Forbes retail columnist: “Retail is not collapsing – retail is growing”
Q&A with expert contributor explores the future of commerce, what it’s like to be on the receiving end of PR pitches
We recently caught up with Forbes contributor Richard Kestenbaum, who covers retail, fashion, consumer behavior and consumer products. Kestenbaum doubles as a co-founder and partner at Triangle Capital, where he’s been doing mergers and acquisitions, and capital raises, for consumer-facing companies for more than 35 years. He is based in NY.
How do you decide what to write about for your column? What are your favorite retail and consumer trends to write about?
I don’t have a specific process. If I find something interesting, then I’ll decide to write about it. I speak with approximately six to 10 CEOs each day. When you do that, patterns begin to emerge and you take note of these individuals touching on similar things and occurrences. These types of situations are informative to me and assist in my comprehension of what actions companies need to take in order to develop their true value in the mergers and acquisitions business. Additionally, I go to conferences and receive reports that help me see what people are doing and what they’re thinking, and these function as illustrations that ultimately serve to confirm my presumptions. They’re demonstrative of the aforementioned trends and really aid in putting the whole thing together. So, when I see a pattern, I will jot it down on my calendar, “is this a trend and is this worth writing about?” If it keeps coming back to me, then the answer is “yes.”
Are there particular conferences, reports or publications that you really pay attention to?
I read WWD every day. I don’t necessarily see trends there, but it helps me with the news, and the news reflects the trends that are already out there. I also walk stores and browse online. But mostly, I speak to CEOs and ask them what they’re doing, what they worry about and where they see their business going.
What about analyst reports? Do you follow Forrester or RSR Research?
The reports that I’ve covered are reports that people like you have sent me, that are prepared by their clients. There are a number of these, and most don’t get me excited. Every now and again they do, and they also serve to reveal patterns. The reports that are the most interesting are the ones that center around real consumer data concerning behavior that’s informative and give insight into what consumers will do next that’s not immediately apparent.
What’s not informative?
Sometimes people write reports just for the sake of writing reports and they’re not informative. For example, I have received reports where there have been real studies done on whether consumers are motivated by discounts. You know, call me stupid, but I don’t think I need a report to tell me that consumers are motivated by discounts. I was given another report that showed that email marketing is effective. That’s not news, and it isn’t a trend. Reports such as those are a waste of both money and time.
All PR people are peddling their experts. What kind of expertise gets your attention? What PR/interview mistakes do these “experts” make?
I get more pitches for experts than I need, so, unfortunately, I can’t engage with all of these people. What isn’t useful to me, and what I never want to find myself using, is pre-canned quotes. Maybe it’s just me, but I feel like if the quote is canned – what value am I adding as a blogger? Perhaps I haven’t been doing this long enough, but it seems like I ought to be getting quotes that are original or break new ground. If a quote is mass-mailed to writers and is usable to me, then I feel as if I’m doing something wrong.
Another mistake that PR people tend to make is that they write me about doing another story about something I have already written. It always reminds me of when you shop on the web and you buy something like an airline ticket, and then for the next week they’re trying to sell you the same airline ticket. I don’t want to write about something that I’ve recently written about.
How many pitches do you receive in a day/week, and how many of them are any good?
I don’t write that much. I’ll write three or four times a month, and if I am getting five to 10 a day, there’s are only a small percentage that I can really use. I don’t have room in my head to go through the virtues or weaknesses of each of those pitches. I’ll evaluate them quickly and am always generally looking for a reason to say yes or no.
Are the pitches generally too long?
No. We’re all familiar with going through emails and finding the essence of it.
As PR people, we run into a lot of contributors who wear two hats in business and journalism. That business acumen certainly serves them – and their readers – well, and it’s understandable that they’re using their writing to build their own brand awareness. However, we’re seeing a lot of blurred lines between pay-for-play coverage with these analysts and consultants, and earned media. You seem to straddle your two ventures quite well, upholding traditional journalistic ethics. How do you separate the two?
