. And I think in ’95 when Flight Centre floated the thing that people bought into in those days was the idea that there was this expansion opportunity and that made it really more interesting from an investment point of view, the first shares when out at 95 cents, they’re trading well over 30 dollars today.

John: Before I ask you about your more recent roles Keith tell me about your passion for Bonsai, how did you get into it, how big is your collection and what do you draw from it?

Keith: Well I’m not a patient man and when in about 1981 I went up to the Dandenong’s in Victoria and saw a Bonsai place, I just fell in love with them, I thought a mixture of art which I love and horticulture which I love as well and creating something really special and beautiful. And so that started a lifelong passion for them, I have about a hundred and twenty trees, I’ve visited exhibitions and nurseries in Dubai, throughout America, Japan, Vietnam so it is a passion that I embrace shall we say.

John: And what do you get from it?

Keith: Again the beauty, the art and the horticulture, so working with nature. When I’m focussed on a tree and working with a tree trying to explore what expression it’s trying to make to the world the whole of the rest of the world disappears and I’m just in that moment. And that’s very important particularly in some of the higher stress jobs that I’ve had over the years.

John: When we met which was about a decade ago I was running Tourism New South Wales and via a mutual acquaintance invited you as the Stella Travel CEO to join a delegation led by the then Premier to China and India. And what I remember being struck by on that trip was your determination not to hobnob with the dignitaries on that trip but to try and understand what the Chinese and Indian visitors to Australia might want from a hotel. Really struck me as a passion and a focus, I wonder if you could tell me about Stella, your time there and how and why you were so focussed on not only the customer of today but the customer of tomorrow?

Keith: Well the thing I found amazing a lot of the other delegates there it was about them and what they wanted to achieve and a lot of it was social, a lot of it was trying to politicise the whole thing. What I found was that our customers are really customers, they had a whole range of Chinese travel agents that were trying to work out, and in India, trying to work out how to access the Australian market and had no idea and they were looking for some insights. Of course once you open up to them and start to give them some they tell you an enormous amount about what their customers are needing. And you know things like in India they have no interest in the beaches, they don’t like swimming in general, was an insight that perhaps some of our tourism boards had not recognised. So these are things that you only find out by listening to customers and in the old days at Flight Centre the thing that I found quite interesting is I was always the one every Thursday afternoon I’d go into the shops, I’d speak to customers, when it came to the management meeting each Monday I was the only one that had a clue what was going on out there and I think that is the role of marketing. In Stella we translated this at a new level because I was running it I was calling the shots, we really focussed on where all the brands sat, what target markets they had, we did a massive rebranding in New Zealand to help one of the businesses over there. We moved away from the commoditisation of air and accommodation to really start to design experiences and design things that customers really go there to do. If you sell the commodity of air and land there is no money in it, if however you’re selling the experience then a customer is willing to pay for your expert knowledge in that instance.

John: So could you just describe exactly what your job was at Stella, what Stella was because of course it is no more and how that job came about?

Keith: Well I’d left Flight Centre, I’d wanted a new challenge, I’d been there for sixteen years I think it was doing pretty much running the marketing for sixteen years, building up. I said that I worked for two of the world’s great brands in Harrods and Ikea and I got to create a third one which was Flight Centre. However there was nothing new for me there so I decided to go into the hotel side of the business and through a friend got recommended to Stella as it was then. It was owned by MFS and they were acquiring hotel businesses, currently Mantra, BreakFree, those brands. I’d been there a month and the managing director sat me down and said look I’ve got a job for you, we’re thinking of acquiring S8 which included all of the Harvey World Travel, Travel Scene and a plethora of other brands. And I said oh that’ll be an interesting thing to work on but I’ll need to talk to Skroo to make sure he’s comfortable with me working there and he said no I don’t want you to do the marketing I actually want you to run it and I said holy moly [laugh] hang on there I don’t know if I’m ready for that. ‘Cause it was over three thousand staff and three thousand five hundred franchisees, so a pretty amazing organisation. He did convince me and Skroo was more than happy to see a stronger competitor there because he’s a strong believer in that. So I went on the be CEO of that company it grew forty two percent in the year that I had it before the GFC hit and a lot of that was rationalisation, I put in finance systems, I put in a whole heap of things that made a massive difference to the business. We had a great team there and we were owned by private equity which turned out to be quite painful towards the end of the experience during the GFC where they were extracting, or trying to extract as much as they could out of the business and probably more than it could afford.

