Podcast appearances and mentions of stephanie what

What's hot today might be out of the zeitgeist tomorrow. Are people still doing goat yoga? Are skinny jeans really the new mom jeans? There are so many trends to keep track of and so many “next big things,” it's impossible to know what's real and what's just a passing fad. For a business, it's important to understand the distinction, and it's even more important to have products that will thrive regardless of the different cycles your industry will run through. Lopa van der Mersch says she has that kind of product with her company, Rasa, which makes a coffee alternative with adaptogen blends. Lopa has a fascinating story, including inadvertently entering into a cult, navigating tricky co-founder relationships, and building up a business to more than $2M in revenue all from her garage.On this episode of Up Next in Commerce, Lopa explains why she believes that her product will be a game-changer regardless of societal trends, and she breaks down how to spot something phony or bad for you, whether it's in a product or even in a partner or personal relationship. Enjoy this episode! Main Takeaways:Finding the Right Match: When partnering with a co-founder, especially one who is a close friend, some things you should consider are their skills and their ability to resolve conflicts. Ask yourself would you hire this person to do this job if they were not your friend? And think back to how you have handled conflicts with each other in the past. If you are comfortable with the answers to those questions, you can feel more confident in that person as a partner.Culture Shock: Growth in any industry is related to what is happening in common culture. When something is trending, a corresponding industry will rise. Today's society is focused on health and wellness more than in the past, so companies that deal with products in that space are on the rise. But to stay solvent even when the trends change, companies need to ensure that they have products that are worth something and add to a person's life regardless of whether it's trendy or not.Let It Come, But Also Go After It: Striking the right balance between organic growth and focusing energy and money into specific channels is difficult. The key is to make sure that you are diversifying your efforts wherever you choose to try to gain attention. Play with the levers of what's working in one area, but continue to invest elsewhere so that when one thing begins to fail, you have other options. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Stephanie:Hey everyone. And welcome back to Up Next In Commerce. This is your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have Lopa van der Mersch who currently serves as the founder and CEO of Rasa. Lopa, welcome.Lopa:Hi, great to be here. Thanks for having me.Stephanie:I am very excited to have you on. So your history as we talked about before the show started is very intriguing and I think our guests would love to kind of start there and hear a bit about your background, childhood, all of the things about Lopa.Lopa:All right. Well, let's see how long we have. So it's all a question of where do I start, right? I mean where do we plug in? But I will say I think a good place to plug is around when I was 16, I first heard the word enlightenment, I don't even remember in what context and I was like, that. I want that, whatever that is. And I started reading spiritual books on Taoism and Buddhism and I went from being this incredibly miserable teenager, like the most, like special. I know like everybody's miserable as a teenager, but I was extra. I'm extra about everything. And then I kind of went through this awakening process as I discovered this other dimension to life and I was just hungry and I was positive and I saw beauty everywhere and it was great.Lopa:I started getting into yoga and I kept on finding myself wanting a deeper and deeper relationship with a teacher. And then I did find a guru, like a real guru from a lineage in India and studied with him for a long time and learned a tremendous amount. Spirituality was a huge focus of my life. I've probably done six months of retreats over the years. And for a while three to four hours of meditation practice a day and I was hardcore. And at some point in there, I started to sort of question the navel gazing nature of it all and was like, what else can I give to the world? And what else can I bring to the world? And through serendipity in many ways, I found a job in the bio char industry.Lopa:And for those who aren't familiar, bio char is short for biological charcoal. It's charcoal that you add to soil to both sequester carbon and improve soil quality. And I helped co-found two businesses there. I worked for Richard Branson's Carbon War Room while I was there. I spoke at TEDx. It was like I was in the right place at the right time in an industry that was really growing specifically for its focus on being a potential solution for climate change. And then after, I don't know, five years of eating, breathing, sleeping, sweating bio char, and then practicing and doing retreats when I could and all of that, I left that context and went on and around the world trip with my now husband and just at the very end of that trip, we inadvertently as always happens, got into a cult. And no one knows you're getting into a cult when you're getting into a cult. Nobody's like-Stephanie:Okay, how do I even know if I'm not in one right now then?Lopa:It's a great question. So there's sort of two distinctions of cults. We are all in a certain cult in terms of modern society, in terms of our involvement with media and the way that it shapes the way that we think. All of that could be considered a cult. And depending on how you look or who you talk to, that could be seen as a benign cult or a destructive cult. Many religions are benign cults. But in this context we were in what could be considered a destructive cult or another framing that they use in cult academia is high demand group. And so one of the ways that you can assess if am I in a cult kind of situation, how much demand is there for your time, for your attention, for your devotion, for your money? And in this context, we were pretty much 100% of our time was focused on this cult. My husband was working at the time and found it incredibly hard to maintain his job and all of his duties in the cult context.Stephanie:How did you inadvertently get into it? Did you meet one person and they're like there's this cool thing, it kind of sounds like this, and it's just like a community of just like besties. And then you get in there and it just turns into more and more and more work, or what does that look like?Lopa:Yeah. Yeah, it's always gradations. So we met somebody and she was talking about her experiences with this woman. And often people don't think of women as having that, but it usually there's some kind of narcissistic component to any cult dynamic. Not necessarily though. And I will also say too, just because I think it's important to understand, you can be in a cult of two and another way to look at that is an abusive relationship. So that would be considered like the smallest size of a cult and then bigger ones are what we normally think of when we think of cults. So if you're in a relationship and you're like am I in a cult of two, look at how much demand is on your time and how much are they trying to limit the world around you?Lopa:So yeah, we met this woman, she was telling me about her experiences and they were amazing and mystical and psychedelic in many ways. And I was like, all right, this sounds like what I want. Yeah. I want that magic. I want that other worldliness. And so we went to go see her and she's a very powerful, very charismatic woman and there's real great spiritual teachings in there too. Nobody joins a cult just because they're like, oh, I want to get abused. That sounds great. There's something that draws them in. And usually it's a trauma bond that keeps people in because there's like, oh, today it's a little bit of love and tomorrow I'm going to humiliate you and today, you're the best thing ever. And tomorrow I'm going to question every aspect of your sense of self.Lopa:So it started as this charismatic, interesting, powerful woman who had a lot of energy. I did have psychedelic experiences around her. Cool. That's fun. Without any drugs and it's the context there. And there are some things that I probably should have been like um, she gravels and hisses and speaks in tongues and stuff.Stephanie:A little off putting.Lopa:Yeah, yeah. But I was like, well, everybody around her kind of did it. And so that normalized it and was like, oh, well maybe I just don't get it. And maybe okay, if I start doing that, then I'll be more spiritual too. And all that kind of stuff. And with almost any cult or context, it gets more and more insane literally. It's like an onion. The outer layers and people who just come to a class here and there, they might be like, she's amazing. What are you even talking about? This is not a cult.Lopa:And then as you get deeper and deeper in and closer into that kind of inner circle, that's where things like some of her like... Sorry, I'll go back and say for the first six months or so, it was like bliss. It was amazing. It was just awesome. And I felt so seen and so loved and all of that. And then after some time is when, and in spiritual contexts, you're trying in some way to break your ego down. And so the eco breaking down a scene in this context of like, well, I need this and so I'm being humbled.Stephanie:Yeah, you need that abuse and ripping apart every piece of need because I [inaudible] and I need to be separate from that.Lopa:Exactly. Exactly. So this is part of the growth and I just have to sustain it and all of that, and it can be tricky to assess if that is real, is it really actually good? And you do need to be cut down in some ways or we all have times in our lives where somebody gives us a reflection that we really don't like but we really fricking need. And that can really hurt to let it in. I think a prime present tense example is people beginning to see the embedded racism in their system for white people and I think that's a reflection that none of us really want to hold, but we have to. It's important to hold and that's a big ego, like we have to let the knife go in on that one, for example.Lopa:But then in these more kind of abusive context, it's like you have to look very closely at what is this person's motive? Do they really feel like it's coming from I am actually trying to help you in some way. And she always said that she was and this was all for us and all for love and all of that. And when it came down to it, some of the things that really kind of set us off towards the end was just realizing how incredibly unhumble she was and how unwilling to receive feedback or any kind of bi-directional. She gives a lot of feedback in our direction. And then we're like, are you kind of sitting on a pedestal and then freaks out. And so those were some of our cues. And sometimes it is, you find just this tiny little cue, and then that's the thread that lets it all kind of break down and then you realize, whoa, wait a second, what are we doing? Where are we? Why are we prioritizing every minute of our lives around this person?Stephanie:Wow. Can you get out? Because I always hear when you're in-Lopa:It's hard.Stephanie:It's hard to get out. So what does it look like you trying to get out of that?Lopa:Yeah. I mean, it's different for every person. For us, it was an outside reflection from somebody who was a relative stranger who brought up. He was like, I'm sure she's a really beautiful person, but I see some red flags and I'm just a little bit concerned and then gave some examples of other teachers who were very humble. And I don't know if he specifically chose these teachers because they're very humble or what, but it was a strange experience. My husband and I were both on the phone with him at the time. When we got off the phone, it literally felt like a bubble popped.Stephanie:Wow.Lopa:We were, wow. Okay, something changed. And we felt kind of naked and exposed. And then we were like oh, we just need to give her some feedback. She's kind of lost her humility and she's like, I am that, I am everything. And so we just need to sort of remind her of her humanity a little bit, right, because we're all humans. And there was a process of, we gave that piece of feedback and then over the next three weeks, there were 3000 emails sent between the group. I went back and looked at my gmail and it was like 3006 or something, crazy. 3006 or something absurd. I'm trying to [inaudible] language out of my vocabulary. And my husband really saw it quickly and was out and for me, it took a little bit more time where I was kind of questioning myself, oh, maybe she is the real deal and I just can't take it and all of that.Lopa:And therapy was a really big part of the healing and the reconciliation and finding my core sense of self again, which got adjusted over the course of this whole time. It was like, somebody questions your motive once and you're like, oh no, that's not where I'm coming from. And then they do it again and you're like, what do you mean? And then they keep doing it and keep doing it. And you move a little bit off of your center over and over because you start to question yourself, well, maybe I am this kind of showy person and you start to believe that. And that's gaslighting and that's how that happens. So for me, it was a process of kind of reexamining all of my beliefs and all of the dogmas that I'd picked up in the course of my life and all of these different things to get back to kind of what feels like a core solid sense of self and a lot of therapy.Stephanie:Wow. That's intense. Okay. So you get out of this cult and then what happens after that?Lopa:Yes. Well that year was a doozy. I now call it my own personal 2020. Now that we've had 2020, I'm like, oh, that was my 2015 because yeah, I left the cult, 3000 emails, I had an emergency back surgery while I was pregnant, I moved across the country a week later, lost a family member, had an emergency cesarean birth that was traumatic, I had a huge falling out with my family. I was fried. And so Rasa actually really came out of necessity. Necessity is the mother of invention. I was fried and I was like, I need something to help me keep going because now I had a baby waking me up, really precious little munchkin. And I tried coffee. I've never been a big coffee drinker because it's a little too much for my system. I tried coffee and was like, whoa, okay, irritability, jitters, panic attacks, sleep is even more messed up. No. This is a hard no.Lopa:And so I looked at all the coffee alternatives out there and tried them all. And I was like, really? This is it? Come on, we can do better, right? And I've been a big herb person, just an enthusiast. I love herbs. I've always had lots of jars of herbs in my kitchen and stuff like that. And I was like, can't we just put a bunch of really good herbs in there? And then I started to really think about here, looking at coffee in this coffee cup that people just don't even really question, this ritual of drinking coffee, it's even built into so many aspects of our culture in terms of don't talk to me until I've had my second cup of coffee kind of stuff.Stephanie:Community stuff like let's meet up for coffee.Lopa:Yes, totally, totally. People talking about how coffee is their personality. And I started being like, wow, this is something that people often actually used to override their body signals. So like their body's like, I'm tired. The answer is not rest or downshift a little bit or maybe I need a little time in nature or anything like that. The answer is often coffee.Stephanie:Yeah.Lopa:Coffee is the tool of a society that does not give two shits about anything except for your productivity in a way. And we buy into that and we do that. And I say this also in the context of not saying that I'm sure a lot of people listening, entrepreneurs, people out there in the world are like, no, you do not blah, blah, blah, my cup of coffee. I understand that. I really get it. It's not that coffee is bad or coffee is the devil. It's about how you're relating to it. Just like how you're relating to anything. Like a glass of wine with dinner is not a bad thing. It's a beverage, but if you have a real dependency on that, and that is something that you really need and you have two or three or four, it's all about right relationship fundamentally. So yeah, I started looking at that and I was like, wow, everybody's just drinking coffee, coffee jacks up your central nervous system. It causes a cortisol flood from your adrenals.Lopa:So it's literally triggering a stress response which is part of why you feel so amazing. And because the cortisol is there to help you be able to beat the tiger or run away from the tiger or whatever. And I was like, wow, that doesn't necessarily put us into our best selves. When I am revved up, I'm not necessarily kind of grounded in my best decision-making, my cognitive executive function is not operating from that wide spacious perspective. And so I was like, all right, what if we, and then there was this other kind of aha about coffee is also one of the few accepted bitter tastes in our culture.Lopa:We don't tend to love bitter in our society, but coffee is super bitter. And so as chocolate is the other one. And I was like, so there's a bunch of amazing herbs out there. Some of them taste kind of like crap, but if you stick them into this like rich, robust cup and with other things that are kind of masking the taste, you can actually get people to drink something that's going to be incredibly healthy for them every single day and is actually going to help them regulate their stress response.Lopa:And so that's where at that point, I started working with a herbalist. I love herbs and there's a bit of a trend out there of people just being like, oh, there's all these trendy things out there, let's just go ahead and throw them into a bag and sell them. And herbalism is a very, very long standing tradition. That's the original medicine, the people's medicine and there's a lot of science in there too. And so I think it's really important. It's very different to have a herbalist formulated product versus trendy things in a bag products. And so I worked with a herbalist and they actually did the formula. And so that was five years ago. We were kind of in beta for roughly two years. And then we hard launched in April of 2018 and now I am founder and CEO of a 20-person business and things are going great.Stephanie:Wow. That's amazing. So when thinking about formulating the product, did you go into it already knowing I want to have for sure these things in it, or did you really just relinquish control and just say, you tell me, here's maybe the benefits that I want to see or I want it to taste maybe a little bit bitter or not at all? How did that relationship go about?Lopa:With that original relationships, so that was my original co-founder, who was a very, very dear friend and now has a royalty on her formula and we bought her out. We didn't bring out the best in each other in a business context. So that's really good, if you're going to start a business with a close friend, you really want to look at them from the angle of would I hire this person to do these things? And have I ever gotten into significant conflict with this person and how did we do? And because as soon as you're dealing with money, it becomes almost like a marriage, it's way intense. And just our friction didn't quite work, but so she had these herbs that she was already working with. Lopa:And I made suggestions, I was like, I think we should add this. And I think none of them ended up in the final formula, but I was like, it needs to taste good. It needs to be really functional. It needs to have an energy component. It doesn't have to match coffee because coffee, I think is an unsustainable energy spike. But it does need to give people some kind of lift and I wanted it to be gluten-free, have no natural flavors, anything like that. So it's just herbs. And she went to town, we now have a herbalist on staff who is a clinical herbalist and he has reformulated that same formulation probably 40 times or something. And some of that is we've done some major reformulations to just continue to improve the taste and continue to improve the functionality. And then sometimes there's like, oh, this herb has a sustainability consideration and so we're going to swap that out and, oh, we're going to change it to a different source.Lopa:And then that source has a different taste. And now we have to adjust everything. But we actually taste every single batch of herbs and reformulate every single time based on the strength of the harvest of the herbs because you're always adjusting for climate and things that are totally out of our control and we want to have a consistent taste.Stephanie:Yeah. I love that. So the one thing I want to talk about too, and understand more is the industry as a whole around adaptogens because I feel like that word now it seems like it's on every product. And sometimes I'm like, well, how do I know what an adaptogen is? Is it real? Is it not? Because it seems like a trendy thing. And how did you think about that when entering into this industry?Lopa:Yes. Oh man, don't get me started. So first, how do you know what an adaptogen is? And is it real? So these are herbs that have been used for thousands of years in traditional context, in [inaudible], in Chinese medicine. And then in the 1940s, a Russian scientist named Nicola Lazaroff, there we go, thank you. He was basically tasked with giving Russian super soldiers and athletes an edge without a crash. And so he went to work studying all sorts of substances, including herbs and fell on these types of herbs, and he was like, oh, wait a second. This does give them the edge. They can go longer, harder, faster, more, and then they don't have a crash after the fact which is what happens with stimulants. And that's the issue with coffee is you get that crash in the afternoon because it's a kind of an unsustainable lift.Lopa:And so he initially started working with eleuthero which was the original adaptogen. And there are over 3000 studies on eleuthero, it's one of the most studied herbs and all through his research. And that term was coined, I believe, in the early 1950s. And so in order to be called an adaptogen, a herb needs to, we call it the four Ns, it needs to have a normalizing effect on the body. So it helps balance, helps you find homeostasis against environmental, physical, emotional, mental factors, all kinds of stress. It needs to be non-toxic in normal therapeutic doses. So it has to be basically safe. It's not going to, basically safe for most people. It needs to be nonspecific in terms of, there are many herbs where this herb is very good for the liver or this herb is very good for the blood.Lopa:These are herbs that work systemically and holistically in the whole body. And then that relates specifically to number four which is neuro-endocrine. It needs to have an impact on your neuroendocrine system which is your nervous system and your endocrine system coming together. And both of those, I want to go a little bit into the science, but so you have two main pathways that your body uses to communicate that you're under stress which is your hypothalamic pituitary adrenal axis and your sympathoadrenal system, hypothalamus pituitary adrenal axis is HPA. And the HPA axis is how your hormones tell your adrenals that there's a stress issue. And then your SAS is neuro-transmitters. And these herbs strengthened those two systems, literally like exercise. So they say that it mimics stress. But it's actually in a good way.Lopa:It's a eustressor. So it's actually like exercise is stressful for our bodies but it's in a good way, because we're getting stronger, we're getting more resilience, all of that, we're getting more flexible. And so adaptogens are literally doing that to your body's stress response system. So they have to have that neuro-endocrine impact as well. And this is also really interesting, just seeing adaptogens trending so much, many companies out there, I think, do not understand that there is a scientific criteria. It's not a marketing term. And there's actually a pretty small class of herbs that are scientifically substantiated as being adaptogens.Stephanie:Yeah, I was going to ask like how many are out there that have that claim against them?Lopa:Yeah. So it depends on who you talk to and who you look at. And we're actually working on coming out with a whole here is the definitive adaptogen guide. Here's what actually has the scientific backing. Here's why we chose these particular herbs based on these scientists and based on what we know and here's the list and here's what gets adaptogen washed. And this is a term that we've coined adaptogen washing where somebody calls something an adaptogens and it's not. So there's about, I think it's 39. And that number is changing based on the science. Sometimes they'll do a few more research studies and be like, oh, actually this one drops off the list or they do a few more research and they're like, okay, this one's definitely on the list. But depending on which scientist you talk to, there's either nine or 12 definitive adaptogens and then roughly 20 to 25 other probable adaptogens or secondary adaptogens.Lopa:And to be generous to the industry, we call anything that is probable, possible, secondary or primary an adaptogen. But many things that we see get mislabeled as adaptogens out there are Chaga is not an adaptogen, lion's mane, all the functional mushrooms, people are like, functional mushrooms are adaptogens. Nope, there's just two. And that is cordyceps and Lingzhi.Stephanie:I love Lingzhi.Lopa:Yeah, turmeric is not an adaptogen. Actually there is one other mushroom that's very little known called [inaudible], I think. But yeah, Chaga is not an adaptogen, lion's mane, turmeric. I've heard Matcha be called an adaptogen, [inaudible]. People just kind of throw it on anything. And this is an interesting case of an industry growing because we're overstressed as a culture. And this was going back to one of your questions about did we know what we wanted to put in that cup? And were we aware of that? We want to put the best stuff ever in a cup and adaptogens are the best stuff ever especially as a superior way to stimulate yourself that's more sustainable. And I believe that they're trending because people need them. That's what's happening right now. And there's a pretty uneducated consumer base.Lopa:And so there's a lot of knowledge to understand. And adaptogens tend to grow in really extreme environments which is why they're expensive. They grow on the tops of mountains, in desert, in these kinds of contexts. And it can be hard to actually get a full harvest out of them in the same way as like you could for other herbs.Stephanie:There's definitely a lot of education needed around this space. And it seems like so many new things are popping up. I mean, I was just at brunch the other day where my friends were talking about Ayurvedic diets and oils to use. And I mean, it was so much, I probably was like oh my gosh, I don't even know how to consume all the things you're telling me because it feels like everything I'm doing, I just never knew about any of this. Well, the same thing with adaptogens and understanding what that is. And there's a whole revolution, I think, of this new kind of nutrition and dieting and way of thinking that is going to take some time to educate the consumers on what that actually is and who's a phony and who's real and what's an actual real product or not.Lopa:Yeah. And what's actually going to have an impact. It wouldn't be such a problem, I think to have adaptogen washing if it didn't like also devalue the herb itself. And to another point, if I gave you something and was like, this has CBD and it doesn't have CBD, you'd be like, what the heck? And some people do call CBD an adaptogen, it's not, and that doesn't make those herbs any less amazing. Just don't mislabel them.Stephanie:Yeah, just use the right words.Lopa:Yeah.Stephanie:So yeah. I completely agree. So when you're starting this company, a lot of founders start out and they're really excited. And then sometimes they're kind of like how's this going? Is this my thing? Get a little distracted, and I want to kind of hear how your journey went with getting really excited about this, knowing you had a solution to something, what did that look like after you had landed on, I want to start this company? Was there any hesitation ever or wondering is this even my thing?Lopa:Yeah. Yeah. I think that's pretty normal. I hope to normalize that for people like, I've definitely had entrepreneurs come to me and be like, I'm not sure if I want to do this anymore and I'm like, that's okay. You'll have those days. It's really hard to create something. And yeah, I mean, my trajectory, let's see, that first two years there was a lot, well, the co-founder conflict really kind of clouded, yeah, my situation for a little bit. And so I was like, well, maybe I should do something else. And maybe I should focus on other things. And I just kind of kept coming back to this and I just kept being like, this is a good idea and I feel like it needs to happen. And I couldn't believe that there wasn't something like this out there. And then, I mean, it's been stressful.Lopa:It is a lot of work and learning how to run a business while running a business is hard. If I were to do this all again, I'd be like, oh, wow, this is going to be a lot easier going forward. I've been the co-founder in a few businesses, but it's very, very different to be actually at the helm. And the buck stops at you kind of thing. And yeah, work-life balance has been tricky. I have two kids now. I actually hard launched Rasa when my second son was four weeks old. Tough planning. It didn't quite go to plan as I'd hoped. And there's definitely a sense of the business would take as much energy as I would possibly give it. My kids would take as much energy as I would possibly give them. And so there's this feeling of, it's never quite enough.Stephanie:The mom guilt. The mom guilt is so real. I feel that [inaudible], yeah, I'm in the house recording. My three kids are usually on the other side of the door and I'll just be like should I be out there with them and having to be like, no, boundaries. Most people, well, not now, but used to go to an office and be away and that's okay. You got work to do. And yeah, work-life balance is definitely a struggle especially working at home now in the same presence as kids and family members and pets and all of that.Lopa:Yeah. We actually originally made the Rasa headquarters out of our garage so that I could be closer to my kids. I just wanted to be able to breastfeed for a bit, put the baby down to a nap, come back. And so we were in my garage until last September. It worked great for that time. And I was like, well, we're running a $2 million business out of my garage. This is solid, it's a small garage. It's not like a big old thing. But it was my garage. We had a storage unit in the back. We had a shipping container in our driveway. We had a shed, it was in all of our basements, pretty much every room had something Rasa-related. And so I was like, all right, we got to get out of here.Stephanie:Yeah. Your neighbors are like, what's this girl doing over there?Lopa:I know. They were like, this zoning. It was not up to code, but we're out now. So forgiveness rather than permission.Stephanie:Yeah, yeah, I agree. So I want to talk a bit about Amazon too because I saw that you were part of the Launchpad program, what do you call it? And I haven't had anyone on the show at least that I know of who's been a part of that. So I want to hear about your experience being on that and spreading the word about Rasa and getting in front of new customers and just being on Amazon in general.Lopa:Yeah. I mean, Amazon in general, Amazon has been a really solid channel for us, which is part of why we went with the Launchpad program. It's been just very consistent. The growth has been pretty steady and predictable. The customers there have been great too. We have some really consistent customer retention on Amazon which I think is not what we really expected. We have a lot of subscribers there. And so we were on the Launchpad program for about a year. We actually are just in the process of pulling out of it. They do take a 5% cut and basically, I think if you have somebody on the team who's really managing it closely and is really taking advantage of every single opportunity that they have, I think it's probably a really good program. We did not have that.Stephanie:What are the opportunities that they provide within that program?Lopa:Yeah, there's a lot of promotional potential. Some of those come with additional revenue cut. Some of those just require additional marketing planning and that sort of thing. And I'll say we have tended to... We actually for about the last year have really under indexed on Amazon. I think we could have autopiloted it. And we were like, oh, well Launchpad will be good and blah, blah, blah. So we may actually go back to the Launchpad program once we have our Amazon growth strategy a little bit more, but a lot of promotional opportunities, get on the front page. You get chances to do extra deals. They have the lightning deals and I don't manage the Amazon super closely. So our Amazon guy could tell you a little bit more, but yeah, a lot of emails came through where I was like, huh, we should probably do that, but we don't really have time. We don't really have the marketing bandwidth.Lopa:And I think now I look back and we're like, well, we want that 5% margin back. We can put that into ad spend. And I think that that's going to be a better use of that capital at this time. And if we had actually been taking advantage of all those emails that came through, you can get a dedicated account manager who will help audit your ad spend and all that stuff. If we were doing that, I think it would have been a great program for us. And it was positive, we've seen growth, but not quite enough to warrant 5% on every bag.Stephanie:Yeah. Yeah. That's quite a hefty margin to take out. For them to do-Lopa:On top of their original 30%, yeah.Stephanie:Ooh, that's a lot. So you pulled back to focus more on ad spend. I mean, what kind of channels were you relying on to get the word out? Because even though it is a big trend around this industry, I still feel like it's pretty niche to get in front of the right people who understand it and are ready to buy around this. I think it might be a little harder of a sell to get in front of someone who has to do the research like me to be like, well, what is an adaptogen? Is a good for me? And how did you go about finding the right people in the platform that'll work for you?Lopa:Yeah, well, we're really going after the coffee market and adaptogens are the way that we're doing that. So adaptogens right now, it's a $25 billion industry, but most of that's in Asia and because they have a cultural context around using these herbs in daily life that we just don't have. And so we are actually bringing a cultural context for these herbs through the coffee ritual and coffees is a $465 billion market. So we like that TAM a lot better. So that said, most of our customers are actually coming to us for a coffee alternative and then they're like, oh, it actually supplies all these benefits as well. And I think that's one of the things that we've been kind of working on and finding our positioning and our messaging in terms of yes, it's a beverage and it's delicious and it's intended to replace entirely or replace partially your coffee ritual.Lopa:But then it also has all these ancillary benefits, not ancillary. I mean, we get incredible customer reviews that say that it's just life changing. And so I think there's a way, and I think that's part of why we get an amazing long tail retention on our customers because we're delivering on more than they expected in terms of the impact. But most of our customers, we've been pretty heavily focused on Facebook. That's been our major scaling channel and that's a really interesting context right now because the iOS 14 change. And I think also with the pandemic ending, the buying patterns ending we hope, the buying patterns are shifting a bit as well. And so people are going back to their third spaces. They're going back out in the world a bit more.Lopa:And CACs are only going up. They're not coming down ever. So we sort of had a little... Facebook's been amazing for us. And I have had this little bug in the back of my head for like two years where I've been like we can't put all our eggs in this basket. We had one ad that, I mean, I think this one particular ad had done a million dollars in revenue for us or something. And it was based on something, it was a relevancy score. So in Facebook, they were categorizing by relevancy and it had a 10 out of 10 relevancy and we were like we could just dump money into it and it would just keep returning money. And it was amazing. And then they dropped the relevancy score as a factor all in their algorithm. And it was like our cash cow has died. It just suddenly, because the way the algorithm was prioritizing, it just didn't deliver in the same way. And we were like, wow, we're at the helm or we're at the whim of something that we have very little control over.Lopa:And so we're starting a little bit of a channel diversification strategy just to have a little bit more health in terms of what we're doing in the business.Stephanie:So many companies start out that way that I can think of and I think it's perfectly okay to rely on one channel. I mean, I've talked to a couple where they're like in chat within Instagram DMs, or Facebook chat, that's where our company's at. And I mean, we kind of went through that at mission too. We were very reliant on media and we became the top on there. That was where our business model was headed until one day they made a few changes and we're like, whoa, that just disrupted our entire business. Why are we relying on someone else's platform? We need to get off here and diversify. What kind of channels are you trying out now? And how did that make you rethink, relying on any platform in general?Lopa:Yeah, I mean, that's the thing. If you're diversified, then you have a little bit of a hedge. And so if something changes, you're like, cool, we're going to just flex the lever a little bit more over here. So we've been very under-indexed on B2B wholesale in general. We've never had a salesperson and we just considered it part of customer care. And if somebody came to us and was like, we'd like to order for our store, we'd be great. And that was kind of it. And so now just knowing that you can really scale a business that way, too. We're going to be investing in that a bit more. So we're in like, I don't know something like 600 retail stores at this point and-Lopa:So yeah, wholesale, actually investing in growth on Amazon, PR is something that we've also done almost none of. So actually working to in-house PR, I have come to kind of think of PR agencies as black holes where money goes to die. So I'm really keen on in-housing it. And influencers is also something that we've been very under-indexed on, just haven't put anything towards and it's all been organic, which is great. And we've had a lot of organic movement in all these things, but there's a difference between letting it come to you versus like, okay, now we're going to really focus on this. And then we have some international opportunities opening up as well.Stephanie:Cool. That's amazing. All right. So I know we're getting short on time and I do want to talk about crowdfunding and I know you mentioned you were very excited about that. So I want to dive into why are you guys crowdfunding? Why do you choose that approach? And you also mentioned innovative marketing ideas around that so. I want to hear all the things.Lopa:Yes. Yes. So DTC has allowed this new level of customer relationships and we have a lot of intimacy all across our communications and people always tell us they feel like they're talking to a friend instead of a company. And we love that and incredible brand love as well. And we feel like the logical next step of that is becoming crowdfunded or community-owned. And we've had lots of investors come and knock on our door and be very interested in what we've done and what we've been able to build, bootstrapped especially for a CPG business. And the thing that just kind of keeps coming up and especially for VCs, VCs are very extractive capital. And we actually talk about it internally. Like VCs are the coffee of money.Lopa:Coffee is an extractive energy source for your body. VCs are an energy extractive source of money for your business. And we do a lot of things differently. In our business, our culture is, I think pretty remarkable. We're doing a lot around sustainability. There's a lot of things where we're prioritizing a triple bottom line instead of a bottom line, just the bottom line. And we get nervous about the idea of getting into a relationship with somebody who's like, well, yeah, you can't treat your employees that way and you can't do this and that.Stephanie:You've got to return the fund to be worth it to me.Lopa:Exactly. Exactly. And we know that our customers love the way that we do things and want us to be more and more that way. So we're very excited about that and they just changed the regulations so that you can raise 5 million via crowdfunding instead of just one per year. And so we're very excited about, we're going to be hopefully one of the first to actually close a $5 million round crowdfunding. And some of it, we've just realized like damn, these businesses can be real capital intensive. And we're trying to do this with capital constraints which means people constraints and bandwidth constraints. And then we're trying to do a very high integrity product with a lot of value in the product and compostable packaging and just fair trade as much as we can all across the business and treating our employees really well.Lopa:And all of these different things that just does cost money, cost more. And then we're like, well, we want to grow as well. We want to invest in growth. So we've been basically break even except for investment in growth for a while. And we were like, if we had more capital to invest in growth, we know that the business is financially sustainable and really solid. And so if we just can get that growth capital and so that's basically why we're doing it. And when you're building a brand that people love, going into some of our marketing strategies around this, when you're building a brand that people really love, and then they're also becoming owners of that brand, I think there's a big question about what's secret, and what's not secret.Lopa:And there's a lot of secrecy in the CPG world and in business in general. And we are seeing that the more transparent we are, the more our customers just eat it up. And they love the behind the scenes about the business. And they love just knowing about why we made a certain change in our packaging and stuff like that. That's where we get the most responses. It's kind of crazy. And so we are shifting towards being more and more open about margins, our run rate and including people in these details allows them to be included in this incredible journey of launching this product. And so we're going to be doing a lot more around this. We're kind of working on building the internal content engine to be able to just be a more and more transparent and share more and more about what it takes to do this and the hard decisions and the hard moments where I'm like, oh my God, my kids and this and the business and all that stuff.Lopa:But our customer reviews are incredible, so incredible. We have to be editing them for the FDA. We've had people say that they had a Rasa baby, it's made them more patient with their partners and their kids and all that. And that's why we got into plant medicine. We knew the power of these things. And so I think crowdfunding is a way of getting people invested in the business and having the business actually be like herbs were originally the medicine for the people and now it's going to be a business about herbs for the people as well. And so it just feels like it's really perfectly aligned.Stephanie:I love that. I mean, I think the idea too around transparency, not only does that give your customers things to look at and engage with you, but I think it also invites help too. If someone sees oh, your margins are around this. Let me come in and help you because I think maybe in the CPG industry, maybe they should be around here. I've got this idea around logistics that might help you enhance that. So I think the more you share, the more other people might come in and be able to actually help and want to lift everyone up in the process.Lopa:Yeah. Absolutely. Absolutely. And I think in the industry, that is really valuable. Sometimes there's always a question of how much feedback you get from where. And sometimes you're like, wow, that's a lot of people that want to help and I don't really know what they're doing.Lopa:But I mean, that said, we listen to every piece of feedback too. And I think going back to the cult conversation a little bit, when you get feedback that you don't like, you have to look at it and say like, okay, if 1% of this is true, what part would be true? And then look at that. And that's one of the nice things too about DTC is that we have been able to actually iterate our products very quickly based on customer feedback. And I think having more transparency also means that we're going to be able to crowdsource product ideas and reformulate things to match people's needs more and stuff like that which we're really excited about.Stephanie:Yeah. Yeah. Super exciting. All right. Let's do a quick lightning round. Lightning round is brought to you by Salesforce commerce cloud. This is where I ask a question and you have a minute or less to answer. Are you ready?Lopa:Yes.Stephanie:All right. What's your favorite Rasa drink to enjoy in the morning?Lopa:Super Happy Sunshine.Stephanie:Okay. Awesome. If you had a podcast, what would it be about and who would your first guest be?Lopa:It would be about cultivating energy intelligence, emotional intelligence but energy intelligence. Yeah. And my first guest is a great question. I have not even thought about that. I mean, if I could just wave a magic wand, I would actually have Brené Brown because we don't think of the way that we hold ourselves in our vulnerability as being actually kinks on our energy. And I think that her work around vulnerability and shame is actually very energy liberating.Stephanie:Yep. Yeah. I love her. What's up next on your reading list or your podcasts list?Lopa:Oh man. I have such a long list. I'm in the middle of The hard thing about hard things by Ben Horowitz. And I'm also reading a book about the ancient Indian martial arts that I practice called [inaudible] and I'm in the middle of like five books right now. Another great one, oh, just Hunt, Gather, Parent.Stephanie:Oh, I'm reading that now.Lopa:It's so good.Stephanie:So good. Yeah.Lopa:Oh my God, so good.Stephanie:It makes you-Lopa:And it's working.Stephanie:[inaudible] parenting in general like oh, why are we basing our parenting advice off? What does she say? The past 100 years or something when there's time-tested things that work for thousands of years that we can tap into and around the stress of the parenting right now is only on essentially the mom or mom and dad where we're doing the same work that used to be 15 people, grandparents, cousins, aunts, and uncles. And I'm like, there's going to be a shift though. I think it's going to start heading in that direction again.Lopa:Yeah, I think so too. And on the podcast, Fred, I'll say, I actually was looking at your list of podcasts and I was like, oh my God, I need to be listening to all of these. So well done. I love business-Stephanie:[inaudible] podcast, hey. I love that. Yeah, check them out. They're good ones. Launching new ones all the time too. And the last one, what is the best piece of advice you've ever gotten? It can be business, personal or from the cult, whatever comes to mind.Lopa:Best piece of advice I've ever gotten. Lopa:What comes up is that purpose is a red herring and that so many of us, I think in this, it may be a little bit less for your audience. But I think that this quest for what am I supposed to do and what is my purpose? And I can only really do something once I have my purpose. The advice was stop wallowing and trying to find your purpose and do something. And you will find your purpose in the process of acting. You will find the things that don't feel aligned and then you'll adjust. And so it's about help someone and help something and you'll find purpose in the process of doing.Stephanie:That's amazing advice. And that's actually perfect for our audience right now. I mean, people trying to start businesses and I mean, you probably went through this too. I know I have of, is this my thing? Am I passionate about this? Do I want to do this for the next 100 years? And I love that. Just start doing it and you will figure it out.Lopa:Yeah.Stephanie:That's perfect. All right, Lopa, well, I've loved having you on. It's been such an engaging conversation. It's really fun to hear about your life and Rasa. Where can people find out more about you and your company?Lopa:We are at wearerasa.com and we actually have a discount code for you guys. If you use the code upnext, you'll get 20% off your order. And we're also on Amazon and we're on Instagram and Facebook at We Are Rasa.Stephanie:Amazing. I'm definitely using that code. I cannot wait to try it. So thank you so much for joining us. We'll have to have you back for round two to hear how the company is going because this is such a pleasure.Lopa:I would love that. Thank you.

If you look on Twitter or do a quick Google search, you'll find a ton of chatter about the foolproof DTC playbook. Everyone has ideas about the surefire ways that young DTC brands should be setting themselves up for success. Alex Kubo is here to tell you that those playbooks aren't as written in stone as you might think. Alex is the VP of ecommerce and digital marketing at Burrow, a DTC furniture brand, and on this episode of Up Next in Commerce, he explained how and why the Burrow team threw out the playbook when certain aspects of it fell flat. For example, Alex talks about the lessons they learned about the signals that pricing sends, and why it's critical to put the right price on your product to attract the right customer even if that means pricing higher than the playbook says. Alex also dives into what it means to actually be customer centric and how Burrow stays in constant communication with customers. Plus, we discuss why marketing toward buying events or using a spray and pray strategy across a dozen channels is about as useful as setting your money on fire. Enjoy this episode!Main Takeaways:Sending The Right Signals: How you price your product or service is one of the most significant ways you signal to customers who you are as a brand and what value you bring. If you price too low, you risk being lumped in with brands that don't necessarily fit with the type of products or value you bring to the table.More Than Words: Saying you are customer-centric and actually being customer-centric are two very different things. To be truly customer-centric requires regularly talking to and learning from your customers and then building experiences and products based on those conversations. You can't just assume you know what customers want, you have to do the work to find out.A Horse of a Different Color: There are best practices and guidelines that many companies follow to get themselves off the ground. Sometimes those playbooks work, but in other cases, you have to toss out what everyone says is the right strategy and go in a new direction. Whether that's in your social strategy, your pricing, or how you're getting feedback from customers, don't be afraid to buck tradition and do something different.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome to Up Next In Commerce. I'm your host Stephanie Postles, CEO at mission.org. Today on the show, we have Alex Kubo joining us, who currently serves as the VP of E-Commerce and Digital Marketing at Burrow. Alex, welcome.Alex:Thanks, Stephanie. Excited to be here.Stephanie:Yeah, I'm very excited to have you here. It was cool reading a bit about Burrow's background and starting at Y Combinator, and I was thinking it might be fun to start there, back in 2016. What did it look like starting the company, and then we can get into today?Alex:Totally. So, I was fortunate that I actually met the two co-founders of Burrow while were on the same business school program in Philadelphia. And back in the fall of 2015, actually, Kabeer and Stephen, the two co-founders and my classmates were both furnishing their apartments as they moved into Philadelphia for the program, and they had two very distinct but related experiences. Kabeer purchased a sofa from West Elm in Philly, and it wasn't going to arrive for about 12 to 16 weeks, which I think, nowadays, people are pretty used to seeing those timelines, but Originally, it was like, "Whoa, this is not Amazon." And so, Kabeer actually used the cart, the dolly in his apartment building and rolled it to West Elm, and picked up a floor model and brought it home, because the lead time was going to be longer than his first semester, so obviously, that was not going to be a great experience.Alex:Stephen went the classic IKEA route, right, where you don't come in to grad school with a ton of money and need to furnish your space quickly. And so he did that, and then ultimately, it's a waste down the road, right? IKEA furniture, you can't move because of the quality of the materials and that sort of thing.Stephanie:[crosstalk]. Yeah.Alex:Yeah. So, the question ultimately became, why can't you have that higher end quality that you might find at a West Elm, or Pottery Barn, or Crate and Barrel, but the convenience, the modern day conveniences that Amazon has made the default expectation of consumers, so fast, and free shipping, and easy delivery process, and be able to modularize that design so that you can set it up and not have to deal with like the IKEA hex key or any of these really cumbersome assembly processes? And so, that concept was born. And out of that came a series of product innovation that ultimately, Stephen and Kabeer got into Y Combinator with just a pitch deck and no product and used that accelerator to develop the product, to prototype the product, and ship it.Alex:A funny little anecdote is that from the time they incorporated the company to the time they shipped their first product was shorter than the period of time that West Elm quoted Kabeer to ship his first couch.Stephanie:Oh, wow. That's great.Alex:Yeah.Stephanie:And what were you doing when they were going through Y Combinator?Alex:I was actually working on my own concept in the health and fitness space and ended up calling time on it right towards the end of the summer because of a number of challenges that I was having on my end, and joined up with Stephen and Kabeer to help build out the demand side of the business. And I had a relatively intimate knowledge of the business and where they were at because we were in all the same classes working on our own businesses. And I had helped them tangentially with sourcing components during our first year of the program, because I have a background in mechanical engineering and they didn't have any background in physical hardware. And so, there was already the groundwork for relationship. And then I was trying to move my own discipline into more of a consumer facing and ground level marketing and product marketing role, so it actually made a lot of sense.Alex:So, we set it up as a brief relationship to make sure that the working relationship was there, which it turned out very quickly, it was. So, I have been tasked or had been tasked with basically just building demand and ran with it since.Stephanie:So, since then, what does the world look like now compared to when you started and you were building up demand? I mean, I'm sure you guys were trying out Facebook and all the traditional platforms that everyone's like, "Every brand should be on Instagram and Facebook, and if you're not here, where are you?" What did it look like then and now?Alex:So, now it's a much more disciplined and much more properly positioned business than it was in the beginning. Two critical mistakes that were good healthy mistakes to make in the early days were, number one, brand positioning and product positioning. We had this idea in our head that... and sort of the classic Warby Parker pricing story of like, they wanted to price it $45, but their advisors and professors advised them not to do that because it would signal the wrong value to the customer. We had a similar experience where, for some reason in our heads, we had to price our couch under $1,000. And we made that decision because we wanted to be hyper competitive on price and make it the default, obvious solution.Alex:The problem that we failed to acknowledge is that consumers nowadays have very limited time to understand the differences and nuances between products. They're not stupid, they're not lazy, but they do have very limited time. And so, you have to be very clear and explicit with them, and part of that is signaling. And one of the most powerful parts of marketing that I think is most often overlooked is a focus on pricing and what that does from a positioning standpoint.Alex:When a lot of shoppers were seeing our product under $1,000 and the fact that it shipped in boxes, which we were very forward with, because we focus so much on the attributes of the product and less on the experience around it, which is another step in our evolution, that people immediately equated those two things, low price and ships in boxes, with a more expensive version of IKEA. So, then it was us talking to IKEA shoppers, and you're not going to convince an IKEA shopper to spend another 300, $400 on a sofa, right? What you need to do is talk to the West Elm shopper, the Pottery Barn shopper, the Crate and Barrel shopper.Alex:So, we actually, for a number reasons, increased prices in late 2017, about half a year after we launched.Stephanie:How much did you increase them by?Alex:Originally, the sofa was priced at 950. By the way, much different cogs, profile as well, at that point. We increased the price to 1,095 to start. So, it was a pretty meaningful difference on a percentage basis, and especially when you talk about margins.Alex:Interestingly enough, everything you learned in microeconomics about the relationship with the supply and demand curves went out the window, because we increased the price and demand shot through the roof.Stephanie:Wow. Did you get it in front of new people? What else were you doing to get it-Alex:I mean, we were doing a lot of the same things in terms of building full funnel architecture on paid social and paid search and that sort of thing, and again, applying a lot of those early D2C playbook type approaches, which ultimately turned out to not be the best approach for us. But nothing changed substantially from a marketing perspective. We were still reaching a lot of the same people, it's just that we were now signaling to those people that we belonged in the comparison set with a higher quality piece of furniture. That helps also, because a lot of our value props, it's much easier to convince somebody who has shopped at one of these higher end brands and had to wait super long or had to go to a showroom and deal with a frustrating shopping experience with this overbearing sales associate, pay for shipping, and ultimately, have to be home to get a piece of furniture delivered, and either take a day off from work. Again, much different world back then than it was today.Alex:But it's much easier to talk to those kinds of people who've experienced those pain points and tell them, "I'm going to take all of that pain away," than it is to talk to somebody who's never experienced those pain points and doesn't need the higher quality piece of furniture, again, the IKEA shopper, and talk to them about all these future pain points that they've never experienced but that we can help them avoid. That's maybe one of the biggest lessons learned, is that people do not think much about the future. They're often very, very focused on the present. And so, as much as you want to talk about why you should go to the doctor every year, why should you should go to the dentist every six months, it's like, people are not going to react until they have a problem.Alex:So, we've experimented a bunch with what is the leading value prop. So, we talked to consumers, and one of the ones that we talked about very early was this concept of modularity and how, when you move into your next apartment, you can just purchase another seat instead of buying a whole new sofa to accommodate the new space, or rearrange the existing configuration that you have to fit the new space requirements. Problem is, people are not thinking about that. They don't really care. They can't think that far in advance of two to three to four years down the road when moving into the next apartment. And so, we've deprioritized that in terms of communication and lead with other things that are more immediate, like fast and free shipping.Stephanie:Yeah. Got it. So, you're mentioning earlier that the D2C playbook didn't work for you guys, where now, even these days, you can search that and you'll find a bunch of the playbooks and people are still saying like, "This is what you need to do to be successful." What were some other things that you did back then that you completely reversed and you were like, "This doesn't work for us"?Alex:Yeah. So, I think, first, was not acknowledging how complex and lengthy the shopping journey is for a piece of furniture online. Obviously, it's a big investment, it's also mutually exclusive with something else, your home, right? Let alone the high price, you're not going to just buy another couch when you have an existing one in your home, right? You need to think about getting that out or you have to do it right at the right moment with a moving event or something like that.Alex:So, the first thing that we had to realize is that what we can't do is architect our funnel around existing attribution technology or just rely on optimizing towards purchase events in digital channels. What we had to do is to look upstream and find correlations and causation between different upstream, midstream, and bottom stream events to really architect a healthy full funnel. And so, most of our campaigns are not architected towards purchase events, they're architected towards or optimized towards something more upstream.Stephanie:[crosstalk] for a couple examples.Alex:Yeah. I guess one interesting one that we've learned over time is there's a pretty clear correlation between add to cart and purchase, and the cart abandonment rate is relatively steady. We do things over time, obviously, to improve that, but it's not something that fluctuates wildly over time. And so, one of the things we can do is just optimize towards an add to cart versus a purchase.Alex:The other benefit of that is it often can happen in the first session. So, when you see a lot of the privacy restrictions right now and a lot of the issues with cookies going away and that sort of thing, it helps us. We've actually always been architected to bear that burden a little bit better than some of our other D2C peers.Alex:And then the other thing, besides the purchase journey, was also that we were just doing way too many things at once. We had, and we still have today, a very lean team. The difference between now and then is that back then, we thought the best approach was to spray as wide as we possibly could and activate 10 to 15 channels with me managing all of them, by the way, and not doing a good job.Stephanie:It sounds very chaotic and not fun.Alex:Yeah. Not at all, not at all. And only until we really peeled back and just focused on a handful of things and did them really, really well, that's when we actually started churning results, but more importantly, honestly, that's when we started actually learning what was working. Because previously, we were just spending a lot of money, we were generating sales, but we didn't really have a clear idea of where they were coming from, again, because the purchase journey was so complex, right? It wasn't a problem that we could solve by just putting an attribution layer in somewhere. We had to really hyper focus on one or two things and do them really, really well.Alex:The concept of growth in the past has generally been focused on the top line. And what that means, often, for a lot of companies, is to just go into as many different channels and try to tap into as many different demographics as you possibly can and then find out what's working and what's not working. I think the issue is that the broader investment community has wisened up to that, right, and they're holding us more accountable on a unit economics and customer economics level, versus just month over month top line growth, which in reality, it's just a vanity metric, right?Alex:So, it is more favorable to take a more disciplined approach, albeit potentially slower top line growth, to really uncover those median sites that you can actually build a solid foundation on and grow a real, scalable, profitable company on versus just something that's just, scaling wildly at the top one but in reality it's just lighting money on fire.Stephanie:So, for a higher priced product like Burrow and a longer buying cycle, what platforms would you advise other brands to look at and optimize for and which ones would you pull back from?Alex:Yeah. So, I think if you acknowledge that it is, there are a lot of things that people have to learn about the product, a lot of things that people have to get comfortable with and confident in the purchase. You think that a lot of these shorter form mediums, like paid social, paid search, right? It's just a quick second and a half interaction with an ad, they're not going to be as effective for a product like ours, and that's true. What we have indexed up on are things that are more storytelling mediums. So, the earliest insight into this was we partnered with a small podcast in late 2017, and it's sort of one of those micro ones, it's not on a network, and just talks about fantasy football. And we just got introduced to the gentleman that runs it, and did a small test, and the results were incredible.Alex:Part of what we've learned over time from that point, rapidly scaled the podcast program for us is that it's highly dependent on the host, and the reason that it's highly dependent on a host is because the efficacy of that channel comes from the quality of the storytelling. And that is really what benefits our brand, is that if we go and we send a podcast host a product and they have the same amazing experience that our customers have, they can talk about it in a much more authentic way, but also, a much more individual way. We've actually matured to not providing very detailed scripts to a lot of our podcasts hosts and just telling them to talk about what has been most exciting for you, and that really brings out the energy in the advocacy for the brand from the host. So, I'd say it's really about focusing on storytelling mediums. So, I lumped other video, long form video into that as well. A little bit less of authenticity, but also helps communicate a lot of these little value props that add up to the major value proposition.Stephanie:So, the other thing that comes to mind is branded content. I mean, I'm thinking about something like Formula One where now the results are out, everyone knows it worked really well for them. It was very, I would think, pretty organic, didn't feel like it was just a brand push. How are you guys thinking about other kinds of content like this?Alex:I don't know if we're at the stage yet where we can start thinking about that sort of thing. I think that Formula One is a great example of taking two powerhouses and linking them together where the sum is greater than or the whole is greater than the some of the parts. So, we're thinking a little bit less about something like that and creating more on a micro scale, I would say, brand and content.Alex:So, when you talk about something like the influencer arena, I am probably the biggest advocate against using influencers in the context that they are used today. And first of all, just to clarify, a true influencer is not somebody that says, "I'm an influencer" on their Instagram profile description, right? A true influencer is somebody that can speak to a community and elicit a response, and often, within a specific category, right? So, I'm not going to give a beauty "influencer" a furniture product and expect him or her to have an outsized impact on the sales.Stephanie:Stephanie:So, you'd focus on the niche influencer who might only have 1,500 followers or something, which is something I think I talked about early on this show, of going through the comments of Instagrammers and seeing, are the people in there asking, "Where can I buy that? Where did you get that from?" Or are they just like, "That's great. Cool. I love that." What kind of engagement are you getting will show if that person has influential power over their community or not.Alex:Totally, totally. And obviously, it's going to vary by a vertical too. This is sort of an extreme example, right? Again, going back to the very considered purchase, even our ability to measure the impact of that is going to be super limited. So, we've actually leaned into the influencer community for, more so is, partnering with actually photography influencers. One of the bottlenecks and problems with our vertical is that our products are very large and our photo shoots and video shoots require massive studios and massive crews that are very, very expensive. Meanwhile, all of these people out there that can already take great pictures and already have really interesting homes need furniture. And so, we can often partner with them in a much more economically scalable way to get a huge diversity and huge volume of content created that can showcase different styles, different aesthetics, different home types, and different personalities, and just build this library of content instead of having to book homes ourselves and go through the whole production process.Alex:So, we've actually been doing that for a while just purely based on economic reasons. But it's interesting to see that now, I think there's going to be a massive shift towards organic for a number of other reasons. When you talk about a lot of the privacy regulations that are going on right now, over the last 10 years, the control of the voice or the conversation has shifted towards the consumer and towards the user. You see like case examples of this with like GameStop, for example. The retail investor just had a massive impact on the market from such a small player, right? Because the control of the conversation momentum is shifting away from the brands that have the big budgets and towards the customers that have the voice, the authentic following.Stephanie:That's the influencer of the year right there.Alex:Yeah, totally.Stephanie:And Reddit. And that's probably where all the other influencers are, an area that I haven't even thought to go, but we've had guests come on previously where Reddit is how they figured out how to build their business, which I haven't even thought to go there. Alex:Totally, totally. I mean, it makes total sense, right? It's experts that are talking because they're passionate about what they're talking about, right, not because they have a vested interest or they are trying to make money off of it, then that's where you get that authentic content from and the actual truth.Stephanie:So, how do you go about incentivizing that or structuring it so it can come in? Because I'm sure a lot of brands are like, "I want my customers to talk about me and take pictures and do all the things," and then they just sit there and nothing comes in. So, what are you doing behind the scenes to make that happen?Alex:So, it's less about focusing so much effort on trying to elicit that response just by trying to elicit it and more about really focusing on that product innovation and that experience that will naturally have that effect on people, right? You don't want somebody to talk about your product in a positive way because you're paying them to talk about it in a positive way, you want them to really advocate, because that means that not only are they talking on the channel that you want them to talk about it, they're also having side conversations. And when people come over to their homes and they're asking, "Wow, where did you get that beautiful sofa from?" They are talking not just about, "Oh, I got it from Burrow," they're also saying like, "And it happens to have these stain resistant fabrics, and it has all of these great other materials, and it was modular, and it was super easy to get it delivered and get it set up." And that's what you really want to go off of.Alex:So, I would say the biggest focus should be on nailing that product innovation and nailing that customer experience, and that's how you can count on that customer conversation to be generated rather than trying to chase down your customers and get them to talk about it in a less authentic way.Stephanie:Yeah, I agree. I think that the days when people on Amazon are like, "I got paid for this review," or something, those will be gone very soon, because I don't know about you, but every time I go through a threat and I see that, I'm like, "Don't trust you, don't trust you." I just want to see the normal person who's reviewing it at their own goodwill, or not, maybe they're mad, but I want that. I don't want someone saying, "I got a free product for this review." That just seems like those days are gone.Alex:Yeah, totally, totally.Stephanie:So, the other thing I want to talk about is product development. I saw that your co-founder and CEO said, "Every single product we've ever launched has exceeded expectations and projections, and that's a testament to our customer-centric research-driven design process," which I want to dive into that and hear. I'm sure many brands are like, "I want every single product of mine to be a success, and I want to expand my skews." So, how do you guys go about designing and crafting new products?Alex:Well, I think one thing that we should clear up is the concept of customer centricity is used so broadly and inauthentically, I think. A lot of brands will claim customer centricity and they'll think that they're being customer centric because that's who their customer is and they just need to make money off of them, and so they'll say that they're thinking about all their needs. The problem is they're not actually talking to the customers, they're assuming on behalf of the customers that they know what that customer needs. Or they're just testing messaging, which is fine. That's been the traditional approach of, "Okay, if I play up this feature or this benefit versus this feature or this benefit, and this one does better, that's what the customer must want," right? But it almost becomes a little bit of a self-fulfilling prophecy there.Alex:We take it to a much deeper level, not just with our customer community but also our lead community, all of our email subscribers that have yet to join and make an actual purchase with us, and actually going to them and asking them very specific and lengthy questions. I remember the first time we sent out a customer survey about one of the next products that we were going to launch and just wanted to get their input on like, "Is this the right product?" Number one, and B, "What are those little things that really bother you about this product?" And did a ton of just open ended response analysis based on that.Alex:The biggest surprise for me from that was the response rate. For a quiz or rather survey that took probably a solid 10 to 15 minutes of someone's time to go through and really complete in depth, which they did, the response rate was astounding. And that opened our eyes to, "Wow, this needs to become a regular occurrence within our work stream."Stephanie:How quickly were you sending this to them? Was it a week after they got their product and are trying to set it up, or what did that look like?Alex:Well, there's a couple different ones. So, what we have is a couple different touch points that are automated or triggered based on somebody actually making their first purchase with us. So, we had, obviously, a post purchase survey right away, which I think is one of the most underappreciated and can be most impactful survey points that people do, or brands do, rather. We also have an NPS survey, which going back to how do you elicit a response from customers and activate customers, NPS is going to be your biggest indicator of how much of that is happening in the background. And that is actually backed up by an element on the post purchase survey where we ask, "Were you were referred by a friend? Does that friend own Burrow furniture, or do they not, or do not know?" And that can also give us a really solid indication of the impact.Alex:So, beyond the triggered survey points, we also do intermittent studies, and it's almost on a monthly cadence now, of either focuses on new categories in general, or we've already identified the category, we've already identified the specific product and we're trying to nail down colors, color combinations, finishes, specific features, doing conjoint analyses on like, what is most important to this set of consumer? I mean, we've really taken it to a super, super deep level.Stephanie:Have there been any products that you launch based off consumer feedback or maybe early launches where it's like, "Oh, they led us astray with that one"? Because I'd be like, "I want a fluorescent pink couch." And then I'd be like, "Oh, I had a little too much wine that night. Sorry about that."Alex:Yeah. Fortunately, we're pretty good at statistics and we can identify outliers and not get swayed by them too much. There actually have not been. And I think it speaks volumes for this concept of authentic customer centricity where... and you can also cross-compare between the customer set and the subscriber set, right? The subscribers are a great audience because they have not purchased anything from you, or at least the subscribers that are not customers, and there's a reason why, right? Versus the customers, they did find something that you offered already and they've already bought into the brand, and they're responding to you because they're still engaged. And so, that's one set of needs that you need to fulfill.Alex:And then there's the other set of needs, and oftentimes, there's a good amount of overlap, which is great for us, and oftentimes, there's not, and that's when we need to make choices around what does that offering look like and who are we really chasing with that?Stephanie:Yep. The other thing I think you mentioned in the past was around how you start thinking about zoning and mapping out what else a person needs in their room, which means like, "Oh, brilliant, okay, if someone got a couch, a little swivel chair, and obviously, they need pillows." And I want to hear, did that method work, and how have you expanded that since you first started trying it I think maybe a year and a half ago or so?Alex:It did, totally. I mean, you take one concrete example of this is with the advent of coffee tables for us. We first launched the sofa and then we launched our first line of coffee tables, and those were specifically designed dimensionally to work best with the sofa styles that were selling the most volumetrically. So, we knew that there was a high rate of match, right, between them. It wasn't like we were designing for something that we were only selling like 5% of our assortment or something like that.Alex:Where that took another level is in 2019, we launched the corner sectional, and then arrangements and configurations started getting a lot more varied and a lot more... opened up actually, additional demographics as well, with more suburban, satellite city homes with larger room spans. And that opened up a new category, and so what we had to do is to figure out, "Okay, well, if you have a five-seat corner sectional, none of our coffee tables really make sense for that. And so, how do we create a coffee table that works perfectly in that configuration for that customer specifically?" So, that's when you saw in late 2020, we released our Kettle and Signal collections, which are more of a round geometry versus a rectangular geometry. And that happens to work really well with things like a Double Chaise Long King Sofa, where the chaise is wrapped nicely around the round coffee table, or the corner sectional, it creates a really nice conversation pit type feeling.Alex:So, it is very much about understanding how our pieces interact. And then the next level that is, what are the types of rooms that people are using it in? What are the actual dimensions of those rooms? And what logically, could somebody need the most, given that room design and size?Stephanie:It seems like a lot of brands are missing that right now, because oftentimes, I mean, whether it's furniture or a lot of other things, I'm like, "Where is that matching dresser set? Or where is the pillow that goes with that?" And it feels like having to go around and look in different places and trying to find it myself, I'm like, "Why am I doing the work? I just want a kit which is like, 'Here's all the five things that match together.'" But why is that so hard? I don't get why can't brands do that?Alex:I think one of the biggest examples of this is that company brand list that skyrocketed, but they were launching things in such unrelated categories that there was no bond between them. And companies nowadays need to think a lot more about lifetime value than they had to necessarily, in the past. Acquisition cost is growing, and they can no longer just rely on first purchase profitability in order to sustainably scale their business, and they need to think about building a relationship with the customer. And that often comes from creating relationship and being the default brand or site to go back to when they may have that next need and finding that perfect accompanying piece, right? Versus just like you buy cleaning detergent from the company, and you come back and, oh, they're offering soccer balls or something.Stephanie:Pillows.Alex:Yeah, it's like, "Okay, well, that doesn't make sense."Stephanie:Yeah. Which makes me think, I mean, it seems like the world is headed towards a more curated world right now. Maybe back in the day, I would go to a Wayfair or something like that and I'd be like, "Cool, I'm fine with scrolling, scrolling," five years later, still scrolling and looking for what I want. It doesn't seem like consumers want that anymore. So, how do you see the consumer journey and preference adjusting now where maybe a couple years ago, that would be totally fine?Alex:Yeah. I think it's almost a byproduct of the ease of standing up a company nowadays. It is exponentially easier to start a company, a direct to consumer company than it was 20, 30, 40 years ago. So, because of that, the market has just blown up in terms of the number of companies. And so, the paralysis of choice has shifted from like going to an old school Sears or Macy's and just having like a million different options, or as you put it, like a Wayfair, and just tens of millions of options, to now having to build a relationship with a brand and trust that that brand is making the right decisions. And so, that's why we offer a very select assortment of fabric colors, leg finishes, arm styles. In reality, we can house tens of component skews and offer tens of thousands of combinations to the customer, but what's ultimately the most important thing is that we do it in a way that is still a very simple and clean experience for the customer so that they get that sense of they're creating their own product, but not to the extent of being overwhelmed.Alex:I think of myself on old school furniture sites and staring at the screen from two inches away trying to figure out the difference between this gray and that gray, and I'm like... and then you request swatches from them and they come 10 weeks later.Stephanie:Yeah. I've recently been through that experience. It's not great.Alex:Yeah. No, it's not fun.Stephanie:They arrived and I'm like, "What was I trying to buy, again?" [crosstalk]. I mean, it seems like you guys could also have a very localized approach where, like you mentioned earlier, if someone is looking from a very suburban area, like my hometown in Maryland, where my expectations there would have probably been to have a huge wraparound couch, I've got this big living room, versus being in San Francisco or Austin, where now it's like a little bit more limited space, and what can I fit in these small areas? [crosstalk] think about that?Alex:I mean, the first step there that we're taking, it's more from a content driven approach. So, that goes back or loops back to the way that we're treating influencers and leaning into the photography community and the different styles and aesthetics that they have. Because what we are creating are based products. They are beautiful but they don't belong in an architectural [inaudible] editor's home, right? They're not the one-off piece that you design and custom build for 15 grand or something.Alex:And what's beautiful about that is that they stand up to any environment that you're putting them in, whether it's a very eclectic like Austin ranch style home, or the fourth floor walk up apartment in New York, or a more sprawling home in Houston or another geography like that. And leaning in with more of that stylistic approach than necessarily sub-segmenting, "Oh, we're only going to show love seats to this geography, or we're only going to show these massive sprawling corner sectionals to this other geography," because people still have varying needs, a lot of people have multiple rooms. So, we don't want to limit, necessarily, the assortment, but we are trying to diversify constantly the styles and aesthetics that our products are showcased in.Stephanie:Got it. Yeah, that makes sense. So, for the last big point, I wanted to talk about the industry as a whole, like the D2C industry, commerce, what kind of things are you seeing or preparing for behind the scenes for what's to come?Alex:I mean, we could talk about the elephant in the room, which is-Stephanie:Let's talk about it. Yeah, let's do it. I haven't really talked too much about that, because it's been so up in the air, and when's it going to go through? It's more official now, so let's do it.Alex:Oh, yeah, it's official. This is a tough thing, and I think it's a reckoning for a lot of these companies, again, where it's been so easy to start a company and just go on Facebook, and you'll generate some sales, and go to a VC and you'll show 100% month over month growth, and they'll throw a bunch of cash at you. That's changing, and I'm thankful for it as much as I curse the fact that we don't have this GPS anymore, I'm very thankful that we don't, because it's forcing us to mature as marketers. And we're fortunate also that we've had to embrace this appreciation for marketing 101 and really lean into principles and not just trust what the ad platform are telling us, because it's a whole shopping journey.Alex:So, we've built a very healthy, full funnel approach proactively, even without any of this talk about these privacy regulations. That has helped us create something that can stand up in the face of this. There are a lot of companies that have not done that, they've not invested in really understanding marketing 101 and how to build a healthy full funnel without having that very granular level of insight or having automatic triggers in their campaigns and stuff. So, I think that is the most important thing, is like there is a day of reckoning for marketers everywhere in the D2C space to take a step back and really appreciate the principles of marketing and evaluate your program architecture overall and make sure that it's in a healthy state, and not just because your add to cart rates or your conversion rates are really high from this one campaign in this one ad unit, but really, overall, how is your program operating? Where are the weak points and how can you supplement those?Stephanie:Yeah. So, if you were starting over day one today, what kind of things would you look at? What metrics would you look at? What kind of things would you put in place to start building up that healthy funnel?Alex:Yeah. I think we would look at... I'm trying to think if I didn't have all the information that I have today, but I think what you would look at is the abandonment rate through the funnel, right? Of the people who click through to your site, how many of them end up viewing a product? Of those people, how many of them end up adding it? Of those people, how many of them end up actually proceeding to step one of checkout, step two, step three, step four? And find out what that makeup looks like.Alex:And obviously, you're going to spend a lot of time on conversion rate optimization and trying to improve the outputs of each step of that funnel. But that paints a picture of, okay, how broad do you have to invest at the top of that funnel if your ultimate target at the bottom of the funnel is X? And what does that reach look like? And what are the best mediums to do that to actually elicit a response and get people onto your site or into your store or signing up for whatever service you provide? So, that, I think, is what I would take as step one.Alex:The other one is, I would just consider, for the vertical that you're in and the product that you're trying to sell, how much of a story do you need to tell? And that will help inform how much you will need to invest in more storytelling mediums than more immediate click to buy type mediums. Also, how visual is your product? That will tell you how much you have to be content driven versus leaning into things like search or audio formats or anything like that. And that can really help govern your channel choices.Alex:And then the last thing is just, don't fall into the trap of doing too many things at once. There's always something to be said to acknowledging the resources that you have and trying to build a architecture that is best for that set of resources, not just the one that happens to be doing really well for the other portfolio company that your VC backer is constantly in your ear about, you have to focus on what is going to work for your company, your vertical, your customers specifically.Stephanie:Yep, yeah, I love all that. Is there or are there any tools right now that you're very excited about that are either new or just time tested, you're like, "We're going to keep using these forever because they do wonders for our marketing efforts"?Alex:I think a lot of it is less about tools and more about information sources. So, we've partnered with a number of different companies over time to do things like customer enrichment and really understand our customers to a deeper level, again, going back to that concept of customer centricity, not just talking to them directly, but also learning much, much more about them. And I think one of the biggest traps that a lot of companies fall into is they think of their customer as an average customer, and the problem is they're failing to acknowledge that customers are not one monotonous group, they are a system of clusters and cohorts. And what you really have to do is understand what is unique and important about each of these clusters and then create a messaging architecture, channel architecture, product offering that really speaks to each of those clusters individually.Alex:So, from a tools perspective, it's more about these data enrichment, customer data enrichment type platforms, and then using those to create these clusters and cohorts and really understand those customers. Again, for us, an attribution platform, not super helpful because of the complexity and both mix of offline and online activity that it takes to get to the purchase point. Much more about really understanding the customer and then applying a marketing 101 approach to it.Stephanie:Cool. Yeah, that's great. All right. Well, let's shift over to the lightning round. The lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I ask you a question and you have a minute or less to answer.Alex:Oh, boy.Stephanie:Ready, Alex?Alex:Sure.Stephanie:Oh, boy. What's one thing you don't understand today that you wish you did?Alex:Shoot. Where do I start? I think I would like to understand more about the global supply chain. I think over the last six months to a year maybe, we've seen, very intimately, the impacts of a broken or strained supply chain, and I think that there's a huge opportunity for D2C companies to innovate on the supply chain side. We focus so much on how do we innovate on the customer side that we focus so much less on the supply side of the business. So, I think that is where... and it will become increasingly important for marketers and supply ops to be speaking and working very much hand in hand to grow a company together. So, I do wish I had more of that background.Stephanie:Yeah, that's great. And you guys just raised around, and I think that money, a part of it, was to focus on international supply chain effort, right? Figuring that out better.Alex:Yes, totally.Stephanie:So, you're already right in the right spot, the right time. You'll have to let everyone else know the insight. You have to come back and tell us what you learn next year.Alex:Yes, definitely.Stephanie:What's up next on your reading list or podcast list?Alex:There's actually a couple books I think that I want to reread. I'm one of those weird people that really likes to read technical books, and so there's a couple of conversations we're having right now about pricing in this book called Power Pricing that I love to read. There's also one by a gentleman named Douglas Holt called Cultural Strategy that I think is one of the most foundational and important books, especially for the world today. And again, how the customer controls the conversation, and understanding how to position your company and your messaging around cultural movements and ride momentum versus trying to create that momentum yourself as you have in the past. The last one is Shoe Dog, actually.Stephanie:Yes, such a good book.Alex:Amazing book. This would now be, I think, my third time reading it, but it is a way to, I think... A lot of people have been talking about languishing right now and the fact that we've been in this environment for so long and we're yearning for that personal interaction, and so tired of being in the sedentary and fixed on a digital screen environment. And I think Shoe Dog can help reignite a lot of that passion, right? Because it's like, "Wow, this multi-billion dollar company started at such a microscopic level." And it really helps you understand the power and the capability you have as an individual to create something like that and can help really reignite that passion.Stephanie:Yeah, that's one of my favorite books. Actually, we have a podcast called The Story that tells the unknown backstory of people who change the world, and we highlighted him in one of the episodes because we were like, "The story is too good not to tell, and tell, and tell until everyone hears it, and gets motivated and starts their thing today."Alex:Yeah, totally.Stephanie:That's awesome. I feel like they need a movie out or something. Do they have one?Alex:I'm sure there will be. I'm sure there will be.Stephanie:There has to be one. Too good of a story not to. What's one thing you're secretly curious about? [crosstalk].Alex:TikTok, I think.Stephanie:Are you all on there?Alex:We are not. From a demographic perspective, in the past, I would say a year and a half, it hasn't made sense. The program is continuing to grow, the demographic adoption is continuing to expand, and so I am interested in what it looks like going forward. I think it is also a challenging medium for a lot of brands that are really attached to high production quality content, because what scales the best on that platform is very lo-fi content, very organic and authentic content. And it creates this shift for a lot of companies in the way that they think about creative. So, I'm curious in that we are actively learning about our potential approach to that channel, but also curious about how does that platform and program evolve over time. I've not heard great things about the ad platform that they've built so far, which is partially why we've been hesitant to really go after the channel, but that will evolve. They will crack that code. And what that looks like, I don't know, but I'm certainly curious.Stephanie:Yeah. We've definitely heard 50-50 on TikTok, some brands saying it works wonders, but they're the ones creating their own content, maybe not an ad partner programs. I also think from a consumer standpoint, how it's going to evolve, because at least me personally, I think I got signed out and I couldn't remember my password-Alex:Oh, no.Stephanie:... and I just never signed back in. I'm like, "I'm not sure I really like it then, or maybe I know that just scrolling is not good for me."Alex:Yeah. That was me with Clubhouse, actually.Stephanie:Oh, same.Alex:I loved Clubhouse for the first seven days and was on it constantly and I have not been back on it for [crosstalk].Stephanie:Yeah. I think it got crowded. I mean, now it's just so busy, so many people talking about so many things, it didn't feel curated. I started feeling like that to me too where it was 50-50 of like, "I like these videos, and next nine, I don't like." I think there has to be curation to keep at least us involved, it sounds like.Alex:Yeah, totally. I mean, honestly, that's what happened with the podcast world too, right? It became everybody launched their own podcast, and then there's so much content. The biggest problem with podcasts now is discovery. The only way you learn about what to listen to is through your friends.Stephanie:Yeah.Alex:And so, that concept of discovery is such a challenge for podcasts right now, and I think that's what Clubhouse is going through at 1,000 times faster through the learning cycle.Stephanie:Yeah. I think the next couple of years will be interesting, because I mean, they've been talking about discovery issues back to even when I worked at Google, figuring out Google podcasts, and that was an issue back in 2017. So, why hasn't this been solved yet? It should be so much easier.Alex:Yeah.Stephanie:All right. Well, Alex, it's been awesome having you on the show, such a fun conversation. Where can people find out more about you and Burrow?Alex:Burrow.com would be the easiest place.Stephanie:What about you? Are you on LinkedIn? What if people want to talk to you?Alex:I am. LinkedIn. Alex Kubo. I'm not sure if you can actually search me and find me, but I'm sure you could.Stephanie:I'll find you. Don't worry. All right. Thanks so much, Alex.Alex:Thank you so much, Stephanie.

In-store sales. Ordering for delivery. Buy online, pick-up in store. With so many buying options accessible to consumers, companies are now facing many different kinds of orders to manage and get right. In the restaurant industry specifically, there has been a huge upswing in the number of people ordering online, especially through apps such as Uber Eats, Grubhub, and Doordash. And that's nothing compared to the number of point of sale systems that are being used. Moving orders from an app or online system into a physical point of sale is a process that's prone to human error, but for so long that's been the only way to do it. Zhong Xu and Deliverect want to change that. On this episode of Up Next in Commerce, Zhong explains how an integrated, cloud-based platform is taking the pain out of managing multiple ordering and POS systems. Plus he discusses how the real world and virtual world will start to blend together more and more as brands invest in digital-focused capabilities. Enjoy this episode.    Main Takeaways:404 Error No More: There are thousands of point of sale systems and all of them require humans to re-enter online orders perfectly into them before they can be made and delivered. This leads to errors and dissatisfied customers. Integrating the POS and ecommerce systems is one of the most effective ways to reduce those errors. The Real And Virtual World: As restaurants reopen dine-in services post pandemic, they are still keeping an eye on the ecommerce space. The rise of the digital consumer has made it so that restaurants are now looking to create virtual brands with specific functions and offerings for their virtual audience. And sometimes that means creating or investing in a physical space that is only used to fulfill online orders.Addition Without Subtraction: Even though there has been an uptick in delivery and curbside pick-up orders, restaurants are still seeing strong in-store dining numbers. This means that restaurants can invest in delivery and ecommerce tools to improve the customer experience without worrying that doing so will cannibalize in-house dining.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hello, and welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, co-founder and CEO at mission.org. Today on the show, we have Zhong Xu, the co-founder and CEO of Deliverect. Zhong welcome.Zhong:Hey, welcome. Thank you. Nice to be on your podcast.Stephanie:I am very excited to have you on. So before we dive into Deliverect, I was hoping we could start a little farther back in history, when you were building your first company at age 17. I think that'd be a fun starting point to hear what were you thinking back then? So, then we can see how you got to Deliverect.Zhong:Yeah, exactly. I think Deliverect today is quite a big company, as we serve customers in over 30 market. Especially the last year, we just processed over a billion dollar in sales. I think that's quite exceptional for a company that young. That being said, the reason we can so quick is due to our couple of decades almost experience in the hospitality space. So, I was pretty much born in this space, as a very young [inaudible]. I started helping restaurants to go online, right? So, making their first website and so on and that's almost, I think 20 years ago. So, I'm very early on the internet timeframe and the reason why I got in that space is actually because my father has a point of sale company for Asian restaurants. So, especially if you're Asian, a lot of people know your father will always say, "Hey, you can work, right? You're young, you should get out there, earn some money, do your part." So, that's how I enrolled into hospitality business and that was my first business.Stephanie:Very cool. So, you were building websites for restaurants and then, did you start seeing issues they were having and is that what led you to building Deliverect to where it is today?Zhong:Well, it's actually quite a funny story, because of that, I never wanted to take over my father's business. So, I said, "Hey, maybe I need to study IT." So, I went to study software engineering, right? Before I went into the restaurant space again, I said, "Hey, there's something out there for mobile applications." So, I created mobile websites and mobile apps prior to the iPhone. So, I feel [crosstalk] and so, when the iPhone and the first iPad came out, I felt it was perfect timing to disrupt that side of business, especially when point of sale was very hard to use. It was a legacy system, not cloud-based. So, actually in 2010, 11, I co-created the first iPad point of sale in Europe, one of the first 3000 apps on the app store back then.Zhong:So, you can imagine how that grew and just in a couple years I grew that company quite quickly. It was called POS iOS. That name you wouldn't know, but I merged POS iOS in 2014 with now a public company called Lightspeed, right? So, we pretty much ran the global hospitality division of Lightspeed, prior to their IPO. So, we were well entrenched in scaling this and one of the things there, of course we are always in contact with restaurants around the world. At the same time, the same thing happens. The first time I did this was really solving the pain of cloud-based and tablets and old hardware, but in 2016, 17, we saw that restaurants were struggling actually managing their online sales, right?Zhong:And it was quite funny, because most restaurants had said back then to me, "This is never going to happen, the offline to online transition. Yeah, yeah. You have this in retail, but that's clothing and that's shoes. We're creative people. It's about warm food, about service, never going to happen." Well, suddenly you have these companies like Uber Eats and DoorDash, GrubHub and hundreds of others popping up, where you quickly saw that transition happening. So, early on, these customers of us said, "Hey Zhong, you need to help us. This wave of offline to online is apparently unstoppable, but we need a partner that can help us to make that transition." And Deliverect.Stephanie:Got it, got it. So, essentially we have all these restaurant ordering apps, like you said, Uber Eats and all the others that exist. And they were all coming at the restaurants a mile a minute and they were trying to manage them individually and you essentially consolidated that into one point of sale system, so that the restaurants could just interact with one portal that would then talk to all of the delivery companies, did I get that right?Zhong:You nailed it. It's really a game of whack-a-mole, as you can imagine, if you're running a restaurant. It's all very dense during your service, right? Where you have hundreds of orders coming in on all these tablets. If they all start to light up, you need to accept them. You need to take the order, re-key in your point of sale, send it to the kitchen, but even when the order is done, you need to go to any of these tablets and you need to find out what order it was, to dispatch the rider.Zhong:So, the complexity of this is enormous and I think as we go, the number of online channels or restaurant need or we'll have, is only increasing. Because it's not even about these delivery companies these days. You need to have an app for curbside pickup. You need to have a QR code at the dine-in app. You need to be on Google, Facebook and so on and so on. So, it's enormous.Stephanie:What are some of the issues you're seeing with restaurants, when you're coming in there and showing them, "Here's how to come online. Here's how to make this process work"? What are some of the hurdles for them to even implement this software? Where's the hold up sometimes?Zhong:Well, most of the times they can't believe what we do, because it's almost magical. When you're used to all these systems and suddenly you removed all these tablets and it just works, right? So, it's quite magical. I think the hurdle is, one side connecting with all these online players, but as well, very seamless with every point of sale they will tap. And the reason why is, in the hospitality space, you could say, "Hey, the online channels is fragmented." So, you have a lot of delivery companies, but actually the number of point of sale is way more fragmented than online players. There's literally not thousands but 10 thousands of point of sales out there and it's still what runs the restaurant. So, we connect that seamlessly through APIs, but also it's not just getting the order in your kitchen, but as well, working with them to do menu management, having automatic stock management, controlling the flows.Zhong:For example, when it's really busy, we will be able to slow down certain online channels to cover the kitchen time and the result of this is quite astonishing and it's threefold, right? One side, we can on average... Pre-COVID, because with the pandemic, it was a accelerated. We saw that the average restaurant was increasing 25 to 30% of their top line revenue alone, implementing us. During COVID, it was double, triple and quadruple, but no one knows why. And the other two things where it's important is, we reduce the error rate for the end customers, right? Maybe you have experienced it, but if you order some food, once in a while... Actually, it's between five to 8%. So, one out of 10, we get us a mistake. Someone didn't deliver what you wanted. You wanted the vegan food and you got something with meat and so on, right? So, we can reduce these errors by 80%. So, that's massive. Finally, with all these automations, it saves a lot of labor costs as well.Stephanie:Got it and how are you reducing the errors? What does that look like? Is it something that they're keying in the wrong way? Is that something the customer is doing or the kitchen's doing? What does that look like, to reduce the amount of errors, because I've definitely I've had that happen. And then, I've just been like, "Oh, this didn't arrive." And then, Uber Eats just refunds me and I'm like, "Hmm. Did you know it didn't arrive? How do you trust me? I don't know if I would even want to trust me saying that." And it's definitely very vague behind the scenes, of how they even view that?Zhong:Yeah. There's a lot of details, but it actually started with the beginning. Often, once a restaurant are not using us, the online menu that they have, they have one called Uber and other players they have inputted. It's not up-to-date right. So, imagine they don't have certain products or ingredients. Though they can snooze, but they cannot change the menu, the content of it. So, the menu on its own is [inaudible]. Second, when it's busy, they can't follow the flow of that stock. So, if it's not automated, you probably are ordering stuff that they are already sold out in restaurants, right? Because online, you have a lot more people ordering and then, with the in restaurant sales, they are always going to provide the customers in front of them the food that you online. So, that's the second thing.Zhong:A third thing that affect massively these error rate is, once you don't have it integrated, it comes on these tablets. You accept. There's an extra ticket printed by Uber Eats, DoorDash, GrubHub. They need to take that and re-key that in their point of sale perfectly, right? And that's where a lot of error happens. Sometimes the top line items, but even worse, when you put a note in there where you say, "Hey, I'm allergic to this and that. I want this and that," it causes a lot of trouble to re-key that correctly. So, if you take only these three things, it's quite massive, right? Imagine hundreds of orders. Even if you would do it, you would make a lot of mistakes.Stephanie:I can definitely see how human interaction always causes mistakes, of course. And I'm assuming it also integrates with the point of sale system to also run the restaurant, right? The one that the servers can use outside of the delivery, or are those two separate?Zhong:No. So, it integrates them directly with our current system, right? Because if you have a restaurant, you have kitchens, there's a lot of printers, kitchen screens. You want to make sure the workflow is seamless, because actually what's funny is, the throughput of a restaurant it's never boggled down by the kitchen. The kitchen can make a lot of food most of the time. It's really the front of house where, if you have customers standing in front of you and in the meantime, you have seven tablets pinging all the way, it's impossible to manage. So, we reduce all of that hassle.Stephanie:That's great. Yeah, I used to work in a restaurant. Starting in 14, I was working at Outback Steakhouse and worked in restaurants the entire time and can definitely say that's very true. The front of the house can get crazy, when the back's waiting on you to put in the order, help the customer, bring it out and get it out of their window, whatever it may be. So, I'm sure you see a lot of trends behind the scenes with working with so many restaurants and I've heard quite a few things. COVID hits, of course less people going in restaurants, more people ordering, but then also more people cooking at home. So, a lot of things kind of shifting. What are you seeing today, now that we obviously went through the big spike of everyone who wants to order online and order from restaurants probably has tried it by now and some of them are falling off. Maybe some new people are entering, but what are you seeing are general trends in the industry?Zhong:Well, I see it's actually picking up. One of the things you mentioned, everyone has tried. For example, during COVID a food status pre COVID, if you look at age group of 55 years and above, less than 10% has ever tried delivery, right? And now, that number is over 35%. So, it shows you that my father, grandfather, grandparents, everyone is using it.Zhong:So, the adoption rate is quite high and what you see is that, during pandemic, a lot of restaurants focus only on delivery, but now with the reopening, you see some restaurant doubling down, because they want to handle their in-dine customers. But at the same time, you see a lot of more restaurants opening multi-brands, right? One physical restaurant saying, "Hey, why don't I create virtual brand, that I only sell on these online platforms, but it's cooked in my kitchen? As well, the exponential growth of dark kitchens, these kitchens with multi-brands everywhere. Especially, as if I look at our numbers, I think the delivery space is only accelerating and what's good for this space is, it's on top of the dine-in. So, it's one is not cannibalizing anymore, the other sales, right? So, it's really on top of it.Stephanie:Got it. How do you view these dark kitchens, because we talked about this in a previous episode with Shake Shack, I believe and she kind of mentioned that she thought this was... I think she said a quick trend that might work for a little bit, but then people are going to want to stick with brand love of a certain company. They know it's cooked a certain way. You're only going to be able to use that model for so long. How are you viewing that right now?Zhong:I think that's still going on quite strong, right? There is a difference of... I would stay pure tech want to be thinking, "Hey, this is a fun idea. Me as a startup mindset, I'm going to implement a kitchen." It's just pure number game. That, I'm a lesser believer of, because what you see as the successful dark kitchens, are ones that are really restaurant operators that create amazing brand, amazing experience and at the end of the day great food, right? Sometimes people in that space forget it. It's like, "Hey, it's numbers.Zhong:I can make it work." So, people that do that well can expand quite rapidly, right? Because the cost of setting up or reaching these customers are way lower. If you want to do a restaurant that's maybe [inaudible] a half a million dollars, if you started a dark kitchen, it's one fifth of that. So, what you would see is that even established restaurants are having a dual model, where they say, "Hey, in the cities, I'm going to have my flagship restaurants, right? A couple of them, where you have the full experience. In the meantime, around that restaurant itself, I'm going to open a lot of these dark kitchens, so that you are at home wherever you are, can still order food." So, that hybrid model is really working well.Stephanie:Mm-hmm (affirmative). I wonder if they can eventually share kitchens in space and then, turn it on when you need it. And then in the meantime, let another brand have it. I'm even thinking about two brands, fast food chain. It's like Popeye's and MacDonald's in the same building. And in one way, I'm a little suspicious of that, because I'm like, "How do you all know how to make the same thing in the same building?" But it's also an interesting model. I think about it, like why rent an entire space if you only need it when you have peak order times. And then, anytime outside of that, it's just a commercial kitchen that anyone else can enter into.Zhong:Well, you actually have that. There's quite some of these concepts, almost a we-work of kitchens, right?Stephanie:Okay.Zhong:I think in these cases it would be, you rent the space because you don't want to open and set up your own kitchens, but then you would still put your own chefs in these places, right? I think there's also models where these kitchens provide you A to Z. I think that works well, if you're established brands, with real procedures about how to cook food. If you're experimenting, that's a bit harder. But that being said, we see a lot of success in the US. For example, in New York, we run Mealco. That's a very dark kitchen brand. They have a lot of brands. In LA, you have [inaudible] brands. Established restaurant chains like SPIN right, where you play normally ping-pong, but they run it at the same time in these kitchens, 8, 9, 10 brands, right? Because it's really complimentary and allows them when it's even not busy, to sell their food.Stephanie:Yeah. What kind of trends do you see overseas that are different than in the US, or vice versa?Zhong:I think it's quite a global trend. Even in Europe, Asia, Latin, as well US, you see the same trend popping up. What I do see it's interesting is, there's a lot of models, especially in the dark kitchen. People are trying. So, renting kitchens seems to be hard. Franchising their brand seems to sometimes work, where you say, "Hey, I have my brand. Any unutilized kitchen space or restaurant can take my brands and just sell." That seems to work. But as well, people that own the full stack, right? I think it's a bit too early to see what of the multiple models really will win, but that being said, I think each of them has massive traction. And that's why, if you look at market sizing, the size of dark kitchens is a trillion dollar business, depending on who you ask, right? So, it's a massive opportunity.Zhong:I think a second trend what's very interesting is the growth. As well, you see in the US, as well in Europe, of groceries, FNCG and CPG. So, for example, wherever in the world, you can order a Ben & Jerry's ice cream, right? You take your phone, you order Ben & Jerry's ice cream at 11:00 PM when you come back from a date and you just need ice cream and it gets delivered within 10 minutes. And you can do that in every city in the world. That being said, you will never find a Ben & Jerry's store so close by. So, even the rise of dark pop-up locations or delivery locations or dark fridges exists, right? For example, we power all the [inaudible]. So, as you go, you're going to see that perishable foods in general, is going to be very available and it's all about the convenience of it. Whatever you want, you click and you're going to get it.Stephanie:Yeah. I do see, it probably depends on where you're at in the country in the world, but there are definitely a lot more consumers now, who do care about the brand, the ingredients, where is it being sourced from? How are you going about growing those materials? It seems like a new trend. That's what sometimes makes me wonder about the dark kitchen trend, because I think a lot of people want convenience and being able to get it quick and easy and cheaper, then it seems like a larger proportion of people now are like, "I want to actually understand who's behind this food and how was it grown?" And all the details that maybe a lot of people didn't think about a decade ago.Zhong:Exactly and that's why one of the things I mentioned is, I think if you want to be successful, you need to be that restaurant operator. You need to be able to convey the complete story and say, "Hey, that's where we source the food. That's how we cook it. That's how we define quality." So, that side of it will work. If you're just there to produce mass produced food and want to have a quick buck and to earn, I think that's quite hard, right? Especially, because it's a very low margin business restaurant, so you better do it well.Stephanie:Yeah, yeah. So, when it comes to point of sale systems in general, it seems like this is great obviously for restaurants, but there's a lot of other applications, because I can even think about a lot of delivery apps being like, "Oh, you need this for maybe Home Depot and you need this from Costco," and offering to pick up from many places. How are you viewing the general landscape of point of sale systems and where it's headed?Zhong:Well, so that's why we are a bridge above the point of sales, because that's really fragmented. So, for a point of sale, especially a lot of these older point of sale that are not cloud-based, it's very hard for them to process online orders. And that's where we come in. But on the other end as well, we have a dispatching product that allows any restaurant or any business actually to deliver their food or drinks or whatever perishable thing they have, within 10 minutes, because we connect with all kinds of third-party delivery companies like DoorDash Drive, Uber Direct as well, all the local ones.Zhong:So, the convenience side of it is going to be crucial for these restaurant, right? It's going to be the future is going to be really decoupling ordering from delivery. You will not per se care how you ordered it and you don't care who is bringing it, as long as you get it right? So, you can imagine you have a Google Home or Alexa and you say, "Hey, bring me some salad from that restaurant." And it gets processed and 10 minutes later, someone rings you up at the door and gives you that salad. So, we can really power that transmission of that world.Stephanie:Yeah. So, essentially it doesn't matter if it's restaurants or anyone else, first step is everyone needs to be cloud-based, so that then you can plug into them and help control the top level experience. So, then the consumer doesn't even know and doesn't have to know what's going on behind the scenes? That's usually how most technology evolves anyways, but you can essentially go anywhere, that's what you're saying?Zhong:Yeah. What we are doing is really creating that backbone of on-demand foods, right? So, creating that [inaudible] restaurant and the reason why I was adamant to start Deliverect, is to my personal experience, right? My father's system, the old point of sale still exists, right? Even after I created one of the most advanced iPad point of sale, I think I converted the three of his customers to that system. So, what that tells me especially in the point of sale space, there's a lot of servicing fragmentation and people have a low tendency of changing systems. That's why in enterprise restaurants, all of them you still see these Microsoft RES 3700 of 30 year old, right? So, that's why we are building that layer, so that any online player can have access to a physical restaurant. In the benefits, it's really benefiting the restaurants, because they don't need to change the system, but still process and grow online.Stephanie:Mm-hmm (affirmative). What did the switching costs look like for some of these restaurants, if they go through and upgrade everything, I'm guessing there's employee training? What does the cost look like and then, I'm sure you know the ROI numbers too of employee efficiency and helping out with inventory and all that, what did some of those numbers look like?Zhong:For example, utilizing Deliverect, there's no switching cost, right? So whatever point of sale you have... So, we are integrated over 150 point of sales at the moment and we're adding a lot per month. [Crosstalk]-Stephanie:What if its an old one, that's cloud-based? I'm thinking of some of the restaurants I worked in, I know they weren't cloud-based they were from the nineties.Zhong:So, that makes us unique. We actually, you know, for example, Microsoft RES 3,700. We create tunneling. We set up the software to make that cloud-based, right? So, making [crosstalk] online, is something that we also do. So, that allows you to save really that investment. If you are a small, medium business, one or two restaurants, you probably can switch because you want to have ease of use and the investment buying an iPad is not too hard. But honestly, if you're a restaurant chain, that's a massive move. You're talking about millions to replace and there's also a lot of risk involved, right? So, instead of doing that, if you just deploy Deliverect, you have a full system that allows you to sell online or offline channels and you're fully cloud-based.Zhong:And like I mentioned, the ROI is huge, right? So, whatever top line revenue, we grow at 25, 30%. That's a minimum, right? All of our customers are doing more than that. Second, like I said wastage, but to quantify it, an app or a restaurant that does normal delivery are doing a month, a thousand orders. If you have 8% error rates and per order that's 80 orders, right? If the average is $50 that's a lot of money that you could save so that's one side. And then, finally labor costs. We can reduce that significantly. You can almost save one out of four of your staff, right? So, they can do something else, right? So, that's important.Stephanie:Very cool. Are there any technologies right now that you're watching to integrate into Deliverect? The one thing that comes to mind is crypto and I know even back in 2018, a lot of people were talking about crypto and point of sale systems and how to think about that. Not only accepting payments, but also the back of how it even functions. Is there anything that you guys have on your radar that you're kind of watching right now?Zhong:Well, crypto is interesting, right? I think de-centralization of payments would be interesting. Especially, I think in restaurants, it's a quite high processing fee they pay, especially if they're selling online, right? There's transaction fees. Honestly, I do not think today the technology... The technology is there, but maybe the solution is not there yet to do mass payments, as it's quite heavy to mine these coins. If you want to do like us, where it's millions and millions of transactions on a month, I think that's quite a heavy to do, but we're watching that space.Zhong:I think more interesting for us is, as we have a lot of info about a lot of sales channels is providing or a CRM or a really a customer relation management tool for our restaurants, so that they can manage wherever you're ordering, right? So, maybe you ordered today on Uber Eats and tomorrow on DoorDash and the next day on their own websites. Well, they can say, "Hey Stephanie, thanks for ordering on our website. We're going to give you a promotion or a extra dish." Right? So, these are the things I think, where it's going to really help these restaurants to increase their margins.Stephanie:Yeah. It's like going into an omnichannel world with these delivery systems, so they actually understand where you're coming from and where you've been? And it also seems like there's a lot that they can do around sensors, around inventory and stock. You mentioned that you can connect that with your company product, but also just thinking, how do you do automatically where instead of someone saying, "Oh, we're out of this item or we don't have this product today," it's automatic, because it sees the ingredients getting low. And it's like, "There's nothing coming on the trucks today, so we just have to say green beans aren't on the menu today. So, sorry." And then, it just updates automatically. That's the world I think is coming.Zhong:Well, in the ice cream example, we actually do that. So, once that shop is running low on strawberry. So, first of all, we ask the local vendor to ship more strawberry ice creams, but second of all, we can automatically snooze that product for an hour. We're saying, "Hey, it's out of stock." Right? So, providing all these restaurants operation tools is something that we also care about, because that's how we're going to help these restaurant owners as well.Stephanie:Yeah, I love it. All right. And then the last thing, where do you see Deliverect heading? What are you excited about over the next couple of years?Zhong:Although Deliverect only exists for a two to three years, I think we are only on day one of this offline to online transition. The motto of Deliverect is not even conquer the world, it is conquer the galaxy, right? So, one day we'll be the first that delivers a burger to the moon. That's our motto.Stephanie:You're going to be on Mars [crosstalk]-Zhong:To speed up his colonies. But all jokes aside, I think that's where our ambition is. I think you really need a player like us that stands with the restaurants, power them and allows them to really be successful and thriving online without a different agenda. So, as we go, we want to expand regionally in all sorts of countries and continents and add as many channels as we can, as well point of sale for these restaurants, so that they can thrive online.Stephanie:Very cool. All right. Well Zhong, thanks so much for coming on the show and giving us a little behind the scenes about what Deliverect is all about. Where can people find out more about you and your company?Zhong:Well, you can find a lot of info on website deliverect.com or a link me up on LinkedIn. I'm [inaudible] users. So, no worries if you want to send me a message there.Stephanie:Amazing. Thanks so much.Zhong:Thank you for your time.

From starting a hedge fund to owning the DTC beauty market in China is a career path you don't hear too often. But that's the winding road that Julian Reis has traveled and along the way he's picked up some critical intel about the ecommerce world and Chinese trends that he shared with me on this episode of Up Next in Commerce.There are a bevy of factors to take into account when entering the Chinese market. From the vast differences in the way consumers shop in China to the sheer volume of consumers that can make a huge boom in sales in a matter of moments, there is a lot to contend with. And how does a brand even get in front of a consumer without traditional ads or email marketing? And what about social media? Or regulations? Julian explains how to take all that information into account and build an ecommerce strategy that lets you win abroad. Plus, he dives into how his company, SuperOrdinary is working with top skincare brands to enter the Chinese market, and some of the experiences that can be expected when embarking on this new path. What a fascinating discussion that was so different than any interviews I have had so far, enjoy!Main Takeaways:It's All Chinese To Me: Brands might want to expand to the Chinese market and believe that there is a huge opportunity there, but rushing into the market without doing the proper research could be a huge mistake. Despite the fact that a lot of information is censored in Chinese, consumers there still find ways to access the content that is important to them. Brands need to get more social awareness, learn about what Chinese consumers are interested in and let their actions reveal whether or not you have a product-market fit before trying to make a splash in that market.Platforms vs. Pages: There has been a bifurcation of ecommerce between platforms and webpages. The debate about where to invest more is coming down to how you see your customers acting. SuperOrdinary's theory of the case is that platforms are the way of the future because at the end of the day, customers spend more time on Amazon and Tmall than on a company's website. Therefore, more focus should be on creating content that drives engagement on those platforms. Boom and Bust: In China, the volume of consumers is so much higher and there is so much more emphasis on influencers and celebrities, that if something goes viral, a brand could do millions of sales in a matter of seconds. Being prepared for that kind of boom is very different from working in the U.S., where you prepare for steady growth over a longer period of time.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone, and welcome back to Up Next In Commerce. This is your host, Stephanie Postles, CEO at Mission.org. Today on the show we have Julian Reis, the CEO and Founder of SuperOrdinary. Julian, welcome.Julian:Thank you, Stephanie. Lovely to meet you.Stephanie:I'm happy you're here. I'm glad you're not in Hong Kong. I was a little bit worried at first. Like, it's got to be 2:00 AM for this guy, talking on the show. I mean, I would have also appreciated that, but that's okay. Before we dive in to SuperOrdinary, I want to hear about your background because you have a very fascinating background, and I want to hear what led you to the beauty industry.Julian:Great. Thank you for having me. Well, first of all my background, I'm half Australia, half Chinese Portuguese. I was born in Australia, and at the tender age of five I moved to Singapore, where I followed my parents. My dad was working for Pizza Hut. And my twin brother, who's identical, we grew up in Singapore and we kind of were brought into this world to experience all these different cultures, and really thank my parents for giving us such an international upbringing. We all went to these international schools in Singapore, and then Hong Kong, and really got a flavor for all the different Southeast Asian countries growing up. I went to study in the UK to confuse myself even more, and studied economics at University of Nottingham. And Justin, my brother, was in London at the London School of Economics. And we kind of had these parallel paths where we didn't know what we wanted to do after university. And I was always intrigued by the financial markets when I was at university. I always thought that ... This was at the time when we still had analog Internet, dial-ups. I was always curious to see how people were thinking about this global economy.Julian:I applied to probably 150 jobs after university, and got very disheartened that I couldn't move to Tokyo, which I had this dream to always live in Japan. And I found myself finding a job eventually in New York, at J.P. Morgan. I was one of 3,000 applicants to the markets training program, which was a rotation through JP Morgan training program. And I still don't know how I got it, but I was so thankful. I went to New York without even an interview, and basically phoned from downstairs and told the graduate recruitment officer that, "Hey, I'm downstairs. You might as well see me." And suddenly, I got the job. I feel very, very lucky for that.Julian:Went from there to, as a trader, I was trading derivatives in fixed income, which is straight derivatives. And that really started to shape my career, about thinking about the macro markets and how you need to think about the world. And after three years, I moved back to Asia and found myself working at Deutsche Bank and building my career as a proprietary trader.Julian:And then I realized that I would love to try and build my own business. And in finance, you either work at the lease investment banks as a trader ... Because the idea of a hedge fund was still very new. And when I was 27, I decided to go alone and start my own hedge fund. And tried to rustle up as much money from my friends and family, and realized I didn't have that many friends and family. And started my first hedge fund, which was called Pagoda Capital, which was one of the first macro funds in Singapore. I got acquired by Tudor Capital a year later and became CEO of their Asian business, building out their macro strategies in Singapore and Australia.Stephanie:How did they want to acquire you after a year? What were you doing? You must have been doing something amazing.Julian:You know, it was kind of interesting at the time because we were one of the only funds in Asia doing what we were doing. And there clearly was ... And this actually dovetails into what we're doing now because we saw this opportunity to build a business around the Asian markets, and many of these big, large, successful brands or hedge funds in US wanted to get exposure to this market. And the way they did that was find like-minded individuals who were trading, and eventually we came together and built this business. And Paul Tudor Jones is still, to this day, one of the guys I idolize the most in the world. And that gave me my introduction to the financial markets.Stephanie:Very cool. Okay, so your hedge fund gets acquired. You're working there for a bit. And then what?Julian:And then what? I moved to the UK again, working at a new hedge fund which I founded. And I realized that the common thread to all of this was that I really enjoyed building businesses. And I really felt like from zero to one when you're building a business, it's all about hiring the right people and building successful partnerships. And after a couple of years of working in the hedge fund industry, we entered 2008, which was obviously the financial crisis. And what became really apparent and important to me was that this was not sustainable, and that it was really exciting to see what other opportunities there were for me in my life. And at the time, was a very difficult time because to change out of a career or something that you'd been trained in to move to a completely different industry was very scary. And I thought long and hard about making that decision.Julian:And I met this lady who was starting a Groupon startup, and I said, "Listen, if you decide to do something in beauty, come back to me because I think there's a really big opportunity." And I started to see that the Asian population or the communities were really interested in foreign brands. And I was a founding investor of a company called Luxola, which was the ecommerce 1.0, distributing brands in Southeast Asia. And after two years, was acquired by LVMH to become Sephora's digital presence in Southeast Asia. So, really got an understanding about learning, about building and investing in the beauty side.Julian:And then I thought, well, why not try my hand at building my own brand? So, moved to the US to start a brand called Skin Laundry, which is a skincare brand focused on disrupting services. And really proud of what Skin Laundry has become today. It's now in five countries around the world, in the Middle East, London, Hong Kong and all throughout the US.Stephanie:Did you sell that?Julian:No, I didn't. The brand is still operational. I still remain one of the largest shareholders in the business. But really brought a management team in to really accelerate the brand. I think it's a very unique concept, and continues to be a loved brand by the customers. And I think by working and building a brand on that side, really started to, when I was back in Hong Kong and I noticed in China many of the brands that we were exposed to whilst we were in the US were not available in China. And that's where SuperOrdinary was born.Julian:I moved to Shanghai three and a half, almost four years ago now. And kind of just wanted to study how brands are being bought and sold in China. And then the light bulb went off and said to me, "This is an incredible opportunity. All these digital native brands that we see in the aisle of Sephora and Ulta and Mecca, why aren't they available?" So, I started the company and started hiring my first-year employees in a country that I had very little experience in. And I didn't speak the local language. I could only speak pidgin Mandarin. And I said, "Well, this seems like a big enough challenge. Let's go."Stephanie:That's a niche, [inaudible] opportunity. All these brands should be in China but they weren't. I mean, what are some of the top reasons why brands maybe don't even think about bringing their products to China? Because from the outside, it does feel scary, and regulations. And does the customer there even want what we love here? Seems like very different things that they love versus maybe what I might like. What are some of the reasons that you hear brands are like, "I've never thought about that before"?Julian:Well, I think the first thing which you kind of touched upon is the regulation. First of all, animal testing is obviously something that many of the brands, or most of the brands in our portfolio, goes against the DNA of what they believe in terms of cruelty-free. Luckily on May the 1st, animal testing regulations now be announced to have gone away, which is incredible because it just opens up this huge, untapped, physical market domestically.Julian:I think because of that restriction, it was very difficult for brands to enter China, and so everyone hears of these stories about Chinese tourists coming overseas and bringing back suitcases of products in the suitcases, and reselling them locally. And I think what happened was that the government obviously realized that this was happening and said, "Rather than smuggling products into the country, let's create a channel for these products to enter the country on a legitimate basis, and let's make sure that they're real products, authenticated, they're registered, and then they can be sold."Julian:But in order to do this, this channel which we call the cross-border channel, only limits the amount of products that you can sell to an individual consumer in China on a given month or a given year. There's a quota in terms of absolute R&D value. Whilst it's an exciting channel and it continues to grow, represents close to 20% of the ecommerce market, obviously there are restrictions for that. We started our business as a cross-border business which allows us to work with brands anywhere from Farmacy to The Ordinary, to Drunk Elephant, Supergoop!, and we really have an incredible partner portfolio. And to be able to build their presence in China by creating a profile for them on social media in all the different channels, on Tmall, and really build a brand from zero and continue to grow them there across multiple channels. That's how we started.Julian:Now, we currently have globally close to 300 employees in the company now, most of which are based in China. And I think what we do as a business is really provide that one-stop-shop service where we really build your brand. Where we call ourselves not a distributor. I would almost call ourselves the general manager of your brand in China, because we do everything that you would do as a brand owner by operating your brand in a foreign market.Stephanie:Yeah. What are some of the tests that you do to figure out what the market here even wants this? Because that seems like a big thing. If a brand comes to you and they're like, "I'm selling this," and you're like, "That might not even go well here." What are some things that you think about if a brand should even try to enter China.Julian:Yeah. I think, I mean that's the million dollar question. And I think what we do, we've gotten a lot better at it because I think the consumer there is very discerning, even though a lot of the information about that brand is not readily available on Chinese social media. There are ways to get it, and people do find out about it. What we typically do for any brand that wants to work with us is really have initially a conversation to really understand what the point of difference of the brand is. And really just see if there's a product market fit. We do a lot of desktop research around the brand, not only in its home market but in China to see how big that opportunity is. If someone comes to us and says, "Oh, we want to launch blonde hair dye in Shanghai and we think it's a big market because it's big in the UK," we have to question is there a demand for people to dye their hair blonde.Julian:And I think that's what we do, and we've gotten better at, is we test a lot of the products within our team. We have experts in each of the categories that we manage who really are our first port of call in terms of trying to see if there's an understanding or a demand for this product. Remember, all these brands have zero social awareness, and as the market's got more and more expensive to launch a brand, it's really important for us to make sure that if we get behind it, we're going to be able to spend the marketing dollars to get the brand to where it needs to be for it to make sense financially.Julian:After two weeks of very deep due diligence on the brand, we'll go back to the brand founder and say, "Listen, we think your hero product in America is this, but you know what? Actually in China, we think it's A, B and C." That helps us have this conversation and once we get to that point where we think that there's an alignment, we then start working on financial terms on how we would work together.Stephanie:What's interesting is that your background in the hedge fund world seems like it would be so helpful when coming and analyzing brands, and looking for opportunity.Julian:That's right.Stephanie:And looking at competitors and stuff. I mean, it seems like a perfect fit of how you came about even into this world, which is really fascinating.Julian:I think the hedge fund world really gave me an appreciation of data, and really thinking about data in a different way than I would normally do. For us to, whether it's analyzing the influences that we work with, or analyzing the livestreaming broadcast that we'll do tonight with Austin Li, or analyzing LTV and CAC on the brands that we manage, it's really become you're heavily reliant on it because if you don't rely on it, then you start to not make better decisions.Julian:And what we've done at SuperOrdinary is using that data that we give our brands, our partners, visibility into the consumer in China. And that gives us informed decisions on what products to make next. And I think that's really exciting for our brand partners, to know that this product, this moisturizer, may be too viscous on the skin. Or, this tint doesn't blend well with this lipstick shade. It's too bright. All of this information helps guide their product development. And for us to be successful, they have to be successful in their product development. So, data has become a really big part of our business model.Stephanie:Is there a different way they have to go about collecting the data there? Versus in the US, maybe you would do surveys, you would just directly ask, you would do your email marketing stuff. How would you go about collecting that data in a way that keeps you safe?Julian:Well, I think everything you learnt about business in the US market, you leave at the door when you walk through Shanghai Airport. And I think that's where you have to really come in with eyes wide open to say, "How is the consumer interacting?" First of all, there's no websites in China, so you're working through these platforms. And we have a market in the US where you have a very large amount of websites in the US market, whereas in China you have zero websites. But you have all these platforms. The world's bifurcated between platforms and D2C websites.Julian:And our view at SuperOrdinary is that platform is where the markets head to. The websites are where you discover your brands, you learn more about the content, you go to Instagram, you go to Sephora. But at the end of the day, where do you gravitate to? Well, where you're buying your products, on Amazon, on Tmall, on Lazada. And this is where I think we really try to create this vision of where SuperOrdinary is headed. And it's very important that our brands believe in this strategy too, because this is the direction we think beauty is headed.Julian:In China, I think to your question collecting data, the data that we get is readily available. You can see what people's revenues are by looking at Tmall data. But I think what's interesting is that we have a lot of other platforms, like the equivalent of Reddit and Quora that allow us to see what people are asking about brands. They're looking up ingredients. They're looking up what squalane means. They're asking what hyaluronic acid does to your skin. And that kind of data there is really important.Stephanie:I mean, how would a brand even think about getting in front ... I know you're talking about platforms and different ways to think about it. So any brands here are used to paid media and email marketing and Instagram and all that, so I know you have to just completely turn off all those ideas and start from scratch. How should a brand think about entering a new market? Even trying to get their product there is one thing, but then trying to get the word out, especially if they aren't working with a firm like those. How would they even go about that?Julian:Well, I think that historically, when a brand has entered the market it had a number of choices. One is to go through a multi-brand website that sells products and posts it into China. The problem with that is that your product may or may not get to the end consumer, so there's a lot of risk. That channel is obviously a very small one.Julian:Two is to go in it alone. Go to China, hire a team, spend 10 million dollars. Really go nuts. And after five years, you'll have lots of learnings. Pretty much what I've done, and figure out oh my gosh, there must have been a better way to do this. I'm not only spending a lot of money, but I'm losing time.Julian:Really, the way we approach our playbook ... And it is a playbook, because it is after many years of learnings, is making sure that you focus on the brand and what it stands for, making sure that the messaging behind the brand is consistent. You don't want 16 different platforms saying 16 different things about your brand. And also, the other thing is there's no such thing as seeding. You can't just send out 100 packages and expect to receive 100 posts. So, it opens a pay-per-play environment. And that's because the cultures are very different, too. Understanding the culture is very important to know where is your consumer spending most of the time? I think it would shock most people that 88% of the beauty market is Gen Z and Gen Y, Millennials. And more than 50% are purchasing products on their mobile phone. And they're looking to spend more and more on skincare and color.Julian:I think understanding that just helps you frame how do you, again, those consumers. Where are they spending their time? They're spending their time on TikTok, or Douyin in China. They're spending their time on Little Red Book to discover ... And so we at SuperOrdinary have a very large team now that speaks to over 40,000 influencers or KOLs, directly or through agencies. And I think because SuperOrdinary has a very exciting portfolio of brands, we're able to authenticate the types of brands we work with. So, we're able to work with the very best livestreamers in China. We're probably one of the most active in the livestreaming area. And that creates a lot of awareness around the brand.Julian:Building a brand from zero to one is the hardest part. It's the most expensive part of the curve. And then year two, year three should be easier. Getting it right is very important, so providing a very concise go-to-market strategy, making sure that the messaging, whilst it's in local language and it feels local to the consumer, is not different to what it is in the US. We don't want to be talking about a brand and not be in line with the brand guidelines, but making sure that the emojis, the hashtags, the cute names around the products really make sense to the local consumer. There's a lot of hard work that goes in before we even launch a brand. It's not just putting it on Tmall and then putting a price, which is traditionally what a lot of the local TPs have done. We really feel like you have to take a much stronger brand view about building that channel.Stephanie:Yeah. I mean, totally agree. What are some of the biggest surprises, maybe, that brands have? When you're going through and you're working with them and maybe you say, "Okay, but we need to do it this way," or, "This is what they're expecting," or, "Influencers are the way here. It's not just a nice to have like it is here. It's like, this is the way to go." What are some of the surprising things that brands maybe aren't expecting when you work with them?Julian:I think volume. Volumes can get big very, very, quickly. It's not uncommon that you will enter a livestreaming event and will do 3 million in sales in 20 seconds. The market is that much bigger. But at the same time, in the US we're used to growth, very steady, 10, 20% every year. And that's achievable. And in China, something could happen where a very big celebrity will go to London and find your product and talk about it, and then boom. It's all gone in China. You cannot find it. And it's just because the absolute size of the market is that much bigger than the US, and that when the community is all on their phones buying and following these influencers, it's very much an influencer-led market and celebrity-led market. I think that shocks a lot of brands. Why doesn't it have some steady growth?Julian:I think they also realize, the shock, the difference is that it's how text-heavy the interaction with media is. While here in the West we're very visual, in the East it's very much about information. Before you even get to the ingredients, there will probably be seven pages of text telling you about the product, the storyline. And then at the end, there will be some more information about the product itself. It's really important to realize that's how they shop. I think that's another one.Julian:I think yeah, I think also the market there moves very quickly. It's very saturated as well, because everyone sees China as almost like the Holy Grail during the COVID environment. I can't tell you the number of times people have asked me, "Oh yeah, this is a must have." Also, I think on the downside is just measuring people's expectations lower. Just because it's a big market, doesn't mean your first year you're going to do 10 million in sales. It's really about it takes time to build a brand. Five years, minimum, in the global market, so why should it be any different in China? My advice is really be patient with your brand. If you give it the love and tender, loving care over the next five years to make sure that it's there in five years. You don't want something doing this and doing this.Stephanie:Yeah. I mean, that's what I was kind of thinking when you said okay, you could do 3 million in sales in a matter of seconds. How could a brand think about setting up maybe a longer-term strategy there? Because when I'm putting on my US-centric view, I'm like okay, you've got SEO stuff, you're getting to the top and you start ranking, and then people see you more because you've proved that you're best long term, and Amazon do the same thing. And there, it feels like if it's so based on maybe influencers and celebrities, because you can have these blips of when you can get in front of people. How do you maintain a brand there long term, where it's not just crazy sales and then to until you have your next celebrity or influencer talking about you again? How do you think about that?Julian:I do think that's a billion dollar question. Really believe.Stephanie:I do those in my head, billion dollar questions.Julian:Because I feel like China has gotten to a cycle or a rhythm of doing shopping festival after shopping festival, whether it's 11.11, 12.12, 618, Secretary Day. These events become so gravitational for the consumer because they know they're going to get the best offers on those days. Naturally brands, if you don't participate in them, you miss the traffic which helps get you more and more awareness.Julian:I think channel dispersion is important because you don't want to be so focused on one channel versus the other. But I think with the opening up of the market with the removal of animal testing it's going to allow us to become a much more measured approach. And what I mean by that is just imagine if you could only sell your brand through Target. And you live and die by Target's traffic. Of course you're going to play along the rules that Target might have given you to go and say, "Oh, here you go and sell that."Julian:If you can imagine that you can leave Target now and open up in all these different retailers in the US, now you have a lot more control about your brand. Just like that in China, I think we're going to have this opportunity to build brands in a much more succinct manner, and open the doors that we think best represent the brand and not have to scattergun it through all these different social channels.Julian:And also, it's fair to say that the consumer now will get to touch the brand and the product for the first time in these physical stores. And it's not just Sephora. There's seven to 10 other competitors in China which have got insane new retail experience, so I think the market there is 10 to 15 years ahead of the US in many ways. And that's another shock to most brands, is like, "Oh my God. This really, truly exists?"Stephanie:Yeah. What are some of these experiences that are so far ahead that maybe we should be looking into?Julian:Yeah. I think the consumer, when they go to a retail store in China, traditionally you go to a Sephora which is really much about it's glossy black, it's got music, you've got these beauty assistants that will come in and they would really sell you the product. China has also gone the other way, where they've removed all the beauty assistants and you go in there and it almost feels like a ghost town. But you get to try all these product and sample sizes. There are examples of that. And there's a shop called Harmay, H-A-R-M-A-Y, you can Google it, have a look. It looks like a museum. And they're 10,000 square feet, and it's very Instagram-able. That's a word. But it's one of these things that I think has really changed the way that people are interacting, because people want to drive traffic towards the door, there has to be a reason. Especially when you can buy everything online.Julian:I think that's really exciting. And I think I always get asked the question of, why is livestreaming working in China versus US?Stephanie:Yeah. That's a big one. Whenever people have come on here and talked about ... We had one guest who taught Harvard, and they brought a livestreamer from China over to show how many Harvard t-shirts they could sell, or hats or something. And it was insane. But then also it was like, I don't know if that would work here. I don't know. I just doesn't feel like a similar market around how it was happening. I don't know, it just didn't feel very familiar.Julian:Yeah. I think culturally, in the US and the West we don't like to be sold to. And that's why Instagram is very much a place where you build relationships with the other person. I think that's fundamentally where the big difference is. And remember, livestreaming in China is a business. These livestreamers are starting work at 6:00 PM and clocking off at 2:00 AM, and they do that 365 days a year because it's a business. And they have tens of people underneath them that are helping them bring in product to talk about. I think when you think about this is your starting block, and when you think about in the West, I don't think people will approach livestreaming in the same manner.Julian:I think at the end of the day, the winner in livestreaming in my view is that it will be the platform. I would make a bet that Amazon would probably be the leader eventually, because they're the ones that are going to be able to fulfill and deliver multiple brands and multiple products to the consumer in a very fast fashion. However, it's exciting to watch all these new platforms come about into the space.Stephanie:Yeah. Are there any other trends that you see happening in China right now that you're like, this could work in the US? Or, this should definitely be brought back because people would love that here?Julian:I think China's done a really incredible job of cross-collaborations with really interesting partners, like very nonsensical to the West. I don't know. In the West, you'd see a clothing brand pair up with a skincare brand. But in China, they'll go KFC will do something with a perfume brand. Or, a bubble tea will work with Fenty Beauty. Really, they like to think out of the box in the market, and I think that's really exciting.Julian:I do like the idea of sampling. I think sampling is something that the US has always been involved with, these boxes that get delivered to the customer and these subscription boxes, whether it's Birchbox or BoxyCharm and all these different ones. In China, I see that there's this interest to go and try sample size products at stores. I think that could eventually translate over here, and I think that would be well received.Stephanie:Yeah. I mean, I think about Costco. I wonder how much business they've lost because people like samples.Julian:They do, yeah.Stephanie:I mean, yeah. It seems like there is the stores that are okay with letting you try everything. And I know COVID mixed that up a bit and made it harder to do that, but I wonder if it will lean heavier into that because they think that's such a great way to sell. But it seems like some brands are kind of stingier, like I don't want to give this away for free. And it'd be interesting to have a case study of like well, when you get a sample, here's the ROI and the LTV just based off that one, little, teeny sample that you did give away consistently. Not just once a week when you send someone in to be an ambassador.Julian:Yeah. No, I think that's really exciting. I do love the idea that I think the US is incredible at creating these ideas. [inaudible] has done a great job and really given the consumer a more accessible way to try products. But we have to always ask ourselves the question, what's going to drive the end plus one customer to go to the next multi-brand beauty store? And I don't know about you, but how many times do I get ... I'm buying my groceries online because I don't to go and queue up. I mean, this is the trend and it's accelerating faster and faster.Stephanie:Yeah. Yeah, I agree. The one thing I'm thinking about now too is that it feels like in some ways, the US and Chinese buyers are the same, and in other ways very different. Thinking about the sale aspect where it's like, that's big in China. And actually, it's kind of like going away here. Why are we doing these Black Friday events? There's no point. And that's once difference.Stephanie:And the other one I'm thinking about is all these new D2C companies popping up where you see consumers here kind of falling in love with the brand, which is very different than maybe even five years ago. And maybe you didn't always know who the brand was behind the product. Are the buyers in China similar, or are they not really open to new brands? Or do they not really want to hear about the story? What are the differences there?Julian:I think for example when we started SuperOrdinary, we saw this opportunity to bring clean beauty into China. Which at the time, there was no social listing around clean beauty. If you checked out clean beauty packaging, clean ingredients, there was really nothing there. And that was very important. I think the US, where they're ahead of China in this respect, is the brand story, the mission behind it. What does the brand stand for? What's the why? I think those types of ideas are becoming more and more important in China. We're starting to see brands really care about the environment, the packaging, what they do. The say/do ratio, we call it. Julian:But I think one of the learnings we had, and it's why I think SuperOrdinary, we moved to the US to really build out the Amazon business. Because we saw the opportunity of what we were doing in China and reapplying that to beauty on Amazon. Everyone knows the story that there are rogue sellers on Amazon. There's plenty of opportunity. And over one third of all beauty purchases are now on Amazon. And it's like this dirty, little secret we all know. We're all purchasing our toilet paper, our mineral water on Amazon, so why don't we buy our skincare?Julian:We set up a team. We have a team just under 25 people here in the US focusing on building brands, the story, making sure their D2C websites look exactly like they do on Amazon. And it's just been really exciting, because in five years' time from now, I think if you ask yourself the question, "I want to buy a product today and I want it on my doorstep in 30 minutes, who's the player that's going to be able to do that?" And it's not your own D2C website. It's really the part that can actually have the tentacles everywhere that's going to be able to do that.Stephanie:Yeah. Yeah. That's going to be huge. All right, well with a couple of minutes left let's shift over to the lightning round. Lightning round is brought to you by Salesforce Commerce Cloud. It's where I ask a question, and you have a minute or less to answer.Julian:Oh, wow.Stephanie:Are you ready, Julian?Julian:Let's go.Stephanie:All right. If you had a podcast, what would it be about and who would your first guest be?Julian:I would invite Anthony Bourdain. I just think he's the coolest guy, and I really enjoyed his international aspect on traveling and eating. I love eating.Stephanie:Yeah? He'd be your perfect guy?Julian:Yeah.Stephanie:So, a show all about eating and food, then. I like that.Julian:Yeah, exactly. Definitely nothing to do with ecommerce.Stephanie:Yeah. That's good. Well, when you want to stay on top of new trends that are popping up, how do you stay on top of that? Where do you go? What are you looking at? Yeah, how do you know what's hot?Julian:I'm lucky enough to have three boys, who are 16, 14 and 12.Stephanie:Oh, so they know.Julian:Who keep me on my toes, yeah. I actually ask them, and they find everything on Twitch. I usually ask them, and then they frown at me like, "Dad, what are you doing in makeup?"Stephanie:You can ask makeup stuff on Twitch? Wow. That might be a new-Julian:Yeah, it is. It's true.Stephanie:What do they ask?Julian:Well, they just find out ... They know everything from men's grooming, and they get targeted. And it's so funny, because the young one, he said, "Dad, what's manscaping?" I'm like, "Where did you learn that from?"Stephanie:We'll talk about that later.Julian:I'm learning about new projects and new things all the time.Stephanie:Oh my gosh. That's awesome. That could be a whole, new trend there. Go on Twitch. Ask the people. They'll let you know what all the trends are.Julian:That's right.Stephanie:What was an idea that you thought was brilliant but ended up failing?Julian:Oh, I've got so many of those. I'm trying to think of the one that's the least embarrassing.Stephanie:You have embarrassing?Julian:During COVID, I was like, wow. I was thinking about everyone is staying at home. Everyone is on these Zoom class, why doesn't people create comfortable clothes? Maybe I should start a pajama company. And I quickly had a handbrake on that. So, I didn't do that. But I've also done other things. What else did I do? I invested in a pool cleaning company back in the day, and that was my first, real investment. And I had a very big learning from that because I gave them all the money upfront. And the second day, he never showed up for work. I'm like, "Huh. That was a bad trade."Stephanie:Never saw that dude again? Oh my gosh.Stephanie:All right, what's up next on your reading list?Julian:On my reading list. I guess I'm a creature of habit. I think one of the books I wish I read 20 years ago, it was available, was Ray Dalio's Principles.Stephanie:Yes. So good.Julian:I think he gives you this honest look at yourself. It's very introspective. And tells you how to build teams. I recommend everyone in the world to read that book over and over and over again.Stephanie:Yeah. He's such an interesting person. All his philosophies, and I think yeah, he came and spoke at Google when I was there. And just how he thinks about rating his employees, have you read about this?Julian:Oh yeah, of course.Stephanie:You get a rating.Julian:I know.Stephanie:And if you're this level, you actually just probably shouldn't speak up until you get to this level, but everyone gets access to everything.Julian:I know. The scorecard is like a baseball card. I mean, but it gives you a very different perspective about radical transparency. And also, teaching you how to take constructive criticism in a positive way, knowing that collectively the information in the room will allow you to make better decisions.Stephanie:Yeah. Yeah. Love that book. Well, awesome. Well, Julian, I've loved having you on the show. If people are trying to get into China and they're looking for help, where can people find out more about you and SuperOrdinary?Julian:Yeah. We have a website, SuperOrdinary.co. Not .com. Thank you, whoever took that website away from us. We'll find you. Or, reach me on JulianReis, R-E-I-S, @SuperOrdinary.co. Really, thank you so much, Stephanie. You're wonderful. It's so nice to speak to you.Stephanie:Thanks so much. It's been awesome.

