On Aire Ep. 17 w/ Jacob Gerson and JJ Hjalmarson of Gerson Company Transcript

[Intro – Host: Team Jensen]

Host: teaching you the art of industrial real estate this is on air with Team Jensen all right listeners welcome to episode 17 of on air with Team Jensen today we have Jacob Gerson and JJ Hjalmarson of Gerson Company on with us.

Jacob & JJ: thanks for having us.

Host: what’s a little bit of the history where did it start? What generation would you guys consider yourselves?

[The Gerson Company Origin & American Dream]

Jacob: JJ and I are what we call the fourth generation… the company was started by our great-grandfather Oscar Gerson along with his wife Tony. They immigrated to the United States in the late 1930s from Germany. Jewish family, not a great time to be in Germany… a family in Kansas City sponsored my great-grandfather and his wife… somebody told him, “Oh yeah, Kansas City, they got great beaches there, that’s where you want to go,” and so that’s how our family ended up in Kansas City.

Jacob: my great-grandfather started in Kansas City as a shoe salesman. Part of his territory covered Indian reservations in New Mexico and Oklahoma. He would stop at these reservations and barter for turquoise, handmade jewelry, and semi-precious stones… in 1941 he and his wife started going out to these reservations sourcing cool items and selling them here locally.

JJ: a Nazi came to them one day and said, “Hey, we’re buying your department store.” They said, “Oh, it’s not for sale,” and they said, “No, you don’t understand, we’re buying your department store.” They pretty much came to this country with nothing… to me it’s the epitome of the American dream.

[Evolution to Seasonal Imports]

JJ: eventually it became a costume jewelry company and we were selling a lot of drugstores… turn-style displays where you turn them around… we figured out that like 30% of our sales came from because they’d get pilfered, they’d get stolen so often that the drugstores had to keep reordering them.

JJ: in the ’90s, Ben Franklin stores had an importing arm doing their seasonal product that went belly up… they came to us and said, “Hey, will you guys step in and help us get this product in the United States?” We did and pretty much the rest is history. We’ve been in the seasonal business since then… we’ve been in business 83 years… we sell home decor and furnishings.

JJ: come out to Olathe for our warehouse sale, it’s Monday through Saturday through the month of May… turn some inventory into cash.

[The 3-Year Family Rule & Professional Backgrounds]

Jacob: our parents set a rule in place that for future generations, if you’re interested in coming to work for the business, you’ve got to go work somewhere else for a minimum of three years… JJ’s been back for five years and two now for me.

JJ: Jacob came from the San Francisco startup technology world, brought a lot of that forward-thinking to us.

Stuart: spent seven-eight years with a manufacturing rep out in Lenexa selling commercial HVAC as an outside salesman in the mission critical space. Kurt logged a few more years, jumped fresh in out of school. There’s pros and cons to both.

Jacob: having our family’s names on the building is certainly a lot of responsibility but it’s a big leg up as far as building trust.

[Open-Heart Surgery: Erp Systems & Operational Tech]

Jacob: we just this week went live with a new ERP system, which is like open-heart surgery for our business.

JJ: on the positive side, we’re pretty slow right now… it’s way better than us being down during peak season. In the past year, we’ve implemented a pretty incredible phone system that really enables our salespeople and our customer service with AI tools… we are in the middle of launching our new ERP system which will totally change the way we go to market.

[Leveraging AI and Big Data]

JJ: we’ve done a bit of a reorg where our previous head of technology’s main focus is artificial intelligence as it relates to sales and product development.

Jacob: one of the benefits of being a business that’s been around for a long time going on 83-84 years is that we have a lot of data that we’ve just accrued over the years… ours, proprietary to Gerson. What we’ve realized AI allows us to do is really mine that data in a way that wasn’t possible before.

Jacob: we take our data, our sales history by customer, and analyze what types of items have they bought in the past, layer on top of that where are they located by ZIP code, what type of store are they… and layer on top of that what are we seeing from trends.

Jacob: we launched a pilot program in January… for the customers that opted in to participate, on average their orders were up 29%.

JJ: a Walmart, for example, they have a hard time taking risks on new products… we can say, “Hey, this is doing really well at the independent retail level… we can re-engineer it to fit your price point parameters.”

[Sales Strategy: Hunters vs. Farmers]

JJ: I always view salespeople on a spectrum… on one side you have the used car salesman… on the other side you have the true account manager… the hunter versus farmer. Our uncle based out of San Francisco, he’s a hunter… lands the whales… then you have some account managers who once they get the business can grow it steady.

Stuart: I went from that outside sales world where inbound was captive… to the real estate world where you have to build trust from the very get-go… here I am now it’s like I got to sell myself.

Kurt: loopnet or something, they might think they can figure it out themselves… off-market data, the nuances of the process… there’s a ton of value there that we bring.

JJ: we sold the sale-leaseback on our building two-three years ago, 2021 I believe.

[Wrap-Up]

Host: thanks again for coming on with us… give us a follow on Spotify or Apple, On AIRE with an ‘e’ on the end… next week we’re excited to have on Lynn Electric, George G.