Les Mandelbaum, CEO of Umbra and long-time member of PEO Leadership has not only been predicting the reinvention of the retail industry, he and his global team have been executing their vision of a digital economy for many years. Umbra has transformed itself from a primarily retail-driven platform to one of the world’s leading houseware companies with e-commerce accounting for more than 50% of their overall sales. An incredible story of a company reinventing itself, listen to Les as we speak about the future of retail, the hybrid workforce, and the pressure to increase prices.
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Special thanks to E+y for helping us bring you t day's PEO leadership snipp t podcast. Welcome to our snippe s podcast. I'm Leon Goren, CEO a d president of PEO leadersh p, North America's premier peer to peer network and leaders ip advisory firm. Today we welc me Les Mandelbaum, co-founder nd CEO of Umbra and longtime mem er of PEO leadership. The Um ra story dates back to 1979. W en both Les and Paul launched t e single window shade, from t eir curiosity, creativity and a passion for design to code as a company went on to create m dern designs for the home that b accessible in both price and a titude. Today, ombre with its h ad office in Toronto has b come a global leader in design a d distributes his products to o er 120 countries around the w rld. with offices in Europe, t e US, Brazil, China, last year a d your team have done a f ntastic job. It's been a great C nadian success story. And it's g eat to have you with us today.Unknown:
Thank you. And thank you for your help all these years to with PEO. And your personal guys.Leon Goren:
Thanks so much last. So I wanted to kick it off with a little bit of the future. And and before I go to the future I'm thinking about because I've been really fortunate, I've sat in lots of numerous meetings with you over the years. And the one thing that I noticed and picked up on is you've been a visionary like I remember eight, nine years ago, what you constantly are doing is predicting the future looking at the future, urging the team directing the team, getting them to explore and try and figure out what's coming next. So I couldn't think of anybody better if I wanted to think about what's his environment, especially around let's say the wholesale retail environment look like, two, three years from today. It's been an incredible past year. But where are we going from here?Unknown:
Well, first of all, you have to look at what's happening before the pandemic, what forces were in play and what trends were in play before that. Before the pandemic we saw the rise of econ taking a major portion of consumers dollars and shopping habits, even before the pandemic hit. We also because we're selling in different markets, we saw what's happening in different parts of the world. We saw that, particularly in China, which is considered maybe the biggest consumer market, and that's certainly the fastest growing one over the past 15 years, that they skip bricks and mortar that sites such as Alibaba, and to mall and the rest, that they they had picked up 70% of the consumer dollars with the shopping. So that was the norm there. And and certainly the rise of consumers having smartphones, so many at all income levels, being able to shop and comfortable shop on that. So we saw that happening already. So we already geared the company, and predicted that at least half an hour or if not a majority of our business would be Econ, of course, in the pandemic kit, that was the only game happening except for a few essential stores. So we feel that eecom is going to continue to grow. But it's it was accelerated by the pandemic because they picked up so many new customers that maybe were hesitant to buy just regular household items that they could enjoy visiting in the store. Older people particularly that now that they're doing it, they'll probably continue doing it. Of course, a lot of the missed associate acts for the low back to store but now they have that tool in that shopping tool and it's not going to go away so fast.Leon Goren:
So, you know, I guess it's been a big, it's the last year has been a massive transformation, right? We're always predicting retail bricks and mortar difficulty getting it settled out now a little bit in terms of all the disruption to that.Unknown:
Well, I wish I wish I could say that it's settled down but a lot of things that disruption is even more so in different ways on the supply chain on different pressures such as cost increases material increases labor disruptions. So even in the markets that have been open for a while and us being our biggest market. I can't say that it's settled down. It's we've seen as as the market has reopened in the US, we've seen a huge return to stores people are having To go back and stores, but the stores are reporting to me that they don't see as much turnover for the body count that airs in the store. So a lot of people are visiting stores is sort of just a social experience or an outing, but not necessarily transferring to dollars because a lot of people are still buying on eecom. We're in the in the home? I don't I don't know, I can predict on that on what it's going to be let's say next year, but for this year. Ecommerce still growth is still the the the acceleration is still there.Leon Goren:
Okay, I know that's great. You touched on the supply chain logistics, this is a big conversation happening in in our groups. I was in one this morning, right? And they were talking about price increases taking one two, what some of them were on their third potential price increase this year, because of raw materials and stuff. Same I'm assuming in the Home Hardware, you know, homeware businesses as well, very much is it you think it's temporary, or you think this is a long term price adjustment now that we're going to see,Unknown:
well, if I could predict that I would be buying Commodities Futures that are shorting here, that, you know, when things go up, you see this and gas prices look looking at what's happening to others, they're very quick to go up, and they're very slow to go down. People are very hesitant to once they've established a price, unless they're forced to unless there's a real competitive market, they there to reduce prices. So I really feel that it might slow down the level of increases as unsustainable, because it's just every week, it's it's been hitting in, and there's a lot of fatigue, in terms of going back and changing prices and who's doing it first. And certainly if you're in the middle man, and you're dealing with retailers, it's it's very stressful. But once you've established a price, unless there's a lot of competition, people are hesitant to lower that. And what's happened is that there's less competition these days, there's massive people like Amazon on the bricks and mortar, the big chains have swallowed even a biggest bigger portion of the market, unfortunately, at the cost of independence and some of the specialty chains. So it's a less competitive market in some ways. So I really feel that higher prices are here to stay. And obviously there's a political will to raise the base the base wages and that goes out through the food chain. So that's the cost increase the rise in China and their currency though or you can say the lowering the US currency is inflationary. tariffs are and and and the lack of global cooperation and open markets is also causing cost increases the strain of not regular patterns and supply chain. supply chains don't do well with blips fast increases and slowdowns. They can't handle it. So it ends up with a lot of the pipes get clogged very easily. So I see this is leading to long term, there's gonna be inflation. And there's gonna be a major correction once governments finally have to face that they have to raise interest rates and therefore mortgage rates.Leon Goren:
