University of Arkansas

Walton College

The Sam M. Walton College of Business

Ep. 18 | Kevin Ervin Kelley on the Customer Centric Innovation in Stores

Kevin Ervin Kelley
August 04, 2021

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On this episode of It’s a Customer’s World podcast, host Andy Murray continues his conversation with Kevin Ervin Kelley. Kevin is Principal and Co-founder of Shook Kelley, a strategy and design firm based in Charlotte and Los Angeles. Kevin is an expert on progressive retail format, acting as a leader in the practice areas of restaurants, retail, grocery, and leisure. From superstores to cities, Kevin combines business, science and design in an approach known as “perception design”. Kevin holds two architecture degrees from the University of North Carolina at Charlotte. On this second episode with Kevin, Andy discusses changing store design, innovation to meet new customer needs, and micro vs macro stores.

Learn more about Kevin Kelley and connect with him on LinkedIn and Twitter.

Episode Transcript:


0:00:07.6 Andy Murray: Hi, I'm Andy Murray. Welcome to It's A Customer's World podcast. Now, more than ever, retailers and brands are accelerating their quest to be more customer-centric. But to be truly customer-centric, it requires both a shift in mindset and ways of working, not just in marketing, but in all parts of the organisation. In this podcast series, I'll be talking with practitioners, thought leaders and scholars to hear their thoughts on what it takes to be a leader in today's customer-centric world.


0:00:50.8 Andy Murray: This episode of It's A Customer's World podcast is the continuation of my talk with the Kevin Kelley. If you missed part one, please go back and listen as we covered his background and macro approach to design. As a refresher, Kevin is the co-founding partner and principle of Shook Kelley, a strategy and design firm. I followed Kevin's work for over 20 years, and I don't think there is a progressive retail format out there that doesn't have Kevin's fingerprints on it in some form or fashion. In this episode, we'll learn from Kevin about the future of store design based on trends and customer choice. Macro versus micro stores and the need to innovate to meet the needs of today's customer.

0:01:31.2 Andy Murray: For the unwashed that are living in the grocery space and dealing with that, one of the hypothesis I have, which is probably fairly obvious, is that customers have now gotten pretty familiar and okay with buying a lot of the essential categories that they might have found in a larger growth superstore-type thing, whether it's laundry, paper towels, they can buy those essential categories online.

0:01:55.4 Kevin Kelley: Yeah.

0:01:58.0 Andy Murray: So the question is, if you go to the store and you're looking at fresh, why would you wanna go down an aisle that you can buy online, and a lot of these essential categories, whether it's laundry or shampoo or whatever, they rely on discovery and the physical shelf in order to bring new to the market. And I've seen, most I think would probably agree with me on this one is that, they tend to be over-ranged and under-choiced.

0:02:25.5 Kevin Ervin Kelley: Yep.

0:02:26.2 Andy Murray: And when you can get that category online and you've now become used to that, the only reason to go into those categories in a store is going to be for discovery or the browsing. Because let's face it, online is not easy to browse, and yet if you go into an environment that is just one facing after another of tiny variations and it's really difficult to understand choice, I think that's gonna be a real problem. And it'll probably lead to more macro space changes, which there's been a lot of micro space changes over the last 10 years, you might do a macro space change on a remodel or a new prototype, but I think the disruption in space utilisation in the store level is going to be fairly significant.

0:03:15.6 Andy Murray: And I also think that for those physical categories, especially in central areas to make sense, they're gonna need to be designed differently, they're gonna need to be designed to help customers with choice, and really communicate choice so that you can understand that. I mean, stand in front of most aisles and try to figure out what's the best value for me, you need two calculators. You can't even figure it out. But what I would suggest, and I'd love to hear your thoughts on this, is that I think a lot of categories can add value in the physical space and be shopped if they maybe pull back a bit from just ranging and started thinking about how do you communicate choice at shelf, and make those choices clear so the customer can have something that sounds more interesting and viable.

