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FreshCo, Old Navy, Rexall: Joe Jackman helps retailers get their mojo back

Joe Jackman helps fading retailers refresh their images. Matt Barnes/Westside Studio

"There likely isn’t a lot of science behind a lot of this stuff,” says Joe Jackman as he scans the homeopathic and naturopathic section at a new Rexall drugstore in Toronto. Yet it was at Jackman’s suggestion that the prominent display was mounted, right across from the pharmacy counter. “Customers are going there,” he adds, pointing to the natural cures. “So we can either go there with them and help them, or we can watch them head into that territory alone.”

Not all of Rexall’s pharmacists were happy about the innovation; after all, they’re trained in formulations, not folk medicine. But it’s this original, often counterintuitive, thinking that makes Jackman a sought-after conjuror of retail remedies. His Toronto-based firm, Jackman Reinvents, has refreshed brands such as Old Navy, Hertz, the Beer Store and Sobeys Inc.’s Price Chopper, which was rebranded as FreshCo on Jackman’s advice.

“We scare people because we are very clear we are in the reinvention business,” Jackman says. “Sometimes leadership teams or boards or owners don’t really want it known that Jackman has been engaged. It’s a signal that more than tweaks are required.”

Says Glenn Murphy, who, as CEO of Gap Inc., picked Jackman to overhaul its Old Navy stores: “Joe helps management teams get unstuck.…The consumer environment is changing at a very fast pace, which puts a premium on innovative thinking.”

Jackman, naturally, agrees. He points out that companies are getting knocked out faster than ever: The average lifespan of Standard & Poor’s 500 companies will tumble to 13 years in 2027 from 18 years in 2010, and 61 years in 1958, U.S. consultancy Innosight forecasts. About 75 per cent of current top companies will be replaced by 2027, it predicts. “Everyone is under siege by some kind of new model,” Jackman remarks. ”When the world starts to change, it’s unforgiving.” But what gives Jackman the power to surf the change?

Born for retail

Retail is in Jackman’s blood. His father was a 44-year veteran of what is now Sears Canada Inc. “I was the kid who went Saturday mornings not to the ballpark but to walk the store with my dad.”

Born in Winnipeg and raised in Toronto, Joe Jackman is the youngest of six in a mostly female family–an influence that taught him skills, such as how to communicate and be a good listener, that would prove crucial in his vocation. “You need a bedside manner that is softer. I learned that growing up with women,” says Jackman, 55.

One of his sisters, Barbara Jackman, is a prominent immigration and human rights lawyer. As Joe asserts: “I create brands and marketing desire among consumers. My sister is busy making the world a better place. At moments I think, jeez, she’s doing noble things.”

Jackman’s combination of daring and groundedness hits the spot with clients. “Even while Joe is pushing management to think out of the box, he does it in a way that is soothing and comforting,” says Tyler Wolfram, managing partner of Oak Hill Capital. “He’s laid-back, not in your face. He’s just a cool dude.”

Oak Hill, an American private equity firm, owned New York drugstore chain Duane Reade (a Jackman client) before selling it to No. 1 player Walgreen Co. (also a Jackman client). Oak Hill had Jackman advise on the transformation of its Dave & Buster’s restaurant chain, which it then took public. Now the firm wants to refresh its health-food chain Earth Fare. Guess who is the consultant?

If one job leads to the next for Jackman, it’s also true that many names in his vast Rolodex hark back to his days at Loblaw Cos. Ltd., for which he consulted for about 15 years, working closely with company veteran John Lederer, who later became president and appointed Jackman head of marketing.

Lederer became a big influence, as did the late design guru Don Watt, who was behind many signature moves of Loblaw’s heyday, such as making stores more inviting and touting the lucrative No Name and President’s Choice private labels. Jackman noticed how closely Watt worked with the retailer’s senior team, including then-president Richard Currie and the late Dave Nichol, who, as pitchman, became the face of the company. Today, Jackman insists on having access to his clients’ top brass.

Watt “spoke about how design can serve business interests,” Jackman recalls. “And that was game-changing for me.…There wasn’t a better school to go to than Loblaw in the Dick Currie/Dave Nichol years.” The executives “were very bold in their willingness to fail.”