The future of commerce is being built all around us, and while so much of the industry changes on a daily basis, there are still some fundamental truths that anchor brands and allow them to find success in the digital and retail worlds. On this roundtable episode of Up Next in Commerce, I got to dig into exactly what those foundational elements are with Mike Black, the CMO of Profitero, and Diana Haussling, the VP and General Manager of Digital Commerce at Colgate-Palmolive.This was such a great discussion that touched on so many different topics that brands big and small should be paying attention to. For example, what are the three key levers that influence ecommerce sales? How should you be developing KPIs that will actually mean something and lead to more profitability and growth? Why is omnichannel the way of the future and what channels should companies be investing in? Mike and Diana have the answers, which they have gathered through long and impressive histories in the ecommerce world — Mike worked at Staples and Nielsen, and Diana has held roles at places like Campbell's, General Mills, and Hersheys. These two really know their stuff and they were so much fun to talk to. I hope you enjoy it as much as I did!  Main Takeaways:Pulling the Right Levers: There are three basic levers that influence ecommerce sales: availability, findability, and conversion tactics. If you can't ensure that you reliably have products to offer people, that those people have an easy way to find the products, and that they are given reasons to actually make a purchase, you won't be able to grow or increase profits. You Reap What You Sow: Being a first-mover on any platform is one of the investments that has the highest potential payoffs. Companies that took Amazon and Instacart seriously from the get-go have created a huge advantage for themselves in the ecommerce space. By having a head start in one place, you also free yourself up to explore elsewhere while your competition tries to keep up in the first spot you've already dominated.You Want Them to Want You: As a brand, you have to firmly establish a value proposition to present to customers, especially when you are trying to extract information or gather data about them. Give customers concrete reasons to want to engage with your brand and earn their trust so that they are more likely to keep coming back. Then use the data they give you to provide even better experiences and products over and over.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hello, everyone. And welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, CEO at mission.org. Today, we are back with an awesome round table with some amazing folks. First up, we have Diana Haussling, who currently serves as the VP and General Manager of Digital Commerce at Colgate-Palmolive. Welcome.Diana:Thank you so much for having me. I'm super excited for this conversation.Stephanie:Me too. And next we have Mike Black, who's the CMO of Profitero. Mike, welcome to the show.Mike:Thank you very much. Also, very excited.Stephanie:Yeah. This is going to be a good one. I can just feel it. I can see the energy between you guys. I can see you got a lot to say. So, it's going to be a good one. So, I would love to start as I always do with a bit of background so people know who we're chatting with. So, Diana, maybe if you could start with… I see you have a long history in the world of CPG work for… I mean the most well-known brands that I can think of, and I was hoping if you can kind of go through that journey a bit?Diana:Yeah. So, I've been lucky enough to work at four major CPG organizations. I cut my teeth with Hershey in sales and really was able to understand, not only retail, but direct customer selling. Moved over to General Mills where I stiffed my toe in the water in marketing. Loved working on those brands and getting a taste of a larger organization. And then I shifted to Campbell's where I spent the bulk of my time. Campbell's will always have a special place in my heart.Diana:I spent a lot of times there, ping-pong back and forth between marketing and sales. I created a couple of roles for myself. One of which was the lead of e-commerce, where I established the e-commerce organization there before leaving and coming to my new love, Colgate-Palmolive. Super excited to be part of the Colgate family. I lead a digital commerce team called the Hive. It had that name before I got there. But I'm attributing it to the Beyonce now that I'm there.Stephanie:I love that.Diana:I'm so super excited to be at Colgate. There's just a ton of energy and growth around e-commerce and our primary focus is on digital transformation which is a perfect segue for this conversation.Stephanie:Yes. I can't wait to get into that. All right, Mike, a bit about you.Mike:Yeah. So, I started my career in retail. I started my first real job was at Staples, the office products company. And I was responsible for public relations there. Opening new stores in different markets, and really got a firsthand look at how retailers, traditional retailers were being disrupted by e-commerce. The time that I was at Staples was right at the time that Amazon started to make its ways. And I could see the impact of that just in the way that Staples was going to market, and they started to really dial up their own e-commerce efforts to combat.Mike:So, it was really interesting to see that pivotal moment inside from a retailer, classic brick and mortar retailer go through that transformation. So, I started my career there, then I started working in startups. And I eventually found my way to Nielsen. So, I worked in the part of Nielsen where we tested new product innovations for CPGs and worked in their measurement and analytics. And while I was at Nielsen, that's my first exposure to e-commerce and first exposure to this new emerging space of analytics.Mike:And I knew this was the place I wanted to be. It was in the e-commerce space, the intersection of e-commerce and data analytics, and that led me to Profitero where I am now. And we're getting to work with smart people like Diana who is someone I listen to her speak, and then I take notes. And then I sort of borrow some of her wisdom, and she's someone I'm always learning a lot from.Diana:Right back at you, Mike. And if you don't follow him on LinkedIn, you should, because he leads all social for Profitero, which isn't in his CMO title.Stephanie:Wow. I like this. Diana's like your hype woman. So, this is a good match we have here.Mike:The feeling is mutual.Stephanie:Yeah. That's awesome. So, Diana, I mean I'm thinking about you starting an e-commerce team at Campbell's. And then coming to Colgate where they already kind of have one set up, and I'd love to hear a bit about what is it like now versus then? Because I can just imagine you being like, “This is important everyone and I need some budget for it and this is going to be a thing.” Whereas now, it's like obvious. Like, “Yeah. Jump in. Let's go deep and spread the word.”Diana:Yeah. I think, and I'm sure this will ring true to a lot of my fellow CPGers and the struggle on the e-commerce business. If you're at an organization, and this is a completely new space, but you have leadership that definitely sees the potential and the opportunity, it really becomes on you to not only operationalize, but really help leaders understand how to translate e-commerce, how to translate digital to a P&L, to growth projectors, to a strat plan. All those things CPG people are really comfortable with.Diana:And then also to really think about not only what your org needs to be like to get things off the ground, but where it needs to go in the next three years. And typically, you're not in the position where the organization truly understands how to make that work. So, there is a kind of this hybrid role that digital commerce folks have to play in emerging organizations where they're really helping folks navigate, what IT support do I need? What supply chain support do I need? Where should everything sit?Diana:And you can do it on your own, but you can also partner. So, there's a number of groups you can partner with. I happen to know that Profitero has done a lot in this space, and they have, basically, a journey for organizations that you can leverage. But it really is like starting from scratch and building a case for growth. I think the biggest question that you get when it comes to just starting up in an organization is how is this incremental to the business?Diana:And my pushback to that always is, it's not about incrementality. Incrementality is a bonus. It really is all about protecting your base business, going where consumers are going, and ensuring that you future proof your organization for the reality of what our new world is, which is omni. It's slightly different when you come into an organization like Colgate who already has a established e-commerce team or Center of Excellence.Diana:I definitely feel like I came to the land of the willing. Everyone, from the top down, is really excited and energized by the space. And that it's energizing, but it also means you have to redirect all of those good intentions and positive energy to the right focus and the right goal. So, some of the work when you're in a more established organization is really, how do I harness all of those resources when they are abundant? And make sure they're spent in the right places and they deliver. Because there's going to come a time where leadership is going to look back on that cash that they threw in e-commerce, and they're going to say, "What did I get for it?" And you better have delivered on it.Diana:I think the other piece is making sure you understand how to integrate across the organization. It's important to have a strong center, but it's even more important to make sure everybody understands the role that they play in digital, in e-commerce regardless of if they're on the badass teams like the Hives of the world.Stephanie:Yeah. I mean the one thing I hear a lot of brands struggling with though are around metrics. I mean from working at bigger companies in the past, I've seen people kind of come up with KPIs in a way that, it's kind of made up. Stephanie:So, when thinking about big and small brands thinking through like KPIs and metrics, feels like kind of a messy world where when you get to the bigger organizations, some of them can start to feel like they're just kind of being forced. Like, "Oh, see, we have it. And if you look in three years, maybe it's like not even relevant. And then the smaller companies are like, "Well, how do we even start?"Stephanie:And so, I'm wondering, how do you go about even thinking about developing KPIs, thinking about brand building, thinking about conversions. Is there some kind of allocation you had going into it of like, "Here's what should be spent on just holding down the fort, and here's what should be spent on acquiring new customers and thinking through the LTV and everything."Diana:For me, that's a marriage between two points. It's the external data and viewpoint. So, where do you have an actual right to win? Where are the white space opportunities? And where are their growth that you're not getting your fair share of? Really understanding that industry landscape is really critical to forming your strategy.Diana:What you want to avoid is just forming a strategy that's based off of internal goals and objectives, because you may not be able to deliver against that. It's a marriage between the two. Then, it's getting really clear internally on what winning looks like. There is a high cost to acquisition, but there also is a huge penalty if you don't ride the momentum and the wave of growth while it's happening.Diana:I use Skype and Zoom during the pandemic as an example of that. Skype had a foothold on the industry. Zoom came in out of nowhere and won the pandemic. You don't want to be Skype. So, how do you ensure that you position yourself and your brands, so you not only understand what the CEO and the board wants you to deliver, but also you're pushing on what are the right levers in order to get there? Because your brick and mortar business is not going to mirror your e-commerce business. It's going to be slightly different.Diana:And then you have to understand those points where there's intersection. So, right now, we're seeing growth across all modalities or modes of shopping. So, there is this real digital impact on the physical brick and mortar footprint. And the onus is on the digital commerce team to make sure they understand what that impact can do, and they're not only influencing the KPIs that drive e-commerce, but they're helping the brick and mortar business understand the KPIs they need to maintain competitive edge. But also to hold their shelf space, their promo space, and their capacity within the total retailer environment.Mike:Yeah. Just to build on what Diana said. I've noticed a shift just in vocabulary and positioning in the last probably three months with e-commerce leaders. They used to really talk about e-commerce as e-commerce, and it was really about winning in that channel. And I've noticed this language shift towards now repositioning around this idea of digitally influenced sale, and taking credit for all the work that you do online that drive sales.Mike:And you think about it, most, and it's true. Most shopping experiences are happening much… Even if you go in a store, you're researching online, you're looking at content. You're doing a search to see if it's even available at your local Target. And what comes up in that digital experience is going to dictate whether you go to that store or not. So, it's just so much more impact that I think goes into your e-commerce that I don't think e-commerce leaders were really fairly taken credit for. But I noticed this, Diana, you probably… And it sounds like you're starting to speak this languages.Mike:It's like almost every sale is digitally influenced now. And so, that investment, I think it breaks down the barriers between the brick and mortar teams when they start to realize that their success isn't independent. It isn't just e-commerce and I don't have to care about it. Actually, will have a full cycle, and you see some retailers, really, I believe the sticking point comes when you have a retailer like Walmart who starts to say, "Hey, you have to talk to me in the language of omnichannel."Mike:And now, when they set that tone and being as influential as you are, I see them starting to drive this different consensus. So, I think the metrics have changed in some ways, the language has changed and I think we're starting to reframe that it isn't just e-commerce, but just commerce now. And I think that's going a long way.Stephanie:Yeah. That is why we label the podcast, Up Next in Commerce, because we knew, we saw the writing on the wall, so just several notes, we were first. So, how are you going about even thinking about that tracking? I mean if you're saying a sale is digitally influenced, in my head I'm like, "How? How would you even know that?" So, what are some ways, either Mike that you see brands kind of attacking that problem or Diana, how's Colgate thinking about that?Diana:Mike, you got this one. This is your [crosstalk].Mike:Yeah. I'd say like basically, I mean the way that we think about your metrics really goes down to the levers, right? The levers that influence your sales in e-commerce, really comes down to like three basics. And there's some, the one is the first lever. Most important is that you're available. So, that your product is even listed and it's not out of stock. That was a major issue last year, and a lot of brands are still feeling that repercussion, and that has a lot of impact.Mike:So, if you go to Amazon, and you're looking for a particular product, it's not there. You better believe consumers are going to switch, and we saw that switching, and that switching is very painful online, because the loyalty can go, and then you don't have that repeat. So, first and foremost you think about, "Okay, we got to be available." It's just like being in store. You got to have the product there on the shelf.Mike:Then, the next big lever is being findable. And that's what's really interesting, when you're in a traditional store, you walk into a store, you knew that your product, you sold it in at the beginning of the year, the planogram. That, yeah, your product was going to be on the shelf, and they're just going to replace it. But in the digital store that changes every day, and we've done like 24-hour video views of search results on Amazon, and the products are just changing constantly shifting.Mike:And so, findability is really being keen to what terms your customers going to search for, and then being there all the time in the top of the results, and we have seen that if you're not on page one, and sometimes not even in page, in the first five spots, you might as well not even be there, because you're not findable. So, that's like your second lever.Mike:And then your third is really about your conversion levers. Having that content and having those reviews, and that's probably one of the most transferable things between the online and the offline experience, because there's so much discovery and learning and research is being done, and that's one of the things that Amazon has done a great job and recognized, they've given consumers so much real estate, so much space. Places for videos, place for content.Mike:And I think most of us, if we're going to look for a new product, we're going to start on Amazon. We're going to soak in that information and make informed decisions. So, if you look at it, it's all right. Well, my end game has got to be available. I got to be findable, showing them a search. I have to have good content. And then if those things are true, you start to gather metrics, and that's actually what Profitero is doing is we're able to help brands understand across all the sites you're selling. Are they available? Are they findable? Are they converting? And ultimately what we know is if you pull those levers, and you optimize those levers, your sales are going to grow, and you're going to outpace the competition.Mike:And to Diana's point, the very, very important thing that grounds all this is having a sense of your competitive growth, because you need to be able to define, like Diana said, not define success in your own terms. But you have to be able to see how your competitors are growing in that category, and if you look at 2020, everybody grew, pat yourself on the back. But if you knew that your competitor grew at like 2x or 3x, that's a wake-up call, there's something you're not doing that they're doing. And so, it's really important that you balance those tactical levers of the shelf with just this overall having sales metrics and not just looking at your own. And these are all data points that are now available through technology and Diana can speak about how they're actioned.Diana:Yeah. I would say the digital commerce starter kit is definitely, first and foremost, digital shelf health and discipline. That's a game changer. If you're not winning there, and you're not going to win, we spend so much time as marketers really focusing on our packaging and understanding the importance and the value of packaging.Diana:Well, in this new world, the digital shelf is your new packaging. It's your new end cap. It's your new aisle. So, how do you think about digital shelf and the discipline there really is going to translate into your competitive set, because now consumers can define what that competitor set is. It's going to really define your conversion rates. Does your content help consumers really understand how to use your product?Diana:And it's also going to impact your ratings and reviews. Does your content enable your consumers to have the experience that they're expecting when they see you online? So, it really does fuel all of the potential for your growth. And I said once you have that starter kit up and running, then you really have to take a step back, and think about, what are the other KPIs? We tend to really focus on marketing and sales when it comes to digital commerce. But this game is won and lost with supply chain, IT, and finance.Diana:So, starting back with supply chain, IT, and finance and setting yourself up to be profitable, to be deliverable, and to be flexible is really how you can break away from the pack.Stephanie:Yeah. I love that. What are some surprises? And maybe Mike this is a question for you. What are some surprising platforms or channels when you're talking about, everyone did well, but some brands maybe did double or triple compared to other ones? What are some surprises there that you're seeing or things that are happening right now, you're like, "This platform's kind of popping up or people are pulling off of this one?"Mike:Yeah. Well, just specifically in terms of platforms, I think, well, in terms of like retail platforms, I think part of it is I think last year was really about the relevance of certain platforms jumped up. So, I think most brands that took e-commerce seriously, took Amazon very seriously from the get-go, I think last year Instacart became the platform that everyone's, especially in CPG space said, "Okay, this is serious now." People were going there first and foremost, it was a lifeline in terms of getting delivery.Mike:And suddenly now, what that creates is an opportunity to be first in market. And I think there's an advantage with any platform to be the first mover, and there's reasons why. Amazon's a good example of a platform that favors brands that have good sales history. So, if you excelled, really, if you were like the first let's say pet brand a couple years ago to rock Amazon, what happened is that you were excelling at all your execution, your sales are going up, and you start to organically just get higher placement, because Amazon favors brands that are relevant.Mike:And so, if you're really selling, they're going to give you that top space. And you see that same dynamic in Instacart, and in grocery too, because what happens is on a grocery site, people usually buy groceries off a list. And so, the first time they place orders on an Instacart or grocery, they're building their list. And then the next time it's a reordered list. So, there's a huge advantage to be a first mover on a platform and to build that purchase history, because it drives your repeat rates.Mike:And so, what we saw last year was just a lot of brands stepping up, and saying, "You know what? We're going to capitalize this. We're going to be early. We're going to invest in ads. You were going to get it, get that top of mind share." And I think they're going to reap the rewards now for the rest of year. So, you can look at it from a platform perspective, sometimes being first to market on these platforms, taking e-commerce seriously can give you a long-term sustainable advantage.Stephanie:I wonder if consumers are changing because of this past year or two, it seems like consumers are looking for the newer thing, the D2C company that's kind of like just saw it on Instagram. I feel like even myself, I go to Amazon, I see a lot of brands that I know. I'm kind of like, "Ah, keep scrolling." I've known of these brands for 10 years. Of course, they're number one. They've been around a long time. Let me find this deodorant that just popped up. Oh, cool. It's natural. It has all the things that I want, but it might be pretty far down or I'm even getting to a place where I'm kind of skeptical that Amazon might not even have it. And I might just need to go to the website or maybe go to, I don't know, Target and browse through and try and find it. What are you guys thinking around that?Diana:I love everything that you're saying there, but the insights background in me is super excited around the fact that we all went through a life change at the same time. So, if you think about that, typically, when you have a baby, your consideration set changes, your lifestyle changes, which are open too. New households with second babies tend to buy a washing machine within that first week that they bring that baby home, because they're like, "Crap, I'm not dealing with all this laundry on my own."Diana:But we all went through that change, collectively had a baby at once and changed how we operate, how we think, what we're open to, what our consideration set is. So, insights teams out there should be real hype right now, because it's an opportunity for them to really take a deep dive in and rethink brand positioning and audiences. So, exactly what you're talking about, people are more open or more exposed or they realize how connected they are to certain brands, and then they were willing to go direct to that brand to purchase those items to ensure that they were getting, and they're going to sign up for subscription because they're not going to be out of that brand like they were, toilet paper, those first few weeks of the pandemic.Diana:So, I think it's a huge opportunity for brands to really think through, really around who your audience is, your target audience is? Are you capturing them? So, this is your defense strategy. Am I getting them? They're switching from platform to platform. I was getting them when they were going in the brick and mortar store, am I getting them when they're going into Instacart? Is my item showing up? So, making sure you're getting that first basket because the first basket is everything.Diana:Then, there should be a real acquisition strategy. Who do I have the right to go after because now they're open to me, they're open to my brand or they're open to new things and ideas? And that's where brands can really leverage their suite of their portfolio to really drive that cross shop. So, I think this is a huge opportunity if brands jump on it to really connect with consumers. I never used to work out before the pandemic, but then when I was stuck at home, in the same room that I sleep in, and then working in. I was like, "Well, I need to do something."Diana:Peloton got me. I don't like working out. I like the community. I like the gamification. I want to pretend that I'm one of their instructors with the jewelry on and super cool. And I'm not, so they totally got me. And now I'm working out three days a week. That's a whole habit that I never had before, and so it's just ripe for opportunities for brands to not only grow within their traditional channels, but to acquire new consumers in new channels.Stephanie:Yeah.Mike:Yeah. Just to build on that. There's no single consumer anymore, and there's no single retailer. I think there's, me personally in my own house, takes… We shop at eight different retailers to stock our house now online. There's certain things that Target does well, there's certain things Amazon does well. There's certain missions, when I'm in discovery mode like you described, yeah. When I want to go find something and be inspired, I might look at Amazon.Mike:When I have a mission where I just need to stock up, I might go to Walmart. I might go to BJ's or Costco. So, what's really interesting and what's really challenging is you can't just… The brands that are going to win are the ones that can do this well at scale effectively. They recognize that their consumer is everywhere, that they're shopping for different, in different occasions. Convenience, different factors, and they realize like you have to be everywhere, you want to be available and you want to show up.Mike:And I think that's the next play, and that's what makes omnichannel really exciting is you have those brands that maybe nailed Amazon, and they're comfortable, but the next level of this game is, all right, now we have to operationalize this at scale across all our retailers teams, and those brands that are on top of that in making those driving that change, internally to be there everywhere. Those are going to be the ones are going to pick up that market share in the next year, and next two years.Stephanie:Yeah. I mean how do you think about for brands needing to be everywhere? I mean I'm thinking about like you said, the shopper, when I'm at Costco, I'm in a different mindset. And I might want to see a slightly different version of a product whereas when I'm on Amazon or when I'm in Target which feels higher end maybe than a Walmart. How would you think about a brand should handle that now that they have to be everywhere, but also have very different consumers everywhere in a different mindset depending on where they're shopping?Diana:I mean that's where portfolio roles and retailers segmentations really come into play. It's not the sexy work, but it's the work that has to be done. And it can't just be done at a very high level anymore, it really has to be done at the SKU level, because there are some multi-packs they're going to pop in certain modalities at certain retailers, there's some SKUs that just have a better fit. The brand teams that are able to really get that portfolio role and customer segmentation right are going to be able to invest to win, because as retail media costs grow, the cost of service grow, dollars, that bucket of dollars hasn't gotten any bigger. So, it's about being smarter about how and where you invest and really thinking thoroughly through how what you're expecting to get from that dollar.Diana:So, sometimes it's going to be a ROAS, sometimes it's going to be data, sometimes it's going to be something else. But really having clear business objectives for every dollar that's spent.Stephanie:Yeah. I love that. Mike, anything to add?Mike:Yeah. No. I think, Diana, like portfolio strategy is it's funny like there's been this like sea change I think when early stages of e-commerce or at least my observation, there's so much excitement that you get the marketing teams are just spending dollars, right? It's about growth. We're just going to buy some ads. And then all of a sudden, you see this diminishing returns. All of a sudden the things you were spending ads on, oh, they're always out of stock or they're getting de-listed.Mike:And that's a symptom and really it's like this idea, and you mentioned Diana, it's like marketing and supply chain are the best friends in the e-commerce. It's a weird thing because I'm a marketer, and you think, but it has to be because unless… You almost have to flip the funnel. And I thought it's like you got traffic, you get conversion. And then you get to like profitability. You have to flip it. And I think that's the flip now is thinking about your portfolio from consumer dimension, profitability dimension across your retailers. If you don't set those clear lines up, you don't set that definition up, this has a downstream effect.Mike:And you see this a lot on retailers where it's like, "Okay. Well, I have the same products everywhere, so what happens?" Well, if Walmart drops the price, Amazon drops prices and suddenly that thing that you're spending ad dollars on, you can't even, it's not even there. So, I think this is like the next generation is like almost like, "All right, let's break it back. Let's work backwards now. Let's start fresh, and let's build that from the portfolio."Mike:And then, once we make that clean, we're just going to see this uplift and our cost to serve, our cost of marketing is going to be super-efficient versus just throwing dollars at it without a strategy.Diana:That's not just for the manufacturers. I also feel really strongly that that benefits the retailers. They don't want to comp prices back and forth. They want a unique value proposition for their consumers. So, how can you help the retailers achieve their objectives? If Kroger's going after young households, and young families, what's your solution to help them go after them? If Target's going after the black consumer, how are you helping them capture as many black guests as possible? How are you really thinking about not only the strategy, so it benefits you, so it also really does align with your retailer strategy?Diana:That's how you create a win-win scenario, and you avoid the competitive pricing pressures that we're all experiencing right now.Stephanie:Yeah. How do you find a good partnership with these retailers? Because I'm sure when they have so many brands they're working with and everyone probably wants to talk with them a little bit differently, and they have different ways that they want to help them or work with them, how do you think a successful partnership looks like or what does that structure look like?Diana:I think this is why the digital commerce space has to exist in this kind of hybrid world, because I feel like marketers take a really consumer human first mindset. Sales people tend to be very like sales for sales focus. In the middle you have to be this hybrid. I do take a customer first approach to an extent because you have to understand your customer strategies. Target's earnings call just came out this week or last week, and they talked about how 90% of all their sale is digital or physical are coming from stores.Diana:That's an insight for me to strategy. So, if I want to win at Target, I've got to understand how they tick, how they operate, and how I can help support their strategies, and their executions. So, it's really that intersection between, what our brand teams are trying to accomplish? Our sales teams targets, and our retailer strategies, and where we can actually play.Diana:From a Colgate-Palmolive perspective, I'm not going to be able to help them win in every single element of their strategy. But there are areas that I am going to be able to help them lead or give them a perspective that can influence other sections. And I think the more and more we play those roles, the more valuable that you show up to a retailer, the more inclined they are to partner with you.Stephanie:Yeah. I mean I feel like that's a life principle. You just did your research on the brand, the company, you looked at their investor reports, you look into the background of the people, and instantly they're like, "Oh, you kind of already know that I don't have to bring you up to here, you're already here." So, now we can get going, which is awesome.Diana:Basically all can be boiled down to the same dynamics of the dating relationship. Sometimes you go to the sporting event because your significant other likes it, and then sometimes they go to the thing that you want because you like it. And then if you have a mixture of alcohol and sports, you got me. So, there you go.Stephanie:I love that. I love that. Cool. Well, the one thing I want to kind of touch on too is around the world of marketing right now. So, I've talked with some brands that have had to kind of always work in a scrappy mindset. One of them was Anheuser-Busch where they're like, "Yeah. We can't ever have this one-to-one relationship. We always have to do other things to be able to reach our customers because we actually can't directly talk to them."Stephanie:And it makes me think brands like that might be pretty far ahead with all these changes to ads and privacy and retargeting and all that. What are you guys thinking is kind of like what are brands missing right now? What should they be doing to continue to have a close relationship with their customers and not lose out when they lose access to a big ad pull that maybe they're not going to have anymore?Diana:For me, I think it's a balance. I think you have to think about your consumer touch points across the board. Everyone's talking about the cookieless environment that's looming. We're all hoarding data. But I don't know how actionable everyone's making it. So, I think it's really around taking a step back and what's your learning agenda.Diana:You want to connect with consumers, but what's the value proposition for them? What's the benefit? And I think brands really have to think about and understand, if I'm connecting with consumers, what value am I providing them? And why should they give me their information? Why should they want to connect and engage with me? And if you haven't established that, then you haven't earned the right to have their information or their contact, because it really is all around creating a delightful experience for them.Diana:I think understanding all of the data inputs that you have and really thinking hard around, how do you leverage them to feed strategies, not with just within the silos of the space? But how do you integrate them so you're feeding your traditional media strategy with your D2 insights? You're feeding your supply chain strategy with some of the ratings and reviews that you found, even your R&D innovation.Diana:So, it's really around being mindful and thoughtful about all the touch points that you have and being able to action against them. But I think for most retailers and manufacturers, if you don't have a strategy to think about how you're going to leverage your data, and you haven't, you're going to miss the boat, because everybody's gearing up, and it's what's happening now if you want to stay ahead going forward.Mike:Yeah. And just to build on that. I think totally it depends on the consumer and what's relevant. But I mean generally, I think what I'm seeing from some brands a little bit of higher level thinking in terms of how they're engaging with consumers, even on social media. I noticed there was a time period where I would go on Instagram and I saw these ads. They're very tactical. There's just like these product ads like, "Okay, buy this widget, buy this thing."Mike:And you still see these display ads, but then I've seen a lot more ads are just more, they're helpful, their content. I'm a pet owner and I wasn't going through my feed and I saw those, it was an ad, but it was from a pet company, and it was really supposed to be like how do you, what are the attributes of a healthy pet? It was kind of an interesting, intrigued me. I have an aging pet, so I just think there's a lot more creativity, you can't… I think it's easy in e-commerce to get very operational, but you can't underestimate the power of creative and how important creative is.Mike:And I think there's a lot of brands that I've seen challenger brands that are leveraging humorous videos. They're really doing things viral on YouTube, they're building a personality around their brand. They're getting up on TikTok. They're leveraging every touch point they can at the top of the funnel to build, to be creative, to stand out. And now what that's doing for them is now they're training consumers to go to Amazon and type their branded, not type a general category keyword.Mike:So, I think what's happening is the mediums are changing, maybe it's not television maybe it's not that, but there's so many more tools for marketers and very agile to still tell stories. And so, I think storytelling is going to be, has always been important. And I think that brands that are going to invest in that and make sure that they're using all these other new platforms these video platforms are going to really be well positioned for the long term.Diana:Yeah. And I think what I heard from you too is this authenticity. And what consumers are really looking for because I feel like now especially within Instagram, people want to be sold to, to an extent, but they want to be sold to for me. I want you to understand who I am, what I want to see and deliver it to me the way that I want to." But I think people are also really looking for real content. So, a lot of the slick and shiny campaigns that work on TV, are not going to work in social. So, really understanding who your consumer is and how to speak to them in an authentic way. But also be able to convert them in three seconds or less.Diana:So, how do you make that from something content, how do you really think about making it real? Especially if you're talking to Gen Z, how do you talk to them so it feels like they're talking to their peer group in a very authentic way? Is really critical. And then, how do you make it every single touch point the opportunity for consumers to buy? Because the funnel as we know it, has really collapsed in a lot of places and consumers are coming in and out as they choose, and if you're not able to make your social shoppable. Then, you're really going to miss a lot of opportunities to drive conversion and acquire new audiences.Stephanie:Yeah. And I love the idea around storytelling. I mean that's kind of what our whole company's been built around is like this is what humans look for. And I think there's this really big opportunity in companies that have been around for a long time, like Colgate-Palmolive. I think since 1806, the story behind that maybe has not really been around of like, how was it founded?Stephanie:I mean we had on UPS the other day, and we were kind of going through the history of UPS. I'm like, "Whoa. They need to talk about this more." I mean founded by like a 19-year-old guy, and here's how like it even started with this bike delivery. They were on their bikes delivering things, and what it is today and all the pivots they've had to go through. And I think kind of getting back to those storytelling routes, especially for the more historical brands not only will kind of… I mean people want to hear those stories. I just don't think big brands tell it enough in a way that connects with people now.Mike:Colgate was the original startup.Stephanie:See?Mike:Right?Stephanie:This is what I want. This is the connection I need.Mike:1800 startup brand, right? That's a challenging brand.Diana:Well, you talk about purpose driven brands. I do think a lot of these more established CPTs don't really know how to tell that story. I think there was a time period and several years ago when like it was just something you didn't do, and if I look back on all the organizations I worked at that do a lot of good for the communities in which they serve, that wasn't the story that you told. It wasn't like the thing. But now people are expecting brands to have a purpose, and they are using their dollars to determine if that purpose is worthy or not.Diana:So, if you're not talking about it, then you're not going to get those dollars. And Gen Z is not having it at all. They expect you to stand up and not just talk the talk, they want to see you walk the walk and they also want to see what your executive leadership team looks like.Diana:And I think consumers are also expecting the role of big corporations has shifted. How are you making this world better? How are you involved in social justice? What is your role? I'm super proud of Colgate for launching a recyclable toothpaste tube that then they gave the technology to everybody in the industry, so now everyone can do it. Those are the type of we're here for the good of the planet, we're here for the good of society, and we're going to be good corporate citizens and contribute to that. That's what the consumers want, and those are the stories that larger CPGs have to start telling.Stephanie:Yeah. I love that. So, when thinking about, earlier we're mentioning like you kind of have to be everywhere. And one thing that I also wanted to get into was all around agencies. We've had on amazing companies, one, was this company avocados from Mexico, and they talked about we've been like the number two or three commercial in the Super Bowl, and we have all these crazy things that we do that really drive, not only conversions, but awareness of our brand and they're selling avocados.Stephanie:They said our agencies are the ones that really, we vet them. They're amazing. They helped us get here, and I'd love to hear your take on, in a world where you have to be everywhere, how do you find agencies to work with that'll help get you there?Diana:For me, I've worked with so many great agencies along the way. And what I found is for me agencies are always an extension of my team. I'm expecting them to push us to make us better. I also really want to empower them to bring us awesome, creative, and make us feel really uncomfortable, because that's when you know you're onto something, especially when your boardroom feels really uncomfortable. That's when you know you're really onto something.Diana:But I think in this new digital commerce age, it's important to have an integrated agency model, because there are different agencies that are good and serve a purpose for different things. You do need those major creative campaigns, and yes, the Super Bowl is still important to some brands, but there's kind of the day-to-day operations, and also the ability to really think about digital commerce and the integration with shopper marketing and understanding how different retailer dynamics works, and how to leverage the data that's critical.Diana:So, agencies that not only know media, but know performance marketing but also understand retailers are really going to rise to the top right now, especially as more and more media dollars are shifting to retail media. Now those agencies that can work together, so from the big campaign to the Super Bowl ad and bring it all the way back to the Kroger, the Walmart, or the Target. Now that is just perfect.Mike:Yeah. I mean agencies from my point of view are, they are an extension and what they're often doing is they're acting on the data and insights that maybe a e-commerce team isn't equipped to act on yet. And so, I think the best agencies are the ones that make data their differentiation. So, for example, you could have a handful of agencies are all really good at spending your ad dollars. But there will be a select few agencies that know how to get that extra edge from some data, maybe it's incorporating some out of stock data or competitive search data, and you want to find those agencies are always pushing the boundary for you.Mike:They're not just managing on the basic models of ROAS, but they're actually looking at, what are these new things we could do? A test and learn, how do we advanced your ROI? Actually show that the ads are growing market share. How can they use data? And I think that's going to be a big differentiator, especially since digital shelf data, e-commerce data, it's still new for a lot. But I think you're going to see the separation where you find these agencies that are data-led, data centric, and I think there's a huge opportunity. To Diana's point, where first wave of digital agencies were very Amazon focused. There's such a huge gap in skill set right now in like the traditional shopper marketing for digital commerce that I think agency are perfect position to start becoming your extension of your Walmart, your Walmart digital operators, your Target.Mike:I think that's where you're going to see a lot of agencies flourish is where the maturity to actually pull those levers still isn't there. They can come in and be leaders. So, I look at agency on two dimensions who is really driving digital data driven decisions, who are ones that I can really scale with beyond just the Amazons but into that next tier flywheel that I want to go. Who's going to lead me there, lead my thinking, and help me be the market share leader on that next platform?Stephanie:Yeah. I love that. Are there any tests that you do when hiring agencies that you're like, "This will let me know if you're what I need, if you're well-rounded, if you can kind of plug in with other agencies and cover everything?"Mike:Well, we work with a lot of agencies. We don't hire them but we partner with them. So, one of the things that we do when we… We've tried to build an ecosystem at Profitero of like-minded agencies that are data-led. And one of the things that we're trying to do is make our data accessible to all these agencies to be able to do things. So, what I've seen is agencies that are really going to, that show the most promise is the ability to be willing to do some test and learn stuff, to pick up some data points from the digital shelf and say, "Hey, we're going to try this."Mike:We're going to say instead of just putting our ad dollars across every product spread it evenly on Amazon, we're going to actually shift and we're going to stop spending on the products that aren't converting well, and we're going to shift it to these products that are converting well. We're just going to shift it up and we're going to try to see what happens. So, for me, for my perspective the agencies that we've been vetting and really partnering with and saying that these are best of class are the ones that are showing that competency and that ability just to try some different things and experiment and find a model that they can repeat.Diana:Yeah. I would say when I think about it from a digital commerce perspective, especially from retail media. I'm really looking for an agency that not only understands media, but they also understand the impact on sales. So, if you think about Amazon and getting the flywheel going, if you're pushing ROAS, if you're pushing certain levers that impacts your profitability, it impacts a lot of your negotiation power with Amazon. So, you need to be able to keep your ROAS to where it needs to be in your other traditional media KPIs while keeping top line going, which can be expensive.Diana:So, that's very critical. So, having somebody that understands that. Also, someone that understands the nuances and the inner workings of Walmart from a media perspective but also that my sales team then needs to go to a buyer or a DMM and sell this program in, to not only get more, whether it's more displays or get them engaged and excited about it. But it's not just a pure media place. So, an agency that understands that from a digital commerce perspective is really critical.Diana:Then, when it comes to more of our traditional content and execution, I like to do what I call media to shelf. So, regardless of who the partner is and most agencies can do this. It's how you can integrate and work with other agencies. So, the idea can come from either side, either the traditional creative agency, the digital commerce agency, the shopper agency. But how do you take the lane that you play in and make the concept work across all? So, how do you take that idea and make it so much bigger? Because our funding models are not changing, our buckets are not getting any bigger. So, we have to make every dollar work harder.Diana:So, I need a traditional media plan that not only drives awareness, but also can pull through to the digital or physical shelf. And I would say a measure of good traditional agency, for me, it's make or break by the creative director. They really do enable the work to either deliver on the brief or exceed our expectations and deliver on our business objective.Stephanie:Yeah. Love that. All really good points. All right, with a couple minutes left, I want to shift over to the lightning round. The lightning round is brought to you by Salesforce commerce cloud. This is where I have a question, and you have one minute or less to answer. Are you ready? And I'll just kind of go back. Both have to answer the same question, so.Diana:Oh, boy.Stephanie:All right. Diana, you first. What's one thing you don't understand today that you wish you did?Diana:I don't understand why sales and marketing are so separate. I wish I could understand why each side didn't understand the other, but hopefully one day, we will be able to create, take the healthy tension and build a stronger digital commerce organization as a result.Stephanie:I love that. You and a lot of other companies, so. All right, Mike.Mike:Bitcoin.Stephanie:All right. You haven't even looked into it yet? I feel like now's the time to get in.Mike:I've tried and I get so confused, but I just have this fear. I have this waving fear of missing out, but then I realized that people are losing a lot of money too. I just don't understand how it works.Diana:I want to do over.Stephanie:I liked yours. What? You want to do over, Diana?Diana:I want a do over. You know what I don't understand? Why can't we have side parts anymore? I don't understand that. I like the side part. It fits my face frame. Why is that not cool anymore?Stephanie:Man, I feel like we can have more. Let's just stay on this question, so many things. All right. Next one. Something wise my elders taught me. Mike, you first.Mike:Something wise my elders taught me. Man, sorry. I totally blanked on that one. So, can you ask that question again?Stephanie:Yeah. Something wise my elders taught me.Mike:Yeah. I'd say that really it was hard work. That just sounds kind of lame. But I learned pretty early that no one's going to give you anything in this world, and you have to work really hard, and my dad was one of the hardest working people I know. He was an auto body worker and put in a lot of hours and really kind of like taught me this blue collar approach that I try to bring to my work. I love working. I've always learned to work hard and I try to always ground myself in that work ethic whatever I do. So, that's something that my elders taught me.Stephanie:I love that. All right. Diana, you're up.Diana:So, for me, I'm a black woman in America and a first generation from Caribbean parents, so it's really about using my voice and my power to have the courage to make space for people who look like me or people who don't have their voices heard. So, I'm really grateful for having parents, but also ancestors that taught me and showed me how to do that. YStephanie:Yeah. I love that. All right. If you were to have a podcast, what would it be about and who would your first guest be? Diana, you're up.Diana:Oh, shoes.Stephanie:A podcast on shoes?Diana:Yeah. My podcast would be on shoes and it would be Sarah Jessica Parker.Stephanie:My space right-Diana:It would really just be for me and a way to get new shoes.Stephanie:I'm so confused.Diana:Literally the whole angle of the podcast would be to get free shoes.Stephanie:Just need shoes. [crosstalk]. Okay. Who would your first guest be?Diana:Sarah Jessica Parker.Stephanie:Okay. I love it. All right. Mike, you can't top that one, but if you want to try, what would your podcast be about and who would your first guest be?Mike:Cannabis.Stephanie:Okay.Mike:And it would be probably, I don't know, Willie Nelson.Stephanie:What would you guys be talking about or would you [crosstalk]-Mike:I'm fascinated by the business of cannabis. So, it's something that I've studied for a while. I started to do a little bit of research on it back in Nielsen, and this was like way ahead. But I'm fascinated by how an industry can just go so mainstream. How can one part be so regulated, then all of a sudden go mainstream? And I'm fascinated by brand building in that space and how brands are building, and even like huge bevel companies are getting in this space now. So, we're like fascinated about the entrepreneurs in that space, the ecosystem of that space, and if I had a separate podcast that was totally unrelated to anything I did, it would be about that, because I think that's like, that and Bitcoin, those are two booming things right now.Stephanie:You could just blend them all together.Mike:Yeah. Right.Stephanie:I thought you would say you would be in it for the free weed. Yeah. Give me free weed.Mike:Samples, yeah.Stephanie:Diana's shoes.Diana:Yeah.Stephanie:Lobby sitting pretty.Mike:Right.Stephanie:So, I'll send you Bitcoin for the first time, and then you'll have to go deep into the wormhole.Mike:Yeah. I'm really opening my heart on this podcast.Stephanie:That is why you're here. That's why you're here. All right. And then, the last one. I want to know how you guys stay on top of your industry. So, maybe, Mike, you first. What are you reading? Newsletters? Is it books, podcasts? What do you do?Mike:LinkedIn. I basically follow a set of people. On LinkedIn there's a group of about 15 to 20 people that I just trust that curate. They curate on a regular basis all the breaking news that I could just go to LinkedIn and I know that at any given moment, I'm going to find something that's really interesting on a different perspective. Yeah. That's my go-to. I wake up in the morning and look at LinkedIn. And then I think about, "Okay, what could I do to add value to LinkedIn that day?"Mike:And LinkedIn has become one of these like platforms that I managed my life around. I never thought it would be like that. But it's become like a valuable news source for me.Stephanie:That's awesome. All right. Diana, how about you? How do you stay on top of everything?Diana:For me, I'm fueled by curiosity. So, similar to Mike, I'm on LinkedIn. He's in my top 20 list of people that I follow that I get content from. I listen to a ton of podcasts, this one also. I am an avid reader of papers and research. So, whether it's from Kantar, Profitero, [inaudible], Edge, you name it, you've got to stay on top of it.Diana:And then it's really about networking. So, I have this mantra like I'll say yes. So, if somebody invites me to a round table, I'm going to go. If it's a bad experience I don't go back. But like I found this small community of e-commerce and digital commerce folks that I can just call or text or get information from. And a really cool thing that a bunch of women in e-com started is basically women of e-commerce, and it's a group of 25 of us, and we connect on a regular basis. But we also bought, each brought in a mentee. So, it's just ripe for learning, and Sarah Hofstetter, the president of Profitero is one of the members as well. But it's just such a great place to feed my curiosity.Stephanie:I love that. I see only more of that happening, these micro groups popping up. I know that that was something that I started experiencing here which is like women all being part of like a group text, which I was like, "Is this going to be too much?" And now, I'm like, "This is the best text thread I've ever been in." And it probably wouldn't have happened prior to this past year or two. That's amazing.Stephanie:Well, Mike, Diana, this has been such a fun round table. We'll definitely have to have you back for round two, because I'm sure a lot will change quick in a matter of months. But where can people find out more about you? Mike, maybe let's start with you.Mike:LinkedIn.Stephanie:Of course. And then, you just go to Diana [crosstalk]Mike:Yes. If you want to find me, you want to talk to me, that's the place to go. I'll be pretty responsive.Stephanie:Yes. All right. Diana.Diana:You can find me on LinkedIn as well.Stephanie:Cool. All right. Well, thank you guys so much for joining. It's been a pleasure having you.Diana:Thank you so much for having me.Mike:Thank you.

The stores of the future are being built today, and according to David Wilkinson, President & General Manager of NCR Retail, they will not be the types of stores that currently come to mind. We are living in a time that blurs the lines between digital and physical, and retailers are working with NCR to make every experience as seamless as possible. David explains how on this episode of Up Next in Commerce. He tells us how personalized shopping will be brought to the forefront through first-party branded apps that customize the shopping experience for you. And he details how retailers in all industries can start breaking free of the traditional shackles of standard point of sale technology and store designs. Plus, David and I nerd out about how cryptocurrency will be entering the mainstream sooner rather than later, and how retailers can prepare for what that will mean for their payments systems. Enjoy this episode!Main Takeaways:Tech First, Differentiation Later: Retailers in every industry are trying to find ways to differentiate themselves and create memorable experiences for customers. But in order to ensure quality customer experiences, the basics of how your store functions need to be flawless. Focus first on optimizing all point-of-sale technology and other digital or tech offerings so that however the customer wants to transact, they can without friction. Then, when that is running smoothly, you can begin to focus on the peripheral experiences that separate your store or brand from the rest.Freeform Future: Anyone looking to create a store or business today has more freedom than ever before. They are no longer locked into the old ways of doing things. Traditional points of sale can be rethought. The design of a grocery store can be revamped to cater to more personalized experiences. Fast food restaurants can completely forgo inside dining. So many new options are on the table because in 2020, consumers proved to be willing to adapt to all kinds of new experiences.    Going Beyond The Loyalty Program: The days of trading your phone number for a discount code are long gone. These days, if a consumer is giving over personal information, they want something substantial in return. Brands have a chance to create loyalty experiences that are personalized and incentivize activities outside of the store, such as on social media, to give their consumers a unique reason to sign up. Crypto Checkout: Cryptocurrency is more than just a buzzword — it's likely to begin infiltrating daily life, particularly how people buy and sell goods. Majority of cryptocurrency holders would be willing to pay for their goods with their crypto, and retailers have to start figuring out now how to create systems that would make those transactions possible and secure.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hello, and welcome back to Up Next In Commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have David Wilkinson, the president of NCR Retail. David, welcome to the show.David:Thank you, Stephanie. Glad to be here.Stephanie:I'm very excited to have you on. So before we start, I would love it if you could highlight what NCR Retail is for anyone who doesn't know, because you guys do a lot and I want the words to come from your mouth instead of ours.David:Yeah, I appreciate that. There's a lot of, depending on who you ask, a lot of misconceptions about what we are as a company and what we do. We think about it in pretty simple terms, we want to create technology that runs the store. And so when I think about that, that's really the software and services that would be creating the capabilities to do transactions and interact with customers in and around the store environment. People might traditionally think of us as an ATM or a cash register company, it's really quite different, it's a payment software and services company across the three primary businesses that we serve, banking, retail, and hospitality.David:We're experts in how consumers interact with technology for things like self-service or automated transactions, which is critical in what's happening around the world today with labor and reallocation of labor, and really just focused on creating great customer experiences and technology to enhance that.Stephanie:Okay, cool. So what are some of the newest projects that you've been embarking on over the past year or two that maybe you had to quickly roll out where you're like, "Okay, everyone wants touchless payments now, or everyone wants this capability"? What have you had to scramble to keep up with?David:Yeah. When you think about our business, we're in the retail side where 70% of our business is grocery, or in big box, I'll put big box in that, another 15% that would be convenience and fuel retail. And then the rest of the balance of that would be, think about a department and specialty. So there are a handful of different trends, as you know, that occur within each of those industries. I'll start with convenience and fuel for a second, as you described. There was a big race when the pandemic was early, everybody wanted to social distance, nobody wanted touch things that other people were touching, so it created the ability or the need to do things like touchless payments at the pump.David:So we've worked with several convenience and fuel retail companies, Kum & Go was one of them, where we created the ability to do stage transactions on your mobile device and reduce the number of touches that you would have to make to the pumps. So it's got store payment, it would allow you this to queue up the pump, initiate the pump activation through our point of sale application, and then you could get to the pump and you always got to touch the pumps to put the nozzle in the car for those of you that have to pump gas in the 48 states that require that. And then the other, you'd have to touch the pump, but it reduces the touch of the thin pads.David:So we're finding those kinds of applications in convenience and fuel. Convenience and fuel also, we're seeing a big rollout of self-checkout, which is one of our flagship... We are the market leader globally in self-checkout, and when I think about what's happening, we really understand how consumers interact with the technology. The hardware is interesting, the software is really interesting, but the understanding of the workflows, the process flow, how do you avoid unnecessary shrink? How do you avoid unnecessary interventions? We're seeing a lot of now, increased demand in the convenience and fuel space that hasn't traditionally had self-checkout, but makes a perfect fit, small basket size convenience shoppers don't want to stand in the line and want different interactions or maybe a less interaction with a person in that environment.David:So COVID is heightened that. So that's what's happening. Convenience and grocery, it's a similar thing. We saw some weird things happening early days with spatial awareness and everyone was focused on, "We've put plexiglass in the stores, we can't have any kind of human interaction, we've got to queue outside the grocery store before we come in and set appointments in different times." So we did a lot of things. We have a very large professional services team that can do custom applications, and we did a lot of that kind of stuff where we're building queuing apps and other things that probably aren't here to stay, but we'll have some longer-term applicability.David:But what we're seeing really is touchless payments with self-checkout, so paying on the mobile or mobile scan in the isles, and then a broader roll out of self-checkout and then getting deeper debt or more density within the store for self-checkout, meaning more lanes enabled for self-checkout so that customers have that capability. I'll take a breath after this, but then the other piece was ecommerce. Obviously ecommerce is growing. If you look at grocery, you can look at different numbers, but it's multi-hundreds of percent growth off of fairly small numbers. But in ecomm, that's being a large part up to anywhere between 15 and probably 25% of grocery quickly moved to ecommerce.David:So we invested, bought a company that has an ecomm engine to turn that experience back over to the retailer so they can have an app, a retailer branded application, allow you to do the list management, recipe management, order online pickup in the store, and then has a picking optimization app on the back end for the retailer. So those are some things that we're working on and deploying that would include payments, but it's a lot going on. Innovation has been compressed into a short amount of time with COVID. I think we're seeing that in a lot of different industries and probably none more impactful than retail.Stephanie:So kind of what things do you think won't stick now that we're a year plus past, and a lot of times when change is happening quick, people are like, "Let's just try everything and do everything new." Some things like ordering groceries online, it feels like it's here to stay, people are debating like, will the percentage fall back again? I think maybe it has this 2020, but then maybe the pie grew. So the numbers, I'm not really sure, but what things are here to stay and which ones were just like a fad and we tried it out and now it's like, no, we actually don't need that.David:Yeah, it's a good question. That's a question we get a lot. I'll start with the easy ones that are fun to joke about in light of the seriousness of the pandemic, but like plexiglass and a sticker on the store that you have to queue six feet or 12 feet or however many feet apart. Those are the things that I think will start to fall down a little bit. We learned that hoarding and stockpiling toilet paper was not a cure for anything. So I think some of those kind of applications or behaviors will go away. What we did find though in the joke in the toilet paper is really about the supply chain. And what we found is that brand loyalty across the consumer base shifted pretty significantly, that you no longer were loyal to a single brand, you were loyal to a brand that had what you wanted and we saw a supply chain shortage.David:And that may have introduced shoppers to where they were traditionally brand loyal for whatever reason, the ability to shop around. One of the trends that will see continue is retailers want more and more data about their consumers so that they can offer personalized experiences, and we all crave that. The social shopping phenomenon is here. And we see it in Asia is more prolific than in the US, but some form of that will start to take hold in the US. And so understanding the customers more deeply is a trend that's here to stay. I think you said online grocery shopping, even while we saw hypergrowth, 85% of the shopping was done in the store, so we think some blend of that will stick around.David:I've seen the same stats that say, "Hey, we've reached the peak of growth, it's going to plateau, maybe decline and then bump back up." So I think online shopping, if you think about it as a consumer, so personally if you think about it, the ability for me to create a list based on past purchases or find a recipe and click on a recipe and add those ingredients to my list or to my basket, have somebody pick those items but I still want to pick out fresh vegetables, fresh flowers, meats, whatever it may be, the things I want to look at, touch and feel, how do we create this hybrid shopping environment where I can do the, we'll call it the center of the store shop, dry other things, and allow me to do the edge of the store, the fresh foods and other things, I think there's there's a hybrid model that makes a lot of sense.David:Now, that's a big change because none of the retailers... We didn't design stores that way, we designed stores to, like I just said, center stores, all this stuff, the outsides are all fresh foods, all the checkout stands are right at the front, congregated. I think this notion of pervasive and flexible checkout will start to take hold. I think those are the trends, convenience, less touch, more choice, and knowing your consumers better are the things that we'll start to see that will stick and we'll see those trends either flatten and start to grow again, or just flatten, but become a bigger percentage of the overall.Stephanie:Yeah. It's funny you mentioned about like what things I want to pick out versus what things other people can. I mentioned this a couple episodes back like, I don't care about picking out the flowers, the cereal, that's all fine get what's there, but no one will ever pick out the avocados the way that I want them or the type of fruit that I want. So why isn't half the store just in inventory, just grab it out of inventory for me, and the other half, it actually want to be and see and touch and smell, that's the part that you can actually interact with. So we're thinking alike, which I like.David:Yeah. You're spot on. Are you a cantaloupe thumper?Stephanie:I am, yep. And the watermelon, I want the perfect little dark yellow spot on it. And my avocados, I hope it didn't get plucked from there and mold growing around the STEM. I'm very particular. And I always think when I order from Whole Foods, I'm like, "Should I write these in notes?" No, because they're going to think I'm crazy if like, "Pick out the avocado just like this, and look for this with your watermelon or cantaloupe."David:Yeah. But think about the opportunity there with what you described. So the application that we have allows us to do a lot of customer specific notes. And then if you have control, if you're the grocer and you have control of your experience, so forget about third-party intermediary picking apps. I'll use Instacart as an example Instacart, sends an Instacart shopper into the store, you may or may not have the same shopper. And the Instacart person doesn't may or may not care, I'll say on a relative scale, cares less about the brand itself where you're shopping. But if the retailer had control of that and knew that you, Stephanie, were a high value customer, you love to buy avocados and that was a real differentiator for you.David:If I knew that about when you shop, you could create an experience that you would actually enjoy buying all the products online, perhaps, or maybe they have an avocado cam specifically for you, but those are the connected experiences that we think getting more and more technology in the stores to deliver those experiences is going to be key.Stephanie:Yep. I think that also summarizes the next couple years, because this past year, year and a half or so, people were willing to try, try online ordering, try going through self-checkout, try all the new things. But then now I think we're in a phase where brands need to actually deliver. We were okay with hiccups as consumers for a while there, but now you go in and if self-checkout is not working, I know some stores I know I'm like, "I'm not even going to try it because every time that little light goes off, if I don't put my thing in the right area and I have to wait and whatever it may be." I remember the brands that it doesn't work with and I don't do it anymore, versus certain stores, I know every time I go in and out and it works perfectly.Stephanie:So I think now is the time when brands have to deliver and figure out, "How do we actually deliver that experience to them because they've been willing to be in beta for a little while now, and now we're popping out of that and we're ready for just like a good experience."David:Agree, agree. And to deliver that, if you think about where retail technology had been, anybody that's been in and around retail technology understands that the way we deploy technology in a retail store is antiquated, fairly antiquated. And the experiences that you described are ones that would say, "I have to have modern capabilities. I can't afford to rip and replace everything." And we're taking this run the store approach where we want to deliver outcomes to you. So as a retailer, we want to deliver all those outcomes that you just described. And the more technology you deploy into the store, as you said, the more it has to be available and working. And that sounds basic, but it it's not as basic as you would think. It's not as common sense as you think across the piece.David:Because I can't put a paper sign or a bag over a kiosk and say, "Hey, this isn't available," it has to be available because that's the way that we're interacting and transacting. And so when I look at that, I think we're investing to deliver at scale all the technology in the store. So think about like the dial tone where it just works. The ability for a consumer to come into your store, identify themselves, stand an item, get a total basket, or start a transaction online and finish it in the store, tender it, take payment. That's what we want to deliver to the store as an outcome, as a service. And then the store then, or the retailer brand can focus on, "How do I differentiate my brand? What experiences can I create? Can I create a store within a store or venues within my store? Or what am I trying to do?"David:Because that's really where the store will start to compete. The base technology is not where the store is going to compete, the technology has to be a foundation for creation of new experiences that will be enabled by technology, and a lot of it, we don't what will it be? I don't know. Most of them are likely to be consumer led technologies as they're bringing their own tech into the store, and we have to learn how to deal with it. That's what we're focused on, is getting down to a foundational level, providing that modern architecture without a rip and replace building the bridge, and allowing them to be cloud ready, cloud enabled to take advantage of all the cool things that are happening and all the investment that's going into all these interesting applications that are all consumer facing or social shopping or whatever you want to call it.Stephanie:Yep. That's, to me, the life cycle of technology, when it starts to work is when it's seamless behind the scenes, that's when you know you've made it to then start building on top of it. You don't even notice it's there. What do you see retail experiences looking like going forward to actually have an experience there? what are you seeing brands doing right now that's really cool? What should that look like?David:Yeah. Think about the experience, think about an online shopping experience overall and why you like it. I will say online shopping is horrible, online buying is a good experience. Shopping online, I have to know what I'm looking for, I don't get to see the selection. Maybe I know a little too much about how the content gets served up to me, but I'm not seeing the full selection or assortment I made. There may be something I like that they don't think I like. So there's all these things that happen. But why you think online buying is such a good experience is because you know who I am. I walk in, "walk in" to your store, and I say, "I'm David Wilkinson. I am here."David:Also, I'll give you permission to see everything I bought, and then you have the ability to say, "Oh, based on everything you bought, these are other things you might like," and serve all that, a package it in a way that makes it a good experience, put it in a cart, and then I also have given you a form of payment that I've told you that you can keep and use for anything that I shop in your store for digitally. And then I transact and then you deliver it to my home frictionlessly. Now, take that and say, "How do you create a great shopping experience?" Take a lot of those attributes of online buying and then physical as you described.David:Let me grab the avocado and make sure it's just soft enough but not too soft, let me thump my watermelon, let me look at the meat, let me look at the flowers. Let me take in the full cereal aisle to see what's going on. I love chocolate, but I don't know if I want milk or dark, but I want to experience that in the store, but allow me to see... If I put a box of Rice Krispies in my shopping cart you might ask me, "Do you want marshmallows?" Because maybe you want rice crispy treats, as a cross sell up. So, deliver that to me dynamically in the aisle on a mobile app.David:You've got my store payment form. I've got all these scanning items in my cart, real-time building that basket real time, and then allowing me to pick up some things that I had you pre-picked for me, that I ordered online, or I may just do pervasive checkout where I'm using computer vision RFID or some other form of sensory fusion to create a basket that always knows what I bought. So the notion of creating that online experience, but with all the goodness of what you could create as a brick and mortar retailer in the store and removing that friction is what the experience of the future looks like. We're not that far from that. That's not a, "Oh my gosh, that's a 10-year vision." We could deliver that tomorrow. It's a matter of breaking down some of the traditional thinking and some of the traditional barriers that occur within retail technology today and then getting the consumer engagement that would drive that.David:So that's the way I see the experience of the future, is a nice blend of all the convenience of online with the greatness of an experience in a store.Stephanie:Yeah. I love that. I think that's also why it's important to take a step back from your industry and look around at like what other tech companies are possibly doing and seeing how other things are being created and being experienced, because I think when you're thinking, this is what the store is, and here's my capabilities, it's hard to think outside the box. Whereas just when you were talking, I'm like, "Wow, how cool would it be to... " People go there to experience things, they go shopping to experience things, and maybe people still want to see shelves, but do you actually need a shelf? Can it be a virtual shelf? Can it be a mix of AR or VR where you just look and you can see all the new brands popping up, you can still feel like you're experiencing it.Stephanie:And then you just tap a bunch and you can have a little bit of both while also the productivity of like your car getting filled on the back end behind the scenes and you're ready to go, because you might not need to see the different types of bone broth on the shelf, but you won't actually see them, but you don't need to be collecting them yourself. And I think yeah, always thinking outside your industry is a way to start feeling that out and seeing new innovations and then rethinking the entire way that retail operates right now.David:Yeah, I agree. I agree. I think it's a lot fun. And you think about those experiences that you have to create and the state of the labor market, it requires more labor in the stores to deliver a lot of those experiences. And we're in a labor crisis where labor rates are going up, unemployment was at a low, but now it's hard to read the unemployment stats because it's more of a willingness or want to work at this point and more labor hours required in the store. I think technology will be the key in getting some of that back. I love the AR, VR. Allow me to build a list outside of the store, whether I'm going to buy clothing, go to a convenience store or to a grocery store.David:You could have a list and shop through your mobile device in the store and it points out where you go and it could point out other like items. There are so many fun things that we're going to be able to unlock with technology and data and the consumer willingness to opt into that if you're creating value for them.Stephanie:Yeah. I sometimes also like to look at the startups who don't have barriers to enter the markets, the ones that can just start a little guide shop type of maybe grocery store or whatever it may be and they're like, "I'm going to implement this store in like a tech-first approach. And it's going to be small, but it's going to be like this." Do you see anything like that right now where you're like, "Whoa, these companies are doing things in a very different way and it could either fail or be really cool"? And you don't have to name names if you don't want to.David:Yeah, we're seeing it on both. We do obviously a lot of research around what's happening on the tech side of retail, and I'll collage together a couple of sources and I'll tell you that there's $100 billion of investment going into retail tech startup is proclaimed to be retail tech startup. Forget about anything that might be on the periphery of that around could be any AI or ML or inventory. It could be some other things. So there's a lot of money and there's a lot of really interesting things happening. Yes, we're seeing that anywhere from retrofitting in-store lighting to create a platform for AI where you can do camera and tracking and you can do facial recognition or gait recognition, store tracking and close the loop with a point of sale system.David:Really interesting things happening there. On the other side, there are a lot of startup retailers. If you and I just sat in a room and brainstorm and said, what do we want to build as a store? We wouldn't be forced to this paradigm of what a convenience store or especially specialty retail store or a grocery store look like today. Why do I need a fixed point of sale? Why do I need these other things? And so we're working with a small startup out of South Carolina that's creating this concept of drive up grocery. They're looking around watching the pandemic, fast food and quick service restaurants do a great job, buy online, pickup in store. No inside shopping. And so we're helping them with the tech. We're going to run all the tech for these stores where they effectively have a dark store that they either order on an app or they drive up and you order on a tablet and they have to pick it quickly, so they have to know inventory.David:So I look at these things and it's fun to watch. They have no barriers, they have no paradigm that they're trying to break. They're just charging forward with a need in the market and how they're going to approach it. So, yeah, we see a lot of that. We see a lot of that around computer vision, we see it on the tech side, we see a lot of that around what's happening with a AI and ML. We're starting to see a little bit more of that around payments and alternative payments with things like crypto. So there's just a lot of interesting things that we see happening.Stephanie:I would think the one misconception a lot of people have too is that retail is dying or dead. And a lot of influential people have said that, and maybe they're retracting that statement now, but what I think is cool to watch is the type of retailers that are opening up. You see a lot of discounters opening up right now way more than maybe in the past, which is an interesting trend. And then you see these very luxury, maybe not too luxury, but B2C brands also only focusing on what experience do you get by coming here? So what do you think around those two types of industries opening up more retail locations this year than before?David:We serve those discounters all around the world and that's not just the US trend, we see that happening in all parts of the world. And I think convenience growth is also... I just this moved to convenience, smaller footprint is a big trend, and I really think it's about that last mile and accessibility. And so, all the discounters will tell you their growth numbers are off the charts. The way I think about that is they have a critical need for data because they have to understand, they're not obviously carrying a full assortment in that store, so they have to understand their demographics. They have to understand that past purchase history of that municipality or wherever they're located. And they have to have probably technology solutions to deploy potentially the order in the store.David:So I think there's a good blend there as the retailers are going to find the discounters that they're really all about location and proximity to their customer base and serving a need that people want either in between a big grocery shop or going to the big box retailer, the ability to just do quick top-up trips for certain items, I think is where they're going to make their names. And I think that they're seeing a tremendous success as evidenced by their growth and the industry. The luxury brands are interesting, or even maybe not the luxury brands, but you see other in a lot of sporting and fat sporting fashion, and other things where you have the home fitness craze or the virtual fitness craze is taking hold, but so many of those things are experiential again.David:So instead of a story, you think about just creating an experience center that allows you... We saw that, Apple started that with their Apple stores, they were very experiential, Tesla had done something very similar, no big surprise, the same person helped design and develop those two stores. But when do we think about that, if you look at what Kate Hudson did with her brand and partnering. So there a lot of interesting things that are happening around creating experiences around retail at those higher end, or call it more luxury brand goods, it's a blend of, "Hey, I have this subscription content and a complimentary set of retail items that you have to somehow bring together."David:And that's a hard thing to do online. I think that's what we're seeing. I think you'll see more of those pop up. And I think we're seeing more of the traditional retail, the older school, especially retail, either collapse or consolidate, and you're seeing a lot of those newer experiential brands pop up. So I think it's a trend that will at least be here for the next three to five years.Stephanie:Yeah. I agree. I'd love to start seeing case studies around these people, they came into the store, their experience is golf store, whatever it may be, they played on in this camping set with their kids, and then it attributed to this many sales. That's what I'm hoping to see over these next couple of years. I think the experience is where it's at, but I also know a lot of people do, maybe even myself who would just go in and have a good time and be all right, see you next week. And so it'll be interesting to dig into that data eventually and see, is the ROI there of having a full-on experiential store or is it more from a branding perspective or how do you even view that from a financial person?David:I think you said it, well, you have to be purposeful in how you do that. You can't just say, "I'm going to pop-up a traditional retail model, and it's going to be experiential." To your point, I think you have to set out to say, "I'm going to create this experiential store. It's got a different footprint, a different look and feel, a different set of technology capabilities." Because you may or may not be catering to the client that's going to buy online. If you look at a clothing store like Bonobos, who has a showroom store or showroom store, you don't buy anything. There you go in and you try things on for fit, feel, you can touch and feel everything. They have one of everything and they have a bunch of different sizes.David:And then when you go to order, all they're doing is ordering online and then they've got your account and you can order online. So I think that's a good example of somebody that has done a great job of creating an experience. And then that also solves the returns problem on the flip side of the econ equation.Stephanie:The other thing that I wanted to talk about with loyalty programs, because I think you've talked about this in the past and I know a lot of companies always try it, and I can think about the ones that actually, I remember that worked well for me, Nordstrom Rack is one of them, I think TJX one's sometimes hard to find where my dollars are, but at least I know that they're there. And then other ones that just don't work well, certain grocery stores where I'm like, "Why do I keep putting my number in here? What am I getting from this?" So how do you think about loyalty programs? How should they be created and how will they work over the next couple of years?David:This is going to get back to data and the ability to do personalized shopping. Some of the research that we look at, and I'll look at things that are 50, 60, 70% of consumers are willing to provide data or willing to give data if they get value in return. I know that seems like a loose equation because value is different to your point from the eyes of the beholder, but I think it has to be a more personalized program like you said, if I'm just going to enter a phone number in and that's going to drive a discount off a price, that's just not going to be good enough anymore.Stephanie:What if it's not clear, if you're like, "I put my phone number in, did I get anything?" You're looking at the little register and you're like, "I don't see any discounts, what am I even building up to? I don't get it."David:Or offering you something after the fact like, "Hey, you made these three purchases, here's something off your next visit." I think there's going to be such a competitive marketplace for people creating personalized experiences. Now, think about social, if you're on the clothing side, like you're talking to those high end brands, the ability to plug into social networking and create a loyalty program that either would reward somebody for expanding their network or influencing your products or the ability to buy through social channels when you see I want input from people that I would view as either my peers or people like me, how do they like reading reviews, other things, information's at their fingertips.David:So I think that kind of information with your personal data, with social interaction is going to be key. But again, I think loyalty programs are going to come down to more of what we talked about earlier around the online experience, creating more of that online experience, where I give you permission to create an experience because I don't want the friction. I want you to know who I am, I want you to know what I like, I want you to be able to recommend things that, and I want the best deal at the time of purchase. And I want you to respect my loyalty to your brand in the long term, and then I want to reduce all the friction.David:So to me, that's bigger than a points program or enter your phone number, and I'm going to track your purchases and may or may not give you a discount. That's creating that 360 full view of your consumer and really truly understanding them.Stephanie:Yeah. And I think it's also, it's okay to interact with them more than you think if it's done in a way that's purposeful. I think that's the interesting thing is you see the brands that you don't ever hear from and you're like, "What am I even doing here?" And then you hear from the brands that just give you random offers that maybe never incentivize you to do something. And so I think there's a sweet spot where a lot of brands now are leaning into that the more, becoming a media company, having their own content, creating this all-encompassing experience and figuring out how to do that in a way that actually drives the results, will be the way of the future.Stephanie:But I think still brands are having a little bit of a struggle around trying to figure out like what that looks and what incentivizes people to want to act and interact with your content or your texts or whatever they need.David:Right. And like we said, in Asia, it's probably a little more ahead with some of that social commerce and the gamification of both social and product recommendations and loyalty. So some form of that will take hold here. I was trying to think of an example of who is doing it really well, nothing just pops into my head. So we'll skip that.Stephanie:We can skip that then. Yeah, no worries. For anyone who listens to the show, they know that I love to always try and talk about crypto when I can, for whoever is willing to do that with me. And so I wanted to hear from you since I know you guys are obviously the payments space and you're probably watching what's happening in that realm all the time, I want to hear your thoughts on how crypto is going to impact retail and specifically around payments.David:Yeah. I love to talk about crypto too, so I appreciate you bringing it up. I think that it's obviously a very hot trend, there's a lot of trending news happening around crypto. Some of them good, some of them bad, whether it's the hype that Elon Musk creates around things those Dogecoin or Bitcoin on Saturday Night Live, you can follow the trials and tribulations of that. When you get to the underpinnings of the applicability of that and the desire of people to participate in alternative payment form that has less, we'll call it less fees or less cost or more direct access, or feel they have more control, I think that's where we're seeing a lot of uptake in cryptocurrency.David:I just read some studies this morning that talked about cryptocurrency holders, 51% of crypto holders are very likely to use cryptocurrency at retail if they would accept it. So you think about, okay, how do we accept cryptocurrency in a retail environment? We did a demo pre-COVID, whatever, I think that would have been 2020 January at the National Retail Federation, their big show that they have in New York at the Javits Center every year, we actually had a cryptocurrency demo where we said, "We're going to help serve unbanked or underbanked cash economy. How do they participate in the digital economy?" But we had our cash acceptance, think about a self-checkout that has the ability to accept cash.David:We could take that cash. We partnered with some companies to convert that cash to crypto that would be then stored on a cloud wallet or a mobile wallet, generate a QR code, and then we shared it. It was a short demo line, and then we effectively go to the point of sale and purchase something with cash that we had just turned to crypto, scan a QR code at the point of sale, a very simple execution of a lot of elegant and complex things behind the scenes and new thinking. So I think we will see more and more crypto applications come up in retail. And for us as NCR, whether it's moving from cash, to still some checks, to credit cards, debit cards, tap to pay, Apple Pay, mobile wallets, crypto, we want and need to, based on what our mission is, to be able to serve your payment needs from cash to crypto.David:So we are absolutely investing in both partnerships and organic technology that is around crypto, we think again, whether it's payment or some other disintermediation using the underpinnings of what distributed ledger would bring to just ease of payment and security of payment, and again, value stream of payment. There is a there there, either work to do to define exactly what that means, and then consumer adoption is a bit of a wild card, which of those will take off.Stephanie:Yeah. But I think once again, it highlights when tech goes behind the scenes, there will be a place when we are transacting and we don't even know really what's behind the scenes and operating that. Even for now, thinking about Venmo, what actually goes behind the scenes to make all of that work, I think there will be a place when people go in and transact, and maybe it is utilizing crypto, but you don't really know how it's really working, you just know that it's fast and you don't pay fees on it, and it just happens, and it just works. And same thing around financing, these companies that you need to finance things, there'll be a much easier way to do it, whereas you can enter into it quickly and you can see your contract quickly and get out of it when you need to.Stephanie:And right now it feels like a lot of friction around that still, and especially for developing countries, like you said, who don't have banks to rely on or can't rely on them because it is a little bit volatile or whatever it may be. A ton of opportunity that I see disrupting and getting to a place where you don't even know what's behind the scenes powering essentially everything.David:I think you're right, there's a broader education that has to be done because crypto is not about nefarious criminal activities and I'm a money launder or in some illegal trade that I don't want my cash to be seen by the government. That's not what it is. There a lot of regulations, a lot of usage around KYC and other ways that are protecting those assets there, a lot of backing that's being done, you see things stablecoin. The volatility of the value is obviously a big myth, we joked about at the beginning, it's up and down, up and down. But getting asset back, tokens and stablecoins will start to create the ability to leverage distributed ledger in the way that it was meant to be, where the chain of custody is always known, the assets itself hold their own chain of custody.David:You remove all the intermediaries and all the middle people, clearing houses and other... It's going to free up the world of payment in some way that we'll see that more, call it a democratization of the payments infrastructure that I think will be interesting, that would be part of it.Stephanie:Yeah. I like watching it. And the only time I get a little hesitant is when I see entities creating their own coins or governments being like, "We're going to be issuing crypto however," it's backed against, I'll just make it up the US dollar or gold or whatever, our currency in this country. And that's where I'm like, "Oh, I feel like you're taking idea of decentralized and you're completely doing the wrong thing with it and it's turning back into a centralized function." And that's the only point that makes me hesitant, but also I know that maybe consumers would hear that it's backed by the US dollar and be like, "Oh, that one is a better bet." Whereas if you actually understand where this tech, even maybe people don't know who created it, but where it even started and the ideology behind it, is not to tie it to a centralized in it, but we will see.David:Like do that then you just recreate the payment system. Probably not worth it.Stephanie:No. All right. Well, let's shift over to the Lightning Round. The Lightning Round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you ready, David?David:I am ready.Stephanie:All right. Hard one first, what one thing will have the biggest impact on ecommerce in the next year?David:I think I'll call it ubiquity of buying online and picking up or delivery anywhere. And so solving, how do I get it to the home at a cost-effective way? How do I manage returns? Or how do I combine that experience of in-person and online? However we define that or whatever that looks is going to change the face of ecomm or commerce.Stephanie:Yup. If you had a podcast, what would it be about and who would your first guest be?David:Wow, It's going to be totally odd. If I had a podcast, it would be about fitness. And I love to do CrossFit, and so it'd be fitness podcast, and I'd have a CrossFit athlete like Travis Mayer or Mat Frazier or somebody on there.Stephanie:I like it. What are you secretly curious about?David:It's funny, it's not overly secret. I think about what the conversation we just had about cryptocurrency. I'm fascinated by cryptocurrency and the underlying applications of distributed ledger across everything from supply chain to the world of, call it finance or micro lending, or just the stock market. A physical stock certificate is no longer... In distributed ledger worlds, you no longer need a physical stock certificates. So I'm fascinated by that. So maybe more fascinated than secretly intrigued.Stephanie:Yeah. I love that. I always keep thinking about smart contracts and especially going through and buying a home and being like, "Why am I still trying to verify that no one from the 1920s or whatever owns this home, that's ridiculous. Why don't we just put this baby on Ethereum or Cardano and call the Dai." There's so many of this.David:The home knows it hasn't been owned.Stephanie:Yeah. It should know that we don't have, we don't need to ask and pay $3,300 in title insurance to make sure that no one else owns this title. That's crazy.David:It is. I agree with you. I agree with you. So I'm interested in how we unlock all that goodnessStephanie:Yeah. When you want to feel more joy, what do you do?David:I spend time with my wife and my daughter and our dog. So I just hang out with the fam.Stephanie:I like that. And then what one thing do you not understand today that you wish you did?David:Wow. That may be the same answer to what I'm intrigued with the cryptocurrency, but I'll go a different route. I don't understand why I can't hit a golf ball more straight, and I would love to understand that. I would love to understand that.Stephanie:I wish I could help you with that, but I just attempted mini-golf with my three-year-old the other day and it did not go well. And I was like, "I shouldn't be teaching you. I think you're doing better than me." So I hope you figure that out on your own.David:Yeah. I do too. I do too.Stephanie:The last one, what's up next on your reading list or on your podcast queue?David:It's funny I don't have it with me, but it is a book about, it's not a crypto book, but it is a distributed ledger of financial book. I don't remember the name of it, it's probably not overly interesting.Stephanie:Is it new?David:It is new. It's a 2020, 2021 book. Stephanie:Digital Finance: Security Tokens and Unlocking the Real Potential of Blockchain.David:That is it. That's sitting there waiting to read. And then it's funny, the other book that is next next on my list, and I'm old school so I have real books-David:a book called From Cotton Picker to Store Keeper. It's the story of the Brookshire's grocery company. So a Texas company at Tyler, Texas, but it's just a store. It's a family-run store that has a grocery chain that has survived and continues to thrive and grow. And so it's just an interesting read Stephanie:All right, David. Well, it's been really fun having you on the show. Thanks for sharing all your insights and hanging out with me for a bit. Where can people find out more about NCR retail and yourself?David:Yeah. I would just go to our website, ncr.com and you'll find about us. And then for me, I'm on the old school social media of LinkedIn. We do still a lot of posting through LinkedIn, it just works for us. So you'll see more thereStephanie:I'm on LinkedIn, it's not that old school. Cool. Well, thanks so much for coming on and joining us.David:Yeah, my pleasure. Thanks for having me.

The relationship between a brand and an influencer is a two-way street. And even though that sounds obvious, even the most successful brands and influencers are struggling to see ROI from their content.Tessa Barton, AKA Tezza, has experiences on both sides of that spectrum. She is an influencer-turned-entrepreneur, whose company — also called Tezza — has seen its ups and downs in the five years she's been working on it. On this episode of Up Next in Commerce, Tezza explains how she went from cold reach outs to Urban Outfitters to leveraging a following of more than a million people to building a company all on her own. She discusses how both brands and influencers should be thinking about putting their best foot — and content — forward and what kind of creative and distribution process has had the most success. Plus, she talks about the lessons she learned when she launched her very first product expecting immediate success and then being able to count her orders on one hand. She turned things around, though, and you'll learn how she did that and more on this episode!Main Takeaways:Show Em What They're Working With: In a world where everyone wants to be an influencer, brands need to know that whoever they invest in will be worth it. With brands being more scrupulous, the smart content creators and influencers are being more proactive and showing exactly what kind of content a company will get when it partners with them.Only One DM Away: Thanks to the myriad of platforms and channels companies operate in, there has never been a better time to get in touch with them on a one-to-one level. This connectedness is a mutually beneficial scenario because customers, potential partners and brands are all only one message away from forming a lasting relationship.Talk Their Ears Off: Even the biggest influencers in the world can't just come out with a product and expect to sell out in the blink of an eye. Selling is a constant action, and whether you are a brand or an influencer, you need to constantly be putting your products in front of people, talking to potential buyers, gathering feedback and data, and pivoting as necessary. Then you have to do that all again.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone, and welcome back to Up Next in Commerce, I'm your host Stephanie Postles, CEO at Mission.org. Today on the show, we have Tezza Barton, the CEO of Tezza and the Tezza app. Tezza, welcome.Tezza:Thank you. I'm so excited to be here.Stephanie:I'm excited to have you. I think this interview, I'm just going to be saying your name a bunch of times, should be very interesting. You'll be like, "Stop it."Tezza:It's very confusing, I'm sorry.Stephanie:I like it and I actually think its branding is on point. I want to hear a bit about your background, because I was looking through your social presence and the things that you're doing. You obviously have a very big following, I think on Instagram definitely over a million, right?Tezza:Luckily, yes.Stephanie:You've got a lot of fans, a lot of fans of Tezza. So I wanted to hear about how you got here and what was that journey like.Tezza:Totally. Where to begin? I grew up in Salt Lake City, Utah, so I loved just living in the outdoors, being really close to nature. My entire family is full of just artists and creative people, so that was just always something that I was lucky enough to be in front of and around and welcomed by. I think as I got older, I didn't really realize how special that was and how impactful that would be on my life, and how a lot of other people just were turned away from that. This was a really beautiful experience, both my parents were entrepreneurs and started their own businesses, so that was just like what life was to me.Tezza:So I was super lucky, and I remember when I was 16 I had this just, I was like, "I'm going to be a fashion designer." I really was so obsessed with fashion design and creating and selling all my own looks and things like that. Then I picked up a camera to shoot the looks I was creating and I was like, light bulbs went off, "This is amazing, I can actually capture so much more than just the clothes, but the storytelling and all that stuff." Which really got me excited, and from there it was like an explosion in evolution of just figuring out who I was as an artist and creator. I did go to school for fine art and photography, where I really dug in and learned more about just ... I guess honing in on my skills.Tezza:That was right about when the whole Facebook, Instagram boom came about. So for me, I was blogging since I was 16, I was always on I guess social media in some way trying to create, just to get my work out there. I honestly was using it as a portfolio, a way to get clients, a way to just be seen. I think I was super lucky, I remember feeling like, "Gosh, I don't even have to have a website, as a 16 year old, I can just post it on Facebook and people see it and people want to interact." So that just became the way I worked, and in college, Instagram came out and really my dream was to work with all these amazing brands. So I was like, "How can I help them create content?" No one knew how to create that much content.Tezza:So I would just message local brands and I was like, "How can I be your just main photographer? I'm going to help you create 60 different pictures that all look different that you can have this awesome Instagram feed." So that became my side career while being in college and playing in a band and all of this stuff. So I used that as just a way to build also a following in the community, and people often would talk about my page as like a TV channel. They're like, "This is like a series. I can't wait to get the next series that comes out." So I used it as a professional and just a personal platform, and not necessarily using it as monetizing to work with brands, but more as just a photographer.Tezza:Then I remember I was like, "I'm just going to move to New York." My husband and I were like, "Let's just go, we have no reason to go, but we need to go. I don't even think at that time the word influencer, it wasn't a thing, but that's really where I just saw like, "Oh, wow. I can actually work with these brands. I can get them to hire me as an individual." I really just loved the storytelling, that's what I wanted to focus on, so I leaned in and decided I was going to use this and try and monetize my Instagram, if you will.Tezza:That was the beginning of where we are now. So it's just been an evolution since then, but I can get into I guess, why and how we started the businesses from there. But that's the gist of the story.Stephanie:I love it. So in those early days, how did you convince brands to work with you? I imagine you being in New York and just going to a brand and being like, "I have a great Instagram, I've got some good followers, pay me." What did that process look like and how did you catch the big fish in the early days?Tezza:Totally. I remember, and I still do this to this day, I'm not going to lie, but I remember the first big client I really wanted to get was Urban Outfitters, this was back in the day. I was like, "I just know I can create the kind of content that will not only sell their products, but my audience would just love and be attracted to." So I would basically buy their products and I would create, I would go so hard and create amazing content that I knew they would want to see, and I would email it to them, I would tag them, I would DM them. Finally, after months of doing it, they were like, "Oh, my gosh, yes." Then all of a sudden they were hiring me every single month to create for them.Tezza:So that always has been a part of my strategy, even with high end brands like Michael Kors or whatever. I think just as an individual or creator showing what you can offer a brand, what you can provide and why you'd be a valuable asset to them, whether it's amazing imagery or you can drive sales or you're just the biggest fan in the world of the brand. Those are all tactics that I think brands actually use and look for when hiring creators and influencers.Stephanie:Yeah. I like that, show value up front. So with this much content that you're creating, especially thinking about sending samples of what you can do, what does your creative process look like when coming up with these campaign ideas? You were talking about banging out six feet of photos, that all look different but have a similar theme and really sell the product. What does that story-boarding and creative process look like to be able to come up with something that connects with people and also keeps the brand's image at the forefront?Tezza:Totally. I think, look, I'm somebody that likes to consume products and most of the time it's because an image captures me and I'm like, "I want to look like that. I want to feel like that." So when I'm about to create any kind of content, I take a step back and I'm like, "What story am I telling? Who's this girl? Where is she going? How is she feeling?" Whether it's a personal project or I'm creative directing a campaign for another brand, because I think those can be a little bit different.Tezza:But I think if you can take something, just even a little bit of the extra mile and do a little more storytelling than just standing on a blank wall, which also that can drive sales too ...Stephanie:That can be so vogue. I have no idea, do not ask me.Tezza:That was a great line. It really can. I think there are so many ways, but I think the one thing I notice and the reason I ever started to really even become, have any sort of traction or growth, is because I definitely lean into just the storytelling aspect and making a piece of content that lasted a little bit longer than just that five seconds of scrolling on a feed, but somebody might want to repost it, somebody might want to recreate a picture like that because it made them feel something. It lives on Pinterest, that's how I focus and think about my content.Stephanie:Were you also focused on distribution? You can make these great pieces of content, but how did you get it in front of the people that they wanted to? Was it just focused on your following, or were you trying to find new ways? Like Pinterest, maybe you weren't there before, you're like, "I'm going to go here, I'm going to try YouTube." What did that look like to really get that content out into the world in a way that could potentially go viral or scale?Tezza:Totally. I think if you can be on as many platforms as possible, you should. It's definitely difficult, I even struggle with it myself, but I use my blog and Pinterest were a huge, huge way of existing and growing my audience outside of just Instagram. Because so many people would be like, "Wow, I discovered you on Pinterest. I didn't know that was your photo, I've been seeing your blog over here." So I think having the conversation, TikTok is an amazing way now, YouTube is an amazing way now. On top of that, I think another amazing thing you can do is collaborate with other creators and influencers. That is huge for just combining audiences and being able to share each other's audiences and messages and build your own brand.Stephanie:Yeah, yeah. I love that. So when thinking about these big brands partnering with you, I always ask the brands, "How do you think about ROI with influencers? Do you think it's worth it? How do you find an influencer is good for your brand?" What's nice about this conversation is it's on the other side of the table. So I want to ask you, how do you think about working with a brand, what's a good partnership look like and how would you advise them on thinking about is this going to be a good fit, will you get the ROI that you want?Tezza:Right. I think ROI, that's always the hot topic, the hot conversation, but there are so many different ways to think about using an influencer. It's like when Doritos does a commercial on the Superbowl, obviously there are so many things that does. Vibe, culture, conversation, visual, you don't know how many people are going to go buy Doritos after you watched that commercial. But I think the benefits of using an influencer is that you're hitting personal, usually an influencer's community is pretty personal, they've stuck around for hopefully many years, they trust that person.Tezza:So I think you're hitting those trust points, and I think personally the most success and the best success in conversations I've had with brands as an influencer is when, even if I'm the biggest fan of a brand and they just send me an email and they're like, "We just want you to post, here's how much it's going to be, here's the brief, done." I'm like, "Okay, cool." But if a brand sits down with me or has a phone call and they're like, "This is why I love my brand and this is why I think you're going to be a good fit, and this is why I'm passionate about this project and this new thing that we're launching." I'm so hyped, I feel so much more connected to that brand, I'm going to spend 10 more hours on that piece of content than I am if it's just too quick and there's no heart in it.Tezza:So I think just as a brand, if you can find influencers that not only love your product and want to talk about it, but actually connecting with that person, that partnership is going to ... It will just go longer and they'll talk about you even more after than when you just pay them, because they're excited about it too.Stephanie:Yeah. I love that. That's such a good idea. How do you pull in whoever you're working with so that they have heart in it? It's not always just about the contract and the hours, all that. People will probably go the extra mile if they've personally committed to it. I know when I was talking to someone from Anheuser-Busch on this show and they were talking about a partnership with Travis Scott and they were like, "He's not just an influencer, he's shaping the product. He's shaping the creative and he has a very vested interest in this entire campaign. It's not just him posting once on Instagram and then walking away." It's a whole thing, and that to me is what you want. I don't know if enough brands think of it that way and think of the longer term benefit and have actually pulled in the people that you're trying to help spread the word in a way that's meaningful to them.Tezza:Totally. I think another example of that, and this is a brand that I've worked with for many, many years and we built just honestly the trust, kind of to what you're saying, I think it's actually using an influencer as a creative and a creative director. I worked with TRESemme for so long and my content always performed really well, they loved the direction I took things, the amount of time I spent on things, and so after a few years, they started to hire me as a creative director and photographer for the brand and I got to shoot other influencers for their campaign. That became a bigger part of the story, they helped tell that story.Tezza:So I think, think outside the box. Use these creative people to your advantage, because we're sitting here. That's more exciting than just a quick post, and I think everyone's just craving just personal touchpoints right now, so anything you can do like that is going to be just a level up from just a post.Stephanie:Yeah. What did that look like behind the scenes with TRESemme when you were acting as a creative director and you were behind the camera, instead of making your own posts for them? What did that look like?Tezza:So much fun, not going to lie. It was a blast.Stephanie:Sounds fun.Tezza:Yeah. I think we had six different girls and I got to help choose the influencers and really come up with different imagery that would bring to life not only the TRESemme content, but the influencers' content. So I think because it was coming from also the influencer side and not just the brand side, there was so much more value in thinking about it that way and really trying to bring to life two different brands. Influencers basically have their own brands, so I think finding that storytelling is really where beautiful things start to happen.Stephanie:Yeah, yeah. Very cool. Which brands to wish to work with in the future? Are you hoping to one day partner with?Tezza:Oh, gosh. Way too many, so many brands.Stephanie:We've got to put it out there so the universe answers your question.Tezza:Yes. No, totally. I think personally, I would love to work with ... I did a small campaign a couple years ago with Canon and I'm a Canon fanatic. I love cameras obviously and I used their products for years. So when I got that campaign and I got to use a new camera coming out and I got to create content that was going to be in a photo gallery and all this stuff, it was such like, "Wow, this is my dream collaboration." So I think working with not only just camera brands that I love, I would love to work with Fuji or anything like that, but also working with just artists.Tezza:I would love to work with, I don't know, like a musician. I think it would be so fun to be like, "Okay, I'm going to come up with your next music video and Instagram strategy and let's get into it and get creative." I just love that kind of stuff, so anything like that would be a dream. But real, real talk, my dream would be like Gucci, okay?Stephanie:All right, it's out there.Tezza:It's out there.Stephanie:... Will be next, now you've put it out into the universe.Tezza:Yes.Stephanie:Let's jump over to Tezza now, I want to hear about your company, I think it's super interesting hearing how you built up this following, you have a lot of people who like your work, they love your creative direction. Then you go and you create an ecommerce shop and then you create an app and I want to hear what was that process like going from building a community and focusing on that to them being like, "And now I'm going to build a full-on ecommerce business and app."Tezza:Totally, yes. So many mistakes, I'm like, "How do I even get into the beginning of it?" I think for me, I wasn't setting out to be an influencer or just even an entrepreneur, but I always just loved ... I had this motto, which was the art of life, that was like, "This is my goal in life." Because I grew up in this family of creatives and people that always were supporting my art and helping me fuel my art, I felt like, "Gosh, not everyone has this opportunity and I want to do that for other people."Tezza:So I want to inspire everyone to find their inner artist, because I feel like everyone is creative, everyone has the ability to create art, but they don't always know that. So that was like my mission, and so then everything that came after that was to support that idea. I was fortunate that every product we've started has been from actual interesting questions that we were getting, it wasn't like I was like, "I have this random idea and I want to make a thing, so let's just figure it out." For example, our first product we ever launched was our collage kitsTezza:That idea, when we started, it was not there, it didn't exist. But so many people, we had so many images on our walls and they were like, "How did you do this? Where do you get these cool pictures?" I was like, "Wow. I take all these pictures, I could create this kit." So that was my first physical product ever and wow, we had no idea what we were doing. We just called a printing shop in Wisconsin, we were just trying to figure it out, we did it all out of our studio apartment in New York. The interest was there, when we announced what we were launching, people were like, "Oh, my gosh. This is genius."Tezza:I was like, "Yes, we're going to make a lot of money. This is going to be amazing." Then we put it up on the site and we got like two sales. We were like, "Okay, so this is a horrible idea." It really was a lesson that just taught me so much that I implemented ... It was just like, "Wow, you do have to talk about something so many times." It doesn't matter, even if you're an influencer, even if the interest is there, you just have to talk about it. You have to get it into the right hands. You have to constantly be presenting the idea. Especially now, I think we're inundated with so ... We're seeing so many products all the time, so how are you making it personal? How are you telling the story? What is the product? Why does somebody want it? Why is it going to benefit their life?Tezza:So that really, after doing it for two years in our apartment and making all those mistakes, we finally found crazy success with that, after grinding away at two years.Stephanie:What did you do? How did you go from having two sales and you're like, "Wah-wah," to then finding success with it? Because I can tell now just by looking at them like, "There's no way you're not selling a bunch of these." Collages are so on trend right now, everyone is trying to collage walls with the pictures and then trying to organize it. I tried to do it, it literally took me a week and I was this close to giving up. So what did you do to hit success with that?Tezza:I think like I was saying, just talking about it way more than we thought we had to. I didn't know how it worked, I never have run ... I didn't know you should be doing email campaigns or I should be ... That every person that is interested in DM-ing, I need to be DM-ing back. Really supporting the community of it and helping people, just making it an easier part of conversation, and then also just getting it into the right hands and having those people love it so much that they want to talk about it, that's always been influencer marketing.Tezza:An influencer, I say that, I think everybody's an influencer. You could have 10 followers, and heck, you might be influencing those 10 people major. So all of a sudden [inaudible], but I think how can you have those organic conversations and find people that are actually interested? The second we did, it circulated and circulated, and circulated, and we never really had to ... We don't overthink it now, but I think that was a really interesting learning process. On the flip side of that, we launched the app, it's been I guess a little over two and a half years now, so two and a half years ago, and that was a similar product where we launched that out of just interest.Tezza:I was a photographer, I really had a super specific aesthetic and so many people were like, "How can I do this? How can I be a better photographer?" So I was like, "I want to be able to help everybody do this. How can I?" I could sell my lightroom presets, which I was doing, and I had great success with that, but it was so limited to people that I could reach and I was super lucky that my husband was a developer. So we were like, "Let's just sit down and see if we can build an app." We were two kids in a studio apartment, who knows what we were doing? But after a year and a half at midnight grinding away trying to figure out how to build a photo and video editing app, we finally got it up to work and it was so raw at the beginning.Tezza:I remember when we launched, it had so many problems. It's such a different product than an actual physical good, but equally you have bugs and you have just a million types of phones that it has to work on and all of these things. So it was a very humbling process, but I think we've benefited, because we knew who our consumers were and what they wanted and I had built such an honest and real relationship with that initial community that wanted the app, and so they were willing to work with me and we worked through the bugs, and that's still how the app works today and we were really able to grow it because of those initial core people that just wanted it and thought it was amazing and were willing to get through the mistakes with us.Stephanie:Yeah, yeah. That's nice and it's good to have a community that is willing to chip in like that.Tezza:Yeah.Stephanie:You get the Tezza app, which is a photography editing app, and you've got Tezza which is an ecommerce shop, how do you think about uniting both of those and sending traffic both ways potentially, or not at all? Do you keep them as complete separate companies and use cases? How do you view the branding on everything you're doing?Tezza:Totally. Just to be honest with you, it's been I feel like a quick five years where I'm like, "Wow, we just did so much." We didn't have time to think, we were just building and doing stuff that we wanted to make. All of a sudden, last year was a very important year for us and in a way grateful for everything slowing down, because we were able to take a step back and be like, "Okay, what are the brands that we're building and how do they work?" So now, we are really passionate and excited about combining those two brands together and really focusing on having art in the physical and digital space, and really just helping and inspiring creators, whether it's making your home a more inviting amazing space, or you're able to create really amazing artwork and be an amazing creator by using the app.Tezza:Then on top of that, we're doing so many different collaborations this year, once again in the physical and digital space, by working with other artists and bringing to life their work through art prints and things like that, and then also within the app. So it's a really exciting year, I feel like we're finally understanding the brand that we're building and I now finally see where we're headed. So that's an honest answer, I think we're still growing and figuring it out and we're such a small team, it's me and my husband and our assistant. So we're growing, we're trying to get bigger and better, but it's been a good year for sure.Stephanie:Well, that's impressive how much you all are doing with just the three of you. Yeah. That's a lot of work. What are you thinking about the NFT trend right now, especially hearing about how you're doing digital art? I'm just imagining, are you going to put it into an NFT, put it on the blockchain, do something like that? Sell it that way? Is that something that you guys have even talked about? Because it seems like you have a good opportunity, especially since you're one of the creators who is making some of this amazing art. People are willing to buy your collages with just your photos. Have you thought about creating scarcity around that potentially and having it in a digital format that people can own?Tezza:Totally. I think it's a hot topic right now and something that we're dipping our toes in and actually trying to figure out an interesting way to go about it. I'm not exactly sure if that will evolve to be the way, I think we're going to see a lot of different things pop up like that. So I don't know. Honestly, I feel like a newb, is that, I don't even know, a word to use on that space?Stephanie:Yeah.Tezza:But I think I am excited to see stuff like that, I think there's a lot of value. I like the idea that an artist can get, as a piece of art goes on and on and gets passed on, an artist actually would still get the commission from something like that. I think that's a beautiful thing and I think it's similar to music. I think music is going to change and evolve a lot over the next little bit, and so I'm excited to see where it's all going. I think all these worlds are about to come crashing together.Stephanie:Yeah. I was just going to bring up music, because I know you were in that world for a bit, to me it just seems like a no-brainer. Why wouldn't you put your music somewhere that can get properly valued and bought and respected in a way that it hasn't been previous? I just so many use cases where I do feel like there was obviously a very big fad, it got a little crazy, you can't just be like, "NFT solves the world's problems, it just needs to do everything and I'm going to put my pen on it, I'm going to digitize this." It's definitely gotten a little out of hand, but I can see a place where there are really good use cases around ownership and giving artists what they deserve, which is really cool.Tezza:Totally. I think just more artists are becoming independent, even with TikTok, the things that has done for small musicians that could never get the viral reach or anything without a label or all these people behind them, I think there's so many cool ways that are coming up and Instagram alone I think has been just an amazing place for independence and artists to be able to sell their art or find a community. I think about the people I've connected with. My favorite thing to say is just, because it blows my mind, because it still happens to me all the time, is like you're one DM away from a CEO of something amazing that you're super interested in.Tezza:So if there's a brand, a person, a musician, whatever it is that you are like, "I just have a question." Probably just send it, because you might get a response and it might be from the actual person that you want to get in touch with. So I feel like there's so many quick touchpoints that are coming more and more accessible. I think we're in an exciting time. I know it's also like there's a lot of negative things people could say about it, but I think that's the positive side of it.Stephanie:Yeah. I like to focus on the positive side as well. I love that, you're one DM away from whatever you want. How do you think about collaborations? I know earlier you were talking about collaborations with brands, it seems like that could also get tricky and a little sticky, depending on who you're working with. So how do you view having a collaboration and a brand that's going to work well and not get to a place where you're both rubbing heads and trying to figure out who is doing what, what's a good collaboration?Tezza:Right. I think we touched on this earlier a little bit, but actually having just a real conversation about the goals of not only just the brand, but as an influencer, what works and what performs well for you. So having that laid out almost before you get into what the collaboration's going to be about is important. Then when a brand sends me a brief it's like, "You have to say these exact 45 things." So this is an infomercial and even if I love the product, my community is going to swipe away. So I think really as a brand, if you can try, I know it's hard because trust me I run a brand too and sometimes you're like, "But we need to hit these talking points," which I understand, but just taking that extra step and making sure it is coming from a personal place and voice is the special sauce.Stephanie:Yeah. I agree. What kind of platforms are you most excited about right now? What are you dipping your toes in that maybe other people aren't even thinking a bout exploring? Or where are you seeing a bigger following than you even would have expected happening quicker than maybe other platforms? What are you bullish on right now?Tezza:I know everyone's saying TikTok, but it really is like the early days of Instagram where there still is that discoverability. I don't think it's going to last too much longer, so that's why if anyone isn't dipping their toes in that, I would say just jump in for a year and try everything. Don't try what you're seeing, just try something new and different. I think people are craving just something that's super different, so that's one area.Tezza:I think also, this is a vaguer area, but this is where I find a lot of success in the platform is more like combining, collaborating with other artists. So I think everybody has such a strong community these days, whether it's a brand, an influencer, an artist, whatever it is, so how can you marry those two, that relationship to really actually combine your followers or your community and the ideas that you share as brands? I think that's almost what I'm excited about in just commerce in general, because we're doing this on a personal level and with brands and things like that, but I think massive, massive brands are doing that. Street style brands are doing it with random cool artists that live in LA that want to be discovered, and I think that brings so much more heart, like I said, into everything that you're doing. So I think that's almost like a new, not platform, but way of collaborating and trying to grow, if that makes sense.Stephanie:Yeah. Yeah, that completely does. I love that. All right, well let's jump over to the lightning round. Lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you ready?Tezza:Oh, boy. I'm nervous, okay.Stephanie:You'll do great. All right, first one. What's up next on your reading list?Tezza:The Adventures of Calvin and Clay, is that what it's called? Wait, Kavalier and Clay. The Amazing Adventures of Kavalier and Clay. I don't know, but my husband's read it like four times and he's like, "It's just beautiful, it takes you into this world." It's on my list just because I hear him talk about it so much.Stephanie:Wow. It's like 1900 almost five-star ratings on Amazon. It looks like a comic book, but I would be down with that.Tezza:It's an escape, not necessarily, I'm not going to learn, it's not a business book.Stephanie:All right. Hey, if it's good enough for someone to read a couple times, I'm down. That's cool. So when you want to get into your creative head space, what do you do to do that?Tezza:I love to watch old movies or look at vintage magazines. I get inspired by old things. I think we can feel ... I get overwhelmed almost by how much new stuff is going on, but sometimes I like to look back and be inspired by things that were done before and see where new inspirations have come from. So I just love old movies and books and magazines and things like that.Stephanie:Yeah, me too. I think it's always a good fun way to get brought back to where things were and then incorporate that into certain things that maybe people forgot about, which is always a fun feeling. If you were to have a podcast, what would it be about and who would be your first guest?Tezza:Great question. I think it would be about art and I've always wanted to have a podcast called either the art of life or starving artists or something like that to break down the walls of just what being an artist actually is and showcasing just ... My husband, for example, he's a developer, I always made fun of him for not being the creative one, but he's so creative and developing is creative. I was being a critic, I was judging him and now I take it back. So I feel like there's so many things like that, that I would love to talk about and so many cool people I'd love to interview.Tezza:But my first guest? This is going to be so lame and cheesy, but I would love for it to be my mom, because she's the most fascinating woman. I haven't even sat down and asked her all the questions I want to ask her about. She has five kids, she started an amazing interior design business from the second I was born, and never seems to be stressed out or not have enough time for everybody. I don't understand. She's just on another level. So I would love to interview her first.Stephanie:That's a good one. I would listen to that one as well, so let me know when that's up.Tezza:We'll see, stay tuned.Stephanie:Stay tuned, everyone. Who is your either favorite artist you're watching or fellow influencer?Tezza:I'm going to say this for people that are out there looking to become influencers, because I think she is doing a really great job at growing platforms, which is really hard to do right now, so I look up to her for this. But Brittany Xavier, she is an amazing influencer and I've just watched her change her brand over the years, and really go after the brands she wants to work with and also grown literally everything from TikTok to YouTube to millions of followers in short periods of time. She just does such a focused approach, and I think for somebody that's trying to become an influencer or wanting to really grow and find the community, she's just an interesting person to observe.Stephanie:That's a good one. All right, what is one thing you don't understand today that you wish you did?Tezza:How to scale a business. I feel like, I wish I went to business school sometimes. But sometimes there's benefit and I know.Stephanie:You're in it right now.Tezza:I know. I'm in the business school, but sometimes I'm just like, "Wow. I don't even know what to do, where to go." But it's fun, I don't know, figuring it out.Stephanie:You will learn so much more by just doing. Well, if I have to circle back in like a year and you'll be like, "Look at all the progress, look what's happened."Tezza:Exactly, exactly. Can't wait for that day.Stephanie:All right, then the last question, what one thing will have the biggest impact on ecommerce in the next year?Tezza:I think we're in a time where everybody has to take a step back and look at what they're doing, what they're giving as a brand, whether that's anything from sustainability to actually being of importance. So I think, though we're having these massive brands like Amazon and Walmart who run so much of ecommerce, I think there are going to be so many small brands that are coming up that have so much more meaning and thought behind them. I think we're just barely tapping into this new generation of young YouTubers that have insane amount of impact and following and community that I don't even understand. So I think they're going to be leaders in ecommerce and products and I'm just excited and curious to see where that goes.Stephanie:Yeah. Awesome. All right, Tezza, it's been really fun having you on the show. Where can people find out more about you and all the cool things that you're working on?Tezza:Thanks so much for having me. Yes, you can go to ShopTezza.com or LelloTheLabel.com, that's my sunglasses brand. Then also in the App Store, if you type in Tezza you will find our photo and video editing app, and on Instagram, Tezza, T-E-Z-Z-A.Stephanie:Good handle. All right, well thanks so much.Tezza:Thanks for having me.

Traditional retailers are facing different levels of competition from all these new ecommerce brands that have popped up recently, and are now being held to new customer expectations that many predicted wouldn't occur for years. Because of the acceleration of digital platforms and online shopping over the last 18 months, brick and mortar stores are in a scramble to catch up or risk being  kicked to the curb. Helping retailers take charge of their digital transformation journey and get in on all of the online action is Sensormatic, which serves retailers with IoT technology to help them with things such as inventory intelligence and accuracy, gathering shopper insights, converting foot traffic, and more. Subramanian Kunchithapatham (KS) is the Vice President of Engineering at Sensormatic and he's been up close and personal with the brands as they implement the new technology that will allow them to compete in a digital world. On this episode of Up Next in Commerce, KS tells us what he's been seeing in the world of retail and how he anticipates the industry changing in the coming months and years. For example, he gives us the scoop on how Sensormatic partnered with Intel to turn already-installed store cameras into an A.I.-powered Smart Hub — basically an intelligent store that can provide insights into occupancy, foot traffic, track inventory, and even provide a personalized experience for customers if they have opted in. Hear all about that solution and others on this episode!Main Takeaways:So Trendy: Retailers have a number of new trends to keep up with if they want to compete with ecommerce. Thanks to the rise of online shopping, consumers are experimenting with and discovering new brands more than ever before, which means the customer loyalty traditional retailers have enjoyed is crumbling. Additionally, when consumers do show in-store, they want to do more than just shop, they want an experience. Retailers have to adapt to meet these new expectations by offering new omnichannel and cross-platform shopping experiences to meet customers where they are.Train, Train, Train: To digitally transform any organization means that there has to be an investment of not just money, but time. Employees need to be trained on new technology and strategies for using the data you gather, and the A.I. or machine learning systems you put in place also need time to be trained on the types of data and information they should be gathering and presenting to create the most value.A Future Full of Livestreams: Recently, retailers have been experimenting with the concept of livestream shopping — a brand will livestream an event and promote items, and those watching the livestream can buy the items right from that screen. This type of interactive and streaming shopping experience is going to become more popular as technology continues to advance and as the younger generation pushes that expectation forward.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we're ready for what's next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey there and welcome back to Up Next in Commerce, your number one show for all things commerce. This is your host, Stephanie Postles, CEO at mission.org.Stephanie:Today on the show, I have the pleasure of chatting with KS, who's the VP of Engineering for Sensormatic Solutions, part of Johnson Controls. KS, welcome.KS:Nice to meet you, Stephanie. How are you?Stephanie:Good. How are you?KS:Good.Stephanie:I'm really excited to have you on the show. I was looking through our doc and I'm like, "There's so much stuff that I want to talk to," because I haven't had too many people on the show, with a focus on retail, so let's dive right in. I want to hear, what is Sensormatic Solutions and what does your role look like, there?KS:Yeah. Sensormatic Solutions is a technology company serving retailers globally. We provide IoT technology for retailers. Right from the edge to the cloud, we have several solutions focused on retailers, on the loss prevention side. How to prevent theft in the store, and the inventory intelligence focused on inventory accuracy. Then shopper insights which is focused on what is the foot traffic and how are we converting the foot traffic?KS:The top of all those things, we recently launched a new retail platform called Sensormatic IQ. It's a connected intelligent operating platform that unifies several systems that we put out for retailers. In addition to that, it helps you to connect third-party systems as well as retailer systems.KS:That's the digital journey that Sensormatic has done, and that's what Sensormatic does for global retailers. My role is for product development. A lot of technology transformation within the company has been driven by me.Stephanie:Over these past couple of years, what does the transformation look like? Especially when it comes to retailers, now probably welcoming technology into their locations, where maybe a couple of years ago they're like, "Oh, do I even need this? You really have to convince me," where I feel like, now they have to transform really quickly. Stay up with all these new E-commerce brands. Figure out how to get access to the same kind of data that these B2C companies can get instantly. What does that transformation look like?KS:Yeah, if you really look at the retail industry per se, it's the most digitally disrupted industry, right? There are lot of digital transformation that was happening in retail, much before the pandemic actually. Almost every retailer was looking at digital transformation.KS:The primary reason is, more and more online sales happen. When you look at brick and mortar stores, how do you stay relevant in the brick and mortar space? Because of that there was digital transformation that was ongoing with most of the retailers.KS:The pandemic, what it has done is it has accelerated the digital transformation. Now if you really look at, because of the pandemic, you see more need for unified commerce and more need for self-checkout. They like to see that the store is more healthy and safe. Those kind of needs are driving now. Sensormatic as a company, we have operated for over 50 years and we have a very rich heritage of delivering innovative solutions to solve a retailer's best business problems.KS:Even now, as we are going through the pandemic, we are working on new, innovative solutions, right from sensors to systems to software and AI-based offerings. Looking at, how do we help the retailers handle that disruption that has cast in the industry, and come up with new offerings so that they can proceed with their digital transformation journey?KS:If you really look at shoppers today, what the pandemic has done is, most of the people who have never shopped online, they're forced to shop online. Now, once you start shopping online, you get used to shopping online.KS:Now when you start shopping online, now that is one thing, where the online shopping has increased. Second thing is, when you start shopping online, what you realize is, you may be loyal to your particular brand. Now suddenly you have many more choices. Because you're not going into the particular store and you're shopping online, you have many more choices.KS:Now people want to experiment. Because they want to experiment and it is easy for them to experiment, there is a shift in loyalty that's happening, actually. That's causing troubles for some of the retailers, when people want to shift from their brand to another brand.KS:The other trend that you see among the shoppers is, no longer, shoppers want to really come to store and then only shop. They expect retailers to meet, wherever they want to shop, however they want to shop. Whatever time they want to shop, you need to meet them at their convenience, and not a shopper coming into the store and making.KS:Some of these trends, what happens is, for you to address some of these trends, then every retailer needs to adopt technology at a faster pace. If you have to shop anywhere you want and then, any time you want and then, any place you want. Then you want that item to be delivered to you, or you wanted to come and pick it up from the store, we call it as buy online and pick in store.KS:If you have to enable that, the retailers need to embrace the technology. If they don't have the technology embraced then they cannot deliver that kind of a customer experience. When you don't deliver the customer experience, then the shoppers are going to shift loyalty and go to whichever retailer who can provide that experience.Stephanie:How do you make sure retailers aren't, maybe scrambling to keep up, because I'm thinking, a lot of times if a brand or a big company's lacking or falling behind, and then they start just grasping for everything. "Whatever technology's out there, I'm just going to do it all."Stephanie:Often times, maybe some of those are just fads. How do you guide retailers on, "This is something you're going to need for the next 10 years. This is the way of the future versus this, maybe you don't need virtual reality for everything right now. Maybe that's a fad and it's only for certain brands"? How do you guide them around what's important?KS:Yeah. Actually you can divide it into two parts. One is on the shopper's side, if you really look at it. If I'm a shopper and I want to shop anywhere and everywhere I want, now increasingly, you see that retailers are adopting a messaging app-based shop.KS:If I'm on the Snapchat and messaging to you, by the way, on the side, I'll be able to shop. Even on the messaging app-based shopping, there are one of the retailers, Levi's who recently launched a Bitmojis. All the emojis, they call it as Bitmojis.KS:They dress up the Bitmojis based on the Levi's collection. As you are in the messaging app, you can pick something and then shop. That's on the shopping side where they're looking at, "How do I leverage technology to go shop?"KS:When it comes to back end, once I shop, then whatever item I shop, and if I say that I'm going to come to this store near my home and pick it up from that store, that item should be there in that store. You don't want to have your inventory accuracy. If you don't have all the right information correctly available, the shopper, when he or she comes to the store, they're not going to find the item.KS:We call this as a precision retail. Sensormatic side, having all the technology that will enable the shopper to get the best experience when they go do the shopping, either in online. If they can do the shopping online, and come to the store and pick it up, or you go to the store and order it, and it gets delivered to the home.KS:The retailers need inventory information, accurately for them to deliver the best experience for the shopper. The technology that enables that, we call it as precision retail, because if you don't have very precise information in the retail operations today, you'll not be able to enable a better customer experience.Stephanie:What are some of the things that you think are pretty basic, that all retailers should have? Inventory management seems like a no-brainer. Also, seems like something a lot of retail locations struggle with. What are some of the other things that's, you need to have these five things to succeed?KS:Yeah. I would say that, definitely accurate inventory is a must. You cannot survive without having accurate inventory. Also, a easier way of meeting the customer wherever they are. If you have to meet the customer wherever we are, you need to provide multiple channels for me to shop with you.KS:I should be able to shop from my mobile app, or I should be able to shop from my desktop, or I should be able to come to the store and shop. I should be able to experience. If it is an experiential items, people would like to come to the store, have a very good experience of the item, then make the purchase process easy. Some of those technologies will become important.KS:The next one would be self-checkout and mobile checkout. It has become more prominent now because customers do not want to touch, they do not want to interact with the people. They would like to come in, look at the item, and then purchase and have a frictionless checkout. Frictionless checkout becomes an important technology implementation for retailers to learn.KS:If you take it little bit as part of an experiential store, you need the higher technology in terms of, you need to have much better bandwidth in the store, for you to have a good, digital experience. 5G technology will play a bigger role.KS:Also, experiential stores will have to provide more appropriate content and more appropriate digital experience and digital engagement in the stores. Digital engagement technology is going to be more important.KS:I forgot to touch upon, when I said inventory accuracy, you cannot get to a better inventory accuracy without having an RFID-based solution, at least in apparel retail and some of the other retail categories as well. RFID plays a important role in getting to a higher level of inventory accuracy. RFID technology will play a big role.KS:If you go further, there are going to be other technologies in the supply chain, and back of the store operations. You'll see that robots are playing a role. Not every store and not every category of the retailer will be able to leverage, but there are certain categories, robots will play a bigger role.KS:Then the technology that will enable ease of last mile delivery and then confirmation to the customer. For customer who are ordering online, they're getting delivered with one stroke. Again, that becomes very important.Stephanie:Awesome. What are some of the things that hold retailers back from doing this, because I know when I was talking with Joe from Intel, he was saying, "RFID can solve a lot of problems. Also, retailers, it's hard to get them to do that. There's so many solutions all around, but it's hard to get them to actually implement the technologies, to track the inventory, to track traffic, whatever it may be." What's the pushback?KS:Yeah. I would not call it as a pushback. I would say that most of the retailers, if you're a brick and mortar stored-based retail, and today, you have lot of business processes, well-defined in the store. How do you operate?KS:Now when you implement a RFID-based technology for getting a better inventory accuracy and better tracking of merchandise movement in the supply chain as well, now they need to change a whole lot of business processes on the retail side.KS:When they have to change business process, that means it's a change management in the organization. They need to manage that change more carefully and they need to retrain their employees with the new changed approach on how they are operate.KS:All those things takes lot of effort, and it costs money to get the employees trained as well as, and it also takes time to implement the technology. They need more tech-savvy associates also, in the store. All those things will require effort and money.KS:Whichever retailer has gone forward, and we make life easier for many of the retailers who wants to pursue RFID-based inventory implementation. I would say that you got a retail industry experts in our organization who can help the retailers to navigate this process very less painfully. Then we can help in, how do you transform the business process? How do you go about implementing it? What are the best ways to do it?KS:We bring in lot of best practices in the industry, to help with the retailer, and that's how we solve. We do have many customers whom we have really helped go through this transformation, and then migrated them to RFID-based inventory.Stephanie:What are you most excited about? When it comes to all the things you just listed, what are you really passionate about, that when you talk to a retailer you're like, "This is the way forward"? What excites you most?KS:Yeah. I would say that, it's really, look at AI technology today, it has disrupted every industry, not just the retail. I'm really fascinated about how it is getting adopted within retail.KS:If you really look at it, in the past, almost all the retail stores, retailers have implemented loss prevention security cameras. These are IP cameras for security surveillance. That's what it was used for.KS:Now suddenly with the advancement of AI technology, now you can leverage the existing IP cameras in the store, and then put in ... They call it as a Smart Hub. We partnered with Intel and developed an AI edge IoT box, an appliance. We call it as Smart Hub. That box, you put it in the store, connect all the camera streams to that store. Now suddenly the store becomes the most intelligent store.KS:You can do whole lot of use cases and whole lot of pain points which you can solve for the retailer. For example, given the pandemic time, we looked at, during the pandemic we partnered with Intel. We have been partnering with Intel for almost two years, and we accelerated this development with Intel and started developing occupancy tracking solution.KS:People wanted to have reduced number of shoppers in the store. They wanted to have mask compliance. People should be wearing mask. Then all of the shoppers should be maintaining social distance. All these things are new mandates, and the retailers wanted to maintain the health and safety of the store.KS:We quickly accelerated our AI partnership with Intel and developed this occupancy, social distance and mask detection solution in that while. Not only that, now that we have our Smart Hub, the Intel-powered Smart Hub, that Smart Hub enables you to develop lot more use cases.KS:Now if you are a loyal shopper to the retailer, and if you've opted in and if you're a loyal customer for that retail store, now since you've opted in, the moment you enter the store, I know that, "Hey, Stephanie is walking into the store. She is the most VIP customer. I need to handle her better. I need to address her needs better."KS:We can go and alert an associate to go address to Stephanie because she's a VIP customer. That's one option, one example, I'm saying. This opens up lot more newer use cases and newer ways of engaging the shoppers in the store, just leveraging the existing security cameras.KS:If you really look at other AI technology, all these stores have whole lot of sensors, and these sensors generate data. We put whole lot of sensors from Sensormatic. We generate lot of data. We generate data from inventory. We generate data about strength. We generate data about foot traffic, plus we have lot of camera-based, vision-based data.KS:Now, combining all this data, again we can apply artificial intelligence on the top, machine learning models on the top and deliver very, very prescriptive insights to the retailer. That's the direction we are headed now.Stephanie:I'm imagining a dashboard where you plug in a lot of your cameras. You're getting these insights. What would that dashboard look like for a retail worker who could just go up and look. It's like, "Okay, you need to close the door. You're at capacity, or you need to go and restock this one thing right now"? What does that look like, behind the scenes?KS:Yeah. Actually, take the example of an occupancy. If the retailer can specify, what are the allowed occupancy you want to permit in the store, and then configure that in the system. Then the cameras of the entry and the exit can keep counting how many people are walking in. We can also put a display at the entrance. It can show a red or a green indication.KS:Green means, the shopper can go in, and the red means, shopper cannot enter until it turns green. That's a simple indication. What happens is, there's whole lot of dashboard. Once you have all these data, you can create a whole lot of dashboard and provide.KS:More and more if we look at retail, they don't have enough resources to take care of the store efficiently. The pandemic has put lot more demand on their associates, to do more work, because they need to ensure the health and safety. They need to take care of several other things in addition to their job, which they used to do before.KS:Now nobody has so much time to look at dashboard and come to a decision. We saw this need, much ahead and that's where we have put together a strategy and executed our strategy to launch the Sensormatic IQ platform.KS:Now what happens is, as part of our platform journey we can take all this data. We can apply artificial intelligence, machine learning models and predict what is going to happen. Then once you predict what's going to happen, then we can prescribe an action. That prescriptive action, we can deliver it in the retailer's handheld device or any form, where we can push it to the device saying that, "Hey, now your back door is open, or your fire entrance is locked," or something like that.KS:If you see that in this particular hour ... Let's say I have the historical data of this street. From the historical data I can tell you that in this particular hour, there is a possible organized retail crime can come and hit this store at this point in time.KS:I can send an alert to this retail as a protection manager saying that, "Hey, you're likely to get hit with an ORC crime today. You may want to take a preventive action, and these are the possible preventive actions you can take." You can prescribe exactly, where the retailers need not look at the dashboard and deduce that information and come to that conclusion.Stephanie:Well, that's good. It seems like it would be so difficult to come up with prescriptive outcomes for retailers. I'm thinking about these models that you built in the background, and you've got one that has seasonality. You have another one's being hit by the pandemic in a bad way. The other one's in a good way.Stephanie:How do you think about training these models in the back end, so it works for everyone and gives outcomes that's not just being trained on false data that's, maybe a little blip?KS:It's a very good question actually. Now what happens is, there can't be two differences. Not every retailer will have the same model. The nature of AI itself is like that. You need to retrain the model based on the context.KS:It's not a long time. You take two to three weeks of training in that environment. Collect data and retrain the model for that outlet. That is one. That's bound to happen, when you deploy it. The other thing is, other interesting thing you'll see is, take the example saying that, for retailer A, I say that, "This particular hour, you're likely to get a ORC, crime event happening."KS:Retailer A and retailer B, both are likely to get hit with an ORC at a particular time, but retailer A might respond to that differently. They may want to respond to that differently, whereas retailer B might be want to respond to the same prediction differently.KS:One might say, "Hey, I want to shut down that entrance for an hour." I'm just telling hypothetically. Another might say, "I want to push all the high-value items that are closer to that entrance, to the back of the store." You can take two different actions for the same prediction.KS:That's why any prescriptive action we work on, we need to work closely with a retailer to understand what is their context. For that context, how do you have to respond, and then put that prescription into the implementation for them. It has to be a joint coworking with a customer to make it happen, actually. To make it successful.Stephanie:Yeah. Yeah. It seems like every retailer needs an in-house data scientist who can plug in a few inputs of, "Okay, we're running a local ad campaign this week. It's going to be very different. There's a parade coming on by. Everyone's going to want my Matcha tea."Stephanie:Being able to add their own little inputs that, maybe a model cannot pick up on. You always need human input into any kind of model.KS:Yeah. That's true.Stephanie:Yeah, but the training part seems tricky, when it comes to thinking about, how do you implement retail workers and make sure they're thinking in this data-oriented way? How do you train them? Seems like a hard problem for retailers.KS:Correct. That is where technology companies like ours can play a major role, I would say, that you have to take the complexity out of the retailer. Try to understand the context and then make it easier for them to embrace some of these new technology solutions. That's where we have to do all the heavy lifting, and support our customers.Stephanie:Cool. I want to talk a bit about ... I was reading an article about how you guys, and you were shifting the company from this hardware model, to moving to a more SaaS model with your products, but also Outcome as a Service model.Stephanie:I want you to touch on that a bit because I though it was super interesting. You hear the world where everyone wants to be a SaaS company, of course, right now. That's the way of the future, but the way you explained it, I thought was really unique and interesting about how it's outcome-oriented. I was hoping you can touch on that, a bit.KS:Yeah. Definitely, as I said, Sensormatic has been transforming our portfolio across the board, right from sensors to systems to software to cloud. We did do most of our hardware portfolio. We can ensure that, now, even if you have bought it in the past, we can go back to the customers, some of our old hardware.KS:We have a mechanism to connect our old hardware, IP-enable them and connect to the cloud. We have invested quite heavily in terms of, how do you IP-enable all the hardware and take the data to the cloud? That's done.KS:Now we do get the data for our loss prevention portfolio. We get the data for inventory, and traffic portfolio. Almost all of them have a SaaS offering, and we actively sell all our SaaS offerings in the market.KS:Now, we also built a data lake on the top of all our SaaS offerings. Now, we get loss prevention inventory and traffic data coming into the common data lake. Now that I have the data, which I can correlate between traffic to inventory or traffic to loss prevention. All those correlations, you can do and come up with predictions and then prescriptions as well.KS:There's still, all the SaaS offerings, like any other Software as a Service, we deliver that. When you talk about predictive prescriptive offerings, now what we can do is, the example, previously I gave. You don't want the retail associate to spend time analyzing the data and trying to keep the business context in mind. Then try to solve whatever is the business problem that he has to solve.KS:The only way the retail associate is going to solve the business problem is by taking an action. That action is an outcome, and it's for a business outcome. We will be able to go, analyze the data on behalf of our customers. Based on their context, by taking their contextual input and then come up with a predictions and prescriptions that are specific to that particular customer.KS:When they act on those prescriptions, they're going to get a business outcome. So you can ensure that whatever business outcome they are trying to solve, you can enable that using our technology.Stephanie:Got it. Very cool.KS:When you're able to do that, you call that as an Outcome as a Service, where you say that, "Okay. Now I'm not talking about technology. I'm not talking about SaaS. I'm just going to deliver a set of outcomes, and then that's what you're buying from us. For us to deliver that outcome, we have to use several sensors, systems, software, AI model, everything, to get to that outcome."Stephanie:Yeah. I love that. I think of so many different consumer SaaS companies where it's like, you buy it, you get into this subscription. I'm locked into a year. Then it's like, you don't really use it. Sometimes you don't even know how to.Stephanie:I think of some of these big BI tools where you get in there and you're like, "I don't ..." Then you're locked in. It's so nice, entering into a mindset of, "I'm going to actually have something that shows me a solution right away, how to act on it. I don't have to put on my data hat and start analyzing it and figuring out correlations. I'm going to have something at least guiding me on where to even start thinking about that," which is awesome.Stephanie:Do you see any new shifts or things popping up right now, in the world of retail that, maybe you weren't even expecting a month or two ago?Stephanie:You're like, "These are some new requests that are coming in from clients, where they're trying to understand X, Y or Z, or they're trying to understand this new omnichannel world." Is there anything new that, now you're like, "We need to build this. We need to get on this right now"?KS:Yeah. I would not say as it's directly coming from the client, and I will just tie it back to the shopper behaving trends that we are seeing. How that's going to be the norm in future, and then how it'll shape the retailer.KS:If you really look at it, everybody is looking for a unified experience. I should be able to buy online, and then pick it up in store, or curbside pickup.KS:Now, BOPIS and curbside pickup, we see that many shoppers, for the first time, they experimented with buying online and picking it up from store or curbside pickup. We have seen some surveys, one from Sensormatic, one from NRF and another from McKinsey. All these surveys indicate that more and more shoppers will go for BOPIS or curbside pickup-based fulfillment.KS:This is going to be a norm. You'll have to support it. not everybody is implementing it today, but you'll see that more and more retailers are going to go and implement that way. The other thing, other interesting trend we have seen during the pandemic is livestream-based shopping, where you do a livestream of an event. Then as part of the event, you wear all the fashion clothes that you want to promote. Then people who are watching the livestream can click on the items and then they can make a purchase.KS:Okay, now we saw Walmart do in partnership with TikTok. We saw also, Nordstrom do an event like that. More and more retailers are experimenting with the livestream. I believe that in future, more and more retailers will try to embrace this livestream-based shopping, more than what you see today. I can only dole out some examples now, but one or two years down the line, you're going to see more and more happening in that side.KS:The other area, also catching up is, there are retailers who had big format stores. They are shrinking the format to the smaller format, or experience-only stores. You don't see many doing that, but you see few retailers doing that.KS:The experience-only stores, you have items you'll not be able to buy. You'll not be able to pick the item from the store. You can go to the store, you can experience the item, touch and feel. There will be lot of digital experience to augment that.KS:Then at the end of that experience, if you decide you want to buy it, you place the order. The item will get delivered to your home. That's an experience-only store. That's another concept that's just picking up.Stephanie:Yeah, but the shipping has to be good on that, because to me, I feel like so many shoppers are like me, where they need it quick. If I'm going shopping somewhere, I'm like, I probably want it that day. I love the idea of, the inventory's there for you to try on and see what fits, and get the experience, but I also want it that day, if possible. One-day shipping. Is that so much to ask?KS:I get it. Yeah, I think there are some who'd like to experience, and then they're okay to get it delivered to home. On the same day, if it gets delivered, that's again, that's why we call it a precision industry. They have all the inventory. If they have everything readily available in that area, they may be able to deliver few on the same day. Right-Stephanie:Yeah.KS:... if they go down this path. Smaller format is like, again, bring in more digital experience. Don't consume too much space, and provide a more digital experience. Then stock and operate with a smaller format. That's another trend that's happening.Stephanie:Yeah, which is nice because it feels like there's a lot more opportunity to beta test and see what could work at a much smaller scale than, maybe a couple of years ago, where these retailers are like, "Go hard. Open up a big shop. Have all this inventory." Then they're like, "Darn, didn't really predict that well. This might not be the perfect location for it, or there's not as much foot traffic as I might have thought, because Blue Bottle just went out of business," or whatever it might be.Stephanie:It's nice to be able to have a little testing ground, and then pivot if needed. Consumers are actually okay with that model, I would think, where, maybe back in the day, they weren't.KS:Yeah, yeah. Also, you see another interesting trend that's happening is, now for retailers who are embracing the omnichannel experience where their shoppers can buy online. They're converting some of the stores into a fulfillment store. That's what led to BOPIS.KS:Another trend you'll see is dark stores, where they're converting some of the stores to be, completely a fulfillment center.Stephanie:Yeah.KS:There is no store experience there. You only go to that store to pick the item that you've ordered and then walk out, actually. That's another trend that's happening actually, to support the unified commerce experience.Stephanie:Yeah. What kind of industries do you think are fit to pull that kind of model, because I feel like there are some stores where ... Is there ever a good experience when you go on to certain stores you're like, "It's probably a hard no for this kind of store. I just need to get what I need to get"?Stephanie:What kind of industries do you think, it would work well to just have your store as a fulfillment center versus the Urban Outfitters of the world, you need the full on experience?KS:I think if you really look at, Whole Foods converted one of their stores into a dark stores.Stephanie:Wow. Whole Foods is an experience though. How could you do that?KS:The problem is, it depends upon what you are comfortable purchasing online, without experiencing. Then if you have that, then you can go and pick it up. You know all your standard items, what you normally buy, and you have experienced it already.KS:Now you don't want to waste time going into the store. You just order it. I don't want to waste time and go pick it up, and walk out.Stephanie:Got you.KS:There are items that are very standard. There's nothing much to experience, go down this path. There are items that you have experienced once. Now you like it and you don't want to change anything. You're certain about it. Go order and just pick it up. Those are the areas where it'll pick it up.Stephanie:Yeah. Yeah. Got it. Do you think live streaming is actually going to penetrate the U.S., because I still just don't ... I feel like, actually, people here are getting burned out from live stuff. Clubhouse was big, everyone liked it. Now everyone's like, "Oh, so much work. I have to be on the entire time. I have to think hard and really jump on that deal, if it is live."Stephanie:It just feels like we all got in this stressful rat race of everything live. Now it seems like people are pulling back to the more, at least TikTok. Little bit more preplanned, Instagram, Pinterest, of really think about and be more mindful about their purchases.KS:Correct.Stephanie:Do you think that's coming here?KS:It is coming here. I feel that the Gen Z, even today, it is ... If I go to my son who is 18 years old, I can never take him to a retail store. They still prefer to shop everything online. They would like to see it online.KS:For a certain segment of shoppers, there may be a segment of shoppers who'll still be interested in shopping through livestream or shopping through the app. There will be certain shoppers who still feel comfortable, because we all grew up in an age of going to the store, and experiencing it and buying it.KS:We are more in need for a socially, going out and interacting and getting it. Such shoppers will continue to go to the stores, but there will be a segment of shoppers who'll continue to buy through livestream. Even if everything becomes normal, 100% of stores are open worldwide, there may be a segment of shoppers who'll shop, I feel.Stephanie:Okay. Yeah, that'll be interesting to watchStephanie:All right, well, let's shift over to the lightning round, if we can. The lightning round's brought to you by our friends at Salesforce Commerce Cloud.Stephanie:This is where I ask you a question, and you have a minute or less to answer. Are you ready? Yeah.Stephanie:Okay. What's the nicest thing anyone's ever done for you?KS:Oh. Anybody who helps me. I grew up in a world of gratitude. Anybody who does any remote help, I feel nice about it. Even small things, I feel very nice about it actually. It may not be a bigger thing.Stephanie:Okay.KS:There are a lot, actually, if you really ask me.Stephanie:All right.KS:I would say, I'm blessed. Every day, I get so many gifts in terms of people helping me.Stephanie:I love that. What's one thing your kids have taught you, that made you shift your idea on E-commerce or retail? You talked about live streaming, but what else have they taught you recently, that you're like, "Whoa, mind-blowing. Never would have thought about it that way, but you're 18, so you know everything"?KS:Yeah. If you ask me, I cannot buy a shirt or a pant without getting a feel for the cloth or fitting. Without getting a feel for the apparel. My kids will not even blink their eye in terms of ordering it. By looking it online, and ordering it online.KS:Even after they receive it, and if it's not good, they don't mind quickly returning it as well, actually. I find that as a hassle, but I learned from my kids that, it's a way of life. The first time I could sense that E-commerce is going to get adopted in a big way was from my kids, I would say.Stephanie:Yeah, that's great. What's one thing, or piece of technology that you don't understand today, that you wish you did?KS:The technology of 5G as well as, currently, people are talking about 6G. I used to work in a telecom industry. I used to play close attention to these two technologies. The pace in which 5G took, caught me by surprise. Then I had to go catch up.KS:Now I'm getting tuned to all the 6G news which people are pushing. Now I'll pay more attention so that I don't do the same mistake I did with 5G.Stephanie:How do you stay on top of all of the E-commerce trends? What do you read? What do you listen to? What do you do each day, to stay on top of that?KS:Yeah. I subscribe to a lot of ... Now today, gathering information is not a problem at all. I subscribe to all kinds of thing. You get McKinsey, Deloitte, Sears-based retail and so many other retail subscriptions and technology subscriptions.KS:Best time for me to catch up on that is mostly in the weekends. I spend couple of hours looking at all the things. That's how I catch with the technology and the trends.Stephanie:Well, KS, this has been such a fun interview. Where can people find out more about you and Sensormatic Solutions?KS:Thank you. Thank you, Stephanie. It's a pleasure talking to you. Hope to talk to you again.Stephanie:Yeah, yeah. Tell me where people can find you though? Where should people look up Sensormatic Solutions?KS:People can find me in LinkedIn, and the company, Sensormatic Solutions' webpage as well, they can find me.Stephanie:Amazing. Thanks so much.