Yes, people have offered me money, travel, and other crazy things. But if you are an investment banker doing M&A, you’re in a business that is fraught with conflict every day. If you have a client, your job is to serve that client’s interests. It is very easy to do things that are not in their best interests without your client ever knowing. But if you want to have a successful career and sleep well at night, you must always protect the interests of your client. So, from the onset of my own career, I realized that you have to understand what the goal is and keep your eye on it, and not let yourself get distracted by conflicts that will, in the long run, undermine your own objectives and the way you want to live your life. I don’t find that particularly difficult to do in journalism because it’s very much within my control. I don’t take things for what I write and I’m not interested in writing puff pieces. All my compensation for my writing comes from Forbes. I am interested in writing articles that I believe are simultaneously interesting and will help us develop and enhance our reputation as thought leaders. Nothing is worth more to me than that, nothing has more value to me than my reputation and I’m not going to let myself get distracted by any other kind of offer.
As an investment banker, how do you weigh PR and media coverage when you’re looking at a company’s potential? Are PR and marketing important areas to invest in, particularly as companies seek new funding or look to be acquired?
We don’t typically do public deals, so PR and our clients’ interests are typically in conflict. If we’re engaged to sell a company and we call up a journalist and get information published about the fact that our clients are for sale, then potential buyers will come out of the woodwork and they’ll call us. But that would be against what’s best for our client. Not in terms of maximizing value, but it puts pressure on our client to sell their company and that would be wrong for us to do. It compromises their position and it jeopardizes their key employees, all of which diminishes the value of their business. So we would never do that. It’s an example of the type of conflict that you encounter when you’re in banking, and experiences like that make it relatively clear how to handle the conflicts that exist in journalism. The key is to never act against the central objectives of what it is that you’re trying to accomplish. So, PR and media coverage aren’t particularly relevant to what we do because most of our clients are private and the deals we do are not announced until they’re completed. Often [when the deal is public], we can be quoted as bankers, and say that we represented the company and give a nice review of the company in the quote, etc. We enjoy that. That’s our completed work, and, in this business, having people cognizant of your work generates more work and we love that. However, I will also make it clear that I would never write on my blog about anyone that we represent or anyone that we are actively pursuing to represent. That is a conflict and I wouldn’t do it.
Let’s talk a little about your vision for the retail and ecommerce industry. What do you make of large brick-and-mortar closures and Amazon’s momentum? What do brands need to do to survive?
It’s so deep. That’s generally what I spend most of my time exploring. Virtually all the things I have written cover that topic in one form or another and there are so many nuances to it. First, it is important to remember that retail is not collapsing – retail is growing. What is changing is who is doing the selling of products to consumers. That is driven by the combination of what consumers want, amplified by changes in technology. Those are enormous shifts and, as I said before, some of the barriers to entry have fallen down and the legacy retailers and brands are under attack. We are seeing the shift of where the power has traditionally been ? the legacy brands and retailers ? to the newcomers, and that’s highly unusual in any industry and a massive change from what the industry has been for decades.
You asked me, “What do brands need to survive?” The answer to that is the same as it always has been, which is: “Give consumers what they want.” The challenge is that if you’re a large organization, you are oriented to deliver products in a certain way, and it is very hard for you to deliver products in any other way. Making those changes has proven, thus far, to be almost impossible for large retailers and brands. And when they do make changes, people tend to view them as inauthentic and that hurts the brand even more.
What are your predictions for the future of the industry?
I don’t know about 2018, but there are two sectors in retail that are doing very well which I think people should be really worried about. The first is off-price and the other is beauty. I think off-price is threatened by challenges that the big off-pricers are not dealing with. Namely, competition and technology that will become a big threat over the next several years. Second, I believe that the valuations in the beauty business are subject to being disrupted by change in the industry that we cannot now foresee. It’s hard for me to believe that the valuations that we’re seeing in the beauty business will keep on going. I’m not saying that these changes will happen in 2018, in fact I don’t think they will, but they are going to happen.