Perhaps Jackman’s biggest Loblaw lesson came in 2006, by which time Lederer had named him executive vice-president of marketing. He was grappling with how to launch an apparel line–Joe Fresh–at a retailer that was synonymous with food. “There was a lot of chatter in the marketplace about: ‘How good will the product be in a supermarket?’” Jackman recalls. “We had to climb a credibility hill pretty darn fast.”

Jackman got skeptical staff behind the fashion foray by drawing on the food-retailing playbook. “We thought, ‘Rather than pretend we’re not in the supermarket, let’s embrace it,’” he says. His team branded Joe Fresh orange partly because no other major domestic clothing line used the colour, but also because it suggested food. They displayed a lot of the clothing like produce: on tables, rather than racks or shelves. They trumpeted the affordable prices with round orange signs that said food more than fashion. And on the day of the launch, the team placed a navel orange with a Joe Fresh sticker on every staff desk across the country.

Within a few years, the line, named for designer Joe Mimran, became one of the country’s top fashion brands; it is now ex-panding globally.

Not everything was a win. Jackman helped develop Loblaw superstores in Ontario in the 1990s to fight off Wal-Mart, but the initiative strayed too far from the grocer’s roots into categories such as electronics and was later scaled back.

Joe Jackman as a customer going to the Beer Store. Matt Barnes/Westside Studio

It was a tumultuous time: Lederer was pushed out and a new regime, under Galen G. Weston, scion of the controlling Weston family, took the helm as the grocer struggled through its defensive transformation.

As part of the resulting recovery strategy, Jackman made Weston into a latter-day Dave Nichol – the face of the company in its commercials.

After just over two years as Loblaw’s top marketing executive, Jackman was ready to light out on his own. “I would not give myself high marks as a corporate executive,” he says, since he lacks “the kind of patience it takes to endlessly prepare for analyst meetings and management presentations and on and on with all the stuff you need to do. My interest and skill lie in getting people aligned on where they’re going and actually helping them get there…I’m an action junkie.”

Still, he took on quasi-corporate titles after his time at Loblaw. Simultaneously, he served as acting chief marketing officer at both Duane Reade (where he was hired by Lederer) and Old Navy, while consulting for them. Every week for two years he travelled between San Francisco (Old Navy), New York (Duane Reade) and his home in Toronto. “It was crazy.”

Jackman is still on planes almost weekly for work with clients across the U.S. Current Canadian clients include Canadian Tire. But his load is lightened by a staff that has grown to more than 100 from a single assistant when he struck out on his own in 2008.

At Loblaw, some of Jackman’s compensation was tied to performance. He makes that his arrangement with clients as well. “I said, ‘I will never do a deal again where I don’t have some stake in it,’” Jackman says. “I’m experienced enough to know that my team and I know how to create value in companies–and that value is extraordinary.”

As the case histories of three clients show, the extraordinary can be hiding in plain sight; sometimes it just takes fresh eyes to find it.

Joe Jackman as a customer of Rexall drugstore. Matt Barnes/Westside Studio

Rexall: The push and the pushback

When Rexall was feeling the pharmacy industry’s pain of rising competition and generic drug reforms in 2012, it called on Jackman. His research dug up good and bad news. Consumers, hankering after more health information and products, trusted Rexall pharmacists. On the other hand, consumers viewed Rexall as indistinguishable from other drugstore chains.

But Jackman’s delving also found that customers were ready to learn more about, and even purchase, alternative medicines. That was in spite of many pharmacists’ concerns about the unproven effectiveness of the natural products.

Joe Magnacca, a Loblaw alumnus who worked with Jackman previously at Duane Reade and Walgreen, says pharmacists generally respond with “major pushback” to naturopathics and homeopathics. They view them as “untested and unproven,” even “voodoo,” he says.

With support from then-Rexall CEO Frank Scorpiniti, who had also previously been a Duane Reade executive, Jackman used his quiet, persuasive ways to get staff behind his plan to push into alternative medicines, Magnacca says.