Okay, you are a predictor, you see you are you're predicting a little bit.Unknown:
Well, I'm not alone in this, I've got to say that it's going to be a predictor I advise other people to go outside their own cocoon. One of the things I do, of course, p OE joining po is part of that. But I'm also part of, you know, a lot of different groups. Now, other vendors in different countries, high level mid level, I really try to talk to as many people as possible, and network as much as I can globally. And the fact that Umbra has a bit of a brand and a story to tell. I get, we can punch above our weight and I get invited to the table to talk to you as you do too, with some of the groups you're involved in. And you can pick up a lot of information. So not only information but you get a consensus of where things are going when you talk when you talk to people in different groups and I encouraged my executives to do the same to in my managers to seek out knowledge. Also I read a lot I'm I'm a bit old school, I still read, you know, the major publications every day. And ones that I really think I get it right, like the economist, you know, every week plus books.Leon Goren:
No, you do I admire you on that. It's funny because that's what we push leaders to do all the time, right be one of their primary responsibility to leading an organization is you got to sort of figure out directionally where you're going. And the only way to do that is to sort of read, talk to people outside of your organization, just get out of your building. Otherwise, you'll have no sense of it.Unknown:
And so, you know, I, in the old days, obviously, for 10 years, I was on a plane every week, and when I was starting the business, but I still traveled until this pandemic hit pretty much 25% of the time globally, and also be on the ground and not as a tourist, talking to business people in all corners of the world, you really get a consensus, it's not that I'm smarter than anybody else. But when I'm getting this amount of information, you get to feel of where things are going. If you're talking and traveling to people all over the world. And you get some common ideas that seems to be resonating, then you get a sense of where things are going. And that's where it really worked for me was in that 2008 recession, when that hit the first the mortgage defaults and all the rest, I really was able to restructure my business in anticipation that early and we survived that quite well. So this is similar. So I've been through this a few times. And I think we're coming out of eating this pandemic in stronger shape. Now part of that is luck, just the the sector that I happen to be in. But part of it is, is reading and getting as much knowledge as possible.Leon Goren:
So I know we're pressed for time. But the other thing I wanted to touch base with you is this whole workplace environment, right? Oh, hybrid piece today. And in your world, I know you got a couple things going on. One is the capabilities that your people are changing all the time now in terms of leadership capabilities, right? You've gone from traditional straight bricks mark to e commerce, and it's accelerating. So your leadership is changing there. But to is in your world, also on the design, the collaboration, the necessity be in the office and collaborate. How is this hybrid workplace going to unfold? For you?Unknown:
Well, you know, I'm a bit old school on this, I really believe in face to face and collaborative environment, and different departments interacting each other on a casual basis. A lot of stuff, a lot of the magics happens here, because we're a product development design company almost by accident. And setting up zoom meetings are fine if you have a specific goal and agenda in place. But a lot of the creative process isn't quite like that here. So we feel part of the our advantage is that women are allowed because we're deemed an essential service, whatever. But we're able to stay open in some capacity, all through the past year. But on the other hand, even before this, there was a big move, that people wanted more flexibility as to where they were, this happened already. So in order to attract top talent, it doesn't matter what I think, if I want to top talent, I have to adjust for the work for the for for the I have to market my company competitively, and I have to adjust, I have to be flexible to attract the best talent. And if the best talent says, You know what? I want flexibility in my work hours. And I don't want to be at the office every day. We're not going to pass on, on having great talent, and not being flexible. Because less man the bomb, the CEO has a philosophy of we'd like people to be here. So we already had that flexibility in place. And I think that's going to continue. So the hybrid that we have now is going to continue to some form and we see this happening globally.Leon Goren:
That's great. Well, let's thanks so much for sharing those insight. We hit three big topics. I know I tightened it upUnknown:
really Yeah, you did a great job. Yeah, we you know, I enjoy these kinds of things and I enjoy our meetings. And I got to say to that part of the reason I'm able to pick up knowledge is that I share knowledge. You only you reap what you sow. So people that are very nerdy don't like to are very closed in sharing information. They They're not going to get the information they need. People are less likely to share things if you don't share. So I my philosophy is share as much as you possibly can and you're comfortable with and you'll get it back, double.Leon Goren:
I like those words. That's awesome. All right, thanks so much pleasure. It's great. If you're interested in our live webcast the way forward live and or any other snippets, please take a moment and visit us at po dash leadership comm you'll find on our site. Various previous recorded webcasts include guests such as Professor Janice Stein, Harvard's Rosabeth Cantor Mitchell gold heart, Greg wells, Dr. Jason, South rock chestnut, and we cover topics such as Mental Health Leadership, the world reset and a whole host of others. Thank you for joining us today and we look forward to seeing you again shortly.