0:04:07.8 Andy Murray: And those are categories that typically like no one wants to bother with, the soda aisle or the laundry aisle 'cause they're just bereft of any type of semiotics that makes sense, and a lot of those are just over-ranged, but for them to survive and get physical space, they're gonna have to be thought of from a browsing mindset. And I'd love to know how... What would you say to someone that's in that category about how to rethink, what do customers want when they're browsing versus just a task mindset that they can now go do online?

0:04:41.9 Kevin Ervin Kelley: Yeah, that's a great theory, by the way, and you're right on, in my opinion with it. We work for both retailers and CPG companies, so we work a lot in micro-aisle sections and we work a lot for the overall, and it's amazing the differences. That's a whole another discussion in terms of thinking. But the thing that is really interesting to me is how grocery has accepted this chassis for 50 years of center store and perimeter. And what we really did is the history of grocery was built during an era when there was more demand than supply. If you really think about it, the country did not have enough grocery stores, and then one complaint that consumers had was, "I love living out here, but it takes me 40 minutes to get to a grocery store," so everybody wanted a grocery store. Developers and banks helped them build those grocery stores. But aisles are not a place human beings wanna be physically, we just talk behaviorally. No human being likes to be in a corridor, an alley, and so the question is, why do they exist that way? Well, they exist that way at the convenience of the retailer.

0:05:54.7 Kevin Ervin Kelley: So when the retailer had plenty of demand, and they were the only game in the world, they really could say, "Look, this is our inventory," and we call it a lumber yard mentality. "This is our lumber yard and if you don't know what a giant sheets of drywaller, then you just won't know how to shop it, and we didn't really help the customer, and we really did all our pack out logistics to the convenience of the retailer and we've been this way for over 10 years, now we're in a situation where there's grocery store everywhere, we're over-groceried in many markets, and we have more supply than we have demand, and customers get to say where they wanna go and who they're gonna go to. And so they're looking for places that can really solve those kind of issues where they get more joy and less work, and walking down an aisle in a center store doesn't really work because it's a sea of commodity, it's a sea of chaos, and our brain physically shuts down when we see too much information.

0:06:57.7 Kevin Ervin Kelley: It's a paradox of choice, and there's no visual anchors, there's no visual hierarchy, it's just visual noise, and what we're really trying to find in a grocery store as human beings are solutions, ideas and inspirations on how to live better. And when I go down the condiments aisle, I don't see any solutions, inspirations, or ideas. And I loved to gather. I see 30 relishes, but I don't even know which one to pick, particularly the younger generations. So what we're doing is we're trying to get rid of aisles. I audaciously have been telling my clients that for 15 years: "We're going to get rid of as many aisles as we can." We did an HBC in health and beauty, we got rid of the aisles, we've been doing it in cookies, we're doing it in coffee, we're trying to get rid of all those areas, and there's a lot of CPG companies don't like it 'cause it's the only place where they can put their entire portfolio out.

0:07:53.4 Andy Murray: A hundred percent. No, 100%. On that point though Kevin, and I love what you're saying and you are definitely being audacious right now. You are fully being audacious saying get rid of aisles. But how much of this could the CPG... Okay, QR codes, right? We've seen the pivot. Now, all of a sudden consumers can use QR codes. I've been preaching QR codes as a better way to interact 'cause the string's in your hand for eight years, but I'm not seeing any packaging changes by CPG yet that recognise what's right there. You know, like, are you seeing QR codes on packaging? So simple things like that. Or understanding that you could really win on choice if you re-think your packaging and assume for a second you're not gonna get all retailers to fix the aisle problem. I just think there's a lot more CPG can even do to think about choice.

0:08:49.6 Kevin Ervin Kelley: Yeah, and I don't think CPG are the enemy, I think CPG...

0:08:53.3 Andy Murray: No, no.

