Chris Grouchy (00:06):

Hey everyone. Welcome to season two of the Legends of Retail podcast, brought to you by Convictional. We talk to leaders in retail and e-commerce so you can learn from them about retail strategy, leadership and team management and take their insights back to your company. I'm your host Chris Grouchy, co-founder and president of Convictional. What is Convictional? In short, retailers use Convictional to connect to vendors for dropship and curated marketplace. My guest today is a retail leader with over a decade of experience in the specialty pet category. Scott Arsenault. Scott is the CEO of Ren's Pets, a Canadian specialty pet retailer with over 40 stores across the country and counting. Prior to his time at Ren's, Scott co-founded Persuasive Marketing, where he partnered with companies such as Pita Pit to design and scale their marketing campaigns.

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(01:05):

In this conversation, Scott and I discuss a number of different leadership topics, including how to become an executive athlete, the power of executive coaching, why leaders need enough sleep to do their best work. We also discuss Ren's growth and their strategy under Scott's leadership, we discussed their strategy for how they open stores, how they tested and experimented with frozen food within their assortment, and how they remain focused on their core mission of providing their customers with their pet's best life. This was an absolute delight of a conversation. I thoroughly enjoyed it and I think you will too. Here's my conversation with Scott Arsenault, CEO of Ren's Pets. Scott, welcome to Legends of Retail.

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Scott Arsenault (01:53):

Happy to be here talking about retail and everything we're doing at Ren's Pets.

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Chris Grouchy (01:58):

Awesome. Let's dive into it. I wanted to begin by sharing something you've mentioned in a past interview. In the interview, you share that a CEO is an executive athlete. I think you were a former football captain in university and played hockey as well. I'm curious what lessons from sports you've been able to take and apply into running a business?

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Scott Arsenault (02:29):

First off, I've always had a big saying before we get into the executive athletes, a key to successes preparation. I found that in sports. Early on in my career at university football, fear was a really good motivator and we've probably all had that, whether we want to come on this podcast and be prepared and sound intelligent or we have an exam that we're preparing for a speech maybe that we're giving a little bit of that nervous nature, that fear can be a great motivator. I remember that going to university, being a first year person at a division two school, going to play in Oregon and in Washington and being out of a Canadian university nervous about the competition we were going up against, so wanted to make sure we prepared. We worked our butt off all summer training so that we physically weren't going to get manhandled on the field.

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(03:17):

That's that fear, but really just the key to success is preparation and know what you want to do. Where I went with the CEO and the executive athlete, I really had my eyes opened a few years back. I thought working harder, longer, sitting at your desk, being on top of everything, coming in early and really driving the business, very short lunches and little breaks, lots of coffee would be seen as admirable or maybe inspiring. I learned it was probably the opposite. People were taking a lot of cues from you and that you really couldn't be a complete leader without looking at yourself in a different aspect. That's where some of these soft skills or important skills came in. It's your emotional, you're own spiritual, you're mental and you're physical. I knew I had to work on some things, active listening, maybe the emotional intelligence as well too.

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(04:16):

I was pretty passionate, but that can be a negative sometimes, if you're a little too over the top. But what I didn't realize and the executive coach challenged me was to come back in two weeks and I had to do some physical fitness. Being a former athlete, I should have enjoyed that, I should have saw that as important. But this triangle of life, family, business and health, it was really struggling with that third dimension. That got me onto the path and it didn't have to be a lot, it just had to be a conscious, intentional effort at something because what they were looking at there was you can't show up every day as a great leader if you're not making sure that you're taking care of yourself like an athlete does. Whether it's eating right, sleeping, reading, learning, growing, was all these aspects that you really had to look at. It related to me obviously having played university football. You had to look at the total person. And that was a stepping off point for me and my leadership.

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Chris Grouchy (05:19):

So much to pull out of that, including fear as energy, that reframe, preparation and this idea of creating leverage through things that aren't just purely work ethic, plowing through any wall through brute force. If we pivot slightly to retail where you are running an incredible company and have way more expertise than I do on it. If you think about it, we can create leverage through stores. And we don't have to be necessarily the best at everything. Ren's has been absolutely crushing it lately in terms of opening stores. I believe the company is at 44 locations today, aiming to be about 46 by the end of the year, if our research is correct. What's been your process for choosing a location to open up a retail store in and what are sort of the different factors that you evaluate as part of the decision to open a new location?

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Scott Arsenault (06:32):

It'll be 44 this time next week. I think Friday will be 44. So, when we talked about it, Truro is going to be opening up and yes, 46 by the end of the year. So, thank you for that. I've been around since store number three. Ren's was built on work the drive, off the beat and paths and big locations, bit of a category killer, interesting stores to come at, but not necessarily on your way to everyday retail. As we grew, we owned our locations and built our stores, but we knew we couldn't grow faster and we wanted to do that through getting in more retail-like settings. The nice thing about that is you're getting instant traffic, but you have to be very scripted on that. It was easy when we were three stores, picking out some winners, getting to 12 stores, maybe even 20 stores because they're all going to be familiar spots. I traveled with my children whether it was for basketball, hockey or soccer, and on the weekends I could drive different retail locations in London and Kitchener and out to Kingston and Berry.