It’s not easy to keep a digital audience engaged. And it’s especially hard when the product you’re trying to engage them with is … produce. And yet, Avocados From Mexico has set a gold standard for what it means to build a funnel and engage an online audience and it has somehow found the secret recipe for success (and also guacamole).On this episode of Up Next in Commerce, I was excited to talk to Ivonne Kinser, the Head of Digital Marketing and Ecommerce for Avocados From Mexico, and learn her many tales about how the company has used out-of-the-box ideas to take something that rarely gets marketing love — produce — and turn it into must-engage-with content. She took us behind the scenes of creating one of the top digital campaigns for multiple Super Bowls, and she dove into what the future of digital marketing looks like, including why Avocados From Mexico has been ahead of the trends when it comes to things like NFTs and blockchain. Enjoy this episode!Main Takeaways:Impressions Matter: Impressions are a metric that often is hard to really judge the importance of. But when you can correlate impressions to search activity, it becomes clear that building an awareness of the brand through impressions and exposure can drive conversations on social media. This in turn leads to more Google searches and native activity on a brand’s page.Eternal Iteration: You have to iterate constantly in order to adapt to changing consumer behavior. Constantly changing your platform is not a signal that your platform is failing or wrong, in fact it’s a sign that you are staying on the cutting edge and trying to meet consumer expectations at every turn.The Powers That Be: When setting a path for the future, it’s important to differentiate between trends and fads that will come and go and the forces that will actually drive companies and consumers toward a new way of operating long-term. For example, rather than get caught up in the hot new social network or gaming platform, think about investing in the technology that powers that network (A.I., ML, 5G, AR/VR, etc).For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey there. And welcome back to Up Next in Commerce. This is your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have Ivonne Kinser who currently serves as the head of digital marketing and ecommerce for Avocados From Mexico. Ivonne, welcome to the show.Ivonne:Hi. Thank you for the invite.Stephanie:Yes. So happy to have you on. I think I just spent an hour going through your guys' website and then I got hungry and I realized it's probably not best to have avocados and salsa right before an interview. So let's see how it goes, I was willing to take the risk.Ivonne:Maybe it's a good thing because you can always get... Go for an avocado.Stephanie:Yes. Yeah, I agree. So before we dive into Avocados From Mexico, I was hoping you could touch on your background a bit. I saw that you moved from Venezuela to Dallas in 2001 and I thought that would be a fun point to jump off on hearing a bit about what inspired that move and what brought you here.Ivonne:Yeah. I mean, if you think about it now, that was a long, long time ago. I came and my first job here actually in Dallas, I have been here for over 20 years or 20 years this year actually. And I oversaw over 20 countries, the campaign of or the advertising for American Airlines across 20 countries in Latin America. And I was there for a long time, I think relatively I was there for about five years before I went to the resource group in Dallas and then I started going from agency to brands and brands to agency.Ivonne:I like both sides of the business until a point where I made a decision and I really liked to stay on the brand side. So I stayed there and right now I have been with Avocados From Mexico for seven years now.Stephanie:Wow.Ivonne:And counting. Yeah.Stephanie:That's amazing. So what pulled you to Avocados From Mexico? Because when you look at your background and what you just went through, it seems like such an interesting jump and what was the draw there?Ivonne:It is interesting. That's a great story. My career is full of stories but this one is one of my favorite ones because I have... I was also on the brand side with American Airlines after managing their account on the agency side, I went to the brand then Haggar company, Haggar Clothing then for a while I even go on my... I went on my own. I was very curious about entrepreneurship and just implementing my own ideas. It went great. It was on the fashion side, it went great, but I really missed the security and the stability of the corporate world and is when I went back then and went to Haggar Clothing and then Avocados From Mexico. But to your question my point is that fresh produce was nowhere in my experience or in my career.Ivonne:I was in transportation, telecommunications, fashion, apparel, retail, never even like the minimal experience in the fresh produce category and then the recruiter of Avocados From Mexico contacted me because they were studying the company actually, which is the marketing arm of two organizations, the growers and exporters of Avocados From Mexico in Mexico and the importers and the Packers and distributors of Avocados From Mexico... Hass avocado in the United States, they came together and created a marketing arm to market their products, avocados coming from Mexico. So at that point they appointed the president who is my boss, Alvaro Luque and he has been there from the beginning 2014, 13, and the recruiter contacted me and asked me if I was interested in going and speaking with them, with Alvaro and I was like, "What? What am I going to do with avocados?"Ivonne:I mean, I have... And that was before the first Super Bowl so I didn't even know that brand existed or anything. And she said, "Just go and talk to him and if you're not interested then fine, but I think that you would like it because it's a very entrepreneurial organization, is a very forward thinking and he is looking to really make an impact in the marketing industry." So that got me curious and I went and talked to him and yes I was fascinated with his vision. He told me the magic words. He say, "I want someone who... I'm looking for someone to build the digital marketing department from the ground up." And when I told him like, "Why me? I don't have any experience in the category."Ivonne:He told me that he was not looking for someone with the experience but he was looking for someone with very good solid expertise in the digital marketing side of the business who was very creative and who would be able to do what nobody else has done. And those are my magic words. I'm very creative. I love creative freedom and do exactly that, what nobody else has done. And besides is one of the very, very few cases in marketing where the marketing budget increases year over year because it's proportional to the sales volume and the sales volume of avocados have been growing year after year... Year over year since 2007 and especially since 2013. So I was sold.Stephanie:That's great. Yeah. I mean, such a good story and it's so interesting too when I think about other produce items in a grocery store, you would never even think like, "This avocado bag has a whole content strategy behind it." And they do Super Bowl commercials and like the stuff that you guys are doing to me seems so innovative. You're taking all the risks, you're trying things but what did it look like before you joined? How were they marketing and selling avocados? What was the landscape before maybe they entered the digital world?Ivonne:So when I started there, that was 2014, there was no digital marketing department per se. I mean, we were doing... We had a social media and we had a Facebook page and we have a few bloggers creating content, but I think that was about it. And then I started in September and my first assignment was okay now you have to build up Super Bowl digital campaign. And I was[crosstalk 00:08:43] okay. Yeah, whatever that means, right? But what has been very exciting about it is that we were talking offline before there was no preconceived notion of how a marketing practice should be. And that was... I think that is what has allowed us to do everything that we have done because nobody has ever say, "No, that's not the way we do things here." There was nothing.Ivonne:So we start creating, at least I can speak for my department that I started creating the marketing department that I thought and I think right now that is the right for these time. And one of the things that a lot of companies do is to become complacent and keep doing things the way they have been doing it for years without even realizing they are doing them. In our case, there was nothing. So it was a blank slate for us to build whatever our imagination can see. And like I was saying, my first assignment was... Was in September, I started in September, right? Super Bowl is next February and building a campaign, you can not build a campaign in just two weeks. So what's literally my first assignment is now you have to build a Super Bowl campaign. And it was the first time we went to the Super Bowl with a TV spot.Ivonne:So I did what I thought that it was best and not knowing or having an experience of what even means to be a winning Super Bowl campaign, right? I just did... Put a lot of love and passion into that but the best I could. And then I remembered that the very next day after the Super Bowl I had a call from one of my agencies and says, "Congratulation for the digital campaign." And I said, "Why? What for? What happened?" They say, "It was number two after Procter & Gamble."Stephanie:Wow.Ivonne:I said, "What does that mean?" And then it was in terms of the most social interactions, the campaign with the bigger bus after Procter & Gamble, imagine that. And that was the first year. After that we launched six more and every single year we were either the top one digital campaign or top two digital campaign. Of course now I knew, "Okay, somebody is measuring this. We're very competitive." So and then we purposefully look for that first and second place but the first year happened just spontaneously. We didn't even try.Stephanie:I mean, I want to dive more into that because I just watched your Super Bowl commercial from 2020 and it was so funny about what your avocado needs. It needs a helmet, it needs a baby carrier for it so it gets more skin to skin contact. I mean, it was really good, writing and super funny, which I feel like sometimes I don't always laugh at things. It actually was giving me a good belly laugh and I want to hear how you go about developing content in a way that you did especially with your Super Bowl commercials that are winning awards and coming in number two, how do you guys even start creating that campaign from scratch to make it connect with a lot of people?Ivonne:Yeah. You know that... I will say the most challenging thing about the Super Bowl is connecting that content across the different departments and disciplines because the concept of the TV spot comes from the brand team and the brand agency. So and I have my team and different agencies. We're like I mentioned before, we're very entrepreneurial organization. So pretty much every lead of every department gets to choose their advertising partners, whomever you feel more comfortable working with for whatever reason based on expertise or closeness or whatever it is. So then we have to... When the brand team define what is going to be our theme and they go to market to test three or four options and then they decide this is the commercial we're going out with. Then they give that to the digital team, to my team and I share it with my agency and we start concepting the digital campaign. And the digital campaign have to be able to stand alone and live on its own, stand up on its own but it has to have some connecting tissue with the TV spot. It has to look like the same story.Ivonne:But that is a huge challenge because how can you bring a story that in TV is 30 seconds and transform that in an experience that it has to keep users engaged for three weeks, because that's the time when we launch the digital campaign until the game day is about two, three weeks. So it's a big challenge. And we have... We develop all the experiences in digital with that connecting tissue in mind but created for digital audience is not only for them to watch, but for them to experience, to play with it, to interact with it, et cetera.Stephanie:Yes. How do you think about building out a call to action that gets people to go back to your website? Because oftentimes I watched these Super Bowl commercials and I definitely have more brand love towards the brands that make really good engaging or funny content. But I don't know if I've always felt drawn to go right over to the website. How do you think about making it a funnel that's actually going to convert and pull people into your avocado community?Ivonne:Yeah. Yeah. I'm going to tell you the story, I tell you I have many stories about the Super Bowl but let me tell you one that will illustrate a great, great example. Years ago, we also had a float in the Thanksgiving Macy's Parade and it was the same dynamic. The brand team who also manages PR has this project or this idea to go do the Thanksgiving Macy's Parade with a float. So we had a float then the CEO comes to my team and say, "Hey, we're doing this in brand so what you guys have to do is to create a digital campaign to go with this float in Macy's Thanksgiving Day, but it's going to launch three weeks before then we start concepting." So what we did is how we can do so users keep coming back after three weeks, every day, right?Ivonne:Because you want them to go come every day and participate every day and interact every day. So what we did is that we develop an interactive map and the story was that we're bringing the float from Michoacan, Mexico from where our avocados come from all the way to New York and you will see how... Stopping in key cities across the United States from Mexico all the way to New York city. So in each city we have videos, we had what are we doing in that video, in that city, et cetera, et cetera. But the key was that the only way the float can move is when users tweet or hashtag. So the more they tweet the faster the float goes to New York and we know that we have to be in New York by a certain day.Stephanie:Wow.Ivonne:So that was so exciting. I mean, users were so excited about it that the day of the parade, when we were monitoring the conversation online and you could see the excitement and users saying, "That's my float." And that was the most rewarding feeling because they felt that was their float because they brought it from Mexico. And just to wrap up the story, we deliver more impressions of, or campaign than the Macy's Parade hashtag, imagine that and-Stephanie:That's impressive and crazy.Ivonne:Yeah. I mean, we're just... Have the power of engaging the audiences, they work on your behalf and because we don't have the dollars that the multi-billion dollar brands have to compete in this type of competition if you call it, like the Super Bowl, for example. But we still have been top one and top two in terms of the most talked about brands and it's because we engage the users and they do it for us.Stephanie:I mean, that's why when I was digging into this Avocados From Mexico company, it was so exciting because at first I'm like, "It's a company about avocados." And I started seeing all these things you're doing I'm like, "They are really pushing the limits when it comes to marketing and being super creative of how to pull people into these funnels and get them engaging." And, yeah, it's super impressive. How do you think about the ROI around a Super Bowl commercial versus a float in the parade? What should the ROI look like or what should companies be going after when thinking about these really big moonshot level marketing campaigns.Ivonne:So every company is different and every company has different goals, right? But we don't manage or sales, we're a marketing organization but our job as a marketing organization we have two objectives that which is, build the brand Avocados From Mexico in the US and increase the demand of Avocados From Mexico in the US. So when we create these campaigns that has an enormous boss what we want to do is to put avocados top of mind. When you have, and I give you the examples of Super Bowl campaigns, when you have, for example 7 billion impressions that was a Super Bowl this year, 7 billion potential impressions on social media. Yes. I mean, you can tell the consumer heard about Avocados From Mexico a whole lot. So when they go to the grocery store, you're top of mind and and our conversation of course is very strategic.Ivonne:So we wrap our conversation around a fun story but really in the core of it, there's recipes, there's conversations about how to consume the avocado. In Super Bowl, for example, we say guacamole, we talk a lot about guacamole and Super Bowl. There's a research company called YouGov, the previous two years they did a survey one month after the Super Bowl and they publish their results and they say the winning brands one month after the Super Bowl. And Avocados From Mexico also is among the top one or top two in terms of purchasing tension increase even a month after the Super Bowl. So, and another thing is when you go and see... We're talking about billions of impressions in social media, right? And then you may think, "So what is even an impression? Who cares?"Ivonne:But it is important because that huge conversation that happen in social media is just a reflection of users engage talking about it. And when we go to, for example, and check the Google trends, how the searches for Avocados From Mexico, the brand, the brand name, the search for the brand name the peaks overlap. When our conversation on social media is very, very high, you also see those peaks of Avocados From Mexico, the brand name search is very, very high at the same time. So, yes, I mean, all this huge conversation that we create with campaigns like Super Bowl, Cinco de Mayo and Thanksgiving Macy's Parade, it really impacts the interest for the brand. So going back to our objectives which is build the Avocados From Mexico brand in the US check and increasing the demand of Avocados From Mexico in the US check, because we have seen also how these YouGov for example, is one of the companies that have shown the increase in purchase intention.Stephanie:Yes. Yeah. That's amazing. So, I mean, thinking about all these marketing campaigns that you've done, what is one of the more risky ones that you've done that actually ended up working where maybe people on your team were like, "It's not going to pay off."Ivonne:Yeah. One thing that I always start thinking even a year before the next Super Bowl is what kind of technology I'm going to integrate in the activation. I think that we live in a world that is dominated and I say this in a very positive way, I believe in technology as a positive force to move the industry forward. So, and there's new technologies every year and I see the technology not as a shiny object, at least not all of them but as a... Like I says, is what is moving the world forward and the marketing industry forward. So I start thinking about what technology I'm going to bring the next year. So last year and it was actually that campaign that you referred at the beginning, I wanted to bring the Vatoms that actually right now are super, super popular right now.Stephanie:What are they?Ivonne:NFT or they call it also NFT. Have you heard about NFT?Stephanie:I mean, I've heard of NFT is in the non-fungible tokens-Ivonne:Yes[crosstalk 00:24:25]Stephanie:Okay. Okay.Ivonne:Yeah. Yeah.Yeah.Stephanie:Al right.Ivonne:So then those are super, super popular right now in 2020. 2020, the other name is Vatoms.Stephanie:Okay.Ivonne:In 2020, we actually were the first... One of the first brands that use that as a marketing tactic and we were the first brand to put one of four advertising assets in the blockchain and that was even before everybody[inaudible 00:24:59]Stephanie:Wow. That's so early. You guys are ahead of every trend, basically.Ivonne:Yeah. I mean-Stephanie:Have you done AR already. I was thinking you have to probably have an Augmented Reality experience with your avocado. You guys have done everything.Ivonne:We did, actually was part of that same strategy. So what happened is last year I say, "Well, I want to do something with NFT, let's call it NFT even though we call it Vatoms last year, but NFT and we did, but what it makes so challenging to be early adopter or a trail blazer that you're bringing something that it hasn't been done before is that it's really, really hard to explain and sell the idea within the organization is like we're putting money towards these, we're allocating budget toward these and it's something nobody has done before is that going to work. And honestly, the answer is, I don't know. I mean, how can you know? You don't know if it's going to work but what we do is when we experiment with that kind of things, we experiment cheap as much as we can and we are really well prepared to pivot if we need it.Ivonne:So my agencies, and when I select my agency partners, it has to be someone that is extremely fast moving that or adaptable and can choose with a call cheap directions because if not, it wouldn't work for the type of approaches that we take. And when you can move that fast and when you have partners that can move that fast, the risk is minimal because we're in... I mean, in the digital space you can course correct in real time and you're going to be fine. The problem is when you don't have the right partner that can move that fast and you know that the campaign is failing or there's room for improvement or it needs to be optimized and you cannot react quickly. But it was a big success in terms of the, it created a lot of buzz and a lot of... Media talk about it and a lot of consumers came and visited our site and participate in our games too because of that.Stephanie:Yeah. That's amazing. So tell me a bit more about the NFT strategy. I mean, I understand the concept of them putting on the blockchain a scarcity thing, limited quantity but what were you actually putting on the blockchain? And are you going to do it again in 2021 now that more people understand the concept of it because of the NBA top shot stuff that really put it on the radar of a lot of people who maybe wouldn't have known about it before?Ivonne:Yeah. So what we did is a mix between Augmented Reality, actually it started... The idea started with Augmented Reality so users will sign up to get at the UTA wallet and then they will go to Google Walmart, for example, and then they will find avocados, digital avocados all over and they will capture the digital avocados with their mentor reality and save them to their data wallet-Stephanie:Like a Pokemon Go kind of game.Ivonne:Kind of. Yes.Stephanie:Okay.Ivonne:Exactly. Exactly like that. So they will call it the avocados and then exchange it for every avocado that they collect is a point. So it was part of a big game. So, but when one of those was a crown that you also saw in the TV spot and that crown also, we place it in the... To develop these kinds of objects, it requires special coding so we coded and somebody... And then users will participate to win it and the winner, we will send them the instructions and it was an object that could be placed in the blockchain and they could then sell it or collect it or save it for later or whatever they wanted to do. So it was like testing the waters without going all in but we want to do one. I think that's one of our goals as a company is just, if anything is going to be tested out there in marketing, in the fresh produce industry, we want to lead that.Ivonne:And of course we saw this is coming at some point. In fact, it came a year later but we know this is coming, this is common in marketing so we have to do this. So we did that the previous year, just to name another technology, we built an experience with IBM Watson, the artificial intelligence and that's another great story because it was such a creative implementation of Watson that even IBM contacted me and to her, "How do you guys do this? Tell me the story," and whatever. And then they send an email to all their subscribers using our campaign as a case story like, look how creative Avocados From Mexico is using Watson in a marketing campaign, because it was a totally unexpected application of what so now artificial intelligence tool.Stephanie:Wow. I mean, you're basically giving you a peek into the future, just thinking I want to know what you're thinking at all times, because you probably are thinking two or three years ahead of what other brands when it comes to a marketing and technology perspective are even thinking about right now. So what are you focused on over the next year or two? What are you guys betting on that maybe other people would look at, you'd be like, "Ivonne, that's definitely not going to play out. No one's interested in that." What are you guys shooting for right now or focused on building from a marketing campaign perspective.Ivonne:Yeah. So two things I want to say about that. First, let me tell you, we're in the middle of planning 2020, 2022 planning our fiscal year ends in June and it starts in July, so we're right now are planning processes in full swing. So any ordering process is six months. So in one of the first meeting, the opening meeting where I get to talk to my team before they start even thinking about what are we going to do for next year? I wanted to make very clear where has to be our focus and I told them and something that is... I think is served as a guide, when we look at the future, we need to see what are those forces moving us toward the future. Instead of looking at what is trending because I wanted them to differentiate what are the trends and what are the forces. The trends are now and they may fade, but the forces are what is going to build the future. In this case right now where we are, I will say the forces are definitely artificial intelligence, machine learning, data, 5G is going to change the way we consume content and the way we consume video.Ivonne:The trends, for example, on the other side are I will put gaming in that side is trending right now. I will put in home fitness, I will put... It's a trend, it may be permanent but it's not something so transformational as it is artificial intelligence, data and machine learning. So what are we focusing in the future? We choose to launch a platform called Avocado Nation, is an intelligent platform with artificial intelligence and machine learning engine at the core of it. We call it the next fix of avocados because it has the same intelligence power, obviously much smaller than Netflix but it was... The inspiration was the way Netflix deliver personalized content to their consumers. And as most of the content production companies, they have like 30% success rates in the shows that they put out there. I believe that the last number that I saw for Netflix is like 70% and it's because they really, really relied on that intelligence.Ivonne:So inspired with that, we say we want to create the Netflix of avocados and that's just one of the portions of this intelligent platform. And we have right now over 100 videos our goal is to get 2,000 videos eventually. And it's videos like any format, short videos, long videos, funny, serious of videos that it could be... It could go from a dating show to a recipe show, all kinds of videos to give the consumers a variety of content for them to interact with and in the meantime, the machine is learning from those interactions and helping us to make predictions in the future about what is the content that our first party data is more engaged with.Stephanie:Yes. Yes. I was just going to say the first party data access is probably... Is that big driving force behind creating an entire platform like this.Ivonne:Big driving. Actually, that was the purpose because with all third party cookies going away and all that, we have been working on that for several years now. And right now we have over 100 million users on our consumer data platform and we have a costume audience, that's our core audience, about 30 million consumers. So we already have... Again, we have been preparing for this since 2015 talking about looking toward the future and when all this happened and a lot of brands are scrambling to get ready quickly, we already have our audience. You never complete with... I'm the one building my audience. That's something that the machine keeps learning, the algorithm keeps learning but we're in a very, very good shape in terms of first party data.Stephanie:Yes. I think it's interesting too that you approach the platform in a way like an AI first focused way where I talk to and hear from a lot of brands and many of them are very focused on content, creating their own series and figuring out how to make that work for the company. But it's very interesting hearing that you're essentially approaching it like a Netflix style model and even thinking back to... I don't know if you remember the earlier Netflix days where when they started coming out with their own originals and people were like, "They're not good." It's like the whole time they were just using that as training data, they were learning what we like. They were learning what makes for a good series, what kind of format are people looking for? And I love how you guys are approaching your platform with that as a focus first instead of trying to figure it out afterwards and figure out, "Why aren't people interacting? Why aren't they loving this series?" Super smart.Ivonne:Yeah, exactly. And you know what? I have my agency, I have several agency partners but I have one that is over all the development and optimization of the website, et cetera. And I told them, "This is an ongoing project, is going to be always an ongoing project because... And I want to iterate every single week because the algorithms are learning. And as we learned about how users are interacting, there's always going to be something to optimize and change and improve the user experience and the user journey. So it's a mind shift because you are iterating and calling it changing, tweaking, it doesn't mean that the platform need is broken, it means that there's always, always, always the consumer behavior is changing and if you forget about that and just launch something and leave it, is going to be outdated next month. So you have to change as your consumer expectations and preferences change all the time, it never stops.Stephanie:Yes. How do you want... I mean, when thinking about your employee base, it sounds like they're working on a ton. You can be working on Super Bowl commercials, you can be working on day to day, like traffic generation. You can be working on an entire content platform where maybe you're trying to bring on new musicians and getting new series created. How do you instill a sense of creativity and an entrepreneurial spirit in them so that they're willing to jump around and work on all these things?Ivonne:It's just a lot of fun. I mean, I think that is... I work with seven agency partners because I think we do so much and every one of them has a specialization in one of the digital... The areas of digital and all of them I think say that Avocados From Mexico is their most fun account. And is one, because it's a fun brand but also because also they have a lot of creative freedom. I really value creative idea that is also strategic. We're very, very strategic. And as long as it ties to the strategy, the sky is the limit, their imagination is their limit. And then we really have fun bringing these crazy ideas. And we do so much that is impossible for one person to bring all the good idea. So everybody has the opportunity to participate and to lead and manage their own projects and they work also very collaborated between all of them and all the agencies, it feels like one big agency working together but it's really different partners.Stephanie:Mm-hmm (affirmative)Ivonne:And it's all about ownership, when people feel the ownership of a project it's amazing what they can do.Stephanie:Yeah. That's awesome. So do you have any advice around working with agencies? Because we've heard from quite a few people that a lot of them have worked with agencies, they didn't have good experiences they ended up the creative and the branding and marketing campaigns back in house. And so how do you go about making sure that you're setting up a great partnership and finding these agencies like these that you speak so highly of?Ivonne:I believe that the agency choice is such a personal choice. Let me explain, the person that is... Or the company culture, the culture of the team, this agency is going to work with internally, the decision maker within the organization has to be a perfect match with the agency. And with that, I want to say, there's not a perfect agency for every... There's not a one pit soul. And I'm not talking about, there's great, great agencies that may not be a good fit for certain people or certain companies. In my case and in the case of Avocados From Mexico, just because we have the freedom to slate the partners we want to work with, they are a perfect match. And I think that makes a difference.Ivonne:So what is my criteria, is that they have to be a very, very creative agency, which of course, any agency should be, but it's a different kind of creativity. They have to move fast, they have to be nimble, they have to be a non-conformance. They have to be... There's so many things that it wouldn't work for us if it wouldn't be that way. And I think that every... That freedom that we have to select our partners should be... Any company should have it because it's like selecting a life partner or selecting a business partner is someone you really, really have to compliment each other and fit perfectly.Stephanie:Yeah. Really, really good advice. All right. Let's shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you ready to Ivonne?Ivonne:Yes. Stephanie:All right. Hard one first, what one thing will have the biggest impact on ecommerce in the next year?Ivonne:Data.Stephanie:All right. Tell me a bit more, what are you thinking around data?Ivonne:Well, data, and I think that companies... Any company, any technology company that has anything to do in that feel of ecommerce is really, really fast right now creating the new best solution. There are things they are working on right now that are going to come out next week or in a month or two months that doesn't exist now. And they are building all that based on data they are capturing now as we speak. So I think that data is going to be the big driver for technology capabilities, for how the technology is and users are going to interact with each other. And there's so much data out there that we are learning right now how to organize it and how to activate it. And that knowledge is what is going to be used to build the next generation of ecommerce tools.Stephanie:Yes. Love it. When you want to get into the creative mindset, what do you do to get into that-Ivonne:I walk.Stephanie:You walk?Ivonne:I walk in nature. It's very unfortunate what happened to the world in this last year. A lot of people... So really sad consequences but I can tell you in my case I think professionally speaking, it was my best year ever. It was my most creative year, my most productive year because I realized that the way I create is by being close to nature and being with my own thoughts and using that reflecting on things that I talk with people in the industry, things that I read but then going back and retrieve and reflect on those things. And I think definitely, I think that everybody should have that space to let their creative power to work on[inaudible 00:46:44]Stephanie:Yeah. I love that. I feel that I also... Yeah, I get very inspired when I'm just out walking and hiking and yeah, I think that's definitely a way to jumpstart that.Ivonne:Yeah. And I like to, I go on a bike, right now that it's getting warmer here in Texas is biking time again and I think my best ideas come when I'm on the bike or when I'm walking, because you don't have interruptions, you don't have a phone ringing, you don't have texts, you don't have anything. So it's you and your thoughts and the brain is an amazing machine that is processing everything that came in at some point and organizing it and making sense of it and coming up with new outputs.Stephanie:Yes. Yeah. You just have to bike on down to Austin, when you get here, we can go on a hike and we'll be super creative and you'll be really in shape so...Ivonne:Awesome.Stephanie:It'd be great.Ivonne:Love to.Stephanie:If you had a podcast what would it be about and who would your first guest be?Ivonne:That's a hard one. I think it will be definitely something related with technology. It will about disruptive technology and new shield solutions. I don't know exactly it doesn't come to my mind what will be my first guest but I think that I would love to interview a woman in technology. I think it's a field where women are being very successful but it was not until recently that they really had a place on the table in that industry. So it would be very interesting to learn how that has been and how it feels to be one of these top technology companies, preferably if she is a founder of a technology company and see how she leaves and interacts in an industry that only until recently became recognizing female as leader.Stephanie:Yes. That sounds like a good one. I would for sure listen to that. Well, Ivonne, thanks so much for coming on the show. It's been really fun to get a peek into some of your marketing and digital strategies and yeah, it was just really fun feeling like I had a chance to glimpse into the future with you. Where can people find out more about you and Avocados From Mexico?Ivonne:So we, Avocados From Mexico on Twitter is Avos From Mexico and about me, I have the same in Twitter, Instagram, Facebook, LinkedIn is all Ivonne Kinser, I-V-O-N-N-E K-I-N-E-R.Stephanie:Amazing. Thanks so much, Ivonne.Ivonne:Thank you.

It seems like selling a product that is designed to make you feel good should be a cake walk. But as we all know, business is never easy, especially when you’re breaking into the supplement and nutritional bar space, which is overcrowded with industry giants such as Clif bars and KIND. So what’s an upstart company with a solid product and good intentions to do?On this episode of Up Next in Commerce, we found out when we talked to Chris Bernard, the co-founder, CEO and Chief Mood Officer for Mindright, the good mood superfood. As it turns out, there are a few ways that a small new company can make a splash, especially in the digital space. Chris explains how organic reach outs and authentic connections formed through his partnership with Rob Dyrdek has helped Mindright create an influencer and ambassador community that wins against influencer fatigue. Plus Chris, he digs into why a content strategy that blends humor and education is what gets the attention of the digital audience. Enjoy this episode.Main Takeaways:Be Serious… But Have A Laugh: Fun and funny content is a great way to build a relationship with consumers and to sell the lifestyle that you want your brand to be about. But you also have to balance real education and sales tactics into your content along with the comedic elements so that customers can get the full picture of what a brand is, why they should buy it, and to convince them to complete the purchase.Can I Get A Sample?: Free samples used to be a staple at grocery stores and markets everywhere, and those samples were a key way that new companies created buy-in with potential customers. Now that the industry has shifted away from that model, finding a new way to hyper-target customers with influencers, deals, and content is the best way to bring customers into the fold.Influencer Fatigue: Consumers are wise to the influencer strategy these days, and their fatigue is real when it comes to consuming influencer content. In order for brands to fight that fatigue and win engagement, building buzz around future products rather than current offerings is one of the best ways to do it.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone and welcome back to Up Next In Commerce. This is your host, Stephanie Postles, CEO at mission.org. Today on the show we have Chris Bernard, the co-founder and CEO and Chief Mood Officer at Mindright. Chris, welcome to the show.Chris:Thank you for having me. Appreciate it.Stephanie:It's good to have you. Would you rather have me call you Bernie? Which one do you want?Chris:My friends and my coworkers call me Bernie, but whatever you're comfortable with.Stephanie:I'm your friend.Chris:Okay, call me Bernie.Stephanie:All right. I like it. So in the beginning, I like to always hear about your background, your journey and how you got to Mindright. So maybe if we could start there. What did you do before Mindright, we'd like to hear.Chris:What I did before Mindright was I was in action sports for a little over 15 years. I represented brands like Burton Snowboards in their sales and marketing channels as an independent contractor. I left that business in 2015 and I invested in a company called, Buff Bake which was protein snacks and protein cookies, nut butters and I came on board with them as part of that investment as the CEO and I helped them run that company for a few years until I was ready to try something new and had an idea and ended up launching this Mindright.Stephanie:So did you have the idea for Mindright right after Buff Bake or was there something in between there?Chris:It was something in between and it just evolved very quickly into what it is today.Stephanie:Okay. What was your original idea? And then what is it today?Chris:Vegan cookie dough.Stephanie:Well that sounds good. I dig that.Chris:It was okay. It wasn't great and that's why I kept it out of the vine and I think we'll probably get into it. But one of the things that dismissed the idea was it really for me, I was looking for something condition specific. Functional foods are really driving the category right now and it's all about condition specific. Foods that drive beauty from within, through collagen, immune support, sleep support.Chris:It's really how we came to Mindright. We started to see this trend in supplements and when you're looking for trends that are going to be shifting to food and beverage, you always start with supplements and you see this rise of adaptogens and nootropics and brain supplements and anti-aging and it's just skyrocketing growth in supplements. It was this idea of how do we support our lifestyle through our mindset, our long hours, our drive, our energy levels through ingredients that support cognitive function. And that's where we started was this idea of cognitive food support and I came to my partner with this idea, he absolutely loved it. At the time the working name was Feed Your Brain.Stephanie:Cool. I like that name.Chris:And it was just really focused on brain health.Stephanie:Do you have a background in this world? How would you even know? When I'm thinking about brain health, I'm like, "Feels like there's so many things. I should be doing facial or I should be doing this. I should be doing so many things." Did you have a background in this where you already knew this makes me feel good? Or did you have to learn all about it?Chris:No, I just knew I wasn't feeling good. I always feel this brain fog and slow and besides this fact that you just hit 40, things start to slow down a little bit and you're looking for ways to support your lifestyle and just keep your edge and just keep moving forward and you start researching and there's a lot of great information around brain health, mental wellbeing, nutrition and other things that support those functions.Stephanie:Okay. And so what were some of the ingredients that you started finding that you're like, "We need to have this in some kind of bar."Chris:It was like lion's mane, Gingko biloba, both of which didn't make the cut at the end.Stephanie:Oh, how come?Chris:Well this is where I was going was, as we started with Brain Health, my partner who is a very big advocate of testing and research pushed to really go out and survey a group around 350 people. And while cognitive function was important to them, what indexed the highest was, "Do you have foods and ingredients that help me feel good? Happy, good mood. I want to be focused and feeling good." And this theme of feel good, just kept popping up and popping up and we took a step back and it was indexed so high. Like, "Why don't we just lean into good mood?" We've got a set of ingredients. We've got some data behind some of the ingredients we're using to really support enhancing your mood, decreasing your stress and giving you energy. All the things you need to feel good. So we need to do it. And that's how Good Mood Superfood was born.Stephanie:Cool. And did you always know that it would turn into a bar or did you have other thoughts early on?Chris:We had many thoughts and we still have many thoughts. This was our way of really standing up the brand, getting a feel for our branding, our message, bars is just the starting point. We have a really dynamic innovation pipeline of other snacks, drink blends, hydration drink. Things that will help support other areas of brain health.Stephanie:Very cool. So let's talk a bit about your partner and how that working relationship is and how you even landed him as your partner.Chris:So I was introduced to Rob Dyrdek, legendary TV personality, former skateboard, a professional athlete. Rob has a show on MTV right now called Ridiculousness. I grew up watching his other shows, Rob & Big and Fantasy Factory, as many of us did.Stephanie:Rob & Big, that's a good show.Chris:It was amazing. So then we just look forward to every week watching. He's just such a character and dynamic human being. But what people don't know is he runs a really diverse, exciting venture creation studio. He refers to himself and the people around him as do or diers, people that are interested in investing in themselves, growing businesses from the idea stage to the exit. And he's invested in several brands, primarily at the startup stage. And when I came to him, I was in the transition period in my life. I didn't know why I was meeting him.Chris:I was going to go in and just introduce myself. And I brought Buff Bake with me just in case he was interested in investing because always looking for investors and he made me tell him my life story from the day I was born until the day I ended up sitting in the chair in front of him.Stephanie:Wow. I should have done that.Chris:It's not that interesting. But he really liked it. And I spent 55 of my 60 minutes talking about myself and then he's like, "Okay. So what's up with these cookies? What's up with this Buff Bake? He's like, "Okay. Those are really good. I like them but I really like you. If you have some ideas or you want to do something, come back and let's talk about it."Chris:I left and I got a call two weeks later from him, wanted me to come back again. Again, didn't really know why I was going there. He wanted to pitch me on some ideas. And it just flew over my head. I went home, I called his COO and I was like, "What's he looking for?" He wanted an idea from me. He wanted to work on something. So I had been in the background working on these cognitive ingredients, paired with superfoods and brought it back to him as a whole package. I came in with fully developed samples around bars and coffee creamers and bites to really articulate what this could look like. And he was so excited about the presentation. He just sealed the deal with me on the spot and we were off to the races.Stephanie:That's amazing. What does the partnership look like with him? How's he involved?Chris:He is very, very involved. He wants to be very involved in the creative process, but also through all the funding, the financial rounds, building the infrastructure of the company. He has built a really strong team around him. Managing the finance arm, managing the marketing project teams. So it's an extension of my team. We are true co-founders, he's very, very involved in the business and he and I are either working together on the daily basis or he and his team are fully integrated in.Stephanie:That's really cool. And it seems like once you get access to him and then you had his network, it brings in other investors as well.Chris:Yeah. So that's the next thing that happened. So we stand this thing up and we start to go out to bring in some strategic capital to help push things along. We started with some traditional resources and private equity and some strategics within the space. And then we started talking to his network a little bit and all of a sudden we saw how excited they were and one conversation led to the next, led to the next, the next thing you know it's Marcus Lemonus from the profits. Jonas was extremely excited about the project. He now sits on the board with myself and Rob. Joe brought his brothers on as well. Jordan McGraw, Travis Barker, Ken Roxanne. It's just this star-studded list of really great mindset celebrities and athletes. Very, very exciting.Stephanie:It seems like you have your own portfolio of influencers. You can get the word out there. While most people you're trying to even think about, "How do I even tap into one of those?" You've got this whole little Rolodex just working for you.Chris:Right. So it's exciting. I think that being able to have that leverage and that advantage really puts us in a unique position to tell the story.Stephanie:Awesome. So tell me a bit about, you said that you were getting samples when you were going to go and show him what you could do. What did that process look like? Because to me thinking about even making any kind of food and then getting the packaging and then getting ingredients that maybe some people aren't the most comfortable with. If you hear some of the words you'd be like, "Well, what is that like? Is that even safe?" Tell me what that process looked like to even find someone who could make the bar that you wanted to taste good and have all that ready for the sample day.Chris:It's funny. You start with the manufacturers. Every manufacturer has a food scientist, R&D, most of them do. Food scientists and R&D department. And most of the time, if they're excited about your project, they will help your R&D. It comes with strings attached and not always do you end up owning your IP, which is important if you're interested in exiting your company at some point, but you learn the process of what goes into R&D products.Chris:And I came in, you come in with a brief and your core tenants for, "These are the ingredients that I would like to use as superfoods. These are the outputs that we'd like to achieve, enhance mood, stress, energy. These are the functional ingredients we're thinking about." And then you work with the ingredient suppliers to understand efficacy and transparency around their ingredients. And you let these guys do their job and you like what you like and you don't when you don't. And I think we did about 13 rounds of this bar until we landed in a place that we felt really good about.Stephanie:That wasn't just you testing it or were there other people trying it?Chris:It was Rob and the entire team. His close team is a team of five.Stephanie:That is awesome. What kind of lessons did you learn when going through that process? Anything that you would maybe do different?Chris:Well, I'll tell you one thing. We tried to be everything but the kitchen sink. We wanted to be keto, we wanted to be paleo, we wanted to be zero sugar. We wanted to be everything. Vegan, dairy-free, gluten-free and have functional ingredients that support incredible, feel, good vibes and decrease your stress. And we were realistic that not all of that was going to work and our guiding light really became taste. If it doesn't taste good, I don't care if it has all those things, it's just not going to work for us. So we planted a flag and it was about taste. And we want this thing that tastes good. And if it has five or six or seven grams of sugar, we use a coconut Palm sugar, which we felt really good about. It was therapeutic. It was like, "Okay, great. We don't have to use sugar, alcohol, or stevia or erythritol or anything. We're going to use coconut Palm sugar. It's a low-glycemic sugar. It tastes great. The bar still has 50% less sugar than an RXBAR or competitor. And we felt really great about that.Stephanie:That's awesome. How do you view the landscape right now? Because I know when I go into certain grocery stores, I'm like, "Wow, there's so many bars." There's the original type RXBARS but now it feels like there's so many offshoots. Everyone's trying to do lower sugar. Maybe not what you're doing, but how do you make sure that you're staying ahead of them and also differentiating yourself where people are like, "Oh, obviously we can see why they're different than all these other bars."Chris:I think again, it came down to taste, great amount of protein, our base values of, it is plant-based vegan, it is dairy free, it is protein packed and low sugar were really important to us. But I think we'll continue to stand out with what our functional message around supporting mood through these super foods and ingredients. And we are just sticking with that.Stephanie:How do you get in front of new people though? I'm thinking about back in the day, samples where you're like, "Oh, I would never have thought to buy that, but now I can see it's healthy for me and good." How do you approach that now trying to get in front of new people and have them try it for the first time?Chris:It's difficult, especially through a global pandemic of people at home and not having opportunities sample in the markets or elsewhere. And for us, it's just leaning into our influencers, our investment community, paid ads, really important. Finding unique ways to drive trial, pinpointing and targeting specific communities. It'd be really great to be everything to everyone but if we could just focus on this core group that's committed to their mindset. They're coaches, they're hustlers, they're the boss, they're the mom and they're focused on what it takes for them to be successful every day. We call them the happy hustlers. That's where we're starting. Our initial reaction was the right one. They're really resonating with the product. They're speaking about the product for us organically. And we're just going to continue to focus on that community right now. And then it'll just hopefully grow from there.Stephanie:It also seems like you have a really good idea around your social presence and how you want to present yourself. It's like a fun whimsical looking, at least your Instagram feed and it's not overly product driven, but it's more selling the lifestyle behind it which I really liked.Chris:Exactly. That's exactly right. And that's what's resonated the most is people are realizing that Mindright is a lifestyle. It's not just about the products. We want to support you beyond that. And as you'll see over the next couple months, we're really going to lean into what it takes to have a better mood, to put the work into your mental wellbeing and really drive home this good mood movement. And being approachable and fun, makes it just easier to pay attention and watch and fun and funny is part of feeling good. And that's the message that we want out there.Stephanie:It sounds like your content strategy you're about to ramp up around those areas. How are you going to keep it balanced between educational, which I feel like a lot of people need education around the ingredients and why they're added and how they need to be mixed together and then the other side around even outside of the product. Like you said, just good mood and how to feel happy and mindfulness and it's like a whole different business over there. How are you thinking about balancing that and connecting with the right audience?Chris:It's just that. It's balancing, trying different things. It's balancing being funny with incorporating lifestyle and people enjoying the product. You're going to just start to see more direct response and testimonials. We are looking to partner with therapy based apps and other entities that help make mental health and wellness really accessible. We're going to have our investment team and our influencers talking about the work that it takes to get Mindright. It's not just, this bar is not going to solve your problems, it's not. But if you focus on your nutrition and you incorporate things like the importance of sleep and getting exercise and some type of a meditation routine, all of these things combined bring you to that next place.Stephanie:Yep. Yeah. It's not just try one thing and all of a sudden everything will be solved, like many things and there's no magic potion.Chris:I think that that's where other companies that are trying, mood or all of these other cognitive functional ingredients, they could fall short because they're making it just about that. And I think that we'll go along for the ride and we'll be there to support our customers along the way.Stephanie:That's great. So you just mentioned influencers. I'm going to go and I want to hear how you view working with influencers because we've had quite a few brands on the show and they talked about it. Some people, amazing experiences if you find the right person who is all in, it's not just sharing a quick message of like, "Here's my teeth whitener and it works great for me go buy it." Versus maybe the ones that are really in they're even part the product development. How do you view a good working relationship with influencers? And more than one, since you have many that you have to balance.Chris:I think for us, it's about being authentic. If it's not something you enjoy and you truly believe in it comes through. You see it and you feel it. And I think having our influencers part of our ambassador program, which we're just at the early stages of building out, is a really important part around building the authenticity of their message. Our influencer program is very small right now, we're still identifying how they're speaking about the brand and what are the best ways to do that. But what we've gotten so far comes from a really organic place. We haven't paid for any influencers yet. All organic because people are enjoying the product and sharing the message with their community.Stephanie:Are you sending them free samples or is it more your investors giving it to their friends who are other influencers probably. And then it's organically happening through that way?Chris:A little bit of both. We identified people that live within our community that we would like to target and say, "Hey, we'd love your feedback. No expectations. You don't need to post. We just ask you tell us how you enjoyed the product. How'd you feel? What do you think about the packaging?" And then it just happens organically.Stephanie:How do you view the longterm strategy around influencers? Because sometimes it feels like they'll have this excitement and a big blip where their network sees it. And then there's maybe diminishing returns and people are either hit over the head with it too much. Or like, "I bought it. It's good." Or the person's not as excited anymore as they were maybe in month one. How do you keep them engaged or be like, "Okay. We're kind of good for now."Chris:We see that fatigue all the time. And I think for us, it's the excitement around what's coming. It's creating community around the lifestyle and the future launch of our new products. The bar is here today. It might not be here in three years from now. It's about continuing to evolve and supporting our needs today.Stephanie:Makes sense. So tell me a bit more about this ambassador program that you're building.Chris:We're at the early stages where we're leaning into this mindset community from happy hustlers. We have three investors on the team that live and breathe in that space. And that's Chris and Lori Harder, their lifestyle coaches and then Lewis Howes who also has a podcast, The School of Greatness. And just really leaning into what they do and how they do it and their communities coming to us and we're setting them up and they're incentivized by product. One of the angles that we're working on right now is charity. When they post, we will support a soon to be identified a mental health charity with an investment.Stephanie:When they're posting about the bar or the company, something like that, then it's like, "Okay, that's a point towards this charity or effect."Chris:Exactly. Those are the early stages. We're still in development. It's still being worked out. We're less than two months old in the market, so we're close.Stephanie:Are there other ambassador programs that you look at where you're maybe taking some key learnings from where you're like, "I know this one works well and I want to implement some of those strategies into Mindright as well."Chris:Yes. A lot of them are custom built though. There's a lot of really great app solutions that work really well and incentivize through product or discount or payment. We want to try to be more organic. I've seen some great custom ones that are gamified, that built community around this excitement around this app itself and the message. So work in progress.Stephanie:That'd be cool to circle back and hear what you ended up building and how it's working and the results. So tell me about your distribution strategy and where you're thinking about selling. Are you on Amazon? Is it just your website and how do you think about where you actually want your bars to be sold right now?Chris:It's everything digitally native. So we are alive on our website getmindright.com. We're on Amazon. We're looking at a various array of subscription box companies. But the really big one right now is all of the delivery convenience guys. So this new evolution of convenience, prime is not good enough. It can't be there the next day. It needs to be there in 20 minutes. So we're looking at partnerships with goPuff, FastAF, Dot. We're in the process of vetting those guys out right now and seeing which one makes the most sense. And I think that can meet format. It's just growing and exploding right now. Through COVID people were forced to adapt to Amazon and delivery service and it's here to stay. It's here to stay. Those conveniences will never change.Stephanie:Are you worried about maybe your brand and the story not being told correctly when you're starting to have many outlets for your products going out and you can't fully control the messaging or?Chris:Yeah. I think that's why picking the right partner for these delivery services is key because we want to make sure that we have the ability to tell a story, whether it's this big or in a banner. It's really partnering with the right team to help make that happen. And then we have a lot of work to do on our end. And I think that our community will help push people to these services. Amazon, getmindright, goPuff, that's where we go and they'll really rely on on that. It's challenging.Stephanie:Yeah, no. Especially when you have so many different people you're vetting right now and thinking about all of the control that you could be losing but also all the access that you're going to be gaining. It's tricky. Because this is a commerce show, I want to hear about your ecommerce strategy around what's working. What do you think that you're doing on your website that maybe is unique and others haven't tried out yet or that you're like, "This is a good tip that more people need to know about."Chris:I think it being less templated and more just an experience where it just feels fun. It makes you dive a little bit deeper to find out what's going on. What works for some people doesn't always work for others and I think this format is working well for us right now.Stephanie:Do you find yourself being able to look back at maybe your experiences at Burton and other places and pulling some lessons from there? Or is it such a different market that you're like, "That probably wouldn't work for this product."Chris:I think it's very similar. I think at the end of the day, you're selling an item that you're passionate and excited about and what is the best way to share that with your friends or your customers? It's very similar in that sense.Stephanie:Yeah. That's cool. So where do you guys want to be in one to three years? What are you hoping to achieve?Chris:We're looking to achieve this just amazing platform of good mood foods that span across really great retailers, Whole Foods, all the natural channels. It would be really great to see it everywhere obviously, but this really accessible approach to foods that help support your mood.Stephanie:Have you started talking to Whole Foods and other retailers like that?Chris:We've had some early conversations, but we really want to stay firm on this digitally native approach. I think that one thing that I'll add is testing is worth spending money on. Just test landing pages, AB testing, digital testing, customer testing. It has opened my eyes to this completely different world. And it is a true science. And when you understand that word that works, that picture that works, that landing page that just converted, it's a science. And then you can continue to really invest towards those things that are working because you know there's turn on that.Stephanie:Yeah. I agree. What is a finding that maybe came out of some of those tests where you were like, "We would have never changed this, changed the product, change the website, but now that so many people are saying this, we're definitely moving forward with that.Chris:I would go back to the beginning where Rob and I, Mindright. There was two different names before Mindright. And now I look back, I'm like, "Neither of those would have worked. Mindright should have always been number one." We tested Mindright. Mindright worked really well but We wanted to brand the ingredients themselves. And we were like the unstoppable blend. We're unstoppable. This mentality of you cannot be stopped, masculine. And we were so sure of it and it failed miserably.Stephanie:They were like, "I don't like that."Chris:No, no. So now at the happy brain blend.Stephanie:That makes me feel happy. That's more on brand.Chris:Yeah. And then from that moment on we're like, "That's our guiding light." It makes me feel happy. Does it? Yes Or no. Okay. It's in.Stephanie:And how are you doing these tests? How are you going about trying to get this feedback? Are they surveys or what are you all doing behind the scenes?Chris:Yeah. Surveys. Right now, we've moved to more surveys. We're surveying around our current database of growing email subscriptions and then we're going to start doing some stuff through Instagram, social media. But the original testing went through a market research firm.Stephanie:All right. Well, let's shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you ready?Chris:No.Stephanie:Nope. Be right back. Need to go get some more tea. Get In the right mood here. All right. Well, we will move on anyways. If you had a podcast, what would it be about and who would your first guest be?Chris:Oh my gosh. My podcast would be about thinking big. My whole life I never thought big. I thought pretty small and I put roadblocks up in front of myself and I think that now as I sit on a board with Rob Dyrdek and Joe Jonas, literally anything is possible and it would be about stories and ways to help open up your mind to anything is really possible. And I think as cheesy as that sounds, it really is. And I feel like here in my home with my kids and now that we're talking about getting Mindright and this positive growth mindset and to hear them talking about it, it's a real thing. I don't have a title yet. I'll let you name the podcast.Stephanie:There you go. I'll help you name it. Who would you bring on for your first guest?Chris:I bring in Rob. He is an amazing person to talk to about all of this stuff. His mindset is just next level with what he does to keep his energy and his success where it is. It's remarkable.Stephanie:Awesome. What does your mindfulness practice look like?Chris:I'm sorry.Stephanie:What does your mindfulness practice look like? How do you stay centered and balanced and not getting pulled everywhere when doing a startup?Chris:I think for me, I committed to getting up early every morning. I have to be up by 5:00,5:15 or else I can't do the things that I want to do for myself, which is exercise or just have a moment of meditation. Whether it's a minute or five minutes or 20 minutes. I try to do that every morning. I have four kids so life is really hard sometimes. Here they are.Stephanie:I feel that.Chris:So it's get up early, it's a few minutes of meditating and just understanding where I'm at and being really grateful for that. Exercise, 30 minutes. That is my non-negotiable. I have to get 30 minutes in, if I don't my day is just off and once in a blue moon we have a sauna that was gifted to us by-Stephanie:Wow.Chris:It was miracle. That's another podcast.Stephanie:Yeah. Okay. I want that friend. Gift me a sauna.Chris:It was some local guy just giving it away. He was moving.Stephanie:What area of California do you live in because I don't know about many local areas being like, "Here's a sauna. Do you want ice staff as well?"Chris:I'm on the hunt for one of those. So, if you know one. I started fasting, so I intermittent fast. I don't eat my first meal until 12:00 or 1:00. And I found it's really helped with inflammation and energy and I feel great. I also stop thinking through COVID I just-Stephanie:So impressive.Chris:30 days and then you felt great and 60 days, I'm like, "Wow, I feel awesome." And it just stuck.Stephanie:All right. Last question. Two more questions. What's one thing that you don't understand today that you wish you did?Chris:What don't I understand. I don't understand a lot of things let's be honest.Stephanie:Good answer. Just everything. Lots of things.Chris:No. I think for me, part of the reason why we're starting digitally native is almost a personal challenge to myself. I know retail really well, I know relationships, building brands, building distribution, working with brokers. I don't understand digital that well. And it can be frustrating at times because the learning curve is pretty steep and it's always changing every day because you're learning something new and I think digital marketing I don't know very well.Stephanie:Well, you'll be learning it with this company. So that's great.Chris:It'd be great to hire the right people to help you.Stephanie:Mm-hmm (affirmative). Yeah. 1,000% to that one. All right. And then the last one, what one thing will have the biggest impact on ecommerce in the next year?Chris:I think it's these convenience delivery guys. I think they're going to change the game for a lot of people. FastAF is a really good example of what's happening with commerce outside of food and beverage, because they're delivering unique gifts. You need a gift and you're going to a party in an hour, they'll be there in 20 minutes with this beautiful candle or gift item which is just changing the way that we do everything.Stephanie:Yeah. Oh, I completely agree. All right. Well, this has been such a blast. I feel like my mind is really in the right place now after this interview. Where can people find out more about you and Mindright?Chris:Check us out at getmindright.com or on Amazon.Stephanie:All right. Cool. Well, thanks so much for coming on the show.Chris:I really appreciate it. Thanks so much.

Repeat customers are the heart and soul of just about every business. But when your product is something that you purchase maybe two or three times throughout your life, how do you create a repeat experience that will sustain your company long-term? That was one of the questions that Chip Malt had to answer when he co-founded Made In Cookware, a digitally-native kitchenware company that launched in September 2017 and is disrupting this $17B cookware industry.And the solution he came up with was a good one: produce the highest quality products possible, have a deep understanding of the industry you’re entering into, deliver an all-around experience that goes beyond those products, then keep scaling to bring more must-haves to market.This episode was such a fun one because we dove into the history of the cookware industry, long term partnerships they’ve set up in France (their knives are made from the great-great-great-granddaughter of a French knife maker who invented the modern chef knife in the middle of Central France), secret recipes for their cookware ingredients, the best cooking tip he ever learned, and more. Enjoy this episode.Main Takeaways:Make It Memorable: Customers today are looking for experiences. In order to secure a sale or differentiate your brand, bringing a next-level experience to the table is a proven tactic. Partner with the people you are connected to in your industry — influencers, celebrities, etc. — who are fans of your brand and create something special for potential customers.A Living Legacy: Connections are made constantly in personal and professional life. Smart business owners use those connections to their advantage. When you can tap into a reservoir of friends, friends of friends, family connections or business relationships of the past who can speak on your behalf or join you in a new venture, you immediately start to create a sense of legitimacy that can spread more easily to those you have yet to connect with.First Time, Best Time: There are many examples of brands that have launched products quickly because they thought it was better to get a product to market than wait for perfection. But the opposite approach is also worth consideration. Rushing a product to market that isn’t up to your brand standards might be what dooms you with new customers who find you for the first time through this subpar product and then judge the entire brand based solely on that experience.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, CEO and Mission.org. Today on the show, we have Chip Malt, the co-founder and CEO at Made In Cookware. Chip, welcome to the show.Chip:Awesome. Thanks for having me, Stephanie.Stephanie:Yeah. I'm really excited to have you here. I might not be the biggest chef, but I feel like I'm still down to talk all things cookware and maybe you can train me up on what I should be doing, and I need all the help I can get. That's my caveat to start this show.Chip:Awesome. We're happy to do so.Stephanie:Yeah. I like that. So, I want to dive into the background of Made In Cookware because I think you have super interesting story where, correct me if I'm wrong, you started and co-founded the company with a childhood best friend and you guys have a lot of history in the industry with your family and family's family, and I would love to dive deep into all that background before we get into the actual company of where it is today.Chip:Absolutely. Yeah. So, we started the company, or officially launched it, in 2017. So, we're just over three years old, now entering our fourth year. But really, the story began a long time before that, as you mentioned. My co-founder, Jake Kalick, he comes from a hundred year old family that has experience with cookware. So, his great-grandfather in Boston where he grew up started a business that outfitted restaurants and hotels, their kitchens with everything from walk-in refrigerators to knives to cookware to a lot of stuff that we're selling today. So, he comes from almost 10 decades of experience in the cookware space, or his family does. Then Jake and I grew up together. We actually went to preschool together.Stephanie:Wow.Chip:We were in the yellow and blue room together, then we went to pre-kindergarten and went to a school that was the same all the way from pre-kindergarten through 12th grade when we left for college. So, our history goes back 28 years and we're 33. So, almost to the beginning of when you can even start to remember, and we've been best friends ever since. So, it's been a pretty incredible journey. We've been able to mesh his background, his family's background, his family's history into our childhood friendship into a business and have fun doing it. So, it's been a pretty cool journey so far.Stephanie:Yeah. Were there ever points when you guys veered apart, came back together? When did you know or even think, oh, we should do something together?Chip:Yeah. To be honest, and it's nice that he's not on this podcast because he can't defend himself, but I don't think growing up I would ever start a business with him. I was more of the studious one.Stephanie:I know too much about you.Chip:Yeah, exactly. I was more of the studious one. I would say he would copy off me in high school if we had to simplify it, and also that I remember me in the space, in the cookware space as well. That's his background and his journey. So, it's been really cool. To be honest, the startup world and starting a business, I feel like the public only gets to see the glamorous side of things. But it's a lot of hard work. It's a lot of ups and downs. For just as many amazing days and successful days we have, you have a really tough day as well. So, going through that with someone you're close with that at the end of the day, you can just have a beer and destress is a pretty incredible experience.Stephanie:Yeah. So, when taking best practices and lessons from maybe his family history and how they've been doing things, what did that feel like, taking this company and maybe bringing in new practices and new ideas? Was there any bit of a struggle behind that where they're like, "No, no, no. We've done this for a hundred years. We know what we're doing. Come on, Chip. Just follow the lead"?Chip:No, we get that a lot. At some point or at some level, we are cutting out his family business. His family is a distributor. They take some of the incumbents who we're competing with now and then they sell them to restaurants and act as the middle man. Ecommerce and direct to consumer in general is a cut out the middle man strategy, and so we get that question a lot. Are they mad we're displacing that to some degree? No, his family's been nothing but supportive. They're super happy we're maintaining the history into something new and just evolving it into the way that the world is moving. So, they've been awesome.Chip:His family and his knowledge of just the product and the industry has been absolutely crucial [inaudible] starting a business. When we walk into a kitchen and we're talking to a Grant Achatz, who is one of the best chefs in the world, he's able to talk about BTUs of the burner that Grant's using and the oven and why it's better, and he's able to talk the talk. It really gives us an air of authenticity and an air of just immediate warmth when we have ... Food in general is a very relationship driven business. It has a lot of credibility when we're approaching partners.Stephanie:Yeah. I saw that you're in crazy restaurants, really big ones. Top chefs use you guys. How did you even get in the door of those people? Because to me, I think you can be really smart around the product stuff and why you need it, like you're talking about the BTUs of the burner and all this stuff. You can have that, but if you can't even get your foot in the door or get in front of those people, you can't really go anywhere. So, how did you guys make those relationships and get in there?Chip:Yeah. I would love to tell you that we sat in a boardroom and whiteboarded out the perfect strategy and absolutely nailed it off the bat, but that was clearly not the case and that's not how it played out. The way the company came about, and taking a step back, what we do is we sell kitchen goods. So, knives, cookware, multiclad stainless steel, carbon steel frying pans, down to wine glasses and table top items, and really anything to outfit a new kitchen you're walking into, Made In will provide that.Chip:Our ethos to start and our launching hypothesis was that food is so emotional and people are spending so much money going to a Whole Foods or a farmer's market and getting super excited about a marvelous grass fed steak from a local rancher who is 30 miles away and it's beautiful cut and then they're coming home and they're cooking it on a frying pan that's a hand-me-down that they couldn't even name the brand of, and it's ruining that steak. So, there is this behavioral disconnect of the beginning part of a process and all the care that went into it with the actual cooking at the end of the day, which was delivering the final product.Chip:So, we wanted to make people care about their cookware in an emotional way as much as they did the ingredient they were grabbing at the farmer's market. For us, that was meshing Jake's family history, that a hundred year old family history, with the craftsmanship approach of the manufacturers and partners that we work with. So, a good example of that is our knives are made from the great-great-great-granddaughter of a French knife maker who invented the modern chef knife in the middle of Central France. This area is the birthplace of cutlery, has so much deep history.Chip:You walk through and everything about this town is dedicated around knives. There's still the old factories with the old windmills that would power the old forges and it's just pure and center all knives. What we wanted to do was make a product and go back to that source and resource and tell that story so that when you pull the knife out to cut the steak that you just fell in love with, you also know all the craftsmanship and all the story that went into that knives.Chip:So, it was this approach of blending love and care on both side, a product to ingredient. So, that was in launch approach, and we carry that ethos through all our product lines. Our bakeware we just launched is from a proprietary recipe that's over 200 years old from the center of France as well, and that's what carries through every single product we make. That actually attracted all these partners. So, most stuff in our industry comes off of a boat oversees in Asia and is nameless and faceless and has a name printed on it, all looks the same, and no one was putting this time and attention and care into the supply chain portion.Chip:As soon as that happened, Tom Colicchio approached us and he said, "Honestly, I've been working in this industry for decades waiting for a company like you guys to come along. I want to partner with you guys," and he invested in us. From there, it was a snowball effect. Tom is just an incredible human being. Everyone respects him. He was able to be the first stamp of approval, along with our supply chain store being the second stamp, that started to attract a lot of amazing shops from around the world to be part of our brand.Chip:I'd say the last point in that, these aren't traditional influencer or endorsement deals. So, every chef we work with, they're authentic customers of ours. They're buying for their restaurants. It's not a pay to play deal. This is a real authentic relationship.Stephanie:That's awesome. Yeah. That's a theme I always hear and I think even for our company as well, that first customer is like the stamp of approval. Once you get the one big whale, then you can just be like, "Well, look. So-and-so is using it," and you can find their network. Yeah. Once you get that first one, I think everything gets easier. How did Tom hear about you? Were you guys doing some marketing tactics to get in front of him?Chip:No, through the grapevine. We approached Danny Meyer's fund as an investment proposal and we were too small. It was too early for them. They write 20 and $30 million checks for growth stage businesses and we hadn't even launched really yet. So, he introduced us. He was like, "Would you like to meet our friend, Tom Colicchio? He writes angel checks, and would that be okay to make the intro?" Obviously, we were trying to play it cool. We were like, "Yeah. I think we'd be okay with that." But obviously, we were ecstatic and super excited.Chip:We emailed Tom and didn't hear back from him for months were like, "All right. That clearly is not going to happen." All of a sudden, we got an email from him two months later out of the blue that was just, "Hey, guys. Landed back from filming Top Chef for two months. So sorry for the delay. Can you meet in New York tomorrow?" I don't know if he thought we were in New York as well. But obviously, we're in Austin, Texas and we were like, "Sure," and booked an immediate flight and more or less had a handshake deal to partner with him and get an investment from him that day. He was just a super awesome guy, super genuine, and believed in what we were doing, most importantly.Stephanie:That's amazing. So, what did that initial startup look like? You have an infusion of cash. What were your next steps? Was it already mapped out, or now you're like, "Whoa. This is really getting us to that next level. We need to change how we were thinking about it"?Chip:I had come from the apparel space, which I was working at a company called Rhone, helping them with digital marketing. So, if you were saying, "Hey, Chip. I need to go buy some stuff right now. I don't even know where to start," is generally the refrain we hear, and that was different from the apparel space because no one is looking at a T-shirt and saying, "I don't know how to use that. I don't know what to use that T-shirt." I put it on my body. We know that, right?Chip:So, the first year is all about learning what people really cared about, how to market our product. Our product is a performance based product. It will fundamentally make the food you cook better tasting, but how to deliver that in a way that makes sense to the normal consumer and it's not too chef-y, especially when we have all the chefs behind us. That was a huge learning process.Stephanie:Yeah. Someone once gave me a really big cast iron skillet and I remember being like, "Thank you so much. What do I do with this? How do I clean it?" And she's telling me, do salt and this and that. I'm like, "Oh, my gosh. Can I cook my engineering in here?" I tried a couple times and it just was burning and, okay, education is key around stuff like that. The one thing I was reading that I thought was really interesting too was your post-purchase engagement of basically using that as a training funnel, because you were maybe having people come in and complaining because they didn't really know how to use the cookware, and so you used that as a channel to start training them right after they purchased and maybe were checking in on the shipping and trying to see where their product was, that instead you would guide them to the website to train them. I'd love to hear how you thought about that, and do you still do that today?Chip:Yeah. I think we're very lucky in the sense that we have some of the best chefs in the world that are, again, our authentic partners and using our cookware. So, we thought a lot about and we sat back and we're lucky enough that because we work with these people, we're able to go into a restaurant and then the chefs generally come out and explain exactly how they made the dish they're serving us and there's very personal experience that heightens the entire enjoyment of going to that restaurant.Chip:So, we're sitting there and we actually kind of have a duty as a company, we have this entire group of chef partners and this entire group of home consumers to be the bridge between those so everyone else can have that experience and heighten their enjoyment of the use of the products. So, we work with these chefs. Grant Achatz taught us how to make an omelet, and he's known for this crazy molecular gastronomy. But actually, Grant Achatz grew up cooking in his parents' diner making eggs, and now he can do it the best in the world.Chip:We talk a lot about what can Made In do that no one else can, and we have this two-sided relationship that no one else does. So, how can we bridge that gap between the consumer and the chef in a way that really values and adds value to the consumer's process, and to us, that's education. So, you buy a carbon steel frying pan or you buy a piece of bakeware. Nancy Silverton, the best baker in the world, is going to give you a recipe to enjoy that product. If you buy carbon steel, as you said, carbon steel to us is a better cast iron, but there's a learning curve. The chef [inaudible] in New York is going to teach you how to season it, teaching you how to ... Wait. What the hell is that salt thing that that person was talking about, what that is, and how to use it, and that's coming from a real expert in the space.Stephanie:Oh, that's a really unique and interesting strategy. You're using the chefs as your influencers to train, and I feel like a lot of these chefs know how to speak in a language that'll connect with me so you don't really have to be like, "Wait, wait, wait. You're going too intense here. Let's dumb it down a bit." It seems like a lot of the best chefs have learned how to be the, what's the one, the Chef Ramsays of the world. Or there's another one I follow that's really good too on Instagram. Anyways, he does things in a way where I'm like, "I can do that," and it's just like, it's only five steps, it looks beautiful, but here's the two things that'll really take it to the next level.Chip:Yeah. Tom Colicchio and my co-founder, Jake, they both have the same philosophy, which is that you really get to enjoy cooking once you can just do the fundamentals. As soon as you break free of the recipe, you can actually start to enjoy the creative process [inaudible]. We talked about that a lot too, right? It's like, it's never been easier to order Uber Eats and have any meal you want delivered to your door within 40 minutes at a pretty good price. But people are cooking more and more, and why is that? It's because people actually love the process of the creativity behind it, of the expression behind it, of just the sense of accomplishment, or people do it to destress, or they're doing it for a specific diet.Chip:People are doing it for a very personal reason, and if we can give them the fundamentals of, hey, this is just a technique of how to sear a steak correctly, we don't need to give you, okay, add salt at the end or add a [inaudible] on it. That becomes your personal sense of creativity and your enjoyment for it. So, I'm just taking that to heart as well. If we can give you technique and how-tos as opposed to step by step by step recipes with the chefs who have gone to culinary school, who have done all this technique work for you, then it'll be a really powerful experience for the home consumer.Stephanie:Yeah, that's cool. What are a few of the top maybe cooking tips or tricks where you're like, "Once I learn this one thing, it changed my whole worldview on cooking"?Chip:Yeah. Definitely heat control. I think that is where most home cooks get in trouble. You talked a lot about just burning your eggs, or something like that, and it's not a hard concept, but there's everything flying around the internet of you need high heat to sear, and that's just not true, and low and slow is the best way to cook, etc. It really becomes down to your personal preference and style. You can sear a steak on low heat if you just do it correctly and give it its proper time and you can still have the exact reaction you want.Chip:Tom Colicchio is a low and slow guy and Grant Achatz tends to cook on higher heat. Everyone is doing it in their own way. So, I think for me, and even in my personal journey, understanding heat control and learning it correctly was the biggest unlock because that applies to the most amount of dishes that you cook. I think a good example of that is Tom Colicchio talks a lot about listening to your meal. So, when you have a pan and you heat it up, no oil, because most people will heat it with oil and burn the oil on and have a lot of dishes to do. So, you put a stainless clad piece of cookware on the burner, heat it up to temperature, dumping cold oil, let that heat up quickly, and then put on a cold steak.Chip:What is that cold steak going to do? It's going to drop the temperature in the pan. So, at that point, you need to have more heat into the pan to get that sear. But once everything gets up to rise, if you leave that high heat on, it's going to overcook everything and burn that oil again. So, then lowering it down. Everything on that is done to just paying attention to heat control.Stephanie:Is there any pushback that you guys have felt? You're in an industry that, to me, feels like an older one where people are like, "Oh, I've always used nonstick and it's fine." Now, it does feel like thing are changing where people are like, "These pans are toxic. They're not the best for the environment. There's a lot of things that you should think about." What kind of education around just using the products, but what else are you encountering right now when you're trying to push into this industry?Chip:Yeah. People do have a preference towards nonstick. It's the biggest objective business market to attack, and I think that's why you get the most amount of entrance into the nonstick space. It's also the most just Wild West of marketing as well, which we try and stay out of. The big push right now is "ceramic". I put it in air quotes or visual quotes because it's not actually ceramic. It's a Sol-Gel coating that looks like ceramic, and so the GreenPans of the world a decade ago dubbed it ceramic because it sounded nicer and sounded more premium. But really, it's a Sol-Gel coating.Chip:This was back in the day when DuPont was dumping stuff in water and all this stuff. So, they created this decade long fearmonger marketing tactic that a lot of companies have latched onto over the decades, and now GreenPan's actually in a class action lawsuit about all their face claims.Stephanie:I used to have a GreenPan.Chip:Yeah, exactly.Stephanie:I had to throw it away because I'm like, "I don't this is good to cook on."Chip:The problem with those too is Sol-Gel and "ceramic", which is how the normal person listening to this would hear it as, it doesn't last long. By definition, it's called a self-sacrificing surface. Every time you use it, it removes some surface. It scores four out of 10 on a durability score.Stephanie:That goes in your food, doesn't it?Chip:It does. But it's made out of what makes hair conditioner. So, you can eat your hair conditioner [inaudible]. But whatever. But just in terms of business, we're making performance based tools. We're not making a marketing gimmick company. Our gold standard is would this hold up in a commercial kitchen and would Grant Achatz or Tom Colicchio or Mashama Bailey, would they want to use this piece of cookware in their restaurant? You will never see a ceramic pan, a GreenPan pan in kitchen because that would last one week in a commercial kitchen.Chip:So, then they're making all these claims about better for you, better for the environment. If that thing's ending up in a landfill a week later, two weeks later, a month later, whatever it is, it's up to you to determine if that's actually better for the environment. [crosstalk] Yeah. Exactly. So, we're not in that game. We don't play in that game. We're here to make great tools that the best chefs in the world and the best home cooks and people who love to cook can use.Stephanie:Yeah. So, what kind of marketing are you guys finding most effective right now? When you said a lot of the other cookware brands are maybe using the fearmongering and just making claims that maybe aren't always the most accurate, what are you guys finding success in?Chip:Yeah. So, we love to tell the manufacturing story and the craftsmanship story. So, I'm just talking a lot about bakeware right now because we just launched on April 8th, and we went out to the factory in France and watched ... It goes through 50 people's hands who touch and inspect this and have been doing it for 30 or 40 years and it's such a beautiful process and it's pouring this clay and porcelain that is proprietary to them. I think there's one person who actually only knows the recipe and we're sitting there being like, this seems like a single point of failure as a business owner. You should make sure this person doesn't [crosstalk]-Stephanie:Oh, you're good.Chip:... [crosstalk] something. Like put it on Google Drive with a password protect or something. I don't know. But it's such a intimate, unique process and our customers love to see that, and the customer that appreciates that is our customer. Everything we make in the bakeware space is hand painted, and so we have these white porcelain with blue rims and red rims and every single piece is literally hand painted by brush. That's just so different than a lot of our competitors and what they do where the coolness comes from applying some coating that's powder blue or something like that. It's just totally different.Chip:So, we want to express that and for us on the marketing side, showing that is really beneficial because one, it is all the work we're doing, like scaling and working with these artisans and craftsman, is tough. It's tough business. But it's also really rewarding and our customers see how much care and attention and time goes into each one of their pieces.Stephanie:Yeah. That's great. When I think about, it feels very exclusive, like you have direct access to the person doing this who know the recipe. How do you put a moat around that so maybe other brands can't just come in and be like, "Oh, we know this one style of copper cookware," which is beautiful. I was looking at that like, "Ooh, that would match my one Moscow mule I have." But how do you put a moat around it to make sure that other brands don't just come in and steal your one single person who has the recipe?Chip:Yeah, yeah. It just goes back to Jake's family history and being so authentic in the space. He was working with a lot of people who were friends of friends who connected us to the right people and really, the only reason why we got a foot in the door was because of being in the space for 100 years. Most of our, or all of our competitors do not have any family history or any reason to be in it, other than seeing a white space and a market to go attack kind of thing.Chip:We don't talk too much about moats. To be honest, we have a very familiar relationship with all of our manufacturers, craftsmanship partners, and everything. Go out, spend multiple weeks. Our knife manufacturer told us she loved us and felt like we were her children and kids and sons at the end of it. So, these are real relationships and it's less about, hey, can we sign and exclusive for 10 years to lock out competitors and more how can we treat them like family, how can they treat us like family, and so they wouldn't want to do exactly what you're talking about.Stephanie:Yeah. How do you go about doing that? How do you instill that trust and relationship, and other than just being a nice, friendly person, which obviously you are, what else do you do so they really feel that relationship and you're like, "Yep, I'm not even worried about it because we got that"?Chip:Yeah. Some of them have invested in us. Internally, we have a mantra of hospitality first, and that goes towards everything from treating every customer who walks through our door or walks through our website door, whether they're spent $19 or $900, like we are a three Michelin star restaurant. So, what can we do to make you feel better, to enjoy the experience better, to, if you're having a problem, fix it, to do service recovery if you've had an issue? If UPS failed to deliver, how can we help you get to the answer that you need? All that stuff.Chip:That extends from customers as well as buyers, vendors, and manufacturing partners as well. So, what does that mean? It's treating them fairly on terms. It's treating them fairly on our business growth and practices and being an open book for them and sharing information and in negotiations, dealing with them in a friendly manner, and getting to a result that [inaudible] zero sum game, but it's beneficial for both sides. For us, that is the name of the game because it gets out of a let's solve for the six month term, and this is going to be a business that'll be around for two decades, three decades, forever, we need to make sure that we're treating people correctly.Stephanie:Yeah. I love that. So, when thinking about your customer, like you said, they can come in and buy a $1,200 cookware set and it's going to last a long time. It's not something where it's like you'll be back in a month. I'll see you when you need a replacement. How do you think about garnering that passionate customer base where it's like you have a good LTV on them? You're like, "They're going to be around for 10 years," because I've seen that you also are able to get wait lists of 10,000+ people who sign up for new products that you're launching. So, I want to hear how you think about that and keep your customer engaged, even if they ... life cycle of when they need a new product might be a long time from when they buy their first one.Chip:Yeah. So, we've been fortunate enough to have really strong cohort and repeat customer behavior. We're only three years old at this point. Our earliest cohorts have repeated over, on blended average, over 100%. So, industry average is 20%. [inaudible] 5x industry average. It's, again, in a product category that, as you mentioned, our product should last you your entire life. So, that's something we had to solve for and think about. Our first belief is that product quality is the biggest driver of longevity and happiness in cohort behavior.Chip:So, if your product stinks and you're the best marketer in the world, that's a short term gain. [inaudible] you can have actually a subpar experience with an amazing product and that's actually the better trade. Again, we try to solve for a great experience with a great product. But if we have only one chip to put it in, we would always put it into the product category because we believe that is what drives behavior. So, when we're going out, and one of our early investors and main investors had a really great point, which was you don't know how someone's going to find you. It could be a blog article about some tail skew that you just launched or cutting board.Chip:It's not, of course, you, but if that is their first experience with Made In, they are going to believe that everything else is like that cutting board. Right? So, everything you launch needs to be okay in a great experience. Or sorry. No. Everything you launch needs to be a great experience if that is their first product they've ever bought. So, don't launch tail skews that aren't up to the quality standards that you want, that don't have the manufacturer and craftsmanship story that you want, that don't have a good unboxing experience.Chip:So, we've taken that to heart because I think you see a lot of ecommerce companies just launch a whole bunch of stuff really quickly without that thought and attention behind it. Again, you don't know how people are going to find you. You're going to Parachute Home and you need a candle. If that candle doesn't come in an amazing box that represents the Parachute Home brand well, then you're probably not going to come back and buy their sheets. So, when we think about a product line and our offerings and cohort behavior and [inaudible] to answer your question, it all starts with product experience and product quality, and then again, that hospitality first mantra, treating our customers correctly, giving them customer service if they need it, and that will drive longterm behavior.Stephanie:Yeah. Oh, that's great because I think, like you said, a lot of brands do think about what are the loss leaders that you can put out there and just get people in the door, the quick hits? Like you said, I've bought many things for the first time, starting off with smaller price points, just to see, dabble in it a bit, see what it's like, and then be like, "Nope. I'm so glad I didn't buy that expensive $100 item because I just bought a bracelet for $10 and it was horrible. And yes, it was $10, but I'm still mad about it."Chip:Yeah. When I was at the apparel company and I was running analytics for them, we did a lot of basket cart analysis on which product ... taking everyone's first cart and basing out the SKUs that made up that first cart and then which of those SKUs led to [inaudible] second carts. Then we found an interesting mantra, which we've taken to heart, which was the lowest price point product of the most premium category was included in the most baskets that drove the highest repeat. To your point exactly on that, it was people who were trying to figure out, hey, is this material worth this extra amount of money I'm about to spend on it? I'm going to test that out, buy the cheapest one in that category.Chip:So, it was that product that we hadn't spent a lot of time and attention on, and all of a sudden, you're like, "Wow. This actually is the most important product of our entire company," because it's everyone's gateway and it's showing the material, but it's not a tough price point to hit on a first basket, and if we can show well on this first basket with this product, then they'll be great customers over the longterm. So, I think exactly what you mentioned is interesting.Stephanie:That's a good one. It makes you think about maybe adjusting margins on that first lower priced item, give it higher quality, lower your margins if you need to to keep that price lower, get them in the door, and then they'll probably go up from there when they have a really good experience with that cheaper item. I don't know if all brands do that, though. We will find out. Interesting. So, when developing new product lines, you're talking about the quality piece of it. But how quickly can you guys develop products, or are you more slow paced, like we just want to make sure it's perfect and it could take us a year to come up with a new product line because we're working with these artisans in France or knife makers or whatever you're doing?Chip:Yeah. It's been a mixture of both. We've had products that came together very quickly and was a match made in heaven with the craftsman who we reached out to and it just got to market in the way we wanted very quickly. We had a product, cast iron product that we were trying to launch in 2019 that got to the one yard line and we had spent a year and a half on it. We invested $50,000 of tooling and a ton of research and time and effort and all this stuff. It just wasn't up to the quality that we felt represented the brand and we scrapped that project at the one yard line, and now it's been a three year project.Chip:So, I'd say it's very variable. We are very aware that once we put that product out, it reflects on the rest of the products. So, if we put out a bad line and it doesn't carry the same quality and care and attention that the rest of our line does, it could reflect on ... Are they doing everything else half-assed as well? So, I would it's been a mixture.Stephanie:Yeah. How do you ensure that you're going to have enough inventory, especially when it's being handcrafted? We've had quite a few people on this show who have similar stories around ... We had Yellow Leaf Hammocks on in the early days and the women in the villages there were the ones making the hammocks, and of course, that can cause maybe sometimes supply issues. How do you even plan for that when it's like, well, this is one person's recipe and there's 50 people who are touching this product to get it out there, and maybe Joe got sick, so there goes his recipe for a week, we don't know how to create it anymore? Even plan when it's so, yeah, custom, I guess?Chip:Yeah. To be honest, that's been one of the biggest challenges of this business is our unique moat and value prop and everything is also the biggest challenge in the business. I think those naturally go hand in hand together. But you hit the nail on the head. It's about finding these craftsmen that make these amazing products, and they've never seen a company scale 5x year over year. They've never seen a company go this fast and just attack the market in this way.Chip:So, it's about, again, going back to being good partners with them, sharing multiyear forecasts, helping them invest in new tooling and new lines and things like that and working with them directly. It's a huge, huge challenge. But we've seen companies who get to this point and then take it and move everything to an automation facility and hurt everything that they built in the first place. So, we're not doing that. It's more about being great partners and figuring out the challenges with those partners.Stephanie:Yeah. Cool. So, when it comes to an ecommerce perspective, I like your example earlier about how to think about certain metrics and what you use to analyze. What are some other things maybe you pulled in from your past marketing experience into this business where you're like, "We've always relied on these principles, or I always look at these metrics every day to make sure everything's going okay"?Chip:Yeah. We look at star ratings by product line. Those are obviously very important for us. It's what is the benefit of ecommerce? In the early days, it was the cut out the middle man story. That's gone away now. It's, okay, direct relationship with our customer, one to one management of that relationship, and we believe more of that mantra, right? So, it's, at the end of the day, we always say at the end of the day when you buy something from Williams-Sonoma and you walk out of that store, you're never going to hear from that salesperson ever again. Your relationship with Williams-Sonoma and that salesperson who just spent a half hour with you is over.Chip:For us, it always begins at the time of purchase. They've bought from us. We now have a direct line to them, we can provide them content, we can provide them customer service. Our relationship is just beginning, and a lot of that goes into product reviews, a lot of that goes into monitoring return rates and how many customers exchange or return products. For us, that's a proxy for product quality. Then cohort behavior is a huge one as well and those three together give us an idea of how the product into customers viewing the company full circle is behaving and is trending. Those are probably the three we focused on most.Stephanie:Yeah. What are some of the behaviors that you're looking for when you say the cohort behavior is one of the biggest ones? What are you guys looking for and how would you adjust it if it's not going the way that you want?Chip:Yeah. So, cohort behavior, you're looking for trends up and to the right, and home space. When we launched in the home space, what we tend to see in this space is a diminishing marginal curve on cohort behavior. So, after they've bought all the things from you, then they don't ever come back again. So, you see cohort behavior one to six months kicking up to the right and then six to 12, a little bit less, and then flat from 12 on, or whatever it is. Right?Chip:So, we wanted to make sure that we didn't follow that trend because that meant, all right, we no longer have a relationship after 12 months, just out of an example, with that customer. So, what can we do to maintain that customer within our relationship and what can we do to provide value to them, whether that's content and recipes and how to use things better, whether that's new products? So, again, we started with just stainless clad cookware, we've launched carbon steel cookware, knives, wine glasses, plates, silverware, copper bakeware, all from these amazing facilities and stories. If we can treat them right in the beginning, then obviously they'll continue to support us throughout that journey.Stephanie:Yeah. What's some of the most engaging content? Is it the educational stuff? Is it the stories around the artisans making the product? What really pulls people in and then keeps them coming, not just a one off hit of, "Oh, that was heartwarming. I like that," and then you don't see them anymore? What keeps them there longterm?Chip:Definitely the manufacturing and craftsmanship stories. Those get the highest feedback and results from us. To your point on inventory being an issue for companies like ours, have that be a portion of it and then have that portion go through a pandemic where demand is increasing and manufacturers are closed in Europe for months because of COVID outbreaks. It creates a tough dynamic, and with and around those stories, we've generally heard the refrain of, "I don't care when this stuff comes to me. Just make it in the right way," and I think what these videos and this content does is show you that were making it in the right way.Chip:It's not like we're delivering medication that needs to be ... If you don't have your oval baker on Monday, you're not going to be too upset about it. Obviously, we're striving for best in class delivery and fulfillment and have a great team who does so. But we're not delivering life needed items. We are delivering craft products that are going to last you a lifetime, and if that takes an extra week, by showing people that, the care and attention that goes into it, they generally have that refrain of, "Do it the right way and get it to me when you can."Stephanie:Yep. Yep. I definitely feel that. How do you feel about being shown up in marketplaces or Amazon? I know there's a couple artisan marketplaces where they highlight some of the best products. To me, letting someone else tell your story, or even on Amazon, you can only tell it in a certain way. How are you guys approaching that?Chip:Yeah. Amazon's interesting because I think the mentality on Amazon has shifted a bunch over the last five years. The ecommerce space in general five years ago, I think, would have said, "No way. Amazon dilutes my brand. Amazon doesn't let me tell my story. It's going to cannibalize all the marketing efforts I'm doing over here." [inaudible] we're seeing a shift away from that mentality and people and brands racing towards displaying on Amazon. I don't think it means Amazon is still doing a great job of letting brands tell their story. To me, it's still a search engine and people tend to not get to the brand page ever.Chip:So, I don't think it's necessarily an Amazon win and that they're helping perpetuate all this effort and craft that we're going towards. It's more, I think it's becoming just such a necessary evil in terms of [inaudible] and people are growing these brands to get scale and need to find the incremental sales, and where else to go but wholesale and Amazon? So, Amazon's been interesting. We're not on Amazon. Almost 100% of our sales come through our own dotcom. So, we're not really on marketplaces either.Chip:In general, we have a kind of anti view on all of those. I'm not saying that will be forever. Again, each channel has diminishing returns at some sort of scale. Fortunately, we're not at that point. But yeah. We tend to like to tell our own stories and craft a message and own the relationship and provide the value to the customer.Stephanie:So, what's on the radar for you guys for the next couple years? Where are you headed? What are you hoping to do in maybe one to two years?Chip:Yeah. So, we're at the point, and when we launched this, we wanted to "own the kitchen". I realize that's an overused, cheesy phrase and hopefully, all the listeners didn't just roll their eyeballs. I swear-Stephanie:I didn't. [crosstalk] Own it, Chip. They're going to own it, everyone. Come on.Chip:Exactly. But for us, everything comes down to the why and it's not just to sell more things. It's, okay, a kitchen is part of the home and people like aesthetic congruency within their home. So, it doesn't make sense to have a different bakeware company vs. different knives vs. different cookware and pull those all out and now you're serving them all on a table to a dinner party and they all look different and it's not a reflection of what you're trying to do for your home, which again, is very personal to you.Chip:So, with the launch of bakeware, we're actually at the point right now where if you're moving into a new home you can buy almost every main vertical you need off of madeincookware.com. It can all show up in one box and it can look the same and it can feel like part of the same system and you know that everything comes from an amazing backstory with amazing craftsmen.Chip:You don't have to go research do I want [inaudible] vs. Henko vs. Made In knives, then All-Clad vs. Made In Cookware. You don't have to do 500 different pieces of research. It's a seamless process for you to do so. So, that was our main brand goal, and we got there a little bit quicker than we thought we would with the launch of bakeware now. So, we're super excited about this being the first year where you can literally pull out a butcher block and cut a knife and prep your food and then cook it on Made In and then serve it on a Made In dish and serve it with wine and all that stuff and never touch anything but Made In, which is pretty cool.Stephanie:That's cool.Stephanie:Cool. Well, let's move over to the lightning round. The lightning round's brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have [inaudible] or less to answer. Are you ready, Chip?Chip:Yes.Stephanie:All right. So, I'd say you're probably an adventurous guy, from what I've read about you. What's one thing that you would never do?Chip:One thing I would never do. Good question. As of interest, I am, I'm not a huge water lover in terms of ... I do scuba dive, but I would never kite surf [inaudible].Stephanie:No kite surfing?Chip:Yeah.Stephanie:Wow. Okay. But don't you fly planes?Chip:Yes. [crosstalk] I'd rather go up than down, and climb mountains ever.Stephanie:Okay. Okay. What's a crazy story from flying a plane where you're like, "I almost died this one time, but here I am"?Chip:Yeah. My 14th hour, so about a third of the way through the private pilot's license, we had an engine out failure. It was right outside DC and we were descending beneath the DCA airspace, the Reagan airspace to sail out of it. It was with my instructor. It's the first time in the training process that you go and land at a separate airport and come back. The first 10 to 12 hours are just all at your local home base airport doing takeoffs and landings. So, we had just crossed the Potomac. He asked me to descend below the airspace, pulled back the throttle, and the engine just quit.Chip:He said, "Give it more gas. Don't throttle back that much," and I [inaudible] and it didn't kick back in. We declared an emergency, to make a long story short. When you declare an emergency, this is the Reagan now, they give you a dedicated person to help monitor your situation and he told us, "Okay, there's an airport two miles to your left. Can you make it?" "No." We declared a mayday situation. It had just had snowed two feet in the DC area at that time, which was pretty rare and lucky for us, and ended up crashing in a snowbank in someone's backyard.Stephanie:Oh, my gosh. I heard about this. I lived in DC.Chip:Did you?Stephanie:I heard about this. Yeah.Chip:It was probably 9:00 AM maybe. This lady came out in her robe with a coffee cup and just was so confused that there was a plane in her backyard, and we were sitting there kind of dancing-Stephanie:[inaudible].Chip:... because [crosstalk] yeah, we did this. We were safe.Stephanie:Oh, my gosh.Chip:She took us in and gave us hot cocoa. I was in school. I was at Georgetown at the time and I was missing, I had an 11:00 AM exam and emailed the instructor and said, "Hey. I know you said no excuses for missing exams, but here's the story." I ended up making it back around 12:30, three hour exam, walked in the classroom, and he stood up, stopped everyone, and said, "I will never accept any other excuses ever again for missing a thing," except for I was in a plane crash and landed in someone's backyard two hours away from the city.Stephanie:Oh, god.Chip:Which was pretty crazy. He ended up being a former Navy pilot. So, kind of, I think-Stephanie:Felt that.Chip:... touched a good nerve with it. But it was definitely one of the crazier experiences in my life.Stephanie:Wow. What year was that?Chip:2009 or '10.Stephanie:Okay. Yeah. I remember when I lived in Potomac area and I remember hearing about this. I don't know if it was you or not, but I remember a plane landing in someone's backyard and it was in the newspaper for a week.Chip:Yeah.Stephanie:[crosstalk] was you. That's cool. So, you've done four or the seven summits. Which one's been your favorite and why?Chip:Denali in Alaska was by far the most wild experience. That's the only one that's totally unassisted, no porters, no mules, not anything. You take a plane that lands on a glacier with your backpack and a sled and they say, "See you in 14 to 21 days." It was also the toughest. That is 120 pound packs over 14 to 20 days. We got stuck. So, we actually were making amazing time. We got up to the 14,000 foot camp. The mountain's about 21,000. So, it's the last major camp before doing your ascent, and about 10 days of -40 degree weather came in. So, we were stuck there.Chip:It was kind of a weird experience because the days were sunny and nice, but it was absolutely freezing and anyone who left the camp, 100% of them got frostbite and had to be evacuated. So, we sat there. We were running out of food. If we got through the last day of food and things opened back up, then we did a rapid ascent and summited on the last day we were able to. But you're out there in the wilderness. It's absolutely stunning and beautiful. You're kind of with yourself for ... It's quite a different experience than some of the others, which are a lot of tour groups, a lot of assistants, a lot quicker. So, it was a wild experience.Stephanie:That's cool. I mean, below 40. Wow. No, thanks.Chip:Funny story is the kid who actually had a [inaudible] job, he was a friend from earlier, but he was working at Walmart ecommerce at the time. We actually received our first investment via satellite on that climb for Made In.Stephanie:Wow.Chip:He was like, "What is that?" Then two years later, he joined us as our head of logistics. So-Stephanie:Oh, that's cool.Chip:... a lot of things came from that journey.Stephanie:That's a fun story.Chip:Yeah.Stephanie:Man. So many things all coming together. Cool.Chip:Yeah.Stephanie:What's one thing that you don't understand that you wish you did?Chip:All this stuff that's happening with physics right now and how molecules can go through walls and power all that stuff. I don't know. It seems very cool and I wish I got it, and I've had a lot of conversations around it. Every time, I feel like I'm high or something and I don't quite get it. But other people seem to get it and I wish I did.Stephanie:I haven't even really heard about this, or maybe I just don't know what this even is. So, I guess I'm in that same camp of I don't understand and now I'm going to start looking into that.Chip:Yeah.Stephanie:The last thing, what one thing will have the biggest impact on ecommerce in the next year?Chip:Probably the mass move to 5G. Everyone is, I would say, still in the camp of mobile as the first touchpoint and then convert on desktop or desktop conversion rates and AOV are still [inaudible] out of mobile, development still is mobile, second in most cases, and even though [inaudible] about mobile first development for the last decade. I think obviously as the more widespread 5G world gets out there, the focus on mobile maybe finally will get through to people. That's the most important meeting of ecommerce.Stephanie:Yep. Cool. Well, thanks so much for joining the show. It's been fun learning about the world of cookware and seeing where you guys are headed. That's, yeah, amazing. Where can people find out more about you and Made In Cookware?Chip:Yeah. Everything is sold through madeincookware.com. That's M-A-D-E-I-N cookware.com. We have everything from full kits if you're moving and need to outfit a full kitchen down to everything is also sold a la carte if you just need to fill around an existing group of cookware. So, we're excited and we have a full team ready to help you out if you have any issues as well.Stephanie:How amazing. Thanks so much, Chip.Chip:Cool. Thank you for having me on.

Taking a company from $1 million to $100 million is no easy feat — especially when you have competition and copy cats coming at you from all angles. But Peak Design has fought off all those knock-offs — including a pretty blatant rip-off from AmazonBasics — and it has done it with humor and panache, which has only endeared the company more to its loyal customer base. Those customers are what took Peak Design from a simple camera utility bag company and turned it into a popular everyday bag and accessories outfitter for photography enthusiasts. Peak Design leaned into the idea of having a close relationship with its customers from the very beginning, by letting their customers have a say in their product line by way of crowdfunding and Kickstarter campaigns. And that, according to Elish Patel, the VP of Growth and Digital at Peak Design, has made all the difference. On this episode of Up Next in Commerce, Elish explains how building that loyal customer base has helped the company stave off the blatant and more subtle competitors. And Elish talks about how Peak Design is using unique marketing and content strategies to take people from browsing to buying. Enjoy this episode! Main Takeaways:It Speaks For Itself: Although Peak Design went toe-to-toe with Amazon after it knocked off a Peak Design product, more often than not, Peak Design lets its products speak for themselves against the competition. If your products are truly superior in quality and the value they offer, consumers will recognize that and make the investment. And when they buy the better product and see its superiority, they become more loyal to that brand long-term.Products Over People?: Hiring good talent is important, but you don’t want to prioritize growing your headcount over maintaining a laser focus on creating a good product. When you scale up your headcount, it’s easy to be distracted by the new focus on managing a large team and therefore your product design and development process can suffer. By relying on third parties and vendors or partners to do work you could otherwise hire internally, you are left with a core team who can focus on the part of your business that is truly important.More Than An Impression: With your marketing and content, the goal should be to achieve more than an impression or a like. Especially with a smaller or niche brand, being a part of the conversation your consumers are having on places like Reddit and TikTok is worth more than getting an influencer to post a picture with one of your products.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome everyone to Up Next in Commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have Elish, Patel who currently serves as the VP of Digital and Growth Strategy at Peak Design. Elish, welcome.Elish:Thank you. Nice to be here.Stephanie:Yeah. I'm really excited to catch you before you journey into the redwoods to get some content for your company. I was hoping we can just dive right into Peak Design because your story is super fascinating. Right before this, you were talking about how when you came in, it was a sub $1 million company. Now it's at almost 100 million?Elish:We definitely had a positive in that we did somewhere around 70 last year and we're hoping to grow to that the hundred soon. So yeah, we're coming right up against it.Stephanie:Okay. I mean, that's an amazing story. That's why I was like, "We need to start there. I don't want to run out of time." Can you tell me a bit about what is Peak Design and how long have you been there, and a little bit about that journey?Elish:Yeah. I've been with Peak Design for about six and a half years. I met Peter Dering, our founder and CEO in a bar in Berkeley after a concert. We just sort of hit it off. So it was one of those-Stephanie:What concert?Elish:It was an Alt-J concert at the Berkeley Greek. It was one of those classic Silicon Valley chance meetings. I was doing marketing consulting in the Bay Area at the time and he needed a little bit of help on the digital side. A little bit about Peak design. Peter Dering had this idea of a camera accessory basically to hold your camera on the outside of your body, usually on a backpack shop or your belt while you're doing some more strenuous activities, whether you're hiking, biking, stuff like that, so you could get to your camera easily instead of it being tucked inside your bag and you would miss that shot, as we say.Elish:He got lucky, if you will, the universe aligned in that was the early days in 2010 of Kickstarter. He was just going to find someone to make it and try to get it into stores. But someone was like, "Hey, why don't you do a Kickstarter?" Put it on Kickstarter. Some people found it, wrote a story on it. I think it was in Gadget or something like that, and it blew up. He did 300-something thousand dollars on Kickstarter that year. It was something the third biggest Kickstarter. Again, early days of Kickstarter. There's now crazy ones.Elish:That was the birth of Peak Design. From there, it deepened into the Kickstarter and photography product world. We became one of the first companies to do a second Kickstarter. That's how we started just launching products on Kickstarter. What we found with that is Kickstarter just has this base who became our evangelists. We created this really one-on-one relationship with our customers and do have a say in the design of our products. They feel invested in our brand. We continue to do that. In fact, we've done 10 Kickstarters to this point. We've raised over $37 million on the platform, fully crowdfunded, which means we've never taken investors, and we get to make decisions like being a part of 1% for the Planet. We founded a climate neutral nonprofit to help companies to offset their carbon. We basically chart our own path and that allows us also to make the best things. We don't cut corners on any of our products.Stephanie:Yeah, that's amazing. We haven't had too many companies on the show that went the Kickstarter route. I think I can only think of one or two. What were some of the lessons maybe when you launched the first time to the second to the 20th time, that maybe things that you started adjusting over time?Elish:Some of the biggest things we adjusted were... they came with just the changes in the world of marketing, with the rise of social media in the last few campaigns, the influencer became so much more part of our campaign, especially the last two YouTube. There was Facebook, then there was Instagram and then YouTube has been around for a long time. But then we layered on YouTube specific influencers and that's it's whole other own community, especially in the photography world. And then relearning that YouTube in and of itself is a great search engine place where you can put evergreen content. There's one piece of influencer content that I have up on YouTube that I placed two years ago that still brings in five grand a month.Stephanie:Wow. Okay. What's this content?Elish:Well, we sponsored a video for basically someone who... and we were pretty adamant to make sure that if you're going to review our product, then you want to leave a positive review. We're not just forcing you to do that. We give them the product. They love it. They're like, "I love this. I want to talk about it." Usually for the bigger influencers, they're like, "Oh, I love this product. I want to put it up." It usually costs 30 grand. We did that and it got up on YouTube. I don't want to say the name just to blow up his spot or not. But put up there, did a great review of it, talked about the pluses and minuses, linked to the campaign below in the comment. That video, which because it did so well, they keep on their page and still draws traffic when you're... especially the campaign was for our Peak Design tripod, our travel tripod.Elish:When you type into YouTube "tripod" especially who people who are searching for like "how to use a tripod, this and that," it's one of the top things that comes up. People will go watch that video and like, "Oh, this is a cool tripod." They'll click the link and it still brings in a lot of traffic and a lot of revenue.Stephanie:That's really cool. Are you still using Kickstarter today?Elish:We just did our last Kickstarter in December. We did it for our new mobile line of products. We went from photography thinking that this iPhone is literally the best camera that everyone carries around on a daily basis. So we wanted to create a line of products for that. We did that in December and that was our last one. Are we going to continue to do Kickstarters? Probably, but we've done 10 of them and it's got to end someday, maybe. I don't know. We'll see.Stephanie:Why? That's what I'm wondering. I'm like, "Man, it sounds like it's going so well." I haven't heard of enough brands probably utilizing that, but it does feel like maybe that market is pretty saturated and it just seems like there's a lot on there when you go in and start looking through products that are launching and what you can find. It just feels like a lot more than maybe when you guys started out.Elish:Well, it's also, we were a part of this cohort that proved the model and then now it's easier than ever to go and make and design a product in China, Vietnam, wherever you're producing. In fact, there's full factory cities where you show up with an idea and they'll help you make it. That also feeds into the system. It's a problem with knockoffs in our brand as well. People are copying our stuff. You can just go there and that's the other part that saturated Kickstarter and Indiegogo, are these half thought out brandless products. It's easy to get lost in the fray there as well.Stephanie:Yeah. Let's talk a little bit about knockoff that you just mentioned, because right before the interview, I was watching a very fun video that you guys put together because of Amazon knocking off your bag, and I was hoping you can touch on the inspiration behind that and how you think to approach companies who are knocking off your products.Elish:Yeah. It's a funny story, obviously. The backstory is that we make this bag called the Everyday Sling. Literally that's the name. We have a TM on the term everyday sling, and we do sell on Amazon. Before the pandemic, we had a large amount of our direct revenue on Amazon. And the rumors are true that Amazon will see a successful product on their platform and say, "Oh, we can make some money on that and create an Amazon basic version of it." What they did in this case was copy our bags, stitch for stitch, it looks exactly the same, even down to the point a design element is just this little hyper lawn patch where we put our logo. They kept that patch the exact same shape and the exact same location on the bag and wrote Amazon instead of Peak Design on it.Elish:We've seen knockoffs before, but we were like, "This is egregious, this is crazy." I guess internally I'm lucky enough, we've never been a brand that does the patent trolling thing or anything like that. We build our own moat as far as around our design process. It actually is extremely expensive to make our products because of how functional and quality they are. And that's part of our own moat as well, built into the brand. But because this looks so much like it, we were like, "This is insane." It's actually far cheaper, low quality product. Our bag one for $100, they put it on there for $20. And they called it the Amazon Basic's Everyday Sling. They didn't even change the name, which was insane. They called it [crosstalk].Stephanie:[crosstalk] already good name, might as well just [inaudible] that too.Elish:Exactly. I work with our marketing team, we're all jokes here. Adam Saraceno, our head of marketing has gotten really adept at writing our scripts or videos. He wrote the script for this video and just came up with the idea and we've got an in house video team and we were recording it and we had this plan, we're going to make that video, put it on YouTube, we'll send it on email. We put it up, we sent it out and it caught fire on some forums. It started making its rounds. Before we knew it, we had something like a half a million views. And then that took off even more. I think the video has over 4 million views at this point. But the idea was like, "Are we going to sue Amazon? We're a fly to them. What can we do? We can trust that our customers can laugh at this along with us, and we can poke a little fun at them. That's all we can do."Elish:That's what we did and point out. If you watched the video, we sort of point out that you have a choice when you buy stuff. You can buy our stuff where we're blue sign verified. We're now fair trade. We pay our factories workers far above the local wages in their local... we produce in Vietnam. We're very honest about that. We offset all of our carbon and we lifetime warranty everything. It's going to last you forever, if it doesn't, we'll replace it. Amazon, you get what you pay for. But that's our message. It's easy to get frustrated, but I think it's probably better for your brand just looking at the long-term. Just stick to your guns, trust your brand, trust your product.Stephanie:Yeah. I think that's what I loved about the video, because it was so masterfully done and it's always a good reminder of why, like you said, frustration, anger probably won't connect with many people because sometimes... I mean, I think anyways, people want to see funny stuff, happy stuff. And the video was perfect where it's like, "Oh, if you don't care about all the bells and whistles, all the stuff you just named [crosstalk]." It was just so well done, especially when they were drawing it out, drawing out the product and being like, "Oh, do we want something that's actually good quality, now take that out and take that out." It was just really well done, and I'm not surprised it took off. What else helps get it in front of people to really help spread it?Elish:I mean, it was mostly word of mouth. We definitely put a few advertising dollars behind it. When it took off, we amplified it, just cause it was resonating with so many people, and I think that's important. Especially in digital marketing, you're testing content all the time, you're like, "Is this working? Is that working?" This was obviously working. I didn't need to test it against anything else. Yeah, we put some ad dollars behind it on Facebook to get it out there as well. But after we had about a half a million views on it.Stephanie:I also saw you tagging Jeff Bezos and Amazon support team and all these other people. I'm like, "Oh, that's good." But also, once again, the way you were doing it was just funny. I can't remember the Twitter copy of what you guys were saying, but it was very funny.Elish:That was Joe Callander on our team and he was like... I remember him messaging Adam and I going like, "Hey, I'm writing these tweets back to these people. I'm putting this. It's a little edgy. Is that okay?" We're just like, "Dude, gloves off, man. Go for it." He really went for it and I think it turned out really well. I like a lot of the YouTube comments because there are definitely some people in there... YouTube has got the worst trolls, I think. YouTube, there's definitely a few people like, "Why am I going to spend 100. I'll just get this $20 one." And he would just write something like, "We'd love that for you."Stephanie:Oh, that's great.Elish:"Go for it."Stephanie:It kind of reminds me of morning Brew. I don't know if you've ever seen them respond to people. Or Wendy's Twitter channel where they reply to people and have it out with them. I'm like, "I love it because they stay so close to their brand and their voice and keep it funny." Hats off to your team for knowing how to keep it on brand and keep it engaging for people. When Amazon came out with the knockoff product, and I think you said you've had other companies as well knock off your product, what kind of result did you see on sale? Did you see a direct impact when they came out of like, "Oh shoot, our daily revenue just went down in half and now we need to figure out how to claw our way back in front of our customers."Elish:Luckily, the Amazon thing made buy our bag more. I'm sure it lifted their sales as well because we just got so much hoopla, and it got a lot of press attention. Pete, our CEO was doing the rounds on a bunch of the media channels. On the other ones, we really didn't notice. If anything, it riled up our customer base because they would see it and be like, "This is just like my Peak Design bag and this is just like this." Their claws would come out and they'd go after it. That's definitely... I attribute that to our Kickstarter base and how we formed as a company of like we created this place where people thought they were part of the brand, and so they'll step out the defend it as well.Stephanie:Oftentimes I don't see brands maybe highlighting all their differences. That's why I loved your video when you're like, "Here's the five or six things that we do that you'll never find with an Amazon Basic." Did you guys maybe change your strategy or how you were messaging that? Because maybe before you weren't as upfront about like, "Here's why you should buy with us."Elish:I'm glad you brought that up. We definitely started steering away from it because early on in our brand, we certainly did that. When we started making camera straps, we were like, "This is how the other people work. This is how ours works." Then we were just like, "Maybe the product can just stand on its own." And it did because the functionality of our product was so different for so long. But again, that was a unique scenario where our product was absolutely different than the competitors. Now the competitor is copying our product. So now we're forced to be like, "They copied it, but not very well." It's almost like we need to inform our consumer of the pitfalls of trying to buy something that's similar to ours, but probably fails on quality and functionality. They're getting duped by getting these cheaper made knockoffs.Stephanie:Yep. Yeah. Yeah. That's definitely important to come back to the roots of... you have to defend your ground and you might lose sight of that for a bit, but it's interesting to hear how it comes full circle with like, "Okay, lean back into our differences."Stephanie:The one thing I wanted to circle back to was going through what it looked like when you joined the company, when it was sub 1 million and then where it's at now, close to 100, and talking about... I know we were just talking about earlier, how you're going to go into the redwood forest, you're going to be creating your own content and thinking through your marketing tech stack, and I want to hear what that evolution has looked like, because I think you mentioned the team didn't scale up with that revenue as much as maybe other companies would have done. I just want to hear it behind the scenes of what that looked like.Elish:Yeah. Credit to Pete, our CEO, and he's been extremely protective of our company culture. We're a pretty tight knit group of people, we're close, I think 38, maybe close to 40 people. When I joined, we were 10 people and it was just me and one other marketing person. As I mentioned, a lot of that was to keep culture tight, but also, we try to prioritize what we need to do and not do too much more than that. One of our mission value statements is to prioritize happiness over growth. When you start adding too many people, sometimes you end up literally looking for work for them to do, and then you're managing all those people. Then the business becomes about managing people, which is a part of a brand, but more or less so than the product.Elish:We are definitely a product focused company and it's about letting the marketing stand on the quality of the product. What we've done to enable that is rely on creating a really good network of third parties. Our shipping is third party, our warehouses are third party. We have some in-house customer service, but we have a little bit of outsourced customer service as well. For marketing, we really rely both on my strategy and executional knowledge, but we amplify that with an external digital agency. What that allows us to do is remain really nimble. During the pandemic, we didn't have to lay off anybody. We didn't make any pay cuts. We've been profitable since day one because we haven't had to push scaling because of not having investors as well that say, "We need you to make this much profit in the next five years."Elish:That's been really stressful for sure, in some instances of hyper growth because we have been growing really quickly, but again, what it came down to, it was like, "What's important in this moment? Okay, we're launching this new product, let's put all eyes there, let's make the right content, get it in the right place." I think we're going through another little phase of growing pains where we now have a very large assortment of skews and we're feeling the pinch of trying to maintain the attention on them across the board and then also making sure that we're supporting our retail and wholesale accounts. Half our business is from places like BNH and REI and we're distributed around the world. They need tons of content as well. They need our help on making sure the brand is represented correctly.Elish:It's becoming a lot of work. We've been scaling on our design and creative side, but there's starting to be a pinch on the more technical stuff. We're trying to think through, does that mean a bigger agency? Do I need to start hiring more internal people? I think it's going to be a combination of the both. I think it's going to be a skeleton crew internally that is really good at handling or wearing a lot of different hats, but then managing some external help as well to make sure that it amplifies our abilities.Stephanie:Yeah. What's the best way to structure it when you're working with agencies to make sure that you can scale yourself? Like you said, you're one of the people who are... "here's the vision and go." How do you make sure that it scales in a way that is not totally going off course?Elish:Oh man. That's a really good question. And I can't honestly say I've figured it out. I'm really not sure. I got to be honest about that. I'm going through it right now, and I think... to be quite honest, I think I haven't been able to... there's only so many hours in a day [inaudible] that require attention and it's really hard to separate or to combine strategy, deep thinking and execution. You have to turn one off to do the other. I think that's been a hard lesson that I've learned over the last year and a half, which is I do need time to just sit and write and think while I'm not executing. I'm really thinking about making sure I separate those roles for sure.Stephanie:It's definitely a hard question and a good thing to figure out, but you have time, there's no rush.Elish:Yeah.Stephanie:What does new customer acquisition look like? How are you guys approaching finding new customers and maybe keeping your current ones?Elish:There's the classics, which we definitely continue to double down on, which is... it's funny PR is an age old thing, but it's still so important and making sure that you stay just in the conversation. For me, when I'm thinking about going for... we've been so getting into the gear reviews and top 10 lists, and I'll never trust the best 10 lists ever again after being in there initially, because it's not like-Stephanie:It's how much did you pay to get that spot.Elish:Oh, yeah. Or who do you know exactly. It's not like someone went looking for the best stuff and like, 'This is what I found." No, all that stuff was definitely put in there. But to me, it's about the conversations you're starting around your brand and industry as well. When it comes to our mobile product or trying to stir up the conversation of like, "What else do you do with your phone? How do you use it in your daily life? Is having just the skin on it that doesn't do anything useful?" Because we are using it elsewhere, in our car, on our desktop, we've made a function on our bike and how it works. Do you have to jus pound people with your product or can you talk to them about it and start the conversation?Elish:There's the whole... We started digital marketing in paper, Facebook, social media advertising, Instagram. TikTok obviously, Reddit, but man, that whole industry, I think, is going through an upheaval currently, obviously with the change in privacy data that Facebook and Google and everybody is facing, and is making everybody rethink about how they're stacking that in their marketing funnel. I think it's a good thing. I think people are starting to think about the intentions and nature of their message in their advertising again, as opposed to, "Oh, if we change this button to red instead of blue, that's going to..." what intention... is that excepted to drive conversion?Elish:I think people have been overthinking the data part for a really long time instead of trusting your marketing instincts/knowing that, or just not really paying attention to the marginal benefit of spending a week trying to figure out what color button needs to be... what else could you have done with that?Stephanie:What are you guys doing? Because, I mean, I think it's such a scary world for a lot of brands who have relied on that pixel tracking, and everything they've been used to, it feels you have to move quick, make decisions in an unknown world where you're like, "I don't really know how they should operate." How are you guys thinking about it moving forward?Elish:Well, you can still track the classics, which are engagement. Then layering in other strategies of making sure you're getting first party data: your email capture and the campaigns you're doing with that. Before we could track everything, we were still trusting things like how many people were seeing it impressions and the quality of someone's audience and so on, on an influencer campaign. But also again, being a part of the conversation in places like Reddit, TikTok and making sure that that is a constant stream of content as opposed to these big advertising things where people are just blind to them now. I don't remember the last ad... I definitely learn about people or a brand, and I'm like, "Oh, that's interesting," but it's pretty rare that I click, and we've seen that on Facebook's ROI and every number across the board has tanked over the last few years. You used to put an ad, it could have anything in it and you'd get a 10 X ROI. Now we struggle to get three.Stephanie:What channels and platforms are you trying out now? Because to me, TikTok sounds like the perfect area. I get so many photography tips on there. I don't know if you've seen all those videos.Elish:Absolutely.Stephanie:That seems like a perfect channel. If you can keep that content going though. But what are you guys betting on?Elish:Yeah. We're exploring TikTok. I don't know if we're betting big there, because our demographic is a little bit older. I do have a theory that there's a very active demographic in... we're in the 25 to 40 range. I think people 25 to 40 are still actually really active on TikTok. They're just not-Stephanie:I am. I'm flapped out in the middle. I'm on it.Elish:But they're consumers, they're not posters, they're not commenters, which is fine. I think that is going to be somewhere we'll probably spend a lot of energy. We're definitely doubling down on content pieces on YouTube and places again, where we can talk directly to the population. Email's still a really big thing in customizing that consumer journey on how we reach them on that. So when they reach our website, where are they seeing? Where are they looking? Where are we sending them? Those are big. Then I'm obviously looking at Reddit. Reddit has had a pretty big limelight over the last few months, just with the game stuff. But otherwise I'm open to suggestions. So send them my way.Stephanie:I mean, I haven't heard too many people talk about Reddit. Are you just thinking about going after Reddit influencers in a way who are talking about what kind of bags to use, or how are you thinking about that?Elish:Yeah, I think we're going to look at it from the social media manager perspective. Someone who's going to go in there and just start conversing. We do have... especially with the gear focused product line, people are like, "Oh, what do you use for your Canon camera? What do you use for your Nikon camera?" Then just inserting ourselves on an organic level there. I don't know about Reddit influencers yet, but certainly something to consider. But I want to keep that as organic as possible to start out withStephanie:Yeah. It always seems hard to scale those efforts when you want to go about it in an organic way, but then thinking, "Okay, one person can only comment and keep up with so many threads and then if they also have to do Facebook and Instagram and everywhere else, it seems hard unless you continually to hire more people."Elish:Yeah. The scaling part is hard. I'll be interested to see if there's ever a good agency that can figure out how to represent your brand Well.Stephanie:Let me know, because we have not found it and we've tried many. I keep trying and trying, I'm like, "One day we're going to find something perfect."Elish:Same.Stephanie:I also think there's something to the frictionless way of shopping on a lot of these platforms. I even think about TikTok. I'm the quiet consumer who's looking through all the stuff, enjoying it, but then I will go and open up a Chrome browser to find that product. I'm the worst kind of consumer. You have no attribution on me. You don't even know where I came from. But I think there's something there where because that platform still feels like there's a little bit of friction from that video. Sometimes it flips so quickly, you don't have time to click. Is there even something to click? It seems like there's a lot of room for growth around making it easy for the customer to buy.Elish:There's been a movement to do the specific app to app based experience. Allbirds did a really good job of it. I just downloaded the Nike app, just being like, "Oh, I need a new pair of shoes," and I saw on their website. I was on my phone and then they were like, "Get the Nike app." I downloaded it and I was... this at the airport, and I bought a pair of sneakers right there because I was like, "Those are cool because they..." I mean, this definitely works with someone with a much larger skew count, but they served me a product that they thought I would like. I don't know how they figured that out. But they figured it out somehow. Maybe they just have really good products. I was like, "That's cool." They had everything built in Apple Pay, all that stuff, made it super easy. It was kind of scary, it was one of those situations where I hit buy, and before I knew it, it was paid for and was shipping to... I was like, "Wait, did I mean to do that?" And I-Stephanie:"My finger just went there and it just happened, and now I have shoes coming."Elish:Exactly. I thought that was a really cool and something... We've done a lot of work on our mobile experience, but we have a lot of work to do. I think people have... most websites they go to have a big thing to figure out for the mobile experience.Stephanie:That's something I've thought about for a while now, because previously at SaaS I worked before, many people talked about going to an app free world, and apps were a thing of the past. I even noticed that in my own history, it's like, you get a phone early on, you get a billion apps, you run out of storage, you chill out a bit and you're like, "I don't need all these apps anymore. I don't want to try everything." Then storage gets easier. So then you're like, "Well, maybe I'll try a few more." But now I'm back in the stage where I'm like, "I'm good with just a couple of things. I don't want everything there." How do you see it? I mean, I think you mentioned Allbirds did this too. What do you see that future looking like and how should brands maybe try it out there?Elish:I think, to your point, we're trying to figure it out again. I liked that app experience for a couple of reasons, which was, when you become a fanatic or just really into a brand, you're okay having that because what Nike and Allbirds are also doing well is serving up really good content on those apps. I'm inclined to go into the Nike app because they've got something cool to send me, put me in, even if I'm not buying something, I'll go look and read about it. That's a big play. Earlier as the experiences on the other platforms. Shopping in feed on Instagram and stuff, which is becoming a much better utilized thing. I think we probably need to utilize a bit better as well.Elish:There's features in there, especially in influencer campaigns when you're able to link your account to other people's Instagram accounts so that they can tag your product feed. That's interesting to me and disseminating it in that way.Stephanie:Yeah, that's definitely an interesting world to think about. I also think if you bring in your tribe and a community and create an experience that you can't get elsewhere, then maybe I would open up the app. If it wasn't just product focused, like you said, if there's content there, if there's something that's going to draw me in and keep me engaged. But it does feel hard sometimes to keep me engaged on an app, unless I get that dopamine hit, open it up and get something new. That's a high bar to have, having something new every time.Elish:Definitely a high bar to have. Then I think Casper, I don't think they have an app, but I've been in the market for a mattress. Man, I sound like a real materialistic consumer these days, but-Stephanie:Probably get so many ads coming your way. They're going to hear you. They got the voice recognition and they're going to be [inaudible] you.Elish:I'm in the middle of trying to buy a mattress and they executed on the text game really well. We do text marketing and it works really well in getting people past the last decision point. They're like, "I don't know if I want this size or that size." I don't know if you've talked to a lot of people, but text is great. People are like, "I don't think people want to receive text messages." Surprise, surprise. They actually do. They don't care.Stephanie:If [inaudible] something they want. That's what I've heard, is texts can be great if you're not just pushing products all day. If it turns into a conversation and maybe giving them some kind of value, instead of just like, "10% off, 10% off, it's a sale happening." It needs to feel personal and give value.Elish:It does. But it's a balance. If you give them enough value and then when you need it, you can send that 10% off text. It still works and that's worked really swimmingly for us. But I think the stakes are the same, if not lower, maybe they're about the same of sending an email. Just like with anything, don't overdo any piece of marketing, you annoy people. But I don't think it's any less or more annoying than any other piece of marketing I get from people as long as it's not overdone. In Casper, if you go to their website, they just really did the text acquisition, the opt-in process really well. The 10% off if you sign up for the email and they figured out a good way to do it for text as well, "Oh, you want to get this coupon straight away?" Let us text you." I thought that was cool, a way of just activating someone very quickly.Stephanie:Yeah. Are there any other brands that you watch where you pulled some tricks from, and you're like, "I love watching Nike. I love watching Casper, and then actually trying that out within our own company?"Elish:Good question. I think I've listed the ones that I've noticed recently, and definitely Allbirds did a good job. I had a good post-purchase experience recently. I'll just give you the outline of what that was, where I needed to return something. Well, first of all, obviously, there's the way of tracking and making sure that you get in contact with what you bought and where it's coming and when it's coming. There's lots of good apps for that. We use one called Shipup. And then I needed to return something and, I'm forgetting the name of the service, but now they've set up places, you can just return something. Instead of shipping it back, you just drop off at the local location. It's usually a business. It's a win-win. You bring someone into your business, you can return it there. It was seamless. I remember in the store, the person... I think I was just in some random boutique dress store and I was returning a blender for Amazon.Stephanie:Oh, that's cool.Elish:I'm making those things up, but it was that sort of distinct, that sort of contrast of what I was doing. I remember then scanning the product and then I got a notification of my refund directly on my phone in that second. I was like, "That's awesome. Now I know when I buy from this person and I need to return, it's going to be seamless. I'm not going to worry about where my money is, where the product's going." It made me want to buy from them again. It was great.Stephanie:That's a good experience. I think that's such an important reminder too, about lifetime value of a customer. It's not always about those quick hits. Like you said, if I were to have an experience like that, I would buy many more things much more quickly, if I'm like, "Oh yeah, I can just go right next door and this boutique will take any of my returns for all my blenders that I buy."Elish:Yeah, exactly.Stephanie:That's awesome. What experimental things do you plan on doing over this next year or two that you're most excited about, but you don't know if it's going to work, or maybe that your team's even telling you like, "No, Elish, this is a bad idea."Elish:Really good question. I'd have to go into my notes. I ideate on this stuff for a while. But we tried some podcast stuff last year when money was a little bit more free flowing for us. We are a travel bag brand, so that's definitely taken a hit for us. And that was exciting at the time. We had a piece on Conan O'Brien show and I was like, "Oh, Brian said Peak Design. That was pretty cool." As far as I can tell, CPMs for podcasts are still relatively low compared to other things. I think that's great. I think there are some expansion in still are our email practices on how we're collecting emails and moving outside of that. What you mentioned just now, what we talked about, the being able to shop our product in social posts that aren't even our own, there are some technologies, video technologies out there where you're shopping in video when it's placed on someone else's website. I think that's really cool.Elish:Then partnering with our distributors more on how they're representing our brand and getting that more up-to-date message out quicker with them. Reddit, we mentioned. Forums.Stephanie:Well, I think it'll be interesting with all the pent up demand of people wanting to travel and get there.Elish:I hope so.Stephanie:It'll be fun to probably see a very different peak than maybe what you've seen over the past year or so, and you all just have to be ready for it, I guess.Elish:Yeah, exactly.Stephanie:Cool. All right. Well, let's jump over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer.Elish:Okay.Stephanie:Are you read?Elish:I'm ready.Stephanie:You're adjusting your seat like, "Ooh, I got to get ready for this."Elish:Yeah. Ready.Stephanie:All right. First up, a few people know that I like to...Elish:Few people know that I like to play poker.Stephanie:Are you good at it?Elish:I was a professional for a year. Right after grad school, I was looking for a job and I played live poker for a year.Stephanie:Awesome. What one thing do you not understand that you wish you did?Elish:Oh, man. So many things. Probably... sorry, I have a minute or less. Is that right?Stephanie:Yeah.Elish:Give me a bell if I... Just topic of the times right now is definitely the Bitcoin market and different types and where, give me a glass ball of where that's going because I want in. Every time I think I've figured it out, I learn something new and I don't. Yeah, I'd love to understand the future of the economics of how that's going to work.Stephanie:If you were in the Austin area, I would tell you to come to our little crypto dinner that we do, where we go deep into futures and investing in that. It's a very interesting space. It's around here.Elish:Okay. I'll come visit it sometime, for sure.Stephanie:Yeah, that sounds good. A time when I made a powerful choice was when what?Elish:Oh man. I've quit a lot of jobs and taking that chance on myself. I did that when my last corporate job, if you will, I worked for American Express and I said, "I'm just going to go figure it out," and I've never looked back. I know that's a common story, especially in our worlds, but that was the most freeing choice I've ever made, is just I will never work for a large corporation where I can't be in control of my destiny.Stephanie:I love that and I agree. I think it's still always a good reminder though, because it's easy to get pulled in. A good reminder to be able to have that freedom to do what you want. If you were to have a podcast, what would it be about and who would your first guest be?Elish:I think it would be something about just the hilarity of the world, how it intersects... just how we all take ourselves so seriously, but then trying to basically pull back the layers of the onion on that, and then looking at how it's affected us as people when it comes to our depression, our nutrition, and how we live our lives. It's basically all of the loose things that you could think about for the millennial generation and make fun of it, but in a serious enough way to be like, "It's going to be okay, man." I think we all get so caught up in like, "How am I changing the world? What are we doing?" I think the message I'd like to tell most people is like, "This is..." the message of the movie Soul. Did you see Soul?Stephanie:Yeah. So good.Elish:It's like, "Oh man, I'm trying to do something big." "Actually you're doing the big thing. This is it."Stephanie:I like that. Who would your guests be then?Elish:I would get a combination of some... I think, going back to Conan O'Brien, I love Conan. He is one of the funniest people out there. I think he went through this crazy arc where he was supposed to take Jay Leno's spot and then they took it away from him. He got pretty angry about it and now he's still doing his own thing, and I'd love to talk to him about... people have talked to him about that, but where he thought he saw yourself going and now where he is now and if he's okay with it, and just what perspective that it gives him.Stephanie:Yeah. Well, I love that. That's a good one. All right. And the last one, what one thing will have the biggest impact on ecommerce in the next year?Elish:The climate and how we think about people and consumption. Fast fashion is going out of fashion. Absolutely. I hope anyway. But I actually don't know that because I don't know if I'm just in a bubble or I'm just in a bubble of people that care.Stephanie:No, I think I agree with that. There's such a big shift now to sustainability and how companies are creating things and paying their employees and all that. Yeah, I agree. That was a good forcing function this past year, too, to think differently about all that. Elish, it's been such a fun interview. Thanks for coming on the show. Where can people find out more about you and Peak Design.Elish:Peakdesign.com. I just had a contact button up, but you can go to elishpatel.com and email me if you have any questions.Stephanie:Amazing. Well, thanks so much for joining us. It's been a blast.Elish:Thank you.