0:08:54.4 Kevin Ervin Kelley: They kinda wanna do it but I think the problem we've had is retailers and CPGs don't work together close enough. I've been in business 30 years, have designed hundreds of prototypes that are groundbreaking and bold, and not a single one of those have I been able to invite a CPG company to sit at the table with us. And I've asked my retailers over and over, and they feel uncomfortable showing their secrets, and I'm like, look, "Our wagons are hitched, we need to find a way to work together." But that's a big problem, and part of that is the sales mentality. But your QR code... What I find is, 'cause people will say, "Well, look, Amazon solved this problem of frictionless shopping, why can't grocery do it?" And this QR code, grocery's known about this. The technology exists, they wanna do it. I think the problem grocery has is they don't have the capital, the R&D to do it like an Amazon has and what we need are some entities to step up to pioneer that. Amazon, to me, their big opportunity is to license their frictionless shopping to everyone because that would help. And the same with the QR codes, I think we're gonna have to really... Grocery can never fund it, they just don't have that kind of money, they're gonna have to wait for somebody...

0:10:09.3 Andy Murray: Yeah, the margins are too thin, but I do think that we're gonna see a once in maybe 10 year event as an opportunity because so many interior aisle categories are now too baggy in space that you're gonna have to... And macro resets as you know, is super expensive, capital intensive. But if you don't, it's gonna look like a war zone in a lot of these categories that have fundamentally shifted buying behavior online. So my opinion is we're on the verge of an era of creativity and ideas that's got a window to it, as you think about 'cause the capital's gonna have to come, it's gonna have to be reinvested in, or the store experience is gonna be really, really challenging when you're walking down and people realise they don't need that many yogurt choices, but like fundamentally, half. What are you gonna do with the rest of that space? And you can't just fill it with cardboard, there's gotta be thoughtful thinking about what's the whole macro. And I think we are in a macro which if your kind of business is probably pretty good news.

0:11:19.2 Andy Murray: The problem, I think though, quite honestly is, I've seen quite a slow down in retail, especially grocery, on proto developments, and so a lot of the protos have been stuck in time because if you're not opening a lot of new stores and you're not really doing macro space redesign, why do you need so many protos? What are you really testing and learning? And I think of those retailers that can get in front of this right now and be really thinking about store prototypes that think about space completely differently, now is the window to do it.

0:11:52.5 Kevin Ervin Kelley: Well, what's really what's gonna precipitate, I think part of this crisis is the trend, it's gonna be smaller stores; more frequent, smaller stores, and that's coming out of center store, that's not coming out of perimeter, and we have five different chain prototypes for stores that are 10,000 square feet, and we're going from 45 or 60 down to 10,000 square feet and so there's going to be a massive level of editing going on, and I think that's gonna really push that crisis. I mean, you're right that a lot of sales are going online for the things you have to schlep. Nobody wants to schlep, so they're saying, "Those things that are heavy, you bring them, and the things I enjoy," which is perishables, and discovery, and enlightenment, and learning, cooking, all those things are gonna be a big part of it.

0:12:52.3 Kevin Ervin Kelley: I would say another crisis that is happening, 'cause I work with a lot of CPG companies, is that ordering online, people shop by habit, but they don't experiment no matter what we do to them. And there's something, I think, very human about the idea of when you're in a store, an end cap, or an aisle bump out gets you. When we videotape customers, it fascinates us to watch how many customers will see a product they didn't expect, not on their list, they'll pick it up, and we call it the "What the heck" purchase. Like, "Ah, what the heck."

0:13:29.6 Andy Murray: Yeah.

0:13:30.1 Kevin Ervin Kelley: And they do a lot of "What the heck" purchases in a store, enough to add $5 to $15 to the average checkout price. $15 would be extreme, so generally there, but what we're always looking at, we're like, "Well, if we could just add two bucks to 20% of the customers in a year, we're gonna revolutionise your numbers." They haven't been able to get that to work online anywhere according to my CPG clients. They're like, "We just... " And they run promos, they do everything, but it just... There's something about the moment that becomes the "What the heck." We describe it sometimes like, "Do you need another green sweater for fall?" And you go, "I have plenty." But when you're walking down the street at a shopping center, and you see that new shade of green, you're like, "You know what? Maybe I'll buy that." And I think that that speaks to something else you mentioned earlier about browsing that's really important, and that is what we call milling behavior or window shopping behavior. And that is the ideal state we try to keep customers in and they enjoy it. They don't feel manipulated, they love to mill and browse. But when we put them in an aisle, it's utilitarian.