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(07:36):

While there might be an interruption in the game, I could see what was going on, but we knew that was not going to get us to the next level. We knew we needed to design something that would be agnostic to the human people that were running the company and we could have data that would make decisions. Not that we're currently looking to go into the USA, but if I was to just be dropped in Pittsburgh, I wouldn't know where the shopping nodes were. We used that framework that we're pretty comfortable around here because we know the settings and the landscape, but as we expand the company, we're going to get less familiar and we're going to have to deal with data.

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(08:11):

So, we went through the process of looking at some really sophisticated retail softwares and the one we picked was based on the fact that when we got to 30 stores, it would be very predictive and what it would do was knock out some of our older stores that were maybe over indexing because of time and familiarity and just look at regular retail and we could get very predictive on what sales and cannibalization would be. But what some of the main requirements in this software was that we got the demographic. So, we got pet spend, we got competition, we got education levels, household incomes, number of households, owner occupied households. We got splits on things like your salaries versus average household costs. So, really understanding discretionary income and what was driving it. Then it got nice to see that we could take these polygons, we could manipulate them by whatever the software was driving or we could figure out barriers that might be highways or rivers and north, south of geographic territories and really come up with a pet spend in that area. And if it was going to be enough to facilitate a Ren's.

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(09:28):

Once we saw that the demographics work, whether it was pet spend and incomes and education levels that we like, then we would go into what was a full core press on site selection. That's your traditional, you're going to drive a site, you're going to look at it, you're going to look at ingress, egress, you're going to look at signage, code tenancy, size of the box. These are the things that really establish whether you're going to be in an A site or a C site. We can talk a lot about it today, but you can mix it up and look at... you can have E demographics and maybe a B minus site. You probably have a winner. You probably could have B demographics in an A site, probably have a winner. But if you take C demographics and a C site, you're probably not going to like the result. That's the way we look at it from a day-to-day basis.

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Chris Grouchy (10:15):

What strikes me as being really critical to success in physical retail is access to proprietary data sources, first and foremost, but then being able to have such a clear understanding of who your customer is and that provides a lens to then view and assess and make decisions based on the proprietary data. Maybe the prerequisite here is know your customer. I'm not sure if you have any reactions to that, but that was striking to me.

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Scott Arsenault (10:48):

Yeah. Early on, we would've thought the traditional soccer mom would've been our customer, but wow, has that ever changed with the boom of pet and really the adoption of the pet as a family member. We've all heard about the humanization of the pet food. We saw it over the last 10 years with dog and we've seen it move into cat and just pets in general. So, the customer has really changed. Obviously, millennials are a great advocate for owning pets and we still see that family member within that cohort of 35 to 55, but we see the baby boomers loving having their pets. Recently purchased a Florida property and it will be a rental and one of the requirements there was... the rental company that would lease it out for us said, if you don't allow pets, we won't take you because that is how critical it is.

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(11:44):

Most of the people that would be looking to go to Florida would be 55 plus, but they're taking their family member with them, they're not leaving them at home. That is a stipulation, whereas back in the day, and you might be a little young for this, Chris, having pets could have been a negative as a renter and people didn't want you. Now, it's a requirement as a person renting.

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Chris Grouchy (12:07):

Totally. So, there's a lens on not only who the customer was and who the customer is today, but it's how is this going to change in the future and assessing behavioral trends as it pertains to the bullseye demographic as it were with those data sources. I remember in our first conversation you mentioned to me like, "Chris, it's always omnichannel. Omnichannel is everything." So, there's an element of online in retail and how those two things work together. Ren's recently has been awarded some incredible recognition for its efforts, including both the Retail Council of Canada and Pet Product News for the company's omnichannel strategy. Congratulations once again, on again, the trailblazing. What has informed the omnichannel strategy and could you walk us through the journey of standing up omnichannel for Ren's?

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Scott Arsenault (13:08):

Going back in time, we've sold online for over 20 years, so we're a bit of a leader there and it was born out the fact that we sell directly to groomers. We have high-end grooming products, whether it's shampoos, clippers and tables and tubs. We had a catalog business that morphed into an e-commerce business that store number one and two, they were picking out of an old warehouse and doing some really early e-commerce. We've done three platforms. That necessity was created around us being the number one supplier of those across Canada. So, getting away from the phones and getting a digital asset there. It was really interesting. But back in around 2016 when we were 10 stores, we were purchased by a private equity firm out of the U.S., Porchlight. They were fantastic.

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(13:55):

One of the words they said they wanted to professionalize as, and I will preface that now with saying, we're back Canadian owned out of Quebec by the Legault family, the Mondou, they're fantastic. But it was nice to have American insight because when they came up here in 2016, they were like, hey guys, we've read the book and we know the ending, you're about five years behind us but it's coming. We had something called Project 2020 and I will have to say at the time, I might have been a leader that was like, really? Our stores are doing great, do we need to invest this time and energy and really have these breakout teams and inquire, but really pushed on and said you have to get ready, this is coming. We were obviously selling online and we were in that business, but I don't think we were that excited or that visionary.