In the wild world of ecommerce, the status quo is always changing. New companies enter the market to disrupt the norms. Legacy brands pivot to get a piece of the pie. Successful niche businesses get acquired left and right. With so much happening all at once, it takes a lot of work for brands to not only keep up but to get out ahead and win.Andrea Leigh and Melissa Burdick have made it their mission to stay on top of everything that’s happening and use their knowledge to help companies large and small make an impact in the market. Andrea, who you may remember from a previous episode where she discussed how to win on Amazon and the death of the category, is the VP of Strategy and Insights for Ideoclick, and Melissa is the Co-founder and CEO of Pacvue, a company that helps advertisers scale on big ecommerce platforms like Amazon, Walmart, and Instacart. A few customers of theirs include Unilever, Duracell, and Johnson & Johnson.These ladies each spent 10 years at Amazon “back when ecommerce wasn’t cool,” as Melissa says. Today, at their current companies, they work with disruptors and major brands alike as they come to realize that ecommerce is not just a fad, but the way of the future. And that’s why I was so thrilled to invite them on this roundtable episode to talk about all the trends they’ve been seeing recently, and to get their take on where things are headed. How are major brands moving to digital? Why are companies investing more in shorter product life cycles? What is the future of dropshipping and ad platforms? I wanted to know, and they delivered the goods. So sit back and enjoy! Main Takeaways:David vs. Goliath: In the world of ecommerce, it often boils down to small, niche brands competing against the bigger companies with a long history and much bigger budgets. In order to compete, small brands are forced to think differently, be more hyper-focused on product and customer feedback, and be intensely in tune with the ROI of any ad spend.Shorten That Lifecycle: Brands today are finding out the importance of being nimble and developing shorter product life cycles. When the unexpected happens, markets shift, or industry standards change, having a product already in process of a nine-month cycle puts you at a disadvantage to other brands that can pivot and change course quicker. Having a pulse on what consumers want, gathering data, and digging into feedback can help with the acceleration process.Show Me The Money!: In the past, measuring the ROI of advertising was a bit more challenging. Now, with the amount of data that you get from digital campaigns, measuring the return on investment of an ad campaign is much easier to track because you can correlate clicks and track customer journeys from ads. And with the number of new platforms that are constantly popping up, there is a bit of a new retail explosion that brands can take advantage of and track in unique ways. And today, regardless of the platform — new or old — brands will not advertise at all unless they can get a full view of the data and metrics from the ad platforms they work with.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone and welcome back to Up Next In Commerce. This is your host, Stephanie Postles, CEO at Mission.org. Today is a very special episode because it's our second ever round table and our guests are going to blow your mind or at least going to blow mine for sure. First up, we have Andrea Leigh who you probably remember. I think she was on episode 81 or so. She currently serves as the VP of Strategy and Insights for Ideoclick. Andrea, welcome.Andrea:Hi Stephanie, thanks for having me back.Stephanie:So glad to have you back. Your episode really was one of my favorites, which is why it's very clear we need to have Andrea back on the show. I think we even said that in our episode, so probably no surprise that you're here. All right. And joining Andrea and I is Melissa Burdick who serves as the president and co-founder of PacVue. Melissa, welcome to the show.Melissa:Thanks so much for having me.Stephanie:Yeah. We are excited for you to join our party. So you guys seem like you have some history. You seem like you're friends, you're in club house together. I was hoping to start there just so the audience knows who are you and how do you guys know each other. Andrea, you want to kick it off?Andrea:Well, I would love to tell the story of how I remember first meeting Melissa. We worked at Amazon together. I think this was in maybe 2006. She was the buyer for the health and personal care side of the business and I was the buyer for the grocery side. And we both negotiated with the same vendor, same brand that span both categories in the same day. We met in the kitchen afterwards and she had gotten such a better deal on her negotiation. Such better terms than me and I couldn't believe it because I was a total newbie and she was a really experienced negotiator. And so I made her teach me all of her tips and tricks. That's my memory of my first time meeting Melissa.Stephanie:Wow. Melissa, do you remember that day?Melissa:I didn't really remember it until Andrea told me and I didn't remember it that way. So it's funny the perception that she had versus what I had, but she and I both spent 10 years at Amazon. We were early pioneers of the consumables category back when ecommerce wasn't cool. And so we really got to do a lot of great stuff. I call it the cheapest MBA I didn't have to pay for working at Amazon, because we learned how to ship tubes of toothpaste probably. Well, I don't know if we've ever figured that out or will across the internet, but it really was Wild Wild West of ecommerce times and Andrea and I were there at the beginning and that's how we met each other.Melissa:We actually had a consulting practice together. We've been friends in the industry. Now we're competitors in some ways, but that's the beauty about our community and industry is that we're still friends. I tell brands, it takes a village to do ecommerce because it's so complex. And so having thought leadership and experts is what we like to do. So Andrea and I have a Clubhouse show that we do together and still keep in touch.Stephanie:Yeah, I remember when Andrea, we were like, who should we have on for a round table? And she brought you up and then when she was explaining, she was like, "Kind of a competitor to our firm, but we're friends and we work together." And I was like, "Whatever you want, girl. We'll bring her on if you love her." I'm sure I will too. So yeah, that's awesome. So, okay. I want to get into the topic. I know you all have a Clubhouse later on today that you're going to be hosting, which I think the topic that we're going to be covering there is perfect for this show.Stephanie:And like I said earlier, it'd be perfect practice all around how brands are going to market and how the world of ecommerce and commerce in general is so different now. So maybe Melissa, if you want to start with how do you even view the world now versus a couple of years ago? Like what's different? What are brands struggling with that maybe they never had to think about before?Melissa:Yeah, I mean, to the earlier point of your question, the moat is so much smaller now. The ability to create a brand is much easier. So years and years, 20 years ago, when ecommerce didn't really exist, it was, you're a big brand, you get into the shelves of a Walmart because you're tied or something like that. But with ecommerce and with more platforms and marketplaces, there's this ability to create a brand and a loyal following and base through things like social media, TikTok, or viral ways that you can build communities and brands.Melissa:And so today we're talking about a couple brands, DUDE Wipes, and Wyze camera or I guess Wyze actually they started with a camera. They both are emerging brands. They weren't the big P&Gs and Samsungs of the world. They built emerging disruptive brands and they've been very, very successful. And so that's a little bit about today's show. What about you, Andrea, what do you think about these emerging brands?Andrea:Yeah, I mean, I think another thing that has really changed is the ambitions of brands. So I think brands were to your point Melissa, they were built by large organizations and they were, you layer on this enormous supply chain and distribution and then a marketing engine on top of that in that order. And I think the two things that stand out to me as being different now with marketplaces is that first a brand can aspire to be smaller than that. A brand can aspire to just address a certain niche for a certain customer segment and do it really well. And maybe a brand wants to only be 100 million dollar brand versus a billion dollar brand and think that's posing some really stiff competition to some of the more established brands in the space, particularly in CPG.Andrea:So I think those brand ambitions are changing for sure. We did an internal panel with some clients and thought leaders and this was like a big topic there too, was these ambitions of brands and how they're different than they used to be. So I think that's a big one and then I think what those smaller brands can do better. And I think we've seen this with both DUDE Wipes and DUDE Wipes is that iterative approach to product development that incorporates the customer and their feedback. And so really thinking about why is this such a great example? They entered a super highly competitive market.Andrea:The category was already highly competitive with a lot of players and they just went in there and they did it better. And they did that because they were able to really listen to customer feedback, not just through reviews, but through all the social media channels and approach brand building in an iterative way. And so those are a couple of things that I've seen with some of our more upstart clients that have been really successful. That iterative approach and that really laser focused on a specific segment.Stephanie:Cool. So talk a bit about the ambitions of the brands. Do you think the brands that... like you said, maybe they don't need to IPO, they don't need to get acquired, they're looking to stay more niche and they're okay with that. Do you think they can sustain longterm because it feels like if you don't have goals to really make a mark, you're just going to get beat out by people who can spend a lot of money on ads and who just has a lot of other channels to create content and create content platforms. It's like they can do so much because of how much capital they have access to. What do you think about the brands who don't have those ambitions right now?Andrea:Well, I think for a handful of our clients, it's just a lifestyle business, right? We have a couple of brands who are a family owned and they've been family owned for generations and that's a lifestyle brand. They're running it because they have a lot of passion for the product or the category and they're product people. But I think in the other cases, they're mostly getting acquired. I mean, I think that's what we're seeing across the industry. They're getting acquired by a larger CPG. They get acquired by one of these newer FBA roll-ups or FBA aggregator companies that goes in and buys up all these small sellers on Amazon. But I think they get acquired. I think the challenge with that is that what I see is these CPGs either acquire them really early and then they try to scale it because most larger CPGs are in the business of scaling brands.Andrea:And so they try to scale it too fast, which kills what made the brand so special or they buy too late and they overpay. And so I don't think there's a super win-win there, but I mean, I guess it's a win for the brand because they walked away with a bunch of money. But I think that in terms of aspirations, maybe it still is to get acquired later or have investments or whatever, but still they're really focused on that segment that they're addressing.Melissa:The other kind of an offshoot of your question when you say, these brands don't have as much money to do these big TV ads. The other piece of that is they are extremely savvy and even savvier than these big brands to grow their brands. So they're actually able to do more with less because they're forced to. And so they have amazing product content or they figured out how to get to number one slot for their most frequently searched term because they understand the algorithms, they figure it out faster and they're more nimble and they have less of a portfolio to worry about. They just focus on a few products.Melissa:So they have a lot of benefits in that regard because they don't have that cushion and fluffy ad budgets and things like that to rely on. So they have to rely on having an amazing product, this iterative process of being able to mind keywords and understand, "Oh, this is the flavor that people are asking for. I need to go create this product." Product development takes a lot faster for them as well. And we've seen that with the Wyze. They're able to create more and more portfolio pretty quickly.Andrea:Melissa, do you think it's fair to say that some of these more disruptive brands are maybe more likely to channel their ad dollars towards the retailer ad platforms because they really need an ROI. For them to spend in some of the more sort of upper funnel activities might be harder.Melissa:Yeah. I mean, we see that especially with the seller marketplace. They are so ROI driven. It's all about if I pay a dollar, I better get a huge return for that dollar and ad advertising whereas these bigger brands are more focused on marketing their portfolio. And so they're much more focused on ROI of their advertising, whether it's anything from Google AdWords, Facebook advertising, whatever it is. They want real time data, real-time understanding of what's happening to their brand and it has to be profitable. And it's quite a bifurcation in how they look at advertising and marketing their products versus these bigger brands, which is more of a marketing play.Stephanie:Yeah. I think that agility to adjust and move quick is so key. I was just talking with a guest yesterday from a company Avocados From Mexico. Y'all ever heard about them? Wow. Their content strategy, like what they're doing. I mean, they've been winning the number two slot in the Super Bowl ads and her whole thing was like, you just have to be able to move quick. You need to be able to work with agencies who can try it on their own, run with creativity and just act quickly. And even when you don't have a budget, you can get scrappy and use organic growth hacky tactics to at least get up there in the beginning until you do have access to that budget. That was her number one thing though, move fast, try things out, fail quickly, and then iterate.Melissa:Exactly.Andrea:I just Googled them as we're talking and yeah, I can't wait to watch some of these videos. They look hilarious.Stephanie:Oh, her Super Bowl ad was so funny. I mean, all their stuff is funny. It was funny at first I was like, "Wait, why did Hillary schedule an avocado company for the show?" Americans super confused by this and I instantly got hungry, went out and started eating avocados. Once she came on I was like, "Oh, wow. They're a whole different level." Like you think about produce and a whole different way. I mean, they're doing AR stuff with their avocados. They're doing let's see, NFTs. They have been ahead, like years ahead trying stuff.Stephanie:I mean, they were trying NFTS and 2020 before it even became popular and they were trying to put ad campaigns on the blockchain. She was telling me a story about how they had an avocado Macy's day. What is it? Float. The only way the float would get there from Mexico to New York as if users would tweet about it. And so when you would tweet, enough tweets would happen and it would move the float to the next city. That's the only way it would ever reach New York is if they had enough engagement.Andrea:Oh, that's so fun.Stephanie:I know. It's so genius, but her whole thing was like, that's why you just try things and have that permission to experiment and a brand that can move quickly and not have to worry about competing top of funnel. Like you'd get it on that engagement level and scrap your tactics and you can win, which I think is awesome.Melissa:And I think that's harder for some of the larger companies to do, because I mean, even just that example you gave about like tweeting to get the avocado from city to city, which I think is hilarious and super fun. If that flopped, no one's going to say, "Oh, that dumb avocado company." It's just a memorable thing, but if it flopped and like, I don't know L'Oréal was doing that or something, I think it makes bigger, bigger news in not a good way.Stephanie:Yeah. Which always makes me think about the integration process of all these big brands are of course acquiring these hot D2C companies and it feels like there's so many out there right now. I mean, so many people come on our show and I always think like, "You're going to get acquired. You're going to get acquired." I mean, it just seems like that's the world we're in, but then figuring out how to integrate them into a culture, but not in a way that ruins it. I mean, have you guys seen good examples of that of companies who are acquired and then keep them in their own little startup hub of like, keep doing what you're doing. We don't want to ruin you.Andrea:I mean, we've seen it go both ways. So we have one client and I unfortunately can't share their name, but they were acquired by a really large CPG and they were allowed to operate separately because they're performing really well, but they're taxed so heavily by the rest of the organization because everyone wants to know how they're doing it. And so the amount of reach outs and coffee chats and all of that stuff and presentations and stuff that they have to give. I mean, it's an enormous burden on the small brand to try to teach a huge CPG how to be like them, you know? And I think that's hard. That's really hard for them.Andrea:I've heard that happens a lot of the time or they get folded in a little too quickly, but something that I was thinking about is what happens to the customer? Because a lot of times we buy these products from these smaller upstart brands. I mean, I think about like in beauty, two of my favorite brands are Glossier and Beautycounter and I love them. I love them partly because I feel like I'm supporting a company, well, at least in the case of Beautycounter, a company that stands for something which is like low chemicals and things like that.Andrea:I'm supporting their sales associate network and I'm supporting the smaller brand, but if they were to be purchased by like P&G tomorrow, I don't know at what my relationship with them feels like anymore. I'm not sure. I don't know. And so I wonder for some of these disruptive brands. What happens to that sort of authenticity and integrity when they're acquired? I don't know the answer to that.Melissa:The other thing that I've seen also is a lot of these bigger companies will siphon off people into a team of incubators and they just let them go. So they take them out of their company organization structure. Like you need all this approval process to go do your stuff. They then go create a direct to consumer brand or they're able to operate in that name nimble way. And they've been pretty successful getting learnings and trying to teach their organization some more nimble habits. So one route is buying the brand and then trying to keep them operating the same way and not to integrate it into that more bureaucratic process. And there's some successes and failures there. And then there's the big companies actually taking internal team to go do and not be subject to all the bureaucracy.Melissa:I've seen that as well, but I think the key that we all agree on is just this ability to be nimble, speed and if we've seen anything from ecommerce that's, what is the push.Melissa:So this nimbleness is something that's really important. In these product cycle times you need to get faster. And just the data like with this whole year of COVID when we're working with brands the question is, is this year I throw out your, because the behavior is just like totally off the chart. We know it's totally different. So how are you making decisions knowing that last year was not a good year to look at because things will return back to normal. How are you looking at it? And so getting faster at being able to look at data, to understand what's happening, knowing the trends of what's happening.Melissa:So the best example is like, MMM, Market Mix Models, where it's like, oh, from six months or a year ago, and you're making decisions on your media based on that. You can't do that. You can't look at six months ago because nobody's doing TV advertising because they didn't have any inventory. So you need to get much faster and that's what's really propelling more of this in this ecosystem. So I think we will see brands being faster because they've been given that inertia because of COVID.Andrea:Yeah, I totally agree with that. I mean, I read some study. I can't remember who put it out. I think it was McKinsey and they said something about, it was more than 70% of brand leadership said that they make decisions faster now than they did previously. I think you're totally right. You have to speak and COVID taught all these companies how to reduce their cycle times and be faster and be more diversified and all of those things. And I think those are the good things that we get to hopefully walk away from the pandemic with which are some changes to how decisions are made and things like that. And I would add to, Melissa, you talked about how these companies need to reduce their cycle times for everything, from budgeting to product development and I totally agree with that.Andrea:I think the other thing that these disruptive brands and particularly, Wyze and DUDE Wipes, is they incorporate that user generated content into their product development. So it's getting the cycle time down, but it's also figuring out how do you take all the stuff that people are saying about your brand in social media and in reviews and all these other places and incorporate that into your product development and your advertising and your content and all of that. I think the reason maybe that's some of the more scrappy upstart brands are better able to do that is because there aren't a lot of scalable ways to do that yet.Andrea:There are some tools that you can subscribe to and you can look across these channels and you can track your mentions and all that stuff but it's really a manual effort to be tracking a lot of that. And I think it's qualitative more than it is quantitative. And so I think some of those smaller brands that are still owner operator run just are more in tune with some of the sentiment of the customers and what needs to happen in the company versus maybe a brand conglomerate that has like 60 brands.Stephanie:Yeah. It also seems like bigger brands... I mean, I was talking with Stitch Fix a while back about how models can start running so quickly with training based off of how the consumers are feeling now, what they want right now and it seems like a lot of bigger brands do have access to crazy ML technologies and things like that to train these models to maybe make new product decisions, change their website every second based off how people are interacting with it. But I do also wonder, will we enter a year next year or the year after where it's like, whoa, what the people want now is not what they wanted two years ago and now all of our models have been falsely trained based off a two year craziness. I don't know.Melissa:Exactly. Yeah.Andrea:It's hard to look at anything. So much has changed in the world, I think in the last year that it's hard to look back at anything.Stephanie:What's real?Andrea:It's hard to go back and look at anything as a data point that's a predictor of the future. I mean, I think it's just really tricky.Stephanie:Yeah. I think about forecasting then that's my thought is like, I mean, that was exactly what I'm the VP of data science at Stitch Fix was talking about is like thinking about forecasting what clothes people are going to want and thinking about your inventory. And it seems like now you have to be able to shift so quickly, but then also you could be left flat-footed where you were planning for something that didn't end up playing out and people, all of a sudden want to be looking nice again, going out into the world, wearing high heels. I don't know. It seems like there will be a point when brands are like, oh shoot, I got to pivot again and get back to maybe our roots of where we started three or four years ago.Melissa:Yeah. And that's why it's all about-Andrea:... it's funny I would...Melissa:Yeah. I mean, it's art and science because the science, the AI models, they need data to work and they aren't very good with anomalies like COVID or like Prime Day or Sun Care member being like the sun care buyer and every single year at Amazon, we never bought enough Sun Care because it was like, couldn't predict that spike in the summer because the models were for the full year. But the modeling needs a lot of data for it to run. It doesn't do well with spikiness or anomalies and so that's where the art comes into play and the creativity you know, as well. So you have to think forward looking in terms of what are these trends, what are they going to be and Marriott together.Andrea:Well, Stephanie, you'd asked this in the beginning of what are some of the big challenges we're seeing across our clients and this one's not very sexy, but it's forecasting. It's so hard right now and they're all trying to figure out how do they forecast? Well, there's a lot of things you have to forecast. It's like, what are your year over your comps don't make any sense right now. I mean, it's like you can't even look at that. And so how do you forecast just demand on one platform because you don't know how much that platform is going to get, and then you don't even know how much of your business is going to be commerce, because that's all up in the air.Andrea:There used to be a pretty steady track of that getting a point a year or something like that. And now that's all over the place. Depending on the category you're in, you may be gain 20 points or something in ecommerce and then it's like, which retailer? It feels a little bit like a gambling exercise right now for these manufacturers trying to figure all that out. And then to Melissa's point, you have to line up an ad budget around that for these different retailer ad platforms and I think the forecasting is just so hard for them right now.Stephanie:Yeah. So let's talk a bit about the ad platforms and I know most of this right up your alley. So maybe you can speak a bit about how are companies thinking about ad platforms and approaching that? I mean, it seems like there's so much to pay attention to, so much to track, so much data. Like you're getting hit in the face all different ways of stuff now. What are you seeing behind the scenes when it comes to ads and platforms and how to go about that world?Melissa:Yeah. I mean, we've really seen an explosion of retail media. So it really started with Amazon, I think at this point, like five, six years ago when their app platform really started getting going, and Amazon makes a lot of profit from AWS and ads. And retailers can't really replicate AWS, but they can replicate advertising, which is great margin for them. And so just last year, we saw a launch of Walmart self-service ad platform, Instacart came out of nowhere. So to Andrea's earlier point, literally brands didn't have a budget allocated to Instacart and then off a planning cycle during COVID, this explosive new platform launches. Luckily a lot of brands had money because they weren't investing in TV advertising or other places. So they're able to allocate some dollars to it. But one of the big issues is nobody knows who owns the Instacart budget or platform, who's running that.Melissa:And then since then, there's just Criteo, what Target has launched, which is a slew of other retailers. So if you're not creating your own self-service ad platform like Amazon, Walmart Instacart you can leverage the network of Criteo who has Target and a bunch of other ones, CitrusAds is coming online as well. We went from not having a lot of retail media opportunities to advertise to now lots of opportunities to advertise with all kinds of different formats. And so it's a whole new brave world of trying to figure out where to advertise, but what I think brands believe is they want to be where their customers are. And so that's where it's really having a test and learn mentality of being able to get some of these test and learn budgets to see what's working well and get some data points and proof points and go from there.Melissa:And so that's where like tech stacks, like Pacvue or agencies who also have technology, like Ideoclick can help brands because they can help them figure it all out. And our value prop is really around unifying retail media so that you can see everything in one place, which is really important for these brands. So I think at the end of the day, you need savvy partners to help you, you need technology to help you, and then you need the strategist at your own company thinking through how to do these things.Andrea:Yep. I feel like right now all the money... and I also read that Dollar General recently launched an ad platform. That really surprised me.Stephanie:What? How [crosstalk] around really.Andrea:No, they did ecommerce. Sorry, Dollar General. [crosstalk]Melissa:How do you make money on that? Is that profitable?Andrea:I know, right?Stephanie:What are they doing?Andrea:It's pretty much like their value proposition is that everything cost less than $10 pretty much. So I don't know how they ship that online very economically. But in any case-Stephanie:$10. What? That cost will be less than a dollar. What happened? They really lost sight of [crosstalk].Andrea:Inflation. I think in the short term where the ad dollars are coming from. They're coming from the other ad options, like the theatrical releases or out of home advertising and TV and billboards and all that stuff. But when people start leaving their houses again, how much of those ad budgets go back to some of those more, I don't know, non retailer ad platform ad types and how much stays with retailer ad platforms. And I predict that a lot of it is going to stay with the retailer ad platforms. I think the reason is the metrics and ROI that you can get from that is like crack for marketers.Andrea:I mean, I don't even know how you would go back to spending on advertising where you don't get ROI metrics. I mean, I remember when Amazon advertising first launched, and that was one of the first performance marketing retailer ad platforms that you could work with and the reaction of the manufacturers just being like, "Oh my gosh, I can directly see a correlation between what I spent, who clicked on it, how many people saw it and then how many people bought it." And so I just don't..Stephanie:Wow. What does the ROI look like because I'm not deep in the ad world. So I don't know how to think about what retailer ad platforms looks like versus traditional. So how do I envision what you're getting in that world that you wouldn't be getting otherwise? What is that ROI look like or what are brands getting used to now where they're like, this is the only way I would do it going forward.Andrea:You want to take that one, Melissa?Melissa:Yeah. Well, I mean, I think traditionally if you're doing normal advertising, you're more focused on impression focus, right? You're really trying to get impressions. You're not tying back to sales of a product. And so in ecommerce, there's a direct tie back to, I spent a dollar, I got $5 of sales and there's like a brand halo associated with that. And so that tie back where I put an ad, if you leverage Amazon DSP, which is their programmatic display advertising, that's retargeting. So you can target to people who are looking for men's shoes within this certain zip code who shop Nike, but didn't buy it in the last 90 days.Melissa:You can get very, very specific targeting. You can show them an ad, drive them back to Amazon, to your product and then you actually know if they bought that product or not. And the actual sales attribution and return that you got from that versus just an impression buy like a Super Bowl buy, right? Where you've no data to say, "When I do a Super Bowl ad, you can try but there's no actual ROAS, return on ad spend that you get that correlates directly to an ecommerce sale. But I do think that media... people are doing all of these things, because some is upper funnel where you're more branding dollars and some as much lower funnel, direct marketing, that's conversion to a sale.Melissa:And so that's where these bigger brands are like, if there's a new product launch, you've got to get people to know about this product. So you might do like during the Super Bowl, the Super Bowl ads are like everybody's watching the Super Bowl and this year they had some weird like caveman soap. I can't remember the name of it, but on their Superbowl ad and so that was really to get attention and drive traffic to awareness of their brand. But not tied to specific ecommerce metrics.Stephanie:So how have you seen brands changing the way they're thinking about ads in a way that's focused on first party data collection, really trying to create that relationship from the start where maybe they weren't always thinking about this before. Have you seen brands shifting their mindset around creating an ad that maybe has the focus on that now?Melissa:Well, I mean, with all of the things happening within the privacy world where third-party cookies are going away. First party data becomes more important and so I think that this benefits platforms like Amazon who have a significant amount of first party data and hurts platforms like Facebook that rely on more cookies. But I think brands in general are really trying to build their own databases. So a lot of them have publicly talked about building direct to consumer businesses so they can own their customer. And so I think that they view first party data, building their own CRM and their own databases pretty highly. I don't know what have you seen Andrea in terms of brands that you work?Andrea:Yeah, I've seen the same thing. I think a lot of them are building their own CRMs, trying to figure out how to access more direct customer data. We talked about how it encouraged a lot more speed of decision making. I think it also encouraged a need for diversification in all ways like manufacturing and the ecommerce platforms that you sell on and how you source the product and I think diversification is really important. And I think there are a lot of manufacturers who've been feeling a bit squeezed by Amazon and it's nice to have options to have a D2C site. I mean, the D2C thing, I think is like a whole other topic, but I do think it's a lot more expensive to drive traffic to those sites. You're going to get a lot.Andrea:It's not going to be a hugely accretive to the business in the short term, but I do think it gives you access to your own customer data, which is, it can be a really important point of experimentation in a sandbox for manufacturers to really see what kind of marketing is working for them. So I've certainly seen that and then I think just looking across the retailer ad platforms, I mean, we've seen a push onto all platforms for a lot of our major manufacturers and wanting to access... If the customer's cross shopping, maybe it's the same customer, but also access different customers that are shopping across different ad platforms to Melissa's point earlier about wanting to be where your customers are.Stephanie:Yeah. I love that. So the other day, Andrea, I was creeping on your Instagram, I think I was. And you were talking about omni-channel strategies and drop shipping as a catalyst for growth. I thought that was interesting because I feel like when I think about drop shipping, it's had this like crazy heyday drop ship, white label, everything. No one has to know who you are. You don't really need a brand. And then no one was really doing that anymore. It didn't seem like there was margins there to do that anymore or people really want to connect with a brand.Stephanie:Like, especially now everyone wants to know who's behind that brand, the story, they want to feel some connection with them. And when I saw you mentioned drop shipping, I was wondering, how are you guys viewing that? Maybe it's always been around and that's just my personal narrative I've written around it or how do you see brands maybe leveraging that right now?Andrea:Well, I think of drop shipping a little bit differently. It's still the brand. They're just bypassing the retailer and they're shipping directly to the consumer. You can do that as a seller in your own right on the marketplace platforms or you can also just do that behind the scenes. And there are a number of categories that are high percentage drop-ship and always have been. It's never going away. It's just not obvious to you as a customer. So shoes is a great example.Andrea:Those are often coming directly from the manufacturer. That's an industry that's been pretty heavy drop-ship for a long time and mainly because so much inventory, you have to carry. There's one style and then there's five size color combinations. And so it doesn't make sense to ship all that to a retailer and then have them re-ship it to a customer and try to keep the inventory levels right.Andrea:So shoes has always been a really big drop-ship business. If you pay attention to the stuff you get from Nordstrom and others, you'll notice that it's often coming directly from the manufacturer. Sporting goods is another one. Some of the bigger bulky categories have been traditionally drop-ship because you don't want to ship like a treadmill to a retailer district warehouse or whatever. It does expose the retailer to a degree of risk because you're not packaging the product. So you lose a little bit of control over the quality, the consistency of the customer experience. I think what I posted was that Nordstrom was going to try to open up more assortment through ship.Andrea:It's a little risky. I mean, I don't think it's highly risky, but I do think it presents some risk in losing control over the customer experience, depending on if the retailer is still deciding the assortment, you could lose a little bit of your credibility as a retailer. I mean, I think part of why customers are starting to shop a lot of places besides Amazon is for the curation. Is because it's a little bit of an easier shopping experience.Andrea:I would much rather shop for shoes on Nordstrom where I know that someone actually made a decision to carry each of those products versus on Amazon where it's the wild west and it's just overwhelming. So I think a lot of these retailers that are competing with Amazon and doing well with it right now, I think are doing it well because of the curation. And if you open up those retailers to just unlimited drop shipping with the brands, I think you just lose a lot of that value proposition.Stephanie:Yeah. I agree. I mean, it seems like the AMSEC could just come in and just have a curated collection and maybe they're already doing this. This is the Radan collection, this is the [inaudible] and like, you go there knowing what you're going to get, because I thought the same thing. The other day I was trying to find, I don't know, some piece of yard furniture and it was so overwhelming. I was like, "Oh my gosh, there's so many egg chairs. I know the egg chair I want, but there's so many." 90% of them are not egg chairs [inaudible] is and I just went to Walmart and they had the exact what I wanted, which I found through an influencer, or I would just go to West Elm. I just feel like they have the exact selection that I want. I'm not going to mess around, but it seems like they could come in really quick and change that if they wanted to.Andrea:They can't. it's so hard. I mean, they have a one size fits all platform and it's heavily search-based. And I remember, how do you say her last name Melissa, Kathy who used to lead soft lines at Amazon? Kathy Boudin. Well in any case, sorry, if I'm mispronouncing your name, but I remember hearing her say, in all hands one time, she was like... They came in and I think Amazon fashion had its best a couple of year run. They really created some curated lists and some storefronts and they started the Amazon Delivers for fashion and I thought it actually was really good stuff. But she said, "It's a thin veneer that we've put over the site." I remember her saying that. It's a thin veneer.Andrea:And once you scratch it, you see just all the assortment and everything that's there and it's overwhelming. I keep a little like goofy quote lists that people on my team say and this guy in my team, Jamal the other day. I can't remember the context, but he said, "If you're going to go shopping on Amazon for a Teddy bear sweatshirt, I'll see you in a week."Stephanie:That's so true.Andrea:I don't remember why someone was shopping for a Teddy bear sweatshirt or what the context was, but it cracks me up because it's so true. I mean, you could spend a week just combing through, even for something super specific like that, a Teddy bear sweatshirt. You could spend a week just coming through this.Andrea:There's this S&L sketch about Netflix, but I highly recommend that you watch because it's like a fake ad for Netflix, but it says, it's the endless scroll. "By the time you get to the end of the scroll, we've added and created new content and so it's the infinite loop." They call it an infinite loop. And Amazon is like that. By the time you get to page 10, they've probably added more assortments. So it's never...Stephanie:Yeah, people are working in the background. "She needs 10 more of these, keep going." Oh my gosh. All right. So I know you guys have a hard stop in a couple of minutes on Clubhouse and maybe I'll even try and join you over there, but I do want to get one last question. Usually I do a quick lightning round. Lightning round is brought to you by Salesforce commerce cloud. But for this one, each only get one question because we're on a time crunch. So Melissa, we'll start with you and it'll be the same question. What one thing will have the biggest impact on ecommerce in the next year?Melissa:Oh, man. That's a hard one.Andrea:Yeah. I'm glad I get to go second.Stephanie:Andrea already had to do it once on her last episode and it can't be the same answer, Andrea.Melissa:What's going to be the biggest impact to ecommerce in the next year?Stephanie:In the next year. Yeah.Melissa:I mean, we already had COVID so that's what had the biggest impact on ecommerce? I guess, I mean, maybe it's a ripple effective. I'm going to have to say COVID because that has had the biggest impact on ecommerce because it's accelerated it so much with new people especially at different age brackets. The older age bracket is shopping online and so we know the baseline is never going to return back to where it was and it has changed behaviors and it will be accelerated. The other interesting thing, I just notice this when I walk into a beauty store, like in Ulta is that beauty used to be a way better experience in store than it was online. Now it's the opposite. It's way better online.Stephanie:I order from target all the time, just directly from Target because I'm like way better than going in store.Melissa:Because you can have virtual reality, but what's this color going to look like? When I walk into an Ulta, everything's taped down, you can't try on anything. You can't see the format of anything. I don't know how much of that's going to return. I don't think people are going to be very comfortable trying, like picking things up that other people have touched for a very long time. I don't want to.Stephanie:I never wanted to. I never wanted to try lip gloss. I'm like, how many... thank you.Melissa:I think the interesting, and then Amazon announced opening a hair salon where a lot of it is going to be tech focused around what's this color going to look like. Virtual reality of hair color. So I think that Cover Desk has accelerated this complete change in behavior lifestyle. And the other thing is, I don't know if I'm ever going to wear jeans again. I might just wear my VRA joggers to work if I ever go back to an office.Andrea:There's a great YouTube video on how to dress up joggers, that I'll send you.Stephanie:All right. Andrea, you're on the hot seat.Andrea:Okay. I'm going to go with social shopping and live streaming and I don't know if it will be in the next year, but I think it is going to be the biggest disruption to ecommerce because it is going to start taking the transaction or at least the beginning of the transaction off of the ecommerce site and onto social media. I know that I don't have a lot of agreement on this in the industry. A lot of people are like, "Oh, it's going to take longer or like people aren't going to shop on social media," but I'm feeling super bullish on this. And I think it's primarily due to my own behavior, which is that I am almost exclusively buying things that influencers have recommended to me and it's a super clunky experience. You have to go down to the bottom of the YouTube show notes and find the top she had on and it's annoying and I'm still doing it because it's preferable to the endless scroll of Amazon.Andrea:So I really think that that is going to be a huge disruptor to ecommerce and have a big impact on it. Although I was wrong about this once before, I helped start a company, I guess it was like 15 years ago now. It was about social shopping. It would like loud allow it. It was kind of an old version of a screen share before we had screen shares, but it allowed you to shop reseller websites with your friends.Stephanie:That was awesome [crosstalk].Andrea:It took a long time to get it off the ground and we eventually sold it to Nordstrom for their style boards, which is a very different application than what we originally went into the idea with, but I still feel super bullish on this. People prefer to shop together or they prefer to feel like they're shopping with someone in the case of like the curation from influencers or whatever. I'm feeling bullish on social shopping and live streaming.Stephanie:I will 1000% back you up on that because yeah, almost all my shopping behavior comes from influencers and I will go through all the hoops and hurdles to try and find something even through that, dang, like to know it app, which is horrible to work through. You're like, "I'm just trying to find my shirt." And then you're like bouncing around like 10 different apps and it throws you over back to Nordstrom and then you're back again. It's not fun. So I hope that process gets easier.Andrea:I'm a huge fan of taking the screenshot and using Google lens. I don't know if you ever do that.Stephanie:I don't do that.Andrea:If you can't find it, Google lens is... I don't know that that's their intended application, but it's really, useful.Stephanie:It is today. That's great. All right. Well, I really think we need to have a quarterly round table. This is super fun having you both join us and yeah. Where can we find out more about you, Andrea, Melissa? Where can we find about Ideoclick and Pacvue?Andrea:Yeah. Well, you can follow me on LinkedIn. I post and write a lot about ecommerce there or on my website, andreakleighconsulting.com and you can learn more about Ideoclick at ideoclick.com.Stephanie:Melissa.Melissa:Ditto. LinkedIn, you can find me Melissa Burdick there. And then pacvue.com. P-A-C-V-U-E dotcom. Yeah. We'd love to hear from folks or you can find Andrea and I in Clubhouse later this afternoon.Andrea:Yes, four o'clock. After this'll air, after that.Stephanie:Yeah. You guys are giving a preview of this, so, yeah. All right. Thanks so much y'all.Andrea:Okay. Thanks for having us, Stephanie. 

Mini malls, shopping centers, and large department stores all still exist and remain popular despite their digital counterparts But online marketplaces are where more and more brands are gathering to not just sell goods, but to get a better 360 view of their customers, and gain access to sell products from other big name brands that fit their marketplace niche. On this episode of Up Next in Commerce, I explored that idea a bit more with Jason Wyatt, the Executive Chairman at Marketplacer, a business dedicated to creating marketplaces. We dove into the various ways that Jason has seen marketplaces evolve, especially in recent years. Plus, Jason talked about some of the incredible innovation that he’s seen take place  thanks to marketplaces — including the birth of Providoor, an Australian marketplace for restaurants that was built as a reaction to COVID-19 and reached a $100 million run rate within 12 weeks. We talked about how the marketplace connections made that possible, and also how the B2B landscape can be revolutionized thanks to marketplaces. Enjoy this episode!Main Takeaways:Getting The Bigger Picture: By creating a marketplace, businesses can get a much deeper picture into the attributes of their customers, while also gaining access to inventory and products to sell from big name brands. The key to success? Curation.We Have A Connection: One of the greatest advantages of a marketplace are the connections that can be formed within them. Especially from a B2B perspective, because for so long those buyers have been left out of the ecommerce equation. They desire the same level of connection and ease that those in B2C have come to expect though, and marketplaces have provided a way to create community and engagement that has made B2B selling and buying much easier.Long Live Loyalty: Big brands have long tapped into loyalty programs as a way to earn customer trust and keep them coming back. By expanding point systems to usage within a marketplace, brands are now becoming even more trustworthy and respected in the eyes of consumers, who can all of a sudden get more bang for their buck. Additionally, the rise of wide-ranging marketplace loyalty strategies will likely become a new way for retailers to attract customers to newer marketplaces.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, I'm Stephanie Postles CEO at mission.org and your host of Up Next in Commerce. Today on the show, we have Jason Wyatt, who currently serves as the executive chairman of Marketplacer. Jason, welcome.Jason:Hi Stephanie, thanks so much for having me on the show today.Stephanie:Thanks for hopping on at 7:00 am. I think you're one of the earliest guests I've talked to over in Australia, so I appreciate you coming on and joining me for a fun chat.Jason:No worries at all. It's just a pleasure to be on the show and talk to your community.Stephanie:I was hoping we could start back in your... way back in the early days when you were 13, because I saw a fun story about what you were doing back then and a little entrepreneurial spirit that was going on, and I was hoping you can kind of share what you're doing back then so people can get to know you a bit before we dive into Marketplacer. This is all around a loan that you got from your dad if you know what I'm talking about.Jason:Well, I might, I was actually... I was a mad sports fan, as the majority of Australians are in this country. And I was playing tennis at the time, if I'm on the right track with this story. And we used to play a lot and pretty competitive. But my brother was a lot better than me, but I used to sort of grab onto his heels, but we constantly used to break racket strings. And we didn't come from this massive affluent family. We come from a family of just, the harder you work, the luckier you get. But dad, what he did do is he loaned us the money to buy our own stringing racket. He just said, "If you keep breaking these strings, well you got to fix them yourself."Jason:My brother and I took advantage of that situation. We figured we had an unfair advantage versus the other tennis players within the group. And then what we actually did is we turned that into a little tennis racket stringing business. So at the age of sort of 13 or 14, we were making a hundred bucks a racket, stringing out sort of four rackets a night and we had a little good business going on. I suppose the entrepreneurial spirit sort of started at a very, very young age where we had a problem to solve and then we solved it for other people.Stephanie:I love that. It definitely rang close to home because I was out in my neighbor's yard, raking, weeding doing anything I could just to earn $5 here and there. And I love hearing about how other people had that itch early on too, and seeing what it turned into later on in life.Stephanie:I'd love to jump into Marketplacer a bit and hear what is it? When did you create it? And what are you guys up to today?Jason:Marketplacer is probably the most fascinating business that I've ever been associated with, because it enabled so much global connection and enables people and businesses all over the world to sell things they don't own and to really supercharge commerce. And the story started back when my co-founder and I, Sam Salter, we just had a simple idea 13 years ago to make it easier for people to buy and sell bicycles. And we created a business called BikeExchange. Think of cars.com for bikes. You're buying a new bike and you want to see everything in one single destination or you're selling your bike and you want to sell it to a community that's a trusted community, has a sense of belonging behind it. And we created BikeExchange. But in doing that we had some really, really big, tough entrepreneurial problems to solve.Jason:We had to come up with a sales and marketing plan. We had to come up with a customer success program, but most importantly, the technology never existed. So, we not only have to be great salespeople, not only a great customer focused, but we had to become technologists at the same time. And we just thought, in everything, in creating a business, in creating a marketplace on a global scale it's a problem that we could help other entrepreneurs or other businesses now actually start to use a platform to enable them to be able to create it. So the story was born out of solving our own problem, out of eating our own dog food in a technology term. But now we help people all over the world in 10 countries solve that marketplace journey, of really just making it easy to connect a customer and community to make it easier for them to sell things they don't own and to supercharge commerce. And I'm sure we're going to unpick what that means in a lot more depth over the next hour or so.Stephanie:That's awesome. What's wild to me is that building a marketplace is notoriously like the hardest thing you can do in commerce. Everyone struggles with supply side, demand side, how to build which one first, and you're not only doing it once. You're replicating it, using your software and doing it with multiple industries. How do you even go about approaching it, especially if it's a new marketplace?Stephanie:You had your bike one, I know earlier you were talking about meal delivery from restaurants, how do you even think about building a new marketplace and solving for both sides of the market?Jason:It's a really good question because we always identify what we consider to be an unfair advantage when we help our clients and customers really figure out whether it's a worthwhile strategic project for them. Because it's a strategic project to go through, that marketplace journey. And the unfair advantage has really been always anchored around two core elements. The first being an existing community or audience or customer base that you know they want to buy more things from you. Or you know you can connect them up in a single destination to improve that customer experience. And the second is more often not the ability to have an in-depth knowledge of the supply base, a connectivity into that supply base and product base. You can actually really exploit the now and explore the future around connecting those two sides of those marketplace journeys.Jason:The evolution and the story of a marketplace has really evolved over time too, from the humble beginnings of a BikeExchange when we first started. It's now in 10 countries, and now we're out around the world and listed on the Australian stock exchange in January of this year.Jason:Thank you, awesome team effort by the team. To really large retailers and brands and, and all types of traditional types of business saying, "Hey, I've actually got one or probably two of those unfair advantages and how can I make it easier for me to grow and drive growth within my existing customer base, without the limits of capital and without the limits of actually producing all of the products, but enhancing my customer experience along the way?"Stephanie:How do you figure out, I mean, how I'm envisioning is that you would probably have like a lead brand who's for the bike one or for the meal delivery one you'd have to have kind a lead person who's owning that marketplace and then they're onboarding other brands as well. And other customers, is that how I'm thinking about it? Because I can't imagine having 20 BikeExchanges where every bike company is, "Well, I want my own marketplace. And I want mine." It seems once you have one, it's probably good enough and you have to be a part of that one.Jason:It's a really, really good question.Jason:There's different types of marketplaces, but the evolution that is really happening at the moment is, take SurfStitch for example. SurfStitch is actually a commerce cloud customer. They're a pure play surf wear brand. They sell hard goods, soft goods and clothing and bus fashion around it. But they've got this community, this tribal community of surfers and they're really a successful business, great growth really, really well leveraged on the commerce cloud stack. But when they looked at their business and they looked at their strategic path, they're constrained by warehouses, they're constrained by the capital, but they had in the back of their mind that they thought that, if we could have the full range of surfboards, instead of only taking 20% of the range of surfboards in all sizes, by connecting up to the wholesaler warehouses.Jason:And then to unpick that to the next layer, when you think about it, a surfer is quite a soulful person. They love the outdoors and are they only surfing? Or are they going hiking on the weekend? Are they exploring the outdoors as well? But I don't want to put a hiking gear in my warehouse. That's too risky, but I could go and connect up to Patagonia to take a full range extension from Patagonia without owning the inventory. So by taking a marketplace strategy or really a growth strategy, what they were really able to do is make it easy for them to connect that to a supplier base, to improve their customer experience and really enhance that 360 view of what that customer is trying to do. Not only from a data perspective, but a product and an experience perspective.Stephanie:Got it. That makes a lot more sense now. And it also just seems the role of curation is so important and whoever's curating the best products and not just throwing a thousand things into one marketplace, really thinking, like you said of, okay, you might be hiking, but you're probably not cooking too. Like I'm not going to put cookware in my marketplace with Patagonia stuff and surf boards. It seems like curation is huge when it comes to that. And also knowing what's trending and what their customers will like is a big part.Jason:Yeah, but it also enables this strategy, the ability to fail fast within there as well. If you put it a camping stove on there or a shower after you go for a surf, to clean yourself off, you haven't bought it. You've had a go at growing in there. It didn't work customers didn't like it. So just turn it off.Jason:With Marketplacer what we really focus on as well, is a really strong vetting engine for the sales force customer and any of our customer community so that they... it's just not a free for all, for all of the products flowing through. It's that ease of connectivity into the supplier base. And then it's the strict controls and measures that you can put in place to enable your customer experience within the marketplace strategy, not just "the everything for everyone" experience. If that makes sense?Stephanie:Yeah, it makes sense. I was going to ask when it comes to marketplaces, how do you guys think about marketplace or versus the Amazons and the eBays and Etsy's of the world that seem like they are kind of creating custom curated collections in a way too. But not as much of a niche level where I would say "Okay, we're going to be doing bikes and here's your community and your people." How do you think about the landscape of marketplaces right now?Jason:It's a very interesting landscape, because it's kind of a bit of a cross matrix at the moment, Stephanie. In that there's B to B, B to C and B to B to C plays within what we're trying to do. And then if you take the types of marketplaces the other way, so all three of those really go across all three gamuts. And then if you take the types of marketplaces, you've got the niche and the tribal based marketplaces, and we put media organizations into that bucket. If you imagine all of the great magazines, like we power lots of magazine marketplaces, where Time+Tide is a good example of a watch marketplace, where they have the beautiful content, they have the trust within the industry. They had a community of people looking to buy watches, but they didn't have that connectivity into the supply. But now they've got it. Another really great example is FishBrain, which is the world's largest fishing marketplace.Stephanie:Didn't know that existed. That's awesome.Jason:I'm not a big fishing person, but think of Strava fishing. Think of a really, really large... I think they've got over 13 million users within the United States now. They wanted that into a commerce play, but they didn't want to own inventory. They didn't have a buyership, they didn't have product developers. It was too difficult to do it. So what they did is they partnered and they connected into the world's best fishing suppliers to create a marketplace. Now that has over 60,000 products to sell that you can just buy.Stephanie:Is there ever a chance of them getting lost. When I hear 60,000 products within a fishing marketplace, how do you get found in that big marketplace?Jason:That's an interesting one. So fishing is probably the best industry to do it because what I have learned about fishing is there's lots of micro products for the local areas. So there's lots of little lures and lots of little different tackles setups, the different communities and different areas. There's lots of niche products within the niche. That one makes a ton of sense to have a really big, broad breadth of inventory within that.Jason:So if you think of the tribe, the addressable market behind people trying to take that convergence of content into commerce and contextual commerce, that space is born for a marketplace. Isn't it? It's an affiliate 4.0 where it can connect into the supply banks. Then you look at brands and retailers and franchise groups and cooperatives. If you actually look at the structure of all of those businesses... Co-operatives and franchise by default are marketplaces. They're a masthead brand their third-party inventory is owned by their franchisees groups. What we're finding in this space is we're just increasing the offering that they can have.Jason:We connect up their franchisees group into a single destination. For example, actually within Australia, we run the largest tire business called Bob Jane T-Marts and Bob Jane T-Marts are a really large franchise group. They're a $600 million business. And tires are a complicated product. They seem simple, but they're incredibly complicated because you've got to match every tire to every car to every wheel ever made, ever sold.Jason:But by creating a marketplace strategy within that, they're really famous for solving one problem. We connected up all the franchise groups via our marketplace technology. But if you think about it, what they really have is car data and car ownership data. What else could they sell a person at the BMW, other than tires and wheels that could enhance their car driving experience? You'll start to see lots of these franchise groups, not only connected in unifying their customer experience, but actually starting to think about how can they enhance their customer experience without the cost of capital burden placed that amongst their franchisees group or cooperative structures and buying groups are in the same bucket.Jason:Then if you just think of traditional retailers, whether they're a pure play or a bricks and mortar or a blend of both. Which the world has a blend of both now, right? There's no real, just pure play or bricks and mortar retailers anymore. So the problem they're trying to solve is exactly that problem we talked through with SurfStitch. How do they enhance their customer experience in store or online. Where they can range extend or category extend, to supercharge their commerce journey within that.Jason:And that last sort of bucket within that is that brand or wholesaler journey. And the brand and wholesaler journey is a really interesting one because it does really touch on those three sort of core verticals that I said at the start being B2C, B2B and B2B2C within that.Jason:The first one's pretty obvious from a B2C perspective, if you're a brand and you can see a perfectly complimentary product, why would you want them to leave your platform to buy it from another platform? Why wouldn't you just connect it up to enhance your customer experience?Jason:If you sell shoes for example, I'm going to dumb it down, but if you sold shoes, how could you connect up with a sock company that had the best brand to associate the shoes with socks without actually owning all of those imagery behind it? And we've seen lots of great examples of that. We actually power the Nokia marketplace. If you're thinking of buying the phone, what other connected product and you put in within that connected ecosystem and Google are a partner of Nokia phones globally now, and all of the Google products is going to be available on the Nokia marketplace.Jason:You can start to see this connectivity piece really, really drive home within that. And then from a B2B2C perspective is how do you not cut out your stockists? How do you find a way as a brand or a distributor in a modern world not to cut them out. Whether it's a marketplace, a unified experience, but what our marketplace platform can do is connect it all up. You can cut your retailer into these third party product sales, but without, without actually going against your traditional business model. And we're seeing a fair bit of that momentum behind it as well. Then the growth space and it's going to be really interesting, because I think that the world is saying how, from a B2B perspective, from a traditional brand, when you're selling to retailers when you're consolidating in a B2B industry, how does a marketplace make sense?Jason:There's Alibaba and then there's not much. The interesting play within there is the unfair advantages to businesses is pretty similar then than it is to a B2C perspective. Their unfair advantage is really anchored around their existing stockists or retailer base that they sell into. They've got a great community of sales representatives or sellers on the floor, who are going around and servicing them. How can they then connect up to other suppliers in other industries that could actually self to that community and we make it easier to do that. And there's a really sort of large demand at the moment behind B2B marketplaces as well. It's an interesting thing to call these things marketplaces. They're not all marketplaces, but what we're doing is we're connecting the world to enable supercharged commerce.Stephanie:I love that. I want to hear a little bit about the revenue numbers. When brands embark on this marketplace journey, what are some stories when a new company starts revising your guys' tech?Jason:It's a really interesting story and journey behind it. I'll give you one example during, during COVID, the world's a different place and we all know that, and there's not much point in delving into what's next after COVID. I think everybody's thinking about what's next after COVID but what we fundamentally know today. It's just a different world. It's a different world than it was in the past. And the power of connection during COVID in a digital sense, drove some of the greatest innovation stories that I've seen for some time. And I'll share the story of Providoor. In Australia, this is a case study we rolled out.Jason:It's nearly exactly this week, last year to the day and a great friend of mine, but a celebrity chef Shane Delia. He owns some of the best restaurants in Melbourne and he's got cooking shows on TV and big personality, vibrant, enthusiastic. Had 150 staff behind his restaurant business at four restaurants, one at the airport. The institution restaurants you know, think of Mamasita in New York. These are like famous restaurants within this country. And he emailed me and he just said, "Jason, I'm stuffed. I've got all of these people, I've got food, I'm just throwing into the bin. I've got leases that I've got to pay, but I've got this one glimmer of hope."Jason:"I've just done a trial where yeah, I'm doing ready, sort of made precut food where the customer just has to finish it off at home. So it's like they're getting the magic of a restaurant quality experience in their home."Jason:And he said, "I've done it for a couple of weeks and I'm selling like $5 to 6,000 a day." And I said, "Well, talk me through the problems that you've sold." And he said, "Well we've solved this packaging, we've figured out how to I get it to the customers with the boxes." He did this in a week, like extraordinary innovation. He's, he's sourced the products, the lined boxes, he's got the dry ice, he's fixed the packaging for this. So the tumor is sort of doing, you know, that those types of volumes in a small way. And I said, "How are you delivering them?"Jason:He said, "Well I've got no choice. My chefs are preparing it, My chef's are driving at 35K around Melbourne, to drop it off at people's doorsteps at 4:00 am in the morning." And I said, "Well, you've probably got to solve your logistics problem in a real quick way. But there's something in this, because there's a demand." You're not doing any marketing, your unfair advantage is you're... I call him a B grade celebrity, he probably thinks he's an A grader. But he's got this celebrity audience that he can tap into. He's got trust within the community. The other chefs will trust him. He's never gonna do anything wrong by that industry or community and customers just loved it. If we could solve a couple of problems, i.e, how do we make it easy for all restaurants to sell in the same way and create a marketplace around it.Jason:And then how can we make it easy for people to get the delivery experience behind it? I think you've got the bones of a really good business. Shane's a pretty good hustler. And five weeks later, we'd pulled every string in the world to get Providoor live. Where the best restaurants within the Melbourne CBD was selling to a 35 kilometer radius of the Melbourne CBD, get it delivered in two delivery slots AM and PM. They would cross stock. The trucks would drive around Melbourne pick up every box. Cross stock it into a single parcel. So you would only get a single parcel. You could order from all the restaurants in one. If you were entertaining in your home or just wanted to release from COVID, or you had a birthday party, or mum and dad couldn't get to the restaurant, then you could actually experience it. And after a 12 week period he was on a $100 million rate. Solving those capital problems.Stephanie:And this was from other restaurants as well that he onboarded onto essentially the marketplace that he created. It started with his restaurant. He brought on others as well. What does the cut look like for him versus the restaurants that are also selling on the marketplace that he essentially established?Jason:Yeah, it was again, really interesting. Shane took, I think it was a 15% slice of the pie. So he actually...Stephanie:Who decides, or you decide when you create the marketplace how much you...?Jason:Yeah.Stephanie:Nice, okay.Jason:It's part of the marketplace platform, when you create a marketplace. We solve all of those commission calculations and you choose, as running that marketplace, what each seller gets, and you can change it by product or category. Now you can do really complex commission calculations, but we also manage all of the seller payouts. You imagine that volume in that period of time, if you're cutting checks, so you're doing individual payments it's un-scalable. So that's why he had to... besides the fact that's why you needed a marketplace platform to, to scale at that rate, but it just shows you if you can leverage those couple of unfair advantages and pull it together in a really neat way and solve a problem, how big you can get quickly.Stephanie:That's crazy. It sounds like you kind of want to make sure you have an audience first or partner with someone who does already have, like you said, that tribe, who's kind of waiting that you can tap into that. How do you go about even convincing customers to come and buy on a marketplace? Are you doing anything around exclusivity where it's if you're selling your bikes or your box meals or whatever on Marketplacer, you can't also sell, I don't know, on DoorDash, do you have DoorDash in Australia? Or something similar.Stephanie:How do you think about creating that moat around the market places that are building up?Jason:I think any business, whether it's a marketplace or not a market place, you create moat. And if you could get the number one selling product of the world and get it exclusive to your business, whether you own it and send it yourself, or whether it comes direct from the supplier. I would a hundred percent recommend that every single day of the week.Jason:In Shane's situation and in Providoor's situation he solved some pretty big problems. No one else in the world, in my opinion, in a five week period could have created this marketplace. And then secondly he partnered exclusively with the logistics company that was an under utilized fruit. You imagined it was a fruit delivery business where they were delivering to corporates, their fruit boxes. And they went from a hundred percent capacity to 0% capacity, but then Shane took them back to a hundred percent capacity. So you've got to, you have to find very innovatively, underutilized, cold, refrigerated delivery network in a really short space of time. He created a couple of really, really solid moats that enabled it, nearly impossible for somebody else to do it in that period. But they were just extraordinary. But the short answer to your question, I'd always promote a moat.Stephanie:So try and make things exclusive, if possible. How do you bring... what are some of these brands methods of bringing their customers onto a new platform? Because that does kind of feel like it could be an experience that might cause a bit of friction of like, "Oh, I'm always used to either just buying directly from your website or just buying from Amazon." What kind of tactics should a brand use if they're trying to convince someone to come and buy on a new platform that maybe they haven't heard of before.Jason:You're talking from the end consumer experience when they're buying from you. It's all around trust in the process. It's in that front end customer experience or any communication around it, it's about building trust and rapport around building a marketplace community. And there's many techniques you can use around that.Jason:Some companies choose not to even say who the seller is on the marketplace. They take a really hard supplier agreement and they say, here's your SLA supplies. If you don't supply under these terms and conditions in these ways, then we're going to exclude you from our community, moving forward. Other marketplaces take the opinion of, "I'll let you rate my supply. I'll let you rate your seller." So it's going to be a customer led trust build up around it.Jason:Other marketplaces over time have put their own sort of ratings and experience... the one thing I'll say around the customer journey when you don't physically own the product is you've got to be really clever and your communicative style. The items might not appear in one parcel, items maybe sent at different times. And if you can bring your customer and community along that journey, they're very attuned to it in this world that you don't get one single parcel from one single vendor every single time and boxes can appear on different days, just as long as the communication strategy around when they're turning up. I mean, the timelines as a customer's experience is really well handled. I think it's a problem that's that's well solved in market.Stephanie:Always good to make sure you're doing it in a trustworthy way where your customers are like, of course I'll go where something's being sold and there's good curated products there. What are some best practices around developing that community and keeping your community engaged and making them want to come to your marketplace that you built up. What kind of tactics do you see happening behind the scenes that are working?Jason:We're seeing at a little bit of scale at the moment, the loyalty programs being attached back into the marketplace strategy. And I think it's a space that's going to be really interesting moving forward, whether it's loyalty or membership economies or subscription economies around it, it's something that's definitely an interesting space.Jason:Take Myer's another example within our region, but Myer's a really large department store. It's the Macy's of Australia. It's the number one department store. They've had some really challenging times, pre COVID and obviously during COVID. Big box department stores, lots of inventory, really expensive leases. And they've kind of been kicked off from every corner. Right. But what they did have is they had an incredibly loyal customer base that actually had a brand affiliation with Meyer, but most importantly had a really strong brand affiliation with the Meyer loyalty program, because it was such a good rewards program.Jason:When they launched their marketplace, they actually gave the customer base the same points that they would earn on Meyer across all third party marketplace products. And you could use your points to buy from all of the third party products.Stephanie:That's imposing.Jason:Exactly. And we won a, I can't say who, but we've won a major global airline at the moment where instead of just being able to book airfares using your airline points, now you can buy 40,000 products using your points, promote burn perspective from your airline miles. So I think what you're going to find is this community of traditional loyalty programs or earn and burn points systems, being able to tap into really broaden their range to become really big, meaningful marketplace strategy, loyalty program.Stephanie:That's super smart. The one thing that's coming to mind is thinking about data privacy and how does the sharing work, especially if you're onboarding other brands onto your platform, I'm guessing I would want access to that customer data. I'd want to be able to talk to them, especially if I'm shipping something to them, or even someone's viewing me as a person that's shipping it to them, even if I'm not really in the backend. What does the sharing of the, maybe customer information look like, in a way that's probably protected and keeps everyone safe.Jason:Say for example, we're talking to the commerce cloud community. If you're a commerce cloud customer, you're the merchant of record in that instance, aren't you? You're always controlling the customer record. You're controlling, you're receiving the funds yourself. But you do have to share the customer address and you do have to share some details of that customer because they've got to receive the items. You've really got to make sure your supplier agreements are quite stringent around data privacy. And then within the marketplace platform, there's a couple of configuration points where you can mask email address and not mask email address. So there's configuration around customer privacy settings that gets forwarded through to that end seller within there as well. But what we actually find is that the broader supplier or seller community is unbelievably respectful of the end customer because they're attuned to selling in this methodology now, and they know if they break or breach those privacy laws or those privacy policies that you set up as a marketplace operator, is that they're going to be cut off and, and they're going to lose that whole channel.Jason:We've had basically no problems of that over the journey of Marketplacer. It's something that's a very small, minimal risk.Stephanie:Amazing. Let's talk a little bit about ads. And I'm thinking about you're this big marketplace. Maybe if you're the fishing one, you've got 60,000 products, I could see you guys having an entire ad unit or the person who maybe is owning the marketplace, starting to create a demand side platform when it comes to delivering ads. And how are you guys approaching that right now with all the brands that you're onboarding?Jason:The world of relevant display and sponsored contents and contextual commerce, back in to market places is a real interesting space. Because if you can not only just send your products to a third party marketplace, but then you can buy specific media around it and launch products within it. It's super exciting. We're actually integrated into Google DMP, and all of those great ad serving systems within that. And what you'll find especially as the world moves into a headless commerce situation, is that the brands can put whatever DMP they want into the commerce cloud headless stack. They can be really quite innovative around, not only just creating traditional revenue streams for the product they own. Not only creating modern revenue streams in the fact that they can sell things they don't own, but now they can actually turn their traditional retail businesses into a media business as well, which obviously comes at a much higher gross margin than physically owning the inventory.Stephanie:Any innovative stories that you see happening around the advertising space within Marketplacer? That brands are maybe trying just new and different things because of the operating model of this new business they didn't have access to before?Jason:The obvious one that just comes to mind is actually BikeExchange. BikeExchange does exactly that every single day of the week. It connects live into all of the retailers. As part of the Marketplacer platform... because some of the problem in the marketplace scenario is how do you make it easy for your sellers to connect? How do you make sure that the inventory is accurate and live? How do you make it so that when a retailer of stock list receives the order, that they can just seamlessly process it, without having, necessarily a billion spreadsheets rolling every direction for everything they sell. We sold that in a really nice, elegant way where if you're on... and if you've got an existing POS system, so point of sale system or an existing e-commerce engine, we built pre-built connectors for the majority of them in the world.Jason:If you're a bike seller selling on BikeExchange and you're on Lightspeed and you wanna send your inventory into the BikeExchange marketplace, it takes minutes. What would typically take hours? Why is this important from a media perspective? It's because then the brands on BikeExchange or Specialized or Trek, or any of the big brands when they're launching a new product, they can actually drive the leads into stores that have stock available today. You can get very clever around your display and media allocation and where you drive the sales to. And a physical stockists level within that marketplace strategy, which is pretty cool.Stephanie:That's huge. I think about the times I try and order stuff Home Depot. And it takes me 15 minutes trying to find what store you can go to pick it up. I'm like, why is this so hard? Just don't show it to me if it's not within 20 miles of where I'm at.Jason:Exactly. And that sort of relevance posts, zip code, allocation and inventory allocation is something that comes out of that marketplace assistant, but it's all structured around live connectivity back into the source seller system. Obviously if a seller wants to connect manually and they've got a few products or they've got a CSV uploader, or they've got a great API, but it's this pre-built connector platform that's enabling our marketplace at the scale at a rapid rate.Stephanie:That's awesome, so where do you all want to be in the next two to three years? What are you planning and prepping for and building for right now, other than scaling and IPO'ing and doing all the fun, things like that.Jason:I think what really drives us at Marketplacer is we just want our customers to grow and to grow in a really sustainable way. Where they can, they can enhance their customer experience. So we've really launched hard within the United States today. We've announced that Salesforce ventures has actually bought a stake in Marketplacer and that enables us... yeah, we're so humbled by it. It's such a great experience to deal with that Salesforce community, but what that enables is any commerce cloud customer globally to now really look at Marketplacer as the way to significantly grow your business and grow your customer experience within that.Jason:It gives us deep access to the Salesforce product team. Gives us deep access to the implementation partner community. It gives us deep access to the actual Salesforce customer success team. What that really enables us to do is to help that Salesforce commerce cloud community grow and connect up to all of these great suppliers, make it easy for you to supercharge that business. And it's a core focus of ours over the next sort of 12 to 18 months, for sure.Stephanie:That's awesome. After hearing all this I'm like, why wouldn't you try this out? Why wouldn't you want to be a part of a marketplace, start a marketplace, so many opportunities and easy ways to scale that maybe it would be hard for single brands to do on their own. That's amazing. Congratulations. That's huge.Jason:No thank you so much and it's a big shout out to how the commerce cloud Salesforce, commerce cloud leadership are thinking at the moment. They're really putting that customer lens first and, and you're trying to grab those trends and you build it back within their community as well.Jason:It takes a little while for you to get your head around it. But when you dumb it down, we make it easy for you to sell products that you don't own. So you can supercharge commerce and grow. That sort of one line, and that sentence can start to really resonate with you. And maybe out of today you're not thinking this is my path, but it might just get those thought bubbles going to say, Hey, what about this supplier? What about this supplier? And if I only had those products, I'd love to try that one, but I don't want to buy it. It starts to connect it all up.Stephanie:Really good way to explain it. All right let's jump over to the lightning round. The lightning round is of course, brought to you by our friends at Salesforce commerce cloud, which they got many shout outs well-deserved throughout this interview. So that is great. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready Jason?Jason:I'm ready.Stephanie:We'll do the hard one first. What, one thing will have the biggest impact on e-commerce in the next year?Jason:I'd like to say the evolution of Marketplacer.Stephanie:That's okay. You do you. You can say whatever you want.Stephanie:What's one thing from 2020 that you hope sticks around throughout 2021?Jason:The ability to put the customer first and solve problems from a customer lens, when there was no other way to do it. And I think that transformative thinking of traditional businesses in that lens is going to put them in a really good light moving forward. We saw the acceleration of five or six years of thinking and thought, and decision-making in the space of six weeks. And just, don't let that go. Don't let that go. Let that stick with you forever. Because I think it's a unique opportunity.Stephanie:What's one thing you don't understand today, that you wish you did?Jason:French. No, I actually don't personally know how to program. I've never been a programmer and it's been to my advantage because I've never got sucked into it, but one day in life, I'd love to actually learn how it all stitches together and works.Stephanie:There you go. Well, that's a good skill to have these days. Let me know if it's hard, I'm guessing it is. If you were to have a podcast, what would it be about and who would your first guest be?Jason:It would probably be about surfing to be honest. And it would have to be Kelly Slater.Stephanie:There you go. That's a good one. And then the last one what's up next on your reading list?Jason:It's actually interesting, because I bought it yesterday. I'm actually reading about gut health at the moment and the benefits of gut health. So I bought the CSIRO gut health book to understand how that can have benefits right throughout your life, from sleeping patterns to energy, to that holistic sort of view that the power of food and what it can do for you or, or can't do for you.Stephanie:Good, you can send me a TLDR of what I should be doing and I'll just listen to you.Jason:It doesn't mean I'm going to do it though Stephanie, this is the problem with reading. You don't always do what you should.Stephanie:We will do it. We will manifest it into our life. We will do it. All right Jason, this interview has been so fun, really a good time hearing about Marketplacer and where you guys are headed. Thank you for coming on, where can people find out more about you and Marketplacer?Jason:Traditional channels marketplacer.com and Jason White on LinkedIn and Marketplacer on LinkedIn.Stephanie:Amazing. Thanks so much.Jason:Thanks so much Stephanie, appreciate your time.

No digital transformation is the same, but when a massive B2B organization embarks on that journey, you better believe that there will be a lot of lessons learned that can be applied to any other company. That’s why we wanted to talk to former Chief Digital Officer at Univar Solutions, Ian Gresham, who led the digital transformation and ecommerce implementation at this $9 billion multinational industrial distribution business. Look around at the things around you, make up, dish soap, skincare, solvents for your car. Univar probably has a part to play in that. On this episode of Up Next in Commerce, Ian tells us about the experience of bringing a massive organization into the world of digital commerce, and he reveals some of the biggest learnings from the experience that he is using now as an executive advisor to multiple businesses. For example, how should ecommerce leaders frame the building of a platform to get buy-in from the top down, and what kind of strategies should you implement to drive adoption of your platform? Interestingly, it’s a combination of moving fast but also taking it slow — tune in to learn what that means in practice. Plus, Ian shares more tips and discusses some of the insider details on the projects he’s currently working on. Enjoy! Main Takeaways:If You Build It, They.. May Not Come: When going through a digital transformation, many companies fall into the trap of believing that if they simply build and launch an ecommerce website, their customers will flock to it. In reality — and especially in the B2B space – there is an education and adoption phase that needs to happen to actually make an ecommerce site successful.M-V-P!: It’s wise to take an MVP approach to building an ecommerce platform because it forces you to focus on one specific feature that you can provide that solves a problem for a customer reliably well over and over. By offering that one solution, you can drive faster adoption of the platform because you are not overwhelming customers with a multitude of features, some of which they don’t want or need. New features can come down the road, but adoption needs to come first. And the entire organization needs to be on the same page that building a platform is an ongoing process with no set start and end date because there will always be new things to add or improve.It’s About The Journey: In businesses that rely on face-to-face interactions, the omnichannel experience is becoming more important than ever. To digitize some of the interactions and drive the adoption of more online tools, you have to start from the bottom up and understand every kind of customer and customer journey that exists within your business. From there, you can start reallocating headcount to digitize certain processes and send other resources to handle high-value customer interactions so that you know you are investing in the parts of the customer journey that are most in need.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. Welcome back to Up Next in Commerce. This is Stephanie Postles, your host and CEO at Mission.org. Today on the show we have Ian Gresham, Chief Marketing Officer and Digital Officer, and currently an Executive Advisor to multiple businesses. Ian, welcome to the show.Ian:Thank you very much, Stephanie. It's great to be here.Stephanie:I'm excited to have you here. I just was looking through your background and we did not cover on our call that I thought you went to University of Maryland, which I am from Maryland, so-Ian:That's right. Go Turts. Fear the turtle.Stephanie:This is already off to a wonderful start now that we have that connection. I love that. I wanted to kind of start with your background. I see you've been in a lot of marketing roles, and I wanted to hear how you got interested in marketing, what that journey looked like.Ian:Yeah, sure. I don't remember exactly how marketing became an interest. In business school, I was looking at a number of things. I think perhaps that it was the fact that it was pretty people-oriented, and it's sort of an extrovert function in business if you will. That was pretty exciting to me. There were some pretty school businesses in the Maryland area that were recruiting at the business school there, and ultimately I ended up starting my career with Black and Decker. I worked on the DeWalt brand, and it's just a great place to learn a ton of great marketing and sales skills, and get out there and interact with the world.Ian:They put you out there on the street selling and talking to real people very quickly, and it was a lot of fun.Stephanie:Are there any lessons from Black and Decker where you still use them today, or you think back to advice you got or campaigns you were running? Or is it totally different now?Ian:I guess I think that for one, they set the standard very high for brands to create excitement and create products and experiences that their customers love and are loyal to. We used to get on the DeWalt brand pictures of people who had DeWalt themed weddings. I have had the good fortune in my career to work on a few other brands like that with Craftsman and later... And Sherman Williams, we had a brand called Purdy, which is a brand of paint brushes and applicators. They make these paint brushes here in the US by hand, and painters can tell a Purdy in their hand when they're blindfolded. They know the feel of the wood. They know just how these things feel and work, and they believe in them.Ian:Anyway, to be able to work on a brand like that at Purdy, we got a video of a guy who had a funeral for a paintbrush that he had used for years and years. When it finally just wouldn't go any further, he filmed a little memorial service and buried it in his yard.Stephanie:Oh my gosh.Ian:Anyway, DeWalt's the same way. Black and Decker, they just set the bar very high in terms of brands that create amazing loyalty and amazing customer experiences, which I have tried to carry through my career as well.Stephanie:I want to dive into your time at Univar, because that company is obviously huge. I think it's what, a $9 billion company, Fortune 500.Ian:Yep.Stephanie:9,000 employees or so.Ian:Yep. Yep.Stephanie:I want to hear about your work there. First of all, what is Univar and what did your role look like there?Ian:Sure. Univar, now Univar Solutions, is a pretty global multinational industrial distribution business. So, very B2B. We sold chemicals and ingredients into many different industries, everything from food ingredients to food manufacturers, to ingredients to personal care product companies like cosmetics companies, shampoos, sunscreen, lotions, paint and coatings, adhesives, industrial use. It was just a super diverse customer base. Thousands and thousands of customers, hundreds of thousands of products, and just millions of transactions. Lots of repeat business.Ian:Some of the products we sold were very commoditized. Some were highly specialized and patent protected, and exclusive ingredients that took a much different sales approach. The customer experience around that was very different too.Stephanie:What was your role when you first started at Univar? Then where did you transition to over time?Ian:Yeah, so I spent a couple of years as the first CMO at Univar, and put in place the first global corporate strategy, built out a lot of the core marketing frameworks with market research, with brand standards, articulating our value proposition, enhancing the value proposition, and aligning how we were communicating that and the brand identity globally. Then after a couple of years somewhere along the way I picked up a responsibility for ecommerce. A couple of years into it, the CEO talked to me about this opportunity to become the first Chief Digital Officer.Ian:When we had that conversation, he made the point that he really didn't want a technical person in this role. He wanted a commercial person in this role who could think about value creation and how we leverage digital to create value for our customers and suppliers, and to differentiate ourselves in a pretty fragmented marketplace with a lot of competitors of all different sizes. To me, this was really exciting. If I think about my whole career, I'd spent time in these companies like Black and Decker, Sherwin Williams, companies that made mostly consumer-facing products that really thought a lot about innovation.Ian:Then to make the transition into B2B distribution, one of my observations was innovation was not as common as daily there as it was in these manufactured product companies. I think a huge opportunity that I saw was with digital this is a way for a distributor to innovate around customer experience. A distributor doesn't typically make products. What they make is a unique customer experience, and they deliver on that better or worse than their competition. Digital is a way for that type of business to really create a better customer experience and solve problems that have remained somewhat unsolved.Stephanie:Very cool. Were you nervous taking on not only one, taking on a role where you're really the first CMO, and now it's like and now you're going to be the first Chief Digital Officer, were you hesitant to take on a new role that the company had not had before?Ian:Yeah. When I had the conversation initially, one of my thoughts was I don't know if I'm the right person for this. But that conversation around wanting somebody who had the commercial mindset rather than a technical mindset was reassuring. I think if you look at chief digital officers as a position and the people that sort of reside in those roles today, there are few different walks of life that find people there. Sometimes it's a technical leader. Sometimes it is a commercial leader, and maybe sometimes it's a transformational sort of complex project leader type person.Ian:It's not uncommon to have a marketer in that type of a role. As I think about marketing as a field and CMO as a role, what's clear in today's world is that digital is becoming really important to marketers. It has already, but the CMO role in general has evolved a lot and it continues to evolve. Much of the change is around digital and the power of data. As I thought about this role, to me it felt very relevant to my career, and it felt like the right skill set to be adding to my toolbox.Stephanie:Yeah. Yeah, very cool. What did it look like behind the scenes when you were entering into this new role? After you started observing for a bit, what did the process look like and where did you want to evolve it to?Ian:We had already started someone. We had an ecommerce platform we had just launched, and we had some analytics work that was already underway. We had some thoughts on how digital would help in supply chain and some other ways. The idea with creating this chief digital officer role was to put it all together to create a bigger wholistic vision, to prioritize and think about which of these things do we really want to do, and what sequence do we want to do them in, and how much are they all worth to us, and what is the investment going to require?Ian:The first thing to do was start to put the elements together and continue progress for accelerated progress in the things that we already had started. Fortunately, I really enjoyed a lot of the work we were doing there. It was very customer-facing. It was on the commercial side of the business, so we had an advanced analytics team that we rapidly were growing. We were doing AI and machine learning. We had a ton of transactional data, very good CRM data, and we were able to create a lot of value out of that by identifying insights that were commercially actionable.Ian:We had a couple of marketing automation systems in place, and we were choosing and moving to one. We were using that pretty effectively to reach out and activate with our customers as well as the ecommerce platform itself. We were still really trying to drive adoption of the ecommerce platform. I guess one of the lessons we learned was we were moving.... There assumed to be a lot of pressure to have a website, an ecommerce system, a customer portal where our customers could transact. There was a bit of a race to build it and launch it. We did.Stephanie:[crosstalk] you launch it, and what did your tech stack look like? What was the perfect fit for a company of Univar's size?Ian:We were using very heavily the Salesforce B2B commerce stack. That's what we built our commerce platform on, which was originally CloudCraze then became B2B commerce for Salesforce. I'd say we had a pretty good experience there. We were able to launch a platform in weeks, not months.Stephanie:Wow. [crosstalk]. That's super fast for a company that size, because we've talked to other people who were like, "Oh, 28 weeks." It's a whole thing.Ian:It was incredibly fast. We had both a strong internal team using very good development processes, and moving fast. Also, we used outside support for the build as well. We spent some money on it. Speed and money sometimes are inversely correlated. This was kind of an example, but we built it. I guess the story that I think is relevant here though is that... Let me just say, my story is one of helping lead a company that's pretty early in a digital transformation stage, not the bleeding edge. I think that looks like a lot of the companies out there who see digital transformation as an opportunity, but an overwhelming one. Where do we start? How do we get our house in order to get going?Ian:We just knew we needed a platform and there was a race to launch it. We launched it. What we learned was the Kevin Costner movie, "If you build it they will come," Field of Dreams, is not necessarily the case in ecommerce. You have to drive adoption. You have to have a great product that makes something better for customers to use it, prefer it, and stick with it. But also, you got to do some hand holding with some of these customers that have been doing things the same way for a long time. Digital transformation is about leaving an old state of affairs and moving to something new and better, but change requires support and communication.Ian:Honestly, we had to do some handholding with customers to show them what's possible, show them how easy it is, and then once they've used it a lot of them feel like "Yeah, this is great. I like this. I didn't know this was that easy." They're just not even open to thinking about something new because they have a habit in place.Stephanie:Yeah. How did you scale that adoption? Because when I'm looking, I think you have over 100,000 customers. How do you scale adoption? Are you giving them training videos? Other than the [crosstalk] handholding, what did you guys do to really pull them onboard?Ian:Yeah, we did do some one-on-one calls. We had some webinars. We had programs where we were getting our Salesforce and customer service reps to have the same conversation on scale across all of their customers. We were trying to activate it across all our touchpoints to introduce it to customers and have that conversation with them. If they needed more support, we could put them on the phone with somebody who could help them answer questions and demo it. We had automated or sort of recorded demos they could watch online.Ian:All of that still felt like it wasn't as fast as we had hoped it would be, adoption. That was one of the lessons that we learned. I guess another thing I would suggest is it's really helpful to know what are your most valuable features, and focus them on that first. If customers need to... One of our most popular features was having a library of customer documents where they could access at any time. In the past, they had to call somebody, they had to email somebody, they had to wait. Well, this is 24/7 that they could go access documentation, is a regular thing that customers needed.Ian:Once we introduced that, it became a no brainer for a customer to say "Oh, okay. That's where I go? Thank you. That's a solution to a problem that I've been less than satisfied with in the past." I've talked to other companies that maybe handling payments was their way in, where once they started taking payments online and managing payments online, adoption went through the roof. It was one feature that customers really felt was superior to the old way of doing things, and that helped to drive adoption.Ian:There were a few things like that where we zeroed in on key features. Another key feature that we had a lot of popular success with, and was highly used on the site was Two Clip Reorder. 80% of our business was repeat purchases. For a customer to log in and then see their last several orders and be able to immediately access those and reorder turned out to be a very popular feature. I guess for a company starting the work, that it was important to do is, to really think about the customer journey today and what are those moments along the customer journey that you can make better quickly, and focus in on those and try to create the right solution that'll drive adoption around those features, is my takeaway from that.Stephanie:Yeah, and that's such a good reminder for a platform. I would see a lot of people, if you try and throw all the features, most people are probably not ready to get power user of a brand new platform and they're like, "I want to know every single feature on here," so just presenting them with the things that are pretty uniform, like you said, payments are a big thing, reordering is a really smart way to get people in the door. Then start maybe dripping out the extra features that would overwhelm them from the start.Ian:I would take it further upstream than that too, Stephanie, which is to say maybe you don't need to build a platform with all of those features on it out of the gate. If you take a true MVP view, focus on what are the moments in the customer journey that you can digitize successfully and give them a superior experience, and start there. Maybe you don't need as many features on your platform to start with, but build something that does perform very well and earns their adoption, and then add other features as you go. Beyond adoption, it's even how do you start faster and get out of the gates with some traction on it earlier?Stephanie:Yeah. Did you have any surprises from either customers or maybe your internal employees who you were also trying to train up on this new platform? Anything that you look back and you're like, "Oh, we should have probably done it this way. We could have avoided this if we would have approached it a little bit differently"?Ian:Boy, there's probably a good list of things that we would have... We learned along the way by doing. I guess I would say one of my biggest takeaways was probably we could have started smaller and been a little more rigorous or embrace that MVP concept even more.Stephanie:Rolling it out for a pilot group type of thing? Like smaller in that sense? Like don't do it [crosstalk] on there?Ian:Or is less complexity to begin with. An even simpler platform and prove that you can drive adoption around that, it's easier to explain, it's easier to build. Then there's less to change and iterate as you learn more about how to make it even better platform. But one of my takeaways I think is really embrace that idea of MVP. You can think about narrowing the scope of the customer base you launch it to. You can think about limiting the products. You can think about a lot of things to make it smaller and more manageable, and get it out the gate and just have data coming in on what's working and how is it generating value. Then build complexity around that. Know what works, and build on success rather than... This is what makes it intimidating for people who are starting the journey is, seeing the complexity of all the problems that need to be addressed, or all the features that you need.Ian:If you compare yourself with Amazon, yes it's going to be a very expensive, very big project. But you don't necessarily need to have all of the features and benefits to start with. Start small. Move fast. And work in the world of results to understand what's working and where to double down on success and invest in scale.Stephanie:How would you get your leadership team to agree on "Here's the five features that we know that maybe 80% of our customers want," how do you get everyone in the same room to all agree when everyone probably has very different customers and they all heard different things, even if it's one off their like, "I know this is important to a customer. It's very big revenue-wise for us." How do you [crosstalk] agree on something?Ian:First, I think it helps to start with a long range vision. I guess one of my other learnings would be that I've seen companies that become system-focused like "We need a platform. Let's build it. Let's turn it on. It's going to cost us $X million and take a year and a half to build." They think about it as a project with a start and an end. The reality is, you need to just think about how fast can we get to the starting point and how do you make that as fast and reasonably good as possible for their MVP. Then assure people that this is not a project that has a start and an end.Ian:It is a journey that has a starting line, and MVP is sort of how you're racing to get to a starting point. Then a multiyear potentially perpetual journey building that out. I think when you get the team in the room, you've got to have some data. You need to have data around your customer segments, around their preferences and needs. You need to sort of have an understanding of the customer journeys that exist. I think it's important to realize that it's easier to digitize simple processes than complex ones. There's a logic to we got to start small. Let's take recurring purchases with existing customers who know exactly what they want, and they buy it regularly.Ian:How do we just automate a repurchase? That's super simple. The customer would prefer to do it that way anyway versus... Later, you to get to things like troubleshooting or selling differentiated products that are a first time purchase to our customer that has a high performance need. Leave the high value add complex work to people and start with simple processes. Add complexity as you go. I think you can, between using real customer insights and the logic of what is possible in the digital world in terms of solution creation, and using a longterm like a three to five year journey map or a journey roadmap. We can assure people, "We can't get to you first, but these are the building blocks that we have to put in place in order to get to that level of complexity," and something that serves that unique customer need.Stephanie:Yeah.Ian:But there may be some things that'll never be digital or in the foreseeable... They're just too complex and they don't have the scale. You may have some one-off customer problems that only occur several times a year, and it just doesn't make sense to invest the kind of cost and a digital solution for some things. People might need to hear that too along the way.Stephanie:Yeah. What did the change management when it came to employees look like? Was there any pushback? Because I could see as an employee being like I always talk to my customer like this, we're on the phone, I do the order for them. We have this relationship. Don't mess with that. What was that like behind the scenes trying to train the employees up, get them onboard, and what kind of things [crosstalk]-Ian:Yeah.Stephanie:[crosstalk] for that.Ian:I think there are two great things to discuss on that. Great question. First, I would like to talk about Agile and how Agile played a role in adoption in our own employee environment. Second, really we had a very robust change management approach going into place at Univar Solutions that is worth talking about. First of all, Agile, this is where I became a real believer in Agile and certainly there was a lot of resistance. There were sales people who said "I don't want anybody touching my customer without me knowing about it. You shouldn't go take them a price or an offer, or anything like that without me approving it first."Ian:A lot of businesses out there are like that still today. There's a lot of trepidation about change. Really, we just had to find a support somewhere in the business who believed that they had an opportunity. The reality is that the speed you can move in digital is an opportunity. We could touch the entire national customer base for a given product in seconds, where it might take weeks for our traditional Salesforce to get out in front of those customers. We found somebody who wanted to work with, and try, and experiment. We put together a plan to target the right customers with the right offering given out there via marketing automation.Ian:We started at a very small scale, and it was to be honest, so small. We knew going into it, this is not going to move the needle at all. It's just too small. Everyone was being too cautious. But we ran the experiment and it came back, and sure enough we just didn't have enough scale to get any movement. But that was what we learned from it. We took it as a learning. We started too small. We need to open the target zone here of customers. The second trial we did, very quickly with a larger customer base, we started to see some progressing results. We picked up a few other learnings. So, we quickly ran a third iteration of it, and by that time we sent this experiment out, this message to customers, and we got real traction on it.Ian:The conversation which started from "Wait a minute. I don't know, why are we messing with customers without salesperson involvement?" to within about three to four weeks having results that were very promising. The conversation flipped, and the business team was saying to the digital and marketing team, "How can we do more of this? What do you need from me to do more of that? Because that felt good. That was a great solution that aligned with my business themes." In that sense, Agile, this idea of start small, run real experiments to get real data, and then once you prove a hypothesis about something that works, the discussion about investing and scale is much easier and you actually have a pull for the solution rather than pushing it into the business teams.Ian:I think first, Agile is a great adoption tool and a process for working cross-functionally with the rest of the business to help drive adoption of digital solutions. Second, I wanted to talk about change management. I would say I commend Univar Solutions for the approach here where part of this came in as well as it relates to an acquisition, and a lot of change that we were rolling out, because we were integrating two companies. I guess I would say as companies think about investing in digital, they're really thinking about how they spend every penny and they make those pennies go as far as they can.Ian:Usually, it is not natural to say "We need to hire people to help communicate." Meaning, communicate through and train our employees, communicate and train our customers. It feels like can't we just have existing people have that conversation? But the reality is, we did hire a change management leader. We started staffing out change management roles to integrate with customer service, to integrate with sales and to interact with customers. I guess a learning, looking in the rear view mirror was, that is the way to do it.Ian:You might even want to have customer adoption teams or cross-functional teams that involve adoption leaders throughout the company.Stephanie:What did this role look like? I mean, you're bringing someone in. Their role is to do change management. What does their day to day look like? How are they supposed to be partnering with teams?Ian:We had a leader at Service Central level who was thinking about putting together training programs, putting together communication, and coordinating timelines and rollout structures, and plans. So, full-time they were... Now, they weren't just working on digital. They might have been rolling out other major changes in the corporation, but digital transformation is something that fits that bill. My point is to have a dedicated structure in place, probably with a leader whose overseeing it, and potentially ambassadors in a variety of cross-functional teams or functions, like sales, customer service, sales ops, and even customer-facing adoption sort of agents is very fruitful.Ian:If you've invested and you believe in an ROI that will come with this, then adoption is an important factor that limits your ROI. I would just suggest that the company starting and going down this journey are thinking about all the investment and systems, and infrastructure of digital. Don't spare too much on adoption in favor of technology because you will be spending money on technology that's poorly used. It's worth the investment to drive timely, effective adoption and satisfaction with everybody in the ecosystem.Stephanie:One point I'm thinking about is all these things are changing, and a lot of the managers... I mean, I've seen this in the past companies I've worked for, well we need more head count. We always need more head count. For what's happening behind the scenes here, you just need to throw more people at it. How did you approach your teams who probably were all saying something similar I would assume? Did you supply more heads to try and solve problems? Or were you like "Hey, let's rework the talent pool. Let's put people on different roles." What did that look like?Ian:Yes. The answer is yes. No, certainly, you are thinking about head count, but this is where as a B2B business we started talking about omnichannel and sort of reconfiguring how we handle customer needs. In a business that has traditionally been very sales driven and relied on field sales reps to deal with face to face with customers for a lot of things, which many businesses out there still do, we started to think more about these customer journeys. There's simple, there's more complex, and there's very complex types of customer journeys, or events on a customer journey that need support.Ian:How do you start digitizing from the bottom up, the most simple, and how do you drive adoption of those? You can build a plan that drives the customer to self-serve options in order to reallocate head count into new... Sort of reinvest it into higher value activities from handling regular orders and replenishment orders to digitizing that and then thinking about how are we reallocating head count to digitize more complex processes, or to handle more high value added customer engagement opportunities. You can go from customer service handling manual work to more sales reps that are technically proficient and able to go sell a high value customer on a high value solution.Ian:As you up the continuum of complexity with digital, you're continually reinvesting head count by creating a self-serve option, driving adoption, and then moving head count into a higher value space.Stephanie:That's great. Yeah, I can see a lot of companies struggling with that now, and thinking how do I put these people in new roles, and then train them. Is it worth all that? Or should I hire someone who's already done this before? Tricky place to be, but I like that.Ian:Yeah. You can think too in today's world post-COVID, I think there's a continuum from digital to sort of inside... Or let's say digital, customer service, inside sales and then your outside sales or national count. Sort of that hierarchy of the types of resources you're applying against customer needs. The inside sales team becomes an even more potentially bigger team. They make more calls a day than outside sales rep can, and in an omnichannel environment they have the tools that you're investing in with ecommerce and digital to be even more efficient and have more intelligence at their fingertips to handle those customers as well.Stephanie:Thinking about intelligence at your fingertips, I want to shift back to the topic of AI. I know we mentioned it earlier that you guys are starting to experiment with that. You have a really big catalog at Univar. You have high frequency of transactions, a lot of stuff going on. What did that look like, introducing that into some of your processes? What did that world look like?Ian:Yeah, sure. Let me say, I am such a huge believer in AI and machine learning, and the opportunity here. This is sort of a revolution that's just starting. We were building out AI and machine learning use cases and deploying those, and integrating them with our entire sales and customer service ecosystem sort of. I think first, if there are companies out there that are wondering about this, I would say a lot of people quickly go to debates about is it AI or not? Or is just a formula?Ian:I saw a couple authors of a book Competing in the Age of AI. I saw them speak recently and one of the authors said "Look, you can get into a debate if you want to. I suggest that you just forget about that. It's not even worth debating. The reality is, if it is, if you're using algorithms and automation to do something a human used to do, let's call that AI." AI isn't all about sort of recreating human-centric consciousness or something, or super complex. More and more, the vast majority of AI application is going to be in super focused problem solving sort of settings.Ian:That's what we are looking at, at Ford. I would say any company out there that has lots of transactions, lots of customers, lots of products, any of those combinations probably has a great opportunity here because if you've got the data from transactions, from your CRM system, and especially if you have a large catalog and you're only selling a portion of that to most of your customers, there are insights hiding in all that data. In a B2B environment, it can be very valuable to understanding and optimizing your pricing.Ian:Pricing is hard to manage, and there are a lot of variables. AI can allow you to put many variables together and create some really sophisticated ways to monitor competitive things, or going on regents to look at how you're pricing customers across your own business, but bring some timely intelligence and automation to recommending optimum prices. AI allows you to predict and prevent customer turn. You can put together dynamics across a variety of variables that might indicate when a customer's regular purchasing cycle is changing, and there may be other factors involved that would indicate that this customer is likely to leave us.Ian:We've had a few things that are not correlated with success here and retention. Certainly, everybody has experienced as a consumer going online and seeing customers like you also bought. AI allows you to see and make those connections with more certainty and a higher understanding of what's the probability of success on these things in order to invest in automation and turning that into a feature, or marketing automation.Ian:This was super exciting, and we had success building teams out internally, bringing in data scientists and setting them loose on different business opportunities where they could build an algorithm and then we connected it through marketing automation or ecommerce to drive real financial benefit and results for the company.Stephanie:Yeah, that's awesome. What kind of insights did you get, or "aha" moments where you're like, "We never would have stumbled on that without building out these algorithms"?Ian:An example would be that we had a customer segmentation model in place but AI created an outcome that had 34 micro-segments of customers that was driving certain activity that was really generating value. No human could manage coming up with 34 micro-segments of customers based on many different variables. That's an example of how AI is able to piece together insights that just humans wouldn't get around to and couldn't connect on the right kind of actions probably with that in place.Ian:Like I said before, if you're a business that has a lot of transactional data, AI might be for you. If you have a lot of customers, a variety of customers, AI might help you. If you have a big catalog that you're trying to sell to a lot of customers, AI might help you. I think that there are plenty of businesses that think it's too farfetched or too sophisticated. I'm a believer that it's more within reach than people think, and that that's not just for any one business but it's already starting to change everything about online merchandising for some businesses, and marketing automation.Ian:It's worth diving into.Stephanie:Awesome. I spent a lot of time diving into Univar because obviously the company is amazing. Your story there, all your stories, are awesome. I also want to hear about what you're doing today. I know you're advising, an investor. Tell me what are you up to these days?Ian:Yeah, so I've started working with another sort of distribution business that is starting their own digital transformation, a very similar story. I believe that there are plenty of them out there. Also, I've been helping a business where I'm an investor that is called Parcel Home. This is an IOT connected device. It's launching in Europe. It's been in Europe for a couple of years and we're getting ready to launch it in the UK. Essentially, it's a delivery box that install outside your home on your front porch or out by the street. It's IOT connected, so with your phone you can access and monitor it. You can delivery people codes, so like if you were to purchase on Amazon, you'd just go in your delivery instructions and instruct them to use a code on the box.Ian:When they get there, they punch in the code. It unlocks. They leave your packages in the box. They close it. Then as you get home it notifies that you have received packages today. Make sure you go get them. You can enable other people in your home to use it, and you can set one-time codes for somebody who's just coming by to pick something up or drop something off. Or set it up as a recurring solution for all your deliveries.Stephanie:I can't believe that [crosstalk] haven't had that yet. I'm just thinking about how archaic dropping off a box of Amazon, there's a $500.00 item in there potentially, and it's just sitting on my front porch for [crosstalk].Ian:I know. I had the same thought. People buy multi expensive things, and then the package gets left on your front doorstep and it feels like really I think in that situation it's like security is essentially the fact that it's concealed in paper or cardboard. The only thing protecting it is the fact that somebody's not sure what it is, but it's sitting out there outside your home for a while.Stephanie:Could be a baby bottle. Could be a high end TV. I don't know.Ian:Yeah, $500.00 handbag or something like those, yeah. We see and there are some sort of online communities for neighborhoods where we see people talking about package theft. We know that's an issue.Stephanie:Oh, I know that from being in the Bay area.Ian:Weather is an issue. If it's left outside and you have precipitation or things like this, it can damage packages. I think now there are places where it's just not okay to read the package because of threats of theft or something, so they have to ring the bell or knock on the door and interrupt now what are Zoom or Microsoft Teams, or whatever online meetings. It's a nuisance as well.Ian:Anyway, this is a startup business that has been active in the Netherlands, Belgium, Luxembourg, and launching in Denmark here this spring as well as UK later this year. And really, direct-to-customer. So, building out regeneration assets and processes, a sales and marketing funnel and the processes to support that, and thinking about, as many companies are now, living in an almost purely digital environment and interacting with customers in that way.Stephanie:Yeah, that's awesome. Do you feel like you have certain lessons from the past that you're able to bring to this company to kind of help accelerate their progress? Or is it just such like a different field and startup where you're really having to kind of relearn the industry and what startups are doing versus really large Fortune 500 type of companies?Ian:I think it's some of both. It is. As you're launching, there are some fundamentals that even startups may or may not have the talent or resources in place. They just need to do some of the blocking and tackle about marketing and PR as you're entering a new market. How do you approach PR? There are some basics about press engagement for instance, that I can help with, but we're also learning about influencers, micro-influencers, and how to... That's an ever-changing game. There are new sort of marketplaces of influencers where brands can go and evaluate who are the influencers with audiences that matter to me, and how do I transact with them, or come to a mutually beneficial agreement to work with certain influencers? How do I scale that kind of work and what kind of investment do I need to do that?Ian:It's an important way that brands are reaching people now. Every moving target, with new platforms: TikTok, et cetera. It's a combination of executing on known best practices and staying in touch with what's working today. In a startup, you have a business that in the course of a year their commercial processes may change many times over. You add one additional person into the working team, and suddenly new processes emerge, or people reallocate different tasks. So, it's a very dynamic environment in that way.Stephanie:That's awesome. Yeah, I will be watching them closely. I'll be excited to see them expand, and hopefully they come here.Ian:Yeah.Stephanie:Well, let's shift over to the lightening round. The lightening round is brought to you buy Salesforce Commerce Cloud. This is where I ask a question, and you have a minute or less to answer. Are you ready, Ian?Ian:All right, I guess I am ready. I didn't even know about the lightening round.Stephanie:It's easy [inaudible]. What one thing will have the biggest impact on ecommerce in the next year?Ian:I honestly think we'll see... If we rewind, people have entrenched behaviors. Take my family for instance, we were buying groceries online from a source. Everything got disrupted. We were a loyal online customer, but certain products and processes changed and we had to change to adapt to what our needs were. Many customers change brands and change their choice of where they purchase these things in the last year. I think the question will be, where did things land? Do people stick with the new brands that they've adopted? Or do brands settle back into a way that they win their customers back who've experimented and gone somewhere else? I think we're still in the turbulence of COVID.Stephanie:Mm-hmm (affirmative), yep. I agree. What do you predict then? Do you think people go back to kind of what they knew before? Or do you think now it's so ingrained with the new stuff they've been doing that that's the new way of living?Ian:I think more and more people will stick with their new solutions. To me, some of that is surprising because honestly we have bought through Amazon and Whole Foods, which I would think Amazon has got this under control, but for certain reasons a Target has over-delivered on new solutions and the product is [inaudible]. We had stopped buying from them. That's an example where competition moved fast and have different relationships with some of those customers now. I think that businesses better get used to where things are now, and it's going to be hard to re-win customers that they've lost.Stephanie:Yep. Yeah, same thing with Walmart. I feel like they've stepped it up in a huge way-Ian:Yes.Stephanie:On very quick delivery. I ordered a planter the other day and it showed up the same day. I didn't really understand the delivery process because it seemed like just some random person, but I'm like, "Hm, my planter's here," in that same day.Ian:Yeah.Stephanie:Which made me kind of rethink where before I'd be like, "Yeah, I'm not going to Walmart because it could take a couple of days, and shipping and all this." But yeah, they stepped it up.Ian:Yeah. I totally agree. They've done a great job.Stephanie:What's the nicest thing anyone's ever done for you?Ian:The nicest thing anybody's ever done for me? Whoa, that's tough. Other than my wife bearing children? I would say that [crosstalk]. That's a big one. It's hard to beat that.Stephanie:That is a good one.Ian:I don't know if I could top that. That's a big deal. And as a father, there's this moment where you're like you're going into that experience and you realize "I really don't control anything about the things that matter most to me. I just have to sit here and hope it all goes well."Stephanie:Yeah. Yeah. If you were to have a podcast what would it be about, and who would your first guest be?Ian:I think I'd have to have a podcast about what people are passionate about, and the lengths that they will go to to pursue their passions. I don't know who my first guest would be, but I think that the most interesting conversations are when you talk to people about stuff that they really love, that they love doing, and that they... That's what lights people up. I think I might start with unexpected guests, people that are sort of somebody in your own neighborhood that nobody knows, but there are amazing things happening that people are...Ian:I love these sort of stories of real humans of, kind of stories where somebody just went to great lengths. I read a great story that's a good example. A little restaurant in Baltimore that made Fusion Asian food, there's a woman who came to visit her kids in Baltimore regularly. Loved a certain dish they had there. Then she came down with terminal cancer. She lived in Connecticut there in Baltimore, and the kids this woman had called the restaurant and said, "Hey, can we get the recipe? We'd just like to prepare it for her in her final weeks."Ian:The owner of the restaurant was like, "You know what, where does she live? We'll be there." They drove six or seven or eight hours and prepared it on the back of the tailgate of their truck, and knocked on their door and brought this food to her. Anyway, that sort of thing is... That makes for great stories.Stephanie:Oh, goosebumps over here. That's amazing.Ian:Yeah, totally.Stephanie:We need that podcast. Someone sponsor this. Ian needs a sponsor. Oh yeah, that's really great. I'd definitely listen to that. What one thing do you not understand today that you wish you did?Ian:Let's focus it back on ecommerce.Stephanie:Okay.Ian:A big question that I don't see an answer to that I really think is a big opportunity is, if I think about real world brick and mortar shopping it's a very rich experience. If you think about walking in a store and walking back to the department you're going to, you past thousands of products and many, many, many opportunities for a retailer to sell something to you: visually, stimulations, [inaudible] signs, POP, that kind of thing. Digital ain't there yet.Ian:It's a long way away from it. At best, we're saying customers like you also bought, or... You know what I mean? It's a cross merchandising that gets relegated to a side banner or below the fold kind of merchandising. It's hard to imagine replicating the richness of an in-store experience, but I'm really curious to see how that evolves because brick and mortar is becoming less and less... It's not going away, it's just that's a rich experience of hard to replicate, and how many online browsing occasions do you need to replicate or replace all of those stimulus that retailers or brands can present you with in-store effectively?Ian:I guess I'm wondering, without that in place what's the output of the whole system here? Do people become just way more replenishment purchase-oriented and less new purchase? Or can we find other ways to effectively introduce people to products they didn't know they were looking for?Stephanie:Mm-hmm (affirmative), that's a good one. Definitely something that I'll be watching closely over this next year, because I love retail. I love going into stores, especially if they have a good experience, good curation, the collection. I feel like you can't beat that, even in a digital world and things like... Yeah, it's hard to get there.Ian:The real world shopping can also be a social experience that online is not anywhere close to replicating either. How you share it with somebody, it's a little different experience online too.Stephanie:Yeah, and you go with someone and... Yeah. Well, that is a great answer. Ian, thank you so much for joining us on the show today. It's been a pleasure having you. Where can people find out more about you and your work?Ian:Reach out to me on LinkedIn. It's LinkedIn slash in/slash... Whatever. IanLGresham.Stephanie:I'll link it up. [crosstalk].Ian:Yeah, there you go. I'd love to connect with you. If there's anybody that has questions about digital transformation or how to connect with customers in that way, I'm happy to have a good conversation about it. Thank you, Stephanie, for having me today. It's been a great conversation.Stephanie:Thanks so much.

Let’s be real, talking about sex makes people uncomfortable. But it shouldn’t! And that’s one of the driving principles behind Maude, a modern sexual wellness brand that is disrupting a taboo industry and making sexual health more a part of the overall health and wellness conversation. On this episode of Up Next in Commerce, I chatted with the founder of Maude, Éva Goicochea about how she built her company with a combination of excellent content, a growing and vibrant community, and a go-to-market strategy with patience and empathy top-of-mind. Éva also gave us some insight into the lessons she’s learned from bringing Maude into the retail market, and how she goes about assessing customer acquisition and community engagement. Enjoy this episode!Main Takeaways:Getting To Market: Ideate quickly, go to market strategically. Get to know who your customers are, what they want, and what problems they need solved before pushing a product to market. Not only do you need to take into account what your customers want, you also need to consider the associated logistics and cost that product will have to your business. You have to decide if your company is the one that should be creating it and whether the market size is big enough to jump through whatever hoops there are to actually bring that product to life.Content is King: Obviously, businesses want to sell goods on their websites. But it may actually be a better strategy to build a site that is less transactional and more content-driven and educational. In doing so, you can attract a casual audience, who are more likely to turn into buyers when they are already on your site.Bidding Wars: When wholesaling or working with retailers, a unique problem arises if those retailers try to outbid your brand for keywords and search terms in order to win more customers. Whether or not to fight to win those bidding wars comes down to assessing the value of the customer acquisition method. Is the customer more valuable as a native buyer or do you get the same or more value by having your wholesale partner see success selling your product?For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone, and welcome back to Up Next in Commerce. This is your host Stephanie Postles, CEO at mission.org. Today on the show, we have Eva Goicochea, the CEO and founder of maude.Éva:Hey, it's nice to be here.Stephanie:I'm excited to have you on. I feel like this is gonna be a very intimate fun conversation, the first of its kind, no puns intended. I would love that before we dive into maude and what it is, I always like to start with the beginning stories. Tell me a bit about what you did before founding maude.Éva:I'm going to try to tell the short version because I think it all connects.Stephanie:Perfect.Éva:I studied advertising in New York in the early 2000s, very analog time. I went back to California, became a legislative aide in healthcare, and then moved to LA and went back into marketing, and worked with a lot of brands, but then I was one of the early employees at Everlane. I think that those two experiences really shaped how I got to maude, and so I started working on maude in 2015 after leaving Everlane in 2013, and here we are.Stephanie:Awesome. What did the early days of maude feel like? Where did the inspiration come from? What is maude? Tell me about how the early days were back then.Éva:Maude was born out of this conversation I had with some friends of mine, who were also founders in a business with me called Tinker Watches. We started talking about sexual wellness and like, "What is the industry that has just never been changed?" This is one of them at least for the modern consumer. It's changed many times, but I think to the modern consumer. I was like, "This is the idea I've been waiting for between the healthcare background and what I thought I would pursue, which was a master's in public health and consumer brands. This is what I want to work on."Éva:Everyone's like... I can't tell my grandma that I sell condoms. I'm like, "I'm going to do this," and so I started working on it. The early days were very similar to COVID for most people, which was heads down at my house working on this idea, not ever feeling super connected to the outside world, and then here we are many years later. It's something that's just grown a lot.Stephanie:That's amazing. What kind of products do you offer now?Éva:We launched in 2018. We had condoms, lubricants, a vibe. Then later on that year, we had a massage candle. Now, the business is about 75% sex essentials, and 25% back and body products which are meant to be used with a partner or alone. That's the profile of the business now, but we launched with these four products saying, "Customers should be able to go to one place and find them," and that really resonated.Stephanie:That's amazing. I mean, how do you even view the landscape now? Has it changed since you've got into it, or is it till the same? What does that look like now?Éva:So much. I mean, on one hand, you see copycat brands, and that's always a little frustrating. But at the same time, I think it's indicative of what is happening in the space. I think it's indicative of what's happening in the space, which is that people are starting to ask for sexual wellness to be considered a part of personal care and reframe that way. They want to see products positioned in that way so that they can shop with the same comfort you can when you're dealing with something like beauty. That's what you're seeing.Éva:We're a brand that fits right there, because we have these products that are bath and body and then also sex. It's really interesting. I think you're going to start to see the products. I mean, I know you are because I know where we're going in terms of retail, but you're going to start to see the products in places that maybe you wouldn't expect.Stephanie:I mean, I'm thinking about even a couple years ago, it's like if you're going to get something, you're going to the back aisles of a CVS, and you're like, "Is anyone looking?" Ka pow. Grab it real quick, run, and check out. They'll look away while they're paying for it. There is this stigma around any items in the sexual wellness industry, but I like how you guys are changing that, especially around your content for the company.Éva:Thank you.Stephanie:You have these amazing products, and you have... It's nice because you don't have a ton of products. You can either have this, this, this, which I think is important especially in the early days of changing this industry. But how do you approach it from a content perspective that brings in new people like I was just describing who maybe would be like, "Well, I'm not going to buy this stuff online?"Éva:I think it was... It was really this choice that we made early on. We had the blog, which is called The Modern from day one. The idea was can you build a world around the product, because we knew we weren't going to have many products. We didn't want to be an over sorted brand, and people were reading it. They just kept consuming it. Then we started to get feedback, and then that turned into seeing what was working and what wasn't. Now, it's been built out into these three verticals. One's called the essentials, which is for an 18 to 25-year-old audience. The modernist is 25 to 45, and then the golden is 45 and up.Éva:It's grown so much. I think we get more traffic on the modern on the product side of the site to be quite honest with you. That's probably because we produce so much content, but it's been great. I think it really positions the brand in the right way, and we're showing content that we want to see in the world.Stephanie:How do you create content that resonates with people? How do you approach that and get in front of new people and know what's going to attract them to the blog to then eventually, hopefully, sell some of your products?Éva:I think, obviously, there's a bit of a science, right? You're looking at the search. What's happening in search, and what are people looking for? But then there's also, I guess, the pattern of behavior around what they've been looking at for the past three years, and what really resonates there and then asking them. That's where the art comes in, because you're really trying to be as empathetic as possible, and as you start to really decide and see who your audience is, then you think about all the things that they need. We try to think of it with both lenses, which I think is the only way to create content.Stephanie:What are your top performing content? What articles you got going on, where you're like, "These bring in the most traffic, or people really love this article?"Éva:It's funny, because for a very long time, it was sex in the wild west, which was one of our-Stephanie:The what? Like Oregon trail type of sex?Éva:Yes. It was sex in the wild west. I mean, it was the shortest piece of content ever, because when we first started, it was more like a Tumblr than it was a full blog. For a long time, that was one of the biggest traffic drivers. It was so funny.Stephanie:People are searching for that? I won't even know the keywords to type in to even think like, "What did they do back there?"Éva:I know. I don't know if it's because there's not many resources for this we were just getting, and it was making it easier for it to float to the top of the search. I'm not sure, but that works really well. We don't dig into it too much, but astrology and sex works really well. There are all of these funny topics where I think people are thinking. It's just these... I would say they're more cultural moments than they are just the WebMD version of content that resonates with our customer.Stephanie:That's pretty fun hearing about the kind of content that works. Now with COVID and everything, what have you seen with this market? I'm guessing, like we mentioned before, that you've had a crazy demand. People are all at home trying to have fun. What new trends are you seeing pop up this past year or two that maybe you weren't seeing before that?Éva:I definitely think that one of the biggest trends that we've seen which makes complete sense is when people are on the site. We used to see it more when it was a nine to five world at night on the weekends, and we still see that, but there is more of a consistent traffic on the site for the whole day, which is interesting. I think we're also just seeing a lot more. There's a lot more press around it being a part of your life and your holistic health, which I think is the right approach. That's how we should think about this.Éva:I like the fact that people are thinking about it, and they're more health related and psychologically. It's psychologically tied to your happiness too, so I think that's important, but we see that a lot. I feel like before, people talked about sex in this compartmentalized way, and now they're talking much more about intimacy. That's always the way that we've approached it anyway, so we were in the right place at the right time in terms of messaging.Stephanie:That's cool. The other thing I was reading about with your brand was that, I mean, you not only lead into content as a big part of even starting the company and less about paid ads maybe in the beginning, but you also focused on PR, and you partnered with a celebrity. I want to hear about how you... Who is it? How did you get that partnership, and how did all of that accelerate growth in the beginning?Éva:The PR was interesting because I was actually just looking at our first piece of press today for some reason, and that was in the beginning-Stephanie:Like ever.Éva:Like ever. That was in the beginning of 2017, which was interesting. The first thing that I did because my background in brand building is also in design, and so I threw up this website in 2015 for maude, even though we weren't anywhere close to being ready to go to market. We started getting inquiries about press, so I knew then that it was a topic people were going to want to talk about. Okay, cut to 2017, we actually had a real landing page, and we got our first piece of press. We use basically our renderings of our products, but that was an important piece in getting maude off the ground because the brand awareness happened so far in advance of launching that by the time it got there, we had built in community.Éva:We had captured those emails, and people were excited and ready. I think that that's a really interesting approach for people to take. I don't know that I would give your brand a year [inaudible] too long, but for us, that was about the amount of time was and then... The celebrity partnership, which is with Dakota Johnson, came about... Her team approached us and said that she was really interested in the brand. At first, I was very hesitant to take on any celebrity investment, because I'm not really interested in putting a name to the brand in that way.Éva:When we partnered with her, it's very much about being behind the scenes, so she's been working with us as a team behind the scenes, and that's been great.Éva:We'll work on products. We talked through what does the next year look like? Anything that we work on hasn't really come to market yet, because it takes a while for any of these things to happen, but it's a lot of just behind the scenes working on really what is the creative direction of the company.Stephanie:Okay, cool. I want to dive a bit into product development, because this is such an interesting area to me like, how do you go about creating products knowing what your customers want? What does that lifecycle look like, great sexual wellness company?Éva:I think for us, I mean, we started working on the product in 2017, which is why we knew what it was going to look like, and so we had about a year. Every product that we make essentially has a six month to a year cycle before it gets to market. We do that for a number of reasons. We don't just take products to market quickly. We definitely work with our customer. We survey them and ask them questions and look at feedback, and then we also look at really what's happening in the market.Éva:Are there products that we can make in a better way? Are there things that we should be... Are there problems we should be solving with our brand? It's this collaborative process with the team to look in this 360 view and say what's really happening, and should maude even be making it? Because I think there are brands-Stephanie:How do you decide? What parts should you be involved in, and which things have you said no to?Éva:I think it's mostly, "Could it be used..." All of our products are meant to be used by yourself or with a partner. How can we be the most inclusive whatever your status is, whatever your adult age is, whatever your gender? That's one way to look at it. I think the other way to look at it is does it make sense with the other products? Is it additive, or is it random?Éva:There's a lot of hurdles to get a product to market. Condoms are class two medical devices. Our lubricants are the same thing. When customers are like, "You're inclusive. You should make all of these things," we say, "There's a couple things. One, is there a regulatory hurdle, and then two, is there a minimum order quantity that we just can't as a small brand get to?" Then the third would be like, "If we could do both of those things, is there a market for it?" That's just real brass tax. Do you take a product to market?Stephanie:Interesting. The other thing I'm thinking about is your ecommerce strategy with your products. I mean, I think a lot of consumers are used to, like I said, buying things in a certain way not really thinking too much about it, definitely not probably standing in the aisle and be like, "Hmm, which one do I want? Let me read the back of everything and see the description." How do you think about developing that ecommerce strategy in a way that people know what it is, know the benefits and do want to hang out and look at it, but also understand it afterwards, especially for someone new coming in and being like, "I'm not from this world?"Éva:I think it's interesting that you asked this because I would say that we could do better in the ecomm strategy given the fact that all of our bottles are brown, so we-Stephanie:Wait. All your bottles are brown.Éva:We have two lubricants. They both look the same, so we've had the same challenges. Our thought was that we create these products that look great in your bathroom or on your bedside table that you wouldn't be embarrassed to have out. But I think in some ways, it's also like, "Okay, but do you know what they are?" What we found in terms of ecomm is to be really clear about how you're shopping for them. Our site is merchandised in a way that's pretty clear and that you can find things in a couple ways.Éva:One is by usage, so if it's before, during and after sex, or just buy the actual type of product. That seems to have been helpful, but I still think we have work to do on that front, because I do think you're right. People come to the site, and they might be uncomfortable, or they might not know what goes together. We're actively trying to make sure they don't just see a sea of brown bottles.Stephanie:That's interesting, trying to put two things together to be like, "This could be a package," and like... Do you have something that shows up on the side of your website that is like, "Here's something that pairs with it?" What kind of maybe tests have you done where you're like, "This one converts well. They add more things to the cart," versus, "When we had it this way, it didn't work out?" Any little findings there?Éva:I mean, there are some products that people just like adding to their cart. One of them is the massage candle, because I think it's something... Universally speaking, I don't know that everyone knows what a massage candle is, per se, but a candle is very easy to understand, so that works as an upsell. I think that if you're pairing a product, if you're getting the vibe, for instance, and you get suggested the lubricant to use, I think that makes sense to people. If it's a bath product, there are other bath products that go well with it like the wash, which is our body wash goes really well with the massage oil.Éva:There's ways for us to basically guide you through the journey, but I still think it's probably one of our biggest challenges is to make sure that people know what else we have.Stephanie:Do you study other brands to see how they're doing things, or are you like, "We're such a different unicorn that there's really no one else that we can look at when it comes to recommendations and trying to figure out who needs what it at what point?" How do you figure out good practices that you want to try and implement?Éva:Well, so it's a bit of a conundrum in a couple of ways. I think the first way is that if you look at a let's call it a skincare site, usually, those things are maybe it's shopping by system. Let's say that they just have one cream or one face wash. That's easy to understand. If it's by say problem, it's distinctively called out, so it's for oily skin or dry skin. We don't have... That's not how you shop the site. In one way, some of the products are a system, but they're not based on a problem.Éva:It's still something for us that we have to, I think, solve for. One of the things that we're really.... I wouldn't call us precious about it, but I do think that we try to be very kind and empathetic about is making the customer feel comfortable, so we don't want to scream anything on the site. I think there are times though that were to tone down. This is a good question.Stephanie:What about quizzes and things like that? If someone comes and they're not really informed on what you guys are selling, have you tried out any quizzes that guides people to what they might want and in a way where they're like, "I didn't get there myself. You told me to get there?"Éva:It's funny because originally, the site was just a quiz. When we first launched, it was like it walked you through, and you ended up with seven different kits basically. There was a couple things, learnings, all things that anyone listening should know. We named the kits one through seven. That's not really helpful. You don't know like... You're like, "I can't remember what number I am." I think also, we didn't have enough options. The only real difference between the kits was how many products were in them, and then if it was shine organic or shine silicone lubricant.Éva:We're still figuring out the best way to bundle. I think that customers... What's interesting, and I think it will happen and improve over time, is that people are starting to see it more as, like I said, something between sexual wellness and beauty, and so they browse the site. There's actually a pretty high conversion on the site. They're browsing the site because I don't think they feel uncomfortable, which was [inaudible].Stephanie:Cool. The one thing that we've talked about in previous episodes is around UGC. That's the best way to get people to buy things if it looks organic, and my friends would use it. I feel like that'd be really hard for your brand to get [inaudible]. I mean, you might get flagged on Instagram.Éva:We do get flagged on Instagram. I think for us, it's just been that's where the bath and body products come into play. We've started to introduce more UGC because we've been seating out more bath and body products for people to try, but it's a really interesting line to tow between messaging around like, "Here's this really soothing body care, and how does it relate to intimacy," but we can't be explicit on Instagram and Facebook, so navigating this category has been really interesting, challenging at times.Stephanie:Did you consciously develop something that you could use on Instagram to then try and get that traffic back? Were you thinking about that before you even developed the body wash type products?Éva:Yeah. It's interesting because the condoms and the lubricant technically can be sold. The ads can be posted on Facebook and Instagram, but the language starts to get tricky. The reality is that there are real people looking at your Facebook ads, making the decision if they should be shut down, which always gets into really funny territory. When we launched the burn massage candle, we're able to start really ramping up ads, but it's really amazing what's allowed on Instagram and what's not allowed.Stephanie:Yes. I mean, I could go down the entire wormhole of certain people who've been banned and other people where it's like, "That is definitely a very bad site, and there's a lot of bad things happening there. How are they still on here?" It's an interesting world. What kind of ads are you creating? I think a lot of times about humor can always be fun around certain topics, and get people in. Do you guys approach it that way, or are you strictly content, educational? How do you think about your ads?Éva:They're just really beautiful straightforward ads. I would say that, again, they always lean more towards beauty. The funny part is that we... I mean, not to use the word funny, because I'm about to say maude has a sense of humor. It's just typically in the captions or in the writing or in the quippy parts of the content, so that could be brought out more. The ads are generally just like how to use the product, and they're beautiful.Stephanie:That's cool. We were talking a bit before the show about retail and how you were thinking about it. Tell me a bit about what your plans look like when it comes to entering into retail.Éva:We are actually... Our business is about 20% retail. We're in a lot of-Stephanie:Oh, you're already there.Éva:We're already there, and it's growing. We're launching in a bunch of new retailers this year. The retail angle has been interesting. We first started out... I can't remember who our first retailer was, but back in 2018, we were definitely in a lot of smaller boutiques. We were in hotels, which makes sense, and started going into bigger retailers. What was happening and what we still see happen is that the merchandising teams would be fighting over where we should be in store.Éva:Now, it seems like the beauty teams are winning. We're seeing maude. It's going to get positioned in a lot of the beauty categories in retail, in these doors not just online. I'm very curious to see what it looks like there.Stephanie:How do you think about connecting the story and the brand and approaching that omni channel experience? What kind of things are you trying out and learning through all of that?Éva:The kinds of things that we're working on is really sticking to the script for the brand, because we see a lot of crossover audience that comes to us via Instagram, and then finds us out in the world in retail. Whereas I've definitely worked in brands that try to cater to each retail audience, and they've test a lot. We try to just really be very distinctively on brand all the time so that people remember us. I think when you're really a new brand or a younger brand, it's important for you to be memorable and top of mind.Stephanie:How do you stay memorable? What do you do especially now that you say there's people popping up like competitors or copycats? How do you differentiate yourself to make sure that you're not blending in with someone else who enters into a Urban Outfitters?Éva:I think it's more about what's the product assortment and then what's our creative strategy, which hasn't been copied quite yet. The other thing is... I've said this on other podcasts. I don't want to completely sound like a broken record, but I think there are really two types of companies. One is product, and one is mission-based companies, very appropriate to what you do.Stephanie:Perfect.Éva:I think that our company is a mission-based company, which means you can't expedite the process of growing community and brand equity. I think that that's what makes maude really ahead of other brands that are trying to do it. It's like they'll have to build their own communities and their own look and feel, and customers will either get it or resonate with it or not.Stephanie:I mean, do you find that you have the ability to stay connected with your customer afterwards? How do you keep the conversation going to then increase the lifetime value of that person and bring them back and stay within your community? What kind of things are you doing behind the scenes to ensure that happens?Éva:Our biggest KPI internally has always been NPS and customer reviews and satisfaction. We have really, really high NPS, and we focus on making sure that they are engaging with our emails, and whether or not they're coming back to buy from us is more a matter of do they need it? What do their sex lives look like? Can we even control that? We can't do any of that work for them, but we can be there. It's staying top of mind through the content, and then making sure that they're happy. We check on them often, and then try to listen when they're not happy.Stephanie:How do you encourage reviews for your product? I could see, like what we were saying earlier, people being hesitant to review something where their name's on there, and someone identifies them. How do you get people to come in and drop some valuable insights into your review system?Éva:They'll get a notification to review the products so many days after purchase, which people are pretty open to doing. Actually, that's all we do. We don't encourage. We don't give discounts for reviews. We're really purist in a lot of ways in terms of how we gather data and what we ask our customer only because we're really respectful of this category and what it means for them to be disclosing this kind of information, and so we want to be as thoughtful as possible. The reviews that we get are amazing, and they're amazing a number of ways.Éva:They're heartwarming and funny and maybe too raunchy. You're like, "Okay, thank you. I didn't need to know any of this," but I think getting people to feel like they can safely write that is what we're trying to do. We're a pretty respectful brand.Éva:I mean, there are other ones that I think are like... a lot of reviews where people will say like, "I lost my spouse, and I just didn't know if I can navigate this alone, and this has made me feel like I'm a person again or lovable," and these things you will just be crying in the office. It runs the range. There's lots of reviews.Stephanie:I mean, I feel like that authenticity is key, though, when people are especially exploring a market that they've maybe never looked into before. Reading reviews like that is, I think, what sells the product by itself, because there's probably many other people who've comment and like, "That's me. I'm in that position right now. I feel sad like that." Trying to get customers to speak like that, I think, is game changing if you can get them to do that, which is why I'm so impressed that you get reviews like that because to me, I can see a lot of people holding back and not wanting their name on something and just being nervous about that whole thing.Éva:I know. I'm like, "I wouldn't write a review like this," but you should read the reviews.Stephanie:No.Éva:After, you guys need to read the reviews because they're very funny. I do have one other funny review that I'll bring up. Somebody used the burn massage candle, which has this great scent. It's really an amazing scent. It took us a while to develop, but she was like, "It made me feel like I was going at it in the redwood forest instead of my dinky no ho apartment." I'm like, "Oh my God."Stephanie:These people are good copywriters. Can I hire them?Éva:One woman wrote about the vibe. She was a powerhouse, a workhorse, an icon. That got turned into an email.Stephanie:That could be the tagline of the product.Éva:I know.Stephanie:Your customers should be the ones putting in their ideas, and then you just take their names and their tagline.Éva:I know.Stephanie:Man, that's good.Éva:That was good.Stephanie:Where do you see maude heading over the next maybe one to three years? What are you guys excited for, planning for?Éva:We're planning to go into one or two other categories. I think we're really deepening the product categories we have, and then venturing into a couple others all around intimacy. If it can be in the before, during or after category, we'll make it. I'm really excited about that, because I envision this maude. We have one in the office, so I guess it's easy for me to do. But I envision a maude shelf, and I'm like, "Okay, what does that complete experience look like?" I'm so excited to build that and then to see it come to life on these end caps and then these retailers is just...Éva:It's incredible. Then to go back to the reviews for a second like how much these products have impacted people's life, I think that that's where I'm really excited to help continue to solve for their needs, and also create products they really like and that have made their lives better in a small or sometimes big way.Stephanie:When thinking about retail, I know I keep getting back to this. I'm just so impressed that you guys are going this route and having success in it. What kind of lessons did you learn when exploring the retail path? What would you do differently maybe if you were to do it over again?Éva:I would say that the biggest thing I would do differently is probably not have launched in a category or in a corner of a store that wasn't really where we should be placed. An example of this is within Urban Outfitters, which again, Urban Outfitters as a brand has been really a good partner to us. It's not our age demographic, but I think in terms of... They've always been good about building out beauty. At first, they wanted to put the vibe in tech and the other products in beauty. I'm like, "The problem with this is that it creates this sense of novelty," and we actually have something launching this week around why we don't call devices toys.Éva:It relates back to why this should not be a novelty in the electronics section of your store. That'd be one.Stephanie:I mean, that'd be weird if it's next to some key chain, cellphone cover, and there's a vibrator.Éva:There's a vibrator. Honestly, I don't know that anybody even bats an eyelash at that sort of positioning because they have been called toys, and they've been made to be these novelty items for so long, but our whole ethos is that we're a brand for all genders, but in particular women, cis women have not... The vibrator has been treated like it's this thing that's an add-on, and for many of them, it's not an add-on. Why can't it just be with the rest of the products?Stephanie:Did you have pushback when you told them like, "We want to have our products together?" Are you even able to tell them where you want your product to be?Éva:We can ask it and guide them. I think over time, they were like, "These products should be here," and then they built out sexual wellness as a part of their beauty both online and in store. Then it was an easy solve.Stephanie:Cool. That's a good tip. Any other lessons or experiences from getting into retail that were insightful?Éva:I mean, we've had conversations with retailers where we go down this long journey of they need certain testing or they need certain things, and we have all of these quality controls, and we have all of this testing on our own, but some retailers are so specific, and then you get to the PO. They're like, "And we want 10 units." You're like, "We've just gone through seven weeks of your editor testing, and you're 10 weeks of this, and you want 10 products." I think that's an interesting lesson is who's really the volume driver, and then who's really...Éva:It's about brand positioning, and what are the risks you should be taking for each.Stephanie:Now, do you go into it with a minimum quantity from the start of like, "We're not going to mess around with 10 units if you're going to make us spend six weeks doing this?" Could someone new do that? Can you only do that now because you've been doing this for a while? Could a newer brand come in with those expectations of like, "Tell me how many units you guys plan on ordering before I do the work," or you just have to go through that phase in the early days?Éva:I don't know that they would have told us. I do think that there are trade offs around. For instance, what we've learned now with retailers is a lot of them online will outbid you for your Google search terms. If you've made all of this effort, they've only bought 10 items, and guess what? They're putting a lot of search dollars behind it. Is it worth it? I'm not sure. Is it worth it to Sam in the xyz.com, whatever? I don't think it always is. It's just a trade off around how are you acquiring a customer? Where are they finding you, and does it really matter if you're in... I won't name names, but...Stephanie:I mean, that seems like a very important point that I actually not heard anyone bring up yet about the retailers outbidding you on your own keywords. It seems like there should be something in the contract that says, "These are my set of keywords I go after. You can't touch them if we're a partner."Éva:We're only learning that we can even push that now. I think there's a lot of things as a smaller company where you're just like, "Okay, sure. I'm so excited to be in blah, blah, blah," and then lessons learned.Stephanie:Oh man, that's a good lesson. I'm glad I'm pushing this. I feel like a lot of people could actually learn from the stuff and go into it with different expectations than... It is easy probably to be like, "I've got Urban Outfitters. I've got whoever," and then to be like, "Oh, maybe I should have asked for more upfront." Ask for what you actually think is fair.Éva:I think you're also like... We didn't put a stockist on our page, because, one, we couldn't keep up with where we were, especially when we were in these independent retailers. If you think about stockist, it's really for the benefit of the customer, right? At the same time, it's like, "Well, then why are we in some of these places, because we know they only ordered 10 products?" This is all up to you as a brand, but think about these things and really what is the value.Stephanie:That's great. Good tips. I love it. All right, well, let's shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question, and you have one minute or less to answer. Are you ready?Éva:I'm ready.Stephanie:All right. What one thing will have the biggest impact on ecommerce in the next year?Éva:This is interesting. I think probably to your point, it's content. It's building out a site that is less transactional and it's more about building a memorable brand, because I don't know about you, but I track brands. I'm like, "There are so many brands coming out." If I can't see a deeper story, or if I can't connect with something that I'm going to remember, it's just really hard for me to think about them.Stephanie:What do you think the world's going to look like in a couple years? Because like you said, it does feel like there's so many new DTC companies popping up, and it actually seems like it's hard to trust who's saying what and if that's their mission, and if they're doing what they're saying they're going to do, because now, anyone can launch really quickly, and then also go away really quickly if they need to. Where do you think the world's headed because of all that?Éva:I think it's in examining all of their channels, finding where they really are speaking to their community. When I mean content, you don't have to go to the site and find a blog per se. But if you can find a community, whether that's on Instagram or Tiktok or some channel where you can see evidence of them having a connection with their customer, I think that's really important, because I have been to a lot of sites where then I go check out their social channels, and they've been around for long enough, and there's just like no engagement. It's really interesting.Stephanie:That's working out really great. If you were to have a podcast, what would it be about, and who would your first guest be?Éva:Oh, this is a good one. I actually just started a podcast.Stephanie:Nice. What's it about, and who was your first guest?Éva:Well, so we haven't booked the first guest yet, but I will tell you who I want the first guest to be. The podcast is called The Una. It's about the first and the few females in a particular industry. It could be any industry, whether that's politics or finance or the spirit's industry. We want our first guest, although I think it's going to be much harder to land now, to be Deb Haaland. If you didn't know, she's now the first Native American Secretary of the Interior. She is from New Mexico, which is my home state, but I think because she's now the secretary of the Interior that it's going to be a little harder to land her, so wish me luck.Stephanie:Come on, Deb. Get on the show.Éva:I know.Stephanie:That's awesome. It sounds like a very cool show. I'll definitely be listening. When is it going to launch?Éva:Well, so we're starting to do the outreach because we did the trailer finally. If you go to theunapodcast.com, you can see or listen to the trailer.Stephanie:Very cool. What's Up next on your reading list?Éva:I just watched the Dieter Rams documentary, and I've been reading the book which is the 10 Principles of Good Design only because I think it's the way to bring me back to why we have maude, why we do what we do at maude. By the time this actually airs, the team will know, but I'm taking them to a screening of the Rams documentary, and we'll then talk through the book. That's what's up. I'm getting through the book.Stephanie:Very cool. What's one thing that you don't understand today that you wish you did?Éva:I mean, I don't know if I wish I did, but I really don't understand the allure of clubhouse. I'm like, "I don't understand. I don't get it."Stephanie:We've had a couple people say that, so you're not alone. Don't worry.Éva:I don't. I think that it's a pandemic phase, but I could be wrong.Stephanie:Well, we'll have to do a check back in six months or a year and be like, "Was Eva right or?"Éva:Although I have heard people like... They listen to this... For instance, our director of product listens to people talking about Sci Fi. I think that's a great use of clubhouse. Otherwise, when it's just talking heads about the same things, I don't know.Stephanie:I agree. All right. Then the last one, what's the nicest thing anyone's ever done for you?Éva:Oh, well, I mean, this is going to sound cliche, but my husband is actually a mechanical engineer. He's the one that's designed... He designed the vibe. He designed our second product drop.Stephanie:Wow.Éva:He doesn't work for maude full time. He really builds the business with me when needed as if he were a part of it. I think that's the nicest thing that anyone has done for me.Stephanie:That's pretty amazing and awesome. Go him for stepping in and helping like that. Was he unsure if he wanted to design sexual wellness [crosstalk]? Did you have to be like, "Come on?"Éva:No. His take on design and the usefulness of design, which I would actually joke goes back this Rams documentary is like, "These products are really everyday items, and they shouldn't be made to be used that way." I think he liked the fact that maude was turning it into an everyday object instead of making it phallic and loud and all these other things. I think he was just like, "Great. Let's make this product better."Stephanie:Oh, that's awesome. That's amazing. Well, Eva, this has been so fun having you on the show, such a different interview, which loved, and it's fun hearing about maude and the industry and all that. Where can people find out more about you and maude?Éva:Well, with me, it's if they follow me on Instagram. It's evagoicochea.com, which is really long, but I'm sure if you type in E-V-A-G-O-I, you probably will be able to find me. Then maude is getmaude.com, M-A-U-D-E, because we could not just get maude.com.Stephanie:Amazing. All right, everyone, go check it out. Thanks so much for joining us. It was a pleasure to have you.Éva:Thank you so much for having me.