0:14:38.8 Andy Murray: And Kelly, on that point, one of the things I've seen is, Kevin, overlooked orphan idea is in-store sampling. Costco does it really well. But because you're gonna see this condensed SKU space, smaller stores, and the truth that in-store shopping tends to be where you're gonna discover new, but yet, the in-store sampling programs are almost an afterthought. Are you seeing anybody step back and think about that more strategically than Mabel on a table pushing out samples? [chuckle] But by something that they see it as more their cooperation than something that is on the side.

0:15:20.5 Kevin Ervin Kelley: Yeah, I don't wanna sound like we're just jumping in the same hymn book, but we're really working on that particularly and have been working on it on really creating. We call them curation stations, the discovery zones, and they're these micro-modules that we do on end caps and other places. And what we're trying to address are the slow days and the busy days and flexibility. So we have these end caps that they're like a transformer when a slow day they can be self-served, but on a busy day, they turn into stations. So a little cart rolls out like a lemonade stand.

0:15:55.6 Andy Murray: Love it.

0:15:56.0 Kevin Ervin Kelley: And allows you. And what we're trying... And not only are we doing that with big CPGs, we're doing it with the retailers themselves. One of our brands in Canada, we have this thing called Frank's Finds. And it's Frank, and Frank is the owner of the chain and he has these great curious ideas all over the world that he goes and we're like, "Let's do displays of Frank's Finds," but we're doing it. I'd say in a store, we try to do it at least six times, if we can get to 12, we'll do that. And what we find is customers love it. They really enjoy this like, "Wow, I never even tried apple cider like that." And it becomes this new thing, but what we see a lot of grocery stores that aren't very good at doing it, is they sell products nobody wants. And they're sampling products rather, that a manufacturer's trying to get people to buy, but it just doesn't have that.

0:16:46.9 Andy Murray: Yeah, and it's probably been hyped as a new item, it's getting funding, it's providing co-op funds, you name all those reasons why that happens. But if you have any that's public you could share, I'd love to put in the show notes, any links on how retailers might think about discovery that's out there because I think that's an area of inspiration, it's greatly needed, and I can think of a lot of brands that the number one... One of the top things they're thinking about is, "How am I gonna get a trial in this new world?" And getting more innovative in terms of sampling. There's a lot of sampling happening now on the drive, the outside pickup, curbside pickup, people dropping things in bags and stuff for brands, but that doesn't really aid the in-store discovery in the same way. I personally haven't been in many retailers that have had that as a thoughtful program that the customer can see that as a reason... Costco and Sam's Club. Sam's who's doing a lot more than they are now. But Costco it's known for great discovery through sampling, and it's just one of those things, I think that's out there.

0:18:01.5 Kevin Ervin Kelley: I think you'd be intrigued with, if we had enough time, I would take you through a series of case studies where we're doing that. I would say admittedly they're smaller chains, 'cause smaller chains are more desperate to win, and more desperate to have points they can win on other than price and variety. But we're doing that a lot. I think the one common thing that comes through all grocery stores is, "Oh, it's gonna increase our labor model," or, "We're gonna have to work harder, we're gonna have to learn about food." [chuckle] And this is the project we have no choice to avoid. If we want to stay up with the current customer, we're gonna have to figure out how to work harder. And I can't tell you the number of chains that I sit in where executives will put their hands on their head and say, "We can't make a good slice of pizza." I literally had an executive tell me that we can't make a good piece of chicken, and my first question is, "Do you really earn the business? Do you deserve it if you can't make it? Why should customers buy your product if you can't make it?"