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(14:41):

So, I have to say that having some American influence helped there because it's like I think, in fashion where it's in Europe first and it makes its way across the water. They were living real time what was happening there. With shipping and logistics and cost just to operate e-commerce in Canada, we were obviously delayed and we just didn't have the density of people. But knowing that eventually we're going to break those barriers and it's going to come here. What we did was we put this vision in for 2020 and I got to say, we were first in BOPUS. It was click and collect and we got it to BOPUS and we did order by two, ship same day. So, these were a lot of things that in March, I guess, we're looking back, what was it? 2021 for COVID, that we were so happy that we had BOPUS when the government was forcing us to close our doors and only go to click and collect.

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(15:35):

Many of our competitors had a phone in system only. It was really nice that we were able to even in such dire straits, be able to operate. What was challenging was to shift all of your customers online at once and everybody was dealing with that. Nobody could have done any stress tests on your systems to figure out what that would be like. There was no modeling that we had that would even come close to it. That's where omnichannel, born out of our need to service groomers across Canada. We expanded to dog and cat and we wanted to make sure that we had products in our distribution center that mirrored us having the ability to order by two, ship same day. We brought all the dog and cat products that we needed to do that and that were going to be online that they would be in there.

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(16:25):

We moved forward quickly is, creating a platform that could service the stores. The last piece of that and some of the recognition that we got recently that you're just talking about is we put DoorDash in. One of our fastest growing categories is frozen food, dog food, it's raw, but there's many different genres within raw, so we like to call it frozen. DoorDash services that wing. It's the fastest growing category for food. Food's, the biggest category within our business and people want it shipped on the same day. We've got to see how we can do that. In a frozen category it's much different than shipping dry kibble that can take time in a truck or whatever logistics way it was. So, DoorDash was that cherry on top that really allowed us to 360 that customer, whether it was same day delivery, e-commerce, same day from the store shipping.

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Chris Grouchy (17:20):

It makes me want to ask about merchandising and skip ahead to that, but I actually want to perhaps double click on what it was like to go through a couple of these acquisition journeys. We can start with Legault, getting acquired by Legault Group and would love to hear what that process... what it's been like for you post acquisition for starters and then getting into learnings for adapting to the acquisition, having done it now a couple of times. First, via Porchlight and second, through Legault. I'll let you take that in however way you want, but I'm curious, as I know a lot of our audience has discussed opportunities with private equity or perhaps other investors and they want to understand what's awaiting for them once they go through that process.

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Scott Arsenault (18:15):

I'll go back to when it was originally sold to private equity. Being Canadian, I think a lot of people might not be familiar with this process of private equity. I think it thrives within the U.S. People understand shares and evaluations and EBITDA. We were running it like a business profit and loss at that point. Very happy for the owners that execute it and worked in this a long time and set us up with a private equity that was a mid-tier private equity. Some of the things that they said is they'll professionalize us and they did exactly that. Whether it was in hiring practices, financial practices, best practices like e-commerce or omnichannel, they really gave us a lens and surrounded us with some people on the board that had been there, done that. Our team, I'd like to say, was young had done a lot but we weren't done.

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(19:06):

So, we got to draw on that experience and really grow up with some rigor that maybe we didn't have previously. Quarterly board meetings, year-end reports and stuff like that. Everybody might frown on them, but when you ever done a quarterly board meeting for a lot of work, but at the end of the day you see what you've done worked on the last quarter, your results, you get some clarity on what's important. You align and you move forward. We've always had quarterly meetings and reviews at Ren's from three stores. That wasn't something we weren't familiar with, but I would just say it was a little bit more documented, a little more rigid in terms of how it was going to happen and be structured, but it can be scary.

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(19:49):

I will say we were fortunate, our private equity lived up to every promise they made to the leadership team and getting through any transaction and during COVID, I wouldn't wish that on anybody because my team was challenged with managing management presentations, which is an [inaudible 00:20:05] amount of time that's given to preparing and then giving presentations to maybe suitors or buyers at this point. It's a big list. Obviously, with pet there was a lot of excitement around a lot of big players that you would know were interested. So we had to carve out a lot of our leadership time to do the prep, the presentations, but still lead the company and make sure those numbers were going to be something that somebody would be attracted to. At the end of the day, the Legault family has 80 stores within Quebec and they have 98% brand recognition, but they're more than just a pet store family. They have real estate, they have manufacturing, they have development.

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(20:48):

They've really built up their name and their brand and they just understood that maybe they'd be challenged as maybe STAUBER or Swish LA was, making that step east or west. They looked for acquisition outside of the province because they had an appetite for it. They just knew they wanted to make sure they had a banner that would give them the same success they had. When they came up around store number 36 and we opened up our first urban store, we cut the ribbon with them. One of the founders, Felipe said to me, he said, "Scott, we didn't buy the company, we bought the people." You never know what that means. That was early on, that was in month one. But now, we've lapped a year. We've retained our whole leadership team. They're pretty invested in trust and loyalty. They want to grow fast. They understand we need the people, we need to retain the people and they understand the Canadian landscape. The nice thing is they've left us autonomous. We've leveraged a lot of things that they do well, but at the same time, they want to keep our uniqueness.

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(21:50):

If I was to say one thing, I've seen a lot of acquisitions within the pet industry in terms of brands, and as soon as the mother company or parent company seems to shed a little bit too much direction, the one that was growing or winning so much can lose its DNA really quickly and what made it special and unique. We've been given the mandate to grow faster and quicker and keep that autonomy where it makes sense and leverage anything they can offer us and take off of our plate, where it makes sense. A plus so far. They are as advertised, which I think we're fortunate because you never know and the more we get to know them, the more we like them.