John: So since we first met we’ve become partners in Komosion and during that time you’ve held a range of pretty interesting roles post Stella, you ran NRMA’s travel business and via Komosion, you’ve had various incarnations back within Flight Centre not to mention working on strategy projects for a range of our major clients, Liquor Marketing Group, Tabcorp, La Trobe University, David Jones, what’s this phase of your career been all about?

Keith: Well I think I’ve learned a lot over the years, I’ve got a few grey hairs or very few grey hairs left to remind me of that. I’d like to help people and I love complex problems, I love companies that have no way forward that they can see, to really delve deep into data, I’m unusual in that I have both a creative side and a data side and I love the data to inform me as to what’s really going on. And that’s stood me in really good stead to help our customers of Komosion to really drive better outcomes for them and we’ve discovered some surprising things using customer journey work to uncover insights, often within the data there are
massive insights there. And that’s really been the most enjoyable part, to see a client who has an intractable problem and we come in, we assist them, we see them get it and then implement and then see the benefits coming out the other side, that to me is the big joy of this period of my life.

John: You were really invited to speak not once but twice in the marketing stream of the famous technology show CBit, there’s a clue in that I think to your answer to my next question which is I’d like to ask you to reflect on the past, present and future of marketing and I’m guessing the customer might have something to do with it.

Keith: [laugh] Good guess John. I think that marketing has gone through a massive stage of interruption, what I am very excited about is to see that evolve through digital. Digital has made marketers have a lot more accountability. In the past when I was deputy chair at the Australian Marketing Institute I and one of my colleagues really pushed hard to get accountability in marketing, our view was that there needed to be more on the board. So when I look now I can see that digital has forced accountability into the market, not all marketers have embraced it and there is a large portion who are still trapped in the interruption or the advertising part. Marketing to me is about really understanding the customer and understanding them well, new technologies are giving us insight at a rate that we’ve never experienced before but not all marketers are aware or looking at them. So in the past we’ve gone through the same process that manufacturing has been going through which is mass produced at the beginning, segmented in the middle and now very much into a personalised space. If you look at the companies that are succeeding today it’s at the high end of quality generally and it tends to be about personalisation, not everyone wants to be the same and the technology today with, you know, 3D printers, things like this, you can literally customise everything to exactly what a customer wants. So going forward my expectation is that marketers will need to understand what Keith Stanley wants in immense detail and don’t dare interrupt me with anything other than what I want or that you think I will be pleased with, don’t give me the trash that I’m not interested in. And I think only through that can you build relationships between brands and individuals and therefore continue to see success for your business.

John: Finally Keith aside from Bonsai and I know your family, you’ve mentioned your wife and your lovely daughters, you have two other great passions in life and I’m hoping you might share your secrets with the audience and I know that may relate well to some preferred reds and maybe some Jamaican rum, what can you tell us?

Keith: I think I have two things, not Jamaican rums funnily enough, but I enjoy a Guatemalan rum which is very fine but in the red, I enjoy all wines, but my absolute favourite is a Barossa red, a good meaty, heavy red and I partake of it as often as one should or maybe shouldn’t. The other passion I have is chillies. So I had a business that I created on the side called Chilli Mania many years ago but didn’t have the time to maintain. Before the internet we had a paper catalogue believe it or not and now I restricted myself to only twenty varieties and each of them has a peculiar flavour, I can walk you through those if you’re
really interested [laugh]. But they are my two other passions.

John: Sounds like a challenge for another day, the red hot chilli pepper challenge.

Keith: [laugh] Well the hottest at the moment is one called the Carolina Reaper and appropriately named let me tell you.

John: Sounds very Jamaican. Thanks very much Keith.

Keith: Thanks John.