0:19:03.3 Kevin Ervin Kelley: But then secondly is, I think the biggest issue is scale. Is that most these changes have gotten too big without getting good on one thing. And so, as we've examined that problem over the last 15 years, what we find is grocery stores have a habit of being good, or I'd say mediocre at 50 things and not stellar in three to eight things. And so the thing we're really focused on grocery stores is go, what are the three things or eight things that we're gonna be better at than anybody, to the point that the magazines will nominate us as the best pizza in town, or the customer when we do surveys, will come back and go, "You can say what you want about their prices, that chicken's the best piece of chicken I've ever had." And we're getting that, we're getting that.

0:19:51.0 Andy Murray: Yeah. No, I love what you're saying. Completely agree. I think my experience in the UK, where because of the way that the geography is set up, the way stores are done and zoning, you're gonna have the same experience at Tesco or Asda, well, on the same car park. If you're not competing on customer experience, you're gonna have a real problem, and so that market pushed harder in that space, I think, than what I see sometimes in the US.

0:20:18.9 Kevin Ervin Kelley: Yeah. You just fascinates us in general because it's such a different market, and when I watch European grocery stores come to America, not all of them, they struggle a bit because we just have a different way of shopping. We require a lot more context in America than European shoppers who have great bread and minimalist environments, but that's very hard to do here, although Lidl has been doing well here.

0:20:47.0 Andy Murray: Yeah, yeah.

0:20:48.4 Kevin Ervin Kelley: But Fresh & Easy didn't do well with their attempt here, and it was neither fresh or easy.


0:20:56.7 Andy Murray: Exactly, exactly. Well, I tell you what, we're running out of time here, Kelly, but I just think that this has been a fascinating conversation. Any final thoughts on to particular retailers or brands to be thinking about as we close this up?

0:21:13.2 Kevin Ervin Kelley: I think it's just a super exciting time to see what's happening in grocery and food in general, and there are people that worry about it dying. I've never seen so much appetite for risk and experimentation. Nobody's trying to run the three-yard ball anymore, they're trying to throw six-yard passes, and that's what's really exciting to me 'cause we needed that, and it's not just coming from grocery, everybody's trying to think about the stomach share, so we have convenience stores upgrading, restaurants thinking about, "Hey, what else can we sell you?" Restaurants have done really well during COVID selling other items. We've seen a variety of other players, drug stores, and other people trying to figure out this space. But I think as we said earlier, you're gonna see two extremes, right? You're gonna see people just go for the warehouse commodity, a variety of price approach, and you're gonna see other people going for the food as discovery, food with meaning side. And I think that's okay. I think that's good and that's what we... I think we should have those choices.

0:22:14.6 Andy Murray: Yeah, and something we didn't talk about, Kevin, was the issue of a lot of these larger stores where the tenant spaces and such are going to have to involve a lot more foot drop fall in different environments to come together, but then, when you start building out those platforms, how do you have a customer data strategy that lets you really understand what happened in the whole environment and trip and in that area we haven't even touched on, but I think that will have an important piece to...

0:22:43.8 Kevin Ervin Kelley: 100%.

0:22:45.7 Andy Murray: Especially the GDPR and privacy, you can't really just share all that data in the same way. And so, no matter where you turn, there's gonna be some challenges.

0:22:53.5 Kevin Ervin Kelley: Every solution comes with a bunch of problems, right?

0:22:56.3 Andy Murray: Exactly, exactly.

0:22:58.3 Kevin Ervin Kelley: But it takes society a before they figure where they want a course correct themselves.

0:23:04.0 Andy Murray: Right.

0:23:05.3 Kevin Ervin Kelley: We're doing a number of food halls, and people have been asking me 'cause we have 10 different projects on the board right now, and people have been asking me, do I think restaurants are coming back, or bars or pubs or all bars, wine stations. We're still doing all of this and we're still building all of this now, we're designing them with flexibility so they can quiet down and transform it to something else, but our clients are spending millions of dollars betting, all of that's coming back and that's 'cause they need it, they can't compete with the price leaders. There's a lot of experimentation there.