Jackman also made the pharmacists the foot soldiers in Rexall’s battle to woo customers; offering advice and flu shots would produce more sales as well. In Ontario, Rexall became the first chain to offer immunizations, within a month of the province giving pharmacists the green light in 2012. In the first year, it administered nearly 80 per cent of pharmacies’ flu shots with just 8 per cent of the stores, Scorpiniti has said.

To create a buzz for both staff and shoppers, Jackman implemented his “first fast steps” method. It entails setting up a test store within three or four months of his launching his research, rather than waiting for perhaps twice as long for all the findings to come in. “You want the market to be noticing, you want consumers to be buzzing about you.”

Along with testing key hypotheses, the lab store allows employees to see for themselves the new direction and become believers, he says.

In Rexall’s test store in a Toronto office tower’s retail concourse, Jackman placed a cooler with fresh-cut fruit, yogurt and other ready-to-eat foods at the entrance, to draw passers-by with a healthy-looking offering.

Store shelves were lowered and aisle layouts altered to give shoppers a clear view of the pharmacists and other sections. The store’s signature colour was changed to a softer, ostensibly female-friendly “poolside aqua” from deep blue and orange. The shift became symbolic for a project internally dubbed “Blue.”

Rexall added new private brands, a hallmark of Loblaw and many of Jackman’s clients. Retailers’ own labels can generate gross profit margins 50 per cent higher than those of national brands, Jackman says. And, by drawing repeat customers, they can be a sort of loyalty program in their own right.

Many of the ideas Jackman used at Rexall came from Duane Reade, one of Jackman’s first post-Loblaw projects. “We copy shamelessly,” Scorpiniti said last year when he headed Rexall. Owned by privately held Katz Group Canada Ltd., Rexall saw same-store sales at remodelled stores gain 7 per cent, Jackman says.

(And just as the restyled Duane Reade was taken over by Walgreen, Rexall could be acquired by Walgreen, says Magnacca, the former Walgreen executive. “I think it’s a nice fit. I know Walgreen certainly has interest in the Canadian marketplace.”)

Joe Jackman as a new type of FreshCo customer. Matt Barnes/Westside Studio

FreshCo: The two types of “cheap”

Rarely does Jackman get to rename a company, but some jobs call for drastic action. In decline for years, Sobeys’ Price Chopper was being beaten by its main discount rivals, including Loblaw’s No Frills. The project’s internal code name at Jackman–Phoenix–made the scope of the needed change plain.

Even so, Sobeys’ research found that none of the grocery discounters got high marks for fresh food, says Rob Adams, general manager of FreshCo (and previously head of No Frills). It also found a rising appetite for ethnic foods from the swelling ranks of new Canadians.

Jackman zeroed in quickly: Focus on ethnic foods; don’t compromise food quality for the sake of low prices. “Joe’s discipline was, ‘Let’s pick categories that we want to own outright and build the brand around that,’” Adams says.

If food can inform fashion, the opposite is also true. FreshCo drew inspiration from H&M’s offering of a wide range of merchandise rather than the usual skimpy number of choices at a discounter.

In signage, the new take was manifested in simple black-and-white photos that let “the food itself be the hero,” Adams says. “It’s very contemporary and would be something that would work well with a discount shopper…Joe wouldn’t come up with crazy ideas that would drive costs up.”

The FreshCo reinvention team set up a secret lab store in Orangeville, Ontario, sending focus groups through for feedback. The shoppers entered a “fresh hall” that devoted up to one-third more display space to fresh products than at other discounters. (Produce can generate higher margins than packaged goods.)

To shave costs, FreshCo converted its meat, seafood, deli and bakery counters to self-serves. It cut restocking time drastically by having staff place products on the shelf in open boxes rather than putting out individual items.

Early results from the first eight FreshCo supermarkets, launched in May, 2010, showed significant same-store sales increases–although gains have moderated over time, Adams says. (He says the company is still happy with its performance.)

Still, not all of Jackman’s ideas worked. He had introduced an Ikea-like “forced flow” at the stores’ entry, making shoppers pass not just produce but also ethnic fare before they reached any other department. Customers who simply wanted to pop in for milk and bread were not happy, Adams says. FreshCo promptly made the set-up more flexible.