The Beatles told us that All You Need Is Love. Howard Tiersky says the same thing — but he’s talking about brands, not the whole of human existence. Howard is the CEO of FROM, The Digital Transformation Agency, which has helped brands such as Mattel, Barnes & Noble Education, Mall of America, NBC, Avis-Budget, and more transform to compete and win in a new digital world — and they succeed by getting customers to love the brands and everything they offer. Whether you’re a shiny new ecommerce start-up or a legacy brand with decades of history behind you, getting a consumer to actually love you is a multi-step process that is getting harder and harder as the digital landscape evolves. On this episode of Up Next in Commerce, we dig into what the pyramid of brand love looks like and how companies should be working to climb their way to the top. Plus, he reveals the biggest mistake he sees companies making that causes potential customers to shop elsewhere, and he gives some strategies to rectify that situation and improve your bottom line. Enjoy!Main Takeaways:The Switching Cost is Zero: On the internet, it’s easy for a customer to move from one brand to another and it costs them nothing to do so. That means a brand’s first duty is to explain very quickly and clearly that it can and will solve a consumer’s problem. This is the area where most brands fail because they don’t have clear, simple messaging or content that tells their story and delivers their value prop instantly.Keep It Simple: Doing customer research is the best and easiest way to find the kinks in your website and processes. Setting up a simple focus group to watch how customers are using your site to see where their pain points are or where they are getting stuck can reveal the most basic and easy-to-solve problems that could increase your bottom line.Pyramid of Love: Creating a brand that people truly love is a challenge that has to be tackled in stages. There are specific levels of customer affection that you need to build up and that eventually culminates in love. But reaching those levels takes work and requires a brand to take specific actions. What are the levels and how do you reach them? Tune in to find out.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. And welcome back to Up Next In Commerce. I'm your host, Stephanie Postles, CEO at mission.org. Today on the show, I'm chatting with Howard Tiersky, the CEO of FROM, The Digital Transformation Agency and the author of The Wall Street Journal bestselling book, Winning Digital Customers, The Antidote to Irrelevance. Did I do that justice Howard?Howard:Perfect. Stephanie, thank you so much. And thanks for having me.Stephanie:Thanks for coming on the show. So I wanted to start with something that we were chatting with a little bit before this, that your whole company is about reverse engineering love, which I actually really liked that saying. And I think I'm going to start using it in my personal life now, but I want to kind of start there to describe what is FROM and why do you say that?Howard:Sure. Well, what FROM is, is a kind of a combination between a consulting firm and a digital agency. We work with large brands like Avis, AAA, NBC Universal, Airbus, and our mission is to help them create a better customer experience that ultimately generates more customer love. Because in our experience, the companies that have customers that feel passionately about them, that feel appreciated by them, and appreciate those brands, those are the brands that do the best in the marketplace by all the most common measures of business success, revenue growth, profitability, and share price.Stephanie:Awesome. And a lot of the brands that you're working with they've been around for a long time. I mean, I was looking at, let's see, some of them. You said Airbus, Barnes and Noble, Facebook, Verizon, Spotify, Amazon. And I think I even saw it was like American Girl, which I used to have back in the day. And it seems like you catered towards the brands that have been here for a while and are now kind of seeking help on like how to get to that next level, how to find new customers.Howard:Well, that's exactly right. I mean, we have worked with some, what you might call sort of pure digital brands like Amazon and Spotify and different things. But the majority of what we do is really working with great classic brands that are faced with a real challenge because they need to transform to be relevant in a new age. And particularly when a company is large and has been around for a long time, that's not an easy thing to do. And so this is really our area of expertise, is how do you... Everything from the vision and the design concept of a future customer journey to dealing with the politics and resistance to change that you find in most large organizations.Stephanie:Yep. So when you're initially approaching some of these brands, I mean, how do you even go about finding out what the issues are? Because especially with the company size, it seems hard to go in and be, there's probably a thousand things going wrong, or everything feels like a fire in a larger company. How you start pinpointing, here's some of the things that are maybe not up to par right now, and that we need to start evolving and here's the game plan going forward?Howard:Sure. Well, the good news is most companies ultimately want the same things. They want more customers, they want more revenue, they want increased profitability, they want increased share price. So at the very top level, it's usually not too hard to figure out what the company's after. And one of my fundamental philosophies of everything I've done in business for 25 years is this idea that most business value is derived by influencing human behavior. If you can get people, people like customers, employees, shareholders, if you can get them to do what you want them to do, you're going to have a great business. And if you aren't able to get, for example, your customers to do what you want them to do, then you're probably going to be in big trouble, no matter what ERP system you've implemented or what other kinds of things you may be doing.Howard:So the first question is, all right, you want more customers, you want more revenue and profitability? Great. What behaviors do you need by customers, employees, et cetera, in order to get that business outcome? And in my book, I talk about many of the most common behaviors, but you can imagine what they are getting customers to buy more, to buy more frequently, to upsell to more expensive products, to refer you to their friends. And also there's some behaviors that are sort of value destroying behaviors. For example, customers calling you on the phone every day and spending hours with your support desk getting help, right? And so getting clear on, okay, well, if we can drive these behaviors, then that equates to business success.Howard:And then from there, the question is, all right, well, what drives behavior? I mean, how do you get people to do what you want them to do? And the answer is their thoughts and feelings. People behave in a certain way because of their thoughts and feelings. And then lastly, the question is, all right, well, how do we control people's thoughts and feelings? Where do those come from? And the answer is from their experiences, your thoughts and feelings come from experiences. So our job is to help conceive what would be the next generation set of experiences, a customer journey, that will drive the thoughts and feelings that will drive the behavior that equate to business results. So a very often it's research, doing a lot of ethnography, task analysis, different types of interviews, surveys, looking at existing data, for example, funnels on sites, things like that to understand well, to what degree are these things happening today? Because of course, no doubt, there is some degree of success in almost any business. We don't do often a great deal of success. And what's holding back the increase in that? For every customer that buys, there's a bunch that don't buy. Why not? For every customer that buys at level A and never comes back, why don't they come back, et cetera?Howard:So once we understand those things, well, then it's just a question of figuring out well, okay, how do you start to remove those barriers? Are we confusing them? Are we frustrating them? Are we annoying them? Are we just not offering a compelling enough value proposition, et cetera, et cetera?Stephanie:Yep. Are there any themes when it comes to the barriers within all these brands, were you have seen this come up time and time again, because maybe they have not thought digitally first because there are similar theme around customer barriers to buying?Howard:There are a number of very common themes. That's really a great question, actually. I would say one common theme is being failing to make it really clear, really fast, exactly what you can do for somebody. Anytime a customer is coming to you, they probably don't care much about you, that's just the way it is. Maybe they do if you've already inspired customer love. People really care about Apple. They really care about The 49ers, they really care about, I don't know, Aeropostale, or some fashion brand. Maybe they care about Rolex. But those are a very small percentage of brands that have inspired customer love. But before you get to that point, most of the customers that come to you, they really only care about themselves. What is it that they're trying? They're there to solve some kind of problem, right? Their kid is having a birthday party and they need to find an entertainer. Or their car is broken down and they need to get it fixed or whatever.Howard:And so how quickly do you make it really clear what you offer them? And it's fascinating to me how often brands don't do that clearly. They have different messages, they make it too hard for someone to really answer the question, can you help me solve my problem right now? And because the internet in this environment where it's so easy to just go back to Google, go to another website, it's like when you walk into a store, if you don't get clarity within the first 10 seconds that they're going to have what you need, the switching costs of getting in your car and driving to another store is at least a little bit high. But when you're on the internet, the switching cost is zero or so close to zero might as well be. So that means you've got to make sure someone understands right away they have a high probability of you being a solution to what it is that they need.Howard:So I think that's one thing. And if I were to just mention one more, it's just making it easy for people to transact. Sometimes I like to think of ecommerce as being basically about two things, persuasion and transaction. First, you got to get them to decide yes, on whatever it is you want them to do, and then you've got to get from there to the point that you have their money in your Stripe account or whatever, and that screwed up along the way. And how many times, Stephanie, how many times have you gone on a website and gone, I want to buy this thing and then started the process of checking out, but for one reason or another, you never wind up buying it?Stephanie:Or you go back to your cart, a day late and you're like, why is my stuff's not in there anymore? Why don't you just save that for a little bit. I'm ready to buy but now I give up. I give up easily though, that kind of stuff.Howard:And there's so many things that can confuse somebody about the checkout process, about the sales tax calculation, about the terms and conditions, about, I mean, it's about the promo code, why didn't the promo code work? So just really getting compulsive about asking what is everything that holds people back? How can I make sure that in addition to doing my very best to persuade people that they should say yes to whatever I'm offering, that I lose none of them between their intention and the completion of the transaction. So we do a lot of analysis and research to try to understand how many people are you really losing in that process. And of course, most people do that, right? They study abandoned shopping carts, things like that. So most people have a fairly high percentage of people, but of course not every abandoned shopping cart was somebody who had an intention to buy, some aren't right? There's various reasons people might be putting things in their shopping carts.Howard:But what percentage of those people are you losing? And then again, it goes back to a simple, what's holding them back? What is happening to stop them from completing what was their intention? And, I mean, I'll give you one tiny example. My company is from digital. Our domain is from.digital. My email address is ends in an at from.digital. It's a little bit of an uncommon first level domain, right? Many more dresses and in .com. And I would say a good 25% of ecommerce sites, when I check out, if I have to enter my email address, tell me that my email is invalid. It's not. Now, and I have a solution to that. I don't always abandoned because I have some other Gmail address, I'll give him something else. But these little problems along the way can very often add up.Howard:And the analogy I like to use sometimes is it's like if I had taped an extension cord across a hallway, let's say I was setting up a Christmas tree and I just had to run an extension cord across the hallway and I duct taped it down, so hopefully no one would trip on it, 50 people might just walk by and step over that duct tape, just fine. And 60 people and 70 people, but eventually, maybe it's the hundredth person, they trip on that tape down duct tape cord, and then another 50, 100 people and another person trips. It's a very small percentage of people. The vast majority of people deal with it just fine. But if you're running a billion dollar ecommerce site, and 1% of your customers are getting caught up by something like that and not purchasing, how do you feel about giving up 1% of your revenue? And for some of our clients, the answer is that 1% is a lot of money. And then if you have six, eight, 12, 15 things along these lines that don't affect everybody, but affect a few people and you start to remove those obstacles, all of a sudden you unlock a whole bunch more sales.Howard:And that's the optimization side of, if you will, digital transformation. And then of course, there's more of a envisioning, a dramatically different journey. But I think so often, and I guess this is my long answer to your question about what are the common themes, one of the common themes I see is the lack of what I call hygiene in ecommerce experiences. And by hygiene, I mean, most digital experiences are being constantly adjusted, tweaked changed. And of course, browsers are changing and iOS, operating systems are changing. And unless you're continuously looking through that saying, have I unintentionally planted a confusion bomb somewhere? Have I added a new feature, but it has a label or has a button that distracts from my main button or whatever? I've just added a cool new feature, but it pushed down something on the page, and now my checkout button is below the fold or whatever it might be, unless you're continuously looking for those problems, they'll creep in like weeds and they'll pull down your conversion. And that hygiene process is something that I find as a common theme, many of the largest brands in the world fail to do often enough.Stephanie:Oh, that's good. So, I mean, how do you go about identifying, I guess more like behavioral issues or how people are actually thinking? I mean, it's one thing to solve the tech and the UI aspect of it and make it easy to check out, but what about trying to figure out going deeper with the customer to really understand why didn't you check out, why didn't you follow through if everything else is there tech wise?Howard:Well, one of the things that I go into in some depth in my book is how to do customer research. And actually because at a certain point we had to start taking stuff out of the book because it was so crazy long, we were afraid of someone would drop it on their toe, they would injure themselves and we have a lawsuit on our hands for publishing such a long book. So we started to put stuff on the supplemental website. So I actually published for people to buy the book and additional PDF and a bunch of videos and all kinds of stuff. And the reason I mentioned all that is because research in customers to really understand them is foundational to being able to do all the things I'm talking about. You can't guess, and you probably can't figure it out even by looking at the site. I mean, you can look at a site and sometimes see some things that are probably problematic, and I do that all the time.Howard:But to really know, you use various types of customer research, such as bringing customers into an office or a lab or on Zoom and giving them tasks and saying, okay, great, go on my ecommerce site, here's the story. Your aunt's birthday's coming up. She's 62 years old. You need to find her present or birthday's in two days, you need to make sure you can get it to her in time. And and then you observe how that person uses that website. And as they do, you can ask them questions or we like to ask people to actually speak out loud, kind of verbalize their stream of conscious thoughts. And of course you record it, and you're studying and understanding, okay, well, what's easy, what's problematic, what's confusing, what's frustrating? And you can learn so much.Howard:And you do that for a few dozen customers and you start to see patterns and you start to see themes. And depending on how many different customer segments, a given website targets, you might do even more than that. But even still, it doesn't take that long, a week, two weeks. And in that time alone, you can learn what many of those issues are. You're observing people and then you're having the option to ask questions. If all of a sudden someone's using a page and all of a sudden they get that look on their face, they're fused or whatever you say, "Oh, what are you thinking right now?" They can say, "I'm thinking I can't figure out what the next step is." "Well, what were you expecting to see?" "Well, I figured there'd be like a next button, but I don't see one." Okay, well, and of course there might be a next button right there in front of their nose, but maybe it doesn't say next, maybe it says continue, right? And for whatever reason, that's not what they're looking for.Howard:So, and if a bunch of people are saying that maybe you should relabel the button. And as simple and obvious as something like that is it's shocking how often we find problems that are that simple. Then of course not all problems are that simple to solve, but very often that kind of low-hanging fruit. Can you imagine rewording a button and getting an extra $600,000 a week in sales? I mean, we've seen things like that repeatedly, of course, assuming the site has very, very high volume. So it's really, customer research just is many companies do some forms of customer research, of course, but my experience it's way, way under utilized. And then it's also about how you do the research. And so we've tried to be very detailed in the book and in the supplemental materials, suggesting some of the key things to do to make sure you're getting, you're really getting the insight and you're getting the most accurate. If you take a customer and say, "Hey, take a look at this website and tell me how you think we should improve it," you're not going to get a good information. You have to approach it in the right way.Stephanie:So what things didn't make it into the book that you wish made it in? What's not in the supplemental material is not in the book and you're like, man, knowing what I know now in 2021, I wish we would've had this in there.Howard:One is, I've done since then analysis on this idea of customer love and shown a bunch of examples. We have actually a scale of customer love from love down, sort of like what's the range from? It starts with love then it goes down to resonant, then it goes down to relevant, then it goes down to relevant and ultimately non-existent. And so this idea that companies exist in terms of the mind of any one customer at any time along this continuum. In subsequent to that, we talked about some case studies that show let's look at Apple, let's look at Disney, but let's look at some companies at each level, let's look at companies that are resonant, like Verizon, for example, great brand. A lot of people like them. They love them? No, probably not quite. Exactly.Howard:And then you go down from one from there, maybe now you're at Citibank and then you go down another one and maybe you're at Radio Shack. I don't know. So looking at them and then looking at their financial performance and really being able to show how this correlates. And then the other thing that isn't in the book that probably should have been, is answering the questions, how do you know what level you're at? And we actually have different tools we use, but one of them is a very simple test. We ask one simple question. And based on the answer to that question, we're able to say whether it's a brand that you love, or that's only resonant, or that's relevant, or that's irrelevant or non-existence. And the question is very simple, if this brand disappeared tomorrow, how would you feel? How would you feel Stephanie if Apple disappeared tomorrow?Stephanie:Oh, that's a good question. I'd be super sad because I own Apple everything.Howard:So if you'd be super sad, if you'd be distraught, if you'd be ah, really emotional, then that's a brand you love, that's a brand you love. That's the sign of love. But if you say, well, I be kind of bummed. I'd be like darn.Stephanie:[inaudible].Howard:Exactly. Well then that's a brand that's resonant for you. It's you care about it. I mean, you don't care about it like that much, but like, you'd be like, oh, rats. That's a disappointment. And then the next level down, if you're, well, I need to know that. I've no emotional response, but thank you for telling me that that brand is gone because gosh, I usually get my gas from Chevron. And I guess if they're gone, I'm going to have to go to British Petroleum. So thank you mental note. At least it mattered to you, it affected you, but not in a way that you're emotional about it. That's what we call a relevant brand. It matters, but you don't have an emotional connection. And then below that, if it's like, you're like, who's gone. Who are they? I didn't even know they were still around. Well then now you're down in this sort of irrelevant type range.Howard:And we do surveys like that all the time to try to understand which other brands that really people do love because a key question is, well, what are those brands doing? How are they inspiring love? And one thing that is in the book then is we showed the pyramid of how do you inspire love? What are the three things you need to do to get your customers to have that feeling of love? And that's in the book.Stephanie:And so what are the things to do? Because I'm thinking about a brand like car insurance, whoever's cheapest, don't care Travelers, Geico, whatever it takes, I'll just go with whoever. I don't feel myself ever feeling loving towards those kinds of brands. It doesn't really matter what they do. So how would a brand like that go about inspiring love when you're compared to someone like Apple?Howard:Right, right. So I'll answer your question and it's really not just for car rental, sorry car insurance, but for all brands. And I'll tell you the formula, which is a pretty straight formula. But before that, I want to tell you this, I've worked with a number of auto insurance companies over the years, including Allstate, Farmers, Mercury, a little bit with State Farm, CNA, so a lot. And I've done a lot of research over the years with customers of car insurance. And I will tell you this, there are without doubt people who love their car insurance companies.Stephanie:Oh, this is not me.Howard:I realize it's not you. And I'll be honest. This is not me, it's not me either. But I have been in customer research sessions and I have interviewed people who they are with the same car insurance company that their parents used, and they will never switch no matter what.Stephanie:Why?Howard:They are applying for life.Stephanie:Why are they so committed?Howard:Right, exactly. Why? So let's talk about why, but let me talk about it in the context of the recipe. So how do you get someone, how do you get a customer, how do you inspire a customer to love a brand? Three, just sort of show up in the book, a diagram of the pyramid, three levels. The bottom of the pyramid is to consistently meet their needs. And that is not enough to inspire love, but it is required. Whatever your area of, whether you're delivering pizza or whether you're a place that they buy power tools, or you're hotel or whatever it is, what are their needs, you are consistently meeting those needs. That's your base.Howard:Then the next level up is to periodically delight the customer, to do something above and beyond what you have to do and what you're expected. And then the top level, and that will get you farther up that continuum, but probably not to love. In order to love a brand you have to feel that they stand for something, they have kind of a value system that you reflect, that you see in yourself, a value system that you resonate with. In fact, to that last point, that's why we see some brands now that have taken a strong political stand, and by the way, a value doesn't have to be political. But like when Nike did the thing with Colin Kaepernick and demonstrated their support for Black Lives Matter, that had a massively positive impact on their standing in the market and their share price, and then their sales, because they were taking a stand for something that a lot of people believed in.Howard:And even though that also meant that they were taking a stand that some people believe the opposite and said, I'll never buy another Nike shoe in my life. And that did happen. And there are some people who won't buy Nike shoes because of that, the net impact was enormously positive because the love that they inspired meant so much more business than the people that turned away from them. And you can say the same, see the same thing on the opposite end of the political spectrum. There's a Chick-fil-A not too far from my house. And Chick-fil-A of course has taken strong stands on extremely conservative right wing social values. And I got to tell you there's police at that Chick-fil-A every day to manage the drive through lane, because there are so many people who want to buy Chick-fil-A sandwiches.Howard:And I have been told, I think I might've had one like years and years ago, but I'm not going to Chick-fil-A for the same kind of reasons, but I don't think there's anything that's special about what Chick-fil-A sells. And I think part of the reason of their popularity is because people... Like what they stand for. And you could say the same thing on the right of someone like a Hobby Lobby or other. And by the way, I'll just close this answer with one thought, which is why, why, why do these three things together create such an emotional reaction? And the answer is because they push the three levers, the three emotional levers that really inspire love.Howard:And what are they? When you demonstrate, when you consistently meet someone's needs, you're demonstrating to them that you understand them because you can't meet the needs if you don't understand. So that when someone's always there for me, I'm like, "They get me, they understand what I need, or they understand, I want that coffee hot when I get it, or they understand that I need whatever it is." When you delight someone, when you go above and beyond periodically, but you demonstrate another emotional thing, you demonstrate they care about me. They didn't have to do this extra thing, right. I was going to give them my money anyway. And they went and they did this extra thing. And that demonstrates that they care about me. So many brands they're constantly saying to their customers, "Thank you for your business." And all that kind of stuff.Howard:And man, that just goes right past people, right? How often do you believe when you get a bill from your utility company at the bottom, it says, "We appreciate you as a customer."Stephanie:You are like, "[inaudible 00:25:09]. You're welcome."Howard:Yeah, that's printed on the form, right? Come on, how stupid are we? We might as well not bother. I mean, it doesn't hurt or anything, but come on, people are very cynical. But when you make a genuine gesture that they knew took money, took effort that demonstrates. When someone at Zappos shoes goes out of their way to help you with something, or I was at an Avis Rental Car yesterday, and I observed somebody helping someone on the phone because they had a problem with the car for like 15 or 20 minutes and they were clearly doing everything they could. Way above and beyond what you would expect. When you get that, that demonstrates to someone that not by telling, but by showing that you care about them.Howard:And then the third level, when you express values that they resonate with, that makes someone feel that they are like me. There's a humanity there, not just a business. And that they share something about my belief or my values about the world. And when you combine those things together, and by the way, many companies don't do this. Many people, if we said, what does Ben & Jerry stand for? What does Whole Foods stand for? What does Apple stand for? I think most people would say something that is sort of [inaudible]. But if someone said, what was the auto insurance company that you were talking about?Stephanie:Travelers. Yeah [inaudible].Howard:Travelers. What is Travelers stand for? What does GEICO stand... You could say, well, GEICO stands for saving your 15%. But that's not a value, right? I mean, it might be a value in the sense of a discount, but it's not a human value, right? There's nothing wrong with saving people 15%, but it's not the kind of value that Nike stands for, or the kind of value that Apple stands for. We believe in you, we believe in unlocking your personal creative freedom and capabilities. What is Citibank stand for? There's so many brands. What is United Airlines stand for? And that's a great example. And by the way, I like United Airlines. I fly them all the time. fly the friendly skies, does anyone believe that United Airlines is the friendly skies? It's just words.Stephanie:I believe it. But I mean, I think that just shows that I don't think brands are able to tell their stories very well in a way that connects. I mean, like a political stance, I think that's an easy thing to jump on because it's like newsjacking. Something's going on. I'm going to take a stance on it. I think that's easy. But to actually tell your story without an event going on, to try and get news around it, I mean, that is still think is hard for large brands. I was just reading Warren Buffett's shareholder letter. I don't know if you also read that for fun like me.Howard:No, I don't.Stephanie:Maybe now you're like, "Nah."Howard:I probably should.Stephanie:It's great. I mean, he was going through the companies that they acquired and why he's going to bet big on America and he'll never bet against it again. And he went through the backstory of these companies that he acquired. I think Ikea was one of them. And it was just very interesting to see how he could storytell better for these very, very large companies. And going through why he even was interested in investing in them in the first place. I'm like, "That is what needs to be told." That startup story, yes, a huge brand now, but how did they get there and how you instill that message around your company without just having to newsjack or jump on politics.Howard:Right. Well, and actually it's funny because you asked about things that weren't in the book and one of the other things that's not in the book, but I did a live cast on Subsequent is the answer to that very question. How do you figure out? Well, actually there's sort of two questions. One is how do you figure out what your brand really stands for? Because some brands were birthed standing for something. Toms Shoes or something like that. And so the people that were attracted to that brand, both as customers, but also as employees, they understood what the brand was about. So you wind up with a bunch of people at that brand who believe in that mission, because that's what it was when they came. But when you start with a company that doesn't have that, then the question becomes, okay, so how do you achieve it?Howard:How do you come up with what it is? How do you figure that out? That's a challenge. And then also, and I did a live cast on that, but then also, and to your question, then how do you express that? How do you get the world? Newsjacking is one way or taking a stand on a political issue. But so anyway, so I did another one on what I call the seven Ps, which are just seven different ways. And you don't have to do all seven, but you probably want to do more than one of how you take the value that you're about, whether it's wholesome food, like Whole Foods, or whether it's personal, creative tools that unleash your creative potential. What have you like Apple and how do you actually get that to be something real in the world that people believe in and really see that you are standing for those values.Howard:And one of those Ps is positioning, which means basically telling people, right, which is what a lot of brands do. This is what we stand for. But if you only do that... What I always say is positioning serves only one purpose, which is to create cynicism, to create doubt, which is good. It's good to do that. Because if you tell people what you stand for, they're going to not believe you. And then they're going to look for evidence. And if you have the other Ps or some of the other Ps, and the evidence is there, and then they start to look for the evidence, then they'll start to see that it's true. Brands that are really strong at standing for something don't even need positioning necessarily because people experience it and they know what it is. But if you position, you better make sure that you've got some of the other things, because you're going to create doubt from your positioning.Howard:People are going to, if they're interested, test your positioning, to see whether it's really true in their experience. And if it is, then you're great. Then you've used the positioning as a lens to get them to evaluate whether it's really true, or if it's BS. But of course, if it's not really true, you've accomplished the negative thing, which is you've lied to them and you've allowed them to spend their time and energy proving that you've lied to them. And now, of course, no doubt, unless your positioning is that you're a lying company. It's harmful rather than helpful.Stephanie:Yep. That makes sense. So this kind of takes it way back to earlier in the interview, but a lot of brands right now, I see focusing on here's my mission and the company's starting around the social impact or causes or things like that. And a question that I've talked with quite a few companies about is, how do you balance the mission behind the company, but then also the product value? I mean, you mentioned that, so one of the big themes was that customers would come to a company's website and not know if it could help them right away. And it feels that's a newer thing where every new DTC company right now has some kind of mission, and I do see some of them struggling with, do you put it on your front page, do you sell with your mission, do you sell with your product, how do you think about that? So what are your thoughts on having a good balance there while not making the customer journey get harder?Howard:I think it depends who you're selling to. I think it goes back to what I said about understanding your customer. I know especially with millennials and younger we definitely see something that we generally don't see with older customers, which is a willingness to actually make a choice and spend money for a social reason, because of some sort of charitable connection or something like that. Usually with older consumers, they like it, we'll do tests like this. We'll say, this brand gives 10% of the money to the American Red Cross and this brand doesn't how do you feel about the fact that this brand gives them money? And people say, "Oh, I'm all for it. I think it's wonderful that they do that." And we say, "Okay, great. This brand's product costs $12, and this other brand that doesn't give them money, their product costs $11. Which one are you going to buy?" And very often they're like, "I think the $11 one."Howard:It's like they like it, but they're not really willing to spend more for it. Whereas with younger consumers, we find increasingly they say, "Oh no, I spend another dollar for the company that gives the money to the cause that I believe in." So I think part of it's understanding who you're communicating to, but also I think part of it's understanding that building a relationship is about a number of different thing. And you don't start a relationship usually by focusing on your values. Usually the first thing, I mean, if I said, "Hey, there's this restaurant that gives 50% of all the money to Greenpeace. Do you want to have dinner there?"Stephanie:And that's it?Howard:Do you want to have dinner there? What's that?Stephanie:If it's good food.Howard:Well, right. And you might want to know what kind of food is it? Is it Chinese? It's not enough, right?Stephanie:Yes.Howard:You kind of want to start with, well, what's the value proposition for me? It's like what I said earlier, people care first and foremost about themselves. So I think there may be exceptions to this rule, but I think by and large, you have to do a good job first of being crystal clear about... It's like that pyramid I talked about, right? You can't jump to the top of the pyramid. You got to start by consistently meeting their needs and demonstrate that you understand them, and that at a very basic level, you can deliver what it is that they need. And then you can go to delighting and then you can focus on values. And so I think the answer is it's probably not your first message, and it's probably not the thing that's going to attract them to you, but what's going to happen is they're going to be attracted initially by what's in it for them.Howard:And then you can start to build a relationship and help them understand, most people didn't buy their first car in a Ben and Jerry's because they were protecting grassland in Vermont or whatever environmental stuff. They looked good. They heard all Chunky Monkey, that's good stuff, and let's try and diet. But then they might've fallen in love with the brand over time because they realized that not only is that bottom of the pyramid, not only are they consistently meeting my needs really well, but that they're also doing things that resonate with my values. And then that keeps me coming back again and again, it makes me more loyal and less likely to jump to the next brand of ice cream that has something that sounds appealing.Stephanie:Yep. Yeah. I completely agree. So get them in the door with good products, showcase your value, and then you could probably upsell in a way, once someone knows this is a good product, and now maybe I am willing to spend that extra dollar now that I've already had a good experience with them versus trying to do it the other way around.Howard:Yeah. Or be less likely to switch or be willing to try new products from that same brand, et cetera.Stephanie:Cool. So the last thing I want to of touch on was content strategy. I saw you working with Aéropostale and American Girl around getting these brands to start creating content, making it more organic, getting customers to create their own viral content. How do you think about brand should be approaching their content strategy right now?Howard:Well, in this day and age, everybody's a content creator. And as you look at the ages of your customers, I mean, I'm a content creator and I'm over 50, but as you go down in age, it becomes everybody, my kids are all creating all kinds of content all the time on obviously Tik ToK and Instagram and everywhere. And so I think first of all, it's easier than ever. And I think that one of the best ways to inspire people to create content is to give them a platform. Because what every content creator cares most about is what, likes, whatever it is on the given platform, right? Subscribers, followers, likes all this kind of stuff.Stephanie:There you go, it's wrong.Howard:So I mean, there are many strategies of course, to inspire people to create UGC around your brand. But I think that the number one strategy to say, okay, how can I give someone a sense that if you create something you're going to get my platform, obviously if you're a brand, you want to make sure you have a good sized platform, which means simply how many people you can reach, how many followers, et cetera you have. And then if you can help someone see that by creating content around your brand, that's going to get that content more exposure than if they just create content and post it on their own personal Instagram account or whatnot. Then that's valuable. And then of course...Stephanie:What's in it for me? That's the same thing that we've kind of talked about this whole time, the whole time.Howard:Understanding your customer, 100%. And in this case, the customer is they may be your customer in the traditional sense, they may be buying your product, but they may not even buy your product, but it's, again, it's like what I said about human behavior, you want to influence people to create content about you online. Great. You have to make sure you understand those people and understand what drives them. And there are going to be some different personas, right? To get my daughter to create content is takes one thing, to get someone who's already a YouTuber with 15 million followers, now it's something different. It's called probably going to an influencer platform and writing them a cheque. And that can be a very viable and smart strategy to do as well if you do it correctly and you pick the right influencers and you make sure that it's organically integrated into their content and not feeling like something they just slapped on, like an ad. But that can be a very powerful marketing tool as well.Howard:So that's what they want. My daughter, they don't need your platform because they have an even bigger platform probably depending on, I mean, if your platform is big enough, if you're Coca-Cola, maybe you even have a bigger platform than them. In which case maybe the influencer is willing to do it for less or for free. But anyway, but it all comes down to that. Anytime you want to motivate someone to do anything, you want to make sure you understand, what do they care about, what are they trying to accomplish? That's right.Stephanie:Cool. Well, let's jump over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have 30 seconds or less to answer.Howard:Okay.Stephanie:Are you ready?Howard:I'm ready.Stephanie:All right. First one, what one thing will have the biggest impact on ecommerce in the next year?Howard:The elimination of a third party cookies.Stephanie:Okay. Expand a little bit more on, because I've had another guest say it doesn't matter and we have solved that and it's nothing to worry about.Howard:Okay. Well, I'll have to watch that episode because I would love that to be true. But essentially what's happening is between things that Apple is doing and things that Google are doing, Google is doing and frankly, things that may also happen from a legislation perspective, the ability to cookie somebody on one site and display ads to them on a different site is being no longer permitted or they're rolling out changes, which will mean that, if you're familiar with going on overstock and looking at a sofa, and then that's sofa is on every site you see around the whole internet, they're not going to be able to do that anymore. And it has the biggest impact on smaller or medium-sized ecommerce players, because that's a key strategy. So I think that's going to have a huge impact and require everyone to come up with different ways of attracting buyers. I think it's going to have a huge impact.Stephanie:Yep. When does that go into place? [inaudible]Howard:Well, some of it is already in place, certain browsers are already blocking third party cookies and other bots, but I think we're already in the middle of a transition.Stephanie:Okay. Got it. Onto a happier subject then, what's up next on your Netflix queue?Howard:My Netflix queue? Well, I think I want to watch this show about [inaudible], I think just started. Is that? I think it's Netflix or if not, it's one of the other services.Stephanie:On of them.Howard:All about how this [inaudible] thing got started and how so many people were hypnotized into being crazy.Stephanie:Interesting. Tell me how it is. What one thing do you not understand today that you wish you did?Howard:Women, and why they do what they do.Stephanie:Oh my gosh.Howard:I've got two teenage daughters and a wife and man, I don't understand a single thing about why they do what they do.Stephanie:Oh, that's great. I mean, I don't even understand myself sometimes. So that's a valid answer. What's the nicest thing anyone's ever done for you?Howard:Well, I guess I have my children, I've got five children. That could be [inaudible].Stephanie:Five. Wow. That's great. That's a good answer. What's the last ecommerce purchase you made that you maybe would not have made pre-COVID?Howard:Well, that I would not have made pre-COVID? I have been buying more gear for at home, stuff we're doing now because I used to do that all at our offices in Manhattan, where we had more of a studio. So I don't know the very last one, but a lot more lights and microphone stands and all this kind of a side monitor, an extra small minor like I've got over here to show me these slides, if I'm talking about things. So I've been buying a lot more Gadgets & Gizmos, did I say that? Gadgets & Gizmos.Stephanie:Whatever you say works for me.Howard:To make it easier to turn my office into a kind of a studio for all the content that we produce.Stephanie:Very cool. And the last one, if you were to have a podcast, what would it be about and who would your first guest be?Howard:Well, I do have a podcast.Stephanie:Oh, well, what is it about?Howard:It's called Winning Digital Customers. And it is about how you most effectively win as a brand in an age where so many of your customers are living with digital at the center of their lifestyle. And the first guest on my podcast was a great friend and client of mine, Michelle McKenna, who's the SVP and chief information officer of the National Football.Stephanie:Oh, nice. I saw she wrote... Didn't sh write a foreword in your book?Howard:She did. She also wrote that. Well, that's kind of why we kicked off the podcast, which kind of connects to the book, same name. And she also was kind enough to to do that. And she's awesome and has driven a lot of innovation and transformation at the NFL, everything from the new way they do instant replays to stuff that supports player health and safety, to drones at Superbowls and sensors on players shoulder pads and helmets and the ball, so they can track with motion capture everything that happens in the game. So many cool things. And so she's always got great things to talk about and also a lot of stuff she can't talk about.Stephanie:We need to bring her on our IT visionaries podcast, which Hillary also produces. So we get her on there Hillary. Awesome.Howard:He is definitely an IT visionary.Stephanie:Yeah, we'll have to bring her on. Cool. Howard, thanks so much for joining the show. It was a pleasure chatting. Where can people find out more about you and your new book?Howard:Sure. Well, thank you so much for having me. If they want to learn about the book, there's a website for the book, which is winningdigitalcustomers.com, just like all one word. And in fact, if you go there, you can also download the first chapter of the book for free as a PDF if you want to just get started on it. Obviously it's available on Amazon, Barnes and Noble, Kindle, Apple books, all those types of places, and in bookstores, possibly near you if you go to bookstores. And as well, if you want to learn more about me, I'm on social media. I publish a lot on LinkedIn and other places. You can find me by my name, Howard Tiersky and my company is FROM, The Digital Transformation Agency and we are at from.digital.Stephanie:Amazing. Thank you so much, Howard.Howard:Thank you for having me, it's been a blast.

Brands are facing fierce competition in this ever-evolving ecommerce landscape. More often than not, shoppers do a general product search on Google or Amazon, where hundreds, if not thousands, of brands fight for the sale. It’s a hard arena to win in, and every company is trying to find shortcuts and strategies to give them an edge.You’ve probably seen some of those strategies — for example, the products with a bunch of random SEO words jammed into the title so that the item appears higher in search. There are plenty more wacky Amazon tricks of the trade that brands have tried. Goal Zero is one of those brands trying to figure out the secret sauce but approaching it in a much different manner. Patrick Keller, Head of Marketing and Ecommerce at Goal Zero, may have finally solved the mystery — but the answer is not what you might be expecting.On this episode of Up Next in Commerce, Patrick tells us that there are a few key strategies to unlocking more conversions on Amazon, and how they view authenticity and increasing brand awareness.TLDR: it takes great messaging, some big bets, and a lot of long-term thinking. Oh, and some pretty cool products, too. Hear all the details on this episode! Main Takeaways:Always Be Iterating: Producing marketing material is not a cut-and-dry process. Define your target market, set KPIs, and establish a timeline, then create a system that lends itself to AB testing and iteration. Don’t be afraid to create assets and then break them into pieces to test in different ways. You’ll learn more about your customers and the market in general that way, which you can then expand on when you embark on larger campaigns.Dream Big: Taking bigger advertising risks with a long tail is often a good way to get more bang for your buck. By investing in large-scale projects with a cinematic quality, you have more of a chance to use that content for much longer and build brand awareness with a larger audience that might miss a one-off campaign.Consider This: Figuring out a way to bypass the consideration phase on Amazon is one of the big challenges facing brands today. Because of the amount of options Amazon shoppers are presented with, companies that might have converted easily on their own site are losing out on Amazon. Whether through influencers or targeted campaigns, building brand awareness and loyalty is one of the methods brands are using to start bypassing that consideration phase and actually convert more.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hi, everyone, and welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, CEO over here at Mission.org. Today on the show we have Patrick Keller, Head of marketing and ecommerce at Goal Zero. Patrick, welcome to the show.Patrick:Hey, thanks for having me. It's fantastic to be here.Stephanie:I'm excited to have you on. I think I needed Goal Zero back in the snowstorm in Austin. So I'm in Austin, I forgot to tell you that. But we did not have power. We were struggling over here, and I did not have any products that I apparently needed. Now I went to Goal Zero's website, and I realized, this is all I needed. I just didn't know about it.Patrick:That's it. That's it.Stephanie:I'd love to start there. What is Goal Zero?Patrick:Yeah, exactly. Goal Zero makes portable power. It ranges from small portable power to use to back up your phone all the way to really massive energy storage that you can use to run key segments of your home for days. We play in that portable power. It's all battery based, so it's clean, renewable and really easy to use. That's it in a nutshell.Stephanie:Yeah. It also looks nice. I mean, I saw in some of the product pictures it's on your counter. You have this huge battery power portable battery station. I'm like, "Okay, I would have that around because it's not a big, huge thing like other energy sources," at least like backup generators and whatnot that I know my parents used to suggest that I get back in the day.Patrick:Yeah, no. It's new technology, but exactly right. I mean, I think that's one of our differentiators, and our industrial design is something we're proud of and we spent a lot of time working on.Stephanie:Yeah. That's great. Before we dive more into Goal Zero, I was hoping we could walk through your background a bit. Because I've seen you have had an interesting ecommerce journey, and I'd love to hear where you started and where you've been.Patrick:Oh, man. I hope we don't take up the whole interview with my background because it wasn't a straight shot, that's for sure. I left college with a marketing degree and became a fly fishing guide and then followed my passions to a company called Orvis based out of Vermont, where my first role was really analyzing the performance of catalogs. Now, do we give pants more square inches? Do we give shirts less? This product needs to be more heavily promoted. This was back in 2005, 2006, when ecom was still in its infancy. It was a lot of educational resource. Yeah, we should have a website, but we don't really know exactly what to do with it.Patrick:My next role really was, well geez, you're doing a good job of building the overall conversion rate on our catalogs. Can you do that with our website? So we started building out the early days of web merchandising. Can we promote products and boost and bury and use common metrics like sales per page view to actually drive a significant improvement in website conversion? Honestly, it was a huge success. That was big.Patrick:That led to eventually me taking a side step into catalog, and I managed the Orvis catalog business for a few years as well as their email. That was really good at understanding customer segmentation, how to go through and parse lists, how to find demographic overlays and psychographic overlays and just really use customer data to make sure your catalog was mailed to the right people and the right message was delivered. That set me up really well for a foray into digital advertising. How can we make sure that our digital ads are as focused as our catalog ads? Ran the digital advertising for Orvis for a few years.Patrick:Then I'm from Utah originally, and I wanted to move back out West to the Wasatch. So I took a job with Sundance catalog. Same thing, grew their whole ecom business and then eventually Goal Zero approached me after about four years at Sundance and said, "You want to come work for this scrappy startup down in Utah?" I said, "Yeah, let's give it a shot." It was absolutely awesome. It's been just a rollercoaster of a ride, and Goal Zero has in the last five years, has 4Xed their revenue, so really explosive growth and really fun.Stephanie:That's really fun. What does your best day in the office look like at Goal Zero? What are you doing these days versus when you first joined this scrappy startup?Patrick:Yeah. Well, I mean we're a lot bigger, so we have more resources and we're doing a lot of different techniques that we're just... We couldn't even imagine these types of techniques four years ago, mass media, television, some of those things that we're stepping into. A good day at Goal Zero we still like to be outside, like to be active people. So a couple of us will go and do a backcountry ski in the morning, come down to the office, have some meetings, talk strategy, talk about how we're going to deliver messages, who we're going to target, what's the best way to convey a message about this somewhat nascent product and category. And then finish it off with maybe a beer after work and call it a day.Stephanie:Man, this is the life. I need to come over and join you guys for-Patrick:It's not bad. I'm telling you, we have a lot of fun.Stephanie:... banging beers.Patrick:Yeah. We have a lot of fun.Stephanie:That's awesome. How does it differ? I mean you're at Orvis. I mean, I think they've been around for like 150 years or something.Patrick:Exactly right.Stephanie:Okay. You're selling a fun, leisurely fly fishing type products and all that, then moving to a utility product where you feel like you don't really need it until you need it, like my Austin experience. Did you have to shift your mindset to selling a product like that?Patrick:You know what that hardest part is, is everyone knows what a fly rod is. Everyone knows what a pair of khaki pants is. There's no explanation. You start at a certain just understanding and then you talk about benefits. With a portable power station, very few people in the US know what a portable power station is, so you actually have to start a step back and say, "Let me introduce you to something you have never heard about, and then let me convince you why you need this anywhere from $400 to $5,000 thing in your home."Patrick:It's a much longer burn and really, it's a lot more complicated in how we educate customers. It doesn't start with oh, do I buy an Apple iPhone or a Google Pixel? It's just not that simple. You have to say, "Hey, let me make you aware of this thing and that this thing exists and then walk you down the funnel for just a long consideration?" A few people will buy who have done research offline or through other various means will buy the day they come to the site. Most of them, it's a 90-plus day transaction.Stephanie:Wow.Patrick:We'll see a slow burn for 90 days and then a lot of conversions.Stephanie:What are you doing in those 90 days to bring them down the funnel? What do those tactics look like behind the scenes? Because I'm even thinking of me, me trying to explain the product at the very beginning. I'm like, I don't even know what you would call it and how do you even explain this, because it's just not something that I'm even used to buying and talking about. So I'd be interested to hear, what does that look like behind the scenes for you?Patrick:Yeah. We break it into two parts. There is the before you've come to the website, and that could be PR. That could be trade shows. That could be television, radio, podcasts, a variety of ways where we're just trying to say, "Here's something that could be really beneficial to you and your family and just all the things you like to do. Come to goalzero.com.Patrick:Once they've come to goalzero.com, then we can open up a whole host of opportunities of how do we get educational messaging? How do we do differentiation between us and our competitors? How do we do differentiation between us and gas generators? We'll spend a lot of time reviewing our website saying, "I'm not sure this is the best way to talk about home energy storage. Let's change that up." We'll put you through and try to get you to sign up for emails. We'll do a bend and browse. We'll do a marketing display. We'll try to find you on Amazon. We'll try to find you in retail stores and say, "Hey, if you want to actually see this thing in person, check out our retail finder."Patrick:We use a company called Locally, which actually does an inventory feed to us so that we know now what do they carry at Goal Zero in a blanket statement, but we know that this product specifically is in stock at this store at this time. So we can drive customers to go see it in person and give them a chance to touch, feel, pick it up, explore it a little bit before they transact.Stephanie:Yeah. That's really interesting. In talking about top of funnel, you're saying you guys are trying everything, like TV, mass media, podcasts. What are you exploring there and how do you view things like TV versus podcasting, which everyone is seeming to try and lean into that now? What are you guys seeing on that front?Patrick:Yeah. It's funny, we're definitely stepping our toes into it. We're not doing anything full scale national wise yet. I think the first one we're doing is probably a national podcast. Last year in 2020 we did a lot of TV commercials. We said, "Let's start with something that seems to have a high level of success, so there was two areas. Number one is California with the power shutdowns, right? Any time the winds get over 20 miles an hour, Northern California shuts the grid down to prevent fires.Stephanie:Oh, I know. I lived through that.Patrick:Yeah, exactly.Stephanie:I moved to Austin, and then a snowstorm hit. I'm like, "What the heck?"Patrick:Exactly right, right? We said, "Geez, if it's going to work, it's going to work in California first. Let's try that." So we did a really kind of cool TV commercial. We spent a lot of time walking customers through the versatility and just showcasing this product and saying, "Come to... " Then we hit them up with immediately social media messaging. We had a custom landing page where they could come to and just really say, "Chances are, you've never heard of this. Let me just explain and walk you through all the benefits this product provides."Patrick:We got them to sign up for emails. We were able to hit them with display. Then we mirrored some of that over on Amazon as well saying, "What we're doing at goalzero.com, should people choose to shop on Amazon because it's easy and convenient, let's make sure that a lot of that content is transferred over there as well." We also did the Gulf Coast, so Houston all the way down the Miami. We targeted a lot of TV ads there as well. It was a record year for storms, for things like tropical storms and hurricanes, and so we wanted to make sure that this is the people who are highly aware of power outages. Their power was out for a good portion of weeks on end in some cases for a good portion of the summer.Patrick:We targeted those two areas, and we had very specific metrics all the way through. Some of it was how much traffic are we going to drive to the website? Based on that traffic, what does the conversion rate and the AOV need to be in order for us to hit our sales goals? We worked closely with other agencies to say, "As we're planning this out, do you think we can drive this much traffic? What are the reasons or what do we need to do differently? What is the call to action?" Then we did a lot of AB testing.Patrick:We would have the full 30 second commercial, and then we'd cut that down into 10 and 15 second shorts that we can do a lot of YouTube and digital advertising with. We'd have five different variations that we could just go through and say, "This one seems to be driving the most traffic to the site. This one seems to have a higher conversion rate. Let's blend these two together and target those."Patrick:Long story, I think that it was a really cool experience. We learned a ton and I think the results were promising enough that we're excited to continue to push into broader audiences and more and more mainstream.Stephanie:Yeah. That's a really cool test. How did you think about attribution from TV, whereas YouTube, very easy running your 15 second clips on there, but did you have a certain CTA on the ads on TV to be able to go somewhere, or how did you think about tracking that? And what did that ROI look like versus just something anyone could get into, like a YouTube or yeah, direct advertising?Patrick:Yeah. We did a lot of it in just comparison saying, "Here's the geographic DMAs these things are running in. How does that compare to areas where it's not running? Do we see a lift over time?" And then just measure that. I'll give you an example. We took a look and said, "During the time these ads were running, what was the daily average traffic to goalzero.com from California?" Right? We said, "Oh, we saw a 300% increase." What was it on non-target DMAs? Oh, it was flat. We're down five. We can get some just basic looks at saying, yeah, it appears to have driven high levels of traffic.Patrick:From there, we went through and said, "How many of those people came specifically to our landing page that we had set up," which used power landing page. That was a good indicator of whether they were just randomly coming or were specifically coming because of this. In the case of the Gulf Coast campaign, it was nice because even within a specific state, there were some DMAs that got it and some that didn't. California was all of California. You had to make a few more assumptions about yeah, this appears to have really increased traffic over the control group.Patrick:But with the Gulf Coast we could say, "Well, geez. We hit Houston, but we didn't hit Austin. What are the differences between there?" We hit Houston but not San Antonio. So we could go through these specific DMAs and see lifts. It was a rudimentary kind of AB test that we learned a lot from.Stephanie:Yeah. That's great. What was your favorite campaign that you guys ran? Because I could see some really fun, creative ways to sell Goal Zero. So what kinds of things did you guys experiment with, or any fun campaigns that you're like, this is a good one?Patrick:No. I came from a highly analytical background, so when I took over the creative team, I was always like, "Well, we got to put numbers behind it, and we need to... " And that learning to embrace my creative side has been really cool. We ran a campaign for our 10-year anniversary called Ode to the Road where we went on a two-week road trip and stopped at all these cool places and produced a lot of really cool content. It was this traveling video blog, and we could follow along as you went. It was so much fun. I mean, you have to watch it.Patrick:It's just really cool people, really engaging content, and just again, it goes back to showing the versatility of what we can do and what our products could power. It's things like we set up Dometic fridges full of cold beer and ice cream in the middle of the Pacific Crest Trail. So people would be coming out of the desert after these long, arduous miles and they'd say, "Do you want ice cream? Do you want a cold beer?" It was like, "Oh my God, trail angels!" It was just fun, cool stuff. We had a massive outdoor dinner on the coast in Santa Barbara, and the entire thing, the grills, everything was powered by Goal Zero. Yeah, it's creative, cool, engaging content. It's a lot of fun.Stephanie:Wow. Yeah, that sounds really cool. I mean, that also just makes me think branded content, and it could be full on series, Netflix series is the way of the future. I mean we've heard from so many guests that organic and natural is definitely the way to sell nowadays, but also having your product integrated in a way that doesn't feel salesy. To me, branded content like that seems like the way of the future. Have you guys thought about exploring that even more? I mean, which also goes back to the whole companies turning into media companies and thinking that way now going forward. How are you thinking about that for the next couple years?Patrick:Yeah. Well, I think a lot of it is we're listening closely to the voice of the customer, right? One of the things I really like about Goal Zero and I really like about my job is it's just, there's surprises around every corner. Right? You'll hear these stories about, "Hey, I used Goal Zero to power this obscure, weird thing," that you just never even thought of. Suddenly, you hear that there's a ton of people doing this and you can start building campaigns and start building content around that.Patrick:One of the things we like to do is we'll run periodically a how do you Yeti. Yetis are portable power stations, it's been called. You get these great stories back of people being like, "You know what? I use it to power my insulin pump when I'm outside. Normally, it's prohibited. I can't be more than a couple of hours away from an outlet because I need the power for my insulin pump working. Now I can go backpacking."Patrick:We had a story on that Ode to the Road. A man was powering his prosthetic limb with some of our products to hike the Pacific Crest Trail. So I think you're right. I think there is a ton of stories that we look at and say, "How can we tell a story that aligns with our core values, that aligns with us as a brand, and then softly references some of our products in the background?"Patrick:It's mostly a question of is it authentic and is it engaging? And is it engaging to a mass of people? If we can answer those questions and then we can say, it has a loose tie to a specific product or to a group of Goal Zero products, then yeah, we're looking at producing higher quality content, more cinematic style content that we can then use on TV, we can use in a variety of ways. Then at a larger scale, we always partner with cinematic expeditions. So a lot of our ambassadors will go out and say, "We're climbing Everest. We need to power all of our RED cameras and power our drones and power all of the backup storage." Our stuff does that, and so we'll sponsor that movie or that Nat Geo episode or whatever.Stephanie:Yeah. I mean, I think that's also just much longer term thinking than quick hit campaigns and always having to think about adjusting ad units every single day and ad fatigue. I feel like sponsoring or creating content like that will have longer ROIs and could be relevant if you have them shot in an evergreen way for years to come, which I think is why it's such an exciting angle to be thinking that way.Patrick:I think for us, what we always look at is brand and category awareness. It's one of those things going back to what we discussed earlier, which is nobody knows what a portable power station is. It is a really long burn to get somebody to understand it, identify that they need it, and then pull the trigger on a very expensive item. We do, we go back and just realize that part of that brand building, part of that awareness is just, it's critical. We have a product that when people get it and they're like, "I need this," yeah, it clicks. But we have to continually get that word out there through really engaging, authentic content.Stephanie:Yep. Did you have to make any quick pivots when the pandemic hit? Because I could see in person, like you're mentioning, touching it, being able to pick it up, see how light or not light it is would be an important part of the sales process. Did you have to pivot to a different strategy when people could not as easily go in stores and maybe even now are still reluctant to go out and see it in person?Patrick:We saw a massive shift to online, for sure. Our partners were selling predominantly online. Our goalzero.com and Amazon increased dramatically. I think the biggest shift we had to make was just the unexpected surge in business. We didn't plan for 100% growth as a result of COVID, so our inventory was an issue. Kudos to our supply chain team. They were pulling in orders and doing whatever we could to actually get enough inventory to support it, and even then, we still ran out for periods of time, long periods of time.Patrick:I think that was probably the biggest thing we faced was it wasn't a lack of interest or people weren't willing to buy online. It was yeah, they easily transitioned and then we just managing inventory, managing expectations, how do we alert people that we're back in stock? Those are all things that we had to deal with as well as just managing growth internally as an organization.Stephanie:Yep. Did you have to change anything substantially around your inventory management and the logistics and the backend that now are completely different than what they were maybe a year ago?Patrick:Yeah. I think that we set up an allocation meeting between all the departments and just said, "Here's how we're going to look at this and make sure that we're trying to service all of our wholesale partners, make sure we're servicing our utility partners, make sure that when people come to goalzero.com, they can use Locally to find product or hopefully be able to buy it there as well."Patrick:I wouldn't say that it was a massive shift in how we did things, but it was a lot more focused. We would have meetings twice a week with the executive team specifically on that topic of are we servicing our customers to the best of our possible ability? I think that was just the amount of time spent, it used to be a monthly meeting, and now it was two times a week. So really, more than anything it was just the focus was always on, when's our next shipment coming? When will it arrive? When can we start selling it? When can we get this out to our wholesale partner? I mean those were very common conversations.Stephanie:Yeah. That definitely seems hard, especially when you're growing as quickly as you all were, to try and scramble. But I also think that now customers seem to be okay with things, inventory, maybe not having something in stock as long as it says it's going to be in stock this date. And you can buy it now and I'll ship when it's ready. It just seems like that messaging maybe was missing before all this where it's like, if I have clear expectations and I know when I could get it, I'm fine if it's not in stock right now. But a lot of times you would just try and order something a year ago and it just wouldn't be there and you wouldn't know why. And is it coming back? It was just kind of like a black box.Patrick:Yeah. We stubbed our toe a bit on customer service side of things. So Goal Zero, we measure NPS religious. It's just something that we really hold near and dear. We have best-in-class NPS. The last few years we've averaged about 70, which is Costco, Apple, in essence, leading NPS levels. A big portion of that is our solution center. People can call in, ask questions. And just the inundation of calls, it was taking half an hour to answer the phone. So having to rapidly staff up as well as just implement new technology, the ability to have customers leave their number and we would call them back when they finally met their queue.Stephanie:And changing...Patrick:Changing the verbiage on the website saying, hey, our call center's completely swamped. Can we chat with you here? Can we answer you in an email? There was just a whole bunch of things that we had to implement very quickly and very effectively because just the unexpected volume that came through was a bit shocking.Stephanie:Yeah. I mean that's cool to think about how you guys pivoted, though, to just send customer service requests in different directions depending on where the resources were strapped at, which I think a lot of companies still need to do that or even just a simple, "Let me call you back," type thing, as long as you call back.Stephanie:Now that you're out of scramble mode, what are some of your favorite things that you're testing out right now? It can be around the website. It can be around logistics. What are you most excited about where I think this could have big results on conversions on reducing the 90-day sales funnel, but we're not sure yet?Patrick:Oh, totally. Yeah. I think there is endless opportunity. I think it's not a matter of opportunity, it's how we prioritize it. What is the biggest bang for the buck? We're actually in the process of re-platforming right now as we speak. Patrick:I think the thought process there is we have the ability to... We're currently in a lockstep environment, so we have to outsource all of our dev work. It's just, it's slow. I think we want to be a lot faster, a lot more nimble, and the ability to go through our funnel and make sure that we are converting at the best possible rate is a key strategy for 2021. Right now we have a group of executives, my ecom director, and some of my senior staff all focused on how do we explain our home energy storage, right? Because, it's complicated.Patrick:I think, Stephanie, you said, "I was in Austin. I could've used your stuff." But if you would've come to the site, you would've been like, "Geez, there is 40 things I can choose from here. What's the right one for me?"Stephanie:Yep.Patrick:The questions we get all the time are, "What will it power and for how long?" On a singular item, that's easy. Oh, this will charge your cellphone three times. This will run your full-size fridge for a week. But when you start putting in mixes, hey, I want to run my fridge. I want to run my kitchen lights. I want to run my ceiling fan. There's all these circuits you can wire in or hard wire into your home. Now you start complicating things and making a very complex process.Patrick:So we'll go through that process of saying, here's all the things that a conservative user can power for how long and this is the kit for you, all the way to hey, if you want to just live high on the hog with power usage and not conserve at all, yeah, here's the kit for you. There's various myriad of things in between. It's a complex, complicated conversation that is very easy in store. It is very easy at a trade show. It's really hard online, and so we spend a lot of time thinking about how to best say that.Stephanie:Yeah. I mean, it brings me back to my Google days trying to think about how to explain how much storage people need on phones or what that looks like and talking more technical terms of how much storage you need. No one knows you need this many gigabytes, this many. Who the heck knows?Patrick:Totally.Stephanie:Versus you could say, "This'll hold 20,000 pictures and all the podcasts you could ever download," or whatever you want. That's when you're like, "Oh, okay. I'll just choose that," or I don't need that much. And putting it in more layman's terms or just pictures, I can imagine you just being like, "Steph, you can power your whole house if it's under this square feet and you have this many appliances and you're good."Patrick:That's it.Stephanie:I'm like, "Okay, great." I just want to just know that and nothing too technical.Patrick:That is absolutely it. On the flip side, there is absolutely people who want to get crazy in the weeds. Some of our engineers, because we bring them into the conversation, they're like, "Oh, this is not enough data. I need to know exactly the watts and the amps and the voltages." They're dissecting everything. Then there's me, who shows up, to your point, I'm like, "Just tell me what to buy. I want it and we're good to go." So we have to find that balance of providing both customer types, both shoppers the experience they're looking for.Stephanie:Yep. You're just like, "Will this run my kegerator?"Patrick:That's it, yeah. After I get done skiing, will my beer be cold?Stephanie:Yeah. That's all I need. That's all I need in life. That's cool. Are there any other big things like that that you're also focusing on other than the messaging? Which I think a lot of brands struggle with that, especially as they approach something more technical or when they're trying to... We've heard a lot of them talk about the difference between selling your mission and selling your product. How do you think about that and all that, so it's definitely a theme that I've heard. But is there anything else that you guys are working on that you're excited about?Patrick:Yeah. We've got a couple big initiatives. I think the next one is looking at how we target potential customers and really getting deep into the not just demographic but psychographic conversation. Our current customers I think we have a really good understanding of. And our ability to target them, to message them, to find out how and where they're shopping, why they buy our products, I think we do a reasonably good job of.Patrick:People who are not in our current sphere but are absolutely looking for our product, we got to get better at saying, how do we speak to these people who may not be on social media? They may not be Amazon customers. How do we find them, engage with them, speak to them? That's a big push for us and something that we're spending a lot of time on. Some of the other things we're looking at is, again, expanding our mass media campaign, doubling down there, continuing to push TV, podcasts, radio, billboards, just getting on a broader level again all through this kind of brand awareness.Patrick:Then lastly, we're coming out with a new content series, to your point. Super high-end cinematographic-type shooting and camera work and really robust, engaging stories that we're excited to share with our customers.Stephanie:How do you think about selling on Amazon? Because to me, people who are on there, they get a much different experience versus going on your website, they can go through all the video series and really get in with your brand and go from start to finish in probably a better way than when you're on Amazon. And you're clicking around and browsing, and you've got competing products all around you. How do you approach those two different platforms?Patrick:Yeah. That's a recent discussion for us. Historically, Amazon is always an afterthought like, hey, we're just going to throw our things up there and people who want to shop on Amazon could shop on Amazon. If they want to buy from Goal Zero, that's where they're going to find the rich content. That's where they're going to find all the great stories and the great videos. We're going to send them to retail stores where they've got experts. So Amazon was like, yeah, we'll put it up there. And for the people who want to just type in Goal Zero, buy our product, we're there.Patrick:We went and did a sizing exercise, and we said, "What is the size of the power station market on Amazon?" It's grown tremendously, significantly. We said, "Well, we got to start playing here meaningfully." So this year, specifically, we're doing a lot of work around top of funnel. Can we look at attracting customers and making them aware who are starting their shopping process on Amazon? Normally, what we're saying is, "Start it via TV, PR, trade shows, goalzero.com, and then eventually come and transact on Amazon."Patrick:We're saying, "We want to actually find people who their very first search for backup power or home resiliency is on Amazon." Attracting those people and then working them down the funnel, I think that we're a premium product. Amazon is a marketplace that really stresses on lower cost value products. So what we've seen is we're really good at driving the traffic and we're really good at converting the traffic. Where we get stuck is in that middle phase, consideration phase, where people are like, "Well, geez. There's 25 different power stations I can look at." And we convert some of them, but some of them get spun off into competitors.Patrick:I think one of the things we're looking at is saying, how do we actually take that middle consideration phase and almost eliminate it? Can we bring people back from Amazon to goalzero.com, where they learn without all the noise of the marketplace, the myriad of ads, and have them really get the full Goal Zero experience, see our differentiators, see why we as a brand have succeeded, and then bring them back to Amazon to convert.Patrick:I think that in conversations with Amazon and just around, I think that's one of the things that premium brands struggle with across the board is geez, we're really good. Our content's good enough to capture them. Then people who see the premium differentiators are going to buy. It's that consideration phase where just you lose a lot in the shuffle. That's our focus is make them Goal Zero diehards before they actually are ready to convert on Amazon.Stephanie:Yep. It does seem like Amazon's also changing when it comes to customer expectations of going there and being ready to buy more expensive products. I mean, I do think back in the day, like you said, you would just go there and just be like, "I just want the cheapest commodity type good. It's probably on Amazon." And now I mean Amazon's selling high-end furniture and live plants that are really expensive.Patrick:Totally.Stephanie:It seems like they're shifting their customers. They're adapting to their needs and being ready to sell higher end things, which to your point, is maybe a great place to start when it comes to getting the people right where they start searching in there and then targeting them afterwards to get them to convert in either place maybe, as long as they just don't lose sight of why they were looking for, potentially, your product to begin with.Patrick:Yeah, no. I agree. I think Amazon is making a concerted effort to not always be the budget brand or the value brand. I think that from my own personal experience and just talking to consumers, sometimes you get burned on Amazon. You'll go and you'll buy a product because it's the cheapest, and it's a knockoff or it doesn't work, or there's no instructions, or there's no customer services. It's just a poor experience.Patrick:I think Amazon is recognizing that and saying, let's make sure that it's not only price that's driving the flywheel, that service and that credibility and that it's going to be right the first time is there. Because they're super focused on customer service, and these bad experiences are bad for them and bad for the other brands on the marketplace. Yeah, we've had that engagement and that conversation with Amazon, and they seem like they're willing to help us as a premium brand reach our goals.Stephanie:Yep. Yeah. I think when talking about credibility, to me user-generated content is a big part of that, of being able to go on Amazon or on your website or social, literally wherever you are, seeing someone who looks like yourself maybe or reminds you of your situation. And being able to see them having that product is exactly what is needed, especially for a product that's maybe harder to sell, that's more technical.Stephanie:If I saw someone like me, single mom, three kids, living her best life, but then needs something like that, I'm like, "If it's good enough for her, it's good enough for me." I think that's the way of... Amazon, I think, is trying to head in that direction, but I still think needs more help when it comes to encouraging people to continue to post their organic photos in a way that's going to help your brand sell.Patrick:Yeah, no. I agree. We've just started dabbling into driving traffic to Amazon with influencers, right? Normally, we drive them to goalzero.com, again, going back to the fact that we just have a much better experience on goalzero.com than we do on Amazon. But if we can take people who have big followings of trusting people that say, hey, this is why I use Goal Zero, this is how I use Goal Zero. There's videos, there's content. It's real.Patrick:They're actually using it and then we drive the transaction to Amazon. That seemed to be a good way to bypass that consideration phase, like get them adapted in saying, yep, I'm absolutely buying Goal Zero because it reflects my core values, because it aligns with who I am as an individual, absolutely.Stephanie:Yep. Have you seen higher conversions or did you do any split testing between having an influencer drive to your site versus to Amazon? And did you just see higher conversions on Amazon, I guess, because that's a platform that everyone recognizes, you trust the shipping on there? Is that what you saw, or did you see something different?Patrick:No. The campaign is actually just starting, and so the early read is yes, we are seeing that we can effectively drive consumers at a less expensive rate to Amazon. They're going to convert at a higher level than what we've seen in the past. We're not doing an A/B test per se, but if our conversion was X percent, it's now gone up by three or four or five points.Stephanie:Yep. Yeah, okay. Very cool. Then how do you think about interacting with your customer if they came from Amazon versus if they came from your website and they are much more knowledgeable already about your brand and your mission? Do you approach those customers in different ways?Patrick:Yeah. That's a good question. I think that we definitely approach customers in an educational standpoint, meaning if you know exactly what you want, you're a lifelong Goal Zero fan, we're not going to talk to you and force you through this funnel of education and learning about the brand and all our differentiators. We're going to fast track you right to the buy box. But absolutely, we've increased the number of videos. We've increased a lot of our A-plus content, and we're actually going through and just really talking about our differentiators.Patrick:I think one of the things that we got caught up in was trying to play the Amazon game, right? As premium brand, we'd be like, "Well, let's keyword stuff our titles, and let's try to figure out how we're going to drive thousands of reviews," and all these things that you just felt you had to do on Amazon. We took a step back and said, "All of the stuff we do for goalzero.com is going to absolutely work on Amazon. We just have to do it the same way. We have to be ourselves and be authentic to our brand."Patrick:We stopped talking about keyword stuffing and started talking about hey, we're designed in the USA. Our offices are in Salt Lake City. We give back 5% of our profits to humanitarian efforts. Come check out our social impact and what we stand for as good citizens and stewards. We started talking about who we are, why we're premium, what we are and what makes us different from the rest of the competition, specifically on these budget brands on Amazon. And we're starting to see improvements to...Patrick:I think more than anything, I think just we're getting back to doing what we know how to do, which is really good marketing and just applying that really good marketing to Amazon versus trying to be like, "Let's say it completely different and be this whole and weird alter ego on Amazon," and just getting back to our roots. I think I'm proud and I'm happy of where we're heading.Stephanie:Yeah. That's a really good reminder, too. Yeah, get back to your roots and not get caught up in the frenzy of the platform. I mean yeah, I'm thinking about the certain listings on Amazon with the titles of so many keywords, and you're like, "Wait, is this the newest iPhone cover or not? I don't need to see every single iPhone that's ever existed since 2000." Yeah.Patrick:Totally.Stephanie:A good reminder for anyone, large or small companies, to stay grounded and focused on what your goals are and not get caught up in the platform.Patrick:Yeah. And it's easy. You're like, "It's Amazon." It's going to make or break you. What we found is Amazon, fortunately for us, Amazon has always been a small channel for us. It's never been a primary channel. Our wholesale, our utility, our goalzero.com are all significantly larger. The ability to come back to center on that is easier than if you are an Amazon brand and 90% of your revenue is flowing through there. I can imagine it's a very different conversation, but my recommendation is absolutely, stay true to your brand and do the things that got you there in the first place.Stephanie:Yeah, I love that. All right, let's shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I ask a question and you have a minute or less to answer. Are you read, Patrick?Patrick:I hope so.Stephanie:All right. What's the nicest thing anyone's ever done for you?Patrick:The nicest thing anyone ever did to me was early in my career I got a bit of advice that has helped me throughout my entire journey. It was the CEO at Orvis, and he said to me, "Success is easy when people want you to succeed." I've built my entire career around that saying, how do I add value to myself, to the organization, to everyone around me in a way that makes a lot of people's lives easier, makes people lives better? If I can do that, then yeah, success just comes naturally. That bit of advice has stuck with me for 20 years, and I still, I think about it daily.Stephanie:Okay, that's a good one. I like that answer. I'm going to start thinking about that too in my daily walks of life. No, that's great. What's one thing that you believe around ecommerce that many wouldn't agree with you on? It can be a trend. It can be something you're bullish on right now. Maybe you get pushback from your current CEO.Patrick:Yeah. Yeah, no. I don't know if a lot of people disagree with me, but I think there's a tendency to have a hard time differentiating between common practices and best practices. For me, a common practice is something that everybody does and it's just easy to say, "Oh, we should do that too. We should absolutely have an email signup box when the popup the second you come to the homepage." I hate those comments. I always say, "No, let's test it, make sure it's right for us." Sometimes they are and sometimes they're not. I think that making it a best practice means it has to be for you and your business and your company and the ability to differentiate is really critical to success.Patrick:Secondly, I would say there is no magic bullet. Success in ecommerce is a ton of elbow grease. It's a constant hustle and just always working a little bit harder and a little bit better. Because there's no technology, there's no new platform, there's no new nothing that's just going to solve all your financial troubles. It's elbow grease.Stephanie:Yep. Yeah, that's great. If you were to have a podcast, what would it be about and who would your first guest be?Patrick:If I were to have a podcast, it'd probably be something outdoors, skiing, fishing, whitewater rafting. Let's see. Yeah, I think my very first guest would probably be Steve Rinella, and we would talk about hunting. I think we would go and talk about the nuances of it. Not the harvesting of animals per se, but the higher level just headiness of it, like how you be able to get out there and become a true conservationist, to truly explore nature in a way that's just so much more intimate than going for a hike with your dog. It's a really cool experience, and I would love to just pick his thought on it because he aligns with me.Stephanie:That's great. I know nothing about hunting or any of that, so I would for sure listen to that episode. What's up next on your Netflix queue?Patrick:Oh, geez. I'm probably way late to the game, but we've been watching two shows. I think the first one is Outlander. It's like this woman travels through time in Scotland and it's a cool story. Then the other one is just more comic relief because it reminds me of my big Irish family. It's called Derry Girls.Stephanie:Okay. I have not checked out that one yet. That's great. All right. Then the last one, what one thing will have the biggest impact on ecommerce in the next year?Patrick:In the next year or long term? I think-Stephanie:In a year.Patrick:In the next year. In the next year, I think just the shift... The aftereffects of COVID are continually forcing customers who were brick and mortar to jump into the ecommerce space. I think that's going to drive competition. It's going to drive awareness. It's going to elevate the whole ecommerce world. I think that it's going to be a big push, and I think that we're going to see people realizing that you have to be on ecommerce. You can no longer be solely a brick and mortar. Now, you can do both, but I think that's going to be the biggest thing we see in 2021 is just the continued rapid growth of ecommerce as a whole.Stephanie:Great. Patrick, thanks so much for hopping on the show with me and spilling all your secrets. It's been really fun. Where can people find out more about you and Goal Zero?Patrick:Yeah. Go to goalzero.com. I have a bio on my management page, and you can also find me on LinkedIn. Yeah, I think that's the best way. Thank you for having me. This has been fantastic, and I really enjoyed the chat. Hopefully, we can, post-COVID, go skiing and have a beer.Stephanie:I hope so. I would be so down for that. I need that in my life right now. Thanks so much.Patrick:All right, thank you.

Ecommerce has come a long way from its early days as a separate part of the company that you set up and just hope to see returns on. Now, ecommerce is pivotal for just about every organization — but there is one faction of businesses that still lags behind. There are $17 trillion dollars worth of B2B payments made every year. Yes, trillion with a T. And half of those payments are still being made manually. Clearly, there is a massive shift that still needs to happen in the B2B space, and Deloitte Digital is helping make those digital transformations a reality.Paul do Forno is the Managing Director at Deloitte Digital, and on this episode of Up Next in Commerce, he helped us understand the struggles B2B brands are facing and how moving them into the digital space could spell a massive change in the ecommerce industry. Paul also dives into some of the major trends he’s keeping an eye on in the ecommerce world, including how ecommerce continues to scale around the globe, most notably in Latin America. Plus, he shares some tips for businesses who are overwhelmed by the amount of channels and platforms they suddenly have to play in. Spoiler: he says do less. Tune in to hear more!Main Takeaways:Massive Call And Response: Bigger brands are struggling to stay connected to their consumers in a way that scales. Today, customers are looking to have a more authentic relationship and connection with the brands they engage with and support. For enterprises, connecting one-to-one is nearly impossible, so they are investing in tools like A.I. and conversational platforms to keep up with this newer generation of customers who crave connection.Dinosaurs Still Exist: So much B2B activity is still done manually, which means that there are trillions of dollars of transactions that could be moving online if/when B2B companies finally shift their activities to the digital space. The problem is that many B2B companies are miles behind their B2C peers in terms of optimizing the digital space for their many personas. It will take a lot of tools and transformation to bring those traditional B2B companies into 2021, but it will be necessary because the next generation is not interested in manually doing business and would much rather work with companies that have effective digital tools.Do Less: Brands can get caught up in the hype and the attempts to keep up with the Joneses. Instead, they should focus on being great at one platform or marketing activity. Plus, it’s critical to never forget the basics — like making sure your email list is generating the leads and engagement it should be to power your business.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone and welcome back to Up Next in Commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Today on the show we have Paul de Forno, the managing direction at Deloitte Digital. Paul, welcome.Paul:Thanks. Excited to be here.Stephanie:I'm excited to have you. I was looking through your background and I saw you were on a list of the hundred most influential people in ecommerce and I was like, we need him. We need Paul. Why do you think you got on that list?Paul:I think first of all, in some ways I'm the old guy who's been around carrying the ecommerce flag for a long time, so I've been doing ecommerce for 20 years. When you've been around that long, 20 years ago it was, trust me, ecommerce is going to be big, honest. Most of the big companies just looked at me and said, "Yeah, it's just a tiny percentage. We don't have the time to focus on it." I've gone through the whole lifecycle from, "Yeah, I don't think ecommerce is going to be big," to, "Oh my god. What are we going to do? Everything is ecommerce."Stephanie:Yep, what did your journey look like? What have you worked on over the years, and then what does your role at Deloitte Digital look like now?Paul:Yeah, I've had some pretty interesting projects all along. We help customers at Deloitte, we're one of the largest implementers and SIs all the way from strategy, studio design, implementation, and run ecommerce and digital platforms. Kind of soup to nuts, end to end for some of the largest Internet retailers both B2C and B2B. My background, I've worked with some of the largest retailers and brands in the world, getting them online, selling, and also supply chain and connecting up all of those things.Paul:I've had the great experience of 20 years ago working with some of the earliest big retail brands of them ... It's kind of funny, when they first started, they treated ecommerce like a store because at the size that they were, on some of them, they were like ... And literally, they would call it store number 1099 and that's the way they treated it almost like a completely separate channel over the to the side. Yeah, let's put some money over there and grow and then see what happens. That from over time, then it became more of a challenge of omnichannel.Paul:How do we make sure that the channels aren't fighting against each other because we dealt with some retailers that literally would ... They wouldn't want returns to come in to the store because those sales and we're not getting them credit, right? That came back and if they exchanged for something else, and so they would be internal fighting because the bonuses of the executives weren't aligned. We've gone kind of like it's off to the side, it's big enough to challenge, to now it's almost the reverse. Retail wants to get more love from the ecommerce side.Stephanie:Yeah, it's a funny and an interesting flip that we see. We've had some guests on the show who said the same thing, like when I started out in ecommerce, they had us in a different building, like on the campus that they were at, they're like, that's the ecommerce team, they're doing their own thing. We've had a couple people say how siloed they were and now, like you said, interesting how retail is like, come on, come give us a little love now.Paul:Yeah, exactly.Stephanie:When you're looking through all these trends that are happening right now, I know that back in the day you were going to a lot of conferences, you were flying all over the world probably, and now I see and follow you on Clubhouse. Tell me a bit about how you're staying on top of the trends and what kind of things are you discussing now on Clubhouse or wherever else you're doing these virtual events?Paul:Yeah, I'll maybe separate ... Definitely right now as we're speaking it's almost a year to the day that I haven't been on a plane. In the last 20 years, over a 100,000 to 150,000 miles a year that I've been flying around.Stephanie:Oh my gosh.Paul:One, my wife has gotten to know me.Stephanie:Hi, Paul, nice to meet you.Paul:But, it's given me a lot of opportunity to connect digitally and do more research and some of the new tools, like you talked about, Clubhouse, and I'll come back to that. I think what this has just done is accelerated ecommerce and how important that is and commerce everywhere and brought it forward, and there's a lot of interesting trends that have popped out. Some of the things that may not be as evident, so in the past year, one of the biggest growth areas just for convenience has been around the growth of commerce around groceries, because we had to, right? You got a lot of the biggest stores growing and anywhere from 70% to over a 100%, and so a lot of the innovation has happened in groceries because it needed to, right? The companies that invested more have done well.Paul:For example, if you look at how Target has done, right? They were able to stay open because they had groceries and so they actually grew and were more profitable and a lot of that why they grew was their investments in shipped, a number of different way they pick from their stores, and so it's amazing that not only did they grow that much but their profitability on the ecommerce channel went up which is almost unheard of in a time like this. They executed unbelievably well.Paul:Then on the other side, another interesting related to the grocery which kind of because it forced people to try something new, the largest growing segment on online grocery was actually baby boomers, and it's because they never were forced to do it. They were always used to going to the store, and so we really see that as a watershed moment of hey, to get over the hump, hey, this isn't as bad. Then as soon as you try something and you do it a couple times, it's going to change how people behave.Paul:we expect the adoption rate going forward for boomers, for example, and older will continue. It won't necessarily be at the same rate, but is an important threshold that they'll continue to embrace it.Stephanie:Yeah, I agree. All right, so when thinking about these new consumers who are online who weren't thinking this way before, how are you advising brands to communicate and talk and do things differently? Because it is such a different generation coming online. We've had quite a few people mention you have to think very differently when it comes to customer service or even the whole unboxing experience. People want different things. What are you seeing among your biggest brands right now around what's working to connect with this brand new group of users who are not online before?Paul:Yeah, there's a whole bunch of battling trends that are in here. In fact, on Clubhouse we had a discussion around the eco considerations of delivery, and that got into we brought in a packaging expert and one of the interesting thing that we talked about is that, hey, everybody has all these cardboard boxes, right? People would love to find out opportunities to minimize what kind of packaging and we all probably had the experience of getting a huge package and having one little item in it. I think the whole consideration around eco and environmental is something that I just saw some research, that's at the top of the list of considerations.Paul:Things such as that and packaging and reducing it is a factor of when you're designing for stuff. Looking for opportunities that you can batch up or minimizing the packaging or making it recyclable and also balancing having a great opening unboxing experience, and so you have to balance those things, right? The environmental side and also the brand side, which is hey, the expectations of brands such as Apple put on, on this hey, you want this great experience in opening. There's a lot of non ... Things that you didn't have to worry about even 10 years ago because if you look at some of the studies of what gen Z and beyond are looking for, those considerations are much higher up than they were for other generations.Stephanie:It definitely seems like it can set up some of the newer based for failure though because it seems like you always have to stay ahead and be trying something new where it could kind of take you off your path of building a great product and a great company when you get too focused on some of that stuff. How do you think about the trade-off to stay focused but then also stay on top of consumer expectations that seem to have very rapidly changed in the last year where I wasn't really hearing a lot of consumers talking about eco-friendly packaging and really caring about that, and now it seems like that's a huge thing that we're hearing time and time again about this is a new expectation that you have to keep up with now.Paul:I think a little bit about it is around just the how do you be authentic brand? In many ways, some of the trends that we've been seeing is around less production, right? Some of the advertisement or even things that are helping to actually convert much higher are actually user-generated content that people in authentic ... You want to see how real people act, real people and real products, as opposed to a runway model or a runway person showing off this great ... Because of that, first thing we would say is try and be authentic to your brand and especially right now the over-production is actually a hindrance on many brands.Stephanie:For some of the larger brands you work with, I mean, I could see that being hard for them to want to keep up with the times but then also staying authentic to your brand. Like you said, I know it has gotten some companies in trouble for trying to do the cool thing, keep up with whatever that trend is, try and jump on something. When these big brands are coming to you, what are they struggling with right now and how are you working with them around this new UGC kind of content that a lot of these smaller D2C companies are like, yeah, of course, that's what we're going to do, but when it's a large company, they're like, I don't even know how to do that and how do you flag it and how do you think about the content coming in. Can I even trust it? How are you guys guiding them down that path?Paul:I think that for many larger companies in many ways it's kind of a how do you manage dealing with this on scale? Because in some of the smaller brands, dealing with a few interactions, it's somewhat easier, but when you have thousands and thousands of followers, how do you manage that on scale? What they mostly get concerned of, they want to be closer to the consumer and listen to them and interact, but being able to scale that in both a combination of AI related tools and responses, but also people responses that can do it in scale that are tailored to the brand voice, that's the challenge. We kind of work through different strategies to help them get through that.Stephanie:What are some other things that these brands are struggling with? What are you hearing right now that they're trying to work with you on?Paul:Yeah, and we work with brands both from B2C to B2B, and so I'll actually give two examples just to get a broad spectrum. On the B2C side, I think the ... And depending on the different segment. The B2C side on CPG we're seeing massive spikes because of all the purchases that we've seen especially going through stores, and that's a lot of the food, CPGs are just spiking. They're trying to figure out, okay, great. This is a great opportunity to scale. How do we now embrace and engage and maybe put out some direct to consumer feelers to learn?Paul:In many ways, a lot of the CPGs are going way more direct. Some of the largest scale CPG companies are doing record numbers of doing ecommerce, but they also partner with massive retail chains. They're trying to balance of not stepping on their channel conflicts, and so many are using ecommerce as a mechanism to explore, do special arrangements, special formulations, and learn and get data. As we see, for example, in that area is just there's been so much innovation going on, they're trying to keep up to the pace. They struggle with, well, what do I do first? How do I prioritize on some of these? Most of it is around helping to prioritize and segment some of the ideas to get them into marketplace faster.Stephanie:Trying to keep up with what's happening really quickly, I've seen a lot of them acquiring these smaller D2C companies and kind of putting them in a mini innovation hub where it's like we don't want to disrupt your process but we want to learn from you. Do you see that as a successful strategy for some of these more legacy brands to be able to learn while also keeping their brand identity or is that not really working?Paul:Yeah, I've seen some awesome acquisitions and unbelievable great talent that some of the large ... Just to stick to the CPG space, that's been probably the most aggressive of picking up new brands and learning, right? I think it's actually a brilliant ... That's why some of the premiums are getting paid. It's not just necessarily for the product and what margins, it's also from the know-how, because what ends up happening if you look, and this is something that that's probably the area that Club CPG on Clubhouse is probably one of the largest clubs and they have an amazing talent there, and there's been a number of acquisitions and they're on there talking about their story.Paul:What's really good about doing some of those acquisitions is these people have been very close to the customer, right? They've really interacted, as opposed to you're getting perhaps a new executive who's rotated around, right? These people understand the customer and had that relationship, had to build up the D2C. They really know all the different channels. They're able to provide that voice to the customer and how to go direct so much more. I've seen it be really successful and understand especially some of the early purchases that they've made. It's actually worked out really well, more from the people experience than even the product.Stephanie:It does seem like you can lose sight of that the larger you get, especially the more data you're getting. It's hard to get as informed and be able to actually find trends or themes. When you're working with a lot of these companies, what is your measurement of success when you're like, okay, we are going to transform this company. We're going to bring you guys to 2021 and what's relevant now. How do you look back and see if a digital transformation was successful?Paul:First of all, it's important that we judge success by the way companies measure their success. When we work with different companies, we try and understand what are their outcomes of success and their success can be ... The first thing you think, how much revenue did you grow? But some might not be. If it's a new brand and they want to get out there and they're trying to change their positioning, their goal might be a number of stories that got out, building brand awareness, changing the perspective, and so we always start with making sure that we understand what are their key outcomes and then provide some guidance on how do you get to those key goals.Paul:Looking at from a digital perspective, kind of like as I was saying before, it's also important to have an understanding of the voice of the customer and the sentiment. It's one thing to say what people might ... When you interview them. It's almost more important to see what they actually do, right? And using different tracking NPS scores, using different ... Looking at the data of actual purchase stories and mapping it onto example profiles. That then provides much more of a richer ... Even from compared to people say what they do is different than what they actually do and looking for actual intent in what they've done, and so making sure we're getting the right data is really important as well.Stephanie:Even if they have a lot of different outcomes, it seems like the solutions that you could bring to them could be kind of similar though. From what I've heard, there's a lot of decentralized processes going on, so you need to figure out a way to pull them all in and reduce your crazy marketing tech stack. Have you seen that on your side too that people might have very different outcomes but right now a lot of people have similar solutions or the solutions that you're presenting to them are kind of the same things?Paul:Yeah, in many ways some of our ... What we do to help customers in some ways is to help ... There's probably so many voices in the room and so many stakeholders is how do we help them bring them together and help to prioritize and to facilitate that conversation? Because that's the real hard part when you're dealing ... If you just have your own one product and your own single [sheet] you can make a decision and go.Paul:When you have hundreds of product lines and executives around the world and how do you facilitate the discussion, that's really what we help to do. Be it similar strategy to other companies or not, you need to help bring the internal alignment, and that's sometimes the hardest part because once you get to execute, many companies can do that. The harder part is how do you get agreement and prioritization with the different stakeholders.Stephanie:What kind of advice do you give for anyone who's struggling with that right now? What do you guys do to gain that alignment and have a go forward plan?Paul:Number one thing is start small and try something. You could spend forever talking about it and don't be afraid to fail. Get something in the market. We try and do agile sprints, and so from a development perspective we've been doing agile for a long time but we're also pushing into doing agile marketing so that we get into the same kind of feeding into that, so that okay, let's get something out there, let's try it, learn, and then from there go through the experiment, prove it, or make the changes and then scale, and keep that on an ongoing basis and trying to institutionalize that that it's an ongoing, you need to keep ...Paul:That's the business and how do you keep rolling that, because before when ecommerce was quote unquote more of a side business, it was more of a set it and forget it. Well, let's set it up. We'll set up the implementation, then we'll look at it, we'll make some changes every once in a while where now your core commerce business is your lifeline and some businesses it's over getting to 50, 60% of your overall business. You need to continue to change the priorities and especially as all of the changes that have come down the line from Facebook, from Google, is changing your whole marketing strategies.Stephanie:What about from a B2B perspective? I know earlier you said, okay, we got these two different viewpoints. What do you see in the B2B world? Which sometimes gets forgotten. We don't have many B2B people on the podcast very often and it'd be interesting to hear what does that side of the world look like.Paul:I've been focused more on that in the last year or two because it's such a big growing area. Just to lay the land, to understand how big B2B is, from a B2B perspective, just in the U.S. there's $17 trillion dollars of B2B payments done.Stephanie:Wow.Paul:That's just in the U.S. Right now-Stephanie:That's massive.Paul:It's completely massive and half of that is done manually. Meaning, if somebody writes a check, they send the check off, it's wired. It's not done digitally, and so when we talk about B2B commerce, again, people right away think B2C, it's just about the order, but actually when we talk about ... Or, the other myth or misconception that frustrates B2B people is, well, if just make it a cooler screen and easier to use on the web, then you'll be better, right? Then those are the myths and putting lipstick on problems.Paul:if you actually look into what the B2B challenges are, number one, many B2B purchases are very complex and there's many personas. It's not like, hey, I like this shirt, got it, they converted well, I've optimized, I buy it. Some of these deals are million dollars, half a million, and you need to go to procurement, you've got the business, you've got the people using it. It has to go through an RFP process, you have to buy versus ... Right? It's so much more complex on the number of personas, that's an important thing. There's no quick, easy, CX solution. Not to say that CX isn't important, but it's not like B2B. The first thing, if you start from that premise, that helps.Paul:Then the bigger pieces is traditionally how B2B sold was handshake over lunch, right? Traditionally, middle age guys shaking hands and "Hey, let's do this deal. There we go," and the last thing I want to do is look at the damn website, right? Well, obviously we know that's all changing and last year was the big thing in the workforce, millennials are now the largest part of the workforce. Guess what? Many of those, it's not all men. They're retiring at a very fast rate. Your expectation of your sales people are hey, where are my digital tools? When you talk about B2B commerce, it's about what are all the digital ways to interact, to be easier to do business with as you sell?Paul:In fact, what ends up happening is the top three things that people like for B2B commerce is order status, product information, and just doing a quick re-order. When you look at that, it's more about, hey, how do I make my life easier interacting with my customers? That's just important to understand the difference between B2C and traditionally on B2B side.Stephanie:What kind of opportunities do you see in the B2B world then? Do you see any new innovations coming about? Obviously having a platform that can meet the needs of the customers and to me it seems like it has to be personalized depending on what the business is and how your customers order, but what do you see right now that could be coming in the next couple years to help B2B?Paul:Well, kind of seeing where B2B is in their lifecycle, and so in many retailers, they're now onto their third iteration of a platform from B2C, and for most B2B, they're on maybe their first or they haven't really, right? Many of the B2B clients we're dealing with, oh, we put something up in 2004 and we've just been living with it and we still have to use IE to access it, and so we're dealing with web 1.0. They can't get it on their phone, and so a lot of it is just we need to make it easier for them and looking for ways to make the sales person's life easier.Paul:In the analogy of how B2C commerce is trying to be omnichannel, on the B2B side, it's helping your sales person and CRM. The lines between CRM and B2B commerce have blended together and it's really a tool to help the next generation business person to, hey, all my follow-ups, my data, you might get leads. Did you know your customers are looking at your products? You'll get that lead information, and so that you can follow-up with them or hey, have you deferred ... How many times has the business guy gotten a call? Hey, where's my order? I haven't got it.Paul:They end up spending half their time, and so the other big learning that we've got because it involves sales people so much is that you have to include them early and often during the process. For example, we had this happen one time. We had a customer come to us and say, "Man, we just spent all this money on this great new ecommerce platform for B2B, and we're just not getting the adoption." A couple lessons learned and they asked us to come in and do an assessment. We went in, we started talking to the customers and the customer said ... We ended up hearing this three different ways.Paul:The customer is like, "Oh, man. I love Joe. He's my best salesman, but he told me that if I put my sale through the B2B commerce, he's not going to get a bonus so I just called him to make sure he got his bonus." It's like, oh my god, of course you need to get the sales persons incentives align such that they don't get penalized for using the website, and that was like, oh yeah, that makes sense.Paul:Also, you want the sales people to be ... You want them to evangelize and get them to embrace leveraging it. That's such a key ... That change management in B2B and getting your sales people involved is super key for success.Stephanie:Yeah, which seems like it's a big training aspect to it too, make sure that they fully understand it to where then they can essentially sell the customers on using it and can act as customer service as well, because I'm sure their customers can be like, "I don't know how to order it on here," and if the sales person is like, "I don't know either," that's a big red flag. Are there any other hiccups like that that you've seen either in B2B or B2C where companies are like, oh, this isn't working. This new platform that we're using isn't working and you're like, well, let's talk a little bit about how you guys even thought about implementing it and you left out a big piece like this. Any other stories around that?Paul:Yeah, and number one it's always about ... It's so important getting the voice of the customer and getting representative people early on to provide input and feedback, because what ends up happening is if you don't listen to ... And we've had examples of rolling out systems trying to solve for what we thought was the problem but it wasn't really the problem. The way you bundled orders or the way products were bundled and you prioritized that and you didn't get the adoption, when actually they're focused on another set of problems or departments. That whole piece about getting user input early and often is so critical. The number one thing as you roll that out, you need the voice of the customer.Stephanie:In times like this that are changing so quickly, how do you think about separating the signal from the noise? I can see just so many companies try to keep up with other smaller brands and there's so many new things to try right now. It seems like it's hard to know what's actually going to be a lasting trend where you actually should put that as part of your processes or your platform. There's just so many tools and plugins and things. How do you all think about separating the two and being like, this one's a longer term trend and this is just something short that we see dying off in a year or two?Paul:Yeah, a couple of things that we do and obviously there's things that you want to lay out and over long-term and shorter term, but number one, look for ways ... First of all, understand what your brand promise is. Depending on your brand promise, you might prioritize things different, right? If you're a luxury item versus if you're an item at the dollar store. You have different brand promises and you want to be consistent to your brand promise, and so that's the first thing.Paul:The second thing as far as in general on commerce is continuously look for friction points. Do your tests with your customers and see what are things that are causing them to stop. As you go through all the different steps of the purchasing journey, if you're seeing friction points, how can you reduce that friction? Meaning, hey, this page seems really slow. I don't know why. Let's reduce that. Hey, this content is not connecting well. How can we use other ... For example, and I mentioned it before, hey, getting authentic content of the real users' pictures. That will help people convert higher.Paul:It's an ongoing iterative, so I think what you have is this ... And you're always plotting this, like how can you reduce friction and bang for the buck in a short-term that you can do versus a longer term investment that might then pay back, because it's easy to be like, okay great, we need a 3D VR AR strategy. We're like, well, how is that going to help your $10 item? Obviously that's an extreme example, but if you have a brand promise and you look for ways to reduce the friction to make your life easier, and similarly on the B2B side, that's why I always stress when I define B2B commerce, I like to say it's not about the purchase. It's about making your business easier to do business with, reduce the friction.Stephanie:I love that. What kind of longer term investments are you seeing being made right now that they might not see a payoff for a couple years? Because I know that Deloitte and I think Salesforce partnered on coming up with scenarios for the next three to five years, and so it'd be interesting to hear what you're seeing being implemented based on maybe the scenarios that these companies so all you get is put out there, which ranged to me from happy to very sad scenarios. I'm like, I guess it just depends how you're feeling that day which one you go with. I went with the happy ones.Paul:Especially for companies such as CPG that aren't used to having direct relationship with their customer, for example, big investments that take a while to really understand is the data, right? Getting real data direct from your customers that you then can build on. Those are things that it's not like, okay, a couple weeks, a couple months and you got it. It's something that over time you build up and you start to learn from, and so that's probably one of the biggest areas of especially getting your first party data, and especially since as you might have heard here recently, Facebook is reducing some of the data that they're sharing and how you're able to market and so is Google. Building up your first party data as a brand or building up your email list is so critical, and the benefits that you'll build definitely increase over time.Stephanie:It seems like it's an easy thing to say, yeah, obviously build up on that one-on-one connection with your customers, build up your email list, but it also seems like it's going to be very competitive because every brand is trying to do that now. It seems like every commerce company is turning to a media company that are all trying to have their blogs and newsletters and be on Tik Tok and Clubhouse and everywhere. How do you think brands can compete and build up content that actually pulls people into their community so they can have access to that first party data?Paul:Yeah, so I think the tactics on some of those platforms on core data and getting some of that primary, that's onto ... I think once you get into content and being outward brand, outward bound, I think the focus is and kind of the things that we've talked to our clients about is try and be good on one platform first. It's easy to be like, oh my god, we're so behind. We got to have a Tik Tok. We got to have Facebook, we have to have all the platforms all at once. We kind of guide them on, okay, start with one that's as close to your authentic brand as you can find, and then try and build it and iterate on it and master one before you really try and go after another because, again, there's limited resources and limited people. Trying to spread across all is a lot worse than trying to be good at least on one.Stephanie:Where do you normally find yourself suggesting brands start out at? It seems like Instagram is always a good bet for any company that has product pictures and things like that, but is that usually where you send them to or is it always very varied?Paul:Yeah, it just depends on where they're at. Some brands have ... Again, some of this stuff isn't cool, but SEO and email marketing have some of the best returns and they're super still unbelievably effective. Focusing on those and making sure those are solid, you get some of the best brand for the buck ... You get your bang for the buck. Sorry. Because it's easy to go the shiny happy route, but the core of understanding kind of the SEO and how it's connecting on all your different content and how you're coming up in search results all across and mobile related, that's still ... And again, email marketing on ecommerce, we did a study here recently and saw that some of the most successful brands are their leads are coming from up to 40 to 50% of their net new sales are coming from email related.Paul:We make sure that you have your core fundamentals ready before ... And you might do this like a portfolio, right? Like hey, maybe you're dipping your toe into ... Get a few Tik Tok videos out there and explore with a couple people, and know that you're not going hard on that but making sure that you get your fundamentals down first.Stephanie:Yeah, that's such a good reminder I think just for business in general but to stay focused and make sure that you're not getting caught up in the craziness and everything new. Make sure you have your email list good and that you actually own that and you're sending out good stuff. I don't know if this question could get you in trouble, but I'm going to ask it anyways. What is something you believe around ecommerce that many don't agree with you on?Paul:Huh. I'll have to think about that one. It's kind of funny in some ways because I've come through the whole ... I'm the old guy in ecommerce, and so I've been the one being like, ecommerce is going to be bigger than it is. I feel like in the last six months that now I'm the hey guys, retail is not going away. Retail has been here for hundreds of thousands of years. It's not going away. There's a lot of proponents out there, I won't name any names, but ecommerce is everything, and I'm the ecommerce guy and I'm like, no it's not. Understand it's too easy to say things are black or white for clicks, as opposed to understanding the nuance.Paul:If you look at in China, they just met a massive milestone. They're now over 50% of retail is via ecommerce. If you look at the states, relatively speaking, depending on which calculation you're looking at is anywhere from 17% or 22%, let's say it's somewhere in between that. Less than half of the penetration in China, and so I don't think over the long-term retail won't be 100% ecommerce, right?Paul:Over time, it might get in the U.S., because of the way we're distributed and the ease of buying at retail, you might get up to 50, 60% in the next 10 years but you're never going to get to a hundred and ecommerce is not everything and more the conversation should be retail has just many forms. I'm now pivoted to make sure that we don't forget the importance of these great real life experiences and then how you can balance and leverage commerce online.Stephanie:That's great that you've had to flip now to defend the other side. I'm assuming you think that retail is going to be changing though in some way or shape or form.Paul:Of course.Stephanie:How do you see that playing out?Paul:I talked about the grocery and that's a great example. They are now changing the way they see their line ... Because one of the biggest growth areas in this past year has been about BOPIS, buy online, pick-up in store. You probably saw, like you might have gone to a store and there's all these pickers. If you go, like half of the people in the store were employees picking for pick-ups. Just recently Walmart announced how they're going to re-jigger and automate so that parts of their stores are add-ons will be automated specifically targeted towards BOPIS.Stephanie:Wow, interesting.Paul:They're looking at maybe rolling that out over the next year or two over 200 stores. It's pretty significant. Then if you look at Kroger, they bought Ocado which is one of the largest robot ... Being able to bring together delivery in stage and they're looking for closer to the store to provide support for BOPIS as well. What you're going to see is this the way real estate is leveraged very differently than the big huge aisles with the big cart. It may be optimized slightly differently.Stephanie:Yeah, that's something I've been thinking about optimizing retail locations, and when I think about having someone go and buy my groceries, all the dry goods just get what I need, but when it comes to my fruits and veggies and things like that, I still think people sometimes they have a certain kind of avocado they want, they have a certain color banana they want. It seems like there's a way to segment the store and the stuff can just be picked out for you because you know what you want, and then there's another part of the store that you can still go in and interact with and grab the things that you want because there's actually preferences around them. I don't know what that looks like but it seems like an interesting thing to think about.Paul:Exactly. It's just going to change.Stephanie:Yep. Just a minute before we hop into the lightening round, I did have a question around Internet or ecommerce penetration. You were mentioning that and it does seem like there's a lot of opportunities all around the globe because certain areas have very lower ecommerce penetration because of a lot of reasons. Are there any regions that you're betting on right now or that Deloitte's looking into of there's some opportunities coming up here once X, Y, and Z is solved?Paul:Yeah, the area that has the biggest potential for growth right now that is behind ... If you look at just relatively speaking, to give everybody a perspective, from an ecommerce adoption, China is number one, Europe and the UK are generally a little bit ahead, and a lot of that has to do with they're smaller and it's easier from some of the delivery. The biggest growth area that we see right now in the next short-term is around Latin America.Stephanie:I was just going to say Latin America. I've heard a lot of VCs that you probably follow mentioned how they're going to be up and coming with them.Paul:Mercado Libre based out of Brazil is one of the fastest growing and there's also another shop app that's just skyrocketed out of Brazil, and so they see Latin America, because again they've been behind on the retail penetration and they've been behind, but this whole COVID just pushed that all along. I think that's the next big massive growth compared to everywhere else.Stephanie:I was just looking at them yesterday so it's funny you mentioned that. All right, well let's move over to the lightening round. The lightening round is brought you by our friends at Salesforce Commerce Cloud is our awesome sponsor. This is where I ask a question and you have a minute or less to answer. Are you ready, Paul? All right. First one. What one thing will have the biggest impact on ecommerce in the next year?Paul:It might actually be how this shipper container problem right now, all the ports are behind and not clear when some of the massive packaging and shipping issues around the world get sorted out. That might be the determinant, because if you can't get the products around the world, you might not be able to deliver what you want.Stephanie:That's a good one. Do you see any resolution with that? I don't understand what the problems are there. I've not looked into the shipping container world, so what's happening there and what could solve that?Paul:It's kind of a combo of stuff, and this has happened in a number of industries. It's kind of fascinating because it also kind of effected the way we planned. When you went back to a year ago into the spring and when you went back to all the historical of what happened when you had a large change and potential recession and what the impact was, you went back to, well, the shipping container industry went back and said, well, all our historical ... We got to pull back. They pulled back. What ends up happening, because of the ecommerce shift and spike, their demand very quickly ... They pulled back and it's hard to then build it back up when you're dealing with massive ships and containers around the world.Paul:By late summer, they realized oh crap, we're way behind and we need to catch up. That was part of it. Then you have a bunch of issues of hey, people on the essential front lines are just getting COVID and they can't deliver it, right? You have a combination of conservative planning, COVID actually effecting people, to geopolitical problems of hey, we don't want to receive packages and you're looking at different areas in the world that actually impact that. That's just another part of it that contributed to it. There was an article in Detail just this past weekend in New York Times that went into a little bit more detail.Stephanie:That's an interesting one and that's a lot at play. That'd be a good field or area to watch. Next question. If you had a podcast, what would it be about and who would your first guest be?Paul:Oh, man. I've actually been kicking around potentially doing ... This might be a little bit of what are the slow ways to be successful at ecommerce, right? Because it's funny because I've been on Clubhouse now for six months and you've got all of these entrepeneurs that hey, make seven figures, eight figures in a month or two, but the thing ... ecommerce seems overly easy to get into, but to scale and be successful is very hard because there's so many factors that play a part of it that you don't have full control of it. If I had a podcast that I would do, I would say the slow way to success to ecommerce.Stephanie:I like that. I've seen a lot of those people on Clubhouse, their bios of I'll scale you to a million. I'm like, nah.Paul:Yeah, right away it's like, next.Stephanie:Yeah, I just don't trust it, not for a second. What's up next on your reading list specifically around ecommerce trends? What are you reading every day to stay on top of the latest?Paul:It's something that I probably spend a couple hours a day reading lots of stuff. I actually use Feedly, I have all these keywords that kind of feed in, and I follow a lot of ... There's a lot of great podcasts out here. Of course, I got to plug my friend, even though he works at a competing company, he used to work for me, Jason Goldberg. The Jason and Scott Show is probably the best ecommerce podcast out there.Stephanie:Yep, I like theirs too.Paul:He's also a personal friend. I've known him for a long time. There's a whole crew of people out there that are passionate about it, and so I'm kind of geeky about it. It's funny, Jason as the retail geek but in some ways I'm more the ecommerce geek.Stephanie:Yep, I like it. That is a good one to stay on top of. I like that. Then the last one, what one thing do you not understand that you wish you did?Paul:Oh, man. I've come more from ... I'm more on the strategy and the technical side and the implementation. While I understand the marketing side okay, I really don't have the in-depth digital marketing side of it and I'd love to be able to spend more time and really focus around that area of how to really effectively connect. That's almost like another side of the brain that I have not spent the time on there.Stephanie:Yep. That's a good one. All right. Well, Paul, thanks so much for coming on the show and giving us a glimpse into what you're working on at Deloitte Digital. Where can people find out more about you or where can they follow you at?Paul:The easiest ... I'm quite active on Twitter, on deFornoP, you can follow me, and I try and share a couple articles a day of ... I curate good stories on both B2C and B2B commerce and people can also reach out to me at Deloittedigital.com or on LinkedIn.Stephanie:Amazing. Thanks so much, Paul.Paul:Awesome. Thank you.