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Chris Grouchy (22:34):

We bought the people. That's a powerful reminder of what drives business success. And yes, the process of getting acquired sounds like it can be distracting and so you can't neglect leading the company. If we think about we bought the people and segue into people, many of the leaders I speak with on this podcast have told me about the value of executive coaching. I'm curious about what that journey has been like for you and if you would recommend it to other leaders.

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Scott Arsenault (23:09):

If you ask my wife, I'm a fraction of who I was. Really, I was exposed to someone at Fifth Element, plug for Ruth Catney who I think, is just exceptional and she's really helped my leadership team. We've all been through her program. If you've never done a 360 review, it's pretty daunting and scary. The feedback can be really... it hurts, I got to say. Everybody says once you get through the first hour or two of some of the feedback, you can move forward. I've seen everyone on my team almost have that same example where you're taken back at first, you didn't see maybe some of your blind spots. And then you're just a better person for it if you really are in a growth mindset. I'm a big believer that leadership is learned. Just finished a couple books, Psychological Safety, The Multiplier. And every time I do, I wish I read it earlier. This is what I'm telling people.

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(24:01):

These books can be 10 years old and they stand a test of time. We talked about some of our favorites too, Jim Collins, Good to Great. That was really important when I saw the vision of Ren's and where we were on the flywheel. We're probably at the spinning really fast with technology at the end now and it's nice to see the people, the hedgehog, all that stuff come together. I think anybody that doesn't think they can keep learning, whether it's a coach, a mentor, somebody that could show you a different way... I golf, some people may play other sports and it's amazing when somebody just shows you something like a grip, how different the experience can be with your success and it's just a little thing.

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(24:45):

You continually got to challenge yourself and read. I think that's what needed in this environment when COVID really stressed leaders to show up and have emotional intelligence. Banging fists was just not going to work. I don't think it worked, that's a carrot and stick before. It works for a short period of time. I've looked at companies where you almost know they're leaderless. And you look back to some companies where the leader was so vocal and so central to it when they left, the company was not set up for success. You almost want to be to the point where you're not needed anymore, if you're doing your job. As a parent, a leader, a coach, you want to get to that. Yeah, big A plus for executive coaching for sure, for me.

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Chris Grouchy (25:31):

It has been one of the common threads between guests on Legends of Retail and I think the broader theme is leadership is learned. You have to be open to new ideas, new sources of knowledge and can't rest on your laurels, which brings us to this idea of the flywheel in Jim Collins' Good to Great. And being open to new ideas in particular around, let's just take a merchandising example around pet food. We did some research on this. I think in 2020, petfoodindustry.com reported on the growth of unconventional pet food formats like raw, frozen and freeze-dried pet food and the decline of traditional pet food. Sounds like DoorDash has been an opportunity to capitalize on the growth. I'm curious whether you're seeing this to be this trend to be true at Ren's and how important are these up and coming food formats or merchandising opportunities import... how important they are to your assortment.

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Scott Arsenault (26:44):

Yeah, critical. When you're getting into something like frozen, I'll go back in time a little bit, but I will say that you test first. So, I can remember sitting down with some of the leaders in this frozen category and saying, "What if we could get to this amount or what would it be like?" What I did was ask a few personal friends that I really respected in the dog community that were breeders and showed dogs and I knew they had fed frozen. So, I tapped into their knowledge, took some quick direction from them, met with a few people and said what would it look like for Ren's? But early on, when we were three stores, I thought people would only buy big bags of dog food because why wouldn't you only fill your car up? Why would you put $20 in? So, why would you buy a medium bag or a small even if you had a small dog? Well, I was wrong.

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(27:28):

I thought people only bought big tubs of GREENIES. That's a dental treat that's pretty popular in the market. So, when we brought in... went from 27 ounce GREENIES to 12 ounce, I was like, "Why would anybody buy those?" They flew off the shelf and then they brought six ounces, and they brought three ounces And I was like, "Really? Why wouldn't you just buy the biggest?" But you don't know what the consumer wants or how they're going to feel, so you test it and you change your assortment based on that. It's gone as far as like cat grass, I might have said, geez, I don't think this is going to sell them cat grass. To have an assortment for the consumer that they want, you've got to continually be there. Getting back to the raw insights, freeze-dried came early maybe like eight nineties years ago and it was expensive and the consumer did not adopt to it.

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(28:15):

The first couple people who were pioneers, they failed. But we saw that there was something there that was going to percolate over time. And when people wanted to start feeding better and really looking at [inaudible 00:28:28] panels, reading online. It started to make a comeback. And then raw became this category, and frozen that people thought was really going to be something that they felt they could feed their dog best. It does not work for every pet. That's where you have to have an assortment. There's multiple dogs in houses that might be on a frozen diet and on a kibble diet with limited ingredient, a grain free. There's multiple solutions for every pet based on age and size and activity. So, there's no silver bullet or solution, but we adopted raw early on in the frozen category and we put in walk-in freezers, so it's store number 16, we put in walk-in freezers and we put five doors in and we thought, wow, we've got a walk-in freezer with five doors, instead of your traditional double door freezers.