0:23:41.4 Andy Murray: Yeah, the whole experience. Yeah, no, 100%. So one last question. So what's your point of view? You do a lot of work with malls, is the Mid-American mall concept, is it dead or not dead?

0:23:57.9 Kevin Ervin Kelley: It's certainly in trouble. We use a word often, we talk about form and shape, and our human body processes things by looking. We knew what a gas station is, a convenience store is, a coffee shop by its form and shape, and when a form and shape becomes too predictable and boring, we tire of it and the giant department store box, the anchors, all that mall has kinda died, but what isn't dying and what's actually growing are villages. People want villages and towns, and the subtle shift and framework between a mall and a village is not that hard to do and so one whole side of our firm does tons of these projects, my partner heads it up, but we really don't need another mall, but we need a whole lot more villages and villages have a lot more service retail, they have banks, they have jobs, they have a living. A village is a different thing. And the last thing I'd say on the mall side is, you're either going up in terms of your experience or you're going down, but you will never hold the middle, it just doesn't work so pick your bat up.

0:25:02.5 Andy Murray: You and Steve Dennis, he just wrote the book, Remarkable Retail.

0:25:07.5 Kevin Ervin Kelley: That's right. Yeah, yeah. Yeah.

0:25:10.0 Andy Murray: I've had him on a podcast. He is so much into the big middle's dead, you've gotta get out of the big middle.

0:25:17.6 Kevin Ervin Kelley: Yeah, it's a terrible place to be. And so, upscale malls are doing good, but I just don't understand why they keep building the idea of mall. The clients I work for, we strike it from the language, no mall words, it's an urban place that it's like a village or a town with a lot of different things I can get done. And that's the way it used to be, for thousands of years we had great little towns.

0:25:41.6 Andy Murray: Yeah. Well, these structure, these mammoth structures that are these contained buildings and malls, it's so artificial in terms of what we expect that I guess it was only a matter of time before we say, it's like going to Vegas and it's not real.

0:25:56.9 Kevin Ervin Kelley: It's materialism, and that's what has been such a shift is the consumers today, particularly Millennials, they wanna make a difference in the world, and they feel like if a place is just focused on vanity, that doesn't do well for them. But it was such a sign, the era you and I grew up in, Gordon Gekko, Greed is good, Wall Street, all of that stuff was just, it was about us, and that makes sense because the Boomers came out of a certain era and they wanted to live, but now it's not what can I do for myself, but what can I do for the world? And that sounds odd, but a barbershop or a local little retailer or cafe, or even a local pub feels like it's part of a community, and that's what the Millennials are seeking.

0:26:42.6 Andy Murray: And I guess, I love our country so I'm not putting our country down, but from living in Europe for the last four years, the concept of village is like, well, yeah, of course. And you just flying over the UK or France, the way the zoning has been handled is so different than what you see flying over the US. The weekends, we would never get our car out, we didn't need to get a car. We would walk to the barbershop, the butcher and the baker were all within walking distance of everything, and it was a wonderful, wonderful experience to see that. Maybe that's where you're going with the new version of the mall is, I do find that village concept is so fun and exciting, and it's just a more relaxed way to live.

0:27:31.3 Kevin Ervin Kelley: When we videotape customers, we work... There's a very famous district in California, Santa Monica called Third Street Promenade, and they meander and mill, they don't have a plan, they are totally open to social encounters, they discover, but the second they get off that street and start walking down a normal street, that's car dominated, they no longer discover, they walk with an intent purpose to get out of there. And the word I said earlier about corridors and hallways is the same with our cities, and if a city is designed like a corridor, which is literally what they call most the hub and spoke idea of a city, people don't behave very friendly. You'll literally see the whole attitude, eye movement, everything change. And we're constantly trying to figure that out, and where local, state and federal policy really mandated transportation. I'm saying the obvious, but the car has been the most destructive force for us on a variety of levels.