Word of mouth is still the best marketing tool, even in today’s digital world. And in this time of the ecommerce boom, brands are constantly working to build buzz for their products. Whether that’s through ratings, reviews, social posts, or unique ad campaigns. But there’s one highly coveted strategy that’s been bubbling to the top of the stack, and every ecommerce leader knows it is the way of the future. User generated content. And a company called Yotpo is here to help with that. Yotpo is one of the top platforms that companies such as IKEA, 1-800-FLOWERS, Chubbies and more lean on to help them build communities, generate UGC, and create loyalty programs that yield the kind of engagement most brands only dream of. On this episode of Up Next in Commerce, I asked the co-founder and CEO of Yotpo, Tomer Tagrin to give us an inside look at how Yotpo is generating 5X more engagement and content creation than is typical. Plus, we also dove into the future of loyalty programs and personalization. My one-sentence takeaway: definitely start leaning heavily into loyalty and maybe let off the gas a bit on personalization. Why? Tune in to find out! Main Takeaways:Do What You Know: Success in ecommerce is becoming more about the community you can build to support you. So the question founders are asking themselves — and Yotpo — is how do you build that community? The answer is pretty simple actually, you just have to follow your own interests. A founder starts a company for a reason, and they typically personify the exact target customer their company is going after. So dig into that link and create content and strategies that would resonate with you, the founder.  Long Live Loyalty Programs: Every brand should have a loyalty program, otherwise there are opportunities and dollars being left on the table. The only way to access those opportunities and cash, though, is through a very brand-specific program. There are no one-size-fits-all loyalty programs. Brands need to understand what they want to incentivize for in their loyalty programs, who they want to target, and how they will reward the behavior they are trying to generate through the loyalty program.  Partial Personalization: By deploying personalization tools, you can sometimes open Pandora’s box of never-ending adjustments and adaptations in order to create individualized experiences. At a certain point, the return on that investment starts to diminish. Customers are all different, but they don’t all need to be treated as unicorns. Create segments of customer types, and personalize the experience to those subsets.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to up next in commerce. This is your host, Stephanie Postles, CEO at Mission.org. Joining us today is Tomer Tagrin. The co-founder and CEO of Yotpo. Tomer, welcome.Tomer:Hey, thank you for having me.Stephanie:I'm excited to have you. You might not know this, but a couple of guests who've come on the show actually have mentioned you guys. We had the CEO of Live Tinted come on, and a couple more. They said your company-Tomer:In a good way or in a bad way?Stephanie:In an amazing way. They said it was game changing.Tomer:Thank you, thank you.Stephanie:Yeah. When I saw you coming on, I told our producer Hilary, I'm like, "This is awesome. So serendipitous." But in your words, I'd like to hear what is Yotpo, and why did you start Yotpo?Tomer:Yeah. You want the short version or the long version?Stephanie:Long if it has a lot of little interesting tangents.-Tomer:You got it, you got it. I'll give you maybe the opening gambit about your points, then I'll tell you maybe the story in a more detailed way.Stephanie:Yeah.Tomer:The best way to think about Yotpo if in retail, it was about location, location, location, online, it's about consumer attention. In a world where every brand is an ecommerce brand, right from Miss Stephanie in Tomer t-shirtcompany.com, up to PNG, everyone is fighting over consumer attention. That's what we do. We help ecommerce brand win over consumer attention by consolidating the marketing stack and really enable them to build great experiences for consumers, because that's the only way to win over consumer attention. We actually started as a reviews company, and we started from a very ... 10 years ago from a personal story that we had a friend in my group of friends that each year made fun of us, that we didn't buy him anything for his birthday.Tomer:11 years ago we decided to do something, and he was big on photography back then, so we bought him photography [inaudible] and because I'm the geek, I [inaudible] online and I find him a fancy SLR camera. We bought him that, he was super happy. But what happened is that the teacher, after the second lesson told him that we bought him the crappiest camera we could have bought him. And all of my friends made fun of me. Then I went back and we saw that my decision was based on reviewers name like Stephanie 123, and I don't know anything about it. That is okay. Let's do that. Very, very good, and basically find authenticity of reviews. So, we built our entire technology based on that, and making sure that whoever writes reviews is a real person that actually bought a product.Tomer:If she or he are an expert in the field, we'll also let you know. We really ... wherever to disrupt let's call it the reviews in ecommerce, especially on the SME, it was also a great time. We were much luckier than small. It was a great time to enter ecommerce, or ecommerce marketing. We grew with a lot of the Shopify, the B commerce. We were very focused on the lower end at the beginning, and now we have Ikea and PNG and 1-800-Flowers, but we were for years focused just on the lower end. I think five years ago, we understood that the bigger problem for ecommerce brands is that they're super busy, they're very small and nimble, and they have just too many point solutions to deal with, so we need to consolidate everything because the consumer experience actually flow through each one of them. I'll give you one example.Tomer:I remember one of our customers telling me a few years ago, he said, "Look, Tomer, when someone gives me a one star review, I still ask for a referral, and that's the dumbest thing I can do as a brand." Right? Of course, but they just weren't able to connect those dots together before [inaudible]. We completely re-architecture. We went through a lot of different things to make sure that it's one platform to really help you win over consumer attention. It was something very, very important. That's our mission in life today. Since then, we built two more products, we acquired two more companies, we completely re-architecture the platform itself. We changed the go-to market, we've been through a lot. Now we're in the face of adding a new product every let's say 18 months.Stephanie:Wow. That's a lot of new products, because yeah, I was looking through everything you did. I'm like, okay, you do reviews, you do referral programs, you do smart loyalty programs, and everything seems every time I talk to a commerce brand, I do always think, wow, you guys have so many tools and technologies you have to plug into. How do you keep track of it all? What does the marketing tech stack look for someone when they come to you? What things are they, "Hey, can you help us consolidate all these crazy processes?"Tomer:Yeah. Usually customers don't come with us to consolidate, it happens, but not a lot. We actually build the company that we commonly just ... we can have five different products in the market, use the general reviews, what we call VMS. It's a Visual Marketing Suite, a referral product, a loyalty product, and an SMS marketing product. Walking on two malls, one of them is going to be launched let's say in two quarters, another one in four quarters, and sorry. Basically you start with the ones that you can start with just loyalty, or actually SMS now is our fastest growing part of the business. Then we show you that through the synergies in the product, it actually makes sense for you too ... I'll give you an example. If you launch a loyalty program, the best way to communicate with your most loyal customer is through SMS.Tomer:We make it very easy for you. If you want to send a loyalty campaign for customers that are likely to buy in the next 90 days, and gave you a five star review, and referred a friend, to send them an SMS with a new loyalty offer, we make it very, very easy for you. Where in the other architecture, it literally use [inaudible] taking weeks to orchestrate all of that. For us, you can start with whatever product you want, it doesn't matter for us. That's how we build everything because we don't want to force the customer to consolidate. Once you start seeing the synergies and it makes sense, that's where the exponential value starts. Actually, in our high touch customers, we see now that more than 60% of the customers actually use buying and using two plus product, so they are multi product customers, and that's something super, super important for us. From time to time, customers come to us to consolidate, but not always.Stephanie:Yeah, awesome. Just to give a little context too, tell me about some of the recent news around funding that maybe you guys just went through. How big are you, and who are some of your clients. Name drop some people if you can. So our audience knows you all are legit, you're on the unicorn status. I'll call you that. You might be like, "Don't call me that." I just did.Tomer:I actually have a joke in the fundraising that we did. We just closed a $210 million round at a $1.4 billion valuation, from great investors and definitely on our path for the next stage to become a public company. I always had a slide actually in the fundraising deck that said that despite of the valuation, we are not a unicorn, we are Flamingo. We are building a Flamingo. Why is that? Because Flamingo is a real animal and we are building a real business to provide real value to customers over time. It's a very unique animal.n It's actually part of our culture. It's a joke, but it's actually something very, very ... that we take very seriously.Stephanie:I love that.Tomer:Some of our customers, Ikea, Unilever, 1-800-Flowers, we also have 30,000 paying customers. A lot of the cool brands, the Chubbies, the away, the movement, all of the poster Childs of D to C are as well usually choosing Yotpo, but also some of the largest brands in the world. I think they come to us usually because our products are really ... we like to call it easy to start, easier to scale, and really trying to think about merchant, and really trying not to use buzz words, not to use fancy things, just really helping those brands grow faster in a very direct way. We are 500 people, or a little bit less, and I don't know any other group of people that are so focused on helping brands win over consumer attention. That's literally what we think of every day.Tomer:Also, I think that ecommerce is one of the largest changes of our generation, and we believe that we have a real shot to become one of the most important companies in the history of commerce. I always tell the company telling me that ... I have two young boys, and one of the things that for me I want them to think about Yotpo is they were a huge driver forward for that something that called digitization of retail, or the shift to e-comm, or whatever you want to call it. Very much we are super, super passionate about helping those brands.Stephanie:That's amazing. Congratulations. That's awesome funding-Tomer:Thank you.Stephanie:...awesome investors. You're really cool. I love that Flamingo reference. I want to use that just for myself now.Tomer:We call it be a Flamingo in a flock of pigeons. That's our phrase internally.Stephanie:That's good. It seems like the perfect time right now too, because customer acquisition is getting really expensive. Everything I've heard on the show is that, organic, natural, UGC, that's what's working now. Tell me a bit about how you think about the customer acquisition world, and why organic natural content or reviews, helps more than anything else right now.Tomer:It's a great question. First of all, I'll maybe share a funny story. Let's say six months before COVID started, we actually had a customer advisory board. We meet customers and we ask them questions. One of the phrases I add that stuck with me is that one of our customers said that buying a Facebook ad is more expensive than a fifth Avenue store. Definitely you know Instagram, Facebook, Google are extremely, extremely expensive, and I don't think it's going to slow down. They want to be like a lot of other consumer fronts, at least in the near term horizon. When you add on top of that, Amazon, so the question is how do you win? You win by building a community. You win by giving your customers a great experience.Tomer:Part of that means social proof, part of it means making sure that you are very transparent, part of it means that you need to focus on customer lifetime value, because it's so hard to bring, and you need to make sure they're coming back. Loyalty, I can tell you it's really top of mind. Then for us, we entered loyalty in 2018, we are now the fastest growing loyalty platform for ecommerce brands, and we power some of the most sophisticated loyalty programs out there, and it's just amazing to see that even in the election, there were brands that giving points for customer to show that they voted, and there are customers that hate the point system because it's they lose their brand and they just have a VIP tier experience, which is super awesome. There's so much to do with that, which is fascinating to see how much brands are able to innovate.Tomer:I think we definitely live in a world to your question, I'll circle back that whatever walks, you cannot win just by being great in paid anymore. It doesn't scale. It can scale to a certain number but it won't forever. Now the question, how do you build your brand? You build your brand by your community. That's what we are very, very focused on as a company.Stephanie:What are the ways that you advise your brands to build that community? Especially if you come and you're like, I don't have a community. Where do I even start with that? I would think you need to acquire customers first, but then that's pricey. Then you're not even thinking about retention yet because you don't have anyone to retain. What are the maybe building blocks even get to that next level?Tomer:Yeah. I'll share a story. Are you familiar with Chubbies, the brand?Stephanie:Yeah.Tomer:Chubbies they have a great story on how they started. It started from an email that they used to send. I don't know if you ever saw one of those emails. Super straightforward, so targeted to the buyer persona because they will, the buyer persona. It's a really great group of founders that were just able to provide great content, and their customers actually want to buy Chubbies because they feel that this is the brand for them. You have movement that were very, very early on, very, very good on Instagram ads. I think today it probably means that you need to do everything well, there is not a hack, so you got to at least experiment with paid, you got to experiment with content, with organic. You have to invest, but in general, when you look at mission-driven brands, the founders are usually, they are the buyer persona, or they know the buyer persona very, very well.Tomer:Then it just become easy. Do stuff that are interesting for you. Do stuff that you would like to buy from. I think that's where we see the brands that are growing the fastest at the moment. I think there was also probably a year, a year and a half ago, there was a huge trend in drop shippers that's now actually declining, which is a good thing. I think it's easier for brands now to stand out. I think that the bad news is that you need to do good in multiple fronts, but the good news is there's so much demand at the moment for great brands that you just need to focus on your buyer persona.Stephanie:Yeah, that makes sense. Another interesting thing that I was reading about was how ads that have reviews in them are the highest converting ones. Which makes sense. I even think about, if I see someone's picture with a review on it, an organic picture, I don't want just the product picture, or even if that came on and she'll be five stars, check it out. I would go there all day versus a normal ad.Tomer:It's actually something we built a few years ago, and the hypothesis was, it was also based on our customer feedback that they think that social ads with social proof will work great on social media. That makes sense. Then what we did is we made it super easy and we work with Facebook and Instagram to make it easy to incorporate your user generated content, and then we started to experiment with that. We learned that, the studio photos that you have actually work like walls then real authentic and customers' photos, so, we really build a lot of technology to encourage customers, and how do you get more photos, and then make it just very, very easy for you to use it on your social ads. It works phenomenally well. I think in general, one of the key learnings that we learn as a company that we're established to establish trust between brands and consumers. That's what we founded the company.Tomer:I think that, especially if you're a newer brand and you're just now starting, you have to focus on how do you create trust? The best way to create trust is by what real people are saying. I can share with you endless amount of data showing you that products that just have five star reviews convert much worse than like 3.8. Which is insane, but it makes sense, because nobody believes everything is perfect. Authenticity, transparency are so key in a world where again, customer acquisition cost is super expensive because if you were able to bring a customer and she or he had a bad experience, it's bad unit economics. You cannot scale that business.Stephanie:Yeah. I think the interesting thing too, about organic reviews, even if they have a 3.8, is that you can oftentimes go in there and find, oh, this person's talking about something that I really don't care about. I'm even thinking about this and maybe Tomer you're in the same place where it's looking at daycare's, preschools, and all this. Some of them have a four-star and people are complaining about the wait list. I didn't want to pay a wait list fee, and you're, 'Okay." That shouldn't have brought it down, but that's real, and now I trust it a bit more, and now I'm interested in exploring it, and not just looking at a high level review. What I wonder is, how do you get people to review? How do you get them to submit photos? I don't have the time a lot of times, even though I love products, I just don't have time for it. How are you incentivizing customers to do that?Tomer:Yeah. I'll share a few stories that I think you'll find they're funny.Stephanie:We all have funny stories.Tomer:When we started, we didn't know a lot on the reviews industry. So what we did, Amazon, Amazon has a page called Amazon top reviewers. These are people that wrote, I don't even know how many reviews. We looked at their names or handlers, and we searched those people on Skype and Twitter, and we bombed them, and wanted to interview them. We spent hours and hours interviewing Amazon top reviewers, and I think it was eBay top reviewers, just trying to understand why people write reviews, what incentivize them to write reviews, and why other people are not writing reviews, and that's how we formed the new approach and the reviews industry. I think definitely we make it easy for you. You talked about, you don't have time. We build a technology called email review that you can leave the review inside the email.Tomer:It's one step, it's really easy to do. That's super, super important. The second thing that's really, really important is knowing when to ask for reviews. For example, when you buy a mattress, you need to experience with the product a little bit more before you will be willing to give a review versus a t-shirt. I think those are important. The last thing that I can tell you, which is really, really interesting, and this is why user generated content is so connected to loyalty, is once you identify who are customers that are likely to be loyal, those customers are much more likely to generate content for you, photos, video. After someone upload a photo, I can tell you now, if you're not a Yotpo customer, ask them to join your loyalty club. There's five X more chance that will happen. How do you take one interaction of the consumer with your brand, and translate it to the next step, and how do you take them in the customer journey step by step by step.Tomer:That's why we are big believers you need to consolidate the marketing stack because it is one customer, one journey, and it's not silo. I think it's a frictionless experience, is knowing when to ask, and knowing who to ask. It's super, super important. I think when we started Yotpo, we always heard the phrase of 1% of people write content, 9% of people reply to that comment, and 90% are just reading that content. Today we are more closer to five to 6% are generating content almost, which is a five X or six X improvements when we started. A lot of it is that consumer behavior, a lot of it is our technology, and a lot of it, I think is just brands are evolving and understanding the importance of that. But it's just fascinating when we ask about photos for example. There are brands that you would never imagine, never in your life, that people will ... I remember I was scrolling through one of our website, and they will say they are selling metals. Literally blocks of metals. That's what they said.Tomer:They have thousands of reviews, thousands of reviews. People write reviews and super passionate reviews. We also have an NLP engine, a natural language processing that can give us and the merchant, positive sentiment, negative sentiment, and show you the score. People are super passionate about it, and apparently people are passionate for ... Different people are passionate for different things. You just need to find those people that are passionate about what you build. That's what I always find super, super inspiring.Stephanie:That is a really interesting take though around how you just need to have that passionate audience and finding them. But what also is interesting is how you guys are ingesting the data in ways that, I think I've been there for a while, but you keep saying consolidating it. I've always thought okay, you get all these good reviews, but oftentimes, I might not want to see their review for 99% of the products that I'm not looking at. If I'm looking at stocks at a company that has a hundred skews, I really just want to be able to zoom in on the reviews of those stocks and not see everything else.Tomer:Even more than that, what we did now, if you go to Yotpo customers, is we build an NLP engine, Natural Language Processing that can pull up topics from the content. Let's say if you ... I don't want to take your pre-school example. If you want to just read about the waiting list, you can click waiting list and read just all the content talking about that. You want to read about the teacher, about the food, about whatever you want, you can. Especially on mobile, I can tell you that really, really increases conversion because who has the time to scroll through 300 reviews? No one. Once you have the relevant topic and a search bar, and the topics are actually accurate, then you start to really improve the quality of content that you are able to read, and you as a consumer really are able to get the information that you need in order to make a buying decision.Stephanie:Yeah. What do you think about curating reviews from other platforms? Do you guys also incorporate Amazon and walmart.com? How do you show in a holistic way? Or I also think a lot of those consumers are very different people who shop at Walmart, are different than Amazon versus on your website.Tomer:Yeah. In general, we are big believers that we need to authenticate. I mentioned how we started that these are real people that actually bought your product, so we just do it from the content we generated. I can tell you in our photos, we curate from Instagram or Pinterest, because we think that makes sense actually from specific hashtag, or specific accounts of the brand. I can tell you ... I'll give you another example that's been explosive for us. Let's say if you are a brand that want to increase your review count. Let's say you sell a lot on Amazon, you sell a lot direct, but you want to increase your review count on your direct SMS, the best example. Our integration, when you can send review quiz through SMS, amazing. Just amazing results.Tomer:I highly recommend it for anyone that wants to increase their social proof, is to leverage SMS and SMS marketing. This is why when for us it's you use our SMS marketing product and reviews under the same data platform. That's what we work. Our platform theme works on is to make that experiences literally a click of a button. Send review request, and that's it. I think in general, we are not a big believer from curation of content. It's more about generating that content and giving you more tools to generate authentic content that we can authenticate.Stephanie:Yeah, that's great. I think just thinking about making things frictionless for the end user. That's going to change everything. Especially with reviews, I'm thinking if you send me a text, an SMS, that just said, just review it and you don't pop me around a million other places-Tomer:Exactly.Stephanie:-I'll hit the start count. If I don't feel adding in words right now, I won't, but making it easy to where I'll actually interact quickly, I think is the way of the future. Even earlier on Amazon, it was asking me to review something on my homepage. I tried to click five stars then it shot me over to another page and wanted me to write stuff, and then I just exed out. I'm like, "No. It's too much work. I have two minutes before this interview." I was just trying to say, “I liked my pair of shorts I bought."Tomer:I can tell you it's the same thing in loyalty by the way. We see that loyalty, because loyalty you also see that in brand. But loyalty is a very complex problem. In order for a brand now to launch a loyalty program, they need to give it some thought. It's not a cookie cutter, because every brand has their own thing. On the flip side, if the experience won't be dead easy for the consumer, or frictionless for the consumer, consumers won't engage with the loyalty program. This is why we really focused on building an experience that it's going to be really easy for your consumers to understand what's in it for me, and how to engage with your loyalty program. Because if not, if it's like you said, a link to another page and then I need to ... it's not going to happen. They're not going to join your loyalty club. In general, in every product that we have, we are very, very focused on a very frictionless consumer experience, because we learned so many times, it won't work if it's complicated. It just won't.Stephanie:Yeah. How do you think about building up a good loyalty program? I'm sure a lot of your clients ask, what are some pitfalls that you've seen before, and how do I make it frictionless, and fun, and engaging? How would you advise them on creating one from scratch?Tomer:Yeah, there's a lot actually and it's a complex topic that we are super passionate about. But, if I need to summarize it, I'll say that one, like I mentioned complex problem, but it has to be an easy consumer experience. Second it's not one size fits all. You really need to understand, okay, why do you want to incentivize for? Let's take Chubbies, another example that we started. Chubbies has a great loyalty program across categories. Let's say if you buy shorts, they want you to buy a t-shirt, they will incentivize you with points to do that. That's super, super important. For Chubbies the point system it's basically a mechanism to incentivize certain behavior that you want, that works extremely well. You need to figure out what behaviors do you want to encourage. Another example is ThirdLove. I don't know if you're familiar with that brand.Stephanie:Yeah, I do know them.Tomer:They also use our loyalty program. For them it was all about the brand, meaning they didn't want to use a point system, they actually wanted to use a VIP tier system. You do a certain action or you spend a certain amount, and then you get certain VIP tiers level that you can get different parts from free shipping products, discounts, whatever you want. That's been working phenomenally well for them. I think early on just in 2021, you have to have a loyalty program. I think we are past the days that, yeah, I'm not sure. You are losing a lot of money, you're leaving a lot of money on the table, but you need to first figure out what do you want to incentivize for? What is the behavior you want to encourage?Tomer:That's super important. Then, what are you willing to give, and how do you make it easy for consumers to engage onsite? You can send different emails, you can run different social campaigns, or social contests. There's a bunch of things, but eventually it's all about how do you build a relationship with your most important customers? With the customer that you care the most on? It's a very emotional experience on one end, on the other end, it's that simple. You need to see ROI. It's all about customer lifetime value. The analytic needs to be if you're not sure if your loyalty program is not working or not, it's probably, it doesn't work, because it's very easy to understand that it's working, and it's about increasing customer lifetime value.Stephanie:I think that's a good point too, about knowing your customer and what they're going to want to see. For something like a ThirdLove, I can see why they want to be seen as it's more premium, you're part of the club. We're so much more higher end than a Victoria's Secret or whoever else they're competing with, versus the Chubbies, their client probably doesn't need to see that to feel like they're part of the club. They just want the product.Tomer:Exactly. It's such a strong brand that if you buy Chubbies you're already part of the club. It's one of the best ways definitely. I'll give you another example. Maybe I can give you also to share some light about the connectivity. Let's take another one of our customer that you probably know, Steve Madden. Let's say you are a junkie of sneakers, that's your thing in life, Stephanie. You are the number one in their VIP tier program. Literally number one. Then you get sneakers and you give them a negative review because the shoelace was off or whatever. They want to know about it.Stephanie:Sounds like me.Tomer:They want to know about it and they want to treat you a little bit differently. Taking that loyalty data, or the review data and injecting it back to loyalty and help desk, and doing all of that, is so, so important in order to provide a great consumer experience. That's the only way to do so. We see that time and time again, you can not live with silo. That's one of the biggest tips that I can give is that whenever if you're a Yotpo customer, you're not a Yotpo customer, it matters less. It's about the connected experience.Stephanie:Yeah. Personalizing it is huge, and having a customer not feel they're talking into a black box. If I say, “Hey, I'm not happy with something," and then like you said, they're like, "Here's some points to just buy some more of it," or something, that's probably-Tomer:I'll tell you another joke that we use internally. Personalization, I hate it when product managers come to me and talk about personalization because I won't call it the graveyard of ecommerce, but I think the problem with personalization, it's an endless problem. There is always something to improve, but eventually for the consumer, there is a diminishing value in keep on personally up until the point. For us, it's more about look at sub segments of your customers and how you treat them differently, and how do you help the marketer really test and try certain things, but trying to personalize it. You can do that all day long and it won't move the needle necessarily. It's just about understanding from that specific customer, what sub segment they belong to, and then how do you treat that sub segment differently?Stephanie:That's really interesting. I like that. It's not like everyone is a unique snowflake. However, they probably do fit in some buckets, and you can treat those segments pretty similar, and now we have methods for them. I liked that.Tomer:Exactly.Stephanie:I'm thinking about all this data that you guys are getting, and the way that you're reacting to it and making new products and helping these brands, what data is out there that I guess you could call it dark data, that you feel could be tapped into, but you're like, we just haven't gotten there yet, but there’s always data that's out there that you feel you're still not fully utilizing. What are brands usually have access to, but they're just not fully capitalizing on it?Tomer:From the brand or from Yotpo perspective?Stephanie:I say brand perspective.Tomer:Brand perspective, I think the most interesting thing is actually analyzing the content itself of the reviews. I can give you two examples. One of the best examples which I love. Are you familiar with [inaudible].Stephanie:No.Tomer:From these scores they're actually doing phenomenally well. A phenomenal brand. For them, we actually were able to analyze the content. We have a engine called insights from the natural language processing, and we learned something really interesting. That a lot of the content was written "I'm so happy. My boyfriend bought me that and that." "I'm so happy. My husband did..." We actually told them, "You know what? We think you should launch a couples line, because a lot of your buyer persona, it's not the sheets He buying for his girlfriend, for his wife, it doesn't matter." It's one of the most successful launches they ever had. Or we have another furniture brand that I won't mentioned their name, that we showed them that the number one reason for returns of the product is actually the smell of the sofa, and they need to fix that, because they have a real problem in that.Tomer:Actually looking at reviews as a let's call it [inaudible] and that your ability to analyze on scale, and have a really smart again NLP engine that can show you what customers are saying in slice and dice, it's fair. All the volumes per a customer behavior, per location, per segment is so, so important. You can get so much in product teams, marketing teams, service teams for sure. You can get to learn so much from it. I think that's a dataset that a lot of brands are not spending enough time looking at.Stephanie:Yeah. It makes me think gone are the days where you would have people come into a room, and they try out your product and you hear feedback. It's why. Now you can just get thousands of data points, use NLP, digest the data and figure out how to change your product going forward.Tomer:Exactly that.Stephanie:Makes it funny thinking about that. What about from a Yotpo perspective? What data do you want to get access to, to inform either your current products or new ones?Tomer:Something that we think about a lot is it's very clear that commerce is going to be like Omni channel. Or is. Some of it will be marketplaces. Most of it will be direct to consumers. Some of it, maybe it will be on social, some of it maybe will be on Google, who knows. Everyone is trying that transaction will happen now at Instagram, on Google shopping, or whatever. For us, it's how do you give more value when you sell on Amazon? How do we give more verdict? We just launched a partnership with Walmart that you can syndicate all your content with a click of a button. If you sell also on Walmart, all of your content will be there as well, so you'll sell more on watermark. For us, it's really about how do we take more data? We're now working with Facebook and Google on a bunch of really, really interesting stuff, and how do we just help you to be a better Omni channel brand? I think.Stephanie:What data then are you looking at to be a better omni-channel brand? What things are you tapping into that maybe you weren't able to a couple of years ago?Tomer:For us, with every new product that we add, there was a huge data injection. Just think about, let's take SMS and loyalty. It's so valuable that you have the two products under the same data platform that you can really for the first time send new SMS'es for just your loyal customers. Just your highest VIP tier, you want to send them an SMS because you know that SMS will convert the best because they are your most loyal customer. You can do that. I can tell you sending an SMS just saying, thank you, thank you, after someone referred a friend. You would be surprised how much that increased customer lifetime value. I always give our product team our ideal experience is let's say Stephanie, one store will start opening up again. Think about you going, buying at the store that you are one of the most loyal customers, buying a ThirdLove offline store once they'll have one, and then the second you walk out the door, you get an SMS, "Thank you for buying with us again. We really appreciate that."Tomer:How awesome is that? Who doesn't want to build that brand? I think from a data standpoint, the more products that we have, we really understand better the different segments of your customers, and make it easy for you to launch different campaigns. For us, SMS, for example, was a huge vision. That's something that we didn't have, a new execution layer. Loyalty was a huge addition. I think every product that we keep adding, we are learning much more on the brand. We're learning much more on the customers of the brand.Stephanie:I like that. It definitely seems there's a lot of room, especially for in-person retail experiences to complete that journey and to also be helpful as you walk into a store. But to a point where it doesn't get creepy where it's "I see you in the makeup aisle right now, and I would go with this one over that one," that's probably is taking it a little too far, but it still seems there's room for brands to interact more because I don't get many messages right now, and the ones that I do are very generic and not helpful. I sometimes wonder, why don't my, a customer service rep, take a picture and send it to me and be, Hope your day is going well." I think I would like something personal and funny like that, more than just come in and get 20% off today.Tomer:I can tell you what we're hearing now from brands is that they are sending so many generic SMS that they actually... an SMS is ... it's not a cheap channel. It's not like email. You need to actually pay for the message for the carrier. You really need to think carefully, “Okay, maybe for customers that gave me one star review, I need to ask a different SMS and send them, 'Hey, how can I change the experience? I'm sorry, what can we do?' versus customers that raved about the price, and maybe send them an SMS talking about a discount of customers that talk about the service, say send a picture of the customer service that helps them. That connectivity is I think what's really, really important.Stephanie:Yeah, I agree. Where do you see the world of UGC in general transforming to over the next couple of years?Tomer:I think UGC will definitely move towards a place that how do you take the content you're able to create, and leverage that in multiple places in your email marketing, in your SMS marketing, on your social ads, on Walmart, on Amazon, on Etsy, wherever you are as a brand, how you interact with consumers, that's where you need UGC to be at. I think that's super, super important. The second thing is that, what do you understand from that UGC? That's something that I feel that as a company, we are just at the tip of the iceberg. There's so much to be done there because these are the most important signals from your customers. That's something that we are very, very excited about. The question is, will there be a new form of UGC? Stories, voice.Tomer:There's a lot of things that we play around with in our hackathons to really trying to help pave the way of what's next in UGC. I can tell you it's very early, like videos actually for now for us now is a new format that's also been growing really, really quickly. Will there be a new format? That's also really, really interesting.Stephanie:How do you view influencers versus UGC? Because the way the market's headed right now, I wonder if the whole influencer scene will start to die off, because people will keep wanting more authentic interactions and relationships, and they want to buy from people that feel more like them. How do you see influencers playing out all that?Tomer:The influencer is another really interesting field. First of all, I think it depends. Again, it's not a one size fits all. It really depends on, what do you want to achieve with influencers? I think people understand today that just giving the Kardashian your product doesn't necessarily mean that you're going to increase sale. They can really, really help, and you can see Kylie cosmetic. But the top influencer was actually building their own brands because they understand that's where the vast majority of revenue is, and that's something we see a lot in. Now you see micro influencers. I think you probably need to do both, and different purposes. I think a UGC is more let's say the basics. You need to have social proof. For me, influencer it's more about another channel like paid.Tomer:Like a Google ads, you now have influencer ads, if you want to influence attacks, and it works, and you need to do it very, very well, but it's actually not related to UGC. UGC it's the foundation of your brand. You cannot do Google ads, you cannot do influencer ads without it. I think in general influencer is really interesting, but I also think that brands and influencer today, they see that in order for it to work, they need to be authentic. Stephanie:I completely agree. All right. The last question before we jump into the lightning round, do you integrate with awesome platforms like our sponsor, Salesforce Commerce Cloud?Tomer:Yes, definitely. We are a big partner of Salesforce Commerce Cloud. We're actually I think one of the fastest growing solution on Salesforce Commerce Cloud at the moment, and they've been great partners of ours. We have really amazing brands. We started with reviews, now with loyalty, SMS is coming in just a few weeks I think. Yes, definitely. I think it's one of the best platform for the enterprises that we see in the market.Stephanie:I completely agree with that. With that, let's jump into the lightning round, which is brought to you by Salesforce Commerce Cloud. This is where I ask a question, and you have 30 seconds or less to answer. Are you ready Tomer?Tomer:Of course. I was born ready.Stephanie:If you were to have a podcast, what would it be about, and who would your first guest be?Tomer:What a great question. I think if I need to do a podcast, it will be just some great ecommerce stories, and I think just like one of the best people I know from the industry, his name is Scott Perry. He's now the leading everything related to ecommerce in Jerome, before that he was involved with furniture, he's just freaking awesome. He's just really, really awesome. The other one that I really, really love is actually Lauren from Shopify. He's another really awesome person to spend time. He basically found the Shopify plus.Stephanie:I like that. It might be a little competitive with our podcast. However, competition is healthy, so I'll accept it.Tomer:No, I think what you're doing by the way is super, super cool. It's really, really interesting, and anyone in ecommerce should ... these are exactly the type of content that people should be listened to, if you care about ecommerce.Stephanie:Thank you. I love that. Man, it's good thing I brought you on. What is the nicest thing anyone's ever done for you?Tomer:The nicest thing that anyone ever done to me. I think definitely I'll say my wife. We have two young boys. She saw me in some really, really tough nights, and she was there to really help me pass through those tough nights. I would definitely give it to my wife.Stephanie:Shout out to your wife. I hope she listens to this. That's great.Tomer:Of course she will.Stephanie:Yeah, she will. What one thing do you not understand today that you wish you did?Tomer:I don't know. How do you get a crying baby to stop crying?Stephanie:I, after three boys, I still don't fully know that one. That's just a question that can't be answered.Stephanie:All right. The last one, what is the last ecommerce purchase you made that you're most excited about?Tomer:I'm actually super excited. I don't know if you can see my background, but I bought from a society six. It's one of our customers, and it's actually a great story to end with. I think I can share about the Yotpo culture. When we founded Yotpo, you know that how every startup is saying that they started at a basement and yada yada. Our office was a real basement, meaning it was an apartment building, you would go down, turn left. There was no lights, no nothing. Even for people that were willing to interview for two people start startup, we got some feedback that their office is too hardcore. We didn't have money for furniture, and we didn't know what to do. I stole for a different time. I had a bunch of Sesame street puppets at my apartment. So I brought them to the office and that started to be our vibes.Tomer:Then when we moved to a real office, we took them with us, and then when we started opening offices across the globe, people thought that they need to bring Sesame street stuff with them. Then when we moved to the home office in COVID, I said, "Okay, we need to bring Sesame street stuff." I bought from society six. We never forget where we coming from, where we came from. Sorry. I think that's maybe one of the things I'm most excited about, and I just bought ... Actually there's another one. Because I keep buying from our customers. That's my thing in life. I buy just from our customers. There's an Oura ring that helps you sleep better and analyze your sleep. I don't know if you're familiar with that.Stephanie:No. What's it called?Tomer:Oura ring. It's really, really ... I don't know if people can see, but it's-Stephanie:You can explain it to anyone who [inaudible].Tomer:It's a ring that basically tracks, with an app tracks, how you sleep, how you need to give you let's say guidance on how to better sleep. I'm super excited to test it. It just arrived today, and I'm going to test it. Excited about that.Stephanie:What things do you think it'll tell you? To sleep better, quarantine your kids off in a room where you can't hear them, or?Tomer:I wish. I wish someone would tell us that, yes, yes.Stephanie:You got that. Tell me how that works. That sounds awesome. Well, Tomer, thanks so much for joining the show. It's been a pleasure. Where can people find out more about you and Yotpo?Tomer:First of all, thank you for having me. It's a pleasure, and I think we in Yotpo are big fans of the podcast, by the way. We have a few episodes that we mentioned, it's actually a thing. You can just go to Yotpo if you want to meet personally. It's tomer@yotpo.com. It's nothing too special, and feel free to reach out.Stephanie:Amazing. Thanks so much.Tomer:Thank you for having me.

The world of ecommerce is constantly changing — this last year being a prime example. How people shop in 2021 is radically different from how they shopped in early 2020, so forget about thinking about comparing today’s world to a decade ago. Although that is fun to see how much has changed. Now, it’s all about keeping up with your customers, which is why for our first official roundtable episode of Up Next in Commerce we wanted to bring on two people who have been on the cutting edge of the industry for years. Ashima Sehgal is a Software Development Manager at Amazon Music and Jon Feldman, a Senior Marketing Leader for Salesforce Commerce Cloud. These two go way back to their days working together on ecommerce implementation at Restoration Hardware, which was a journey in and of itself, and while they remain close friends, they sit on the opposite side of the fence when it comes to certain aspects of the future of ecommerce. We get into all of it in this episode, including discussing whether shopping at the edge is the future of the industry or just a passing fad, and how to get buy-in when selling a new implementation. I hope you enjoy the conversation as much as I did!Main Takeaways:Make It Easy: When pitching or selling an implementation, the key is to tell the right story and make it hard for the business to say no. Highlight the pain points that their business is facing, and play up how you will solve those problems from beginning to end and be a great partner throughout the process. But one thing to remember, don’t try to tackle everything from the start and be upfront about what is prioritized and what is put on the backburner. Edgy Opinions: There is a lot of debate on the future of shopping at the edge and whether or not it is a fad. Regardless of whether it sticks, businesses should be harnessing the power of meeting customers where they are and selling to them in those places, but the base ecommerce platform should not have to suffer as a result of those efforts. It’s All A Simulation: In the last year especially, there has been a lot of talk about the death of retail and the rise of an ecommerce-only economy. That is a myth. While 2020 and early 2021 undeniably changed the way people shopped, it was more of a blip in the timeline and not a true indicator of the future, which will more likely be a blend of in-person and online experiences.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome to Up Next In Commerce. I'm your host, Stephanie Postles, CEO at Mission.org. Today's episode is going to be a really fun one. It's our very first official Roundtable and we have the two perfect guests joining us. First up, we have Ashima Seghal, the software development manager for Amazon and Jon Feldman, a senior manager of Product Marketing at Salesforce. Ashima, Jon, how's it going?Ashima:AwesomeJon:How's it going? Stephanie:Good. I'm glad to have you here. So I heard you guys have a little background, you've worked together in the past and I wanted to start there so people can know your relationship, like how do you all know each other? And maybe, Ashima, I'll let you start with that.Ashima:Yeah, I feel like Jon and I have worked together forever now. 2008, I moved to the U.S. and I met Jon, the first company I joined. It was a consulting shop, we work together to help people build their ecommerce websites and features on it. And, he's mentored me through that period to help me understand better where my interest lies. And he's also helped me grow my management skills and given me opportunities as he grew in the ladder in those organizations, I saw some opportunities come my way as well. And then, we worked together recently in Restoration Hardware. As a director of engineering, he and I worked together in terms of prioritization of what should be done when and working closely with the business, in terms of understanding how to get to the customer, how to go get features quickly to market and so on and so forth. So, a lot of history there to explore.Stephanie:And that really talked Jon up. So Jon, is that your recollection as well?Jon:No doubt.Stephanie:And what was your favorite project that you all worked on together?Jon:My success in ecommerce is deeply intertwined with working with Ashima. I mean, we worked very closely, both at Access Group where we did a zillion implementations. And then, when we went to Restoration Hardware, we had a really beautiful relationship and so far, I had the crazy ideas and she had the practical skills to do those. And so, it worked really symbiotically. So I feel like we've seen a lot of stuff and built the systems so yeah, really delighted to be sharing this.Ashima:Yeah. One funny story, I can tell you was we work for Falabella in Chile, and it was a Spanish speaking Morgan, I didn't understand as much Spanish so I would speak my English louder thinking they would understand me and Jon would be like, why are you yelling at them? I'm like, I'm not yelling at them. They just don't understand me. I'm trying. So, that was some happy moments.Jon:I remember that. That's wonderful. That was back at the building of [inaudible] or whatever.Ashima:Exactly.Stephanie:My gosh, that's awesome. And Restoration Hardware, that seems like a really good company to work on, especially from an ecommerce perspective, because when I was looking through articles and whatnot, it was talking about how they were resisting moving to ecommerce for a while. So, were you guys working there when that was still undergoing, when they didn't really want to make that move or were you already past that hurdle, and already ready to start implementing things?Ashima:I can go first and then, Jon can add to that. But if Restoration Hardware wants, they don't want anything to do with digital, they would close their eyes and close that shop today. The reality for them is they want to be beautiful. They want customers to come and touch them and feel them. They want people to experience it and then, love it. And digital is a hindrance to that because digital is very removed. It's away from the customer, however beautiful an image you put on digital, the fabric is something you can't feel and that's what they're selling. They want you to experience it. Then, going into building restaurants in their business than going into hotels half that is an extension of that. But we were more of an idea shop. We were enablers for them, not that loved and given as much money but still help them run 90% of their business through auto management and so on. So, we were critical to their success, but didn't get as much love I would say. Jon?Jon:No, I totally echo that. I think that Restoration Hardware is at its core, a luxury business and they want that luxury, in person experience. And it's really interesting because it was fascinating to be there during a time when there was all this transition to digital and everybody's like, well of course you need these nine things and to have like a real hard no, the experience is fairly impersonal and manual. I think it was really frustrating at the time. But it's really impacted my thinking since that I challenged the ease shopping at the edge. It's definitely something we're seeing. There's huge growth in it, right? It's a big area, certainly, Salesforce can't stop talking about it. But, from a Restoration Hardware standpoint, it's growth, but is that the growth that's important for my brand, which really affected how I evaluate some of that stuff.Ashima:Right. Another important thing is that we were always asked to do one day in their store, and Jon did it and we did it like all of us employees did it. And it was fascinating, because you could see why that was important. You could see that they wanted customers to come every day, look at a cushion and buy that and keep the relationship going. That is what they thought the bread and butter was. I met this lady who comes in every two, three months and buys a new big thing for her house. She has lots of money.Ashima:And that's the 1% that they're targeting. And that's what's running their business. They don't care about the 99%. They don't want to be digital, because they don't want to be for the masses. They know who their customer is. And that's what I learned in Restoration Hardware, that they were so aware of who their customer was and they were very successful. Look at the stock price now, right? That's part because they understand their customer. And we were just like I said, enablers. So, we were a step removed from that painting and so embedded in engineering, but if you talk about business, they were geniuses, I would say.Jon:Yeah, no doubt. Gary, he has built an unbelievable business. Restoration Hardware was a very difficult place to be in IT but it is an unbelievable business.Stephanie:Were there any big projects that you remember that you felt really strongly about? You're like this could go through and you just got like, Nope, sorry. We are not doing that.Ashima:Many of those.Stephanie:Maybe your favorite memory?Ashima:Yeah, we brought in so many different awesome implementation options for [mobile] and people just didn't buy it. It's like my cat who knows I'm here but pretends I'm not here. It's like that. Restoration Hardware acknowledges mobile is important but just does not want to invest in our mobile experience. I still say our because I feel like I'm connected to the brand but it is still sucky. Right? So I feel like mobile was the big, big one and why it's painful is because we brought in so many different ways of getting it in, like let's do it incrementally. Let's get one page there. Let's just get on iOS like, no.Jon:One of the strongest members I have is one of the chief merchandising officers who I want to be really clear is a lovely person, I follow her on Instagram, we're still buddies, is super brave but sitting at one of those tables in the center of innovation and whatever it's like it's the big show building and Restoration Hardware is really designed, if you're a vendor to be like, yo, this is the place, holding up herself and being like, who's going to buy a couch on this? Right? And I was like, man, we got a long way to go. Technology is not the place these guys are hanging out so-Ashima:Right.Jon:Man. So, before I get into... I want to dive deep into implementation because I know you both had background in that. But before that, I would love it if Ashima, you can explain maybe your current role at Amazon and then, Jon will go over to you just so everyone knows who we're talking to.Ashima:Yeah. Like I said, I'm software development manager there. I manage teams that run the front page of music app. So my team is a full stack team, which translates into iOS, Android web engineers, as well as Silverstack engineers who come together to build features for browsing, how customers discover music more easily, and highlight the personalization capabilities that we have under the hood and make it more obvious for customer experience improvement.Stephanie:Pretty cool. All right and Jon.Jon:That's awesome, probably the highest performing team at Amazon Music, I assume.Stephanie:I would think so too.Jon:[crosstalk] Ashima took the technology path after leaving Restoration Hardware and I was like, I can't do another project or I'll be dead. So I went into marketing and now, I do event content and I do all the flashy video stuff for Salesforce. It's a ton of fun. Ashima, your worst nightmare, I am paid for thought leadership. People pay to listen to the crazy stuff I say.Stephanie:I do want to dive into the implementation piece. I want to hear a bit about, we haven't actually dove that deep into that side of things on the podcast. Usually, I have brands on big and small, but we don't go into the weeds there and because you both have seen a lot of implementations in your career, I was hoping you can go through what makes a successful ecommerce implementation, like what does that look like, any case studies, I want to know how someone can make sure to put their best foot forward when thinking about that?Ashima:Yeah, in my experience, the best way to sell an implementation to a business stakeholder is to highlight their top three pain points, what is it that you're struggling with the most like in case of Restoration Hardware, or even my current company, we would ask them, what are the features you wanted to get in in 2019 and still haven't been able to get out of the door? And how can we increase velocity? Velocity is a word business loves. They want their things out the door, in front of the customers as soon as possible. That's one. Two, I feel really strongly about instrumentation and collecting metrics. If you don't know where your customer is and how they're using your site and what they're thinking as they're using your site, it just is pointless in many ways, because you can't make progress in any specific area, if you don't know how well or bad it's doing.Ashima:So those two avenues of velocity and instrumentation connect with business a lot. And then, also giving our business a sense that we're not boiling the ocean, we're going to go slow, start at point A and take you through to point B and won't abandon you midway and here's how it's going to go and give them an early peek into what an implementation would look like, is again, something that just strikes under with business and I feel like they understand our side of the problem.Stephanie:Okay.Jon:I couldn't agree more with agreeing on a language from an IT standpoint with the business and how you can evaluate the success of it. So ahead of time, you know that the business values this and IT values this and is the project to achieving that yes or no, rather than some... because the worst situation is where people start pulling metrics that no one's ever measured out of the air. And it's like, in the last week, our average card size is down 82 cents, you can chase that rabbit pretty deep.Stephanie:I was just going to ask that about metrics. It seems like at least back in my Google days, everyone was always operating in different metrics. I worked with product teams and [inaudible] teams and they didn't really see eye to eye with what was important. So, how would you present that to leadership in a way that connects with everyone who's your manager or manager's manager, and not just presenting business metrics that don't make sense to an engineering team who's like, well, wait, this is actually the bigger infrastructure problem while business is like, but what about my average order size? How do you think about that good balance without overwhelming them with hundreds of metrics?Ashima:Right. I feel like I agree with Jon that metrics and exclusivity don't make sense but if you connect the funnel that, here's where the customer started, we can see that we have so much value in this detail page and this is the button they're clicking the most. And if I improve this experience and reduce the number of clicks, it's going to get us this much left in the final revenue number. I feel like starting and ending, creating a story out of it has the best impact.Ashima:If you throw out a caught value number from the middle, maybe that won't resonate as much but creating a story, creating here's where we start, here's where we see most value. And this is where it's going to end, might have a better-Jon:No, totally. And I can think of two reasons why that's important. One is that it provides a north star for the project as it's going. These projects are multi month projects with different stakeholders and a lot of movement in them. And so being able to touch back to here are the use cases that we all agreed on that we're doing I think, is really critical. The other is it's interesting because it's table stakes to the level you're talking about is to have a broad agreement with the business and IT about what it is you're building full stop and while you're building it. I can think of implementation we did in Emeryville, which was, super lovely people but they were ultimately trying to save the business by replacing their ecommerce engine and as the business degraded, the energy around like we're going to get this new site out and all of a sudden the boat's going to float again. It just doesn't bear out that way. If you don't know why you're building and how that's building your business, technology alone is not going to do it. [AD READ]Stephanie:Yeah. And I love the idea to around having to have a story for it. I don't think I've heard of many, especially, engineering managers speak that language before, which I think is awesome. But I mean, we talk about that in our company all the time about, every podcast needs to be told and the hero's journey type format, even our show notes, everything needs to be told in the story, it needs to open up loops. I'd be interested to hear how you structure that to connect with other people. How do you think about building a story in a way that's going to sell leadership and excite them for something that they might not be able to see like the changes that are happening after a year or so?Ashima:Yeah, and I might be preaching to the choir. You guys are much better than me in this business but I feel like you have to know your audience. If you're going into a VP discussion, your story is going to be totally different and if I'm selling it to my senior manager, he's going to look for what is my [inaudible] AWS. What story are you telling? So knowing your audience, and creating the story based on it is super important. We pay a lot of attention to documentation and story writing. That is why all engineering managers are, well, could have been all of them, rounded part of just knowing what will resonate with that particular team member is super important so that you can bring out just those facts in that conversation and sell that specific point. Jon, I don't know if you have any-Jon:In marketing, we call those personas.Ashima:Personas.Stephanie:Tell me one more thing, Jon, how do we approach that?Jon:How do we approach aligning the stories with a persona? Yeah, I totally agree with Ashima, you have to know your audience, you have to really be able to know what the people want... like any big project like this, it's only going to be successful when it's a mutual success. So understanding how you can talk to somebody and say, we're going to do this and it's going to help you this way, and we're going to need your involvement this way, right? Knowing how to have those conversations is the way to, I think, introduce people to these big projects and get them excited about it. But then, also really being focused on, here are the problems that this project solves for you, constituent of this project, because if people don't have any skin in the game and there's no clear connection between their participation and some better outcome, they're not going to want to do it.Jon:A lot of it is people have some sort of vision, we came in at the point where people already had a vision that they were going to do something at the ecommerce thing and we filled in the blanks of here's what your store would actually look like and here's how your use cases actually match into a finished product. And so, I think she's really right, that you really have to know what the people who are consuming the information about the project need to hear to feel great about it to feel like it's a solution to their problems.Ashima:The other important thing to remember is the the reviews that go well are the ones where you're not tackling 10 problems. I feel like you should look at your story again and find the two problems that you're trying to solve, don't talk about 20, 10. The ones that are successful are the ones that are saying, here are my two problems, working backwards from it, here's where we need to start and here are the big milestones we're going to touch as we work towards it. So working backwards, shortening your storyline to one to two problems that you will solve and never say you will solve everything because you will never be solving everything. There's just too many things that you could fix.Ashima:As an engineer, I could find 1001 things to fix on a particular implementation, on a system. But are you trying to save cost? If cost is your end goal, your story should be just focused on cost. If getting customers specific feature is your goal, that's what you should be focusing on. If you try to do too many things, the audience gets confused. And then, you don't get consensus with it. Because they're like you're asking too much of me. I can't make all these decisions today. So, you don't get good outcomes of this conversation.Jon:Totally. I think that that's a really good insight all the way around when you do an engineering project because it's... particularly one of the sides, right? You live and die on the success of it. And in a very real way, it sucks but a lot of it is also politics and the visioning or how the perception of your project is in the company, and projects that are incrementally spinning off benefits, even if they're not huge, but reliably doing it in my experience, get a lot more love and attention than the, there's going to be this unbelievable bang on Thursday and everything's going to change, right?Jon:Those big bang projects, I think, can be very traumatic for everybody involved. And so, I think the idea that you start with something that works, and then build on top of that, rather than, I got to get all 10 of these perfect at the same time, it's a much harder climb.Ashima:Yeah. The last thing I would say about this is, be honest and upfront about what the trade offs are because you're not going to make everybody happy out of an implementation. Never have I seen that in my career making everybody happy.Jon:Of course.Ashima:So, the prioritization is key to success, like I was saying, picking through problems and solving them. But even within that, you're not going to be able to fix everything, right? If you set the right expectation as a consultant, as an STM or whoever you are in that meeting, and say, this is what I'm going to be able to do in this timeline. And, this is what I'm not going to be able to deliver up front, that might make you lose some customers, but you'll probably gain more customers out of that and I feel like that's a more honest conversation, you earn trust.Stephanie:Yeah, I was thinking-Jon:Yeah, total radical transparency, being upfront. We had a mentor Ashima and I, who would say, hold your client's feet to the fire. Every time he'll be like, are you holding their feet to the fire? And that idea that all of these are partnerships and that a strong vendor relationship is not a vendor who is complacent and like, I'll do whatever you want but is actually holding your feet to the fire and being like, if you don't do these two things, these outcomes are going to happen. And I'm not going to be injured the same way you are, but you got to get on it.Stephanie:Now I know where you got that line from Jon, you pulled that on me last week.Jon:Some inside baseball, Stephanie is outstanding at holding her clients feet to the fire. It's really great, because long ago, I learned that people in business negotiations very rarely say stuff, just to say it, right? There's always something that happens. And I was like, this is the third time I've heard this. It's consistent every time.Stephanie:Yeah. So how has the landscape changed when it comes to maybe either re-platforming or moving to digital for the first time? What were the maybe the two to three biggest problems that were being solved back when you were at Restoration Hardware or before then to now where before maybe people were focused on costs or just simple things? What's the focus now that people are trying to achieve when going through any kind of digital transformation or re-platforming? What are they looking for now?Ashima:I feel like business and engineering are looking for different goals. Engineering is looking to break down the architecture. When Jon and I did initial projects, most of the systems were monolithic. And there was this one giant deployment doing everything and when it broke, everybody cried. We've moved on from that world into the new brave world of Azure and AWS, and every other small or big company trying to get into the buzzword cloud but what that really means is that the implementation goal from engineering side has changed. We've felt more empowered to make small changes. I don't want to boil the ocean. I don't want to switch all of my implementation but I'm going to change this part of this page and just live with it and then, see how it goes.Ashima:And that's a big empowerment factor because then, I'm not stressed about changing everything at once. Right? I can go make micro changes. From business point of view, I feel like the challenge is about understanding younger customers and that's a totally different challenge from engineering because you have to run more user surveys. When we were doing implementations, I barely saw anybody doing user surveys, and coming back to me with a product doc saying, here's what I found. This is what people want, and it's going to be awesome. It was like, I have some intuition. I want to implement incrementality and this is what we should try and do and we'll see what happens. I feel like business is smarter now. I see many more people doing user research, user deep dives, experience deep dives ahead of time to know why they're building something, what would resonate, how do I get that 12 year old into my service so they will stay with us until 40 and I have a continuous revenue stream. So, I feel like the business landscape is changing from that point of view. Jon?Jon:Yeah, it's really interesting that you say that. It reminds me of a million years ago, like 2000, 2001. I was at ATG, which became Oracle commerce. And we were at some crazy Swedish auction bidding site and in Stockholm, I remember the CTO comes in and he's like, are there any features of ATG we haven't turned on yet because we should turn them on and I was like, that's bananas. And so, I think that initial like, I just need to be online. I don't really care what it is because I just need to hold the hill like just to physically be there I think is less important than to Ashima's point. There's a lot more intentionality about like, I want to produce this experience for my customers, and it's tied into a larger journey rather than like, if I'm not selling online.Jon:Although, actually, you said two things I was really interested and the first is that, just to say it out loud, right? At Salesforce, it's not a monolithic, kind of is monolith, right? Like we have micro services or APIs but it's all behind the curtain. It's not pure micro services in the way that someone else would but provides it all API stuff. I hear what you're saying about engineering teams having more ability to make small changes and being able to just get in and do stuff, because stuff is more easily manipulated, because there are more places, I don't know, from access. But, I think that also comes with a lot more ownership. I mean, you need an engineering team that's capable of doing those things, or more maintenance in that scenario.Ashima:Yeah, absolutely. You can't microservice the heck out of the system. You have to be intentional about it. But I feel like in the last five years, our overall engineering pool of people have learned this and it's no longer an anomaly. More people are doing this, it doesn't matter what language you're using, you could be on C, C++, or you could be on Golang. I feel like there's lots of people who have experienced it, learnt it. The bigger companies are now doing it, the Walmarts are all microservice based so we're no longer in the world where people were just experimenting with this and created hundreds of them. I feel like we're more intentional now, we've learned from our experiences.Ashima:The pool of engineers we have now are more experienced. This is not a new thing for them so, I feel like I have seen... maturity is the word I was looking for, that people are becoming mature in their implementation and more intentional about it. It's no longer monkeying with this new concept like-Jon:No, totally. Not only their robust skills in the marketplace, but their design patterns as well that people can fall back on. It's not like I'm now writing the very first of these ever on the internet.Ashima:Right.Jon:Awesome. That's really interesting. I've already answered the question.Ashima:The other thing I would mention from business side, which I really appreciate is people are trying to do one thing and one thing really well. You could go to the play shoe store, and you see kids shoes, they do that awesome. I love those shoes or the furniture I recently bought. These companies who are doing small things less inventory, trying to make the business profitable but doing those really, really well. I feel like that's a huge switch from ecommerce that Jon and I are used to where I am this shop that is going to sell everything under the sun and tell me how to sell it and that was hard because every product is different and categorization is different. The search has complexity and those were really hard problems that we were solving. I feel like businesses are becoming smarter in deciding where they're good at and what they should be doing.Stephanie:Yeah. [crosstalk]Jon:Shopping at the edge is this big idea, right? That all of a sudden, you can't keep people within your website, that all of a sudden, those four walls of your website are gone and now people are going to be shopping in marketplaces or on Amazon Music or at the Hertz checkout thing, or you're renting your car, you can buy whatever, right? And I think it's a compelling idea and I think it really speaks, Ashima, to what you're talking about in terms of little engineering things to make it easier. Like all of a sudden, you're like, now I can really easily ingest orders from the Hertz kiosk. It's not a big lift to do something like that.Jon:And we're seeing crazy growth and I think it speaks a lot to that engineering crowd into the marketing idea that you'll have a lot of control agility to be able to do this stuff. So I mean, as a Salesforce employee legitimately, it is something that we're investing in making happening, but I don't know, it'll be interesting to see how brands navigate it. Because certainly, it's a different model than I'm used to putting on the internet, certainly different than I'm used to using personally, but then, Ashima's point was like, kids today, right? Stephanie:I was going to say exactly what you just said, Ashima about how now, it used to be kind of chaotic, because businesses were trying to do everything. But now to think about, it seems like businesses have to be everywhere to sell, consumers want to shop everywhere. I mean, I know Jon mentioned shopping on the edge, that term which we've brought up a few times in the show and I want to hear how you guys think about that. Because I talked to quite a few brands who say that consumers are on TikTok, Instagram, Pinterest, they're over a walmart.com, they're on Amazon, how do we keep up? We need to be selling everywhere quickly. And maybe Jon, I'll let you start because I know you have a strong opinion that maybe doesn't go well with what Ashima thinks?Jon:I think Ashima and I naturally falls in different sides of this. I think in addition to brands now not necessarily needing to have a gigantic... you can have a very focused set of skus that are easy to merchandise and understand. You also don't need to own all the software and stuff that you once did. It's much easier for a brand to be like, I'm going to exist to sell beanies. They're going be the greatest beanies in the world and assemble, it's the software stack for the brand stack, getting back to that, assemble the software in a way that, frankly, a physical brand that has a lot of legacy stuff is going to have a much harder time following you along. Ashima:I'm not opposed, or I don't think it's something that's not happening, it is happening. Shopping on the edge is happening. My point is that, as an engineer, as an engineering team, it doesn't preclude me from building a strong ecommerce site that's going to be my core platform. I still have to do everything in my power to make that as a strong space, that it can be stable enough to take regular orders. So the engineering effort to chase 50 different places is hard. But I feel like all teams probably first need to focus on making their core platform strong, right? It has to be.Ashima:And the second point I would make is only small... only X5 of your customers are coming from the edge shopping and that is why it's harder to understand exactly how to show your features and what will work for them and that's where my point about user case studies might work. But the bigger bulk of customers still going to come back into your site to explore other things that you have. So if you have X number of dollars, where would you get the most value out of them? Would it be just a shiny poster on Instagram, and bringing them back to your site or putting in your engineering dollars and making that one click work from Instagram? So that's where I struggle what would give you the best bang for your buck? Jon.Jon:Yeah, no, it's, I think, a great point, right? When you're talking, I'm like, man, I definitely want that core platform that's like robust and could do anything.Ashima:Yeah.Jon:I think what you're saying about user stories is ultimately the right answer, though, because when we think about core platform, I think you and I, Ashima, generally, we think about big robust servers sitting in a box somewhere, able to handle any trade, but that's not what every brand's priority is particularly something you want so-Ashima:Yeah.Stephanie:Yeah. Essentially say, they didn't even know they needed a website. They were just like, if you... I am trying to think, who we had on who is... a more recent episode where they're like, well, if we're selling on Instagram or Facebook or wherever it may be, no, it was a bot within Facebook Messenger. And you go on there, it's a personalized bot and then, they can say, this shirt would fit you perfectly and you can buy within Facebook Messenger. And she was making the point of like, why would you even need a website, if you can sell within Messengers or through Dms which is where the world is moving right now? Who cares what your website looks like [crosstalk]Jon:I guess, right back to this Ashima's point about user stories, right? Which is that ultimately, it doesn't matter if you have... pure in the server box of ecommerce definition, if your users are all on TikTok and they're going to buy through some crazy thing, you'd be bananas to invest in the giant server solution or in a traditional ecommerce solution. You want something that can flexibly follow wherever your customers are and knowing that if you don't own the store they're in, that they're probably going to move around a lot, right? It's not going to be TikTok forever. And so, you need the ability to service that.Ashima:Yeah, I feel like I'm a little bit biased being in Amazon, just the pink hat makes me think that I'm not just selling to TikTok customers, I'm thinking big. I have my customers everywhere. So it might be that for your brand, that might work. But for the [inaudible] of the world, they have to have strong presence on their own platform, and TikTok might help. I recently made a big purchase of couches I bought from article.com and I didn't do the shopping on the edge but what was super helpful was to look at Instagram photos of people using that furniture in their house and how it's set up.Ashima:It enabled me to buy it. So again, I was thinking one of the investment people are making is an AI and augmented reality and so on and I don't know if it's worth it because you the Warby Parkers of the world which are sending you the thing at home or the Instagram approach where you're showing people how your product looks in someone else's home. I feel like that's so much more effective to me as a customer that, making this guess of where my dollars should be spent is a hard problem. And I just am not fully convinced that shopping at the edge should be your end goal if you're a big hump.Jon:No, I think even in the most robust Salesforce marketing, we're definitely not suggesting, turn off your channels, shopping at the edge is the only way. 104% [crosstalk]. don't even need it anymore. it's going to be really interesting Ashima because my kids have Amazon accounts, I think. I don't think they've ever bought anything but turns out, all this management of your kids accounts trying to keep them affiliated like Apple , not doing a great job, Amazon, not doing a great job. Anyway, that's not where they go to shop for stuff. It's all social. I'm like, I need a cable, I go immediately to Amazon. They will not do that.Ashima:That's a really great point because I feel like there's a generational gap that I am starting to understand better as my kids are growing up, living my life through them a little bit and that's a great educational experience for all of us learning, how are people adapting to these new things? What are they connecting with? What are they not connecting with? And so on and so forth. My kids don't even read books, it's all audible. I'm like, I'm going to listen to story that I pick so the life is very different than... why I call shopping at the edge, a fad is it's working really well for this generation but for how many years? The next thing is going to replace it is my opinion and that's why having a core strong platform will get you over this hump into the next one.Stephanie:What do you think could be the next thing now? It's piqued my interest of like, what do you see coming after shopping at the edge just dies? No one does that anymore. What are they going to be doing next then?Ashima:You know-Ashima:I have started to see people use Airbnb experiences and Amazon explorer experiences a lot. Just yesterday, a friend of mine said they've gifted their friend or their wife a Valentine's gift of our tour in [inaudible] somewhere in Korea. I'm not saying name right.Jon:Korea?Ashima:It was awesome. Yeah, it was awesome. Lik this person walked through the markets, who then, they could show them the product. It was a very personalized tour so, I thought that's like the next big thing. And even an ecommerce opportunity like if you're buying from here in a shop in Korea and they can ship it to you.How unique is that? I think there's lots of potential and then, doing online experiences. I'm going to do a cooking class with you and then, I'm going to buy all of these pots and pans and ice from you because it looks awesome. I feel like that could be the next big thing.Jon:No doubt because we've got this live shopping demo that we do which is that it's like we have... it's funny because I thought of you when I narrated. I was like Ashima is going to be like this is never going to happen but it's that, there's an Influencer, you can buy stuff on the side so it's interesting to hear the facts.Stephanie:I think that's the way to go. Yeah, I mean, I think about we had someone saying that they... Andrew from Ideoclick, he teaches or does something with Harvard Business School on ecommerce and stuff. And, she was mentioning they had an influencer from China come in and show what shopping looks like and what her fans do and it was within three minutes, she'd racked up hundreds of thousands of dollars in sales of a Harvard sticker. And they're like, that's power.Jon:Totally.Stephanie:It was new to me. I mean, I get it. I buy shirts and clothes and all this stuff on Instagram just by seeing people I follow I'm like, they remind me of myself and that shirt's cute. So I guess maybe not top level.Ashima:Yeah. Well, I use Airbnb a lot. We go out a lot and one of the things that I really enjoy is that something that that person is using in their house, I sometimes come back and buy it because I've experienced it. I've worked with it for two, three days and I loved it and I'm like, I should have this fixture or I should have this knife or I should have this other thing that I've experienced now, lived with it and I feel like that's such an awesome way to promote product, where you can touch and feel it and experience at no extra cost, but then, also buy it if you really like it. So, if Airbnb uses it, they should give me some money. But-Stephanie:We've got affiliate Airbnb, come on.Jon:Right? I think you're really, right and I also think about Twitch because I do some deejaying stuff so I am on Twitch a lot and there's not only crosssection between product buying but also, in terms of rewarding the influencer directly with cash, that your experience where you're like, this is great. I love being here and they're also selling stuff.Stephanie:How are you guys thinking of retail then, you talked about touching, feeling things and experiencing that, obviously, retail hasn't been at the profile lately. How are you guys thinking about that?Jon:That's why all these predictions, they are really a little tricky because this physical digital thing is all screwed up, well, not screwed up but vastly affected by the pandemic and that's incredibly changed everybody shopping habits. I mean, I bought stuff online, I never buy again and so, if I'm really honest, I am not sure the Twitch DJ stream outlives clubs opening. I'll talk about how Twitch is going to change the world and it's all great but I don't know if people are going to hang out online all day if they can go out once a week.Stephanie:Yeah. [inaudible] I am ready to get out.Jon:Yeah. Like everybody-Stephanie:[crosstalk].Ashima:Absolutely.Jon:For me, in person is going to be a big trouble. The camera's not going to get it done anymore.Ashima:Yeah. I feel like this is a blip, I feel like retail and in person shopping is going to come back with vengeance once things open up, we all get vaccinated and be safe. I generally think this is a blip. I feel like retail's going nowhere. It's going to be back. Restoration Hardware is all ready for it, I'm sure.Jon:[crosstalk] Do you think that they'll shift...yeah, totally. Do you think it'll shift the market place, right because I agree, I think we are going back to in person something but the Best Buy down the street has evolved so many times. During the pandemic, they were a fulfillment center then, they were a store , then, they were like outside only and now... I just don't know that it makes sense for Best Buy to have that big retail store and not have a [inaudible]. I agree they'll come back but, I don't know if it's going to be the same.Ashima:Yeah. With Fry's stores closing last week which was a sad event in my household. My husband loves Fry's.Jon:That was really sad. Bad day.Ashima:Yeah. You are absolutely, right that it's going to look different. It's going to be more personalized as, I think, we discussed before, it will look different. There's also going to be a disparity, the big guys are going to have money, they're going to come back the same way, the Targets, the Walmarts, they are going to be the same. The little guy or the medium guy has to make some sense of what will get them through this hump and keep them going. I don't see a [inaudible] store coming up near me, even if they were planning to, I think those plans will be delayed but I feel like some of it is going to back the same way it was, earlier.Stephanie:Yeah. The one thing we keep hearing is more about curation when it comes to stores, that people want to go there for an experience, you go to a pottery ban, you go to West Elm, whatever it maybe and you're lik, this is my space, this is my style, I come here because I don't want to think but then, I also think about me and I'm like, I go to a T.J.Maxx and it's just, all over the place and I thrive there. I'm like, this is my spot. Find something fun and I don't know what to expect so, I think it just depends on the shopper.Ashima:I love that comment because it's very hard to create emotions online. Pe`ople don't have the patience of going through things and things online. This feeling of hunting and finding gold in that aisle, that's going to stay with us, again, there's a demographic that loves it and that demographic is waiting for being vaccinated to get out there.Jon:And you think that digital needle in haystack experience doesn't exist in the same way it does, I mean, like T.J.Maxx, I found this unbelievable bargain.Ashima:It does in some cases, where you guys talk about Instagram and finding something you didn't even know existed. Sure, it does but not in the same way. Finding the $5 t-shirt that you didn't know exist in T.J.Maxx is like, that's new.Stephanie:It's my day. Walking out of T.J.Maxx store snapping, maybe Jon, he looks very confused about our conversation.Ashima:Yeah.Jon:No, it's cool. There's a Ross up here. I know what's up.Stephanie:Ross-Jon:Ross is like the... you could get, Ross is a second store, right? It's just lost inventory so anything can be there.Stephanie:Extra lost. No one goes in and doesn't get lost. All right. Well, Ashima and Jon, this has been an amazing round table. So fun having you guys on. We definitely have to do it again, where can people maybe find out more about your work. Ashima, we'll start with you. Where can people find more about you?Ashima:You can find me on LinkedIn, a lot about me, things I write or things that are relevant to me so LinkedIn is the right place.Stephanie:LinkedIn. All right. Jon, what about you? Where can people find out more about your work?Jon:Yeah, totally. LinkedIn is a good place or just search for Salesforce and my name. I write a lot of Salesforce stuff, number one blog ever. Number one performing blog.Stephanie:Yup and you have an amazing stay conversation for it. Everyone should check it out, methodical trans in there. We've referenced it a few times in our newsletter and it is very helpful for anyone who's either trying to start an ecommerce shop or trying to transform into a big brand. So, thank you guys so much for doing this show and we will see you next time.Ashima:Thank you very muchJon:Thank you.Ashima:Take care, Stephanie.

By now we’ve all heard about the thousands of businesses that pivoted to ecommerce in the wake of the pandemic last year. What we haven’t heard as much are the lessons both companies and consumers have learned in the process.On this episode of Up Next in Commerce, I was excited to dive into those lessons and more with Israel “Iz” Moreira, the co-CEO of Doughp, a company that sells edible (and delicious) cookie dough. Prior to 2020, Doughp relied heavily on its brick-and-mortar stores and the foot traffic they delivered. But Iz saw potential in expanding the company through ecommerce channels, and, luckily, laid the groundwork for the infrastructure for that pivot even before COVID-19 forced Doughp to shutter its retail doors. With a now fully-online company, Doughp has started to centralize and increase its shipping capabilities and has seen success, but it wasn’t a cake (or should I say, cookie dough) walk. Iz explains some of the hardships Doughp faced on its journey to ecommerce success, including how little information-sharing there still is in the business world when it comes to cold shipping. Plus he dives into the recent revelations he’s discovered about whether free shipping actually matters as much as you think it does. Enjoy this episode!Main Takeaways:Secrets Are No Fun: Multiple players in the ecommerce space have reported struggles in optimizing the logistics of cold shipping. Some have figured it out on their own, while others have known the answers all along and have been keeping them close to the vest. Competitive advantages are still alive and well in the business world, so the level of information sharing when it comes to cold storage is still quite low in order for places like grocery stores and meal preppers to maintain their edge.Lead With Mission: Depending on your industry, you should be thinking about how to best reach customers in a differentiated way. Testing is required to find the right strategy, so don’t be afraid to experiment with personalization and messaging. And if you are in a more commoditized industry, finding that one thing that separates you from the rest of the pack is going to be the difference between a customer choosing you or not.Does Free Shipping Matter?: While 2020 was a struggle for most, there were some bright sides, including the education of consumers on the world of shipping and logistics. As more consumers became educated on the hardships businesses face when it comes to shipping and handling, the customers have become more willing to pay for shipping.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce, your number one spot for all things ecommerce. This is your host Stephanie Postles, CEO at Mission.org. Today, I'm chatting with Israel Moreira AKA Is. Welcome to the show.Israel:Hey, thank you for having me, Stephanie. Nice to be here.Stephanie:I'm really excited to have you on here. I'm excited to have a company on here called Doughp, which I've said now multiple times, "Why was I not innovative enough to create a company called Doughp?"Israel:Yeah, I have to give full credit to Kelsey though. She was the marketing brain behind this brand. So, it's really interesting. Coming from Brazil, Doughp was not part of my English skill. So, when I first heard it, I was like, "Wait, what is this?" And then it makes sense.Stephanie:So, maybe let's start there before we dive into what Doughp is and your role there. Tell me a bit about coming from Brazil. When did you come over to the US? Why? What was that process like?Israel:Yeah, for sure. So, I have a civil engineering background. I went to school for civil engineering, started working in construction in about 2010, 2011, some time ago, and eventually became a project manager for a construction firm in Brazil. I loved working in construction per se, because of all the changes and all the new stuff going on around. Being a project manager is really relevant in any industry. You can just transfer that skill set across multiple industries. So, I love doing that, but living in Brazil was not something that fulfill me per se. I would say, safety in Brazil, public education, public health, everything you hear in the news here about third world countries, most of it is true.Israel:So, being raised there, my parents always told me like, "Oh, if you ever have an opportunity to leave and study abroad, just go do it. All the other countries out there, they're way better for you to have a better career." So, I had that mindset built into me in my upbringing. Israel:So, in 2015, I decided to make the change. I did a backpacking trip to the United States and Canada, because I wanted to be in an English speaking country. English was always my second language. So, I was like, "Well, I've got to go during the winter and find out if I can withstand the winter and the place that I'm going," because the summer is fine, right? I was born and raised under the sun. So, I did this backpacking trip of 30 days going across the US and Canada, which was awesome, but it led me to find out that I wanted to be in Berkeley in California. So, I applied to a course there, an international student course that gave me the ability to stay here studying business management and marketing, which were not my strong suits.Israel:I was always a project manager. So, I wanted to know how to manage a business. The marketing side, because I'm so focused on operations and finances, was never my strong suit. So, I wanted to be a little better in that regard. And then after studying here, I was able to secure a job in San Francisco, which my head was just blown away by that. Yeah, eventually just stay here, working in SF, and then the love story begins between me and Kelsey. But after working for Product School, which was a company I was working for in SF, I joined Kelsey at Doughp.Stephanie:Yup. So, Kelsey founded Doughp, which is a raw cookie dough bar, but it doesn't have raw eggs in there, right? Is that the right way to explain it, or maybe you can do it better justice?Israel:No, that's correct. I like it. It does not have any raw eggs. We use heat-treated flour. So, it's super safe for consumption. So, the whole idea of this is to bring nostalgia by the scoop. So, you just probably grew up here trying to eat the cookie dough that your mom or somebody in your family was baking. Everybody was saying, "No, you can't eat it, because of the eggs and you're going to get salmonella and whatever." So, Kelsey did found Doughp in 2017 to solve that problem. It's an interesting story as well, because in 2015, she became sober. She was struggling with alcohol, working for Intel for 10 years. In becoming sober, she rediscovered her passion for baking.Israel:So, she just launched Doughp in 2017. In 2018, she started the Pier 39 store that she used to have in San Francisco. It was a rocket ship, I got to say. She then launched in Oracle Park in a kiosk. And then in 2019, Doughp opened the store at the Las Vegas Strip. So, in 2019, Doughp have basically three brick-and-mortar operating stores.Stephanie:That's awesome. So, everything was brick-and-mortar at that point. When did you enter into the company? What year was it? What does your role look like as Co-CEO versus what Kelsey works on?Israel:Right. So, let me start with the second question, the Co-CEO role. Kelsey and I have very different skill sets. She is a marketing guru and a business development wizard, I got to say. She's great at that. I'm great in operations and finances. So, we have very defined responsibilities, if that makes sense. So, whenever she comes to the problem, obviously, I'll be the sounding board, but she's the one that's the expert in marketing, for example.Israel:So, if there's anything coming up in a marketing campaign, then she's the one who's going to say, go or no go, the final word. Vice versa, in operations and finances. So, it's a really fortunate situation, I got to say, because it makes it easier, right? Especially having a relationship as well. Right now, I'm speaking from the office. We try to keep all Doughp matters in the office. So, the relationship also happens, but it's a challenge. But anyway, I think we have a very fortunate situation in this skill set.Israel:As far as your first question, when did we transition into the ecommerce? When did I join the company?Stephanie:Yeah. When did you join the company? Because that's where I want to get into the path to Shark Tank and all that. So, what year was it that you joined?Israel:Right. She went to Shark Tank before I joined the company. So, she went to Shark Tank in 2019. So, right after she opened the store here in Las Vegas, she went to Shark Tank. I joined the company late 2019. So, it was about six months after the Shark Tank episode aired.Stephanie:You are in the midst of the growth then, because I was listening to an interview with some stats around... I think it was in November 2019. You guys were maybe shipping 30 boxes a month. And then by April 2020, you were shipping 3,000 boxes per week, which is crazy growth. So, I want to hear. I mean, it sounds like you were right in the midst of that, of entering into... She was on Shark Tank. She didn't get a deal. But then she started opening more retail locations, grew like crazy, and then COVID hit. Tell me a bit about that.Israel:Right, exactly that. So, you just summarized everything. I joined the company in November of 2019, which was exactly when we were doing the small amount of boxes a month. When I joined, one of the first things I did with her was to have a big brainstorming session about all the operations that she was doing, right? So, at the time, she was doing catering events. She was doing a little bit of wholesale, a little bit of ecommerce. She also had the stores. So, it was a very wide breadth of operations and not having a lot of success in any of them per se, right?Israel:So, the stores were still the bread and butter of the company, but none of the stores were growing astronomically. We were already seeing some foot traffic decreases. Happening so much so that as soon as I joined the company, I was like, "We got to make sure that the unit economics of these stores are a little better," right? So, we were paying way more in rent than we should be paying based on foot traffic. So, renegotiations started happening back then. So, out of that brainstorming session, we used a very rudimentary framework, I would say, but it was super helpful to understand what type of work was being done in each distribution channel to serve customers versus what type of return that was giving to the company.Israel:So, the outcome of that situation was, "Okay, brick-and-mortar is still the bread and butter of the company. We are not going to change that, but we need to find one other channel, not five, six, seven, whatever she was doing back then, that will be the 20% revenue, right? We're going to keep the brick-and-mortar 80%. We're going to have one of these as 20%." Ecommerce was the one we decided just because of the "infinite possibilities" of having foot traffic not being limited by foot... It's not actually foot traffic. It's actually eyeballs. So, we decided to go into ecommerce in November of 2019 together. That's when we started shifting all of our resources into growing our website and our paid acquisition channels and our social media strategy.Israel:When the pandemic hit, thankfully, we were ready. So, although it was awful for the brick-and-mortar stores, it was great for the ecommerce because people were at home. They were not very happy being at home. They were trying to find novelties to fill the time, right? They're just not happy at home. Being an impulse buy, a nostalgia buy, we just skyrocketed. That's why 3,000 boxes a week happened.Stephanie:What kind of things did you have to adjust on the back end when it came to logistics? I mean, I'm thinking about shipping perishables. It's one thing to ship it to a retail location. You've got it all set. You're planning for your orders on average every week. How do you prepare for shipping all over the country or world? How did you set things up to prepare for that?Israel:That was a big learning experience, I got to say. There's a lot that co-chain shipping entails. Back in 2019, we knew almost nothing about it. So, there was a lot of talking to people that are already in the space and flying and driving to fulfillment centers and co-packers and seeing how they work, really learning how they work. But at the same time, we didn't have all the resources to go into a co-packer and a national last mile distribution contract. So, we have to be scrappy as well. So, we had to use all the resources that we had.Israel:In March, when the pandemic hit, I had staff of the store and I had the space. I had no customers to serve. So, that helped us in that I started using those resources to fulfill the ecommerce orders, right? So, January, February, we were already having some growth, not astronomical, but still some growth. I was already using that labor to fulfill the orders. And then in March, when the pandemic hit and ecommerce just went through the roof, I was able to use our staff to help there. But as far as the logistical implications, we have a lot of limitations, because of cold shipping, but now I thankfully can say we know what we're doing.Stephanie:That's a plus.Israel:Yeah. When we first started, finding coolants and insulation that will be able to keep our product refrigerated through the time in transit. Also, making sure that you find that sweet spot between the winter and the summer, because in the summer, we'll need more coolant, but you also can't forget about the coolants in the winter. It was a big challenge, but now we got it dialed in.Stephanie:I mean, it seems like this area of cold chain shipping and logistics has a lot of room to grow, because we've had a couple people on the show who... We had Yasso on. It's like frozen yogurt bars. Everyone talks about building their packing materials from scratch, depending on what you need, which seems insane to me. It seems like there should be some shipping materials. If you need something under this temperature for five days, here's the box to go with. Why do you think this industry is lagging behind like that when it seems like this is the way forward? I mean, everyone's going to be doing grocery delivery and online orders much more frequently now. It's the way we're moving, but it seems like that area has definitely lagged behind.Israel:That's a great question. I do think there's a wide or a vast lack of information around there. There's a little amount of players that know a lot, right? So, if you talk to some specialist companies in packaging and box design and coolant design, then yeah, they will know everything, but it's proprietary information, because it's their product. So, they don't want to be sharing this with many people. So, you don't find a lot of that information online consolidated in a how-to book. That's the first problem.Israel:The second problem is we had grocery stores operating before all this happen. Now, obviously that trend of going into ecommerce was already happening. But when the pandemic hit, it just accelerated exponentially. So, the speed with which the information is shared was not equal to the speed with which people needed that information. So, we have this major gap right now in which some players know what they're doing and some players are still trying to figure it out.Stephanie:Also, it seems like as a middle ground if you don't have the resources to invest in your own shipping materials, you could do the middle ground of working with grocery stores and letting them take care of it, ship it to the grocery store. They can do the online orders, the in-store pickups, and all that stuff. You don't have to figure out the logistics from end to end in the beginning.Israel:Right, right. Yeah, that totally makes sense. I think that's why most brands did not adventure into the ecommerce space, I think. Now, we're just seeing so many brands going into ecommerce, because people are at home and they're not buying from grocery stores as often, which is a whole different conversation, right? Are they ever going to go back to whatever normal is, or are they going to continue buying from ecommerce? My take on that is that they will continue to buy from ecommerce not as much as now, but definitely, they're not going back to what that rate was before. So, yeah.Israel:So, having this central player is also another reason why the information was centralized, right? They have this competitive edge, and they don't want to give it away to their competitors. So, if you're talking about Whole Foods, they have their own distribution chain. So, they have their own ways to make their profit at the end of the day. So, they don't want other competitors to find out what they're doing, I bet.Stephanie:Yup, yeah. It makes sense. So, when you were going through these transitions of going from mostly retail to ecommerce, what were some of the areas of the business that needed the most adjustments? When you're focused on retail, you're thinking about foot traffic. What neighbors do you have moving in? What other stores are nearby? You're mentioning unit economics. It seems very different when you're shifting almost completely to online sales. What things that you have to adjust or completely cut out from the business? The whole way of thinking, what do you have to change?Israel:Well, the unit economics of the two channels are very different, right? So, if you're thinking about a brick-and-mortar store, you have to consider labor as one of your biggest costs, along with ingredients and packaging. And then as you go into ecommerce, ingredients and packaging are still there. They're not going to go away. So, the major difference is shipping, handling and shipping. So, these are the major differences. Some people consider shipping within the cost of goods sold universe. Some people say it's out. But then after shipping, it's a contribution margin. Whatever you may say, shipping is a major cost to serve your customers on ecommerce channel. So, that is the biggest change, I think, we've seen.Israel:Ingredients and packaging as we're selling the same product do not change. Operating expenses and SG&A, we'll have a whole different conversation as well. Because as you go into ecommerce, you're acquiring customers in a very different way as you mentioned. You're not dependent on foot traffic. You're not dependent on a shopping mall management, what happens with the world, flights. Especially in the Las Vegas Strip, it's a very tourist-based area. So, going away from that gives us a lot more independence, but at the same time, because everybody got into that space last year, it got very competitive. So, although the cost structure is different, that competition makes it hard.Stephanie:Yeah. Did you have a customer base that you could tap into from your retail locations, where you've got these loyal customers coming back? Maybe they're getting points. Did you already have that baseline to tap into and be like, "We're moving to retail. We'll see you there"? Or did you have to start from scratch?Israel:So, it's a 50/50 response here. Yes, we did. It was great, right? We had a lot of customers through the Pier 39 store and the Las Vegas Strip store. They were indeed activated for the ecommerce. Whenever we were ready to ship, we sent a blast saying, "Hey, guys, here we are. We can ship to your house now." This was January, pre-pandemic. So, that part was great, but at the same time, we just grew so much in March and April, that I would say most of our customers right now did not go through our stores before. So, although we did tap into that, that's not the majority of our customer base.Stephanie:So, then how are you thinking about customer acquisition now? Because once again, it seems like such a different hat you have to wear of how to attract customers in the online world versus I could do a billboard. I could go out and give out samples of the cookie dough. What are your top performing channels right now that you guys are leaning into?Israel:See, our top performing channels are paid advertising and social media organic. I think we have a very different scenario here than most brands that you see in the grocery stores. It's because we lead with our mission and our giving back, right? We have a mission. We talk about mental health and stigmas around mental health. We also give 1% back to the community. That's just not something that other brands out there do. So, if you associate that with a kick ass product, which is what we have, then you have the winning formula. I think this is the way that we lead with our brand messaging. This is what's made us so successful so far.Stephanie:How do you think about balancing that? Because we've had a couple brands on the show who also have missions. We've had Bombas on. We had BLK & Bol‪d Coffee. But they also talked about the unique balance between thinking, "Do you sell with the mission, or do you sell with the product and then showcase the mission afterwards?" Because it depends on who you're getting in front of or who you're trying to reach. How do you guys think about that balance of we have an epic product. and we have a great mission without muddying up the website. Israel:That's a very interesting question. I think you said the answer in the question.Stephanie:I just answered my own questions.Israel:I actually agree with your answer. I think it depends on who you're trying to sell. It depends on what your product is. I think there's many ways for you to do this. In our particular case, we tried to lead with the mission. I think as you go into a commoditized industry, leading with the mission is more important. If you're not in a commoditized industry, then your product has major differences against its competition.Israel:So, it makes sense for you to lead with more of your product and how it is and why is it better than a competition. Although we have differences from our competition, it is a more commoditized product, right? If you go to a grocery store right now, you're going to find Pillsbury, Nestle, and other big brands right there. So, leading with the mission in this case, I think, is more relevant.Stephanie:I like that point. That is a good way to think about it. Depending on the industry, you should think about how to reach your customers. I also think you could maybe segment the customers depending on what they're searching for, what they're interested in, if they're past customers. We've talked a lot about loyalty on the show and how you should be giving different messages depending on who the customer is and how they've engaged with your product. Do you guys think about doing a more personalized approach depending on how your customers are interacting?Israel:Yeah. That also talks very closely to our landing page strategy, right? We have different offerings for different customers. So, it makes sense for you to segment your customer base and say, "Okay, I got to potentially have a loss leader to have this customer in the door. And then I'll make sure that this customer loves the product enough that they will come back because of the mission." So that's one potential strategy, but again, it depends on what customer you're trying to sell to and what your product is. In our case, we have many different customer personas. We try many different approaches to each of them every single day. So, there's a lot that goes into A/B testing and understanding what performs better to each audience. So, that's a lot of our time.Stephanie:Yeah. What are some of your favorite experiments that you've run or results where you're like, "I wasn't expecting that, but now we're leaning into that strategy after deploying that"? Any good stories around that?Israel:Yeah, shipping.Stephanie:Let's hear it.Israel:Shipping is very interesting. We've run many, many tests around shipping. It seems to be a seasonal thing or it has something to do with a pandemic. We're not quite sure about the reasoning behind it, but it seems like in the very beginning of the pandemic, people are more sensitive to the free shipping messaging, right? You were testing free shipping against the $2.95 shipping. Free shipping would convert like crazy versus the 295. Whereas now, it seems like people are more understanding of the world situation and how shipping works and how expensive it is for brands to ship.Israel:So, right now, the latest test that we ran about shipping, we didn't have a very significant variance in conversion between... I think it was a $9.95 shipping versus a $7.95 shipping. So, giving discounts on shipping right now is not as relevant as before, which to me just blows my mind because what you think in shipping, you consider Amazon, right? Customers are getting spoiled with Amazon, "spoiled."Stephanie:I'm spoiled.Israel:Exactly, you just go on Amazon. I literally went on Amazon last week on Friday to get some vitamins and I got the vitamins on Saturday morning.Stephanie:Yeah, I got a leaf blower in one day.Israel:Wow.Stephanie:That's a whole different level of being spoiled, but I mean, I'm all for it.Israel:Exactly. That talks closely to how expansive their distribution network is, how many warehouses they have, and how much inventory they hold in each of the warehouses to be able to do that, because as you centralize, it's easier for you to keep control of what you're doing and keep your processes consistent and whatnot. That's what we do.Israel:But as you want to reduce the time in transit, you have to do that. And then you need more labor, more headcount to make sure that everything happens, and more inventory. There's more cash tied up into that inventory. It just goes crazy. But most people that don't know what goes behind running a business just think, "Oh, well, this brand doesn't know what they're doing, because Amazon is doing it in a day." So, there's a lot of educating consumers about shipping and logistics for them to understand why Amazon is able to do this. Whereas the small brand that you're trying to support cannot do that. It doesn't make sense on their unit economics.Stephanie:Yeah, I mean, I think that's the silver lining of 2020 is that a lot of people did experiment with new DTC companies. They went places they would have probably never shopped before then and were buying things directly from brands. So, I think they probably became more accustomed to paying for shipping to where going forward, that might be a more normalized thing, or going forward, people will just be like, "You need to just include that in the cost." Because oftentimes, I do think if you were just to increase the cost by a couple of dollars and tell me I have free shipping, I probably would be happier and just not care where it went. You can charge me for it, but just don't show me that extra line at checkout.Israel:Right, right. That's exactly how we did that first test. We just did exactly the same total cost for the customer. One had the shipping as a separate line item, and the other one had the shipping baked into it. Again, the free shipping converted way more. But now the last time we ran it, it didn't. So, yeah. Who knows what's going to happen now?Stephanie:Yeah, I mean, that's definitely a good test to run. So, what's next? What are you guys preparing for right now? Are you going to re-enter retail? Are you going to start working with wholesalers? What are you guys planning for over the next one to two years?Israel:That's a great question. It involves a little bit of forecasting in times of uncertainty. To the best of our ability, we forecast that potentially until late this year or probably mid-next year, we're going to be back to whatever normal is. So, there's many other channels that will come back to normal aside from ecommerce, right? Ecommerce is now our bread and butter. We're heavily focused there, but we foresee some opportunities, for example, in grocery stores and wholesale that we might pursue as well. So, that depends a lot on where the market is. I think by now, we know exactly how to pivot and persevere whenever needed. We learned that lesson during the ecommerce and pandemic shift.Stephanie:Would you re-enter retail with... Would you do anything different now, where you've had a year plus to think about it and think through the strategies that you were using before? Would you go about it a different way?Israel:Retail as in to brick-and-mortar stores?Stephanie:Yeah, brick-and-mortar.Israel:No, no, that's definitely not in our intention for the future. I think retail can work in some ways, but that's not something we want to do anymore, just because right now, we have this brand awareness. We have this momentum that the brand generated with the ecommerce shift and everything that's going on around us that we just think limiting your product to one single store that depends on the foot traffic around that store is not where we want to be. So, on the brick-and-mortar side, no, I don't think we would do anything different. On the ecommerce side, perhaps we would have started earlier.Stephanie:You can't have that kind of hindsight, but yes, I'm sure everyone's like, "Why didn't we do this a couple of years ago?"Israel:Yeah, definitely.Stephanie:What about samples? So, that's always my thing with everyone who's come on the show who is in the CPG area and foods and snacks and all this stuff. I mean, I always think about Costco, which I love so much. I miss their samples a lot. I think about a product like yours, especially with buying it online, it's like, "Well, I don't know how it'll taste. It'd be nice to be able to try it out in a small amount first." That's why I think retail is so great. So, how do you guys think about introducing it to customers like me, who would be maybe harder to sell to online without really knowing if I would even like it?Israel:Right. Well, I think you touched a very important point in the wholesale/grocery store channel, which is they do their own experiential marketing. Some of them do. Some of them have fairs and other types of experiential marketing. That's one thing that we'll definitely tap into. Organizing our own events is something we thought about, but not depending on real estate that's under a lease agreement, if that makes sense, right? Because an event, you're going to generate all that buzz and bring potential customers to your event.Israel:Maybe you can even do brand partnerships to generate even more buzz. Those people will come and try your cookie dough or whatever product you're selling, and then potentially buy from you at the grocery store or the ecommerce side. Whereas if you have one space, you're going to have to conduct business as usual. You're going to have to hire staff and keep staff and train staff, keep the lease. There's a lot of difficulties that encompass operating a retail store. I think for what you're saying, acquisition of customers, I think there's other ways to find that.Stephanie:Yeah, I love that. I think there's going to be so much pent up demand around people wanting to, like you said, getting into these experiences and experience brands but in a different unique way, whether it's events where you try something out or meetups or whatever it may be. I do think a lot of people who are changing quickly with the times will see it how you do around, "We don't need just one location. We can tap into the Walmart's and the Whole Foods, and then go to these events and just not be so reliant on one channel or one retail location."Israel:Yeah. I think that brings us to a very important point that's happening because of the pandemic, which is the decentralization of population density, right? If you look at population density of San Francisco, LA, New York, Chicago, all the big cities in the US, there's many people that just left.Stephanie:Got out of there. I'm one of them, peace. Bye, California.Israel:So, do we. Now, we're in Nevada. There's a lot of people that just don't need to be in a physical space. They just work remotely. There's no sense in keeping all the lease or whatever mortgage you have for nothing. So, that creates a very interesting moment for the industry, because there's a lot of other cities that otherwise would not have had so much foot traffic or population that now do, right? Las Vegas now has a big boom. There's a lot of people moving to Las Vegas. So, initially, you would have thought, "Well, I'm only going to launch events in New York, LA, SF, Chicago, Dallas, because these are the biggest cities." But now, it makes sense for you to go a little scrappier and do smaller events in cities that were not that big.Stephanie:Yeah, I was just thinking that too of exploring micro events that seems like it'll be a lot more logistically, because to actually tap into that same maybe amount of people that you would have before 2019 or before 2020, you really have to do a different approach, which seems like a lot of new and different kinds of work that many brands probably weren't and maybe still aren't prepared for.Israel:Totally agree. I believe the brands that are the most prepared in the ecommerce world are the ones that are going to succeed in the experiential events side of things, because they're going to have to ship cold product and make sure that the consistency and quality is kept throughout the time in transit. The companies that are doing the best in ecommerce are the ones that are going to succeed there.Stephanie:So, when thinking about experiences and focusing more on maybe the longer tail, like you said, the big cities, how do you think about leveraging influencers? Because to me, that could have a big impact too if you have events going on and you get an influencer from some city in Alabama, probably will have way better results than pulling in a Kardashian. How do you think about utilizing them over the next couple years?Israel:Well, that's a great question. That's a great question. Definitely, something I did not think about, but now, I think-Stephanie:I got the wheel spinning.Israel:Yeah, no, I think you got the wheel spinning. I think if we're starting the events in these smaller cities, I think the local influencer is going to have a better result as you said, right? Instead of spending millions in a Kardashian, for example, we could spend way less than that but distribute it across 20, 30 influencers in 20 or 30 different cities and bring more people to the event for sure.Israel:I think for the acquisition side of things, that will help because people will try our product, but at the same time, we have to make sure that the people that come to the event don't come only because of the influencer. They have a very good experience there as well provided by us, right? So, leading with the messaging and the 1% giving back. We're not here just for you to see this influencer and just for you to try this cookie dough. We're also here to foster raw conversation about mental health and addiction recovery.Stephanie:Yup. Yeah, that's cool. Also, maybe brings up a point of having volunteer events and smaller micro activities like that to bring people in for the mission. And then you've got the cookie dough, and you're making this well-rounded experience that people walk away with. They're like, "That brand had a really cool thing that I wouldn't have known about unless they hosted it."Israel:Yeah, love it. That's a great idea.Stephanie:You're welcome, man.Israel:I'm taking note of this.Stephanie:But I am thinking now about attribution piece too, which I think is going to be a big thing that brands have to think through over the next couple of years of, "How do you know if your efforts are paying off?" The world's changing so quickly. If you're moving to these more smaller locations to focus on things that are becoming more distributed, it seems like there's going to be a lot of work to do around, "What's actually working and what's not?"Israel:Yes, yes, you just find a situation there, right? Attribution in marketing is the hardest part, because some marketing pieces are going to be for brand awareness. How do you quantify that? It's super hard. So, a good approach for that is to just put everything in the same bucket and say, "Okay, revenue this month versus spend in marketing this month and just have that metric follow you through times for you to see whatever changed this month is doing okay or is not doing okay."Israel:So, obviously, it's a very simplified metric. There's way more refined metrics, I would say, for you to use in each and every channel, but that is a quick indicator of, "Okay, you're messing something up," or "Okay, well, something's going on that's doing well here." So as attribution goes harder and you mentioned it quite well, when you said, "When we start spending in these events and other stuff, how do you know that that person actually purchased from your website because of the event or because they saw an ad on Facebook or because they watched Kelsey on a podcast or me on a podcast?" There's limited ways for you to find that. So, I think that's a good way for you to gauge your results.Stephanie:Yeah, yeah, it's going to be a tricky world going forward. All right. Well, let's shift over to the lightning round. Lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I ask a question and you have 30 seconds or less to answer. Are you ready? I just saw your eyebrows though.Israel:I'm ready.Stephanie:That's your game face, I guess. All right. What one thing will have the biggest impact on ecommerce in the next year?Israel:Experience, customer experience. I think when you receive a box from a brand, if you're the brand, you got to make sure that that box is the best you can do for that customer to have a great experience, because the convenience factor is there. Yes. But if you tell them or if you send them an experience that's underwhelming, you're not going to keep that customer. So, I think that's the most important thing in ecommerce.Stephanie:What's your favorite thing you did to your unboxing experience that you're like, "I'm real proud of that"?Israel:Is that still under the 30-second limit, or can I expand that?Stephanie:This is a new one. Yeah, this is your next 30-second question. I just added on.Israel:I think as of now, the coolest thing that we do is to send a note card for each and every one of our customers talking about our mission and what to do with the product. If there's anything that's wrong with the product, please contact us. I think some brands don't take the care of telling their customers how to reach out to them in case anything goes wrong. I mean, let's consider I'm the customer now, right?Israel:I'm paying whatever I'm paying for a cookie dough to receive cookie dough in my house. Something happens and I'm not happy with the product. I'm going to go after it. I'm going to go ask the brand, "Hey, I just paid this amount of money for cookie dough. I could have paid way less in the supermarket. Can you please make it better?" If you're not ready for that, then you're not going to succeed in ecommerce. You've got to be ready to make sure that the customers have the best experience. So, sending that card and making sure that they know what to do and how to reach out to us has been a great victory for us.Stephanie:Yup, yeah. I love that. I think gone are the days of, "There's our chat bot. You can talk to them. Try and solve it through them." Nope, people are over that. That was something that maybe worked in 2019 for a little bit, and everyone was headed in that direction of tech can solve everything. It can take out your whole customer service team. It can solve all your problems, but I think now people are looking for that experience. They're looking for the brand to actually solve their problems and help them.Israel:Totally agree.Stephanie:All right. Next question, if you had a podcast, what would it be about? Who would your first guest be?Israel:Wow, you got to tell me that these things are coming now. The wheels are spinning here.Stephanie:Sorry, I can't. It's the lightning round.Israel:What an interesting question. If I had my podcast, I think it would be about hustling. There's so many people that do so much cool stuff. We never hear about it. there's people that are intrapreneurs. They're entrepreneurs inside their own organizations. They're still in their job, but they're doing very cool stuff within their companies. There's a lot of glamor around just entrepreneurship and whatnot. So, the hustling side would be interesting for me to hear. Who would my first guess be? That's a great question. Does it have to be a person that's alive?Stephanie:Nope, they can be whoever you want.Israel:Okay. I would probably interview Steve Jobs.Stephanie:That sounds good. I would listen to that.Israel:Oh, cool. I think he must have had very cool stories about hustling. There is some controversial information about his managerial skills, but I do believe he was a hustler. Apple is what Apple is very much because of what he's done to it. So, that would be a very interesting conversation.Stephanie:Yeah, I think that'd be really cool. I mean, yeah, there are so many people within companies. You see new product launches. You see new features. I think people just associate it with, "Oh, that's the brand." That's Google. That's Facebook. That's whatever. But there's people inside there who maybe had that idea and actually brought to fruition. I want to hear from this people. That's a good one.Israel:Exactly. Yeah, there's so much PR around the people that are on top of the company, but little is said about the people who actually bring those ideas into life.Stephanie:That's a good one. All right. What's one thing you don't understand today that you wish you did?Israel:Oh, wow. Interesting question. Israel:Well, the wholesale world has a lot of question marks to me right now, just because we're not in it very deep, I would say. So, I would love to learn more about the wholesale and direct grocery store channel. I will probably know a lot more in a year. We can redo this.Stephanie:I know.Israel:My answer will be-Stephanie:We'll do a round two. When you guys start exploring wholesale, you come back with that. And then the last question, what's the nicest thing anyone's ever done for you?Israel:Wow.Stephanie:We go deep here.Israel:Yeah, I love it. I love it. Israel:Okay. So, when I was doing this backpacking trip in 2015, I think it was in Vancouver, Canada. I had just missed my flight going to Toronto. It was the first flight I've ever missed in my life. I was very upset, very upset. So, I just went into this Starbucks shop. I was like, "Okay, I'm going to have this coffee. I'm going to just de stress. I don't want to think about this." I was alone. There was this gentleman sitting on a table right next to me. We ended up striking up a conversation. I was a little stressed because of the flight, but still, whatever. I'm just here to make friends and see what it's like to live here.Israel:And then this guy, I just told him everything about my life, but I lead with what I was doing in Brazil, right? I was like, "Well, I'm a civil engineer from Brazil, yada, yada." And then in the middle of the conversation, he's like, "Oh, so who are you, Israel?" I'm like, "What's going on here? I think this guy is a little odd. He didn't hear what I said." And then I'm like, "Whatever. I'm just going to say it again." And then I started saying, Well, I'm a civil engineer from Brazil, yada, yada." And then he stopped me in the middle. And then he said, "You are not defined by your job. You are defined by your passion. What's your passion?"Israel:And then it made me think like, "Oh, my God. I describe myself by my job today. I'm literally here trying to find a new city for me to live in. I'm trying to lead with my job." So, I think that was really kind of him to do. It was an interesting thing. I don't know that he thought it was going to be so impactful for me. By the way, if you're listening to this, I don't remember your name, but you're really cool, dude.Stephanie:You're the best.Israel:Yeah. So, as I went through my backpacking trip, I just kept that question in my mind over and over again. I was like, "I got to find my passion. What is the passion that I'm trying to solve here or trying to pursue in moving to the United States?" That eventually got me into a very deep reflection. Civil engineering was not my passion, basically. That's the bottom line of that reflection. My passion is education. I want to do something around education. I think education is the key to change the world.Israel:One of the things I want to do whenever I do have some more time... Right now, I don't. But one of the things I want to do is to found a nonprofit in Brazil to help with education in underserved areas. I think that's the key to go. I'm so grateful for the education that I had in Brazil all in all, because that's why I'm here, right? If I had not had that education, then I wouldn't be here. So, that's a long winded response.Stephanie:That's a good one. I think that is awesome of that person to give those thoughts. I've had that same reflection when I was living in the East Coast. People were very much into, "What do you do? What's your degree?" Always starting off with that. And then when I moved to California, it was very much not that. And then moving to Austin now, it's like, "What do you like to do? Do you like to hike? Do you like to paddle board?" That's a different conversation, but it makes you think very differently about, "What do I like to do? Who am I?" So, I love that. That's a turn for the philosophical and I am all about it.Israel:Love it.Stephanie:Thanks so much for joining the show. If people want to try out some Doughp, where can they get it from? I'm going to keep saying it like that, Doughp.Israel:www.doughp.com. It's D-O-U-G-H-P.com. You can also follow us on social media. Most of our handles are @Doughp.Stephanie:Amazing. Thanks so much for coming on. It was a blast.Israel:Thank you for having me. I had a blast.

If done correctly, a two-headed strategy of driving sales on Amazon and your native website could yield huge dividends. But what does that kind of strategy look like, and how can you create a scenario where one builds off of another?The answer lies in assortment and pathways into the brand experience. Ben Knox is a bit of an expert in this area and he’s here to share his expertise. Ben earned his stripes working on Red Bull’s ecommerce strategy, and now serves as the vice president of ecommerce and growth at Super Coffee. According to Ben, brands need to come up with an assortment strategy that allows customers to get what they want, when and where they want it, but also leads them back to the type of brand experience you want them to have. He also details how beneficial a subscription model can be, if done right. Plus, he gives some tips on how to get the most out of your texting strategies and what is going on in the wild west of customer acquisition.Main Takeaways:Assorted Assets: When you sell on Amazon, as well as natively on your website, you need to decide on an assortment strategy and how each site can build off each other. Whether that is only placing a select assortment of products on Amazon, or having a full assortment across channels, but offering more subscriptions and sales on your website, it’s crucial to have pathways back to your branded channels.Gotta Flex: If you offer subscriptions, you can only achieve true customer success if you offer flexibility. Even if it means that your customers can cancel a subscription ten minutes after they sign up, those are the kinds of options you need to offer. Doing so allows your customers to feel unburdened and that the experience is risk-free, which makes them more inclined to sign up.Text Me: There are benefits to separating your text strategies in order to maintain the relationship you want with your customers. Having separate text numbers for subscription management and branded content will help customers differentiate the experiences they are having and allow you to cultivate a true VIP experience with those who opt into the branded company channel.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to Up Next In Commerce. This is your host Stephanie Postles, co-founder and CEO at Mission.org. Today on the show, we have Ben Knox joining us. He's the Vice President of ecommerce and growth at Super Coffee. Ben, welcome.Ben:Thanks so much for having me. I'm excited to be here.Stephanie:I'm really excited to have you on. So, you have a very long background in ecommerce. I feel like you're a veteran when I was looking through your profile. And I was hoping you can start there and go into where you've been and how you got here.Ben:Absolutely. I think that's a great foundational question. I started my career at Red Bull at the headquarters in Los Angeles. And looking back on it, couldn't be more thankful of a place to start my career. Obviously, one of the most exciting and powerful brands that CPG has seen in the United States, if not worldwide over the past several decades. So learned a lot there. Started in brand marketing, rotated into corporate strategy, eventually distribution, before finding my way into a special project on ecommerce and at Red Bull at the time And even today, the entirety of ecommerce really relates to Amazon.Ben:For one reason or another, Red Bull only wants to sell merchandise and things like that in a direct consumer way. Everything else is for retail and Amazon would be considered there. So, that was my first experience in ecommerce was leading global Amazon strategy for Red Bull starting in the United States and then, exporting that to Western Europe which was a really exciting opportunity. Great way to learn ecommerce from really the best and brightest, Amazon. Spent a lot of time in Seattle, working with the vendor team there and the related marketing teams. But eventually was really interested in going deeper in particular on direct consumer, paid media, things like that. And so, found my only real opportunity to do that was to leave that great brand, leave the company and join what ended up being several other startups and companies since where I've gotten deeper.Stephanie:Cool. So what does your day to day look like at Super Coffee and what is Super Coffee?Ben:Yeah, absolutely. Super Coffee is an enhanced Coffee Company playing really in almost all consumer packaged goods coffee categories. So, we have bottled coffees, can coffees that really tastes like delicious frappuccinos but don't have any of the calories sugar or carbs and other added positive ingredients, functional ingredients for health. And we also sell similar super espresso product. It's like a double shot espresso, more portable, more on the go, less liquid, same performance.Ben:But also, as of last year, we've moved into ground coffee with added vitamins and antioxidants, k-cup coffee pods and then, previous to that we had been selling creamer, super creamer, similar profile, very decadent, indulgent, but high on health, low on sugar and calories and all that working together as one stop coffee shop for the health minded consumer.Stephanie:That's awesome. And then I saw... so the company was started by three brothers. Right? Was it when you were in college?Ben:Yeah, Jordan as the youngest brother, Jordan DeCicco and his brothers Jake and Jim, his two older brothers, founded the company together. Jordan actually formulated the first Super Coffee in his dorm room and enjoyed it himself and then was sharing it with his former basketball team players. He was a college athlete and got an insight that there's really nothing like this out there.Ben:They didn't enjoy... they enjoyed the flavor and the taste of Starbucks drinks and cafe drinks, but not the way it made them feel, nor the sugar and the calories. And they also liked the idea of energy drinks, but again, not great ingredient profiles and tons of sugar and those things too. So they didn't want to put that in their body and that's really why they started Super Coffee. And, like mentioned, Jordan formulated it in his dorm room for the first time, and then, slowly but surely convinced his brothers to join in on his mission of disrupting the coffee industry. And now, five, if not six years later, here we are and and it's really amazing what they've accomplished.Stephanie:Yeah, it's definitely huge progress. I saw that they were on Shark Tank back in 2017 and then, now recently, they received investment from like big NBA stars and NFL quarterbacks. And then, I think most recently, the company is valued at like 200 million in June or something which blows my mind for something that started in a dorm room. That's amazing.Ben:Yeah, let's not forget J.Lo and A-Rod are our investors and partners in the company and it's no big deal.Stephanie:No big deal, J-Lo. What is up, girl? So, obviously, this company is awesome, which is why you're there, what does your day to day look like as the VP of ecommerce and growth? What do you do?Ben:Yeah, it's varied. So overseeing the sales division of ecommerce so, the actual divisional P&L for Shopify, Amazon, and then, that long tail of third party online retailers. Thrive Market is really awesome standout, actually a new partner of ours, early this year and really great partners so far. So really excited to go deeper on that relationship. Walmart.com is in the mix there as well. So, that's from a sales, divisional responsibility. That's what we're working with. But then, also responsible for the 3PL, whose services all of our ecommerce order fulfillment, the 3PL also services our Amazon business, so is basically, [inaudible] and inbound logistics to Amazon for FBA. And they also do some managed services for us. On top of that, also responsible for overseeing all of our acquisition or retention marketing efforts to really drive both of those two strong horses.Stephanie:Cool. So, what is the breakout between selling on Amazon, selling on your site, selling on other websites, what does that breakout look like? Are you favoring one area right now? Has it changed in the last year?Ben:No, it's the... the really interesting thing about it for us and it's funny now, having done this with a few different brands, it's so brand specific, where your consumers desire to shop from you and for us, we really maintain a very consistent mix so what you might often see is a brand, start strip consumer, then they start moving into Amazon and customers just shift in to Amazon, because everybody has a Prime account these days. It's very easy, very dependable, great return policies, all that so there's a lot of trust there. You're already doing a lot of shopping there. So oftentimes, you'll just find your customer base moving to Amazon in that somewhat uncontrollable way.Ben:There's definitely things that you can do to maintain a more healthy mix. And I would say a lot of those, factors and criteria are in place at Super Coffee and so as a result, we maintain a really healthy mix, let's call it 60%, Shopify, 40%, Amazon, and both both scaling pretty consistently against each other and maintaining that mix and we expect that to continue this year.Stephanie:So what are some neat tricks with selling with Amazon because we've had a lot of smaller brands on here, DTC players who... we've, of course, talked about Amazon creating a white label version of their product and we've also had a couple people be like, there's nothing to worry about as long as your product is strong. How do you guys think about selling on Amazon? And what opportunities are there that maybe people are missing?Ben:Yeah. So, there's many ways to skin a cat there and again, it's very brand dependent on what's right for us. Our context is we really are a retail brand first. So we're now, I think, in over 30,000 outlets across the United States, approaching 60 to 65% ACV so we're getting pretty ubiquitously available. But obviously, nothing compared to a Red Bull that, at the time I left the company over 300,000 outlets, so you can stumble and buy a Red Bull no matter where you are.Ben:Super Coffee is a bit earlier in that lifecycle, but still predominantly retail brand. I think in relative to our category, we really want the consumer to be able to have perfect availability of our products and to be able to purchase our products, when, where, how often, from whom they like. And so from, this is leading into an assortment strategy, from an assortment perspective, maybe another brand might have only select assortment on Amazon and then, to get the full brand experience, you have to go to the website. So, that's a natural path toward toward direct consumer.Ben:There's other ways that we do it. However, we provide the best subscription experience and discount on our website. So, we actually offer subscription on a limited basis. And when we do only the 5% funding amount on Amazon, whereas our website is 15% and so, naturally loyalists, people who are really engaged with the brand will come over to us. And there's other things like special bundles and different content and things like that the website offers that Amazon simply can't.Stephanie:Are you oftentimes finding your customers on Amazon and then, speaking to them in a way that brings them to your website afterwards, top of funnel, they come there and then, you pull them in to create a loyal customer base and retain them?Ben:Yeah, there's a master design for that to occur. It's almost though in practice a bit of pushing a boulder uphill, in that people are demonstrating an intent to purchase somewhere, and there's something there, right? And so, if they are starting to buy on Amazon, that's really an Amazon customer, most likely and then, the factors that would drive somebody from Amazon to our website are a bit more natural and gradual per se. That being said, we do nurture that behavior but it's not a really aggressive, offensive strategy that I would say we've unlocked. Even though I would like to say that we've unlocked that as a massive arbitrage opportunity on the platform, we do find that people tend to stay where they start.Stephanie:Yeah. I mean, what would the ideal state look like to you, if you were to make it into the perfect funnel? How would you have it work, if you could just choose?Ben:Semi-limited assortment on Amazon, full assortment, full experience on the direct consumer website. And then, different mechanics and communication strategies in between that Amazon experience, that trial opportunity into the direct consumer experience. Again, slightly different for us, since we're beverage and consumable, or really on the go and post product, retail product, but a brand that's maybe less oriented in that way, could more aggressively attack that type of opportunity.Stephanie:Yeah. Cool. And how do you guys think about subscriptions? Because that was a thing that I feel like everyone wanted everyone to have subscriptions to their products? And then, I feel like a lot of people realize, okay, that's actually not best for our customers, because they don't need a subscription for whenever we have t-shirts or something so we are going to drop that from their offering. And now, it seems like it's making a comeback, but only with certain products. So how did you guys think about that as part of your customer retention strategy?Ben:Yeah, subscriptions for us are paramount, I would say. So, again, a very consumable product. Ideally, we are 50 to 100% of your coffee consumption, obviously, when you're on the go on the weekends, you're out with friends, things like that, pop into coffee shops, you can't avoid that, of course, but relative to... especially, from being at home and through the pandemic in the last nine months, we really want to be that one source coffee solution for you at home, irrespective of your on the go behaviors. And so, for that, subscription, works perfectly on that repeat purchase behavior.Ben:And it's great because you don't have to recruit or remind that shopper to come back and buy every single time they're running low. It's actually right... it's going to happen anyways. But then, we give them the opportunity to say, Hey, not right now, I'm not quite through my last order or we give them the opportunity to say, Hey, I blazed through that order. Let me get my next one, ASAP. So there's that opportunity to modulate on the consumer side of things, that makes it an ideal situation.Ben:I think the technology is not quite there yet to make that a perfect experience, that 30 day cadence is not always perfect for the amount of units in a case and the amount of units in a case is going to last you longer or less time than it would, me. So it's not perfect, but we are working on communication strategies and software and technology to help improve that subscription experience for our customers.Stephanie:Yeah, I think that flexibility is key, I even think about something like Stitch Fix where they say you can pause the orders, you can start it up again, you can take a vacation from it, whatever you need to do. And, I think that feels very risk free like you mean, I can just try it once and then, pause it for three months, and then, try it again? And it's just so different from how it was, I would even say a year ago, where it felt very, cut and dried, you're in it or not. You can get six months in or you can't have it at all, which shows so much has changed a lot.Ben:You're committed. Yeah, we offer ultimate flexibility. You can add a subscription to cart, checkout and then, go and log into your account and cancel that subscription, five minutes later and while that's not ideal, it's okay. That's okay. And really, it's more modeling less than, in a way, the function of subscription itself, we're modeling a loyalty program, in a sense. And so, if our subscription customers get 15%, every order, don't really care if they're actually on a subscription that auto bills them, or they're managing that bill on their own. So, we find ways to incentivize and give rewards and give backs regardless of the way that they are actually going about that.Stephanie:Yeah. That's cool. So, what are some of the biggest driving forces with the program that work well? Is it just the cost savings that usually attracts people and then, something else, once they're in it or what do those incentives look like?Ben:Yeah, it's the cost savings and then, the stated flexibility, the money back guarantee, things like that get them in and interested. Thereafter, one of the things that we invested in six or nine months ago, was basically text message based subscription management. And so essentially, three days before re-bill, an automated text will go out and say, hey, your order of, fill in the blank, is set to ship in three days, would you like to make any changes? Gives the opportunity to opt out, cancel, gives the opportunity to say, ship it right away. Thank God, you messaged me. I'm ready for it now.Ben:They can add products that are not even subscribable. So, they can add season or one time products to try, things that might not even be subscribable. They can modify quantity. They can do all kinds of stuff. It's just as easy as a text message back and forth. So, that's the experience that we're trying to create both at managing and an automatic and dynamic concierge experience for the customer. To really make that experience carefree, really feel like they have as much control as they want over the experience and to steer away from what you were mentioning, which is the old history of you opt into a subscription, you get a deal. And then, you try to go log in and cancel, you can't even figure out how to cancel the dang thing and that's not-Stephanie:Call our customer service representatives and [inaudible].Ben:My gosh, yeah. Email us or okay, that's crazy. So that's not the business that we're in. We're in it to spread positivity, create a great connection with our consumers because now, they're not just buying from us on our website. They're buying from us in stores and they have family members and friends and that kind of experience goes a long way and, the opposite experience also goes a long way.Stephanie:Yeah, I agree. What did it look like after you implemented the SMS stuff? And then, all of a sudden, the customers can easily just be like, and cancel. What did the results look like? Was there anything surprising there?Ben:Yeah. So you'd think, okay, you're would go through the roof. And because you give somebody such an easy way to cancel, it's almost a fear mindset rather than an opportunity mindset and what it actually did for us is it didn't increase cancels, but it decreased cx inbound. So, it actually decreased our costs on the customer service, customer experience side of things, because customers could then, choose their own adventure, right? And self service.Ben:And, philosophically, we haven't gotten the data yet until a software, right? The customer has a great experience, doesn't have to email support, all of that back and forth, they're probably more likely to come back later because there's less thrash, less risk of a negative experience. So all in all, great from that perspective, and great from the perspective of allowing people to increase quantities, add new products, things like that. So AOB subscription has also increased.Stephanie:That's awesome. Is there anything else that you do in the text message arena where you're like, this is also working well, or another way that you communicate with your customers outside of just your orders coming up from a subscription standpoint?Ben:Yeah, we do. We do marketing blogs so to... the other part of our text message strategy, and I like calling it a text strategy, not an SMS strategy.Ben:It's pretty much what everybody calls it, but I even see it sometimes where companies or brands, call it that to consumers. And I see it printed on packaging or it's like, send us an SMS. I don't know if any consumer knows what an SMS is.Stephanie:Calling on a landline.Ben:Yeah. Exactly. So, relative to that, it's actually two separate softwares that power it, which we would like to synthesize over time. So two separate phone numbers that these communications come from. So, we let people know that this is your subscription phone number and then, this is the Super Coffee personality brand phone number. And on that second one, we really nurture that as a VIP audience and so, when we do a product launch, things like that, we let people know if they want early access to the new products or early access to, let's call it a Black Friday, Cyber Monday sale, or what have you, you're going to get a 24 hours heads up, to everybody else, to get that early access if you're opted into our text message database.Ben:And so, that's largely how we use it, get early access to things like that product launches, seasonal products and then, the occasional motivational marketing push, things like that that are more conversational, less, we're trying to sell you something. And, I think that's the direction that we want to continue to go deeper on, is driving personalization, driving value, as opposed to asking so much. I think that's something that the industry is striving for as well.Stephanie:Yeah. I agree. It definitely is a tricky channel to where you see a lot of people doing it wrong. And I can see brands being hesitant to even try it out because they probably have experienced something not so great themselves. And they're like, I just don't want to get it wrong. Because I mean, I'm sure you get the random text where you're like, I don't need that coupon right now. I'm in bed, watching Bachelor, which, Ben, I know, you're doing the same thing. I just don't need that right now. It's unhelpful.Ben:There's this... I don't know, who invented it is probably decades, if not 100 years old but this concept of, I think Gary Vaynerchuk might have popularized it, but this concept of give twice, or give three times or five times before you ask for anything. So, it's all about that, giving value and that can be modeled through social media, that can be modeled through email marketing, and that certainly, I think, should be modeled in text messaging but it's tough as marketers or as business owners, business operators, as soon as you stop being consumer, sometimes it's hard not to become incentivized as the business owner and want to sell, sell, sell.Ben:I think sometimes as the business owner or the operator, it's easy to forget what it's like being a consumer and slip into that sales mindset. But I think it's important for us to all, empathize as much as possible with being on the other end and really think about what you would like to receive from a brand as opposed to just another sort of promo?Stephanie:Yeah, I definitely agree that as a business owner, seeing all this data, it's easy to slip into that mindset to, you people like that and, especially, if you're being measured by certain KPIs, and you're like, well, if I send out three random poems or jokes and my boss sees that, they're going to wonder what I'm doing and I can explain it versus my marketing message, which is very kosher and by the books, might not perform as well, but less explaining, just-Ben:Yeah, exactly. So, I think depending on where you are in your organization, or who's listening to this, doing this correctly could require a lot of education upward or throughout the organization. And it's tough, because it's a long term thing. And it's building trust with the consumer, but you also have to build trust internally, to give yourself that runway to operate like this. So there's no silver bullet here, but something to strive for, for sure.Stephanie:Yeah, I agree. So what do you see right now, when it comes to the customer acquisition landscape. What has so far 2021 looked like? Is it very different than prior years?Ben:Yeah, it's interesting, I think... two things happened last year and people started spending more time on the Internet and on their devices as a result of the pandemic. So in a way, there's now more reach, more impressions, for sure. And then, there is definitely a surge of people buying more heavily online in certain categories than they ever were before. But I think, we're moving toward the back end of that and reverting to a new mean or a new normal. And, now we've also had nine months for advertisers and brands to catch up to starting to sell and advertise on the internet. And so, there's a crowding from the brand side of things and certainly over the last... [inaudible] always but even now, in starting the year, things are just continuing to escalate and get more expensive on CPM and CPR basis.Ben:So putting increasing pressures on cost per acquisition, and overall customer acquisition costs for a brand new business that might have been previously very reliant on paid digital advertising to find new customers. And so, at least what we're focusing on is diversifying, not only just in channel, so testing obviously, other advertising channels to acquire customers. But diversifying away from paid and more into owned and earned and shared, obviously, longer term investments, things like Content Marketing blog, or let's say, diving deep and building an organic presence on TikTok, which is a buzzword and everyone's very interested in right now.Ben:Pinterest is another area. Pinterest is really the third search engine of the internet, I would say, behind Amazon and Google. So that's something that's been hiding in plain sight for a long time and strategies like that to nurture a healthier upper funnel and then, Paid may be more of converting, retargeting remarketing engine, than a prospecting engine is probably the best way forward. from our perspective currently.Stephanie:Yeah, and I think that's a really good viewpoint, especially when you think about what's happening around the privacy rules and what people have relied on for a long time when it came to Facebook ads and like what IOS is coming out with, it seems like a lot is changing but brands are going to have to rethink how they find new customers just like you're mentioning.Ben:100%.Stephanie:Crazy. So, when you're talking about, right now, there's also a lot of crowding from the brands who popped up, who either came online that weren't or a lot of brand new DTC companies that all started last year, a lot of them did, how do you think about making sure that Super Coffee shows its value in a way when there's a lot of other coffee players popping up and keto brands and butters that you add to your coffee, it feels like the space is getting very saturated. How do you know keep showcasing your value and why you're so different than a lot of other brands?Ben:Yeah. 100%. We tested so many different creative strategies, and this is... we'll talk about paid advertising for a second. Ultimately, we've come down to a few key creative formats or messaging strategies on the paid side that work really well for us. One that we continue to own is is a comparison style ad, which is putting us up against a really sort of delicious looking, we'll call it a Starbucks or a Dunkin Donuts cafe drink with foam and cream and swirl and things like that. And then, putting our product directly next to it, and saying, hey, everything about this... these two things are the same, actually, except for and then we flashed through the nutritional profile, the calories, the sugar, the carbs, that works really well. And, that's not only driving value for us, from an ecommerce perspective, but that's driving global value for us all the way, through the omni channel environment. So we're really happy about that type of communication and that creative strategy, very hard working. That side of things-Stephanie:It's hard too because you're instantly anchoring yourself to a brand that everyone already knows about. So you don't even have to explain, it tastes like this, it's got its own, you don't even have to worry about that when you anchor yourself to a larger brand like that.Ben:Exactly. It's interesting. It's a strategy that has being successfully used by the Magic Spoons of the World, maybe a bit easier, right? Because we've all known for a long time now that cereal is not good for us but we love it, right? I grew up on cereal. I'm from the Midwest and I subsisted off the cereal. So when I learned Magic Spoon came out and Catalina Crunch and different brands like this, it was like, no brainer. I'm ready to try that because I've been dying to eat cereal for a decade and I told myself I couldn't anymore. That's a great comparison.Ben:Ours, we were comparing it against a bottled product in the past. But less household penetration on those types of products, what we really found success in is actually comparing it to the cafe drinks, actually looks like they get an indulgent frappuccino from Starbucks and maybe less people actually, these days are getting frappuccinos than they did so it's moving toward that sterile example, as opposed to bottled or canned coffee drinks, we might still in a way not know that those are super unhealthy for us.Stephanie:What are some other creatives like that that you guys are leaning into?Ben:Yeah, otherwise, we really lean into UGC style creative, raw stuff, really focused on the product this year. So our product, we do have packaging that really distinguishes ourselves from the category, a lot of white in our packaging, we have that Angular slash to our packaging that really stands out. And what we found is really just a standard iPhone style photo, tightly cropped bottle or can is oriented such that the user can actually read it, if they're scanning through the feed. And, with some situational context that could feel like it's a real person, right? It could actually be real UGC, could be manufactured, etc.Ben:Either way, it gives that sense of, okay, I learned that this product in comparison to this other drink is a lot healthier for me. And then, okay, on my second impression from the brand, I'm seeing that this is actually a real thing that exists in the world. I can see myself holding and consuming this product. Let me click through and give it a try. So, that's the funnel, oversimplified, how we think about things currently but both of those creative styles have been very hard working for us historically.Stephanie:That's such an important shift. I've even seen personally like when I'm on Instagram or Tiktok, and I see people using something or they have something in their room, where I'm like, it's like my living room right now. But I don't remember thinking that way, a couple years ago, where I was looking for that more, I really want something to look formal and official. It's already the real deal if you spend a lot of money on it, where now I mean, our best performing ads for Mission are, I'll be walking around with the iPhone, doing the ad and that movement, and organic look does way better than anything that we've actually produced in a formal fashion.Ben:Totally. Yeah. People are turning off the advertising these days. The more polished it looks, the worse it performs, in a way, which is so ironic.Stephanie:Yeah. I agree. So, what channels are you most excited to... I mean, I know you mentioned like TikTok and Pinterest but then, everyone's talking about TikTok, where are you guys zooming in on for this coming year that you're really excited about?Ben:Yeah, we started investing pretty heavily in podcast advertising, as of the start of the year. So we're advertising on shows like Armchair Expert and Pod Save America and Sibling Rivalry and a whole basket of great shows that have partners that represent our brand and are a great fit for our audience. So that's been going quite well. And that's exciting, because it's supportive of the total business, again, maybe moving from a singular ecommerce mindset to more of an omnichannel view on on the world and the market.Ben:So that's been great, we'll continue to invest there and work that into our ongoing marketing mix, a bit more upper funnel. And then, I think, yeah, as I mentioned, really thinking through a Content Marketing Strategy holistically as an upper funnel driver and obviously, there's different distribution channels, but really owning an editorial calendar, owning our perspective, leveraging our partners, and then, distributing that in the channels that are applicable, and really bringing all that to the world of Super Coffee to life, through our partners and through content, I think, is going to be our bleeding edge this year. And really write the ship relative to upper funnel, mid funnel, bottom funnel, and create that healthy balance that all of us are looking for in this industry.Stephanie:One thing I have been thinking about lately is how... in the next coming years, all these brands are turning into essentially, like media companies creating content, and everyone's going to be trying to pull the consumer back to their blogs, to their hubs, and it's like, instead of just going to Instagram feeds and seeing it on there, you're going to be pulling people back to your websites. I mean, how do you think about that landscape because it feels crazy, thinking about hundreds of brands going to be like, come back to my blog to see content that we're creating. And you have to kind of go in a million different places to find it.Ben:Yeah, I think it just puts an increasing pressure on, I will say quality, quality is in the eye of the beholder, right. So, it's, again, like we mentioned quality from designer or creative director of yesteryear is perfect, polished detail dialed whereas quality these days is on a YouTube channel or TikTok account and from a mobile phone and not really produced and published and polished. I think it's quality, it's relatability, it's authenticity and above and beyond all that, it's having something to say, that really speaks to somebody and makes them feel like they're engaging with a personality, engaging something that means something to them, that makes them feel a certain way. And so, it'll just put an increasing pressure on that confusing definition of quality for the consumer, to really create that connection and say, hey, it's worth subscribing to us directly, as opposed to all these other 100 brands that offer X, Y and Z to you. In order to do that, you're going to stay focused and attention on us and not the rest of them.Stephanie:Yeah, I think about the amount of newsletters that popped up last year where obviously, that whole industry is very much democratized. And now, anyone can make a newsletter and charge for it and I subscribed to quite a few of them. But then, now, I'm like, whoa, what'd I do? I mean, now they're coming in, I'm having to send them into different categories and filter them so you don't hit my inbox. And it makes me think that could be an eventual future for brands too, if you don't figure out how to write something, create something that someone is eager to open and actually wants to hear what you have to say and doesn't just drift over to a corporate create marketing message over time.Ben:Yes, exactly. It just all goes back to giving and creating value and it's dependent on the brand and the Tim Ferriss mindset, which is tools, tips, practices, all of that he gives his audience, that's why you go listen to Tim Ferriss. It's contextually different for a brand or for another personality in a podcast or what have you. So, it's all about knowing what you want to say, knowing what you have to give and share to the world and then, give it as much of that as possible.Stephanie:I agree. All right. Let's shift over to the Lightning Round and Lightning Round is brought to you by Salesforce Commerce Cloud. And, this is where I ask a question and you give an answer under 30 seconds.Ben:Wow. Okay. Exciting.Stephanie:What one thing from 2020 do you hope sticks around throughout 2021?Ben:Wow, not much.Stephanie:I know, that's a hard question.Ben:Well, I think, this is going to be a firm answer but a lot of people are of the belief that COVID accelerated transic technology, transic consumer behavior that would have otherwise taken 10 years to happen so, I think, as a digital marketer, as an ecommerce professional, I think thankful and excited for all the change relative to consumer behavior and online commerce that happened in 2020 and I don't think we are going backward on that so excited and thankful for it and excited for what's next.Stephanie:I like that. What's your favorite resource or resources to stay on top of, like the ecommerce industry as a whole?Ben:There's great podcast like yours. I'm not talking to other podcasts because I was on it, DTC podcasts, I think it's Pallet House labs and speaking to these others, they've got really great newsletters as well.Stephanie:Cool. Sounds good.Ben:[inaudible]. Yeah, they're killing it.Stephanie:What one thing do you not understand that you wish you did?Ben:I feel like I wish I understood almost...I don't feel like I understand anything, ever, in a way especially in this industry, everything is always changing and you would speak to somebody, you had such high confidence over something that you feel like you don't know anything about and that's just the constant feeling that you'll have and so, I think, always maintaining an extreme curiosity over things, continuous learning. You'll never know it all so I think that's in the DNA of somebody successful in this industry in ecommerce and digital is, that needs to be a big thing.Stephanie:Yeah. I agree. What's the last purchase you made online that you normally would not have, online prior to 2020?Ben:Well, I'm a new dog dad.Stephanie:Congrats. What's the dog's name and what kind of dog is it?Ben:Her name is Honey because she's so sweet and she's rescue pup, about six months old and we think she's a lab mixed with jindo which is a Korean breed.Stephanie:Okay. I'm like, I know what kind of dog that is.Ben:It's almost like a Siberian Husky that's more slender.Stephanie:Okay. So you bought that offline or you bought something for her online?Ben:I buy everything for her on the internet now. I never bought the pet category before in my life and certainly not online so that's opening me up to just a completely different world of industry and I think, the number one ecommerce category is vitamins and supplements, number two is pet supplies, number three might be pet food and over 50% of pet products are bought online so pet is the most endemic ecommerce category there is besides vitamins and supplements.Stephanie:Yeah. All right, Ben. Well, this whole conversation has been a blast, thanks so much for coming on and sharing your knowledge. Where can people find out more about you and Super Coffee?Ben:Yeah, Super Coffee is easy, drinksupercoffee.com or just type us in the search bar, Super Coffee in Google or Amazon, they'll find your way to us. Myself, really the only place I exist is on LinkedIn. That really means in any social profiles. I don't have a newsletter or a blog myself but feel free to find me on LinkedIn and make a connection and reach out and love to connect.Stephanie:Perfect. Thanks so much, Ben.Ben:No, thanks, Stephanie. It's been great.