As well, Jackman hadn’t wanted to clutter the store–and add costs–with signs flagging discounted prices that already were being promoted in the stores’ flyers. But focus groups found that customers felt the absence of such signs signalled that FreshCo’s prices were higher than those of rivals, Adams says. “That was not our reality.” The team mounted promotional signs in the stores.

“If someone has a better idea or if something is not working, Joe will be the first to say, ‘Let’s fix it and change it,’” says Chris Staples, partner at Rethink Communications, a marketing agency that worked on FreshCo with Jackman. “A lot of people would have got their backs up about it.”

At the same time, Jackman is a stickler for details. At the lab store, he had the signature lime-green accents repainted three times before he was satisfied, Staples recalls. The colour, he says, “can look really sickly yellow, almost like a used car lot. The whole thing was to make the design aesthetics of FreshCo look quite cool–very sort of Ikea. Little things like that made a huge difference.”

Jackman develops a mantra for each reinvention to drive home the brand’s essence and give employees something to rally around. At FreshCo, the new approach was dubbed “discount done right.” But for its advertising slogan, the firm went with “Fresher. Cheaper.” This was risky because grocers generally fear that “cheap” denotes inferior, Staples says. “It could have signalled ‘fresh and lousy’ instead of ‘fresh and great.’ But it didn’t. People know the difference.”

Adds Jackman: “Everyone in the marketplace was saying something about low prices so we needed to be bold and provocative. You have to throw a rock to get the pool to ripple.”

Joe Jackman as a teen visiting Old Navy. Matt Barnes/Westside Studio

Old Navy: Fun is fundamental

Old Navy broke new ground by introducing cheap-chic casual fashions to North America in the mid-1990s. But its business model was being copied by rivals and getting stale by 2008 when it hired Jackman. “They had lost their mojo,” he says.

Glenn Murphy, who was credited with spearheading parent Gap’s revival efforts before stepping down as CEO early this year, says he rarely went outside the company for advice. But the situation with Old Navy’s store experience was one of those “extreme circumstances.”

Jackman’s research found that rather than focus on low-cost apparel, Old Navy needed to return to its roots of creating “fun” experiences. One of the first things he pushed for was ditching its ban on employees bearing tattoos. “Young, fun, adventurous-spirited people often have tattoos,” and many of the chain’s customers sported them, he says.

He pinpointed another problem: The middle of the stores was lifeless because staff rarely spent time there, gravitating instead to the fitting rooms at the back or the checkouts at the front. So his team moved the change rooms to the centre. Now there are employees at the hub. “Fun fundamentally gets created by people,” he comments.

Employees were encouraged to hold customer “parties.” Some went too far with “a little too much skin” showing, but that’s the risk you take.

The stores refocused on casual fashions–even adding the fast-growing category of yoga wear–and dropped office and evening clothing, which wasn’t part of the fun approach, he says. The chain displayed knick-knacks and fashion accessories near the checkout to draw last-minute impulse purchases, even branching out into candies and dog collars. Old Navy’s mantra: “Fashion fun for all, and value is part of the fun.”

The changes generated immediate single-digit same-store sales lifts at the re-imagined stores, Jackman says. Once perfected, the model achieved “mid-teen” increases. Today, Old Navy often outperforms Gap’s namesake and Banana Republic divisions.

As Murphy explains: “Joe’s approach is not about presenting a PowerPoint deck but rather he gets the client to talk and start the process in a collaborative way.…We never met in the office; rather, we were in stores – ours and our competitors’ – working over the solution.”

Jackman doesn’t have the Ivy League credentials that characterize prestigious consulting firms such as McKinsey & Co. After all, following high school, he studied industrial design at a community college and then hung out his consultant shingle.

Now, however, he’s making his own business into a self-styled, McKinsey-like consulting powerhouse with a creative edge. It goes without saying that some clients will get less face time with Jackman. Counting on his hand-picked lieutenants, Jackman is embarked on his boldest makeover yet.

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