0:28:31.2 Kevin Ervin Kelley: The word that is the hardest word for people to get used to is densification is what we need to do. More denser, compact 15-minute cities that allow you to get a whole lot done and not this I'm gonna go to Best Buy 45 minutes out of the city. We have to work on this aspect. I live in LA and we just got rated the worst pollution again, we were doing really well, but we've lost it again, and that affects whether you wanna live here or not. And they fought off light rail and train forever 'cause people didn't want it running through their community or have those undesirables there and thank gosh, we're winning that battle and making us less car dependent. I love cars, but they destroy the fabric of the pedestrianisation and you don't really even know a city if you don't smell it, if you don't get out and walk it, you don't really know it.

0:29:26.6 Andy Murray: No, I agree, and I think for... I would encourage anyone that hasn't left the US to go do some international travel, go to some of the cities in Europe. Every country has their own challenges and problems, but the pedestrian ability and the connection to the local shopkeepers and the humanity of all of that, and then taking care of each other, there's just a different level of that you get that you don't get when we're so spread out that it's so hard. But I'm with you, and I wouldn't have felt it if I hadn't lived in it for four years, and then feeling it then coming back here, and I love being back in Arkansas and sunny weather and all the good things that the UK did not have, but at the same time, I do miss the ability to just walk and connect into so many different things, and I think that's a city planning... It's a bigger issue of government and how we plan our cities, but I'm glad that there's some pressure 'cause you would know more than anyone from what's the vibe in architecture and where is it going, and it sounds like that's getting a lot more thought.

0:30:38.2 Kevin Ervin Kelley: Trying to course-correct it, and there are a lot of generational household make-up, people are getting married less, having kids less so it's really changing. And if you look at the drivers of what humans want, one of our greatest fears is to be lonely and not to find our "magic other," and we used to meet our "magic other" in high school or church. That doesn't really happen anymore because of the way our lives work, and so people in their 30s, 40s and 50s are still needing to find ways to interact and if COVID has done anything for us, it's really proven that there's no way we can have a life just at home. It cognitively impairs us and we need to go out and meet strangers and see people and become what we call part of a temporary community. Just being on a high street is like being a part of a temporary community. And you can find your distance, you can be a voyeur and watch that or you can get right in the middle of it.

0:31:36.2 Andy Murray: Yeah.

0:31:37.2 Kevin Ervin Kelley: But it makes you feel less lonely.

0:31:37.2 Andy Murray: 100%.

0:31:38.0 Kevin Ervin Kelley: And so, there's a lot of issues where people say retail is dead, and cities are dead. They're not. The cul-de-sac neighborhood is literally the highest correlation of Prozac and antidepressants happen in cul-de-sac neighborhoods because there's not a sense of community. If somebody was to walk in a cul-de-sac neighborhood, someone that we didn't know, it gets the highest number of police calls. "There's somebody strange in my community, you need to arrest them."

0:32:07.0 Andy Murray: Wow.

0:32:07.1 Kevin Ervin Kelley: And this is what is changing about us is younger generations are saying, "Look, I want to see the other person. Now, we need this sense of safety." And so certain places provide that. And that's not like physical safety, but social safety and psychological safety. But that's where you get the meandering and milling. When people meander and mill they feel safe. But when they don't feel safe, they walk very deliberately. And so it's exciting to see some of that changing, but these are all the battles that we always fight. We do a lot of mixed-use urban housing. We really help though, what we call the public realm of those aspects and the retail and those have grocery stores and retail shops, which is a whole different type of grocery store.

0:32:55.3 Kevin Ervin Kelley: But when you buy a house in one of these places, I shouldn't say buy. When you rent an apartment or condo in these places, it is very expensive, a big part of your value proposition is, "What do I do here?" Not "What do I just look at? Or how many rooms do I have?" But, "What happens here?" And they're like, "Oh, every Friday we have this. We have a band come. We have happy hour here." These are becoming very big issues to consumers and that market is booming right now.

0:33:23.4 Andy Murray: Oh, that's great.