Innovation is risky business, especially if you’re a hardware startup. But it’s not just risky on the part of those inventing a new product. The early adopters of that product are putting a lot on the line, too. Which is why certain industries, like retail, have remained mostly the same for decades. Retailers only want to bring in something new if the operational cost of installing and using the innovation are minimal, and if it doesn’t require a massive overhaul of a retail space. This is exactly what Lindon Gao found out when he started exploring this space. Lindon has been on a mission to disrupt retail since his first application for a smart security tag was accepted by Y Combinator, and while that hardware didn’t take off, Lindon kept going until he landed on an idea that stuck. Today, Lindon is the CEO of Caper, a company bringing smart cart technology into the retail space with increasing success. In fact, Caper’s tech could be coming to a store near you, as the company recently agreed to partner with America’s largest grocery retailer, Kroger, to bring smart carts into chains all over the nation. On this episode of Up Next in Commerce, Lindon talks us through how Caper is finally bringing change into the world of grocery, and he explains how smart cart technology could have ripple effects on ecommerce, personalization, and the entire customer journey. Enjoy this episode!Main Takeaways:Where’s The Easy Button?: Implementing new technology isn’t easy in retail. The operational headaches of launching anything new often outweighs the benefit of most of the new tech being presented. Incorporating new tech as a retailer requires finding innovations that don’t need large system overhauls, already naturally fit into the customer’s store journey and provide an added benefit (i.e. more customer data, more opportunities to upsell, etc), to make the investment worth it. Do You Want a Receipt?: Smart receipts are one of the top ways to keep track of consumers after they make a purchase. Receipts offer a window into consumer behavior, and also provide a new area for personalization and follow-up conversations that keep customers engaged.It’s Not Either Or: When it comes to ecommerce and grocery, it is not an either/or question. Both in-store and online shopping will continue, and, in fact, the move toward ecommerce will only push the in-store experience to be even more efficient and streamlined.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder and CEO at Mission.org. Today, on the show, we're chatting with Lindon Gao, the CEO at CAPER. Lindon, welcome to the show.Lindon:Thanks for having me, Stephanie.Stephanie:Yeah. I'm really excited to have you on. So, tell me a bit about Caper. I was doing a little bit of background digging. And maybe, actually, it'd be great to start with your background first. I saw that you were involved with Y Combinator. So, maybe starting off there, and then we'll get to Caper.Lindon:Sure. I joined Y Combinator shortly after I left investment banking. So, prior to YC, I was an investment banker in Goldman Sachs and JP Morgan, have had quite a number of corporate lives, and didn't really feel like I belonged in finance as much as I belong in startups. I started my first startup when I was 14, my second one when I was 19. So, I've always had a lot of passion for the startup industry. And when I realized that there was a big opportunity to potentially pursue in physical retail, I decided to quit my job to start Caper. And we were lucky enough that we got into YC. And our first application, I remember at the time, we-Stephanie:That's lucky.Lindon:Yeah. And we built... At the time, we were actually building a different product. We built a smart security tag. You know those that beeps at the door if you try to steel in Zara? We made it such that it will unlock upon payment. So, just imagine, on Black Friday, you could walk into a store. You could take out your phone, tap on that security tag, pay for it, and the security pack will unlock, and then you can leave the store.Stephanie:Smart.Lindon:Yeah, so...Stephanie:What happened with that? I still need that?Lindon:I could get into that a little bit actually. So, we built a prototype for the smart security tag. And then, onsite during the YC interview... YC interviews are ten minutes. So basically, within 10 minutes, you have to knock out everything. And they will be firing questions at you. They will be cutting you off during the interview. I've thought about something that was very interesting. Since we only had 10 minutes, I wanted to convey industry urgency, our market. So, I printed these t-shirts where it says, "Did you know that customers will leave the store if they have to wait in line for more than five minutes?" 33% of customers will leave.Lindon:So, I printed it out on a t-shirt. And I walked in. And all of a sudden, the interviewer is... At the time, it was... I remember it was Geoff, Geoff Ralston, who is the president of YC. He looked at it and it was, "Oh. Interesting t-shirt." And we started talking. And I remember, at the time, our prototype was working 50% of the times. So, when we did the demo, the prototype... We were hoping that it will unlock. So, we're praying, praying, praying. And it did. So, if it didn't-Stephanie:Whew.Lindon:Yeah. So, if it didn't unlock, I think I would probably go back to finance and be an investment banker by now, but luckily it did. So, we got to YC. We build the security tag out. We signed on a couple of really, really large apparel customers. And we launched with Rebecca Minkoff in Soho. But we realized that the tech was really difficult to scale, because you need to apply the technology onto every single garment. That means that it was a gigantic operational overhaul. Every week, the store stock needs to maintain it somehow to make sure that all the new inventory that comes in are tagged, and are synced, with the specific unique identifier for each garment. And that just proved to be too much.Lindon:And so, we built it for about a year and a half before we realized that we were just being stubborn, and it was too difficult to scale to market. And that's when we decided to pivot.Stephanie:Very cool. So, what happened next after that? Is that when you... Had you already been thinking about a smart checkout grocery option. Or did you all have to huddle and start brainstorming to be like, "What's next? Where are we going to go now?"Lindon:It was very difficult at the time, because we were not a typical YC company, in that we are a small portion of the hardware companies in YC. And hardware companies are not very popular. So, when we-Stephanie:They're expensive.Lindon:Exactly. It's very capital intensive. Investors don't like to invest in it. So, after we did our demo day, we didn't raise so much money. We raised like two, three hundred K, in total. Typically, YC companies, they come out, they sign a million dollar term sheet on the demo day. And there I was, after demo day, some of my buddies were signing term sheets left and right. I was just like, "Hey. You guys want to chat?" And they were like, "Ah. You guys go hardware, not really."Lindon:So, throughout the whole time, it was very difficult. So, when we built it, built a security tag for about a year and a half, none of us were getting paid. At the time, it was four co-founders and two early employees. We lived and worked out of a house in College Point in New York. It's right by the LaGuardia Airport. And yeah, all we did was just we woke up. We worked. We'd eat together, and work, and we'd go to sleep.Stephanie:I heard you got in trouble for buying orange juice [crosstalk].Lindon:Where did you hear about that? Yes, I did.Stephanie:I just did a little creeping on the internet.Lindon:It was a very funny story. My co-founders are extremely frugal because we really didn't have too much money. We were bringing $7,000 per month. And we'd buy groceries together. I'll walk into a grocery store... It was a habit. I usually drink orange juice. And I dropped it in. My co-founder's like, "Do you really need to drink this? This is like six bucks." I'm like, "All right. Maybe you're right. I don't."Stephanie:Oh my gosh.Lindon:So, it was pretty tough. But it was also very interesting in that the passion really bonded us together. And that's why our team is extremely cohesive, even today. We barely have any attrition in the company. And our team is like a family. So... yeah. So, we built a security tag for a year and a half. And at the time, when we decided to pivot, we had probably less than probably 100K or something left in the bank. So, we really didn't have too much money, and we couldn't do too much with that amount of capital, especially in a hardware.Lindon:So, we kind of huddled together and we were thinking about what sorts of things should we pursue next. Or should we just kind of close up, just go home, and start applying for other jobs? And we decided that it was the retail, the grocery, just general physical retail industry has been extremely under innovated over the past decades. If you were to walk into a grocery store after world war two versus today, it will essentially be this... It's basically the same.Lindon:And we just couldn't understand retailers are not innovating. So, me and my co-founder, Ahmed, took a slightly more drastic approach in that we're saying, "Hey. You know what? Before we decide on building anything, let's go out to the market, and let's talk to grocery store owners." But before we went to the market, we were brainstorming. What are some of the things that we could do with our capability? So, we thought maybe... If we retrofit the entire store with sensors and cameras, maybe we can enable a check out free experience [inaudible] retail stores.Lindon:So, we had this thesis in mind. And ironically, probably six months later, Amazon go kind of launch with the same idea. But we took a very diff-Stephanie:That's not an app. What year was this? And where was Amazon at then? Who solved it first?Lindon:Yeah. So, we thought of... Amazon probably thought of it first because they built it. But we thought about it as well. But we kind of took our idea. But we approached these stores and we just asked questions. So, I remember, it was during the winter of 2016. It was very, very cold. Every day I would wake up. Me and Ahmed would wake up at 7:00. We'd go down to the train station, and we'd just take it to any stop. And then, after we'd get off, we would just walk into any grocery stores that we see on Google Map. And it's a very different place.Lindon:You go in, and a grocery store would be like, "Well, what the hell are you guys doing? If you're not buying anything, just get out." So, we went through a lot of that. But there were grocery store owners and managers who were willing to talk. So, we just asked them, "Hey. What are some of your top pain points? And what are some things that we can do to help you innovate your store?" And interestingly, we saw a huge amount of sentiment from the grocers and retailers who are telling us that they do want to innovate. But their concern is that a lot of innovations requires a lot of infrastructure, operational maintenance, and overhaul. And that makes it very, very difficult.Lindon:So interestingly, when we presented our "Amazon go" idea to these store owners, most of them freaked out. They were saying, "Hey. Why are you trying to renovate my store? How much does this infrastructure cost?" I'll say, "A couple hundred K." And they would say, "Look dude, even if you give it to me for free, I wouldn't want it." So, I was shocked.Stephanie:[crosstalk]Lindon:Why? Yeah. And they were like, "Look. It took me six months to install wifi and amplifiers in my store, because I need to rewire my ceiling and install amplifiers in the gigantic store to make sure everything is in line. Do you think you could come into my store to renovate my entire store, and install thousands of cameras? And do you actually think that could work?" So, we're saying... So, we're like, "Okay. You're right." And the store owner's said, "If you want to make anything work in this industry, you have to make sure that it is something that you bring it to our store and it just works. It shouldn't require infrastructure overhaul. It shouldn't require operational overhaul."Lindon:So, we really put that to note. So, we kind of went back to the drawing board, and we thought about, "How can we build a technology that just works?" And we kind of stumbled upon this idea that, if we compact computer vision and sensory fusion directly into a shopping cart, which is the most common tool in physical retail, we could enable the same type of experience at much lower maintenance. That really also tied back to our first idea of why we failed the smart security tag idea, was it would require a lot of operational maintenance.Lindon:And we thought that the smart cart could really overcome a lot of these barriers. So, we built the technology. Actually, before we built it, we just did a 3D rendering of the cart. We took it to the store owners. And immediately, within two months, we signed over probably 30 contracts. So, that was when we saw a huge pick [crosstalk].Stephanie:With the cart that didn't really work? The cart was...Lindon:A picture. It was not even a cart that didn't work. It was picture rendering of what it looks like, and I just described what it would do. And the store owners were very, very interested to sign on. So, that was how we got started.Stephanie:Okay. Cool. So, you got 30 new contracts. I'm guessing you had to go out and raise some more money though. Because, with only a couple $100,000 in the bank, even with 30 contracts, I'm assuming you wouldn't have been paid... at least net 90, probably, or more. What did you guys have to do to get that first version of the cart made?Lindon:Yeah. So, very interestingly, and very luckily, my co-founder, hardware co-founders father, actually owns a manufacturing facility in China. So, we have a very-Stephanie:Lucky, lucky.Lindon:Yes. So, we had a very unique hardware advantage in that we were able to prototype, and built our first versions of the shopping carts directly at his factory. And that was also one thing that, I would say, is our unique competitive advantage, in that we're able to iterate all hardwares on a monthly basis. Typically, it takes six months to iterate, on a typical hardware. It takes us a month. And that was the reason why we're able to accelerate our product development cycle so quickly.Stephanie:What were some of the early features in the cart that you either got rid of... What does it look like now versus when you first created it.Lindon:When we first created it, it was a lot of duct tape, a lot of weird components in there. I think I remember, when we built our first version, we were trying to demo this to a very large European client. And we shipped it over to France. And the entire cart broke. And I spent two days in a hotel just piecing things together before my client meetings. I actually used glue in there too.Stephanie:Oh my gosh. And it wasn't computer driven at that point, right? Or did you already have AI in it, or not yet?Lindon:Not yet, at the time, because our idea was that AI was going to take a little more time. So, while we're building the R and D branch of our government, we were going to go to market first with the barcode scanning version. And that was a very explicit strategy that we had, because we didn't want to be a heavily research dependent or research oriented company. We wanted to go to market, to understand the market as we go.Lindon:So, we built the shopping cart with a scanner, with a screen. And it also has a low cell which measures the weight of what's inside the basket. And I remember, when we first launched a very, very small trial inside one of the stores in Long Island city called Ruth Seller. We saw users try to use it. The scanner was very... It was a very small scanner that pointed at the side. And no one knew how to register the item into the cart. So, we did a lot of different changes to our scanner model, changes to the screen, and the low cell. And also, low cell was very, very difficult. Because it's not common knowledge that the scale is inside your grocer...Lindon:Your typical grocery stores are regulated by the government. It's regulated by the consumer affairs, because if your apples are a dollar per pound, and your scale is off, and it's wrong, then you're cheating the consumer. So, it's protected by the consumer affairs. And to be able to pass that certification requires us to send them our cart. And they will put it in a furnace, put it in a freezer, put in automatic weight into our cart and out of our cart 400,000 times. And we need to be reading accurate to 0.005 pounds. So, there's a lot of additional engineering in a hardware infrastructure that kind of went in there just to get the first versions of the carts right.Stephanie:Wow. That's intense. So, early days, it sounds like the cart was... It wad kind of like having a checkout conveyor belt on the cart. You could scan it. You could weigh things. And you could check out. And that was the gist of it.Lindon:Pretty much.Stephanie:What does that look like today?Lindon:So today, it's completely computer vision powered. We could directly drop items into the cart. And we're launching these into retailer stores very, very soon. And it's one of the paths where we took, where we thought about, "How do we make computer vision scalable?" Because inside a typical grocery store, you have at least 50 to 100,000 unique items. And for each one of these items, we need images of what the item looks like from different angles.Lindon:So, in a way, when we started building the scan version of the cart, it really paved the way for the scan less version. Because, as customers are using it, they're collecting images for us. You scan a Coca Cola. You put it inside the cart. Now, we know this is a Coca Cola. And then, using our cameras, we're able to collect over 120 images for us to train. So now, we have over 100s of millions of images in our data bank. And now, we're able to directly enable the scan less version of the cart.Stephanie:That's smart. That's like Tesla, how it's always kind of learning as it goes, learning from other cars. You're learning from every time someone's putting something in the shop.Lindon:Exactly. Exactly.Stephanie:That's great. And then, I also read that it does some product recommendations. Tell me a bit about that.Lindon:Yeah. So, you actually tapped into a really, really interesting space. Product recommendation is a big part of our system. Because when we walk into a store, and you shop for groceries, typically you will probably spend 30/40 minutes in there. And you probably spend five minutes at the checkout, but 35 minutes in your journey as you browse through the store. And when we were launching the carts and working with grocers, we realized that the bigger piece of the opportunity in innovating retail is actually not automating checkout.Lindon:That's a piece of the experience that we can make very seamless. But it's not the whole picture. The whole picture is, how can we help customer shop through the store during that 35 minutes, and provide them a very digitized and personalized experience. So, the personalized recommendations is a part of that which drives the digitization of the store, where if a customer puts in the milk, for example, we could give them recommendations for cookies, Oreos, cereals, and so forth.Lindon:And, as we go on, we're going to start implementing, for example, things like recipe recommendations. "Hey. I notice you have pasta and you have meatballs in your basket. Would you like to have some Parmesan cheese to go with it because we notice that you might building a recipe for meatball pasta?" Or "We notice that you have gluten free items inside your basket. Would you want us to recommend additional gluten free items inside your basket?" And that really creates another layer of digital platform, on top of physical retail, that really never existed before. Right? You have ecommerce, which is a gigantic digital platform. But also, now, in the physical stores, you have a digital platform where you could browse through the stores and interact with items around you through Caper.Lindon:We could eventually help you trace the roots of where your products are coming from. We could also help you count calories of what you've been purchasing. So, there's a lot of different ways to play in this market right now. And that's the most exciting part.Stephanie:Yeah. It also seems like there's an opportunity to kind of see the location of the shopper, and showcase coupons or things like that, based off the aisle that they're at. Because that's always something I think about is... Getting a random coupon in the mail, you're like, "Well, I'm not going to that store. And now, I forgot about it,' versus if I'm there, and I'm on that aisle, and it's like, "Oh. You can have a dollar off an egg." Okay. I'll get those eggs then, much easier by-Lindon:Exactly.Stephanie:... transaction than trying to bring something in store.Lindon:Exactly. Exactly. And through that... So now, we have some basic recommendations plus nearby deals. And we've been able to see average basket size pick up in some of the... I can't talk about the larger stores, because we're [inaudible]. But the smaller stores, we've seen more than 18% average basket size increase, on a very consistent basis.Lindon:Because if we're able to get the customers to buy a couple more things, that actually drastically helps the retailers top line as well.Stephanie:Yeah. So, tell me a little bit about, what does the landscape in general look like for autonomous check? I mean, now we're talking about location based stuff, personalized stuff. How do you view it interacting with ecommerce? What does the omni channel experience look like over the next couple years? Or what are you guys planning for?Lindon:Sure. So, I could start by just talking about the autonomous check out market. And maybe we can probably dig a little more into the ecommerce part. So, here is the general landscape. Basically, you have the Amazon go formats, which are... The start ups, little companies, are building cameras on the ceilings to directly enable all cashier less checkouts. So, this means that you will have to install hundreds of cameras on your ceiling, on top of building a process, and installing GPUs inside the store to make sure that we're able to process all these images and make sense of it.Lindon:The cameras will be used for two purpose. The first purpose is object tracking, which is you track how people are moving around the store. Because you need to apply that item to that particular person so we can't lose track. The second part is the cameras are also being used for pinpointing where items are inside a store. So typically, what a lot of... We've seen companies where, basically, they use cameras to label where items are inside the store. So, they don't directly do recognition of that particular item, but they label based on where it is inside the store.Lindon:And then, there is the other form factor, which is, instead of using the cameras to label where items are in the store, they use smart sensors, basically weight sensors inside the store, where if you pick something up, the weight sensor would detect it and it will know, "Okay. Coca Cola weighs 100 grams." So, you just picked it up. You picked that one bottle of Coca Cola. And that's what Amazon does. Amazon does a lot in Amazon Go. And then, there's the other form factor, which is a lot more similar to, basically, what Caper does right now, which is we compact everything into a device like a shopping cart, or shopping basket. And customers will pick it up and directly use it.Lindon:All the compute is done locally inside within this boundary. And it's also very, very interesting. I think, probably three months ago, Amazon Dash Cart came out, which is the smart cart iteration of the Amazon Go store, which I thought... And I thought it was very, very encouraging for the industry, because Amazon is known for their innovation in the physical retail through Amazon Go. And Amazon Go has been scaling to have 20 stores or so. And all of a sudden, they came out with Amazon Dash Cart. Because everyone thought Amazon Go was going into Whole Foods, was going to go into Amazon Fresh, but it didn't. And that was precisely the moment when we were happy to find out our thesis has been right all along.Lindon:Because we went out there to talk to the grocery store owners. And they told us that it would be operationally intensive to maintain. So, that's kind of the landscape. And then, beyond the Amazon Gos and the Capers, you have additional self scanning apps, which Walmart had implemented before in their scan and go program. That really didn't really take off, so they canceled it and kept it to a smaller membership, like Sam's Club, I think. But that's kind of the overall field. When you're really thinking about which type of form factor works, again, kind of going back to my earlier point, the most important factor is return on investment for retailers.Lindon:If they're investing in the technology, what is the cost of the technology? And what is the cost of maintenance for the technology? For in our security tag example, the cost of the technology is low. Each tag costs like eight cents. It's not worth too much. But the cost of maintaining the technology is big because I need to get the store staff to consistently apply it. One of the concerns on the maintenance of the technology for the Amazon Go form factor, is that it requires the stores to consistently update where all the items are inside a store. So, you definitely need someone else in the background to monitor and make sure your inventory is 100% accurate. Otherwise, you're going to start catching the wrong items.Lindon:With Caper, on the other hand, with our thesis, is that you could do whatever you want inside a store. It's none of our problem. All we care about is what you put inside the basket.Stephanie:Yep. One thing I'm thinking out too is, how do you continue the conversation with people who use Caper shopping carts? I mean, to me, I think of it as, if you at least have an app, you kind of can continue the conversation with that customer once they leave. When they come back in the store, it's like, "Oh hi, welcome back. Here's what you got last time." I'm even thinking about Whole Foods and Amazon check out on Amazon right now.Stephanie:How do you guys think about keeping track of consumers in a way that's helpful and personalized when they get back in the store?Lindon:Yeah. So, that's an awesome, awesome question. And this is something that we've been thinking about a lot, which is, how do we tap into consumers? Right now, one of our first ways to do this is to interact with them through the receipt that we sent them. So, we personalize the receipts. We can send them recommendations on the receipt. And when you come back, we give them unique identifiers that they could log in and we could recognize them. On top of that, we also integrate with retailers loyalty program, so that we're able to track and we're able to understand the shopper's purchase history.Lindon:So, that's kind of one part of it. The second part, which is more of a long term vision is, as we increase penetration in the market, we want to come out with a Caper app, where you could track... Shopping lists is one of the biggest pain points that we have heard from our shoppers. They want to be able to build shopping lists, and come into a store, and upload it inside in our cart. And then, we'll tell them where everything is inside the store. So, that's one piece that we're going to build in. And two is, we really want to build something that's a little more what we will call the Caper lifestyle.Lindon:What the Caper lifestyle is, is that, your diets and what you eat are guided by AI. So, if you have a particular fitness goal, when you go into a grocery store, we give you recommendations of recipes of items that are going to help you get there. And that's a much, much more healthier, and more informed, and AI driven lifestyle that you could pick up. And... Yeah. That's our very exciting future vision, but we're not quite there yet.Stephanie:I mean, that's really cool. That's just... I mean, it's like the trends right now you see around media blending with content and tech. And that kind of seems like where you guys are headed is starting here, when it comes to the tech piece, and then start introducing the media and functionality, community building, and encouraging healthy behaviors based off what someone wants to do. That's awesome.Lindon:Completely. Completely, because we interface with the customers, at the right place, at the right time, right, as they're inside, in their store, as their deciding what to buy. So, we have a lot of opportunities to provide our recommendations to the customers. And hopefully, that can enrich their shopping experience.Stephanie:Yep. I also like that you guys have the ability to track based on the receipts. And it just kind of opens up a whole discussion around making things that maybe were normally not useful, like a receipt where it's like, "Well, I'm not going to return any of these groceries. Just throw it away." Putting something on there that makes you want to keep something. And it's kind of like finding-Lindon:Completely.Stephanie:... arbitrage opportunity that maybe many are overlooking.Lindon:Yeah. One of our mottoes is, "Making the mundane into something magical". So, that includes making the shopping cart into something that's magical, so that when you put items in there, we just magically recognize it, into something like what we just talked about on the receipt side. It's not... traditionally, not very interesting. But we want to start enriching every part of your shopping experience that way.Stephanie:Yeah. That's cool. So, you're talking about increasing market penetration. And I saw that you guys signed a big deal with Kroger. So, I want to hear... First off, congrats. That's amazing. I want to hear a little bit-Lindon:Thank you.Stephanie:... about that. How did you strike up that partnership? And what does that look out on a national roll out?Lindon:Yeah. So, it's a very, very exciting deal because it is definitely a step towards the right direction in terms of accelerating the adoption of digitized stores. And Kroger's came to us initially. We had reached out them. But I would say a good portion of our clients are most effective when they reach out to us. And that was a part of... the early part of the process as to how we got to know Kroger, or how we got started on the project.Lindon:They've been looking into this phase and thinking about what could potentially make sense. And we decided to start working together, very fortunately. And throughout the process, there were definitely a lot of learnings. But fortunately, Kroger wasn't our first client, so we had gotten a lot of the initial warp up out of the way. And so, we were able to deploy in their stores very, very quickly. And I think one piece that was quite interesting was that, when Dash Cart came out from Amazon, it really accelerated the Kroger's process. Because there they were, Amazon, making additional innovations inside physical stores, and now they're actually... Before, people were saying Amazon Go wasn't going to scale to a larger store.Lindon:And Amazon proved people wrong by developing the smart cart. And that was a validation of what we have built. And that accelerated the process as well.Stephanie:What kind of lessons did you learn, or would you tell someone else, when you had that first partner versus moving to something like a Kroger?Lindon:It's definitely night and day. We started first by working with a local grocer, a smaller grocer called Food Cellar. The store owner's extremely friendly, very open minded, wanted to try new technologies. So, we launched with him first. But as we started working with him, we realized that grocery is a extremely complicated market. It's not like a typical convenience store where everything is just bar coded and stuff. Inside grocery stores, you have promotional deals. Buy one, get one free. Buy one, get one 50% off.Lindon:The promotional part of the pricing logic was very difficult. And also integration into the store's system was also very difficult, because we need to connect to their point of sale system to make sure that we know the latest pricing of what costs what. And we also need to push back that information to their inventory systems to make sure that their overall records are well maintained. So, that part also took a little bit of time. But I think most importantly is really just figuring out the overall flowing process. In grocery stores, you have... They sell produce. Produce are weighted. So, how do we facilitate that to make sure that it's very easy for customers to understand that this is the way that they add produce?Lindon:On top of that, there is also buffets, coffee beans, beans, different types of... They also have a bakery with coffee. And they also have a pizza little section in the store. So, really understanding every single part of that was very, very essential. So, we really learned... We did a lot of learnings at the local grocery store level. And we also ramped up to Kroger. And before we launched Kroger, we actually launched Sobeys, which was one of the largest super market chains in Canada. And by that, we've realized the complexity of a larger enterprise organization, how their system is structured, how their processes work.Lindon:And then, all through all that learnings, then we started working with Kroger. And with Kroger, we're still learning along the way. Physical retail grocery is a complicated space, but we have really figured out a lot more things. And now, we're able to move a lot more faster.Stephanie:Yeah. That's very cool. It also seems like there's going to be a tipping point where you train the machines, and then just so much data. But then, you don't really have to do that anymore because there's only so many products. There's only so many bottles of ketchup.Lindon:Right.Stephanie:Where it's like, "Okay. I know what that is now." As you start rolling out into future stores, it seems like you'll get over a hurtle, then it's kind of like on to the next thing because you've tackled that and they're good.Lindon:Yeah. Completely. Because the initial wrap up is always the toughest. But once you kind of get through a certain critical point, then you realize that, "Okay. We have all the images that we need. We have the integration system, the infrastructure we need. We have overcome a lot of the hardware issues," which I didn't mention. The hardware issues are also another beast. And so, I think, from our first store, which it was probably launched about a little over... probably over two years, until now, we just learned a ton along the way.Lindon:So, we really... A demo environment... Coming out of a demo environment/a pilot environment into actually a production environment where customers are using it on a consistent basis, where thousands of transactions go through our system on a daily basis, it's different scale. It's a different beast that we have to manage.Stephanie:Stephanie:And did Y Combinator come back to you now that things are going pretty well? Or did they ask to invest now?Lindon:Well, Y Combinator has always been a co-investor along the way.Stephanie:Oh happy, I thought they didn't... Oh, Y Combinator. I'm thinking about the investors at Demo Day.Lindon:Oh. The investors at Demo Day, yes. But we're a little too big for their tech size now. So...Stephanie:Yeah.Lindon:Definitely, when we started building and started fund raising, it was a different product. And it was a different market dynamic too. Back then, it was like 2016/2017, there were... Cashier less check out wasn't even a concept. It was like back in 2008 when self driving wasn't even a thing, and you were trying to build self driving. People were like, "You're crazy." Cashier less check out for retail is kind of very similar to that.Lindon:But I think a lot of the recent tailwinds in the industry... It really started first with Amazon Go. And then, Amazon acquired Whole Foods. So, it really spurred up Amazon's intention to tap into the physical retail market. So, it got a lot of people nervous. And then, it kind of evolved into... Recently, you have COVID, which accelerated the need for a more automated checkout process, because cashiers are very prone to COVID risk. You see more than 20% of cashiers were diagnosed with... tested positive with COVID at some point in their lives. And that makes it a very difficult decision for both the retailers, and the shoppers, and the cashiers. Because you have cashiers who are consistently exposed to thousands of people on a daily basis.Lindon:Shoppers want to make sure that they're safe. And retailers want to make sure that their shoppers are safe, and their employees are safe as well. And that kind of accelerated the interest in the market.Stephanie:Yeah. Do you see curbside pickup and people shopping for you as a threat to the business model?Lindon:Yeah. This is very interesting. So, this kind of comes back to... draws a full circle on the ecommerce portion now. I do think that grocery and general retail is going to continue to be more ecommerce. That's one part that I definitely recognize, and definitely am aware. And ecommerce is very interesting in that, during COVID, physical stores are actually doing substantially better. Because we systematically shifted the demand from food, basically from restaurants, into cooking at home for yourself.Lindon:So grocery, general retail, kind of enjoy a lot of that market expansion. And then, on top of that, then ecommerce came in and chipped a little bit of the market away from them. But then, when you actually think about the overall landscape of retail, Instacart is the largest ecommerce player. 100% of their transactions are [inaudible] physical stores. So, it doesn't reduce the traffic inside stores. If anything, it really increased the need to be efficient inside a store. And that's where Capers come in as well. We can help facilitate delivery shoppers to make them more efficient by telling them where all the items are inside the store, and get cashier check out free so that they can walk out of the store.Lindon:So, curbside pickup also, also the same. You need someone inside a store to go walk around the shelves to pick up everything. So, where I see the future of retail really converging is that you are going to see a lot more retailers. Not only are they going to optimize their stores for the shoppers, but they're also going to optimize the stores to make sure that it also becomes the local fulfillment center. Because these are the distribution modes that are closest to your house. These stores are just a mile away from your house. So, I don't see in store activity going down at all. In fact, I see in store activities... It's going to continue to pick up.Lindon:And that also increases the need for technologies like us to make in store experience more pleasant so that, when people come back to the store, they enjoy and love that experience as they interact with food around them, but also make it extremely efficient and expedite it. So, I'm very bullish on the overall check out free industry.Stephanie:Yeah. I see there being opportunity as well, expanding into the Home Depots of the world, and all the stores where it's like, "Ugh. This aisle is a little too much for me. I just need to know where to go to get what I want, and then just walk out and not wait in a crazy line." So, it seems like there's a lot of other industries that would probably be waiting for this...Lindon:Completely.Stephanie:... after you guys were fully secured.Lindon:Completely. We could expand to all retail formats. So, we're very excited to explore that.Stephanie:Cool. All right. Well, this has been such a fun interview. I probably could keep going, but I'm going to shift over to the lightning round. The lightning round is brought to you by Sales Force Commerce Cloud. This is where I'm going to ask a question, and you have a minute or less to answer. Are you ready?Lindon:Okay. Sure.Stephanie:All right. What's one thing from 2020 that you hope sticks around in 2021?Lindon:That's a really tough one.Stephanie:It can't be like, "Oh. I hope people continue to shop more in person and not go to restaurants." It can't be something that benefits your business.Lindon:Okay. I hope that my team momentum keeps up, because 2020, ironically, is one of the years where my team has really gone together, despite COVID, and really accelerated our development. So, that's one thing that... That was good. And it really proved that work from home... Actually yeah, work from home is here to stay.Stephanie:Yeah. I agree. People will not want to go back five days a week anymore.Lindon:Yeah.Stephanie:What one thing will have the biggest impact on ecommerce in the next year?Lindon:Cost of delivery. If cost of delivery goes down, ecommerce would also take off.Stephanie:Yep. If you had a podcast, what would it be about, and who would your first guest be?Lindon:The cockroach way. I thought about that. I was going to write a book about it.Stephanie:About what?Lindon:How do you survive building a startup, earning, I don't know, $2000 a month. It was one of those things. Because we burned $7000 per month for two and a half years. So, not buying orange juice and all that stuff, that was real, and definitely want to talk about that. So, who would I want to invite? An entrepreneur that was very referable, very, very cheap.Stephanie:Your co-founder?Lindon:Yes. Yes. He will be a great one. He's still referable today, even though our team [crosstalk]. Yeah, at least... Well, I mean, I'm paying for it myself now. It's not on the company. So, he can't stop me.Stephanie:There you go. What's up next on your Netflix queue?Lindon:I watch a lot of stand ups, Kevin Hart.Stephanie:Yep.Lindon:Yeah, it's awesome. After a long work day, you can sit down and just watch some Kevin Hart.Stephanie:Yep.Lindon:It's great.Stephanie:Right. And I think you'll have a good answer for this last question. What one thing do you not understand that you wish you did?Lindon:The complications of scaling a team. When we scale from sea drown to the series A, to beyond, my role has really evolved from a independent contributor that's on the route to execution, to middle manager, which is managing the execution level people, to managing middle managers, to managing managers of middle managers. And along this way, I really learned a lot about management and growing as a CEO. So, that was something that I wish I had known a little earlier, so that I'm able to roll my team along more effectively.Stephanie:Good one. All right, Lindon. Well, thanks so much for joining the show. It was a pleasure to have you on. Where can people find out more about you and Caper?Lindon:You can find me on LinkedIn. And you can also find out about Caper on Caper's website, caper.ia.Stephanie:Awesome. Thanks so much.

When people scroll through Instagram these days, they can’t avoid the ads and the influencers pushing products. And that’s not a bad thing. In fact, more and more often, ecommerce is taking place in channels other than on a brand’s website, which is why so many companies are looking for ways to optimize how they execute commerce at the edge -- this means meeting customers where they are. Paloma has one way to do that, by turning messenger platforms into sales channels, which creates a more personalized shopping experience for customers, and a .5-to-10x higher conversion rate for brands.On this episode of Up Next in Commerce, I was joined by Kelsey Hunter, the Co-Founder and CEO of Paloma, to give us the inside scoop on why brands should be investing in conversational commerce. In the last year, Paloma has helped partners convert $9 million in sales, and she explains how that happened by simply diverting ad traffic away from a website and into a chat instead. Plus, she discusses the future of conversational commerce and how the low barrier to entry into the ecommerce industry is forcing everyone to adjust quicker than ever before. Enjoy this episode!Main Takeaways:Website Woes: Moving forward, a brand’s website will become more of a secondary piece of collateral when it comes to driving conversions. It will still be critical to have a fast, highly-efficient website experience, but more of the interactions and conversion efforts will be focused on other channels where customers are spending more time.Get To The Party: The worst thing a brand could be doing right now is not experimenting with and setting up processes in Facebook Messenger and other messaging apps. Customer service and the customer experience are two of the leading drivers of conversions, and ignoring a channel that allows you to provide a proactive and personalized experience is a huge wasted opportunity.Far Out Future: The future of commerce is being written right now with shops that are opening with simple Instagram product posts and telling customers interested to go to a PayPal link. More new brands are foregoing the traditional channels and website launches, so the barrier to entry is much lower. As more competition enters the market in this way, traditional brands will have to keep up with their own easy, personalized commerce options.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome to Up Next in Commerce. This is your host, Stephanie Postals, co-founder and CEO at mission.org. Today we have Kelsey Hunter joining us. The founder and CEO of Paloma. Kelsey, welcome to the show.Kelsey:Thank you, Stephanie. It's so good to be here.Stephanie:We're excited to have you on. I was just thinking I'm like, "How do I know I'm actually talking to Kelsey and not a chatbot?" She's put up a virtual screen and it might not even be Kelsey back there. I'm not sure.Kelsey:I have a history of pretending to be a bot, so.Stephanie:I actually, I read that. I read that you spent a little bit six weeks pretending to be a chatbot to learn how they worked.Kelsey:True.Stephanie:That's fun jumping off point. Tell me a bit about being a chatbot. What's that life like?Kelsey:It is wild. Let's see, I was working at a startup in New York that we offered mobile commerce solution for brands and publishers. So I was really deep in the mobile commerce space when the messenger API opened up. And as we're getting side projects, of course then, decided that messenger would be a good place to try to test things out.Kelsey:And before even building anything, I pretended to be a bot just to see how it would work. That's what sparked all of this. It was like, "Oh wait, if you can talk to people directly, people will talk to you about themselves." I'm asking people questions, they're telling me way too much information. That was really the spark for me. Then I said, "Oh, why are we making assumptions online? We can just ask people and they will very happily tell you things to help figure out what they should buy and why."Stephanie:That's cool. So you were doing this at another company. And then you're like, this is the business in and of itself. And that's how you went to create Paloma?Kelsey:Yeah. It was a totally side project outside of the company that I was working with. But all of the pieces tied together for me. That company is called Button, and when I left Button, I did a little bit of other experimentation in the channel. Actually, worked with a team to build a open-source software, to help people call Congress on Facebook Messenger, which was one of the first software tools that was like a MailChimp for the space, which is really cool. But brought it all the way back around to commerce and launched Paloma at the end of 2017.Stephanie:Cool. So tell me a bit more about Paloma. What is it? What does it do?Kelsey:Paloma helps brands turn Facebook Messenger into a sales channel. Essentially, we work with a lot of D2C and ecom brands across every product, category, audience, price point, and we help them drive traffic into messenger instead of their website where their customers get a more personalized shopping experience, that's powered by our software. So what that might look like for a furniture brand would be, they're running Instagram and Facebook ads and they can set them to open up a Messenger conversation instead of opening up a website landing page.Kelsey:And once in Messenger, our conversation, we'll ask them questions like what room do you want to design? What are the colors in that room? Do you have cats, dogs? Any other kind of style preferences. And then we'll dynamically route the customer to the right products based off of what they've shared. By helping the customer make the purchase decision, we're effectively seeing anywhere from two to 10X increases in conversion rates. And that's a little bit of very cap on, on how that works.Stephanie:That's awesome. I feel like just thinking about, I follow all these influencers on Instagram and they're always selling stuff, which normally I'm like, I want a lot of this. But if you respond to them, they definitely can't keep up. If you're like, does that size, would it fit me? Is that Off-White? Is that Real-White? It seems like there's a lot of opportunity everywhere to have a chatbot set up that personalizes the experience and also helps it scale.Kelsey:Exactly. And what you just described is one of the reasons that we see so much opportunity in that space. And the reason why customers messaged in the first place is because when it comes to online shopping people don't shop on websites. That's just where they transact now. But they're making decisions by what you're talking about, watching influencers, DMing folks, talking to friends, watching YouTube videos, TikToks.Kelsey:So you're basically piecing together all these different parties to figure out, should I buy this? What's the right thing for me? Whereas if you walk into a storefront, for example, you can get all of that figured out in a matter of minutes. You can talk to an associate, they're going to ask questions. Everything that you just described can happen there. There's nowhere like that online. And that's where messaging channels open up that opportunity for the brand to be part of that purchase decision process. So instead of leaving it up to all the third parties, the brand can do it themselves and they can scale it through these kinds of automated conversations.Stephanie:Very cool. And how do you go about setting up the responsive? Is it very custom based on the product? Like, do you work with a brand early on to be like, here's probably what they're going to ask you or they're telling you. What does that look like behind the scenes?Kelsey:We definitely curated a lot to the brand, a lot to the product type and to their customer demographic. So for example, Facebook recently published a case study of the work that we do with Wallow, which is a brand that sells titers, strollers. Basically goods for families and their kids. So they're really great products, but it's actually not so much about having a lot of skews. They don't have a ton of skews. It's more about why should somebody buy this Wallow stroller and how is it going to fit into their family and lifestyle?Kelsey:So essentially what we do is we'll work with them, look at the products that they sell and try to understand their customer type. In their case, a lot of their customers will buy for themselves, but there's a pretty good chunk that are gifting. So for example, the first question we ask is, is this for you and your family, or is this for a gift? Who are you gifting for? And then as customers answer these questions, we can speak to how it will fit into their lifestyle. How old is your little one? Are they eating solids yet or not?Kelsey:We don't actually need the customer to ask questions because by us asking questions first, we can preemptively answer how the value prop works for them. How it fits into their life. So we can say, "Well, they're eating solids is getting very messy. This high chair is very easy to clean." And so you're effectively accomplishing both along the way. It's basically just a really good sales conversation.Stephanie:Yeah. I mean, that's really smart and I think it's a different mindset where a lot of times, when you think about chatbots, the consumer has to initiate the conversation. Has to think of the questions. And it makes me even think about when I'm hiring... I'm trying to think what I was hiring. But they're like, "Oh, do you have any more questions?" And I'm like, "Well, what do people normally ask you? Like, what's the normal questions because I don't know what to ask you."Kelsey:What should I ask. Yeah.Stephanie:If I'm buying a house or whatever it is, what are the top 10 questions you get? And so that's great being like, we'll do all the work for you. Here's some of the questions that we know will start a conversation. So it's actually less work and less cognitive load. Where you can get to the end point and still leave being like, I know what I'm talking about now with this product.Kelsey:Exactly. That's 100% right. And it's actually a really classic UX design issue. Which is actually my original background. Basically, when it comes to any digital interface or any interface at all, if you don't know where you can go, you're not really likely to do it. You're not going to walk up to a pitch black tunnel and be like, "Yeah, I feel confident walking into that."Kelsey:That's like an open free from bot conversation or like you get on a customer support call and it's like, "What can we help with?" And you're like, "Well, depending on what I answer, what's the likelihood you'll have any idea what I'm asking?" It's not great. So we find that structuring and providing a really clear interface for the customers to navigate also makes a huge difference.Stephanie:We talked about this a lot on the show that shopping is moving to the edge. Everyone is shopping on Social, they're shopping on Amazon, Walmart it's everywhere and not always on the website anymore. Do you think that websites are going to become like a secondary thing, where it's like, yeah, it's a nice to have. But people are actually on TikTok, Instagram, Facebook. Going directly to Amazon, they're not really going to always go right to your website.Kelsey:That's exactly right. It's going the way of retail. And that's not to say it's going to go away. It's just that it's not the primary anymore. We see a website as like the catalog and it's a transacting location. In a lot of cases that's useful, but it's not necessary anymore. And we see that with how new sellers are starting today. Especially with COVID, everything accelerates so rapidly. But one of the really interesting trends is, you've got new shops opening up just with Instagram pages and saying, "Hey, DM me for this product and I'll send you a PayPal link."Kelsey:I think those kinds of very low tech indicators of the fact that that's where the market is heading. And, I think you're 100% right. The website's really not necessary. And there are tons of great antique shops I follow in New York that are doing just well without it.Stephanie:Yeah. That's cool. So what other trends are you seeing among sellers right now? Maybe anything new popping up and you're like, pre-COVID we actually weren't really seeing this and now there's a big trend to just opening an Instagram page and selling through DMs. What other things like that are you seeing?Kelsey:I think that's huge. I think that I'm really interested in these future QVC type of models. But that's just because I grew up watching those. I don't know, did you ever watched the knife show?Stephanie:I did not watch that, but.Kelsey:The show was wild.Stephanie:Well, there's a [crosstalk].Kelsey:I think it was on a lot when I was in college. We'd always end up like late night. The knife show would end up on at very late hour and it was just like, "Hey, here's some knives and we're just going to cut all sorts of stuff with these knives." Like the silliest thing. It was so funny, but-Stephanie:[crosstalk] the Blender show. It wasn't called the Blender show, but where they [crosstalk] random things in the blender and I'm like, [crosstalk].Kelsey:Exactly. The same kind of stuff.Stephanie:How much time do we have on our hands apparently?Kelsey:It was so silly. It was like cutting shoes and weird things like that. The humor of it, I think it was really fun. And I think that online, we're seeing a lot of that, like humor come into commerce in a way that I think it's really fun. And that's really what it should be. So I like things like that. But I do think that the new selling methods are probably what some of the most interesting things to me is just, what's the version of opening a store today versus before. And like the barrier to entry is just so low now. It's pretty phenomenal. So I'm excited for that.Stephanie:Yeah. Cool. And how do you advise brands to being proactive when it comes to starting conversations versus being reactive and just taking the inbound? Because if I'm thinking like, I'm a new brand, I don't have any inbound. What's the way to be proactive and like reach out to people with your product?Kelsey:What's really nice is that these channels are often first, which I think is really important for there to be a great customer experience. If we want these channels to succeed, if we want these brands to succeed, we need to make sure that we're being really mindful of the consumer. But what's really, really nice about Facebook Messenger while it is tough to work on another platform, play by someone else's rules sometimes, but there's a ton of great benefits there.Kelsey:And one of them is the acquisition funnel. So brands are currently running ads from Facebook and Instagram and stories, all those normal places. And all they have to do is set up the exact same ads, but they can change the destination of the ad click to open a messenger conversation instead of a website. And so we're able to say, "Hey, we're basically giving you a new ad type that you can leverage. It's going to drive to a higher converting destination." And there's no reason not to try that.Kelsey:Basically, it's a win-win from the standpoint of, it's really easy to test. We can guarantee traffic and make sure that we're properly vetting it and controlling the volume. And you can compare it one-to-one to your ads that go your website. So it makes it really easy for brands to get started. And it makes it easy for the consumers because they're doing what they don't normally do, which is click on ads. So that's the most common way to start.Kelsey:There are other ways of getting customers into the channel and you can do it with short links, with QR codes, we'll link from an email, a pop-up on your website. There's a lot of different methods there. And we have partners that do all of what I just described, but ads is a really common format because again, it's just a very seamless acquisition funnel.Stephanie:Cool. And is there anything that brands are doing right now in messenger or Instagram DMs, where you're like, that's actually the wrong way to do it? Anything that you would advise brands not to do or have seen things going wrong?Kelsey:Yeah, that's a great question. I think not doing anything at all is what I would say is the worst thing. Because, whether that's Instagram DMs and you're just not responding to the people that message you there, and that's a huge, lost opportunity. We understand that it's really hard to scale responding to people individually, which is why platforms like ours can help. But I'm just not doing anything, you're losing customers every time you don't respond to them because they want to engage with you directly for a reason.Kelsey:And every time they do that, there's an opportunity for that to become either a customer or a recurring customer. So let's say that's probably the worst, but in terms of actually doing things that are, are wrong, I don't like any of the spammy stuff and I don't like any of the things where it's not clear to the customer what's going to happen. Those are the things that I find frustrating, but in terms of how to do that, well, there's not as much going on with that anymore because Facebook really did crack down on some of it. So I'll say what I didn't like before was, there was a trend where there's an opt-in check box that you could put on your website that basically said, "I'm opting into Facebook Messenger with a business."Kelsey:And that's still something that you can use today, but at the time you could actually put it on your website pre-checked. Oftentimes customers wouldn't necessarily notice it or see that it was there or see that they had opted into something. But what was even worse was there were lots of sites that were putting them behind the scenes. So it wasn't actually visible on the page at all. So a customer would add something to their cart. And by submitting that add to cart, it was opting them into messages without them knowing it.Kelsey:And then they would get messages later if they abandoned their purchase that were like, "Hey, here's the 10% off. Here's a whatever go buy that thing you were looking at." Which inherently is not a bad workflow, but to do that without letting the customer know that's what's going to happen, really not great. I'd say that's the worst thing I've seen in this space, but you can't do that anymore. And I'm grateful for it.Stephanie:Yeah. Well, that's good. How do you keep up with the changes that Facebook's going through? Because it seems like they've been definitely on like a roller coaster where very popular. And then, I feel like they kind of went through a trough where it's like, does anyone use it anymore? And now I feel like it's growing again. Even among my friends, it's like people are using the groups now and Messenger.Kelsey:The groups are huge.Stephanie:That's the only reason I go on there for the most part, but how do you keep up with what they're even doing behind the scenes and how the buying groups on there just changing. And then coming back and then leaving, and then there on TikTok. How do you keep up with that?Kelsey:I think it could be really easy to get distracted or feel like that's very volatile. The approach that we've taken is actually just been to have our own point of view that is rooted in something just so fundamental that it doesn't matter what the policy changes are really. We won't be disturbed by them essentially. So we've looked at Facebook Messenger as a sales channel since day one of the business. And we've been around just over three years now. And of the platforms that were popping up at the time were MailChimps for Messenger, were abandoned cart notifications and things like that.Kelsey:And that is really easy to get disrupted by policy changes. But if you're fundamentally saying, this is a place where you can more effectively get a conversion from a customer and have a better experience for them. There's actually not a lot that that Facebook could do that would really interfere with that in a way. Unless they just fully said, "Hey, you can't actually use the API at all anymore." They just shut the API down. Then it'd be like, okay, fine. But even if that were to happen, the US market for messaging is inherently multi-channel.Kelsey:Messenger's not being first or last for us. It's going to be one of many. So, that's the way that we approach it as yes, we keep up with the trends. We are a platform partner, so we're pretty in tune with the roadmap and what's going to be happening there. And that's really important. The relationship is really important to make sure that you can prepare for your business. But at the end of the day, I think having a really just underlying fundamental platform approach to what we're doing, enables us to avoid a lot of the mishaps that we've seen affect other business models.Stephanie:Yeah. Cool. And you just mentioned like messaging is just the first, are there other areas that you feel like there's a lot of opportunity that brands can be selling in right now. Or maybe it's not even ready yet, but in the future it's coming down the pike.Kelsey:Yeah. I think anywhere where consumers and brands can have a direct conversation, you're going to see things evolve for that. And it might depend on the platform, if the platform is incentivized towards it or interested in it. Facebook supports this because they believe in messaging as the future of consumer behavior. It's something that's been around since the beginning of the internet, we've been chatting. I don't think that's going anywhere, but Facebook is also really highly motivated to monetize on it. And so, there's opportunity there.Kelsey:But would someone like discord do something like this? I'm not sure. I'm not sure if they're like motivated towards that or if that's part of the business that they want to be building. But I really do see that any messaging channel where you can have that kind of interaction, there's no reason not to produce a better shopping experience there and tried to scale that. It's kind of infinite, I think.Stephanie:I wonder if chatbots on websites, like native chatbots have muddied up a bit. Where it's like, we've all had that bad experience with a chatbot where they're talking and you're like, "Get away, get away. You're not going to be able to help me. I already know it Verizon, stop." [crosstalk]. I wonder if that has hindered the market, with certain people being open to buying via chat bot when they've had experiences that are subpar on maybe certain websites.Kelsey:At the start of these platforms opening up and these APIs opening up, you had people making bots left and right. And they were very low quality. It tarnished it a little bit. I think tarnished it a bit for the consumer and for the brands, because, when things opened up, brands started testing things and they weren't getting performance results. It wasn't their fault. It's really hard. It's like launching your first website and then not working super well. It's like, well, yeah, this is a totally new... It's where the start of websites existing. It's like, yeah, that's tough. It's tough to figure it out. It's a whole new learning curve.Kelsey:So I think that in terms of, what can happen there. It is very easy to tarnish their reputation, but again, it's not going anywhere. So as long as again, you have an opportunity to drive a better experience. You should keep iterating on that. And again, it's like if you have customers that are willing to do directly, it's always an opportunity to do better and to turn them into a better customer for you as well. There is also really huge difference between like the customer support experiences like that, and these types of sales experiences. I think there's a pretty clear line between the two and a lot of that depends on the customer's intent.Kelsey:If you're coming from an ad to shop driver, for example, you know that's what you're doing and you know that that's what you're being helped to do. And it's pretty straightforward. But if you're going in with any level of support need, there's a lot of opportunity to get that wrong. So it's really tough.Stephanie:Someone's already coming in with a heated mindset and one wrong word from chatbot. Ooh, I'm hot.Kelsey:Exactly.Stephanie:The one thing I think about too is the payment piece and how to make sure that customer journey is frictionless because even when I hear, Oh, some brands have a PayPal link, which I think is great. Or like an MVP, get something out there. And also, show there like, do I even know my PayPal login? Like, Oh, I don't know.Kelsey:Exactly.Stephanie:How do you think about, making the checkout experience frictionless where it's not a million different options and people know it's very be fast and easy.Kelsey:Currently we actually drive to check out on the brand site and we find that works really well because it's the trusted destination. You have all of the tooling and UI that you need to be able to have a good seamless checkout experience. And that works really well. Checkout is on our roadmap to be able to process that and manage that. And we won't be like a payment processor. We have partners we're talking to on end, but in terms of the checkout, there's a lot of ways to handle that.Kelsey:And I think that there's been so much best practice learned from mobile shopping as it is, that can be leveraged there. And there's also a ton of testing opportunities, but we really do look to... We're not trying to reinvent wheels here. Stephanie:That whole space is evolving so quick and just talking to the team at fast and continuing to be here and see what they're doing with the one-click checkout. I'm like, it seems like there's such an opportunity to have that right. In every form of like, you've got your cart already loaded in like your Instagram DM, and you can just hit checkout and all your payment information save and drop onto the next Instagram site.Kelsey:[crosstalk].Stephanie:There also seems like there's a good opportunity for Amazon there. I always look at all those Q&A sections, where it seems like how much time do I spend looking at toothpaste? Is it fluoride-free? It's for my kids, is it fluoride free? Does it not have this, that, that. All these questions, but I'm actually going through the whole product page for a thing of toothpaste so much time wasted. But it would be really nice to have a Messenger on there where you could just say, "Hey, does this have this and this?" Instead of me trying to zoom in on the ingredient list, or like, look at all the reviews for something that's like $6 or whatever it may be.Kelsey:Yeah, exactly. I hope Amazon's listening. They should come talk to us. We haven't seen anything quite like that, but we have talked to brands that sell on Amazon and we have done experiences in Messenger that link to Amazon product. That is something that we've experimented with before. And I think that you have to your point, why scroll through a million questions and answers that aren't necessarily relevant to you? And one might be, when you could just have the brand get to know you better and then tell you what you need to know.Stephanie:Yeah, exactly. So when you're first starting to work with brands who are implementing chatbots, what kind of metrics do you maybe advise them to look at to see if it's going well or not? Because a lot of people I could see being new to this, not even knowing like, well, what should I expect for conversion? Or like, what's good. What's bad. Like, how do you advise them around that?Kelsey:That's a great question. So first and foremost, and I think this is a little bit of what might have gotten wrong in the early days of the channel. Businesses care about performance. They care about conversions and CACs and return, and all those things. So, we want to make sure we're mapping to that because if you don't then at the end of the day, they're going to be worth your time if it's not performing on those metrics? Probably not. So first and foremost, we can own conversion rate. That's the KPI that we really truly measure against. Because essentially we're saying if you drive traffic here, instead of your website, it's more likely to convert. That's our thesis. And so if that's true, that's what we're going to start measuring against. And we'll do that by looking at what's your conversion rate from a standard click to site ad.Kelsey:So purchases you're getting out of link clicks. And then when you run a click to Messenger ad, we'll do the exact same thing. How many purchases are you getting out of those ad clicks? And that should be able to tell us if it's a higher converting channel for you. Fundamentally we've seen anywhere from 50% increases to 10X increases in one case and anywhere in between. So it's not abnormal for that to be the initial result. But then in terms of the other things like captain role, as they should benefit from that better conversion rate. It shouldn't be approached necessarily differently than any other conversion tests that you're running.Kelsey:That being said, we have a ton of insight into the full funnel that we can leverage to optimize. And so, all of our partners start with at least a three month program because we know it takes time to warm up and we want to make sure we can iterate. And we do that on a weekly basis. So you might start with X result in month one, by the end of month three, it should be much better. And so the way that we can do that is looking at everything from a customer clicks on an ad, they land into Messenger. Do they respond to the first message, which basically ops them into the channel?Kelsey:Are they completing like a quiz? If there's a quiz or personal shopper? Are they clicking on products back to the website? And then are they adding to cart? And then are they purchasing? So we have a slightly different funnel. You're going to get your ad performance from ads manager and see the link clicks and add to carts and purchases. Paloma is going to see everything in between. So we'll be able to know exactly where people are off and why. And be able to iterate on that much more efficiently than if it were traffic going to a website, where are they clicking? How are they browsing? There's like a ton of more opaque data from a website side. From our end we can literally just see, okay, you have too much drop-off on the first question. So let's not ask that question. Or, Hey, everybody is answering the same way to this one question, that doesn't need to be there.Kelsey:Or, people are clicking on the products. Maybe we need different product batches or whatever that may be. So we'll be able to get a lot more of a finer detail on that. And we have benchmarks for each. We expect our partners to get at least a 30% opt-in rate, maybe percent completion on any type of quiz or personal shopper experience. And then at least 50% of traffic clicking back to the website. And then from there add to carts and purchases depends on what they would normally expect to see. It's kind of a lengthy answer.Stephanie:It's good to know metrics like that to aim for. How do you plug into a brand's inventory system and then also make matches. That will be something that I want to look at. I can just imagine me going in there and not knowing what I ever want being like, "I want a picture." And then someone's showing me something and maybe like, "Oh, not that one." How do you guys personalize it and show something I want, but also make sure that you're not tapping into inventory, that's like out of stock.Kelsey:So we basically can ingest inventory into our system, keep that up to sync, keep that availability up to sync. And so anytime that we're building experiences, you're able to make sure that it's the right things getting shown. In terms of what to show customers based on their selections. We have this like start matching dynamic product matching system where basically the customer's responses get associated with the inventory.Kelsey:So all of your boots are associated with like a boot selection or all of your things that come and break colors would get associated with like bright colors. If you were asking about color preference. And some of these qualities are not things that would normally be tagged onto your inventory. So we're basically expanding on that. So we make the association between the two and as customers make the selections, we basically just filter down and display all the things that would then relate.Kelsey:So like Andy swimwear, for example, if you chose one pieces and some coverage and a lot of support, you're only going to see the products that, apply to all of those qualities. And it's really simple for us to create those. Something like that can take like 10 minutes to build, whereas a quiz to put on a website can cost thousands of dollars and take two months. And so, that's kind of part of the magic and secret sauce of our software.Stephanie:Yeah, that's cool. I was just thinking about, okay, to even create that kind of filtering and navigation options and all that can take a long time. And tagging it and making sure that it's actually can be searchable. And then if you can just have it in a DM or Messenger, that's great game changing.Kelsey:Yeah. It's really fun. It's a very simple, we have like own drag and drop interface to just jag product on to the selection options. They're tagged with that in the future. And then as customers answer, we just know what to show them.Stephanie:Cool. Where do you see the future of commerce headed or chatbots and commerce intersecting. What does that look like to you maybe three to five years down the road? Where do you hope it looks?Kelsey:Really, again, I like to look to what people are doing now when they're just starting out and also at other markets. So really in terms of the future of commerce, we believe very strongly that it's on messaging channels, that that is the next door front. And so, what does that look like? It's customers going to DMs, it's brands driving traffic to DMs and customers just getting much better shopping experiences there, converting there, checking out there. And new stores not having to even open up a website. Again, I don't think website's going to necessarily totally go away, but it's just going to be a smaller part of the puzzle. If you look at what's gone on in other markets like China with Weechat, they're way ahead of the game. And that works really, really well.Kelsey:And it's a huge chunk of the commerce ecosystem out there. So we've been a little bit slower to that, but it is happening. It's happening a little bit more multichannel, and I think that's really interesting and that's a really fun challenge is that, we don't have the monolith app that will do it all. We have a lot of [crosstalk] apps. I think it's great because everyone likes to have their own different way. We're always getting new social networks and apps out there and it's fun. It's really fun. So basically, I'm not sure how many different tools there will be in the future, but we very strongly believe that messaging is the next channel and destination for commerce to happen. And we're effectively building the platform to power that. Stephanie:That's great. It definitely begs the question about keeping things organized when you're selling on so many different channels. And there's probably going to be dozens of messaging platforms that people are using. I'm just imagining a brand, trying to keep up where, they go from selling on their website and then maybe dabbling in Amazon, maybe on Walmart. And then all of a sudden it's now, you can sell on Pinterest and Instagram and Facebook and TikTok. How do you think a brand would be able to keep up or do you see anything right now? Like any innovations that are allowing brands to organize everything in one central place that they can keep track of what they're doing?Kelsey:There are definitely a lot of interesting tools. I think that what comes before the tools are just the people, expertise. I think that's what we're seeing, services and agencies that will help with coordinating all of those things or know how to best launch on Amazon. And then once you've launched on Amazon and all these other places, then you go, okay, well now I have everything in too many places I need a more scalable system. And that's when you start seeing softwares get put in place. And I don't think any come to mind immediately, but I think there's some really great tools that are coming up to try to glue things together and basically to piece together, all the different supply chain and logistics issues.Kelsey:And there's some really great things out there for that. But we're also seeing new commerce platforms that are inherently taking those things in mind. So we have a lot of commerce players that exist that are trying to catch up and trying to add on these different channels. But then you have new players that are from day one saying, "We know it's not just about one place." So you've got things like, headless commerce and no code tools and platforms like Paloma that will from day one say, "Hey, this isn't just about a single source of shopping. It's about a lot of things."Stephanie:Yeah. I completely agree. All right, well, let's shift over to the lightning round. Lightning round is brought to you by Salesforce commerce cloud. I'll ask a question and you have a minute or less to answer. Are you ready? You look a little nervous. Wow.Kelsey:I don't know, that's scary. It's a little daunting.Stephanie:No, it'll be fun. It'll be fun. What one thing will have the biggest impact on e-commerce in the next year. I have a feeling you're say message shopping and Messsenger.Kelsey:Obviously messaging. I'll just be repeating myself a little bit, but I think messaging is a bit. It's already been exploding pretty quickly and it's growing faster than ever. We drove almost 9 million in partner revenue last year. And that's just as a small, early stage team, so there's a lot ahead of us.Stephanie:Yeah. That's cool. What, one thing do you not understand today that you wish you did?Kelsey:Just so many people things. I find people so fascinating. I'm constantly seeing how people chat, but I would just love to talk to people about their experiences with all of these experiences and with all these different kind of shopping channels. And, I think that it's not something that I don't understand. It's just something that I'm always eager to understand people's behaviors more. So that'd probably be it. [inaudible].Stephanie:What's up next on your Netflix queue?Kelsey:I am so behind, I need to watch Bridgeton and literally everything else. I've been doing a Buffy rewatch. So I'm just like living in a very different time.Stephanie:What is a book that has really left a very big impression on you? You're like, "I always think back to this book for either business or life."Kelsey:Oh, that is a great question. I'd say, well, what are the ones that comes to mind, it's Italo Calvino. [crosstalk] is the author. And basically, it's a person telling stories about visiting a lot of different cities. And when I was younger, I found that it was just... When you're reading, it's all about picturing what's going on. And as someone who, if you didn't grow up being able to travel a lot, it stuck with me. I was like, I want to be able to do that someday, but also just being able to picture it from a book is really, really nice. I still have like the images in my head of different passages from that.Stephanie:Oh, that's cool. All right. And then the last one, what's the nicest thing anyone's ever done for you?Kelsey:Oh my gosh. I feel like people are so nice. What is the nicest thing anyone's ever done to me? Oh gosh, there's too many things.Stephanie:Wow. You must be a very... People are sending all this nice stuff you way. [crosstalk] people around you, can I have some?Kelsey:When you run a business, or when you start a business, it's all about getting help. That's the best way to be able to succeed is knowing what you don't know and how to get help. So I will say I'm very good at getting help, but what's like the biggest part of that is having people be really nice and great. And so, there are just a lot of people that have helped along the way that I literally would not be where I am without that. From little things like making the introductions, not everyone has access to the networks that you need. And so, the people that believed in me more than the business or more than anything else, that's really huge.Kelsey:And so, I've just got like some really great, great people that helped along the way. I can't pick a single thing, but I'd say like some of our investors, some of just the people I've worked with in the past and they're really just root for you. And will be there when you say, "I have no idea what I'm doing. How does this work?" Or, "I need some help."Stephanie:I thought so. Good answer. All right, Kelsey. Well, it's been a blast having you on the show. I love learning about Paloma and your story. Where can people find out more about you and Paloma?Kelsey:You can learn more about Paloma, getpaloma.com, G-E-T-P-A-L-O-M-A. And me I'm on Twitter, LinkedIn at Kelsey Hunter. I think it's usually Kelsey AH. So feel free to message me, check out the site, chat with us. We're always around.Stephanie:Amazing. Thanks so much.

The world is moving toward being decentralized in every area from the internet to big business. What that means is that the way we do things will change, and in some cases, those things are already vastly different than the norm we all have grown accustomed to.Funding and investments are one aspect of the business world that for a long time have operated in silos. But the tide is shifting, and David Koifman is helping to democratize the world of investment through his work at Kickfurther.Kickfurther is an investment platform that uses the power of crowdfunding to help CPG companies fund their inventory and production runs. Most of the deals on Kickfurther are fully funded and closed within minutes, which proves there is an appetite for this kind of investment in the general market. On this episode of Up Next in Commerce, David explains the model and its benefits to both businesses and investors, and he explains how crowdfunding will continue to make an impact on ecommerce companies in the decentralized future. Main Takeaways:Democratizing Investment: For too long, companies have been at the mercy of financial institutions to help fund early production runs or other operational costs. And while that solution works for some, we think that new solutions are still needed. Opening up investment opportunities to the general public is a peek into where the world of funding is headingKeep Proving Yourself: When a company gets a bank loan and pays it off, the business is seen as more successful and its credit rises. A similar thing happens when a company uses crowdfunding for inventory: by delivering the inventory the crowd has purchased and then opening up a new round of funding, a business is building credibility with a consumer and broad investor audience that it otherwise would not have been able to reach.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. This is Stephanie Postles. And today we're talking to David Koifman, the head of growth at Kickfurther. David, welcome to the show.David:Hey Stephanie. Great to be on the show.Stephanie:I'm glad to have you. So I was looking through your background and I was hoping we could start there because I saw that you've been in sales and partnerships and business development, and it seems like you've had a wide ranging career. So I wanted to hear a little bit about what you did before Kickfurther, and what brought you here.David:Before Kickfurther? I was in marketing right out of college. And then I went into the world of startups in financial technology. I began as a sales rep and grew within a small organization to a much larger organization, led the team, and basically built out sales account management partnerships. And then we were getting to a stage of growth where I wasn't feeling the excitement that I initially felt and joined the team at Kickfurther to do it all over again. So I've been here three and a half years. It's been awesome. We've grown tremendously, and I'm very excited about the next few years to see where it will go.Stephanie:Awesome. So you've always, always had the startup bug, where you're looking for that crazy hectic environment, fast growth.David:Yeah. It's like I see myself as a sales guy who doesn't like just selling. What I like is building the sales process, building the team, understanding the customer. So a little bit more beyond just knowing individual customers and building a book of business.Stephanie:Yep. Got it. So tell me a bit about what Kickfurther does.David:So Kickfurther solves a unique problem that every consumer goods business faces in their early stages of growth. You'll see a lot of companies are funding on platforms like Kickstarter, Indiegogo. These are crowdfunding platforms where businesses raise money to fund their first production run. Production run is when a business is producing inventory. Inventory is the product that they sell. So as that business completes their crowdfunding campaign or determines that they have product market fit, they will need to come back and order more product. Sometimes, they're buying that product from a supplier, maybe a manufacturer in China or here in the U.S., somebody that produces a finished product, and then they receive it in their warehouse and they sell through it. Sometimes they're buying a bunch of raw materials and making a product themselves. Usually that's the case in food or some health and beauty applications.David:But the bottom line is that costs a lot of money, and the faster the business grows, the more they have to invest into inventory upfront. You have to pay for that inventory, it takes months to produce, and then you get it into a warehouse and then you start selling it to customers. And then your customers start paying you. So there could be a long amount of time from when you need to outlay that cash to produce the inventory until you're able to recoup that revenue and put it into the next production run. So as businesses grow, they encounter this cash flow pinch, and Kickfurther solves that pinch. We have developed a marketplace on kickfurther.com, where we will vet companies and structure deals. And then a community of users will come to those deals and participate in purchasing the inventory for that business. The business will then produce the inventory, sell it, and pay back Kickfurther and the users who participated in the deal; we'll make some money and get to do it all over again.Stephanie:Yeah. Very cool. It reminded me of, I saw quite a few real estate investment platforms like this too, where you get the fund, the next three or whatever it may be. So it seems like they're popping up in different ways to have a Kickstarter approach, but also getting people in the market who have the funds to be able to fund this inventory or investments or whatever it may be. So is that the main way that Kickfurther is different, where it's sourcing investment from the community instead of traditional lenders or actual investors?David:Yeah. So I mean, what we're doing is using the power of crowds rather than financial institutions. There's a lot of solutions out there that take money. They borrow money from banks and other financial institutions, and then present it to businesses and take a cut. And what we're doing is creating that opportunity for any individual on the internet, somebody who has money sitting in their bank account, and they want to use that money to make money by participating in a purchase of inventory for a consumer goods business. And so what we do is, it's not a loan. It's not an investment, it's actually a consignment agreement. So what we're doing is purchasing inventory for a business and consigning it to them to sell on our behalf. And as the business sells that inventory, then that triggers the consignment, and then we invoice them for it and they buy it back plus their cost of funding.Stephanie:Got it. Okay. So how do you make sure that you're bringing on companies onto your platform that won't make you nervous, where it's like, are you actually going to sell all this inventory? Because I'm not trying to cover that cost.David:Yeah. Well, there's a pretty thorough diligence process that we go through for every business that goes on the platform. We evaluate everything from their revenues to their supply chain, to how they distribute that product. And it's all verified through documentation. So it's not like anybody can come to us and say, Hey, we need money," and then just go up on the platform. There's a diligence process, just like there would be going to a bank or any other financial institution. I would say our uniqueness is we look at supply chain and distribution, and we assess risk in a very specific way. It's different from a bank. So some of our customers, everybody wants to go to a bank. Bank money is the cheapest. You want to go to a bank and get a line of credit and fund your business that way.David:However, if you're a small business, whether you're a restaurant or a clothing store, the bank looks at you the same. They say, how long have you been in business? Are you profitable? How much have you sold? Whereas we're looking at a very specific sector of small businesses that are consumer goods, businesses with supply chains. And we understand the intricacies of that supply chain and then how they get that product to their warehouse, get that product from the warehouse to the customers, and collect that money through their distribution channels. And so we use that information to determine who has access to capital on Kickfurther.Stephanie:Got it. Yeah, what's cool is that you guys are acting as like the trusted source, so that the community doesn't have to do as much due diligence, or I don't know if they do any at all, but you're acting as like the mediator, to be like, "We've done all the research. We know this company, and it's for the most part trustworthy," and then people can come in and fund that based off of your research and due diligence.David:We do verify all the information that's presented about the company. The individuals still do decide which deals they participate in. And that's based on what they read in the public profile. Some of them will go investigate more. Some of them will actually ask questions on the platform. So you have the ability as a participant to ask the owner or CEO questions before you participate, or during the deal, about distribution or how they're making products, or what if they're worried about competition? Any topic is welcome. There's a lot of additional diligence that an individual can conduct before they make the decision to participate.Stephanie:Cool. And is there a risk rating of, okay, this company is more of a startup one, this is going to be their first time raising money here; we're going to give them a risk rating of this? so maybe you have a higher payoff because of that if they end up selling all the inventory, or how do you guys think about the risk-based approach when it comes to getting investment?David:It's not as simple as just boiling it down to a one to 10 scale or something like that. But there's a lot of categories which each one of the customers that we fund will be shown in. And so you can look at how many years in business, what their revenue range is, how many different wholesale buyers they have, how many times they've gone through the supply chain and produced with their supplier. So there's a number of different elements that, that are categorized in terms of risk.Stephanie:Got it, cool. And what is the average return for someone? If I were to go in there and invest right now in a deal, is there an average range of what you make over one year or that a longer time horizon?David:So the deals range in duration from two to 10 months. So the way we compare deals is on a profit per month basis, and businesses will offer anywhere from one to two percent per month. And so you can annualize that in a way where, if you participate in a deal and then that money comes back to you, then you can redeploy it into another deal. And if you continue doing that, let's say 1.5% a month will translate to about 18% per year.Stephanie:Got it, cool. So what kind of struggles do you see ecommerce brands having right now when it comes to ... Obviously not having money to fund inventory is the high level problem, but maybe what kind of sticky situations do you see brands getting in by either waiting too long to get funding or not even thinking about it. What are some stories that you have around the whole inventory funding?David:Yeah, I think the biggest thing to do is to be proactive and understand what solutions are out there and how to use them before that need comes around. Because being desperate is the worst time to be looking. And if you've run out of inventory as a business owner, you're missing out on opportunities to sell. So like you could have a really successful Q4, and then you get to Q1 and people still want to buy your stuff, but you're all out. And then you placed an order with your supplier, and the supplier takes two months to produce. And then maybe you're in a position where you have to air freight instead of going on the water and you have to pay a lot more money to get it there faster. So there's all sorts of obstacles that come into play. And that's ecommerce.David:A lot of the businesses that we work with are multi-channel sales. So they're selling ecommerce and then they're selling to target or Best Buy or REI. And those companies will place orders, if you don't deliver those orders when you say you will, then you're probably going to lose that opportunity or at least jeopardize it in the future. So it's important to make sure that you have the inventory ready when you're going to need it. And you also don't want to have way too much. So if you buy a lot, and then you don't sell at the rate that you expected, you have a lot of cash sitting in the form of inventory in your warehouse. Sometimes it's going to go bad, if it's a crude product or it's just cash that you want to spend on advertising to sell the product, but you can't because you don't have it.Stephanie:Cool. So if I'm a new brand and I'm looking to crowdfund my inventory, what are some best practices that attract the investors in the crowd? What kind of things do you see connecting with people? How would I write up a good post right now to attract funding for someone to help with my inventory?David:The most important things are that you've done it before. So we don't work with businesses that are doing their first production run. We did in our very early days, and, as you can imagine, it's much higher risk. So we only work with businesses that have at least $150,000 in sales. And once they've demonstrated that, it's good to talk about how you work with your suppliers, what sort of things you do to ensure that you're going to receive the product that you want to receive within the timeframe that you plan on receiving it. So being conservative with time estimates, making sure that you have testing in place so that once your supplier says the product is ready, that somebody goes in and looks at it and you don't get a bunch of broken stuff.David:And then once it arrives, it's important that you have reliable distribution. People want to see good reviews. People want to see lots of reviews. And I would say, if there's somebody who's selling to a wholesale customer and they just have one customer who is placing large orders, that's pretty high risk. Because if that customer decides they don't want to buy anymore, who are they going to sell that product to? So those are the kinds of things that users on Kickfurther are taking a look at, reading through the profile, to decide if they're going to participate. One thing I will say that we haven't touched on is how fast these deals fund. So it's good for us at this point. It means that there's an imbalance in the marketplace in our favor. So the deal flow that we put up gets funded oftentimes in minutes.Stephanie:Yeah, I know. I noticed that, because I'm like, "Hmm, maybe let's see if I should investigate these deals." And I think it looked like everything was sold out, or it was all met to the limit. At least the two I was looking at. And it seemed like it happened really quick, where I'm like, "Hmm, this is competitive."David:Yeah. It's super competitive. So we have the ability to scale our deal flow pretty substantially without having a concern for deals funding fast enough. And as a user, if you're thinking about participating, you're going to get emails, you got to act on it fast. And so we put deals up. They have about 24 hours before they launch. And they always launch at 5:00 PM Eastern Standard Time. And if that, there's hundreds of people that are clicking, trying to get into deals like within a minute or two of 5:00 PM, when they usually fill up.Stephanie:Wild. I think you need more deals then for people to get in on.David:Yep. That's my job. I've been working hard on it. So we we've grown quite a bit. We have aggressive growth goals for 2021, and so far we're on track. It's early, but it's an exciting time to be at Kickfurther.Stephanie:That's great. So what brands are you trying to get on the platform right now? Who are you trying to convince to get on there?David:There's a lot of repeat customers, and we have really good retention. We average over four deals per customer, but they're all across the board. We're pretty product agnostic. We serve anybody who either buys or makes physical goods and then sells them with the exception of regulated things like alcohol, tobacco, firearms, THC, anything that's temperature controlled or perishable. Because of the consignment agreement nature of the contract, the inventory is our collateral in these deals. So we don't want it to go bad. And we want to make sure that it is available to anybody who participated in the consignment, they have to be able to purchase it.Stephanie:Yep. Oh, got it. So if the inventory doesn't sell out, you guys essentially have it in a warehouse, and me as an investor could be like, "I want one of those t-shirts then." Is that how to think about it?David:Yes, that is a way to think about it. So if the business is unable to sell the inventory, and they're unable to pay back Kickfurther and their users for the cost of it, then Kickfurther, based on our contract, will require a delivery of that inventory to us, at which point we'll attempt to sell it, and all the proceeds of that resale goes to the participants in that agreement.Stephanie:Have you had to do that yet?David:We have had to do that. We've been around for seven years. So it's happened, but these days it's very infrequent, and that's why these deals fund so fast as people who are participating on Kickfurther have great returns and they tell their friends about it and they the deals. So the performance, overall, is strong.Stephanie:Yeah, got it. So when I'm thinking about, as a business myself, getting credit and working with banks, you're building up your business credit worthiness. When you get traditional loans, I know we had to take on a couple of last year and it does help being like, "Oh yeah, we took on this size loan, we paid it off." How do you view crowdfunding in that kind of sense? Is it building up a business's credit worthiness or is it so siloed still at this point that it doesn't actually build up the financial view of the businessDavid:In some ways, it does, and in some ways it doesn't. It isn't considered debt to them. So it doesn't operate the same as taking out a loan and paying it back. But there's a lot of transactions that still occur that show the business is selling and making money. So their business credit will improve as a result of that. But yeah, it's kind of a mixed situation.Stephanie:Yeah, yeah. That seems tricky. Because it seems like a really good avenue to not only help the businesses, but then also bring in a lot more players. It seems like it's much more decentralized, which is great. The whole world's moving in that way, but if you can't really use it, be like, "Oh, look at these three different loans I have right now, the market funded them." I feel like the world needs to move to that place, the more of that crowdfunding and the decentralized approach is coming to the forefront.David:Well, the world is moving in that direction, but what's really cool is Kickfurther moves in that direction with the clients themselves. So as we establish a relationship with a business and they come back for repeat deals, we increase their limits substantially. And they have access to lower rates. Basically, they're earning credibility with this community. So let's say they offer one and a half percent per month on their first deal and they complete on time, and then they come back, they can offer less. It's really in the hands of the business owner what they want to offer, and the community, the marketplace, will decided if that business has earned that rate and are able to fund it at a lower cost. So as a customer at Kickfurther, as your revenues grow, you'll be able to take on more funding with Kickfurther, buy more inventory, and do it at a lower cost.Stephanie:Got it, okay. So you're building up that credit worthiness, just in a different hub, but you're doing that by just performing well and, yeah, that makes more sense.David:We will work with businesses who are starting at 150,000 in annual sales, and all the way up to 30 million. So there's quite a range of growth in service by Kickfurther. There's businesses that, once they reach a certain stage, either they're not accelerating as much as they used to and they have the cash flows to fund their own inventory and continue producing, or there's other businesses that have been long and around long enough where they are now exciting to banks and other financial institutions that have very low cost lending.Stephanie:Yep. Is there any guidance or any point where you're like, "Oh, you should probably just reinvest revenue or profits instead of getting a loan." Do you ever give guidance on that? Because I could see a lot of businesses always being like, "Oh, at such a low rate, why don't I get loans?" But then quite a few businesses have a lot of cash on their balance sheet too, and they don't know how to fully deploy it, but they're just so used to getting low interest loans. Is there any point where you've actually advised a company like, "You guys are good. Maybe you should reinvest profits." Or do you even see it from that angle?David:I don't think anybody's coming to us if they don't want additional capital. And I am always very transparent with everybody, and [inaudible] make sure you know, what your options are. We don't make money off convincing you to do one deal. We want that long-term engagement [inaudible] coming back. But I think the reason people come to Kickfurther is they have an opportunity with a buyer, or sales are growing so fast and in a channel where they want to launch a new product, they just don't have the cash to be able to do that. And that's why they're looking for funding solutions. And maybe they go to their equity investor and they say, "Hey, I need some additional capital to be able to take advantage of this opportunity." And the VC says, "You know what, why don't you seek some non-dilutive capital for that? That's a much better use of, why give up five or 10% of your ownership just so you can produce the next run when you're going to have to do another one and another one and another one after that?"Stephanie:Yep, yeah. That makes sense. So, since you're deep in the crowdfunding space, I'm sure you just see opportunities all around. So much stuff could be crowd crowdfunded. Where do you see that world headed? What kind of new opportunities do you see popping up in that space? Or what do you think is missing right now, where crowd funding could be meeting a need?David:I think there's a lot of money and power in crowds. And there's the ability to cut out middlemen and big entities that have been around for a long time and empower individuals to help these business owners grow. It's also not just the money that's coming from them. Why are people deciding to participate in these deals? A lot of them believe that they have an advantage and they have the knowledge in the space. So maybe they want to help the business owner. I've had plenty of users come to me and say, "Hey, I actually work in this space. And I have a couple of distribution opportunities that I'd like to connect with your client about." And I'll make a direct introduction, and all of a sudden they acquire a new sales channel. Or somebody who's got a lot of money and they want to do a side deal. Yeah, I am looking for equity investors, let me connect these two people.David:So those kinds of things happen rather frequently. And that's not going to happen when you're working with a sales rep at a bank. Because everything's coming from the bank's bank account. And actually the money that the bank is using is just coming from account holders and their deposits. So if you're storing money in a bank, the bank is using that money to lend to businesses and whoever else. So we're cutting that out of the mix. And I think it's good for everybody involved.Stephanie:Yeah, I think it's a good reminder too, about diversifying investments and why finding opportunities. Yeah, you don't want to just keep your money in a bank and let inflation just wither it away to nothing. So, yeah. It's cool to hear about opportunities like this that are very different, but will definitely help diversify your portfolio.David:Yeah. And it's really fun, from our standpoint, to work with all these young business owners. I mean like the business is young, not the individuals per se, but some of them just started a few months ago and they've had some real success. Some of them, it's a family business that's been around for a couple of generations, and all of a sudden they're discovering that ecommerce is a way to skyrocket the business. They have a really good product; they just haven't put it in front of the right audience. And they're figuring out how to make this happen financially, and we're there to help them. And it's just really great to be side by side with them as a partner and see that growth.Stephanie:Yep. Yeah. It seems like there's also could be a lot of international opportunities. I know that's a lot more risky once you start going that route and finding people who are doing much smaller scale ventures and being able to help back that, then turn into a bigger thing. But I have read a few stories of finding people doing amazing things in other countries, but they just don't have any kind of funding. Or they can't buy inventory for even 10 things to sell. And yeah, it seems like there's a lot of opportunity around the world, but of course it'd be much more risky trying to vet those projects and companies.David:It is definitely a challenge. It's something that we're considering doing down the road. You probably start with Canada and some EU companies, but there's different regulations in different countries. And also, if we get into a bad situation with a client, we have to pursue them legally. So working in a foreign legal system is very costly, and we try to help businesses out, and so our margins are pretty slim. So being able to afford that kind of activity is probably a ways down the road for us.Stephanie:Yeah. So what are you guys looking forward to for the next, maybe, two to three years? What are you planning for? You said you were going to be growing really quickly this year. What kind of things are you putting in place right now and where do you want to be in the next couple of years with Kickfurther?David:I'd say we want to be a household name for inventory funding. A lot of people are starting their own businesses. And we want to create an opportunity for them to grow at the rate that they're able to grow and have access to capital. And so our goal is to put our name out there in a way where it becomes recognizable to all business owners who are in the right space for us.Stephanie:Yep. Very cool. Yeah, Amazon be a good space, but then sometimes those one-off products that are being sourced and sold on there. So maybe that's not the best space. I'm not sureDavid:Those people are business owners and growing too. So if you have one product that's selling really well, and that's what you want to focus on, sure, that's great.Stephanie:Cool. All right. Well, let's shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, David?David:I'm ready.Stephanie:All right. What one thing will have the biggest impact on ecommerce in the next year?David:Probably the state of the world. So the ability that people have to shop and travel and continue to live their lives the way they did before lockdowns and quarantine.Stephanie:Yep. All right, cool. If you had a podcast, what would it be about, and who would your first guest be?David:I don't think I would have a podcast.Stephanie:What would you have then, a clubhouse? What would you have then?David:A clubhouse. I think that, honestly, I was a little bit foreign to this whole world of supply chain and inventory finance when it came to Kickfurther, and I've discovered a passion for helping these business owners. So I think the clubhouse that I would have would be one where business owners get together and talk about different solutions that help their business grow, and what vendors they use and what are best practices, just an exchange of information across business owners and vendors.Stephanie:I like that, because yeah, I think even thinking about, "What manufacturer should I use? And how do I even source those people?" Still always feels like a black box and it's referrals. Or you have to know someone and that'd be a good one.David:We make quite an effort to make those resources available to our customers. So, as we go through our diligence process, we cover a lot of topics, and oftentimes customers will identify pain points, and we will say, "If you're interested in these, this is a partner of ours, or we've got a few different options or people you can talk to, to learn more about the solutions in this space."Stephanie:Yep. Cool. What's up next on your reading list?David:Can't Hurt Me by David Goggins.Stephanie:Okay. Nice. Where are you traveling to next when it's easier to travel again?David:In two weeks, I'm traveling to Salt Lake City to go skiing, but that's a drive for me.Stephanie:Yeah.David:Big skier. And whenever the snow comes, I'm out there.Stephanie:I love that. All right. And then the last one, what is your favorite piece of tech that you're using right now? It can be personally or with the business.David:Don't hate me, but it's my iPhone 12 Pro.Stephanie:What's to hate? I have the same thing. It's my favorite. It has the best cameraDavid:I bought it for the camera, but it's really fast. It's a computer in my pocket that does pretty much everything my actual computer does.Stephanie:Yeah.David:Super valuable piece of tech.Stephanie:Yep. I agree. All right, David, thanks so much for joining the show. Where can people find out more about you and Kickfurther?David:Kickfurther.com is the best place. You can find me on LinkedIn, David Koifman, and I look forward to connecting with anybody who's interested. Also, if you're a business owner listening and you're interested in funding with us, you can go to our website, fill out an application, or you can just email me david@kickfurther.com.Stephanie:Yeah.David:Thanks so much, Stephanie.Stephanie:Cool.David:It's good to be on here.Stephanie:Yeah, thanks, David. All right. See you.David:Take care.

What happens when you can’t own the direct relationship with your customer? In the ecommerce world, you would think that’s pretty rare, but companies in big and highly-regulated industries deal with this problem daily. Anheuser-Busch is one of those companies and its team has had to be innovative in the ways they gather insights and create relationships with customers. Arabella Watters leads Category Development and Insights for ecommerce at Anheuser-Busch, and she is helping bring creative solutions to understand exactly who AB’s customers are, how they shop, and what they’ll want in the future. On this episode of Up Next in Commerce, Arabella dives into the roundabout ways that AB has had to gather data, and she explains how important it is to have a two-way relationship with retailers in order to share data that is useful to both parties. Plus, she explains why we can all learn a little bit from our international peers and what sorts of innovative approaches ecommerce brands can implement on their own right here in the U.S. Oh, and Arabella teases some exciting influencer content coming up soon that AB put together with Travis Scott that you’ll definitely want to check out. Enjoy this episode!Main Takeaways:It’s a Two-Way Street: With retail partners, sharing data goes both ways. Whether it’s out-of-stock data, landing page placement, or general consumer insights, there’s information that both sides need to have access to. Establishing a reciprocal relationship of data-sharing will not only take the partnership further but transform how you can serve consumers.Digging For Data: Accumulating and then analyzing consumer data is the only way to get a 360 view of who your customers are and how they shop. But in industries that are heavily regulated, such as alcohol, having a traditional ecommerce experience is not quite possible, which means you have to get creative. Put on your creative hat and listen in to hear the many tactics you can use to get intel on your customers in a fun and unique way.Take What You Can: Although China is far ahead of the U.S. when it comes to ecommerce adoption, and how it has permeated through just about every industry — alcohol included — there are still points of inspiration and innovation that can be brought to the American market. Creating full omnichannel experiences and engaging with customers at every touchpoint on the customer journey are just two examples.Premiere Partnerships: Influencers are a dime a dozen these days, and it’s easy for a brand to pay for someone with a big following to promote a product. But the ROI from that is negligible. What works better is a more authentic strategy in which a brand forms a true partnership with an influencer or celebrity who is truly connected to the product and the campaign in a personal way. That authenticity resonates with audiences better than most other marketing activities.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder and CEO at Mission.org. Today, we're chatting with Arabella Watters, the Head of ecommerce for Category and Insights at Anheuser-Busch. Arabella, welcome.Arabella:Thank you. Happy to be here.Stephanie:I'm excited to have you on here. Is it too early for a beverage? Or ...Arabella:Yeah, it's only 10:30, otherwise, I'd definitely would be having a seltzer next to me, for sure.Stephanie:Yeah. So speaking of seltzer, I was think that you're the perfect person to talk about all things D to C alcohol, not just because you're working at Anheuser-Busch, but because of a company that you actually started out of college that I saw you were taking an entrepreneurship class, and you actually took your project and ran with it, and I want to kind of start there because I thought that was really cool, and I was like that's impressive. Probably no one does that that I know of unless maybe you're at Stanford that's a little bit more normal, so tell me a little bit about that.Arabella:Yeah, definitely. I think it's a good segue into how I got to AB for sure. So I founded that company, Mojo, with my partner, exactly like you said, during college. So we were taking an entrepreneurship class, had this idea, and just decided to run with it because it felt like a really kind of rich and impactful idea that could actually go somewhere. I'd say it's super interesting when I think about how it kind of came to be and came to fruition. My partner and I at the time had both been studying abroad during our junior year. We actually were in South Africa, and had just a lot more exposure to kind of the alcohol and drinking culture in a less regulated place, which sounds really interesting and funny, but in South Africa, you can buy wine whenever, the drinking age is a little more relaxed and people are getting a bottle of wine, having a picnic, going for a hike, all of that.Arabella:Kind of more casual, outdoor, daytime drinking behavior. And we found it very, very, one, fun, and two just interesting and kind of something that was missing from the alcohol market in the US. So I've always liked wine. I grew up in California so it was something I was familiar with, but we kind of had the realization that wine in the US was very much so kind of stogy, a lot of different options without a lot of different differentiation, and the majority of the time it's very heavy red wines that make you fall asleep, and hard to drink.Arabella:So the insight that I kind of had was that there really was this growing opportunity for more easy to drink, lighter, social beverages that could be portable, you could take them on an adventure, you could drink during the day or during a more active activity. And I'd say so that was really kind of the thought that led to Mojo, which was basically a wine spritzer based off of this drink in Spain that was wine and Coca Cola. I think it actually was such an amazing experience to have and to dig into those insights and build that brand because now that was five years ago, but we're seeing that same trend of easily more portable, lighter, more sessionable drinks like seltzers or canned cocktails are really growing at such a huge speed. So I do feel validated that one, that was an insight that was definitely something that was a real trend that was growing, and two it really kind of exposed me to the alcohol biz early on.Stephanie:You were just ahead of your time. You're just a futurist.Arabella:I like to think of that too. It's funny though, now looking back when we were pitching it, it was kind of just this counter culture idea of oh you want to put wine and make it sparkling and you think people are going to drink wine outside during the day? And now people are chugging seltzers left and right during the day, so it's pretty much the same thing. So it's nice to feel validated now for sure.Stephanie:I'm sure that was a really good experience. So what ended up happening with that?Arabella:So I think the other less fun and more kind of realistic part of the experience was getting exposure to A, the legal landscape of alcohol in the US, so super challenging, a lot of barriers to entry whether it's getting permits, getting the ability to be registered as a wholesaler and selling to retailers and all of that stuff. So I'd say that in itself was challenging. We got through it, but the bigger challenge was just in order to really have the scale to get a beverage company off the ground, you need to have a lot of capital, and like you said we were pretty close out of college, had done a couple entrepreneurship pitch contests to get some funding and had gotten some funding through crowdfunding sites, but didn't have a huge amount of money at our disposal.Arabella:So I think what kind of is full circle for me is while we had to make the hard decision to not continue pushing on with it since it was so expensive to be getting a proof of concept, now I get to be at AB where it's such a huge scale operation where those things aren't a problem. So I like to think I can take some of those learnings and apply it to my job now.Stephanie:Yeah. I was actually just going to say you were in this kind of D to C world if you would have been fully launching and everything, and I'm sure Anheuser-Busch saw that and they're like that's exactly what we need, someone who was ready to start talking one to one to a consumer, like have the idea to do that. How was it when you transitioned to Anheuser-Busch and you're working on ecommerce for category and insights and all of the sudden you're like oh I actually can't talk to my consumer directly, it's like a roundabout three tiered system that I don't even know who I'm selling to really.Arabella:Yeah. You hit the nail on the head. It's definitely adjustment, it's definitely different. I think when I was thinking of joining the team, what I was really drawn to was exactly what you were saying, that there kind of was this gap in understand of who the ecommerce alcohol shopper was, and I love insights, that's definitely my passion point of my job. I love the whole job, but understanding the shopper really is what kind of gets me up and going in the morning. So yes I was drawn to this new channel that it was a new way people were shopping, that there really wasn't a huge amount of information available.Arabella:I think now being actually faced with it and not having access to direct sales data and to actual onsite metrics because we're working through the three tiered system with retailers definitely has been a challenge. Although I do think it's really kind of forced me to think creatively and think about how we can structure our research and our insights approach, and take directional insights that we have from in-store and take them to online and say what is similar here, what's different? It's pushed me to kind of go above and beyond to think about how to approach the problem of who the shopper is and that in itself has just been incredibly valuable.Stephanie:Yeah. I was thinking that too, you really have to get creative to get data in your industry, and I thought what AB is doing around merchandise and shops and all that is really interesting. I saw a quote where someone at your company said, yeah, we essentially launched these stores and we consolidated them so that we could get shopper data, because we really can't get that easily anywhere else on ecommerce. So tell me a bit about that approach and do you think the people buying merchandise are the same ones probably buying the alcohol in store?Arabella:Yeah. I mean it's super interesting to think of that. I don't know if it's the exact same shopper always, but what I do know is that anyone who's probably buying merchandise from us is definitely a brand loyalist, because you're not going to want to wear a Bud Light sweatshirt if you don't really love Bud Light and feel really strongly about the brand.Stephanie:But I saw a crop top in your store and I'm like that's cute. I don't know if I ever would have worn like a Busch branded T-shirt, but that crop top, it's something. I like it.Arabella:Yeah. You know what, the Bud Light merch is actually really fun. I have a beanie that I wear sometimes and I get endless teasing from my friends but I love it. So yeah, I mean I think it's definitely brand loyalists, or to your point, people who feel, each of the brands that are within AB have such strong brand voices and such legacy and such power pretty much in the market, and so I think the merchandise, while it doesn't directly relate to us selling beer, it does do I think some great work in furthering the brand awareness and people feeling like they're connected to the brand and want it to be something that's part of their day to day, and I think the ability for us to, I think where I'd love to do a little bit more work with the merch business is thinking about how we can kind of create more of a one stop shop experience, so how can we partner with retailers to get that Bud Light crop top paired with a Bud Light six pack and get it bundled together so we can merchandise and sell that in one fell swoop, because I think that sort of would be the ultimate goal that we can get the shopper having the actual product and also that brand loyalty experience.Arabella:But I know that's a huge, huge priority, because to your point, we can't capture the data, but I know with the merch biz, that's a big focus for our next year in 2021.Stephanie:Yeah. So what other creative ways are you all going about to find customer data so then you can personalize that experience in one way or another, like what are the things that you're trying out that you're having success with right now?Arabella:So we pretty simply just work as an insights-driven org to be bringing as much data that's specific to the retailers as we can. Stephanie:Yep. And how do you think about out of stock issues? So we just had a guest on from Intel where they were saying they're trying to work with all these retailers, he was from the internet of things group, and he was saying there's so much opportunity with retailers where they oftentimes don't understand their inventory, things can remain out of stock for an entire day and they'll say that they're on it but they actually had no idea, how do you handle that from a tracking perspective to make sure that your retailers are keeping your stuff in stock and it's being tracked properly?Arabella:Yeah. So that definitely has been one of my big goals for this year is to really get more of a data specific perspective on out of stocks, on how we're doing on the shelf online, everything that you're saying. So we actually just partnered with a digital shelf tracking company, Profitero, I feel like you guys maybe have heard the name before. So our big plan with them in the next year is basically to take on all those things you're saying and give it more of a data lens so we can be reporting out weekly and tracking what products are out of stock and what we should be communicating to the wholesalers to be getting them updated and fixed, because we know that from an ecommerce perspective, out of stocks are a huge, huge issue because in store, you're out of one pack of Bud Light, well the shelf is stocked in a way that Bud Light is a brand that has multiple SKUs, you could easily just grab the other one that's there and go on your way.Arabella:Online, when something is out of stock, a lot of retailers will simply remove it from the site so you don't even see it, so that recognition that we get with our brands is completely gone if the product doesn't even show up on the site, and then you see them moving to a different competitor or substituting in a different way. So I think that really it's a huge, huge piece, and it's especially huge with our pure play partners, so those who are only online retailers, because we're able to have a little bit more of a direct connection to them as well and work through those things.Stephanie:Got it. Cool. So the one thing I'm thinking about too is attribution around marketing campaigns and things like that. How do you think about seeing if something that you're doing out in the world is actually impacting sales, if once again you have to be like let's look at our retail partners and see what's happening, or how do you think about attribution in your industry?Arabella:Yeah. I mean it's definitely a challenge.Stephanie:[inaudible].Arabella:It's a challenge, it's a constant challenge. It's something that I'm always working on to try to, again, thinking creatively and outside of the box, I think one way that we are working on thinking about how our campaigns are performing is we track our placement on the shelf on retailers, so what percentage of the first page we have, what percentage of the first five spots we have, and the way that a lot of algorithms work with the retailers is that they're based on sales and conversions. So what you could do is sort of back into how a campaign or product is doing by looking at the change in where you're placed up on the site, and that's something that's like of course, it's definitely there's room for error there, but I think from a directional standpoint we're able to see, okay we ran a campaign on Michelob Ultra Seltzer all of January and it started at the bottom and now it's at the top. That means that if we were driving to that retailer, it worked. Right?Arabella:So it's a little bit more binary in that we're not able to get so, so granular, but that's one way I think from the category and the retailer perspective we're able to either check or not that something is working. Stephanie:Man, you're in a tough industry.Arabella:Yeah.Stephanie:I haven't had to ask questions like this on any of my episodes, but it makes me wonder, oh actually except for Haus, when I was talking to the Haus founder.Arabella:I listened to that one.Stephanie:Okay yeah, that was where I learned about the three tier-system, but it makes me wonder is a three tier system going to go away? Because it seems like there's companies right now who are kind of just working to get around that system, and once that starts happening it's like maybe that system's just broke, and with the move to D to C, why would it still be there then if everything else can have access to the consumer, it seems like this industry should too, with the proper protections. Stephanie:Yeah, that just feels so odd to me. Especially the world that we're in today, and just thinking that you can make something and then not be able to sell it on your own just feels very archaic in that you have to go through a retail location or whatever it may be.Arabella:Yeah.Stephanie:It just feels not very business friendly, but that's [crosstalk].Arabella:It's super interesting also to think about as marijuana is going to eventually I'd imagine be legal on a federal level, then how are they going to regulate that as well, because it's sort of a mirror industry to us, is that going to be something you also have to go through a wholesalerArabella:But I think that's another probably will give us another opportunity to have the bigger conversation because it's sort of like if THC and marijuana is able to have this direct to consumer business relationship then why can't alcohol as well?Stephanie:Yeah. It sometimes seems like older industries are punished from the older times, where as you're new and up and coming, you move so quickly where it's like you can get much further ahead where it's hard to pull you back in when you're already like well now I'm out delivering everywhere in California.Arabella:No, it's so interesting. I think that's such a great point when you think about the Ubers or AirBnBs or the share economy of the world where they just absolutely turned old industries on their heads and didn't really think about the regulations, and then they're so big now that it's harder to go backwards.Stephanie:Yeah.Arabella:Exactly. And overturn those things.Stephanie:I think it's good sometimes. It's good to push the regulations forward and bring them up to the times.Arabella:Yeah, I agree.Stephanie:So the one space that a lot of guests have talked about is what's happening in China. And what was interesting is I saw that AB was looking at China now as kind of the market that they use to bring a lot of learnings from ecommerce back to the US. So what are you guys seeing there and what kind of learnings have you actually been able to bring back to the US and apply versus what have you been like whoa that's just such a different market, it's very different there and we kind of keep it siloed when it comes to what we're doing there versus in the US or in Brazil or all around the world?Arabella:I'll start off by saying that while I work on the North America business, we do have a global e-retail center of excellence where we meet frequently to talk about best practices and get inspiration, just like you're saying, from markets where while it may not be cookie cutter to our market, we're able to see what they're able to do and how it performs and think about how we could apply it to what we do. So China is definitely an amazing example. I'm always thinking about what they do kind of as the best case scenario for ecom, I think we have to always take it with a grain of salt just because there are legalities, to the convo we were just having, they can sell directly to shoppers at any point I believe in the shopper journey.Arabella:So that's amazing. And we've really been able to I think one of the things that struck me the most, we had the China team present to us last year on double 11, the singles day, and what they have been able to do with our brands there like Budweiser being one of the huge ones, and kind of just creating this huge omnichannel event where we're taking over every single possible touchpoint for the shopper, whether it's a vending machine, or the apps on their phone, or the actual grocery store, doing activations where there is a concert and then you can click the video and get your Budweiser delivered. Things that sort of feel to me like this crazy world of digital, physical connection that I think in the US we just don't have yet in general, and we definitely don't have for alcohol because it's so regulated. But I think that's something that we try to take inspiration from and think about okay, while we can't have a Budweiser delivered in three minutes from someone's cellphone, we can think about how important it is to take over from a branded perspective like multiple touch points from the shopper journey, and communicate with them not just during the shop on the retailer, but with a more interactive experience before.Arabella:I know our D to C team has done some awesome things like international beer fest which was I think in August, and then a New Years Eve concert festival series, those kinds of things, where we're getting shoppers on, they're interacting not only from a transaction point of view, but from just feeling close to the brands, having an experience in a time when we need them even more so, and those have been hugely successful. So I'd say that China is an amazing example. I would love to go over there and work, I think I would learn so much. It's kind of the pinnacle of not having to be regulated versus we're much more in that regulated space.Stephanie:Yeah. I was just chatting with a guest, Andrea, yesterday, where she said they brought an influencer from China to Harvard so the Harvard students could see it in live and action, so they pulled her screen up so they could see what was on her phone or something, and then she was selling Harvard shirts and sold like thousands of them in minutes. She's like that's when I realized that's crazy. And I don't know if that is the same thing that would happen here. You definitely see influencers driving sales, but I don't know if it's to that degree of and I have a pen, and now 10,000 of them just sold because I said I had a pen. I don't know if it's to that degree, but it's very interesting to watch.Arabella:Yeah. That's a great question. I know that influencers, they've been trying to make all the social platforms so much more shopable this year, and I feel like I don't have stats from Instagram, but I feel like it's not quite there yet to the point of what you're saying where an influencer can just be selling things and have this huge, huge power to be creating transactions. But I think another interesting thing about the whole China piece with that is that so much of their tech is just integrated in whether it's the social media, it's with your payment system, it's with the equivalent of Amazon, and so it's just a lot more seamless. But yeah, the power of, we certainly have people in the US who can sell things. Actually an amazing example would be we're doing a seltzer with Travis Scott that's launching in the next month or so, Cacti. I'm super, super excited for it, and I think that's a great example of he partnered with us to create it and he has such star power, so I think it will be incredibly fascinating to see how that does.Stephanie:That'd be cool to bring you back and hear how that campaign went, because I think a lot of people have been debating around do big names, of course they will drive sales, but at what point is it authentic versus not authentic? How do you structure the campaigns to make it, sometimes you'll see certain people being like oh I always use this teeth whitener, or I sure love this whatever it is, and you're like do you though? That's very inauthentic. So it'd be interesting to see how you guys create a campaign in a way that's a partnership instead of just a one off, like okay go put this ad on your Instagram and see what happens.Arabella:Yeah. It's a great point. I think there's so much influencer marketing that can be so disingenuous, exactly. It's like I love this product. Cool, that's great. It doesn't have any emotional resonance with me. I think with Travis Scott, what the team did was really, exactly what you're saying, partner with him. So he was so in lock step with the creative process and the brand building and the actual liquid itself, that when it came time to, we announced it about a month ago, when that was kind of coming to fruition, he was incredibly invested in having it be successful, and it feels really authentic to actually who he is, like the whole Cacti, Cactus Jack thing, and I think that definitely is part of the hopeful success of it, and yeah I'd love to give you guys an update when it launches in March. I think it's just going to be super, I know the initial stats that we've seen like on social media, it's already the top alcohol following of any brand that's out there.Arabella:It's really an amazing testament to how, to your point, how powerful people can be and what is it about Travis Scott that's so resonant with so many people. Is it he's incredibly creative? Is it the whole kind of eclectic side of his brand? Is it because he's Stormi's dad-Stephanie:Probably.Arabella:And Kylie's baby daddy. Arabella:But neither here nor there. He's incredibly powerful, and I think it will just be a good whether it is a smash hit or not, it's a good test to what you're saying about can a person really be the driving force behind a brand?Stephanie:Yeah. I would also like to see the lifetime value of that person, is it a one hit like I'm going to try this out? You obviously have to have a great product behind it, which it sounds like you invested heavily to make sure it was good in partnership with him, but how do you keep those people around after maybe the excitement is kind of dying down, how do you make that an everlasting brand and something that people actually come back to? Arabella:That really is, exactly, that's the special sauce, that's what's going to make people feel connected to it, and also that the liquid is filling some need for them that they actually like and want to continue drinking. Because there's only, I feel like with consumables, what's always kind of driven me to be interested in food and bev and alcohol is that while there is the branding and the specific need that it's filling, it's also there's a piece of it, you're eating it, you're drinking it, it has to be good, versus I think with a lot of the disruption with D to C brands across kind of industries, there's a lot of copycatting going on and things that are not product driven and really brand driven which is not always a bad thing, but there's not really room for us to do that because if it tastes bad nobody's going to re buy it.Stephanie:Yeah. Yep. Love that. So how are you thinking about maybe the next couple years in your industry? You guys had to shift really quickly, I'm especially imagining how big the company is, how maybe certain processes were maybe a little outdated, how did you shift really quickly to focus on ecommerce and where do you want to head over these next couple years?Arabella:Yeah. So I think we're in a really strong position because AB has felt like ecommerce has been something that's important for I believe the team started five or so years ago, so really when building the foundation for this channel for a while, but totally to your point, this year has completely transformed the way that we do business, just because the sheer volume of interest from players wanting to get online, the amount of people who are entering into the category online, so it's double the amount of households in the US of people who are buying alcohol online, and just the sheer simplicity of that and the size of the way the industry has grown, our category in the channel has grown, has definitely been a big change.Arabella:So I think we were set up for success going into it and it kind of was more of an accelerating and scaling everything that we were doing, so making sure we were supporting more regional partners versus just the Walmarts and the Amazons and the Instacarts of the world. Thinking about how to optimize what we were doing in a really fast way, so just like what we were talking about before, trying to track campaigns and get a green light or a red light on whether it is actually doing well. I think one thing that we worked on during COVID that was a big pivot and I'm very proud of is we created a site called buy beer online, and it is designed, basically during COVID huge boom but not everyone knew exactly where to go to find their alcohol online. We found that a lot of people were searching in Google beer delivery, how do I get beer delivered, buying beer online.Arabella:So we created this site that is designed to be bridging that gap and so it has all of our brands on it, and it also links to an ecommerce product locator. So you come on, you can find craft brand that you like, click it, and it will tell you where you can order it for delivery or pick up near you.Stephanie:That's smart, so you're optimizing on a new search trend which I know myself personally has been like how to get wine delivered, and being like where do I even start, and I have to download this app or this one, and this one's going to take four hours, that's too long for me.Arabella:Yeah. Oh totally. Exactly. We actually should have it where it's like 30 minutes or less.Stephanie:Yeah. Important. Sometimes you need it right when you need it.Arabella:It's true. I just actually saw a piece of research where it was like a quarter of people are immediately consuming right after, which makes sense. Sometimes, exactly, you need it. But yeah. So that was I'd say something we created like within a couple months during the beginning of COVID to make sure that we had a tool like that to be helping shoppers, and I'd say it's been really strong for paid search like we're saying, and then also for a lot of our craft brands that really relied on regionality and that on premise bar experience, brewery experience. During COVID it was sort of a big issue where shoppers didn't know where to get the craft brands that they loved, so we were able to in a way make our craft website, so a Goose Island, or a Karbach, we live in Austin, make those sites shoppable by linking out to buy beer online so you could get the shopper to an actual place where they could find the beer.Arabella:So that's been really impactful and very cool for us to be doing during COVID and I think the more we can do things like that where we're owning the full experience because to your point, we also capture all the data that comes through too. So it's like win-win on both sides.Stephanie:Yeah. I just love those stories because it really does highlight the creativity and innovative thinking at AB that maybe you wouldn't have done if you would have had it easier. Like if you would have had that easy one to one consumer relationship you wouldn't have had to think about what are other creative search terms we can go after and content we can create and ways to reach our consumer that a lot of brands don't really have to think like that, so it's really cool.Arabella:Yeah. It is really cool, and I think that's one reason I love AB is it's very creative and innovative place. Which I don't know if everyone knows that, but it really is. And I feel like if it was direct to consumer, there's also you can really kind of get caught up in the tactical pieces of things. So to your point, I would just be obsessed with the open rates on my marketing emails and how I'm converting people, which those things are amazing and important but I think we're forced to, like you said, think outside the box and figure out more about our shopper in a way that's kind of a little bit unorthodox.Stephanie:Yeah. That's cool. So the last piece I wanted to touch on before our lightning round is how does AB think about their tech stack for, because it's B to B to C, how did you guys have to adjust, if at all, to all the sudden be able to let all these retailers maybe order online in a fashion that was not happening before, like pre COVID, did you have to adjust your back end to make it simple for people to come on and order and make that an easy relationship or what did that look like?Arabella:Yeah. So luckily because we have the three-tiered system, we're not actively funneling any sales through our own tech side or back end. Actually what we try to do though is as a lot of retailers have come on in the last year or so is leveraging our knowledge and our partnerships to offer them the best connections. So whether it's connecting a grocery store with the best on demand delivery app, GrubHub or Drizly or whatever it is, and creating those relationships so that they can get on board I think is really what we look to do. I know that that's not a techy answer, but it's definitely what we try to optimize. And then also helping them with the payment platforms too, so helping them onboard with a Stripe, or an Apple Pay, or just at least giving them the tools and the information, it's something that they have to do on their side as the retailers, but we like to try to optimize and help them get to the strongest place to launch as possible.Stephanie:Yeah. Very cool. All right, let's move over to the lightning round. The lightning round is brought to you by our friends at Sales Force Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready?Arabella:I'm ready. Scared.Stephanie:Yeah. Dun-dun-dun. What one thing will have the biggest impact on ecommerce in the next year?Arabella:You know what I actually feel very strongly about is the presence basically, the fact that retailers and D to C companies are moving towards creating not just the shopping experience on their sites, but more of a content hub. And what I mean by content hub, not just to say buzzwords, is a place where not only are shoppers coming to buy your products, but maybe they're looking at recipes, maybe they're doing mixology, if it's retail, maybe you're giving them styling options or more information about your products. Really, I've seen more and more companies do this this year as I think it's a two fold thing. It's become the status quo is people know that shoppers love content and social media has been so big in the last few years. And then secondly, as people are more and more at home, more on their phones than ever before, and that's not a COVID answer, it's just true, that if you can capture someone's attention to actually get them engaged and interacting and making everything on your site shopable, I think that's really going to be kind of the bread and butter that can really change your experience or not. And I know that for us, for ecommerce with alcohol, that's especially huge because we're not quite there yet and I really want to get there.Stephanie:Yeah. I love that. All right, next question, what was your favorite virtual event that you did at AB in 2020 and how do you think about success for these virtual events that you're saying performed really well?Arabella:What a good question. Yeah, I think that the international beer fest that we did in August, so I wasn't leading that, but our general direct to consumer team was, and I think that was incredibly successful because it came at a time when people were A, really starved for that interaction and the feeling of connecting with people and doing something and having something to look forward to. And B it worked in a really strong way where it connected with our brands. So international beer fest had, there was music happening, a few artists who were sponsored by our brands, I think Post Malone did a thing, sang, so there was that element where it was a little more passive, it's encouraging you to crack open a beer and watch the concert. Super strong, but then also just other things, like I believe we had a cooking tutorial and a mixology thing, and trying to create something that is for everyone without stretching yourself too thin and also being true to the brand is super key, and what I know was also a great add to it is we were able to leverage buy beer online to also direct you during the event so that people could find places to shop for the products.Stephanie:What did the traffic look like going to the buy beer online during that event or afterwards, what kind of conversions did you see going to that?Arabella:Yeah, so I believe we actually saw a lot more conversion coming up to the event versus actually during it. Which is interesting for sure. I think we're in much more of a place where shoppers are still shopping for a little bit in advance, like planning ahead, like I saw this ad for this thing, I'm going to buy beer for this weekend to watch it, versus looking and saying I'm going to get drinks late in 20 minutes to get delivered. So we saw a lot of traffic leading up to it definitely and then a lot of live interaction during it, but not as much I think quick conversion onto those on demand platforms, which I think just speaks to the fact that click and collect and pickup is just a little bit stronger right now than the delivery aspect, but I think we'll probably see that grow as Uber just bought Drizly literally yesterday, so that's going to be a big game changer for scale.Stephanie:Yeah, everyone's trying to figure out last mile delivery and how to make it work. There's been quite a few interesting articles about why some of those companies like the DoorDashes need to expand. Very cool. What's up next on your Netflix queue?Arabella:Oh. What a good question. I am currently making my way through Grey's Anatomy. I've been watching it for so long, since it started, so it's kind of my comfort watch and after a long day with a little Zoom fatigue and talking on the phone all day it's nice to just relax to something that I know is reliably dramatic and juicy.Stephanie:That's great. If you were to have a podcast what would it be about and who would your first guest be?Arabella:Good question. I think, you know what, I'm kind of a fitness buff a little bit, and I've gotten really into it during COVID just as like a distraction and a thing to keep me sane. I love Pilates a whole lot. I find it very, very, it focuses my brain, it's challenging, I don't have to jump around. I don't love HIIT, it's not my fave. So I would love to do a podcast that kind of explores the relationship between human psychology and exercise and how those things are so entwined because I really believe they are. And I think as my first guest, I'd love to bring on someone, I actually just read a great book about endurance running and ultra marathons where they run like 200 miles-Stephanie:Wild.Arabella:I don't run [crosstalk]-Stephanie:Two miles sounds like, whew.Arabella:Yeah, exactly. I'm like one mile. I find it so, so fascinating how you really can push yourself. So I don't know a specific name but I'd like to bring on someone who's an endurance athlete to kind of pick their brain.Stephanie:Yeah. Very cool. Aright Arabella, it's been awesome having you on the show, such a fun conversation. Where can people find out more about you and Anheuser-Busch?Arabella:Yeah, definitely. So you can check out my LinkedIn I'd say if you want to find more info about me. And if you're curious, please check out buy beer online, we have a lot of info about the biz and all of our brands on there as well. And you can feel free, if you'd like to reach out to me, I don't know we can maybe put my email address somewhere, I'm happy-Stephanie:[inaudible].Arabella:Yeah, that say it's being risky, but I'm always happy to chat with people and connect. I think that's really kind of what is the bones of business and makes the world stronger. So shoot me an email.Stephanie:Amazing. Yeah, thanks so much for coming on the show.Arabella:Of course. Thank you.