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(29:13):

There was just so much more cube, there was so much more ability to store. We quickly saw that five doors wasn't enough. We went to eight, saw eight wasn't enough, we went to 12 and now we're at 16 minimum. I think our Oakville store has over 20, plus some small freezers for fun things like bones and ice cream, the chest freezers. There's even support products that are not in necessarily the food category that would be more in the treat category in the frozen. So, we've really seen it grow. My message there would be, like anything, you don't bet the farm on it, you don't bet the company on it. We tested it, we built a business plan, we did a couple walk-ins, we check the lift and we do that traditionally with any category. You got to have some strength with an assortment for consumers to adopt.

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(30:05):

We didn't want one freeze-dried brand, we wanted multiple, so the consumer could see that there was a section. I think that's where brands really have to understand that there's power in numbers. You can't just have a single solution because consumers don't want to shop that way. You see it in chips and whatever, candies and chocolate bars. There has to be a multitude and there has to be a section there as opposed to just a single winner. So, in both categories we made sure that we were adopting a really best-in-class assortment so that the consumer would look at us as a category killer but maybe a category winner and they could come and shop with us and have a lot of comfort in that we would have the brands that they wanted.

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Chris Grouchy (30:50):

I'm picturing an alternative, parallel universe where Ren's just sells big bags of dog food and how different the trajectory would've been. It gets back to this idea of leaders need to be open to learning and at least at a merchandising level, testing and learning to prove or disprove your assumptions on what the customer wants is so key. I think you hit on that.

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Scott Arsenault (31:21):

Yeah. Now getting up to 44 stores, we have the ability to even test in markets and we've done some of that as well. When we rolled out DoorDash, I think we did 12 stores, tested it. I think we knew the answer, but we wanted to stick with that test and learn format. Sometimes, there's a full launch, but we've definitely tested new treat lines, new dog food lines, that's consistent. You can take a six to 10th store sampling, get some early indications, how the consumers can adopt it. With brands that we are comfortable with and we're all in it with, we're traditionally try to be a really good partner. If they see value in bringing something new to the market, we're going to support them. We usually have a conversation, if it doesn't work. So, on the way in, we're eyes wide open. We built up some trust both ways there, that we're willing to experiment with them in a full launch, but they're willing to support us if their hunch didn't work.

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(32:20):

That's one of the nice things about Ren's, is corporately owned and I have a saying, the bigger you get, the smaller you act. It's not my saying, but I just was in Montreal for some three year planning and we talked to... I wrote on the board act as if, and our manager should act as if it's Chris' Ren's Pets in liberty. I think that's the way you win locally. But we can give them the support at a corporate level and make sure we have best buying practices, we're getting good volumes, getting great pricing so the consumer's getting the best. Then when you walk into Ren's, we want it to feel like Chris's Ren's Pets or Scott's Ren's Pets so that it's unique and different. Feels like we're involved in the community, whether it's local rescues and humane societies. So, having a high level ability to pick the assortment and consistency across the brand is great. And having the ability to have our people deliver an experience that might be unique to that community, I think, is the winning solution.

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Chris Grouchy (33:18):

Right. Care to the local needs of the customer with the benefit of centralized merchandising and resources. I think that's a really powerful combination, especially if you're able to... whether it's used data sources or survey customers or just listen to them at a store level, what do they want? And then how can we use the qualitative perspectives of our customers to drive assortment decisions. And then test and learn as you did with the frozen category.

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Scott Arsenault (33:56):

Some of the data we get outside of even assortment from the community, our stores have to have at least two events every quarter, whether it's a rescue inn, humane society, something local. We get an NPS score weekly on every location with comments. So, we can see at first we did NPS company wide and we're like, oh we're 70, that's great, the Starbucks line. It's such a general number and it's got 30 stores in it. So, then we broke it out and those questions here are specific to our rewards members that have shopped with us and it's just that one question and rate as one to ten. It's a pretty hard number to get but we also track every night how many, carry-outs each store does to the car. Some of these things have been mired with COVID but we wanted to make sure that those are the things that I think if I own my own location, I would want to carry your dog food or your partner's or wife's or friends dog food out to the car and have a conversation with you about your pet. That's what owner operators do.

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(34:55):

We track that on a daily basis, how many carry-outs we do to the car. And that's been something that is specific to, I think, our brand and what makes us successful at that grassroots level within the community. I think you're right, making sure we have tailored assortments and we don't get too corporate, that's always a struggle with a company as they grow. But listening to the responses that we get at the store level, really helps us keep our ear to the ground. I guess-

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Chris Grouchy (35:25):

It requires a lot of experimentation too. We talked about this, but one of the downsides of experimentation is you just take on too much or you're happy ears all the time and then your surface area just gets untenable. So, you just dilute your focus ultimately. Can you share if that's been the case at Ren's with any examples that may come to mind?

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Scott Arsenault (35:51):

Even yourself, like this podcast, I could have gave you a quick no. I love to do some of this stuff, but at times, there's a bit of a time suck for everything you do, whether we've spent an hour prepping today, some emails back and forth with my EA. Multiply that over five a month and you've given up a quarter of your day plan and it can be really things that you don't think are leaking. From my level, I've got better at saying no quickly. Sometimes the understanding isn't there on the other side, but the end game is probably not going to move forward with this. So, I need to say no quickly because as soon as I bring four of my people into it at an hour a person, they're already challenged and they're running at optimal, this is just too much.