0:33:23.5 Kevin Ervin Kelley: Just booming.

0:33:24.1 Andy Murray: Well, I also suggest, from my own experience, get a dog.


0:33:28.4 Andy Murray: The people you meet when you take and walk your dog, you know, if you don't have one. We've met so many fascinating people by just taking our dog for a walk. I'm talking in the UK, because it creates social interaction. It's so funny to watch people. You probably have already seen this in your studies, but when you meet someone on the other way, and you're not really sure, everybody looks at the dogs, they're looking at them, then if you think you might like him, you start looking up the leash and then eventually you make eye contact.


0:33:58.5 Kevin Ervin Kelley: I love that, looking up the leash. Well, we do a lot of pet stores. What we really study in pet is the humanisation, and the personalisation, and the premiumisation of pets as a level we never saw before. When I was a kid, we never did any of these things. But now we treat these animals like they're humans and like they're our kids. And they become this great conversation starter. They are the ice breakers and that's what facilitates and we generally need something to break the ice and allow people to talk to each other and they're doing that. And in addition to working for pet stores, which is a very premium business, my wife has a fashion brand called Pajory,, I'll make a plug for her.

0:34:49.6 Andy Murray: Excellent.

0:34:51.1 Kevin Ervin Kelley: Her statement is, "Walk with quality." And it's all about walking your dog and she built the brand around social anxiety. She moved from New Zealand here. She didn't know anyone, I was traveling, I'm working and she's like, "What am I gonna do?" And she got a dog and her whole life changed because she met people and just changed it.

0:35:09.4 Andy Murray: I wasn't kidding. I wasn't trying to be flippant or funny. I honestly do believe that. Good on her. That is such a great way to break out. If you do live in a cul-de-sac, get a dog at least to create some connection in humanity because it's such a magical thing that happens.

0:35:29.2 Kevin Ervin Kelley: Yeah. The studies say it reduces anxiety. I'm sure you've seen all those things.

0:35:32.3 Andy Murray: Oh, yeah.

0:35:32.7 Kevin Ervin Kelley: And it's unbelievable what it does for our calmness and our personality. My dog is my best therapist, so I can tell him anything.

0:35:42.6 Andy Murray: Yeah.

0:35:45.7 Kevin Ervin Kelley: And he seems to be okay with it.

0:35:45.8 Andy Murray: Yeah.

0:35:46.0 Kevin Ervin Kelley: Never judges me.


0:35:48.4 Kevin Ervin Kelley: Loves me all the same.

0:35:51.2 Andy Murray: Yeah, well, we ended up getting a dog and we already had a dog that went over. She's 14 and she's not doing well now.

0:35:55.0 Kevin Ervin Kelley: Oh, I'm sorry to hear that.

0:35:56.6 Andy Murray: We bought one in the... I got one in the UK, a Cockerdoodle.

0:36:00.2 Kevin Ervin Kelley: Oh, wow.

0:36:01.0 Andy Murray: A just lovely, lovely dog. She's very British though so she's not used to this Arkansas heat.


0:36:07.7 Kevin Ervin Kelley: She holds her bowl with her pinky out. [laughter]

0:36:10.9 Andy Murray: Yeah, exactly. She's like, "What did you do to me?" We're like, "We went to an oven." So it's quite a thing. Well, Kevin, I've so enjoyed this.

0:36:19.7 Kevin Ervin Kelley: Well, thank you too.

0:36:20.8 Andy Murray: And we have so many things to cover but we'll come back and do some more at another time. But thank you for your time. Great insights.

0:36:23.9 Kevin Ervin Kelley: I'm so impressed with your program. Same here. You're fantastic and great ideas and I look forward to doing more with you. So thank you so much, Andy.

0:36:33.3 Andy Murray: Once again, I can't thank Kevin enough for sharing his progressive and innovative thoughts on retail and food strategy. If you haven't already, make sure you listen to part one of our conversation in the previous episode of It's A Customer's World.


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