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(36:38):

I'm trying to model that to make sure that people understand that we have our clear epics or rocks that we're working on. And outside of that, the noise has to be really low and something has to be really exciting for us to take it on. Even in Canada we have, along the 401 we have all these great places, the en routes that you can stop and we put vending machines in there with pet products and we have an opportunity. The end game was, I just saw a lot of work and a distraction from our mission of a pet's best life and us delivering that through an omni channel. It didn't fit. It was exciting, thought it would create a lot of brand awareness and some people really wanted to get behind it, but you had to kibosh it really quickly, having crystal ball from previous experiences of things that have been similar to this.

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(37:37):

While it probably could have been a really good idea, it was just one of many and it just can't make the... what do they say? The cut for the reel on the movies and stuff like that. It just laid on the floor, so you have to cut quickly on some of those. That comes over time with experience and some failures. So, I think it's easier for me 11 years, to say what's a winner and a loser, so we can make those decisions and prioritize really quickly and make sure everybody has clarity. My leadership team meets every Monday morning. We have a quick, what went wrong for 45 minutes. Each department goes over what quickly went there and then we meet with the team to see how we did last week. So, we keep our pulse really quickly on what the stores and our online presence is. We look at the net promoter scores and get those answers. Like I said, something has to be pretty unique to make it into our day-to-day, for us to move forward or consider it.

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Chris Grouchy (38:34):

Yeah, it's a balancing act. If you don't experiment or take on unique opportunities, it might be difficult to really inflect growth. On the other hand, if you take on too many opportunities, you pull in lots of people. They can never really get anything done because they're multitasking and focusing on too much. It is striking the right balance. I agree, finding truly unique opportunities that embed into the strategy is probably the right way to think about it with constant testing and learning, back to the merchandising examples. Also, very interesting that you have a what went wrong section during your leadership meeting. Curious to hear more about that, if you're open to it.

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Scott Arsenault (39:23):

That was born out of Rudy Giuliani's Monday morning meetings. And I know Rudy's fallen into not favor now, but I watched him as a leader and did take some things in my early days from him and he had a Monday morning meeting. I toured New York City with my dad and I remember thinking growing up, how bad New York City was and you know hear all this crime and stuff, but I think we all could give Rudy some credit. His time in leadership in New York City just transformed it to a great place to go for entertainment and tourism, it just thrived and you felt safe. It felt like, knowing Toronto, that there was just 100 Young Streets. We have one Young Street in Toronto, but you just could walk endlessly and it felt safe and a police officer on every corner, no visibility in terms of graffiti and garbage. It was these little things that he ran the business of New York really well.

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(40:17):

What he did was, he had all of his leaders come in every Monday morning and report. Nobody wanted to say response time had to be three minutes for police and it's six minutes. If I'm the police chief, I'm going back and saying to my team, hey look, I don't want to go into this meeting. Everybody had a great week, ambulances were on time, no complaints about garbage, graffiti was all cleaned out, the roads were great and I was the person leading our team that had to report we didn't do well, so it doesn't reflect well on ours. It's great to bring your team in and get an impulse of the what went wrong. I think Four Seasons uses that as well. It's great to hear about what went right but let's hear about what wrong because those are the gems. We give a really state of the union quick, we look how we did the week previous. So, we start out on Monday morning getting a really good reset of how was the week, how was the weekend, how did we do in all departments, all locations.

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(41:13):

And then everybody reports if there's something problem. We roll it right into a company-wide huddle at 10 o'clock. I feel like we're reset. Some companies like to do that on Tuesday or after they've got all the data. I used to do it at eight in the morning. Again, growth mindset. I probably was intentionally forcing my teams to be prepared at eight o'clock in the morning, on a Monday morning. So, it probably meant some Sunday morning work. We don't want that. We want people to come in, be fresh, have a quick look at their numbers, get on any problems that they heard from Friday or previously, discuss it in a larger format and then go for the week from there. That's where that came out of. And I think making sure you have a pulse on the business. And what we do have before those meetings is reports generated automatically on NPS, on sales, on the metrics like the carry-outs, the comments that we care about. So, we have a real quick glimpse at those.

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(42:07):

If I look at NPS and it's over 70, I'm happy. If it's under, I'm going to delve into the comments really quickly and see where it was. What was nice when you're getting comments is most of them were born out of lack of staff and inventory and pricing going up, and a lot of that was out of our control. At least we were like okay, I see why they're giving us a bad mark here but the reality is that four of our people have COVID and we only had two people on the floor. Our supplier didn't ship us and we didn't have the assortment you wanted. I think everybody quickly understood that, but in the first six months of COVID, they didn't. They were just like, why are you out of stock? And then everybody was a little bit more accepting. But the reality is still, I'm having experiences personally in retail that you feel for the people behind the counter. I rented a car in Montreal last week and there's one person and then there's 10 people.

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(42:58):

I bet you somebody called in sick because I know that happens within our locations and this person is struggling to keep up and people are getting frustrated. It seems like that's just the new day of retail. As companies we're challenged with making sure we can buffer that negative experience as well as we can.

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Chris Grouchy (43:20):

Flipping back to what went wrong, one of the guests on this podcast, we're lucky to have as an investor in Convictional, someone named Scott Belsky, who's the chief product officer of Adobe. He talked about this idea of merchandising progress. And as leaders, our job is to merchandise progress. The way to do that is to balance hard truths and seek them out and balance those hard truths with real wins. I think you absolutely nailed it with the what went wrong and actually embedding that into the fabric of the leadership team meeting. I think I want to pivot now to books. We talked about it briefly at the beginning, but there's one in particular that we haven't discussed yet and it's one that I know you're passionate about, Why We Sleep by Matthew Walker. Tell us about your journey with sleep and why that book is so important to you.

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Scott Arsenault (44:26):

You know what? We talked about that one. I'm glad you brought it up because I'm struggling with it right now. People say I don't sleep well and you really have to persevere and ask why. Whether it's caffeine or you've got something on your mind or you're not preparing yourself, whether you need to shower before bed, relax, you need to have a cold atmosphere because it really is easy not to have a great sleep. There's so many things going on in our head, so we have to be very purposeful and intentional about trying to have it. Why it's so important? I read that book and as a parent it changed my mindset on early morning practices and the need for sleep and the brain development, whether it's the fetus and they're in the womb to the time that their young children and this teenager brain that you hear so much about.

‍

(45:11):

Just a couple quick stats. Some schools in the U.S. went to nine o'clock and even 10 o'clock starts and car accidents went down dramatically because teenagers were just asleep driving to high school. It was just a known fact. If they're on the road at seven or eight, but they're just not awake, they didn't have enough sleep. We've heard that about teenagers and how much they need to sleep. But for leadership, it's paramount. We talked about pillars, but that was the foundation is what me and you were talking about, that you can't be a good leader without getting sleep. It's not heroic and it's not admirable to burn the midnight oil and get up. I got home from Montreal at 11 and I really challenged myself to sleep till seven to make sure. Wanted to get up and know that I was traveling and away on some meetings for a couple days that I had probably a pretty big couple days to catch up. But you know that you can't do that without sleep.

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(46:05):

What the lack of sleep really affects is your emotional intelligence. The kids at my house have a saying called, 10 sale dad. Early on, we did 10 sales and I would work on weekend with my VP of retail and we ran a lot of these up into the store number 30. It was something that we did and it was unique to Ren's and we ran many of them, but we still had our day-to-day job on Monday. So, we were just physically and mentally exhausted and I couldn't be a good parent, couldn't be a good leader. I choose sleep now over getting work done because I know the work's going to suffer if you don't. It's really, really easy to think that you can go and just get that optimal amount of sleep but then you got to consider diet, exercise, alcohol, consumption, a lot of things.

‍

(46:51):

I gave a speech recently, for a conference of a brand that we deal with. There's over 80 people there. I talked about, at the end I wanted to give them some takeaways and I said, "Leadership has learned, read, keep reading." Whether it's personal growth or professional growth at all, it's growth. It doesn't always have to be a business book for sure. And the other one was, read this about sleep and get eight hours of sleep a night. I had somebody come up to me at our most recent conference and she said, "I remember that talk you gave." I didn't know her because there was many people in the room, but she's like, "I'm reading again and I'm sleeping eight hours and I'm so much better for it." If there was one takeaway from all of this, if anybody wanted to be a great leader, I'd say get eight hours of sleep, minimum seven, you're going to be so much better for your family, your friends, your company, and then you can be the leader you want to be from there.

‍

(47:42):

Have you read some of that? I know you followed Mr. Walker a little bit too. Is it podcasts? Are you aware of that, Chris?

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Chris Grouchy (47:52):

It's interesting. I started reading Why We Sleep and then I heard a couple of different podcast interviews that Matthew Walker had done and it prompted me to particularly reduce my caffeine consumption after 2:00 PM. I've got a coffee right here and it's delicious and I'm just a coffee snob and I'm like, I've got eight minutes to consume this or else I'm going to be having a difficult time getting to sleep. It's also been a motivator to use analytics more seriously. So, I have this product, not affiliated with them in any way. It's called Eight Sleep and it's basically a cover that goes around my mattress so my partner and I can each have our own different temperatures, but it's filled with sensors to give you a perspective on what time you fell asleep, what was your sleeping heart rate, how did it change over the course of the evening, was it higher or lower on average?

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(48:56):

And then I basically every morning, wake up to a report on last night's sleep. And then I know what kind of day it's going to be based on that. The best part about it though, I think from my... and then I'll hand it back is just being able to regulate temperature, it's critical. I notice if I can't adjust the thermostat because I'm traveling and the hotel room can't get cool enough, that will impact my sleep in addition to alcohol and caffeine consumption and just really watching that.

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Scott Arsenault (49:28):

It's amazing that with the lack of sleep, goes the cravings for eating. It's all intertwined and health and fitness. So, you'll see a tantamount difference between the amount of food you crave if you're getting good sleep versus little sleep. I think you nailed it on the head. Alcohol as well and caffeine too. I'm struggling right now. I've been drinking a little more coffee later and I know it's affecting my sleep. I'm pretty good at tricky coffee and sleeping, but if you want to be optimal... So, I'm glad we bear the same beliefs there, but more people need to understand this. They really, really do. There's a lot of zombies walking around out there. Yeah, I get it at times you just get put in positions where it's not going to be happen, but you want to get back on that routine as quickly as you can. Live life, enjoy yourself, but when you can, I think, getting into a routine is much better.

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Chris Grouchy (50:30):

Absolutely. Everything in moderation, including moderation. We're coming up on the end of our time together, but I have one more question and then a couple of rapid fires for you. We're coming up to the end of 2022 and I'm curious what Canadian pet owners can expect from Ren's in 2023. Any initiatives, ideas that you can tease us with?

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Scott Arsenault (50:58):

Yeah, that's a great one. Regular retail is what we settled into in some regards. In stock's been some things. Can we get back to some of that data that we enjoyed previously? The numbers that we accept now are numbers that we previously wouldn't have accepted. Standards, again, staff training people on the floor. I wouldn't say it's new, it's back to where we were. When people are frustrated with lack of retail staff, it's usually not the company that's driving that is just the amount of access to people and then just still general sickness. Our goal was like, could we get back to the standards that we were comfortable pre pandemic with. How our store looked in terms of operation and cleanliness. How our staff were trained and feeling. How many people we did have there to service customers and what the product and assortment was like for an in stock.

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(51:49):

I wouldn't say that there's something... we're not building some space shuttle that's going to take us to Mars by any means that Ren's here, continuing to be a leader and tweak and be better at it. But there's some of the regular retail that we're ambitious to get back to that I think consumers would enjoy. We're trying to figure out a way to get more people in the stores, to get more product on the shelves, to get those standards back to where the consumer would be happy with it. That's our big focus right now.

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Chris Grouchy (52:19):

Dogs are not going to the moon. Sticking to the basics and really nailing them. I think that's a testament to the focus you've driven into your team. I want to move into our rapid fire round. We've got four quick questions. I'll give you a brief question and then you'll give me your immediate thoughts. How does that sound?

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Scott Arsenault (52:45):

Oh, wow. Scary. Is that one?

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Chris Grouchy (52:45):

I guess we're going five. Most exciting opportunity in retail and e-commerce.

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Scott Arsenault (52:54):

Tackle the shipping barrier cost, I guess. It's not one word. Are you looking for one word or one thought?

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Chris Grouchy (53:01):

Nope. You can riff on it if you want. A brand you love and why?

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Scott Arsenault (53:12):

Geez, wow, you're really killing me on this one. The Keg as advertised, they're going to have to get back to pre-COVID standards, but I felt like the TV commercials... It wasn't like it was my best experience eating, but it was as advertised. I felt like The Keg lived up to their promise and that's important. You can be a Dollarama, you can be some type of other concept, as long as you know who you are and you're delivering that concept, I think that's what the consumer wants. So, I always felt The keg was bang on with what they promised and what they delivered

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Chris Grouchy (53:51):

Their twice baked potato is just like... Probably not sleeping too well after that and couple bottles of wine. Most important lesson as a parent.

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Scott Arsenault (54:06):

I guess again, is to keep in a growth mindset. The things that you probably historically were taught or grew up on, might not be the best. So, as a parent, you got to be in a growth mindset, read a little bit, learn a little bit. You talked about moderation, that you can get a little bit to right wing or left wing as a parent sometimes you'll see that. But I think parenting is almost like a job as well and there is things you can learn to help you sleep. When we go on diet, these are things that would help your children immensely. So, I just think standard growth mindset, we definitely, as our children grew up and even now, we were always trying to make sure that we were current, my wife and myself.

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Chris Grouchy (54:54):

That's wonderful. Lastly, the kindest thing someone has done for you.

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Scott Arsenault (55:02):

Geez, Chris, you're killing me on this.

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(55:04):

I guess, and this can sound a little bit prescribed, but I guess the kindest thing, it's like that, you got that something in your teeth and somebody can tell you. A little bit of area for improvement. You're not going to like it at the time. And getting back to the growth leadership, it's really affected my personal and professional behavior. So, definitely a different person. I thought hard work and up early to rise and all those things would be things that would make you a great parent or a great leader but some of the hard conversations, I guess, would be maybe the best things or gifts that people have given me. They're not always seen that way at the time, but probably now looking back, it's made me a better person, so yeah.

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Chris Grouchy (56:01):

That's great. This has been a incredible conversation, Scott. Thank you so much. A true masterclass in what it means to be a retail leader, how to balance, focus with test and learn and sleep and all of the great leadership lessons within it. I really appreciate the time you've taken out of your day to have this conversation and hope to do it again sometime.

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Scott Arsenault (56:28):

Yeah, I highly recommend it, Chris. You guys' preparation, your team overall professionalism, that's one of the reasons that I got a little more excited after our first meeting and knew this was going to be something that inspire and motivate me as well. I got some good takeaways from this as well. And your preparation was really appreciated. This was fun.

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Chris Grouchy (56:48):

Awesome. Really appreciate that, Scott. Take care.

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Scott Arsenault (56:51):

Okay. See you, Chris.

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Chris Grouchy (56:56):

Thanks again to Scott for coming on the show, and thank you for listening. To catch the latest episodes of Legends of Retail, please subscribe to the show on Spotify, Apple Podcasts, or wherever you get your podcasts. You can also stay updated by following Convictional on LinkedIn and Twitter. Finally, if you want to share feedback on the show, I'd greatly appreciate it. You can DM me on Twitter @ChrisGrouchy or you can email me at chris@convictional.com. That's chris@convictional.com. Thanks again for listening.