If it seems like a new DTC brand is launching every day, that’s because it’s true. In every industry, across every vertical, on every channel, the next “big thing” is competing for your attention, your clicks and your cash. As a consumer, sifting through all that noise and filtering out which companies are worth your time can be a daunting task. And as a brand, it begs the question: how do you set yourself apart from the ever-growing pack?One option is to find a trusted source to vouch for you. Matthew Hayes can be that source, and his new marketplace, The Fascination, is where he wants to lift up some of the most worthy DTC brands coming to market.The Fascination is a product recommendation and reviews publication focused on emerging and purpose-driven direct-to-consumer brands, large and small. Users of the platform have the ability to filter through vetted brands, digest the company’s story, and even transact all in one place.On this episode of Up Next in Commerce, Matthew dives into lessons he learned while building Leesa Sleep, why curation is so important in the rapidly expanding direct to consumer space, and gives his take on why the convergence of media and commerce will be the one thing that impacts ecommerce the most. Plus, I even pull out a few stories from his trip to Richard Branson’s Necker Island.Main Takeaways:Curation Station: The saturation of the market with a new DTC brand every day is creating issues for consumers and brands alike. With so much clutter, it’s hard to stand out. Through measurable metrics, in-depth reviews, and by holding brands up to certain benchmarks, The Fascination created a space that customers can trust, and brands want to be listed. Layers of Use: For a brand to stand out, The Fascination has found that being mission-driven, promoting social good, and leaning into and highlighting the unique aspects of your business will be the most effective strategy. Lessons Learned: While not everyone can pick the brains of the biggest entrepreneurs in the world, when you get the chance, it’s wise to listen. Matthew was able to visit Necker Island and spend time with Daymond John, Marie Forleo, Tim Ferris, Seth Godin, and Richard Branson. Tune in to hear what advice they gave that has been helping him to this day.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. And welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder at mission.org. Today, I'm chatting with Matthew Hayes, the co-founder at The Fascination and previously on the founding team at Leesa Sleep. Matt, welcome to the show.Matthew:Thanks for having me.Stephanie:Yeah, I'm very glad to have you on. So I was hoping we could start with maybe Leesa Sleep. Because when I saw that I'm like, "Whoa, you were like an OG in the D-to-C space," and I thought they'd be a good jumping off point.Matthew:Yeah. So I was part of the founding team at Leesa. Yeah, we launched it back in 2014 before everything exploded. Right? So we were very early. We were one of the first BedInABox brands to get out there, Tuft & Needle came maybe, I don't know, six months to a year before us. Casper was literally right before us. And then we were out right around Thanksgiving of 2014 and that whole industry just exploded under our feet. We had the wind at our back for most of our tenure, especially our growth years. But things are a lot different now and t's a different ball game in terms of launch and growing a D-to-C brand in 2021.Stephanie:Good. Tell me a bit about the differences. I mean, obviously the world is very different and there's a lot of new trends coming out about what to expect over the next couple of years, but are there any lessons that you took away from Leesa that are still relevant or is the world just like in such a different place now?Matthew:No, I think it's still really relevant. I think a lot of the stuff that we were learning as we grew is incredibly relevant to the way that we launched The Fascination, the way that brand founders are thinking about things now. When we first launched in 2015, cost of acquisition were beautiful. Like all day we could scale the auctions across Facebook and Google, were very, maybe a fifth of what they are now just in terms of competitiveness. Just, I mean the mattress industry specifically there was 180 entrants after we launched, so a huge amount of volume coming into that space and just generally in D-to-C. So the cost of acquiring just pure play digital customers was going up and people were seeing the writing on the wall and starting to diversify into brick and mortar.Matthew:And so I think that was one of the things that we realized, is we've got to have a diverse channel mix. And so we struck the partnership with West Elm, we leaned more into Amazon. We looked more at international and we actually set up our own brick and mortar stores. So I think the combination of that brand awareness and exposure helped our brand tremendously. Whereas a lot of brands stuck it out, stayed pure plays and they learneD-to-Costly less and overspending on acquisition.Stephanie:Yeah, that's definitely the biggest thing that I see from the past couple of years or past decade is like before you could just focus on paid acquisition, like throw a bunch of money at it and one's really, they're going to come to you either way. And then now it seems like a lot of the, I guess the brands that are ahead are more media companies now, and there's a big spectrum between paying for people versus organic or versus starting a community and then launching a product to them. So it does feel like a definitely a different world than just like pay, and grow, and scale up as you go.Matthew:Yeah. I mean, we're seeing that a lot actually. And I think our notion of how to build a profitable business with The Fascination is quite a bit different. No, we're not a pure play own D-to-C brand selling our own products, we're essentially a marketplace, but what we've done is we've seen the success that media companies have had in building an audience that's super loyal whether that's The Hustle, or Morning Brew or The Scam, all of this audience aggregation and demand with these customer demos, there's so much that you can do with it. And so, we saw a bit of an opportunity and the fragmentation that was happening across D-to-C brand for popping up literally every day. And you start to become a little leery of, is this a good brand? Is this is a good product? Does this align with my values and tastes? And we saw this need for curation across all spectrums of D-to-C really. And we saw an opportunity to really create a media platform and a commercial platform around that.Stephanie:So let's dive into The Fascination a bit. So it's a marketplace. You guys are curating D-to-C brands. I saw you have filters focused on the product technical quality, also the soul of the company. Tell me a little bit more about The Fascination. How do you allow brands into the marketplace? Yeah. And any other details around the platform?Matthew:Yeah, so I mean, people are basically referring to it as a marketplace meets magazine, which I think is an accurate description. It's basically at its core, it's a product recommendation and reviews publication specifically focused on emerging and purpose-driven direct to consumer brands. So in much the same way that Wirecutter or the strategists reviews top products and writes those objective third-party reviews and recommendations, as a media publisher we're really doing that, but we're focusing in on a subset of these D-to-C brands that are new and emerging and have purpose driven values.Matthew:And the idea is to create a single platform where people can come and discover new brands, they can read reviews and research those brands and products, and they can shop deals all in one place. So it's a linear play from discovery all the way through to purchase.Stephanie:Yep. So who are some of your favorite brands on the platform right now?Matthew:There's so many good ones.Stephanie:[inaudible].Matthew:Yeah, I know I'm going to get in trouble for this. We've got badges across the site, which are really cool. The badges call out things like women and minority led businesses, or organic, or made in the USA. And so like Girlfriend Collective is one of our women and minority led brands. Haus is another-Stephanie:Even Haus on, yeah.Matthew:... Yeah, they deal the [inaudible] and great products, great brand story.Stephanie:Delicious.Matthew:Delicious. Yeah. I was just chatting with the founders of Huron, which is a men's skincare line. Awesome story. And then we've got the big names that you'd expect. Like we've got Allbirds on the platform. We've got Warby joining soon if they're not up already any day now. We've got UNTUCKit so, those it's a nice mix of the old school D-to-C incumbents with a lot of really cool emerging brands that honestly I'm intimately involved in direct consumer and a lot of these brands I hadn't heard of for the first time.Matthew:So if you think about like, as it broadens out the halo from the bulls-eye of our tightest demos, there's going to be so many people that are discovering these brands for the first time. And that's really what we want. We want some of these big names to attract people into the site, and then we want a lot of our awesome emerging brands and products to be discovered while you're there.Stephanie:Yeah. That's great. So how are you convincing these larger brands to join the platform? Because I'm thinking your space, I think also is very competitive. I mean, the world right now is headed to a place where everyone wants curated collections. I mean, they don't want to spend a bunch of time everywhere. They want it all in one place. We had the CEO of Fast on talking about, you need the one-click checkout and be able to allow people just to check out instantly and not have to bulk it into a cart. It seems like your space is very competitive too. How are you convincing the Warby Parkers? And the older brands who probably are approached by quite a few marketplace platforms to, "Oh, join us." Why are these brands going with you?Matthew:Well, I think we've really a ton on the story and the user experience and just the overall look and feel of our digital product and what we stand for. I think it's also in our favor that we have been D-to-C operators ourselves and we can really empathize to what these founders need. And we've been fortunate to be in the community for several years now. So we had a few close partners that our spring pad, if you will. Not to mention Nick Sharma as an advisor, who's great at pulling in brands.Stephanie:He was on our show too, man, I was just-Matthew:Yeah, I know.Stephanie:... fortunate.Matthew:And so yeah, between that, and we had some really amazing brands reach out the first day that just totally shocked us. We have a type form application that comes through and we had a couple of 100 brands, including some of the biggest names in the space on day one, which it was super exciting. And just a lot of founders getting really excited by seeing their brands mentioned in our round ups, or seeing products being shared. So I think that the validation that we're starting to provide, and really empathizing with what brand founders need is something that they're really clamoring for. And I think word it gets out fast.Stephanie:Yeah. That's great. So is there any trends you're seeing right now around what customers are most excited about? I mean, I'm guessing you have all this data now and you can see, okay, a bunch of people are coming on during quarantine and buying Haus. We need another type of Appertiff or something to offer that's similar because we see so much engagement there, any trends?Matthew:I think that one of the things that we've seen that's really interesting is our roundup pieces on brands that are making an impact and just the social impact stories are really, really resonating with consumers. And the brands are sharing the stories, which is just amplifying the message that much more. So the general consumer sentiment that we're getting from a qualitative perspective is that a platform like this is very much needed and like, thank you for building it. So I don't think it's even halfway to where we want it to be, or it could be in terms of the overall product development evolution, but we're going to get there quickly.Stephanie:Yep. So how, when you're... You just said that certain stories that you're telling around the brands and the social good aspect of it are really resonating. Is that your main play when it comes to acquiring new customers on your platform is by writing good pieces of content, having the brand share it to get in front of their audiences as well, or how do you think about acquiring new customers?Matthew:Yeah, I mean, customer acquisitions, it's always a challenge for a marketplace like this. And that's why from day one, we didn't approach it as a pure play commercial marketplace where you're just aggregating and selling products. From a consumer perspective, that's really not serving the overall need that we're trying to address, which is discovery, research, and shop and convert. And so the research aspect of that is really where we're going to focus a lot of time and attention and work. And what I mean by that is writing really in depth, thorough product reviews that are authentic, that are meaningful, that consumers value and ultimately Google values that content really highly as well. And so, what I'm getting at is the SEO and organic traction and such. It's going to be a big part of how we grow organically, keep our acquisition costs low.Matthew:There's a lot of performance marketing things that we can and will be doing. Brands have had tremendous interest in doing paid marketing partnerships, whether that's white listing on Facebook, or sponsoring newsletters, or any sponsorships. I think there's a tremendous amount of demand for that. And we really are just dipping our toes into the very first test there. And then I think PR and having, as I said, our brands amplify, our content is also, it's just going to be a latent, organic way to continue to build low cost audience. I mean, I think if you think about the way that Leesa scaled and a lot of those 2015 brand scaled, we know that we can't run the same playbook and build a sustainable business.Matthew:And so as we were launching in early days, it's like being a media company is really hard, right. Coming up with really engaging content every single day, pumping it out, like the Morning Brews and Web Smith's of the world, I take my hat off to those guys because it's not easy, but I think you can already start to see the rewards that we're going to reap from that.Stephanie:Yeah. So what channels are you... Well, maybe actually first, let me talk about the content piece, because that's top of mind for me is, a lot of people say you just need to create good content and that's the key to finding great people. How do you go about brainstorming something that will resonate? Are you actually going through maybe search trends and starting there to see what's going on in the industry, and then writing articles around that? Or is it purely, just like, I want to talk about Haus's story and we're going to talk about what they're doing behind the scenes? Like, how do you brainstorm content?Matthew:It's a mix of all of that actually. So we've got a number of things that we're covering at any one time. A lot of it is when we have new brands onboarded, we've got to write the brand story and we've got to review their products. That's phase one. And that's like an ongoing process as we get up and running. But yeah, we're also looking at industry trends, category wide trends, search trends around specific products or competitive products to see how we can write really compelling content that meets that need.Matthew:And then we're thinking about the cultural relevance, things that are happening topically in everyday life. And we've got a couple of different personas that we look at. And so what are our personas caring about, what's their headspace, and then what are the things that are happening in their specific lives at this very moment in mid January? So as we think through those things, you start to surface really relevant content ideas, and that's where our social content, a lot of our editorial content comes from. And that's generally how we do it.Stephanie:Cool. And what are some of the channels that you're most excited about right now, or you think that there's untapped potential? Are you sticking with the Facebook where of course stick the Facebook? How is sticking with-Matthew:Afterthought.Stephanie:I like that. Hey, they used to be though. Right?Matthew:Yeah. Drop that.Stephanie:Yeah. I mean, when? It's still pretty relevant, but yeah. Are you sticking with Facebook? A lot of other brands still say that's the best place to reach customers. Are you trying out a bunch of new channels and experimenting? How are you thinking about that?Matthew:So Facebook isn't a priority for us right now other than to the extent that we use it for paid social advertising. I would say it's there. Of course it's there. But when we're thinking about building audience, Twitter has been a nice surprise for me, I'm really bummed that I didn't get myself on Twitter several years ago, but Sharon, our audience development team's doing an awesome job of engaging that really passionate community.Matthew:I think LinkedIn has sneaky, organic reach and potential. And we found that a lot of our brand founders are sharing our content there and we're getting a lot of engagement.Stephanie:They're more organic then, right, because LinkedIn is super expensive when it comes to advertising.Matthew:Yeah. All organic. And then stuff like TikTok is interesting as we look at really organic product reviews doing things with founders, I think that's something that we're going to be looking at as well as Clubhouse.Stephanie:Yeah. Clubhouse. I think that's where it's at. I'm on there. I listen to people. I think you can connect with a lot of great people on there. I'm still not sure about the unstructured format sometimes where things can go on for hours and hours, but yeah, it seems like there's a lot of potential there to at least connect with new people. I don't know about selling.Matthew:A lot of untapped potential.Stephanie:Yeah. So I saw that you were also an investor in GRIN. Right. And that's the influencer platform, which is... That's the right brand. Right?Matthew:Yup. [inaudible].Stephanie:Okay. So our guest yesterday that we had on was, that's her favorite new tool that she's looking into and I had not heard of it before. And I'm interested to hear a little bit about how are you thinking about influencers? What attracted you to GRIN, where's that market headed over the next couple of years?Matthew:Yeah. I mean, we've been doing influencer marketing since 2012, honestly. And I think there's going to be a lot more regulation around it for one. So you've got to be buttoned up as you execute itMatthew:So I think that's just part of the industry growing up. A lot of these minors are now celebrities in their own right with huge followings and PR teams. And so the days of just engaging with an influencer that way are over. It's really about adopting a micro/nano strategy where you're activating pockets of a couple thousand followers up to 50 to 100,000 followers and doing it more strategically at scale. And that's where I see a lot of brands and agencies having success doing this stuff. So GRIN is just a really awesome tool for managing that entire workflow. Keeping you really on top of things, you can search for look alikes of an influencer. So if you have someone or something that you want to find influencers around, it's great for that.Stephanie:That's awesome. And how did you think about attribution and analytics around utilizing influencers and seeing if you're really getting the most bang for your buck?Matthew:Yeah. I mean, well, especially with iOS 14 and everything that's going on there, it's always been an imperfect science, we never assume that we would have even close to perfect attribution on influencer activations. So we always treated it very top of funnel and you do what you can in terms of attribution. So you give them trackable UTM parameters, you give them a bespoke promo codes with their name. You give them a landing page experience, everything that you can do to cookie the user on your website and get them into what feels like an authentic customized experience for that loyal following. That's going to increase conversion, I think as much as anything.Matthew:And the vast majority of influencer activity is probably happening on mobile anyway. So wherever you're sending them, it's got to be very mobile optimized because if they switch over, your attribution's lost at that point.Stephanie:Yeah. And I think that authentic piece you're saying, I mean, it has to fit your brand. The person has to not just be saying something just to say it. And I think taking that longer-term approach more of like a partnership and someone who is going to be a part of your brand, even if they start out smaller and grow with you, will be way better than just trying to target a big name, because I normally don't really put any weight in products that large celebrities are showcasing, just because I'm like, I just know how much money you're getting paid and I highly doubt you're using that teeth whitener.Matthew:Yeah, I mean to that point and a lot of grants are basically incentivizing on the CPA or per sale basis with, like you're saying a subset of really loyal influencers and affiliates that they can send that influencer their fall collection of bags and apparel or whatever, and they can get 10 or 15 posts out of it if the influencer continues to see performance. And so I think that's the new way of doing things nowadays.Stephanie:Okay. So yeah, viewing it from a content generation perspective of, they're not just posting once trying to get their product off, but they're also creating an article or blog posts that you can repurpose and pull quotes from or whatever it may be.Matthew:Yeah. And more frequency drives more conversion. So the more you get that brand in front of your audience, the more likely it is they'll finally take action.Stephanie:Yep. So I want to talk a bit about mentorship, which I always love asking questions around this. I saw that you went to Necker Island a few days ago... a few years ago [crosstalk], really? Few years ago. And of course Richard Branson's Island. So I want to hear, what did you learn there? What advice did you hear? I saw, I think Damon John was there, Tim Ferriss, Seth Godin, Marie Forleo, a bunch of great people to learn from. And I want to hear about the stories behind going there. What did you learn, all that?Matthew:Yeah, I mean, it was a life changing experience for sure. Damon is still pretty close to us in the business. He got involved with Leesa after we met, especially with their 110 program, and I really just learn from him the hustle, the grind. He told his story about how he came up with FUBU and really built that business from zero. And so, talking about fundraising with him is a different thing.Matthew:Tim was on the Island too. I was fanboying out when I met Tim actually, because I was obsessed with four hour workweek, four our body and here I'm chatting with him in person. We actually started talking about going up against Casper. At the time, we were pushing pretty heavily into podcasts and Casper was buying up literally every podcast that we could find, that we wanted to go after. And funnily enough, he would really push a micro strategy to us. He said, "You need to go after these very small podcasts that aren't affiliated yet, that have nascent, but growing followings." And we did, we found 10 of those, especially in comedy and gaming, and we stayed with them for years and they ended up crushing for us.Stephanie:Oh, that's great. And did you secure long-term partnerships with this company?Matthew:Yeah, I think we're still working with a few of them honestly.Stephanie:Oh, that's great.Matthew:We just completely sapped the audience, an everyone's got a Leesa now. Yeah. And then we talked with Seth. David and I chatted with Seth Godin, who's a marketing genius. He's like the professor of modern day marketing. And at the time, we had done around 30 million in our first year of sales, which was just crazy. And he was talking about making this leap called crossing the chasm. Basically when you're attacking the early adopter market and you're doing quite well, there's a point at which you have to "cross the chasm" and reach the broader demographic of people. And so I don't remember the tactics that he talked about, but he always impressed that idea of our okay, now we've got to broaden our sphere of influence. We still use that phrase today.Matthew:And then Marie Forleo was there and we had a lot of really good, we like chatted one-on-one several times, because I was incredibly anxious. I've always dealt with anxiety issues in my career, in my past. And so we had some frank chats about vulnerability and putting yourself out there. And once you do that, it just eases the tension, eases the anxiety. And I still use that to this day.Stephanie:Yeah. I was going to say, does it help now? Because I mean, I definitely feel that too. I remember when we first sold this podcast, then they're like, "Oh, Stephanie can new host it?" And just being like, oh, I usually always would have our other team members host the shows and yeah, I liked working behind the scenes and it definitely was hard being like, okay, you just have to do it. You have to get yourself out there. Did it help afterwards thinking through about her advice?Matthew:Yeah, it totally did. And I always think of this idea of demonstrated performance, where it's like, you're nervous about something, you're anxious, you step on stage or you sit in the seat, you put yourself out there and you have a really good performance. And then that just gives you one more step, one more piece of confidence and you keep going and building. And now stuff that I do every day without even looking at my calendar is stuff that I would have just freaked out about all day five years ago. So I think it's just about experience.Stephanie:Yeah. Now I agree. I remember even just thinking about doing video meetings, like when I first was starting out in the corporate world and being like, "Oh, my gosh, my first meeting." I was just so scared and sweaty and nervous and then now taking like 10 a day and being like, not even thinking twice. So yeah, I think just doing the work and pushing past and knowing you'll probably fail a couple of times and who cares?Matthew:Exactly.Stephanie:That's great. And did you meet Richard Branson when you were there?Matthew:Yeah. We met briefly. He gave us a talk which was awesome. He talked a lot about Virgin's impact program, and what he's doing there. And so that was really important to us at the time, because we were setting up our Leesa 110 program and that was cool to hear from him.Stephanie:That's great. So where do you see the next couple of years headed for The Fascination? What are you guys building for? What are you doing in stealth mode right now? What are you planning for the world to look like in a couple of years?Matthew:Yeah, I mean, right now we're really heavily focused on getting the digital product where it needs be to really deliver on a full transactional marketplace that's cutting edge for consumers. So in the next couple of years, we want to have a destination that is super engaging. We want to have brand founders engaging with consumers real time in the platform. We want to have people shopping and reading and researching brands and products all seamlessly, and to be able to buy those products in one click, right? Right on The Fascination.com. And so a lot of things have to happen in the background to obviously make that work.Matthew:And then we're always thinking about, how can we acquire the best customers, bring them in most cost-effectively? And it's always on my mind of like, delivering really solid, meaningful content to the audience, not just fluff stuff, but stuff that's really, really valuable. And so that's what I think we're trying to win.Stephanie:Well. Yeah. It also seems like there's such an opportunity to... I mean, when you have all these brands and they have access to a lot of insights on their customers or who's coming to their website to then build lookalike audiences off of those brands, and then all of a sudden you have access to customers and you're coming from a different angle where maybe if Leesa would have already gotten in front of a customer two times and they're like, "Nah," they then see The Fascination comes in and they're like, "Hey, check out this mattress. It's like a third touch point. That's very separated." But it seems like there's a lot of opportunity there to get insights at a much more accelerated rate than you would get just by yourself.Matthew:Yes. That is the goal. Yeah, there's a whole data infrastructure that we really need to put in place to get the most out of it. And honestly, coming from Leesa for so long, I'm still trying to wrap my head around what that all looks like in terms of affiliate click attribution and how we create audiences and how we do product recommendations. So we're only a month old, but we'll get there. And I can tell you that there is such tremendous demand for what you're talking about. Just leveraging lookalike audiences, leveraging audiences across categories that aren't competitive with one another. At the end of the day, everyone that comes to The Fascination as an interested consumer if we do it right, it's always going to have similar demographic profiles, right. Whether they're a man or a woman. So as you aggregate that at scale, there's a ton of value for brands to be able to tap into that.Stephanie:Yeah. It seems like eventually they'll have to be tools for the merchants as well, to be able to interact with all the platforms they're on. Or like, I mean a lot of sales are moving towards the edge. There's a lot of people say and how do you keep track of that? Like, how do these merchants they're selling on The Fascination, they're selling on Fancy, they're selling on not that Fancy is the same, but there are quite a few places popping up where these brands might be like, "Yeah, I want to sell on that platform or over here," but I don't know if enough tools exist right now to keep track of what you're doing and consolidating it all in one place.Matthew:Yeah. I mean, it's got to be a challenge for these fairly young brands. There's product feed software that'll handle some of that, but at the end of the day there's manual stuff that's always needed once you're drop shipping and wholesaling and you have retail partners. So yeah, we're going to be thinking about it from the other side, just the same, how do you manage 100, 200, 300 merchants and keep them happy?Stephanie:Yeah. Crazy. All right. Well, let's shift over to the lightning round. Lightning round is brought to you by Salesforce commerce cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Matt?Matthew:Yes.Stephanie:One minute to answer. All right. Yeah. Prepare, drink your drink, whatever that may be. All right. First thing, what one thing will have the biggest impact on ecommerce in the next year?Matthew:I think the convergence of content and commerce is, is going to have one of the biggest impacts. You've got media companies that are converging in the commerce, they all want to be transactional. They all want a bigger slice of the pie. They all want more lifetime value extraction from their readership. And then I think on the commerce side you see brands and retailers who are obviously seeing the cost rising of customer acquisition in the traditional sense and creating really rich content. It's the only way to do that. So we're diving in right at the intersection with what we're doing at The Fascination and that's where we saw it going. And that's why I think we're bullish on where we're headed.Stephanie:Yeah. Well, it'll also be interesting to do a recap episode on what's happened since some of these brands got into mixing media with commerce. I mean, I'm thinking about NBC, I think did a whole shoppable TV thing. And I remember seeing them launch that maybe in February or April last year, but I don't know what actually happened. So it'd be fun to do a recap of like, here's who launched in 2020 when it came to mixing media and commerce and here is status update.Matthew:Hopefully we will be one of the givers.Stephanie:Yeah. Hopefully. What's one thing from 2020 that you hope sticks around in 2021?Matthew:I think that we've all had to embrace things like this, just getting on video conferences, not having to present ourselves through this façade, in the office I would have never thought about wearing my hat backwards and rolling around in athleisure. And now that's just the norm for everybody. And kids are on work calls and it's just, the whole thing feels a lot more familial. And even if we do go back to offices, I really have loved that work now feels a little bit closer to home because you're in your home, but also because just the interactions, you see more than you would if everyone was in an office environment.Stephanie:Yeah, I agree. And I think it definitely brings a more human perspective too. Like you're saying, working together, knowing someone's kids, seeing them in the background, and then you also have more, I guess, empathy when a mom or dad's like, "Hey, I got to go do this with my kids." It's like, "Oh yeah, I saw your kid connection." Of course you can, whereas I'd say prior to this. Yeah. Not as much of a leniency, I guess for that. Yeah. That's a good one.Stephanie:What is the funniest story or best story you can think of when it comes to either building up Leesa or building up The Fascination where you're like, "Oh, this is a good time or a good story that really sticks in my brain from those years."Matthew:We've done so many like gimmicky things at Leesa. We were growth hacking like crazy and we were throwing stuff against the wall and not all of it stuck. We did a ton of stuff with Barstool Sports. We maybe did a few influencer integrations that wouldn't go over so well today with certain influencers.Stephanie:And with Barstool, I feel like they're so edgy that they can get you in trouble all these days anyways.Matthew:They're very edgy and we purposely like with all of those podcasters and creators, we're like, go be very authentic. And so you can't tell Barstool like, tame it down and not be authentic. But they were a huge converter for Leesa for several years.Stephanie:That's fun.Matthew:So we did a lot of fun stuff. We sponsored Larry at the gambling goldfish, which was a gold fish swimming around in a tank on Barstool sets, they pulled a mattress behind a truck with a Santa Claus riding on it. But we've also done a lot more admirable things, like we did a sleep out for the homeless. We've done a lot of cool things at Leesa just in the experientials side of things that made it fun.Stephanie:Yeah. I mean I have a love for the gambling goldfish. I want to go check that out. That actually sounds pretty funny.Matthew:Yeah. One more thing that we did is I think it was the 2017 NFL Draft, it's shown on ESPN and all the players are interviewed in their homes. And so we sent the players that we knew would be interviewed on TV, on ESPN Leesa mattresses. And we had them put their Leesa mattress boxes behind them and their families. And we got millions of impressions that night because we had Leesa mattresses all over the air on ESPN Draft.Stephanie:Oh, that's fun. See, I love creative stuff like that, where I mean, as long as it actually converts too, I always have the question about TV, does it actually convert or what happened after everyone saw the mattress behind them? Did you guys see a big uptick in sales, or?Matthew:I don't remember if we did or not. I think we saw a bit of an uptick, but I mean, it was such a low cost stunt to do that. It wasn't a swing for the fences, but we also did a ton of TV in heyday at Leesa. And you can really see the brand awareness effects the TV has even though it's insanely hard to track.Stephanie:Yeah. I agree. What is next on your reading list?Matthew:I'm probably going to do Shoe Dog by Phil Knight.Stephanie:Such a good one. I love that book. Yeah. So inspirational. I highly recommend. If you were to have a podcast, what would it be about and who would your first guest be?Matthew:Well, that's an interesting question because we may very well have one soon.Stephanie:Oh, nice.Matthew:Yeah, I don't know in what format it will be. It may be a podcast. It may just be like Instagram TV stories, but we really want to interview, just do flash interviews with our brand founders, asking about their origin story, asking about what makes their products different, fun facts. And I think a groundswell of really interesting stories like that would be fun.Stephanie:Cool. That sounds good. And then the last one, what's the nicest thing anyone's ever done for you?Matthew:Oh, that's tough. I mean, I there's been so many instances of generosity. I think honestly, giving me a chance to make the career switch that I did, and this is a bit of a shout out to David my co-founder, but he really took a chance on me. He's been super supportive of me for years, and it's really gotten me to where I am today in terms of my career and the place that we're at collectively. So him and the people around me that pushed me to make that leap out of the traditional corporate world of consulting. I was really hesitant to do that coming right out of my MBA and looking at a nice salary, and he was one of those people that pushed me over the top to do that. And I'm thankful for it.Stephanie:That's really cool. Great story. All right, Matt. Well, thanks so much for coming on the show. Where can people find out more about you and The Fascination?Matthew:So about me, you can find me on Twitter at MattDHayes, all one word, and then The Fascination.com. Go check it out.Stephanie:Awesome. Thanks for joining us, Matt.Matthew:All right. Thank you.

You’ve heard it time and time again on this podcast: That influencer marketing not only works, but could be the key to unlocking massive business potential for your eComm business. Influencers have the power to take a product – or an entire brand – from unknown to a trending topic product overnight. And sometimes, the community that they build is so valuable, it creates a jumping off point for a business of their own. That’s what Deepica Mutyala did when she launched LIVE TINTED. On this episode of Up Next in Commerce, Deepica takes us through how she progressed as an intrapreneur at BirchBox before she took the plunge and set out on her own journey. And it all started after one beauty video that she made went viral on YouTube. Deepica explains how she went about building a community based on a mission to bring more diversity to the industry, and how she’s been able to tap into that community to create content and launch a successful business with products designed specifically for her community. Plus, Deepica reveals some of the advice she got from her investors and mentors like Bobbi Brown and Andy Dunn. Enjoy this episode!Main Takeaways:Deprioritize the Big Channels: It’s okay to deprioritize big marketing channels such as Facebook in order to explore and engage with users elsewhere. Facebook will always be there, but you might catch lightning in a bottle if you are willing to adapt and explore new platforms. It’s Not a Dirty Word: Influencers tend to get a bad rap, but the truth is that anyone can be an influencer, and that influence can be nurtured for the good of a community and a business. By tapping into the power of a community, growth becomes much more attainable.Start Where You Are: Intrapreneurship is an avenue you hear about less often, but is a strategic way for anyone with bigger dreams to learn the ins and outs of business. By embedding yourself in a business that works, volunteering to help in every department, making connections, and taking all of your learnings to build an initiative internally or on the side, you can advance as a true entrepreneur much faster. More Than A Check: Fundraising isn’t just about filling your bank account, it’s also about adding to your knowledge bank. Deepica tapped into mentors and investors like Bobbi Brown, Andy Dunn, Payal Kadakiam, Hayley Barna and others to learn from their experiences and invite them to be a part of her own growth. Tune in to the episode to hear some of the advice they each gave to Deepica!For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to Up Next in Commerce, this is your host, Stephanie Postles, co-founder at mission.org. Today, we're talking to Deepica Mutyala.Deepica:There you go, you nailed it.Stephanie:The CEO of a beauty brand, LIVE TINTED. Deepica, welcome.Deepica:Thanks for having me.Stephanie:How many times do people pause when they're like, "I'm about to botch your name, I know it, I know it, ah, there it goes?"Deepica:I mean a lot, but I appreciate the pause and effort to get it right, versus just blatant lack of attempt to try and get it right. So, I appreciate you trying. Thank you.Stephanie:Good. Yeah, thanks. Stephanie:So, I was doing a bit of research, as I always do on my guests, and I'm fascinated by LIVE TINTED. I mean, you have such a great story, so much stuff [inaudible] want to dive into, but first, I think it'd be fun to kind of talk through how you got here, your background, What did you do before you founded LIVE TINTED?Deepica:Yeah. So, I actually started my career on the corporate side of the beauty industry. In college, my first internship was at L'Oreal in New York, and post-college I had a brief stint at Limited Brands, which is now L Brands at Victoria's Secret, which is no longer there because they went bankrupt. So, I was there for a brief stint, but the whole goal and end game was to one day create my own beauty brand. I was that 16 year old girl who grew up in Sugar Land, Texas who said that... I was going to change the narrative of what I saw when I was going down the beauty aisles.Deepica:When I was a kid, I shopped at Walmart predominantly, honestly, that's where I shopped for beauty because, going to shop for beauty wasn't really a thing in my family's life, so when we were just getting groceries at Walmart, I would divert to the aisles and go look at makeup. And I would find myself not reflected in the ads, and I would also not see any foundation shades that worked for my skin tone. And I literally, remember telling my family at 16 that I was going to change that narrative one day, and everything I've done for my career since that point was to get me to starting LIVE TINTED.Deepica:So, it's kind of crazy being now back in Texas, like I was telling you earlier, that it's just really full circle being here, and finding doodles of me writing out what I thought my brand name was going to be, and talking to family members who are like, "It's just crazy that you're actually doing it." Because this is what I wanted to do. So then, after nine months at Limited Brands, I quit my job to take a risk on a startup called Birchbox, which at the time was the hottest tech company... Not even just beauty, but I think overarching, they created a whole category of subscription model that really created a whole new category.Deepica:And so, that was really cool, incredible experience working for two bad-ass female founders who, in my parents' eyes, were really okay with me working there, and taking a pay cut, and going for my dream, because the two founders went to HBS.Stephanie:Oh my gosh.Deepica:And so, they were like-Stephanie:I also read the quote from your... You were saying, "Oh, my dad all growing up would hand me a stethoscope," and then you would instead grab lipstick or something, and I thought that was really funny.Deepica:[crosstalk]. Yeah. It's kind of an Indian tradition where... There's this ceremony that happens... I think it's after your first 100 days, and we just did it for my nephew, where they put things in front of you [inaudible] like a book versus different things to see what you would gravitate towards. And instead of me gravitating towards anything that was in front of me, I was grabbing my mom's lipstick in her [crosstalk].Stephanie:In the purse digging over there.Deepica:Yeah, yeah, which is so funny, and crazy, and full circle now, but yeah, this was always the dream, and it's wild for me to look back and reflect. But I worked at Birchbox, and in true startup culture, you can create opportunities for yourself at a startup. And so, I made it very clear to the founders that I wanted to one day create my own beauty brand, and they gave me opportunities in the company to do that. Then, I had to do it a lot of the times, in my free time, it wasn't like... I still had to do my day job, but if there was projects that I could work on in my free time, I did it, because I saw it as Birchbox was my business school.Deepica:And they always said it as founders, right? But I truly felt it. I really felt like working there was an incredible network of really smart people, and I got to... Literally, you have an idea, you can test it, and just go for it. And so, I got to work on product development at Birchbox. I got to work on influencer partnerships at Birchbox. And when I did that, was my first time being like, "What is going on in this influencer world? And how much are these girls getting paid? What is happening?" Some random girl at Iowa getting paid this insane amount of money to do a YouTube video, and I was just like, "This is wild."Deepica:So, as I was doing that, was when I realized there was nobody who looked like me on YouTube creating content, and I kind of just saw it as a fun hobby. I was like, "You know what, Deepica? At the end of the day, you're not quitting your job, just do it on your weekends. And at the end of the day, all the people in your life that text you questions about makeup and things like that, you can just say, 'Go to my channel, stop texting me.'" So, really, I didn't think much of it. And so, January of 2015, I picked up my iPhone... Because again, I didn't know what I was doing video content wise, I had no clue how to... Ad revenue wasn't even activated. I didn't know.Deepica:And I picked up my iPhone and held it vertically instead of horizontally. The production, it was like I knew IGTV was happening before IGTV was happening. I did it in a vertical mode, and I used red lipstick under my eyes to mask dark circles... And people who are hearing this are probably literally so confused, but-Stephanie:I read that too, I was like, "Well, it'd be funny if I showed up with red lipstick under my eyes."Deepica:Oh my God, that would have been awesome. Yeah, no, I used red lipstick under my eyes to hide dark circles, and I guess that was crazy to 10 million people, because that video went viral, and yeah, has millions and millions of views.Stephanie:And it worked. For anyone who's like, "What did that look like?" I looked at the pictures and the video, it actually works.Deepica:Yeah. So, here's the deal, I basically... That was my biggest beauty concern my whole life, how to hide my dark circles? And it wasn't talked about, people didn't talk about it because it's such a specific problem to specific communities of people. And so, I just did the video that I had learned when I was on set one day, where a makeup artist was using a color corrector under my eyes, an actual product made for under your eyes, and I was like, "What are you doing putting red lipstick under my eyes." And she was like, "Oh no, it's a color corrector, it cancels out the darkness, so when you put on your foundation, you really can mask your dark circles, because you have extra pigments that require kind of additional correction." And I was like, "Well, what's the difference?"Deepica:My brain is always thinking about hacks and simplifying things, and so that doesn't change with my beauty routine. I want to always simplify things. And so, she basically, said, "Not much." And so, I filmed this video and it went viral, and when the video was at 4 million views, I got a call from the Today Show to come on to do the segment on air, and I quit my job that day. I kind of just had this moment of, this could be a cool 15 minutes of fame, or I could turn it into my dream career. [crosstalk].Stephanie:That's amazing. What did the founders say? Because I'm guessing, you had a pretty close relationship with them. I mean, they were letting you essentially, be an intrapreneur within their organization, and test things, and learn, and try, how did they feel about that? Because I saw that they were some of your first investors along with Bobbi Brown, which I'm like, "What? How did you get in front of her?" So, what was that process like leaving and getting them to invest afterwards?Deepica:Yeah, it was really tough. There's two co-founders, and they just had different mindsets, right? One of them was more like, "You are all on a Birch tree, and you're all acorns that will fall into the world." I remember she said... And she's the one that's currently an investor in my company, "I want to see you grow and thrive." And the other one, it's not to say that she didn't want the same thing, but she was really excited about me growing within the company. And listen, she had every reason to feel that way. She helped me get so many opportunities within the company to be able to create what I have been able to do today, and she gave me those opportunities, but it was more like... I was really close to her too, I worked more with her directly. So, of course, it was like one of those bittersweet things, but they're both incredible and really supportive.Deepica:But it was really scary to... I remember when I got... The day I got the email from the Today Show was when I pulled her into a room that day at 6:00 PM, towards the end of the day, and I just was like, "I feel like I have to go for it." And she gave me a really big hug and said, "She's really happy for me." But you could tell it was like a bittersweet thing, which I appreciated, because at the end of the day, that means she felt that I made an impact at the company.Stephanie:That's great. So, what was the Today Show like? Did you go on there and do a tutorial? Tell me a bit about that.Deepica:Oh my gosh, it was wild. So, my sister came on and was my model on air. So, she flew in from Texas. My dad was backstage sitting next to Kid Rock, which was hilarious. Picture this immigrant Indian dad who's like, "What is even happening? My daughter is on national television. And who is this guy with a beard and long hair, what's going on?" It was the moment where I realized that I was meant to do exactly what I'm doing in that moment. I was not nervous, I felt like that was... I was just meant to be there, it just felt that way. You know that Eminem song... What is it? Lose Yourself? You get one shot, one opportunity. I was listening to that backstage, and I literally felt like I had four minutes on national television to show people that a brown girl can do this.Stephanie:Mm-hmm (affirmative) Oh, that's great.Deepica:Yeah. I felt like I could be the Indian Hoda, and just be the next news anchor on the Today Show. I still feel like... I love doing live television, I think it's like... There is a beauty in the imperfections that come with it. And it was surreal, is what the word is, and incredible. And I remember after it was over... The hustle and bustle of live television is very real. The second the segment is over, they're like, boom, boom, boom, moving onto the next thing. And I was like, "That was so fun, let's do it again." Most people were just like, "All right, lady, we're moving on." But then, there was this senior producer who came up to me and she was like, "You should do it again."Deepica:And I was [inaudible] around, and it's so cool because my dad is in the background recording it, so I have all this on camera. But she just was like, "We can't believe it was your first time doing national television, we'd love to have you back regularly." And that was really cool for me, because everyone told me that when you go on national television, it's a cool moment in your life and you move on, and I feel like I proved the exact opposite, that if you have what it takes, you can make things happen for yourself. So, I became a regular doing beauty segments on the Today Show, and was a full-time influencer, which is a thing.Stephanie:Yeah, I saw that. That was one of the first things when I was looking into your bio a bit, and it's like, "Oh, Deepica is an influencer, and I think she's just signed a deal with WME." I'm like, "Oh." So, tell me, now you've got the status, and you're super popular, how did you think about capitalizing on that, and to get out of just being an influencer, and then being like, "I'm going to create my own stuff?"Deepica:Yeah. Well, here's the deal [inaudible] I never grew up saying I wanted to be an influencer or even be famous, but I did grow up saying I wanted to be a CEO and run my own business. And so, when you fall into something like this, it's very weird. But I think what got me through the years where I was just an influencer and didn't have the business side of it was, the end goal was the same. I wanted to change the face of representation for people who look like me, period. So whether that's in the media, or through my own beauty brand, the net goal was the same, and it still is the same.Deepica:And so, what I realized was, I had this opportunity to create a brand around myself that was really once in a lifetime, honestly. And I was just like, "I want to focus in on this and really learn everything I can about the beauty industry." Which at this point, I knew a decent amount. I worked at Birchbox, I had a lot of beauty brand contacts. And really, what I did was, after I quit my job, I emailed all my contacts and I was pretending to be my own assistant, and I was like, "Hello, I'm the assistant to Deepica Mutyala, beauty influencer with 10 million views, Today Show beauty expert, blah, blah, blah, blah, blah, blah, if you want to work with her, whatever."Deepica:And for every 100 emails I sent, I got one reply, and that one reply led to my first job where they asked me my rate, and I had no idea what to say. And then, when they said, "Okay," I realized, damn it, I could have asked for triple. You just learn as you go, and you're your own assistant, producer, editor, manager, agent, sometimes lawyer, which I don't recommend.Stephanie:Nope.Deepica:I'm like, "Bad idea."Stephanie:Yeah.Deepica:But you just learn as you go. And so, I think for me, what got me through being the girl who was waking up and taking selfies, and posting it for literally a career, I got paid to do that, was that I really saw a narrative in the beauty industry that didn't exist when I was growing up. There was no token brown girl, there was always... And even then, there wasn't really a token black girl growing up, that was still in the... Now, I feel like we're finally... It still has so, so much work to do, but I do think that we now have representation happening more than I ever saw growing up, but there still is this tokenism that happens where... I felt like for three years, as grateful as I am, that I've been able to work with every beauty brand under the sun, like a L'Oreal commercial to a Samsung ad that aired during the Golden Globes, and just any beauty brand I could have dreamt of.Deepica:I also realized there's plenty of people out there that deserve the shot to also do that, and there shouldn't just be one of me. There is not just one white girl on the campaign, why shouldn't there be more brown girls in the campaign, more black girls in the campaign? That experience as an influencer is what led me to launching LIVE TINTED as a community platform prior to launching the actual product itself. I didn't plan for that, again, being a community brand wasn't a thing growing up either, but it was lived in experience that truly inspired the idea that, before this launches with a physical product, let's create this united community where they dictate our future decisions.Deepica:And really, for me, honestly, I was craving a home where people were talking about things in the beauty industry that was not a thing, heavy topics like colorism. But then, other topics like facial hair, and things that you just didn't say. And so, we created this almost like collective home where every day we were just posting about faces that I felt like you didn't traditionally see being shown in campaigns. And it just started to organically grow into this very, very engaged community, which then at a point, I was like, "Let's create products for them, it's time." And that's kind of what led to our first product launch in may of 2019.Stephanie:Yeah. We had a really cool company on... Food52, same thing, they build up a huge community first, and then, afterwards, she was like, "Oh, it was only right to then start creating products to service that community." But my biggest question is always like, how did you build that community? How did you transfer the audience from TV to then go into your community? Or from Instagram, or YouTube, or wherever you were, how did you pull them in and get them engaging in a way where you're like, "They're here for the long haul and now I can move on to phase two of a product?"Deepica:Yeah, no, it's a good question. I think for me, I feel very grateful that those three years as an influencer, I created a community of people who felt very connected to me, because again, there wasn't a lot of brown girls doing this. And so, I felt like they would be ride or die for anything I put out into the world. But that is, to me, a huge responsibility, and it was like, "Okay, so now, if I create this brand, I don't want it to be about me, I want it to be about something so much bigger than myself."Deepica:So, if I had just launched it, which a lot of investors in the beginning were saying to me like, "Why do you have to create this community first and spend money on creating content as a community platform and things? You already have a following, create a product, show proof of concept, and build it out." I just didn't listen, and I felt really strongly that LIVE TINTED was bigger than my own identity, it was about a larger multicultural group of individuals coming together and finding common ground in industry where I felt like people were so divisive.Deepica:And so, I really wanted to kind of bridge that gap and create a really powerful, I think, warm home for people. Which, I think, a lot of brands are saying they're doing now, and it's awesome, right? I'm not hating, I think it's all for the greater good. But people are smart, and they can understand when some people are being performative versus not. And I feel very grateful that since day one, we've had values and core beliefs that we've... Of course, they evolve, but the core belief around diversity and inclusion is the pillar that has stood strong since the beginning.Deepica:And so, for me, on an actual tactical level, the first 20,000 followers, I would say, came directly from my following, from... I remember before we even launched it, I was trying to find photos of deeper skin brown women online, and it was virtually impossible. I was just searching and the team was searching, and I was like, "You know what? Let's use the power of social media." And I just posted on my Instagram, "I'm working on a project on stories, if you see any deeper skin melanated brown women, use #livetinted." I'm not even kidding, within minutes, the #livetinted was flooded with just tags. It was just like this community of women who have been thriving to be seen. They are just craving for this industry, who has neglected them, to pay attention to them.Deepica:So, when you ask, how I did it, sure, my following definitely helped do it, but what really did it was that there was just a natural need. These people didn't have another home, and they were excited to finally have it. And so, I also think that it grew from just being a South Asian Brown collective to being much larger. Because again, I talked about topics that were very specific to me and my life. I didn't force it and try to speak to something that I didn't know personally. And with that, I recognized colorism is not an issue in just the South Asian community. To be honest, I'm learning so much as we build this brand that... I had no idea, this is something that so many different cultural backgrounds face around the world.Deepica:And that actually, excited me, because I realized that there is an opportunity to create a brand with pillars that, like I said, unite people from all different cultural backgrounds rather than divide. And so, it just organically grew from there, just by talking about things that I lived in and experienced in my life.Stephanie:Yeah. That's very cool. So, how many people are in your community now?Deepica:Well, it's a tricky number, because I say 600,000 because I include my community as well. Because quite honestly, my whole brand has shifted to just LIVE TINTED stuff, Which I love. Yeah, we're a little over 600,000.Stephanie:Cool. And how do you think about keeping them engaged on the different channels? What are you doing now that's maybe different than when you started out in what? 2015, 2017?Deepica:I mean, yeah, because my brand started in 2015, and then LIVE TINTED started in 2018. But you have to evolve with the times. Perfect example is, hello, TikTok.Stephanie:Yeah. Actually, my favorite influencer is an Indian girl on there with her dad.Deepica:Oh yeah, she's amazing. I love her.Stephanie:What's her name?Deepica:Sheena? Is it Sheena? It's starts with an S.Stephanie:Yeah. She's so funny. But you never see her dad, it's always just his responses to things that she's doing. I've never seen her dad anyways in any of her videos. But she's my favorite. She's hilarious.Deepica:I'm obsessed with her. And yeah, I feel like there's this understood brown community bond where you're rooting for each other, because it's like, so many of us were told to be doctors and go down this traditional path. Yeah. One of my goals for the brand is to spotlight not your traditional beauty influencers, but people like her who are just creative creators. I think there's this incredible creative community that I've come across just from building LIVE TINTED that deserves so much spotlight. We have big plans to only continue to spotlight them in a bigger way as the brand continues to grow, Which I'm excited about. What was your question, again?Stephanie:[inaudible] Yeah. Okay. So, [inaudible] I like to derail things every once in a while, but back to saying... You said you had to change with the times, from what you used to do to what you do now, and you said, of course, TikTok, what are you doing today to keep your audience engaged? And how do you think about treating the different platforms different, [crosstalk] people right now are connecting with them best?Deepica:Well, I think, first and foremost, I don't try to pretend like I know something that I don't know. And so, luckily, at this stage in the business, bringing in an intern that's in college that can do TikTok for us, because I'm like, "Wait, what is this dance move? What's going on?" So, I think hiring subject matter experts is something that I feel like, finally, oh my gosh, because I've been just doing everything for the longest time that now, it's like, let's hire for people to do what they're good at.Deepica:But of course, you have to have a pulse and know what to even hire for, right? It's like, am I looking for an email expert? You have an X amount of budget, if you're going to focus in on email versus... Social versus paid versus all these other marketing levers, you know what makes sense? For example, for us, influencer is such a critical part of the business, because a lot of them are my personal relationships, but we need to continue to grow that network to the people... Just like the girl you just mentioned, there's a whole community of people that are continuing to create and build every year, and so, for me, it's about staying on the pulse and making sure you feel comfortable evolving with the times.Deepica:Facebook is still a powerful, powerful sales channel, for sure. And so, we do need to be relevant on there. But if you're a small team, and you have to pick and choose your efforts, for us, it's been deprioritized, and eventually, we'll get back there. But I'm way excited about LIVE TINTED impacting the next generation and helping them be a more tinted future, where everyone sees beyond the hues of their skin.Deepica:And so, I get really excited about tapping into a younger audience because they are the future of this entire industry, than going towards maybe an older audience. So, these to me, are just the little things you have to keep your mind on, what is your goals? What is the audience you think that you can really tap into? And what are they doing? And then, you decide your marketing leverage based on that.Stephanie:Yup. So, how are you thinking about tapping into TikTok then? I mean, you're mentioning partnering with an influencer who isn't a beauty influencer, but could still probably drive results. And I know earlier you said influencers, and you kind of cringed too in thinking about that. So, tell me a bit about, how do you partner with them? Does it work? How do you make sure that it works? All the details behind them.Deepica:Yeah. I cringed because I feel like the word influencer has been so like... It's been created into this like comedic relief for people, and I think that's what makes me cringe. But one thing that I feel really, really strongly about, is the value of these creators. I think of them as creatives that are just really changing the landscape of marketing. And I think that it's just the word influencer used to really make me cringe because I felt like it wasn't respected. And as somebody who went through being an influencer, and I still am an influencer, at the end of the day, [inaudible]... By the way, something people forget is influencers have always existed, they were just called celebrities before.Deepica:The definition is evolving and changing, and it's going to continue to evolve and change. If you have a platform and an audience, you are an influencer, you have an influence of some sort. And I think it's actually a really powerful thing, if you think about it, because it makes you realize, anyone can be an influencer, and it makes people empowered to use their voice. But the part that I get really excited about, like I said earlier, was this creative community, and how we can work with them. The same way I told you, these girls were just wanting to be seen. These creatives are just wanting to be seen, and they've never been given the opportunity to be seen. So, how is it that LIVE TINTED as a brand can tap into these people, and really invest time and effort as an internal team to search for these people, and work with them, and not go against the grain, and go against who everyone else is wanting to work with?Deepica:Listen, we're still a small company, so paid partnerships is something that I can't wait to be able to do. It's like, are you kidding? I went through it, I want to be able to do it for other people. So, we're working on trying to grow those relationships now. So, when we have a full budget in place, we support these, I would say, underdogs, versus going towards the people that everyone else was going to, because that's no fun.Stephanie:Yeah. And I mean, that's a big theme that I'm hearing too, is finding more of the micro-influencers who have a very engaged following, but they might only have a few thousand followers, versus a million, but those few thousand are ready to convert and really buy the products, and do the things that you're doing. How do you go about finding those people? I mean, it seems hard to have to go through TikTok and Instagram, and find people that might not show up on your feed right away, if you are kind of searching through all that.Deepica:Well, there's a lot of cool tools now that we've actually just invested in, which... Honestly, for me, my plan was to do it the old school way, of just investing the time, finding people, and I think, that to me, was the way to go, but there's supplemental tools, like there's this new platform... I sure don't know if it's new, it's new for us, called GRIN. And it's a way to manage your influencer partnerships and relationships, so you can actually have data and analytics to back up why you're doing certain decisions. And it's like, traditionally, in PR, you send products out, you hope somebody posts about it, who knows if they do? Tracking that is really... It's just a lot, so you need to have the manpower to be able to do it.Deepica:And now there's these tools in place that make it a little bit more scalable, which is really great. But I don't think anything can beat the just human aspect of finding a gem of a person and saying, "This is who I want to grow with." And I now, luckily, now that there's a team in place, I can spend my time doing those things, because, first of all, I truly believe that is the special sauce that comes from a brand, is those little efforts you put in that take time, that really set you apart from the others out there. I don't want to be the person who partners with the biggest TikToker, and not just because of the financial reason, which I think... I don't want to speak for other people, but I think a lot of times, the theme is to go to micro or nano influencers because of budget reasons. And to me, it's really exciting that they're untapped, and have a voice, that they're... You just want to continue to empower that voice, I guess.Stephanie:Yep. Yeah. I love that. So, how do you think about strategic partnerships, or when it comes to when you're getting investors? I mean, I'm thinking, okay, you have Bobbi Brown who is very big in the makeup space, what did that look like? Did you have that in mind when you partnered with her, like, "Oh, maybe you can kind of showcase my line along with your brand?" How does that work? And how did you think about picking strategic investors instead of just going with the first person who might give you money?Deepica:Yeah. That's actually exactly what happened too. So, I learned so much through my fundraising process, so it was my first time doing it, and what I came out of it realizing was, nothing is more valuable than experience, and that includes a cheque. I think I was taking people's cheque, but really, what I was taking was their experience, that's what I wanted to learn from.Deepica:And so, I had a couple term sheets where it was like one large cheque from one VC... Which, by the way, that whole process is a whole thing in itself. But I feel grateful to say that... I actually don't feel like I had as much trouble being a woman of color getting investors on board as much as I think I've heard a lot of my other girlfriends who are women of color, specifically, black women, which is just all sorts of messed up in its own, that... I feel very, honestly, grateful that I didn't go through that, but I also think it's really messed up that I didn't go through that as much. But that process has taught me so much in what I want to do in my future of... There's so much I want LIVE TINTED to do to help other women who want to create their own brands. But when I went through that process, I was like, "Wow, I really don't want one person this early in my business to dictate my decision-making."Stephanie:Yup.Deepica:You're learning so much in the beginning, and the last thing you want is for someone who knows nothing about your business, who just gave you a cheque, to say, "You need to go into this retailer, or you need to do this partnership, or grow this, or hire this person." So, instead, what I did was tap into a network of people who I worked my off to build my entire career, and tell them, "I'm launching my own brand, and you've been somebody who has been a mentor in my life in some capacity." And really positioned it as an opportunity to be a part of the growth of what I'm building. And I feel very confident about that. I still feel that way. I know and I feel very competent about what I'm building, and what the impact it's going to have on the world.Deepica:And so, I went to all of these mentors or just advisors in my life, and they put in more angel cheques, strategic angel cheques, really, just to get their advice. I'm learning from their mistakes. Andy Dunn from Bonobos, the other day, I sent my annual investor update, and he was like, "Just continue to focus on profitability, don't overspend on marketing, learn from my mistakes." I'm learning from all of their mistakes. Payal Kadakia from ClassPass, she would say, "Focus on your why, don't ever get distracted from the why." And Bobbi Brown, she was the first to tell me, "Go on a motherfucking date." That's what she told me to do. She literally, told me to go on it, and she used that word. So, that's why I said that, I apologize [crosstalk].Stephanie:That's okay.Deepica:But that's Bobbi for you. She is such a dope woman. She is no BS. She told me, she was like, "At the end of the day, you will succeed because that's who you are, but you don't want to look back and wonder, what was it all for if you don't have someone to share it with?" And so, maybe that's a part of the reason I came back to Texas, and I'm kind of taking a step back and zooming in on things. But they all give me different advice for their own nuggets of what they went through. And Hayley Barna from Birchbox, is now a partner at First Round Capital, she put in a personal cheque, and I feel like I could always call her to ask her about fundraising advice, because they've obviously raised so much money.Deepica:It's just truly invaluable to be able to talk to people who've gone through the mistakes and the wringer to say, "I'm thinking about [inaudible]..." I'll give you an example right now. Food52, I love what they're doing. You mentioned them earlier, I love what they're doing. I love the idea of a collective ecommerce shop where you're creating content to commerce. I think it's really smart. And I've gotten distracted in the past of wanting LIVE TINTED to also be that as a collective home for inclusive beauty. I wanted to create the next sephora.com that truly zoomed in and focused in on, you won't be on our site unless you are caring about inclusivity. That doesn't mean you have to be a POC owned brand, we will absolutely prioritize it more than most people do, but I had this vision.Deepica:And at the end of the day, I think the biggest, hardest thing for founders to remember is to stay focused, eye on the prize, and I think... That doesn't mean I don't want to still do it one day, but we have way too much momentum happening as a singular brand that I think I just have to stay focused. And these kinds of founders in my life, if I called them, and I'm like, "But what if we, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah, blah." They will all pull me back and say, "All in good time, young grasshopper." [crosstalk].Stephanie:That's awesome. And I mean, that is the time when a lot of founders do kind of want to start seeing profit, want to go big, want to experiment a bunch of different areas, and I think that's really smart. And I also love Bobbi Brown's advice too. I mean, I love the personal aspect when you find people like that. Deepica:Another thing, on the Bobbi Brown thing, her specifically, we met through the DM.Stephanie:That's great.Deepica:Yeah. You can connect with anyone in the world, you have no clue what the power of social media... There's so much negative that comes with it, but there's so much positive. And I remember on my launch day, I was in New York City doing a ton of press, and I went to Jersey to meet with Bobbi Brown in person, and she was like, "Wait, your launch day is today, and you're here?" And I was like, "Yeah, you're Bobbi Brown." [crosstalk].Stephanie:I'm here.Deepica:Yes, of course, I'm here. Because to me, she was doing inclusive beauty before inclusive beauty was inclusive beauty. And as a Jewish woman who grew up in New York, I just find it to be so impressive that she recognized that... She sees it as like... Obviously, I care about making sure that everyone feels represented, that's how she sees it, and I feel like I wanted to learn from that person. I want to create my own Bobbi Brown cosmetics one day, and I feel like with her guidance, I'm well on my way.Stephanie:Yeah. That's cool. So, I mean, you have a lot of good mentors and investors. I mean, Andy Dunn is another good one. He actually was our first investor in our company too-Deepica:Oh, wow.Stephanie:[inaudible]. So, good people you got there. What is something that they're guiding you on right now for 2021? How are they kind of... I mean, Andy has Walmart, but he got to look at... He has a lot of things that he can see around ecommerce at Walmart. What are people like that saying right now? Like, "Hey, Deepica, you need to start preparing for this. Or we're seeing this shift at our company, so maybe you need to kind of pivot, or adjust, or do something different to be ready for this new world." Anything high level like that?Deepica:I think the biggest theme and general advice, is slow and steady growth for the win. And that's very different from what I was told when I was first fundraising in 2018, it was all about the next billion dollar unicorn company. And I have a couple of people who were unicorn companies, Payal Kadakia as an investor, and it's like, they are all also advising me like, "Just don't get caught up in the noise, don't get caught up in the quick turnaround story." And the more I'm seeing what's happening in this bubble, that's kind of bursting, it's like, "I'm so happy that we didn't take on a ton of funding, we're growing slow." And I'm going through the fundraising process right now for our Series A, and the reality is that we don't need to fundraise right now. It's this back and forth of like, we're doing really well and we can go really slow.Deepica:But at the same time, like you said, Andy is with Walmart, and one thing we're exploring right now is retail partnerships. And so, one thing that I think is very apparent now is, it's a very different ecommerce and D2C climate than it was five years ago, as we know. And I think the idea of being omni-channel, it's not an option. We have to be omni-channel to also beyond just like the business and the metrics, because myself being, again, that 16 year old girl who dreamt of having her own beauty brand, it's about impact too. And I want my physical products to be able to be touched and held by people who are in store. And again, go down those beauty aisles and actually see yourself represented. And I feel like we're the brand that needs to do that in a big way.Stephanie:Yes. Beauty feels hard to me though from ecommerce. I mean, I'm just thinking about... I went to Tarte, which is of course, a beauty website, and I was ordering things on there, and it still feels so hard to figure out what you need to buy based on your skin tone. And it's asking me all these crazy questions, which you're probably like, "Yeah, those are obvious ones." Like, do you have a pink with a yellow undertone there?Deepica:Undertone.Stephanie:I'm like, "I..." And it literally has 50 options, and I'm like, "I don't know, am I pink? Am I yellow? Am I green? I'm not really sure." So, beauty feels hard. I mean, I know obviously, being in retail, being in person is important, but during this time right now, where that's been a little bit harder, how did you think about adapting your ecommerce experience in a way that people could know what they wanted, or what was meant for their skin? It just feels so hard.Deepica:And it is really hard. That's totally true. We're actually going through a site revamp right now, and it's all going to focus on community, which I know is such a buzz word. But the best thing we can do is tap into all these people who, again, have been just dying to be seen and be featured. And they're not like the person with all this following, whatever, this massive following. And to me, what we can do is... The best marketing tool we have is them, and see them, the product, have them create the content, have them be the things we feature on our website, so people like you can go directly to the site and see themselves and say, "Oh, well, I look like her." It just helps.Deepica:I think Rent the Runway is the first example I saw of a company that... I remember shopping it and picking a dress, because I saw girls who had my body type, and I was like, "Oh, well, she..." All the reviews, I think it was [inaudible] that they used on their website that is really great customer review experience. And I remember when we created livetinted.com, I wanted to use [inaudible]. So, we do for our review system, because I wanted it to feel really real, a yelp kind of situation where you're truly feeling like you trust that person telling you which product works for you.Deepica:So, it's tough, but there's tools and ways to make it better. And I think just leaning into people and humans, and having them be a part of the experience, and creating a really strong customer service experience so they want to meet that review, is all important.Stephanie:Yeah, that's great. I also think that technology is evolving to a place now where... You should be able to have your face in front of your camera, and take a picture, and then be like, "Here's exactly what would go best with your skin tone or something."Deepica:It's getting there, and there's apps and stuff too where you can do that, but lighting is such a factor. We're getting there, but with beauty, it is tricky. And I think all the tools I've seen this far, none of them have worked for me. That was one of the business ideas I wanted to do in college, I was like, "It's just too hard to shop for beauty online." We'll get there though.Stephanie:Yep, I think so, too. All right. So, let's shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question, and you have a minute or less to answer. Are you ready?Deepica:Yeah, sure. Okay.Stephanie:All right. What one thing will have the biggest impact on ecommerce in the next year?Deepica:I would say new ways of leaning into people and community. Yeah. I just said that, but we're currently revamping our ecommerce site, and the biggest thing we're focusing it on is people and experience, and tapping into the human aspect of what people are looking for when they're buying something, which is as emotional as a color corrector to solve their dark circle issues. And so, I think if you continue to focus in on people, community, how they can drive purchase decisions, you'll thrive in the ecommerce world, especially in beauty where things are very... You want to see yourself reflected.Stephanie:Yep. I love that. What's the nicest thing anyone's ever done for you?Deepica:Wow. Is this personal or business? I mean-Stephanie:Whatever comes to mind, whatever you want.Deepica:This is the first thing that comes to mind, because we just talked about it. You should always value every person you meet in life, because you never know where it's going to lead, and come back, and connect, and help you in the future because... I didn't work directly with Hayley at Birchbox, but when I quit my job for her to... She introduced me to XFactor Ventures, which is our first VC that came on board, that gave us our first cheque, which then created a ripple effect that made other people think we were legit, that created another ripple effect. And I think that confidence in somebody who only... I worked with her but at a very bird's eye view and stuff, and so it's kind of like... I'm so grateful for that. And not just her, just generally, I think, when I think about the people who have taken the bet on me, I think it really makes me feel like I'm here for a reason, and I have shit to get done.Stephanie:Yep. That's great. What ecommerce tool are you most excited about right now?Deepica:Right now, it's GRIN, that's the one that we're literally doing trainings on right now. We're really trying to optimize. I think the influencer partnership space is something everyone's trying to figure out and find a way to scale, and I'm hoping and hopeful that GRIN can help us do that.Stephanie:Yeah. Wow, that's awesome. We will check that out also. If you were to have a podcast, what would it be about? And who would your first guest be?Deepica:Well, I'm working on getting this started, but it's going to be... It will be called Hue To Know, which was... Instead of [inaudible] To Know, Hue To Know.Stephanie:Yeah. I like that. That's cute.Deepica:And we had a whole video series for LIVE TINTED when we were just a community platform, where we interviewed people, they came on, and they talked about their identity and culture, and it was all these... To me, they were dope creatives, again, people that you should know about that you may not, like a black Muslim rapper, or a gender nonconforming South Asian artist. And these people who were like, "I'm going against the grain and creating a path for myself, and living tinted." That's really, to me, what that means, and what LIVE TINTED stands for. So, I want to bring them on as a guest, and create it into a podcast form. And my first dream guest would be Meghan Markle, because I think she's incredible.Stephanie:That sounds great. Well, if you need help getting off the ground, you know who to call.Deepica:Great. Okay. Cool. Yeah.Stephanie:All right. And then, the last one, what is your favorite business book where you often go back and think about it, or read quotes from it, or whatever it may be?Deepica:Man, I wish I had it so I could show it to you right now. This was a pile recommendation. It's called Financial-something, Financial Terms... Financial... I'm going to have to find it and send it to you.Stephanie:[crosstalk].Deepica:Yeah. But she told me... Before you go into fundraising process, as a person who's never done it before, there's a lot of terms that get thrown around, like convertible notes, and cap tables, and all this stuff. I didn't know what I was doing, so she was like, "It's going to feel like you're reading a dictionary, and it's going to be dense, but you want to be able to walk into those meetings with full confidence, and I highly recommend that you read it." And so, I have to look for the book and find the name. There's a lot of different terms in there, so I'm blanking on the title itself.Stephanie:Yeah. I think there's a good book that it reminds me of called Venture Deals by... I think it's Brad Feld-Deepica:That's what it was.Stephanie:Oh, is that what it is?Deepica:Damn it, it was Venture Deals. You're right. Yes. Yes.Stephanie:Okay. Well, [inaudible] because I'm like, "That's a good one too." Where I remember-Deepica:That was it.Stephanie:... when we were thinking about raising money, I'm like, "All these terms, I don't know what they are. Pre-money, post money, cap table. Oh my God, what are we talking about?" So, that's a good book for anyone raising money right now.Deepica:That was it. Mm-hmm (affirmative).Stephanie:Awesome. Well, thanks so much-Deepica:[crosstalk] But it's a good book, but yeah.Stephanie:Yeah, yeah, yeah. It's a good book. And then, after you read it, you're like, "Okay, I'm done with that for a while." Awesome. Well, thank you so much for joining the show. It was so fun having you on. Where can people find out more about you and your work?Deepica:Well, I'm obviously, going to plug LIVE TINTED first. LIVE TINTED is L-I-V-E T-I-N-T-E-D, livetinted.com. @livetinted all on social. And then, you can also follow me at @deepica, D-E-E-P-I-C-A on all social outlets.Stephanie:Amazing. Thanks so much.Deepica:Thank you for having me.

In 2008, the economy had tanked and John McDonald was left at a crossroads. Rather than withdraw into comfort, he took the opportunity to do something a bit crazy. John was a woodworker who spent time at trade shows, and someone once suggested that he make cabinet doors that fit with IKEA cabinets. With nothing to lose, John launched Semihandmade to do just that. Now, a decade later, Semihandmade has seen consistent double-digit growth year over year and has been featured in countless blogs, interior design social posts, on the feeds of influencers worldwide, and in the homes of tens of thousands of people. On this episode of Up Next in Commerce, John tells the story from start to finish, including how he built a successful ecommerce custom cabinet model on the backs of the IKEA brand, and how he’s now launching into the DTC space with the first US-made custom cabinet DTC offering, BOXI. From finding the right partners, to building an omnichannel approach that doesn’t handcuff your resources, to challenging yourself to strive for more, you’ll learn something from John and his story that just might help you level up your ecommerce business, too.  Main Takeaways:Perfect Partners: For ecommerce brands taking on an omnichannel approach, there is no reason to tie up a lot of your resources into retail spaces and showrooms. Instead, exploring partnership opportunities with other brands in a similar category might be a mutually beneficial way to expand your brand, the brand you partner with, and offer an in-store experience to customers who seek one.Meeting the Moment: The world of home furnishings and interior design is changing rapidly, especially as A.I. and VR technology enter the marketplace. With that tech, users are gaining more flexibility to design their own spaces without leaving home, which means there is an opening for DTC companies that are tech-first. Step Up or Step Out: You can’t let competition scare you, let it inspire you to raise your game. By surrounding yourself with the best and forcing yourself to compete against them, you have to level up to simply survive, and succeed expectations to grow your business in a meaningful way.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, Cofounder at Mission.org. Today, I had the pleasure of chatting with John McDonald, the Founder and CEO at Semihandmade and also Boxi. John, welcome.John:Thanks for having me. It's great to be here.Stephanie:I'm really excited to have you on. Before we get started, I was hoping you could give me a little background, and for anyone who doesn't know what Semihandmade is and also Boxi, how did you start it? What is it? How do I think about it?John:Sure. Semihandmade is a company that's been around, I guess, just over 10 years now. We're based in Southern California. We make doors that fit IKEA cabinets. What that means is, if you want to buy a kitchen, bathroom, closet media system, IKEA, for the most part, gives you the amazing flexibility of not buying their doors. For a kitchen, you'd buy the cabinets, you'd buy the interior components. Then we have over 40 different options from entry level doors to some really high-end, one-of-a-kind offerings.Stephanie:I love that. Do I think of it like white labeling? You take IKEA's [inaudible] and then you can add like rose gold fixtures on it, yeah?John:Yeah, absolutely. Yeah. The credit, obviously, goes back to IKEA. This is an ever expanding ecosystem that's been around probably for 15 years now. People that make amazing slipcovers that you can put on their sofas. People that make furniture legs, companies like us that make fantastic cabinet doors. It's a way to get a really high-end look for a really mid-level price.Stephanie:Cool.John:I'm even fortunate to grow quite a bit with that.Stephanie:That's great. How did you come to this idea?John:I'm always honest and clear that this was ... It's a spectacular idea that somebody gave to me.Stephanie:Who gave it to you?John:I think his name is David Stewart. I think he's a photographer. Look, I'm 53. I don't know if I'm older than a lot of the people you talk to.Stephanie:A little.John:I came to things a little bit later. I had moved to California from the East Coast when I was 21. Well, wanted to get rich and famous, work in the film business, didn't really have any kind of plan, bounced around with that, was writing, not making any money like everybody else I knew waiting tables. Then I woke up in my early 30s and said, I got to do something with my life. It was post 9/11, which is a wake-up call for a lot of people. I tried a bunch of different things. Then I somehow landed in woodworking and furniture making at first and cabinetry. I got good at it.John:Through the late '90s and early 2000s, that's what I was doing, Southern California based custom furniture and cabinetry company called Handmade. I worked hard. I approached it like a business into my late 30s, which was different than a lot of other people I knew, the craftspeople, spectacular artists, but just no head for business, no interest in business. I always looked at it like as a business like any other. That's what I was doing through, again, the early 2000s. I was networking and blogs just started to happen. I was doing a lot of woodworking shows but also design shows. At one of those design shows in 2008, I think somebody came up to me, this guy randomly and said, "Have you ever thought about making doors for IKEA cabinets?"Stephanie:Was that something that others were doing? Why did he have that idea? Then was like, I'm going to tell John to do that.John:It's interesting. Again, I always want to give credit where credit is due. On top of him, there was a company called Scherr's based in North Dakota that has been making doors for IKEA cabinets just a little bit prior to that. People are always making their own doors as well. It is because IKEA lets you not buy doors when you buy their kitchens. I don't know why he mentioned it. I think part of it was because when I did those shows, it was a show called Whelan Design, which is a great show in Southern California at the time and back when Dwell magazine was really in its heyday and just an iconic brand.John:I was always like the one off independent company. It was me and all the big brands. It would be like Kohler and Caesarstone and Sub-Zero. I was there alongside them with my little custom furniture setup. I don't know if he took a liking to me, but we just spent that day, the Friday and then the following day just talking about it. I had no idea what he was talking about at first.Stephanie:That's awesome. Then for people listening, I know when I first heard of your brand and was looking through it. I'm like, oh, it's just like a small thing, a big thing. Then I was looking through some of the stats and you've been named like the fastest growing private company every year by Inc. magazine [inaudible].John:Well, yeah, one of. Yeah, one of many. Inc. 500 originally, we've been on that list, I think, six or seven years now.Stephanie:You've had double digit growth for almost a decade, year every year.John:Yeah. It's exciting. It's, again, one of many things. I try to be candid and clear, but I never expected this. I never thought in a million years I'd be doing this. Every year that we were fortunate to grow, even my ambition or dreams, it got bigger. It's like get to a million, get to two million, get to five million. It's been exciting. Believe me, I don't take it for granted. That's why I enjoy doing things like this, because I always ... At 40, I was newly divorced. I didn't have any kids at the time. I have a son now. He was nine. I lived in my shop for a year, because I got divorced.John:I didn't have anywhere to live. I had options, but I wanted to hide. I lived in my woodworking shop. I lived on my sofa with my dog. I just said, I got to do something else. It was a huge wakeup call. Then that's when the conversation I had, I think, six to nine months prior. It was like, maybe I should try this. Again, in terms of the second acts in life, whatever, I was 40 and had no clue. 10 years later, more than 10 years later, it's different.Stephanie:Yeah, that's very inspirational. Cool to hear about and cool to see where you can start and where it can grow to. How did you grow the company? From starting out where you're woodworking, you're building stuff, and then you're like, okay, I'm going to buy IKEA stuff and make it better. How did you get in front of people and be found in general?John:Like anything, Stephanie, it's like you look back on it and as much as it was, a long journey at times were so challenging, whatever. You get through it, and you gloss over it. It's only when conversations like this that I do get an opportunity to look back. The reality was, again, I had a nice custom furniture cabinetry business. I had some really good clients. I work with some good architects and designers. Then in 2008, the market tanked. Everybody went in the dumpster. I had to do something else. Things had slowed down.John:I started saying to a couple designers and architects, "What if we try to do integrate some IKEA cabinetry into the custom project." Because at the end of the day, a box is a box, and you're just going to see the outside of the beautiful panels and the doors. There were a few people that took a chance on that. That's how it ... It's like anything. I was 100% custom in 2009. Then it's like, okay, you can start mixing it in and starting to organically ... I don't even know what kind of ... I wasn't doing advertising. Blogs had just taken off.John:Apartment therapy had seen see me at a design show and written about me, which was amazing. That was a really big deal. L.A. Times did a story on me, which is incredible. Yet it was always organic. Through 2010 and 2011, it became, okay, now we're doing half custom, half IKEA. Then every year, it's a little bit more headed towards full IKEA. The truth is, I don't know when it was, maybe 2013, when it was fully just making doors for IKEA. It was fun. It was always a steady progression, always growing every year.Stephanie:Yeah, sustainably growing, which is a lot different than a lot of the brand.John:Yeah, profitable every year. Beginning, doubling every year, which, again, was not what I expected. Part of that, what's funny too is I have a lot of incredibly supportive family, but also friends, guys that I grew up with. When I was in California at 21, or 22, or 29, or whatever, they were amazing. They love me. They were supportive, but they probably had no clue where I was headed. I didn't either. Now, it's fun. I gave them a hard time constantly about the fact that they probably gave up on me.John:Not in a bad way, but it's just ... I mean, I do think that there is a time to cash in your chips. It's great to have dreams. There was an interesting like Scott Galloway kind of thing recently about if you should follow your dream. His overly simplistic thing is definitely do not follow your dream. Because unless you're willing to pay your bills to start because following just exclusively your dream can be incredibly impractical. The people that you admire, suddenly, the people that I admire weren't these head up in the clouds kind of people. They worked really hard. I geek out on founder stories, things, podcasts like this. I'm fascinated by that. It's never an overnight thing, or at least it's rarely. Again, I'm 53 now. This is all house money.Stephanie:Wow, that's awesome. When you started, getting more money, you're doubling growth, more revenue, obviously. Where did you invest? How did you think about investing that? Because I'm sure you're like, woo-hoo! I'm going to go have fun now.John:No.Stephanie:No?John:It was never like that, no. It's interesting. I would say I like nice things like some people do. I'm pretty frugal. In terms of the business, everything lives inside the business. I had a partner at that point. Up until three years ago, we made everything in-house. I was the original guy making the doors and packing them up and then shipping them in New York or different places. Then my partner at the time, Ivan, came on board. He was the guy cutting the doors. Now, we were fortunate to grow.John:Eventually, we had close to 35, I think 35 or 40 people that were working in production. Up until three years ago, we topped out at 75 people and half of them were making products. Now I'm proud to say we don't make anything in-house. Everything, it's made around the US, some at the top manufacturers in the country. That was a huge shift. To answer your question, everything is in the business. That's why you see revenue numbers are different than other things.Stephanie:Yeah. What were some mistakes maybe that you remember where you're like, ooh, I would have avoided this if I were to do it again, or especially in the more maybe the past five years or something. Not early on when you're just ...John:Right. If we're going to say 10 years ago, the mistakes that I made were unavoidable in the sense that I was creating this out of thin air. Ivan and I were just making stuff up as we went along. We were two guys. He's a little bit younger than me. He came out from Boston. I came out from Philadelphia to be writers. In some ways, no business starting this kind of business. In the last five years, it's probably the mistakes that I've made are ... I don't know, maybe waiting too long to really build up the team, which is not to say that we didn't have good people, we did.John:Part of my job now is just looking at the next 12 months and 18 months and say, hopefully, where are we going to be? Where do we think we're going to be? What are we going to need then? As someone who is ... Again, I think pretty honest about their limitations or whatever, we only thrive with people that are smarter, better, or more experienced than me. That's one of the biggest changes in the last at least six months, where we really just hit the gas and brought in some really amazing complementary pieces.Stephanie:Yeah, cool. How do you think about building on top of another company? What if IKEA changes their cabinet line or does something different, did that ever worry you, building a business that's ... I mean, a lot of businesses are built on another businesses, obviously. How did you think about that?John:We've always been after market. With IKEA, it's pretty well documented. We've gone up and down with them. I think in most ways, they appreciate what we do. Certainly, it's undeniable that we sell kitchens that people wouldn't normally buy if we weren't available. They also, I think, hate a little bit that we're there. I don't know this is arrogant or anything to say. They're not going to change their model because of us. They're never going to not sell doors. Even if they did, I would say to people like, "Then just buy the doors that literally cost $2."John:Then we'll pay for them and recycle. Their model is that a la carte wide range of pricing. We've always been respectful. Again, I have immense respect for them and what they built. It's extraordinary. Even when my fiancé and I moved into a new house and it's like going there, buying the basics for the house, it's just nobody can beat it [inaudible].Stephanie:Yup. I'm doing that now as well. I think, like you said, you're opening up a market that they probably wouldn't have access, otherwise. When I'm about finishing this house now, I honestly would not have thought to go to IKEA to get cabinets. I don't know. Then when I saw you guys, I'm like, oh, well then you can have the finishings and the colors and the things that I actually want. I don't actually care what a cabinet is like inside or behind the scenes, but I care about how it looks. A lot of the IKEA stuff does look like you know sometimes.John:Yeah, it's understandable. Because at that scale, you can't get that fancy and creative. This is the part where I drop names, just in the sense that what I do love is we work with some really cool people that do make IKEA more accessible. It is people like Karlie Kloss and Coco Rocha and all kinds of celebrities and high end designers and influencers. They, more so than us, have normalized IKEA. That's good for everybody. If design is supposed to be democratic and accessible to everybody, there's nothing more accessible than IKEA. Obviously, Amazon, Wayfair, and things like that.Stephanie:Walmart? Walmart is coming back. I have bought rugs now, a little egg wicker chair. It's from following influencers. I'm like, Walmart is coming back.John:You're right. It's funny, because the same thing with my fiancé, Stephanie. Yesterday, she was looking at different coffee tables. She said, "This is ... " She showed me a thing. I was like, "That's awesome." She said, "Oh, it's like the Kelly Clarkson line." I was like, "This is great." It's true. Look, certainly, you can make the argument that some of that stuff is more disposable and it's going to go into a landfill and less sustainable. I understand that. The reality is, not everyone has the same access to disposable. If you can get cool stuff, it's reasonably priced and it lasts for a few years. I don't know. It's hard to turn that down.Stephanie:You mentioned that you partner with influencers and celebrities. How does that relationship work?John:Yeah. I think that's always been a huge differentiator for us, one of several things. From the start, I always felt no self-consciousness about reaching out to people. Whether it was blogs, I would say, "This is what we're doing. Here are some photos. I'd love for you to write about us." Or even influencers. The biggest one and the one that we worked with the most is Sarah Sherman Samuel. We've had a door line with Sarah for three years. That's a situation where, god, I think 2014 or 2015, she reached out and said, "Hey, I bought a bungalow in Venice. I love IKEA cabinets.John:I wonder if we could partner on some doors." We did a small collaboration, gave her a tiny discount. She painted the doors. She styled everything. She took photography. The kitchen went completely viral. It's one of those kitchens that is everywhere. I think a really cool Farrow & Ball paints, brass and mixture of this light green and white. That just opened the door to all these other relationships. People saw that and started reaching out to us. It's been an amazing thing. The truth is, we've gotten to a point where we've had to pull back on that because it's just a different way to market the brand. It can be expensive. It's definitely grown us, there's no doubt about it.Stephanie:Have you thought about Netflix series? I'm just thinking, wow, they should be on a home remodel type of show. How perfect is that? People always trying to do amazing things on a budget on like the HGTV [inaudible].John:Yeah. We've talked about that stuff in the past. I like that stuff. Again, I don't know. I do think it's interesting our growth. That's how I always look at things, behind the scenes of how businesses grow, especially within that. I do like someone we haven't worked with in a while, the Studio McGee, the Netflix series, which is great. That's really interesting, especially after listening to another podcast like our friends at Business of Home, where ... I left the podcast with so much more respect.John:Because my interaction with them was a long time ago, and then I just see the photos and the beautiful stuff. Just the growth that they've had and the behind the scenes, and again, hearing their story is really extraordinary. I enjoy watching that stuff. I don't know if I want to watch this. I get sick of hearing myself talk. Maybe if it's everybody else, that might work.Stephanie:Yeah. I was just thinking like, wow, that'd be a really good partnership strategy. I always bring up the Container Store partnership that they had on the Netflix series and just how much Container Store sales went up after that series.John:[inaudible]Stephanie:I can see why, same thing with cabinets and stuff.John:Yeah, it's interesting. Because even that, again, I'm a lot older than you, but in the early '90s, whenever Trading Spaces came on and that was huge like ...Stephanie:I watch Trading Spaces, just to be clear.John:I mean, even in the '80s, the godfather of that is like Bob Vila in this old house. That's definitely before your time. That was restoring amazing New England homes and stuff. It was master carpenter, Norm. I think Norm Abram is absolute craftsman. That was the start. Then you had Trading Spaces. Even now, you would have thought, after 10 years, that goes away, and it hasn't. That's the thing. Is it the ladies like Home Edit and stuff like that? I don't know. It hasn't evaded, it just only grown. Obviously, Chip and Joanna Gaines and the dynasty that they have built. It doesn't show any sign of stopping.Stephanie:Yeah. It seems like the world is now just moving to a more curated collections like I'm going to look for someone who knows my style, so I don't have to waste time looking at everything. Whereas before, it's like, oh, I'm going to go to Target to get this, and then I'm going to go to Dollar Tree to get this. I make it up. I think, 10 years ago is very much about DIY, but all over the place. Now, it's like, okay, I'm going to follow Chip and Joanna Gaines, their line at Target, whatever that is, and follow the people that I know are my style and be ready to immerge myself in that brand.John:Yeah. The interesting, whether it's the 180 to that is the amount of growth that Restoration Hardware has had, where it's just almost like meteoric, being a complete luxury brand and selling the whole experience. It is like the Ralph Lauren of today, and now as they move towards hospitality restaurants and sounds like hotels. Part of your brain thinks, man, you can't sustain that. How do you keep growing? There is a market for that. Even when you watch the Studio McGee, their services are not expensive. Amber Interiors, who we work with, people like that, incredibly talented, at the really high end of the market. They keep growing.Stephanie:Yup. Tell me a bit about your omnichannel approach. I saw that you had showrooms around the country. Then you're, obviously, online as well. Now you're moving into DTC. How do you think about keeping a cohesive story of your brand but also expanding and reaching a lot of people on different channels?John:I guess the biggest challenge, if it is the biggest, it's just the fact that what we're selling comes at a higher price point than the average online purchase. We sell certainly, if you're doing a GODMORGON bathroom vanity, that then may cost $150, $300, $400. We're selling cabinet doors and panels and complementary trim and things like that that can cost $3,000, $5,000, $20,000. Again, it's not buying a pair of Warby's or an Olay bag for a couple hundred bucks. There's a lot to it, a lot of back and forth. Excuse me.John:Showrooms we're always a part of we've got to show people our product, especially when we're asking them to spend that much. The benefit of IKEA is, even though they're still a privately held company, there are only, I think, less than 60 around the US. What I could say to people to say to you, Stephanie, or wherever, like you're in New York, go to one of the five local IKEAs. Then come into our mini ... I never want to call it a showroom, because it could be 200 square feet. It's got some cabinetry in it. It's got door samples, things like that. There would be a whole experience.John:I would always say, if you want to see a kitchen, go to IKEA and you can see 15 kitchens or see 20 kitchens. Want to see the doors? Come see us. We've had that in New York, in Brooklyn, in Chicago, obviously, in LA, Minneapolis, a bunch of different places. Again, trying to be reasonable about that. I don't want the overhead of signing leases if I don't have to. What we've typically done and we will continue to do even more so is partner with other great brands. It is like a multi-brand approach.John:With our lighting friends, with hardware companies like Rejuvenation, Fireclay Tile, upcoming collaboration with Caesarstone, it's partnering with Cambria in the past. It's just saying, let's do this collectively. Because the kitchen is, as someone said to me, "The base purchase, if you're fortunate to have him as a house, there's a car, and then maybe there's your kitchen." We're trying to grow the company that way. We started what I think is an amazing ... I got to [inaudible] blog anymore. It's that. [inaudible] stories that launched last summer.John:That was the idea that I wanted to bring together all these great writers, great content to help promote the brand, of course, but also expand us, again, to make that cliché to becoming a lifestyle brand. On the one hand, it would be enough to have a really successful cabinet door company. I just think we have the opportunity to do so much more. That's what something else we can talk about, is this brand Boxi, which is going to launch at the beginning of March. That really is direct to consumer. That's our own product, no IKEA. That's a whole different thing for us.Stephanie:Alright. Let's move there next after my one thought. I've many ideas when talking to you now.John:Awesome.Stephanie:What about having like partnering with IKEA on their AR app or developing your own AR app, instead of having to have a showroom, being going to IKEA, pull up your phone, and then you can swipe through the designs of ours, and you can see exactly what that trim would look like, what that doorknob or whatever, so then you eliminate showroom.John:It is interesting. Look, the thing with IKEA, they have partnered with people in the past. Obviously, places like Target have done an amazing job of that completely. As you said, Walmart too.. It always seem like the natural fit with us. If you were going to do it with anybody, it would be us. In terms of AI, yeah. IKEA has been slow and is put a huge push in the last couple years of their online presence and their economy. They have an app they launched last month. What we are doing with the new brand is working with a 3D AI company called Skip. It's going to launch in the next few months. That lets you basically not go in showrooms.John:There are ways to order this new line of cabinets, and one of them is to make an appointment and someone comes to your house and 3D scans your room. Then you design remotely. With 80 hours of AI and machine learning and everything else, it's compressing that and then presenting you with design options.Stephanie:That's cool.John:That's where we're headed. All has changed dramatically in the last year. COVID or not, it was headed towards that. The new iPhones have the camera technology where you can almost do that. Maybe in 12 to 15 months, you don't even need a guy to come to your house. You can do it with your iPhone. They're already pretty close.Stephanie:Yeah, I think it's fair. I have a little tape measure app on my phone and it says, okay, scan the whole room. You do that and then you can measure everything. The placeholders all around the room for you and [inaudible].John:Yeah, it's fascinating. Even brands like Primer that launched last year, which do the work with other brand partners, and you want to click on like the Hygge and West Wallpaper, you can hold it up to your wall. They'll show you different swatches and things like that. It's interesting. For us, yeah, that is part of what we think is a differentiator. IKEA is always going to have massive brick and mortar. Even though they move in some cities towards smaller footprints, it's still footprints that are 20,000 to 150,000, as opposed to 300,000. There's another cabinet line that's launching.John:It just launched, it's got a 30,000 square foot showroom on the East Coast and 100 kitchens. You go in and wear the AR or the VR goggles. That's completely different because you're looking at some space that has nothing to do with yours. It's kind of what you're saying. The point is, things are changing so fast. With Boxi, it is saying, can you make this as DTC as possible? The caveat being, it could cost $10,000 to $15,000, to $20,000. It's not like ...Stephanie:Okay. Tell me what is Boxi then since we [crosstalk].John:Boxi is the first American direct to consumer cabinet brand. It's a cabinet system for the entire home. It's basically taking the last 10, 11 years of everything we've learned from IKEA and saying, let's try and offer something. I don't know, if it's ... I don't want to say better than IKEA. Because again, I've huge respect for them. It's a more complete package. Certainly, the quality is there. The accessibility is there. One of many things that we're going to improve on is the fact that Semihandmade customers have to go to IKEA first.John:It's a two-part process where you've got to go to IKEA. You've got to order the cabinets and hardware. Then you've got to order the doors from us. Thank God that they do, but especially in the last year, IKEA, like a lot of people, has suffered horribly with supply chain issues. We have customers now, unfortunately, it's January, they're hearing, cabinet boxes might not be available for three, four, or five months because ...Stephanie:I ordered a couch from Pottery Barn and four months out. [crosstalk] order, I just didn't look, I guess.John:As a business, on a personal level, that annoys me because I want ... That's a whole thing. We have such ridiculous expectations because they're easily met or they have been up until now. Not to blame Amazon because that's too easy. I'm a hypocrite about Amazon too. With Boxi, we're saying, no big box stores. Somebody can come to you, things ship, leave the factory in a week. Part of what we're doing, you're from Palo Alto, I don't know if you're born there, but it's almost like an In-N-Out Burger West Coast approach. Meaning we're going to do a limited number of items, and we're going to do it great. If you want ...John:What they do is they're great. What's interesting about that is they ... I think just little background on burgers. I think the founder was best friends with Carl Karcher who started Carl's Jr., another big West Coast place. In the '50s, they open hamburger stands right next to each other. The In-N-Out guy's thing was always, I'm not worried about competition. You're welcome to open across the street from me, next door, or whatever, because I'm just going to bury you. I'll just be that much better. Not like in an obnoxious, overly competitive way. Just like, this is going to raise our game. With us, with Boxi, yeah, limited selection, fast turnaround ships in a week, never need to go to a big box store. It's built in the US at a really competitive price point. That's the idea.Stephanie:I love that it's built in the US. I think that a lot of companies right now are bringing things back into the US and some are struggling seeing how expensive things can be and what was happening overseas and maybe how it's just different here. What did you guys learn from IKEA that you're taking with you? Then what are you discarding where you're like, we're going to do this different though?John:Again, in some ways, I learned everything from IKEA. Look, I learned a couple things. One of them is you can't compete with them in terms of pricing. That's the most basic thing. I always say like, with Amazon, the same thing, you can't ... I mean, then the turnaround lead time. Up until recently, with COVID, you could buy a kitchen today and bring it home today. Nobody else could do that at a crazy price. Best of all, really high quality. IKEA, to their credit, pretty much every year, as long as I can remember, the last 10 years, is right at the top of like J.D. Power customer satisfaction in terms of quality, customer service, things like that.John:You could complain about certain products from IKEA and their quality, but their kitchens, I think, are inarguable. As much as I'm not affiliated with them directly, I always get defensive when people would slag them. Because it's also understanding that the product that they offer, and this blows some Americans minds, but it's a particleboard core with a melamine skin, a three-quarter melamine box. That standard in the entire world for kitchen cabinets. The most expensive cabinet brands in the world are constructed the same way.John:In the US, that's less the case because 70% of the market wants a frame around their cabinet. It's literally a face frame cabinet. The European style that IKEA is called frameless 32 millimeter. Again, I've learned everything. We're deeply indebted to them.Stephanie:Well, is there anything that you're changing though now that you are exploring DTC that's [crosstalk]?John:Yeah. We'll always have the ability. With Semihandmade, one of the differentiators were ... You'll always have this when you're smaller, we're microscopic compared to them. It's just being able to be nimble, to be able to get more custom, to be able to offer certain versatility that they could never do. Limited run doors, ability to do appliance panels for really anything. The Semihandmade, we could always do that. We can do upgrades with matching ... We used to do open cabinets that match your doors and things like that. We do less of that now.John:With Boxi, what will be interesting is because the hope is anybody to scale and to have short lead times, quick turnaround, we're not going to offer as much customization. We've learned like what ... In terms of people's taste. We have eight doors, which are basically the biggest sellers for Semihandmade. It's basic white, gray, black, and some wood tones. It's not saying like we have at Semihandmade of 45 choices. That's fun to me. Because if anything, you can have too many options and that is paralyzing.Stephanie:Yup. Just going to say that I appreciate when things are curated or you showed me something cute and I'm just like, "I'll have that." Whatever that is, the white, the gold, and the brown, perfect. That's what I want. Not choose every single piece of it. Which I think is for a lot of ecommerce, that's what I've heard throughout many interviews, is don't give so many choices, show people what you think or know that they're going to want based off of preferences or how they're interacting with your site or whatever it may be.John:That's part of if there'd been multiple challenges with getting Boxi off the ground understandably. I think the biggest one is like you said, with even a call today, there was seven of us on the screen and I said, "If the seven of us were the typical technology guys or girls that knew nothing about socks, but we're launching a socks brand, we wouldn't bring all this baggage to it about what we thought we knew." With Semihandmade, we have all this great knowledge, but some of it can get in the way with the new brand.John:Because the new brand, for it to really work, you can't do all the customization. There are certain things that Semihandmade where we'll make exceptions and we'll do things. Of course, you always want to service the customer, first and foremost. It's just recognizing that if the goal is for this really to take off and grow, which I think it will, we have to be a little stricter, a little more brand fidelity, like say, this is who we are, this is how we get to where we want to go, and then stick to that.Stephanie:Yeah, that seems tricky. Having two different hats where you and your team are like, we know what works, this is what works, we build a company that does this. Then having a slow creep where you turn the other brand into the same thing. Like you said, you have to really be strict about creating a whole new company with a new vision and making sure everyone's on board and not just let the old company creep in and [crosstalk].John:I think in some ways too, whether in a good way or a bad way, the fact that we've been fortunate to have growth and success for Semihandmade, it's either made it easier or harder to get the new venture off. Because it buys you certain time. If we were a startup, we raised funding. We've got 18 months to runway all these different things that will be different. Probably, things have taken longer. On the other hand, we wouldn't have been able to do it. When this launches, what we leverage is, yeah, it's 10 years of Semihandmade. It's 25,000 projects. It's incredible.John:We have 2,000 semipro designers around the country that are champing at the bit to offer this. It's relationships we've got with Rejuvination and Kaff appliances and Caesarstone that are going to be partners. I continue to remind people and even myself like if we were a startup, we'd never have this stuff. We wouldn't have five, six amazing influencer projects that you're going to roll out in the next six weeks with the new launch. You'd be launching and then keeping your fingers crossed.Stephanie:Yeah, yeah. Okay, cool. Alright, so let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have one minute or less, prepare, get your water, [inaudible], shake it out, do what you got to do. Alright, are you ready, John?John:Yup.Stephanie:Alright. What one thing will have the biggest impact on ecommerce in the next year?John:That's great question. Do I have a minute for this?Stephanie:Yeah, a minute.John:I think it depends. I'm cynical about the fact that in some ways, yeah, a lot of companies have taken off, Instacart and things like that, but even like Wayfair. I was reading Bed Bath & Beyond today. I think the question is whether or not that'll be sustained. When life comes back to normal, which hopefully, inevitably will, certainly, people will be more inclined to shop online. There's no doubt about that. The world is changing. It's not going to go back. There are companies that have gotten a little frothier or whatever that I think that artificial is going to wear off. It's normalized.John:It's great. There's stuff I would have never done. Even with not ecomm, but with Zoom, we hired a new president, Beth and Molly, who runs marketing and stuff. I hired three of our highest people remotely. They're based in New York. I would have never done that. I would never trusted people or trusted myself. Now, it's normal.Stephanie:Yeah. I was slow with grocery delivery and curbside pickup. It forced me to do that because I was the one who always want to go to the grocery store, look around with my friends, whatever it maybe. Now, I'm like, oh, I don't really want to go there anymore. There's no point. I'll save my time and do other things.John:It is amazing. To me, it's more interesting to see how those people make money. That's the part where it's one thing to do great revenue. Obviously, profitability is a thing, unless it's not your money, unless you have a thing too. When it is your money, it's much more of a focus.Stephanie:Yeah. We just had someone from Intel on who was saying that they work with a hardware store and they're struggling because contractors were coming in and placing 40, 50 item orders for curbside pickup.John:All of it?Stephanie:Because they're like, why would I send in my contractor and paid him to be there for two to three hours when I could just have you all do it. They're struggling with trying to figure out the program because they weren't really expecting them.John:Yeah, that's interesting.Stephanie:I'm like, that's scary. What's the nicest thing anyone's ever done for you?John:Business wise or otherwise?Stephanie:Anything, whatever comes to mind.John:I guess the biggest cliché was my son's mom having my son. That's probably ...Stephanie:That's a good one. Having three kids, I appreciate that answer.John:I mean that from heart.Stephanie:Yeah, that's a good one. What's up next on your reading list?John:I constantly have five or six books I'm reading. That's interesting too, whether it's because I pursued writing for a long time. I haven't made the jump to eBooks. There are few writers that I correspond with on Twitter. Twitter is another thing that I didn't use that much before this. I've asked them like, "Well, what's the feeling on eBooks? Is it like cheating or whatever?" Of course, these guys and girls want to sell books. They're not considered cheating if you buy their eBook. The response I got from a bunch of them was, it's best in some ways for nonfiction.John:I read tons of nonfiction. I'm reading Say Nothing, which is a story about the troubles in Ireland. I'm finishing a great book on ecommerce called the Billion Dollar Brands book, something like that. That's spectacular. I've got so many. I'm reading a book on Chinatown, the making of the movie. I love a lot of different things. It is mainly. It's less fiction now. It is more nonfiction.Stephanie:Very cool. What is your favorite cabinet design? What's in your house?John:My house, it's interesting. Because in my house that I share with my son who I split custody with, we have a more contemporary kitchen. It's walnut. It's unique. We sell a fair amount of walnut and it is one of a kind. Every kitchen is different. That's a little more contemporary, even though it's wood. It's contemporary. In the house with my fiancé, where she lives, that's a more traditional. It's a shaker kitchen. It's got some really pretty hardware. I guess I'm very particular about what I like. In general, even when we she and I have arguments about furniture, I just say like, "Buy something quality and it'll fit with everything else." I know it's a copout, but that's where I'm landed. I love eclectic as long as it's nice quality.Stephanie:Yeah, cool. Alright and then the last one, if you were to have a podcast, what would it be about? Who would your first guest be?John:That's a great question. I like a lot of probably IKEA. I like a lot of different things. Even podcasts, same thing. I didn't listen to before, frankly, a year ago. I listened to one the other day. Marc Maron was really talented, funny guy who've been doing podcast for about 10 years. He had this guy, Daniel Lanois, who's a big time record producer, did U2 and all kinds of amazing people. I was amazed at the depth of Maron's knowledge of music. I don't have that. I don't know. I like diverse things. I don't know if I could do it.John:Because I like to think I'm a good listener, but I'm probably not because I'm always ready to say something. Obviously, like in your spot or whatever, to do it well, you should be listening to people. Again, I love screenwriting podcasts. I like anything. I like news, podcasts.Stephanie:Okay, so it'd be a little bit of everything. I like that. That's cool.John:I could do this kind of thing. If we're talking about remodeling, if anything, would always have an edge to it. If I were going to do a show, that's the thing. I gravitate less, maybe not towards Gordon Ramsay, but like Anthony Bourdain. There would be an edge to it. It wouldn't be ... Even when I was inside people's houses, I don't know if I was combative. I had very strong opinions about with architects and designers and homeowners and what I thought they should want. The one thing I don't like is when it's all sweet and sacristy and artificial. Totally with an edge.Stephanie:I like that. That sounds good. Alright, John, well, this has been a pleasure having you on. Where can people find out more about you and your work?John:Sure. Semihandmade, we can do semihandmade.com. Then Boxi, which launches March 1st, is at boxiliving, B-O-X-I-L-I-V-I-N-G.com.Stephanie:Okay, thanks.John:I appreciate the time. This has been great.Stephanie:Yeah. Thanks so much for coming on. It was fun.John:Thanks for having me, Stephanie.

For more than two decades, Dan McGaw has been engrossed in the world of marketing technology. And through the years, there has rarely been a new MarTech tool that Dan hasn’t given a shot. Why has he placed such an emphasis on knowing the latest tools available to marketers? Because every company, big or small, needs to invest in tools that will elevate their business rather than slow it down. Some tools are better than others, and sifting through the rubbish to find the diamonds is a daunting task. That’s where Dan and his company, McGaw.io, come in.On this episode of Up Next in Commerce, Dan discusses all of the marketing technology he’s bullish on at the moment, and why he believes ecommerce companies will be investing heavily in certain tools and operational activities. From campaign tracking, to multi-touch attribution, to recommendation engines, to personalization, Dan’s toolbelt has a tool for you, and he also has some comforting words for anyone who is worried about the potential of a cookieless future. Main Takeaways:Text Me Back: Companies are misusing SMS messaging as simply a way to send promotional messages. Instead, brands should think about texting as a way to open two-way communication with their customers, especially through the use of direct questions and interactive exchanges.An Easy Way to Personalize: There are opportunities to personalize the shopping experience that are being left on the table. Brands reflexively choose the easy option of sending a cart abandonment email reminding users what they left in their cart. What would be more effective is sending an email that utilizes their entire shopping history, including things they didn’t add to their cart. Just because they didn’t add a particular item, doesn’t mean they weren’t interested. After all, they simply could have been distracted or otherwise disposed of before making the transaction. C is for Cookie: Despite the fact that many people are worried about the death of third-party cookies, they will not completely disappear. And, in fact, there are actually already alternatives to cookies available that work in a similar way. Find out what they are and how to use them by tuning in!For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone and welcome back to Up Next In Commerce. This is your host, Stephanie Postles, co-founder at mission.org. First things first, I would love it if you could hit subscribe and leave a rating and review, let me know how I'm doing and what you guys are interested in hearing in the future. All right, onto the show. Today, we have Dan McGaw, the CEO and founder of McGaw.io. Dan, welcome.Dan:Hey, how are you today?Stephanie:Good. How are you?Dan:I'm doing amazing. I'm living the dream right now. So having a ton of fun.Stephanie:You are. So tell me a bit about McGaw. So I was reading about your background and what you were known for, and someone called you the godfather of the marketing tech stack and one of the original growth hackers. So if I'm setting you up big here, let me know. But tell me, how did you get those names and what does your current company do?Dan:Yeah, great question. Well, I got those names from other people calling me, which is pretty fascinating to say the least because I remember the first time that I heard that I was like, "What?" But then it kind of caught some legs. So I've been in this space for over 20 years. So I've been doing marketing technology marketing since 1998. So I've been doing mass emails since before mass email was even a thing. So I just have been around for a really long time and I've been in the marketing technology space since before there was even a concept known as marketing technology. So definitely have had a long history of doing this. I've been an entrepreneur for a long time, even have been, another funny, fancy title that I was given is I am a United States ambassador of entrepreneurship.Stephanie:I saw that too. I didn't know what that meant though so I was afraid to put that one out there.Dan:Right? So I was selected by the United States State Department to be an ambassador of entrepreneurship to Mexico and I was flown to Mexico and I had to advise a bunch of companies and corporations and colleges on how to build entrepreneur ecosystem. So it's just been really fascinating. I think that the big thing that I will just say is I have a really big mouth and I'm always out there doing something stupid and I'm not afraid to say how I feel. So it's kind of wound me up with some cool places and I've done some really cool stuff, but yeah, I've had an amazing career. Everything from working at a cemetery, to making pizzas to now of course doing some really bad-ass marketing technology stuff. So I hope that helps.Stephanie:So what'd you do at the cemetery? Now you've piqued my interest there. We'll just have a conversation about that now.Dan:Yeah. Right. And that was the creepiest job I've ever had, but so awesome. I just did, I was a lands crew person and I weed whacked and I blew leaves. I think I was 14 in middle school, but I've always had the hustle so I just wanted to work and make cash. And I mean, I started my first company when I was 13 and was very successful in that business. So I've always just wanted to make money and that's actually how I got into marketing technologies. I saw marketing technology was going to blow up and we chose a vein in there and stuck with it and it worked out really well.Stephanie:That's cool. So how did you see that area was going to blow up? I mean, you're saying that it was before there was even a terminology around it. How did you see this as an industry I want to get into and now I know what to actually do to even be helpful.Dan:Yeah. Fascinating question. So my first company was basically in the music business. We started one of the first online booking agencies for DJs and producers. So everybody here has probably watched the Fyre documentary on Hulu or Netflix. I literally did that same exact business except for I was not a fraud, which is so fascinating. We started an online website and bulletin boards marketing DJs and producers that basically would do raves. Today we now call it EDM and it's all this big billion dollar industry, but back then it was like nothing. And I was just young and didn't know what the hell I was doing. And so I said, "Hey, we're going to figure out how to promote these DJs because I love raves like any ..." What 13 year old goes to raves? But either way-Stephanie:Yeah, really. Where are your parents? We don't know where Dan went. He's been gone for a week.Dan:Supporting me a 100%, crazy enough, but I started that and then really started figuring out the internet and none of our competitors were using the internet. They were still just like relationship based. And as we went through that process, I learned a little bit about development, HTML and nobody was doing anything. So so far in like those days, AOL didn't even have a concept of mass email. You had to get white listed to send mass emails. So I just kind of started doing it to come to find out that there wasn't really any technology back then to do this stuff. So before there was all this tech to be able to make it happen, I was already kind of making it happen manually. So I got really involved, naturally Google analytics which was urchin came out and like ad tech became and there wasn't MarTech. It was just ad tech at the time, Google analytics and traffic tracking.Dan:I got really big into UTM tracking, which is kind of the first bit of it. So fast forward a little bit to like 2000, I think like 11 or something like that, Kissmetrics was a large analytics company. I got hired there as the head of marketing. I was hired to replace Neil Patel, one of the founders. So I wound up becoming like the head of marketing at one of the rocket ship analytics companies. But all the stuff in between the middle there was kind of you just made it up as you went. And then 2011, 2012 was when MarTech kind of like took off and I saw that as a humongous opportunity. So I've just kind of have stayed in that industry.Stephanie:Okay, cool. And what brands do you work with today for context?Dan:Yeah, really, really good question. I mean, our clients weren't ... So our company mission is to help companies of all sizes realize that their customer data is their most valuable asset. So we work with some really, really small companies all the way up to some really, really big ones. So some big ones that people would know like King's Hawaiian Bread. We do a lot of their implementation work. We are managing their ecommerce. Hydro.com, which is like the Peloton of rowing. We do work with them. Some other people might be familiar with like forksoverknives.com. They were a long time client of ours. We no longer work with them, but I mean, we helped blow them up. These are some really popular brands that people would be aware of, but we also work with some of the MarTech companies. So even Kissmetrics has hired us. Segment.com has hired us. Looker which is owned by Google has hired us. So it's really across the board. It's been a lot of fun.Stephanie:Cool. And what kind of challenges do you see the bigger brand struggling with today? And is it kind of similar to maybe with the smaller brands that you work with? Like same kind of thing or are they very different problems you have to focus on?Dan:I think the problems are exactly the same. I think the tactics which are being used are slightly different because the tool set changes, but there's two primary problems that most companies have and that's when they come to us, which is great, is they either lack visibility into their customer journey or they lack the ability to engage in the customer journey. And this is a pretty big problem that every business faces is that they can't see what's happening in that customer journey or they can't act in there. And that's where the marketing stack which is what our specialty really is, is we help companies basically connect all the tools together, integrate them, operate them and be able to gain visibility into that journey so they can provide engagement there.Dan:And this is one of the biggest problems that you're facing in marketing today because everybody's figured out ad tech. Everybody's figured out email automation and everybody is kind of trying to figure out analytics now, but there's still this huge middle and bottom that nobody understands and that's really where our company kind of sits nice and sweetly. So the customer journey is huge right now. I mean, that's what everybody's focused on.Stephanie:Cool. So where do you see companies going wrong right now in the customer journey? Like are there similar things or like you guys all keep doing the same thing and it's messing everything up or is everything very different, all the problems that you maybe discover as you were starting to look into how the brands are operating.Dan:Yeah. The biggest thing that we see that that's fairly consistent, and it's the thing that no marketer really focuses on is it's the taxonomy of the integration. So like what does taxonomy mean? So every time that somebody does an action or we learn an attribute about somebody who's coming through our funnel, that's got to have a name to it. It's got to have a label or as you might call, nomenclature. We've got to all call it the same thing. And that's a big problem that we see across organizations and I'll try to put this ... If you're working with an online education company, the marketing team is calling it a signup, but the development team is calling it an enrollment, but customer success is calling it a registration. And the problem is when this happens and the data all goes into the systems, you now have three attributes for the same exact action, and it makes it really hard to tie all these things together.Dan:So the fundamental problem that we see most companies have is that they just don't have a consistent taxonomy across the stack. So when they finally start looking at the customer journey, they have it all in different namings, and then they have to spend all their time transforming things to get them to line up. So that foundational thing is the last thing everybody focuses on, but when they get that right and it works across the entire stack using a unified taxonomy, which sounds so technical but it really isn't, they really are able to create magic because now everybody is calling the first name of a customer by first underscore name in the analytics, but in the attributes you see in marketing automation is Fname. Right? So that's usually the key problem that we see is that taxonomy is wrong. And then the second problem that we see is that the tools are not connected.Stephanie:Yeah. So it's funny talking about how the taxonomy is wrong. A lot of people listening might be like, that's so easy. And I'd say for a startup like starting out, it's very easy if you know to do that from the start. Like of course, have your variables, make sure they're exactly what you want and train people up, have your data dictionary, whatever you may have so everyone uses the same term. But actually when it's a bigger company which I've seen like back in my Google days, everyone's operating off different things. How do you bring the org together and all the different departments to be able to not only agree like this is the variable, but then make sure everyone's using it that way? Because that's actually a lot trickier than I think some might think.Dan:Yeah, it's extremely, extremely hard to get that cross department alignment. And it's fascinating because like this is one of the things that a growth team would ultimately help with, is kind of cross department alignment in regards to these things. But growth is always focused on action, not necessarily planning. So a new companies or I don't want to say new companies, excuse me. The new role a lot of companies are rolling out is revenue operations, marketing operations, sales operations, revenue operations is the big position that SaaS companies are hiring because it straddles across marketing sales and customer success And that's the big thing that's happening. And I think in a lot of the enterprise companies, you're going to see a lot more of these revenue operations style roles that are coming out that try to align it.Dan:Because everybody's realizing if your data's crap, okay, great, we can't do any of these cool things. This is where a lot of companies are getting their CIOs involved. I think the conversation over the past two years has really shifted away from, hey, we're just talking to marketing technology. So now the CIO calls the shots for all of this because the CIO is the one who makes the decision on business intelligence and all that. So I think a lot of CIOs own the problem. I don't think that they understand the problem because it's outside of their purview, which is sales and marketing. So I think it will be really, really hard, but it's really important for a company to have good data. And without good data, you're kind of, you can't do machine learning, you can't do artificial intelligence, you can't do personalization. But right now it's the CIO, which I think needs to hire the revenue operations person to really get that done.Stephanie:Yep. Yeah. And a side note, if anyone's like, "I really want to hear more from CIOs," we have a whole podcast called IT visionaries where we interview CIOs from fortune 500 companies. So go check it out. So okay. You get your data all set and correct at the company that you're working with. What's the next thing that you encounter that's either an issue or that you see happening a lot right now?Dan:Well, I mean, just to make sure, I mean, the taxonomy, the data dictionary like you said, which I think is possibly a more common term or a schema. I mean, there's just so many ways to call this, which is ridiculous. The integration of the tools I think is really, really important. A lot of companies don't understand the way that tools can now integrate. We have a concept that we call data recycling. You typically see companies that are looking for what's known as we want our source of truth or our single record of truth. And for us, we find that to be a really, really bad model. What you should be trying to do is mirror your data across many, many different tools over and over and over again, and then recycle this data throughout the entire tools. If you have a single record of truth, which is always great, that means that you're helping one team and holding back many other teams.Dan:So we try to make it so that we recycle the data as much as we can and that's through basically data recycling. Leveraging a customer data platform is always really helpful for this, leveraging tools like Zapier, leveraging tools like tray.io, Workado is always really, really good, but you have to string the systems together along in a very, very structured manner to make it so that that data can even flow. Because even if you call everything the same, if nothing's connected in the right way, you're still not going to make any progress. So integration is also a key part of that.Stephanie:Yep. Cool. So now thinking about a little bit farther down the line like maybe when it comes to actually either interacting with the customer or guiding them around on your website or something, what things can be improved there because I've talked to quite a few companies or people on this podcast who say, "Any plugins, get away with all the plugins, they just slow your website down. You just need to focus on website speed. But then you were mentioning earlier how much do you love tools, and so tell me more about that.Dan:Yeah. I mean, I definitely think website speed is extremely, extremely important. I mean, when you're a large ecommerce company, speed is obviously paramount because it affects everything from SEO rankings to people actually converting on the website. But I also think you have to very much focus on personalization and creating a customer journey for the user. I think there's two kinds of use here. I mean, one marketing automation is great because it enables you to do so much, but sometimes we lose the human element and we kind of forget that people are still humans. They want to have a communication channel with us. So you want to make sure that you can personalize the experience and tailor that experience as much as you can. But at the same time, you just don't want to overdo it. So we focus a lot on personalization throughout the website, getting people back to where they want it to be, back to where they left off.Dan:And this would be, so as an example where you don't want to use a plugin because you want to let them use their experience. As things are happening on the website, we can track that in real time. We can save that in marketing automation, we can save that in any tool. So when the person leaves the website, we can very easily send them an email saying, hey, picked up where you left off. Especially if it's ecommerce, right? Last product that they viewed, they don't need to add it to their cart. I think it's the stupidest thing that we do. We send cart abandonment emails to people when they add something to their cart, because we think they have interest. If you send people an email which showed them the last five items that they've viewed, it adds the same value, right?Dan:Just because I added it to my cart, yes, it means I'm interested. Just because I didn't add it to my cart doesn't mean that I'm not interested in it. It means I probably have a five-year-old that's distracting me and I didn't get to add it to my cart. So we see allowing people to pick up where they left off as a really, really easy thing to do. But personalization in helping them accomplish their journey I think is the biggest thing. Marketers job is ... I come from a developer company where the marketer's job was, we were there to manipulate and trick people. And it's like that's not my job.Dan:But a marketer's job in my opinion is to basically help somebody accomplish their goals by serving them what they wanted in the first place. Right. It's to create that magical customer experience, knowing what they already wanted and serving them that on a silver platter, not tricking them to figure out, oh, you should've bought this, right? And I think that's where growth hacking went bad a few years back is it got a little like slimy and really it's about how do we just create the best customer experience for them through personalization?Stephanie:Yeah. So sometimes I think that personalization that I could see it going too far and I've talked to this a bit on the show before of like when you call in on the phone and it's like a robot and they're pretending to type, and they're trying to personalize it to your name and they're jacking with your name or sometimes you get an email and it's so over the top, like Stephanie, I saw this, this and this and it made me thought of you and whatever. I'm like, "Oh, creepy." How do you walk that fine line of giving people something that is helpful, but not being creepy.Dan:Yeah. And just because you're using the word creepy, it brings back some awesome ... I have a webinar and deck that I did before COVID happened. I was traveling the country doing this talk about automation without being creepy. But what does creepy really mean? So what I advise everybody who's listening to this podcast, grab your cell phone and I need you to go to your text messages and I want you to text (415) 915-9011. I'll just say a number again, (415) 915-9011. And I just want you to text the word creepy to that number and then follow along with the text prompt. There's a bot that will follow along with creepy. And then if you're really, really well known on the internet, you're going to get a super creepy email that will surprise you on what the internet already knows about you and that we have access to through your email. So either way, nice experiment for your people to go try, but-Stephanie:I want to do that now. Now that piques my interest. I don't know if I'm well-known enough on the internet though, but we'll see. It'll pull things from like Facebook. I'm like, "Here's what you're doing, Stephanie, back in high school."Dan:Yeah. We'll see. I mean, and usually the minimum that you're going to get is like we get your zip code or it might have your wrong zip code, but there's for myself and had over 300 attributes. I was like, "Holy crap, the internet knows way too much about me." But that being said, you do follow this line of creepiness to straddle, right? And you have to understand like target as an example can predict with nearly 90% accuracy that you're going to be pregnant within three months or you are pregnant within three months and that's crazy data science that you have and that blurs the line of creepiness. What you have to understand is that you don't want to impact life moments like that. Always, you don't want to precede those things, but what you have to figure out is how do you understand what they're looking for and then just serve that element to them?Dan:Because with an email address and with your IP address, we can basically find out anything we want, which is really, really terrifying to think about. So you have to make sure that you're just superseding what somebody is probably already looking for and there's definitely enrichment that you can get. So knowing that it's raining in somebodies area and sending them an email is not necessarily a bad thing, but you don't need to tell them that you know that you know it's raining, right? Like don't say, "Hey, it's raining, you should buy an umbrella." But yes, it's okay to send them umbrellas and rain boots and things like that, which banana republic knows how to send emails based upon that but they don't say it's raining. So there's a lot of ways that you can be helpful to somebody without telling them that what you're doing. But I mean, you can be really creepy if you want.Stephanie:I mean, I think that it sounds simple, but I like that where it's you have all this information, but you don't have to be like, "Hey, here's the zip code you live in? And apparently there's this festival going on right now." Like you can send something where it's like, oh, how did you know? Cool, okay. That's helpful because now I know of an event or whatever nearby without you saying, I know exactly the attributes of why I'm sending you this email because of this or whatever. So that's interesting.Dan:Yeah. There's an API for that too. When you talk about the events, I immediately think of companies that have APIs that allow you to have events and people's areas. So definitely an API for that nowadays.Stephanie:There you go. So what are some of your favorite tools that you're using where you're seeing the biggest success with right now? And it can be marketing tools., it can be stuff around like helping the customer journey. I mean, what comes to mind where you're like, "Oh, 2021, I'm really leaning into these things or we're implementing these things on our customer's websites."Dan:Yeah. So there's probably two primaries that I would go with. One, I'm super big fan of text message marketing, but I think a lot of companies get it wrong in the fact that they use it as a promotional channel and they use it as spray and pray. So I think text is really, really big. We use a software called autopilot, which is our marketing automation tool. They have an integration with Twilio so you can build a Twilio bot. So earlier I said, "Hey, text this number and text this word to it." It adds you to a subscription list and then it will automatically send you information and it can talk back and forth with you. And those types of technologies are where you really get some interesting engagement from consumers in regards to your services. So definitely is a real unique channel, but I wouldn't say that that's something that you would leverage on your website all the time.Dan:However, as somebody's going through your checkout flow and you collect their cell phone information, this is a way that you can reach out to them. Hey, we shipped your order to you and it has arrived today, right? Provide them helpful tips and then say, "Hey, you received your order. On a scale from one to five, how did it arrive?" And things like that. And providing this two way communication channel is really, really good for consumers. It gives them a communication channel. You do have to connect it to a support system and things like that. But customers really find it unique when you're trying to have a two-way conversation with them compared to like buy my 20% off thing.Dan:People hate getting those spam promotions. They hit stop more than you would like to think. So I think that for me, leveraging the SMS bots, whether that be through Autopilot and I think there's a company called Text In, which does really, really good there. There's another company called salesmsg.com. And no, I'm not talking about the Panda Express MSG, but salesmessage.com. They're more integrated with HubSpot or more meant for sales teams, but they work really, really good for customer support too. So text is huge for me. And then the flip side-Stephanie:How do you think about engaging people in texts? Because that's an issue where, I mean, I even think about like World Market right now just sent me a text this morning, like oh, 20% off. They send it to me like every week. I'm like is every week, 20% off week? I start to lose interest and I just haven't had the time to hit stop yet. But how do you think about building a flow that's going to keep your customer actually engaged and excited to see your texts coming in? So I feel like it's a two-way thing instead of just blasting them with promotions.Dan:Yeah. It's got to be really personalized. And this is why when we think about text messages, we think about it from a helper perspective. Right? So we have to think about like the things that are going to optimize their customer experience, not the things that are going to help us, right? Sending somebody a 20% discount is not helping them, that's helping us. So when we think about the change in that fundamentals is of course like when somebody is coming through your website, like hey, you can of course, hey, do you want to be updated with sales and promotions? Right. But I would target it more, hey, do you want to be made aware when we launch new skirts or hey, do you want to be made aware when we do these specific things, and try to only send the messages what's they're requesting which is going to help them in whatever they're trying to accomplish.Dan:And you get unique opportunities like when somebody is going through the checkout experience, right? Like, hey, do you want us to keep you aware of certain things that they're already interested in or hey, do you want to be shipping notifications? Do you want us to keep you aware of your shipping notifications? And those are good ways to get people going, but asking questions is going to get you much more than, hey, here's 20% off. Right. So I think asking questions, that's where the bot part comes into play is asking the question, like do you feel that our customer experience is optimal? Can you reply back with a one to 10 on how your checkout experience was? People respond back with a seven or two or a five. That's the interaction they're looking for, not hey, here's 20% off, right?Stephanie:Yeah. Unless you walk in the door. That's when I always think I'm like, if I walk into the door of a retail location and then I get that text, cool. I'm happy with it. But if you're just sending it to me when I'm at home ... Yeah. It is so possible. I know I'm like, they've got the beacons in the stores, you can do it. There's so many ways to do it now, but I don't see many brands at least retail locations doing that quite yet. But maybe I just don't go into retail stores obviously.Dan:Well, yeah. Yeah. The retail stores is hard. Yeah. I mean, I definitely think if anybody on this podcast wants to do that, let's do that because I know how to do that, leveraging radar, mobile apps and all that stuff. So like totally cool. I think my favorite campaign was by Burger King. They said if you were within 500 meters of a McDonald's, we will send you a free coupon for a free Whopper and you have five minutes to buy it. So if you had the Burger King app, came in within 500 meters or so I think it was even maybe a hundred yards of a McDonald's, you would get an instant push notification, you have five minutes to get your free Whopper. Holy crap. I mean, can we say contextual?Dan:But yeah, that's all possible. I agree with you. If I walked into JC Penney and JC Penny sent me a 10% off discount, I would totally use it. We were working with an ice-cream retailer, which I can unfortunately say the name. They're trying to create a loyalty program, but they couldn't figure out how to do it. And we're like, "Dude, just put a fricking number on the side of your building that says text loyalty now to this number and you're in our loyalty program. And then connect that to beacons and you can do more stuff with it, connect it to your app and do more stuff with it." And-Stephanie:Did they do it?Dan:No, they didn't listen because they were too traditional, who needs technology either way. But [crosstalk] is super powerful.Stephanie:That'd be a really good thing to do now that I'm in Austin area. So hey, anyone listening from Austin, give me a shout out. I'm here now. Yeah. But that's a good area to do that because there's so much like artwork and graffiti that turns into artwork on all the buildings out here, but people pay attention to it. So I think it does depend on the city you're in of like, are people open to that or will they see it and be like, "Man, there's writing on a building."Dan:Yeah. I think text is awesome. I mean, you just, people suck at it and I think people suck at most marketing in general. They just try to spray out there and hope for the best. So the one other technology, there's two technologies that we're testing a lot right now. One is called ConvertFlow, convertflow.com which is really, really good. The other one is right message. And both of the technologies are relatively the same. They're a pop-up technology that happens in your website, except for they're integrated in with your marketing automation solution and they also track a lot of what's going on on the website. So you can provide real time personalization to the website based upon what people clicked or what people did. And for anybody who follows the B2B space, there's like these drift chat bots.Dan:So if somebody comes to the site, a pop-up comes up, what is your goal today? Did you want to see a demo? Do you want to see this? Do you want to see this? People click on it. And then only the chat bot is able to control like what happens next. The difference with these technologies, specifically ConvertFlow is that when those types of things come up, you can click on something, it will drive you different places on the website, but it can also change the headline copy of the page. It can also change like things that are happening. So if somebody comes back, it can be like, "Welcome back, Dan. We hope that we were able to help you in your last visit. Last time you left off, you were looking at socks, let's go look at socks again, right? Or is there something else we can help you find?"Dan:And then of course you could constantly be contextually changing the experience for that user. For us, ConvertFlow has one of the most powerful engines to it and it's super cheap. These two twins created the platform, super, super cool guys, but they're really good at that. And then the flip side would be right message, which right message is more of a kind of a chatbot-esq. It doesn't change your websites, but it does constantly provide you personalization to push people down the funnel based upon what they sent.Stephanie:Cool. Like how many tests should a company be running to see what works and then how much should they pull it back and narrow it down to?Dan:Yeah, man, you should be running tons of tests. I mean, there's a linear line between the number of tests that you run and as well as the growth that you can create at a company. So I would just say you should run as many as you possibly can, that you can hit statistical significance with, speaking of which we have a tool for that. If you Google AB testing calculator Chrome extension, go check it out. It'll help you know if you have statistical significance. But yeah, I mean really, you should be running tests all the time. You shouldn't be launching anything that's not a test in our opinion. That's a big part of our business.Dan:So companies like Hydro, we run all of their AB Testing experiments and we're always running tests, right? So like for me, you should not be doing anything unless you're testing it. The thing that I would just add as a caveat of that is you have to have enough traffic to run the test. You have to hit statistical significance and you have to know what you're doing from a data perspective because false positives, I lost a company $125,000 in 24 hours because I had a false positive. I made a mistake. Luckily, this was a long time ago, but-Stephanie:What was the false positive? Tell me the story, or backstory of that.Dan:Yeah. I mean, a great problem that you have is that people only focus on one metric. So when you create an AB test, the test, I worked at a company called codeschool.com. Going back to that developer centric company, we were an online education company for developers. We created an experiment called the summer school campaign or summer camp campaign. And I had optimized the AB test for sign-ups and then purchases. The problem was we didn't optimize the test for lifetime value. Lifetime value was 75% less on the winner of the test. So we saw an immediate increase in conversions. We got super, super excited, come to find out that those users were 75% less valuable based upon that test.Dan:So there's a thing known as you have to basically reverse look at tests. So when they've been running for two months, go back and look at that to see if it hurt lifetime value, it hurt retention, anything like that. But we basically had just wrote a headline, which wasn't 100% percent true to the developer. Like it wasn't 100% in line, so they wound up churning after their first I think it was two months. The other users who didn't see that headline stuck around for like six months. So it was just-Stephanie:Okay. So was the headline, it made them think it was something that it wasn't where they came in-Dan:Yeah.Stephanie:Okay, got it. Yeah.Dan:That's what the developer said that we manipulate people and it was like, no, we just had a misalignment in regards to what we wrote. I wasn't trying to manipulate somebody, but either way, that's marketing.Stephanie:Yeah. I mean, to me, that's just always a good reminder that all of this is a long game and anything that's focused on like a quick hit and trying to pique someone's interesting and get them in, it's probably not going to work out long-term.Dan:And if anybody knows of Kissmetrics, that was the whole reason why the company went out of business and got sold to a private equity firm is there was too many people at the leadership level that were focused on quick hits and it's what put us out of business. You got to focus on, you've got to have a good mix of short-term and long-term focus and why we've been so successful and are still successful even at our company and our clients, we focus on the longterm as much as we do on the short term.Stephanie:Yep. Yeah. Very cool. So when thinking about marketing and all these data attributes that you can have on your customer, how do you think about a, sorry, a potential cookieless world?Dan:Oh, it doesn't bother me at all. Cookies, whether you like it or not, the cookie is not going to die. It's third-party cookies they're talking about which are going to die. It's not first party cookies. The problem that people don't understand is we've already come up with millions of solutions to create better first-party cookies, if I could talk, better first-party cookies, which we hide third-party cookies behind. So I mean, we just had a whole debate about this last week.Dan:Cname cloaking and proxies and all this stuff. There's already a ton of ways to kind of hide it and change it. The cookie's not dying. It's just the way that the cookie gets used is what they're saying is going to die. But cookieless world is going to happen. Is it necessarily going to be ... I almost want to say it's a false or that the cookie is going to die because you can't completely kill a cache in a user's browser about what we know about the user or you'll break the internet.Dan:And the internet is not prepared to completely get rid of all those technologies, so there's always going to be a hack around it. So we have a technology called utm.ao that we use for campaign tracking. So if anybody out there uses UTMs, they have a stupid UTM spreadsheet. We solve that problem. But the real problem is that the technology is now making it so that before you even before you even get to the website, we know who you are. So that's all going to be passed to the website through URL parameters, and there's all kinds of hokey stuff there. So I guess like I'm not that stressed, if that makes any sense.Stephanie:So why are other people so stressed? Because I listened to different ad tech podcasts and other marketing shows. And I mean, there's been so many conversations where people are stressing about it. So why are you so chill about it then and they are so worried?Dan:Yeah. Well one, if you're an ad tech company, Apple's out to cut your throat, right? Like there's just no way around it. Facebook is in a complete battle with Apple, which I think one, Apple is totally doing this for a promotional stunt because their job is to own your data, right? Like don't let them fool you, they know every single thing you do and they hold it on. It's the reason why they're one of the most valuable companies in the world is they know every single action you do. So for a Facebook, it's definitely really, really concerning because they have to be able to get companies like, and I'll just use one of our clients, King's Wine to figure out how to do Cname cloaking and proxy changes and stuff like that, which is really, really hard.Dan:But if you're using myself as like your consulting firm, like that's our job is to figure that stuff out and to solve those problems for you and to deal with it. So I guess like for me, I'm not stressed because that's what we do. But for the ad companies, like how the hell did they get everybody else to know how to do that, right? They've got to teach mission.org how to load a advertising pixel in this certain way and there's no way that mission.org is going to figure that out unless they hire me. So that would be the reason why there's the big difference is I actually know how it works. Most people have no idea how any of this stuff works.Stephanie:Yeah. Okay. Well that's good then. So then no one has to be worried and just hire someone who can help you, sounds like the gist of it.Dan:The general thesis of it. And it's expensive. It's a lot of service that stuff. So I mean, the problem is that 95% to 98% of the internet is not going to be able to understand it or fix it and that's where a lot of people are really panicking on how do we get this done? But there's always a hack.Stephanie:Yeah. And a certain point though, I wonder if Apple is going to have to change the way they do things. I mean, I know that they have been like ruling the market for a long time, but I see now that they're trying to get into something like podcasting and they have big competitors out there who already know how to do podcasts advertising, and they know how to show the dynamic ads and actually showcase metrics to the advertisers. There's so much competition when it comes to that. I can see Apple having to change the way they do things and provide more data and show the ROI instead of being like the black box of like yeah, just put it on here and it's in your best interest because we're a big platform.Dan:Yeah. Well, we have to remember that they did invent the pod cast and that came from the iPod. But they're allowed to, I mean, I think when you have that dominance, you're allowed to be slow to things. I mean, when we think back, I used to run a bunch of mobile app companies and like they sucked at giving us data about the mobile app. So we had to figure out all these other things. But when you're the gateway to the rest of it, right, when you're the heroine of the drugs, you can be a little late to solving your problems and that's unfortunately how Apple is. So they're going to be late to the party, but when they step on the throat of anybody else, they make changes. And I think the easiest way to think about it, does anybody remember the QR code? And it hasn't gone anywhere, but all the QR code apps, there's none of them, they're gone because it's part of your camera now. So when-Stephanie:It's funny how you forget about that. Like I remember being like, "Oh, which QR code app is the best one that I need?" And it's like, they're all the same, just pick one.Dan:And now none of them are around, just like the calculator apps. And like when Apple wants to ... And in our business, one of the things that we try to help our customers figure out and this is something I hope all of your podcast people listen, if you've never read the book, Crossing The Chasm, it's a really, really good read. But you have what's known as basically these innovators, which are out front. Most innovators die, right? They just don't live forever. And what we've recommended to our clients is be the early majority, right? Don't be the person always out trying to be a hipster because then you wind up finding out that like, hey, this stupid business idea blows up. I mean, I was put out of business one time by Facebook changing a feature like, oh my God, I can't believe Facebook changed a feature I went out of business.Dan:There's definitely things that other big companies, when you build on their platform, you have to be aware of that if they just decide to get into that space, you could go out of business or you could not have a feature which your business is around. So we always recommend people don't always try to be the innovator, wait for there to like be something solid, wait for something to be proven, wait for something to be figured out. Because if you're always going from the next hot flip to the next hot flip, and you're always a hipster, you're going to spend 10X more money than I am, and I'm going to still make the same amount of money if not more than you and that's always fascinating.Stephanie:Yeah. I also recommend that book and it's come up a few times on here. It's a really good one. I mean, how do you think about companies relying on a platform? Because I see so many brands right now just launching on Amazon, for example, and not even worrying about building out their own website presence or even developing their own community. Like how do you think about that?Dan:Well, I think my opinion would be different if they would have been doing that 15 years ago. Right. But if you've ever read the book, The Everything Store About Jeff Bezos, just understand he is coming for your throat too. I mean, they're just like Apple. If you read what they did to the book publishing industry, I'm like, "Holy crap. Wow, they completely gutted that industry." So for now I mean, there's not much you can do about it. You have to play with it. But I think it's definitely imperative that you create your own online presence. And I think this is where Shopify is trying to come fill a void is there is definitely, you have to do both at the same time because at any time Amazon is just going to come out with Amazon basic of your product and you're done. They've done it hundreds of times, if not thousands of times.Dan:So you do have to build your own kind of side sliver as a brand. And I think the best book that I think I've ever read, which made me understand not only my childhood and why I am the way I am as an adult is the book Antifragile.Stephanie:Yeah. You seem to love them.Dan:Yeah. It's such a great book. But you have to have optionality and if you put all of your cards on Amazon, well, you don't have any optionality. And I think creating those options is a huge business. I mean, I read 42 books last year. So we want to get into like talking about all the cool things I learned just last year on that stuff. But optionality is huge. I think it's really, really important.Stephanie:Yeah, we've had a great guest on from, let's see, it was Taylor Holiday from, I think something collective. I can't remember what his company was, but he said, "You need to figure out how you can basically win even when you're wrong." So like when your models are wrong, which to me I'm like, "Yeah, you're talking about being anti fragile and making sure that you won't fail, even if your models set you in the wrong direction, how can you still benefit and have upside?" Which I thought was really interesting to frame it that way.Dan:Yeah. And I think in regards to the platforms and I'll try to bring this back to like the marketing technology platforms, there's a lot of optionality that you can look at and you need to have a backup plan to your backup plan in regards to marketing technology tools. I mean, Marketo got bought by Adobe and that's going to revolutionize the way their product works. And I mean, there's a lot of things in Marketo that suck already and Adobe buying it just means that it's going to slow down, right?Dan:So you have to be prepared to be able to say, "What's my backup plan to Marketo? And if I was to switch, what is that going to take?" And that's one reason why we recommend a lot of companies to leverage customer data platforms because it makes switching easy, but then you run into the same problem. Well, if you have a customer data platform and all of my data goes to the CDP, well, what happens when that CDP gets acquired? Right. What happens when Twilio buys Segment for 3.2 billion? How does that change my ... what's going to happen to the CDP? So you just have to ask those questions, like what are my other options with these platforms when I choose it and how much am I baked into this tool? And if I lost this tool tomorrow, what would it take to replace it?Stephanie:Yeah, that's really good to have a mindset like that and be thinking about all angles. So really good. So from a general ecommerce standpoint, what kind of trends are you guys preparing for in 2021?Dan:Well, first one, just going back, the death of the cookie.Stephanie:Or apparently you're not preparing at all and you're like, "I'm good."Dan:No, I mean, we started ... I mean, if Google the death of cookies McGaw.io and we wrote a blog post about this a year ago. So we've been tracking this for a long time. I think that the biggest thing that we are focused on, the biggest thing that we see in ecommerce right now, everybody wants to do multi-touch attribution. Everybody's trying to figure out how do they do multi-touch attribution to better align their return on ad spend. Because the key problem that you have is all these retailers are spending millions of dollars a year on advertising spend. And then if they look in Facebook, they see a conversion in Google, they see a conversion in LinkedIn or whatever the platform they see a conversion and they're attributing one sale to five different conversions. So they're really trying to say, "We understand that those five conversions we see in these different platforms or from one purchase, and we need to be able to pull that data together." So touch attribution is huge.Dan:We're extremely well-known in that space so a lot of companies are working with us on that, but every company is a unique snowflake for multi-touch attribution. Recommendation engines are probably the other thing that we see a lot of companies really trying to figure out. There's a cool technology called blue shift. Really, really good for ecommerce especially if you have thousands of products. They use machine, excuse me, machine learning to consume your catalog. And then also use machine learning to distribute that catalog as a recommendation to people based upon the best channel that suits them at the best time for them. Blue shift is crushes it. Great technology, Josh, the CMO or CGO, chief growth officer is a good buddy of mine.Dan:So we see a lot of the trend in regards, how do we make proper recommendations on the right channel at the right time with the right message. And then the last thing would just be customer data platforms. So those are the big three trends. I mean, one of the reasons why we're crushing it right now is like we know CDPs better than almost anybody else, customer data platforms. And customer data platforms, it's not a fad, it's not a trend. It really is the future on how you need to manage your data and your customer data specifically. So those would be the three big things that I would lean on for 2021 and going, especially into 2022.Stephanie:Cool. So you were just mentioning channels. What kind of channels are you guys most bullish on right now? Maybe are there any new ones out there? We've had a lot of people mention TikTok. You and I were talking about Clubhouse earlier. Is there anything that you guys are kind of shifting your focus towards and trying out?Dan:Oh, I love TikTok. Man, they tried to hire me as a brand ambassador and I so wanted to do it, but we had to turn it down and I love TikTok. I spent so much time on there. It's ridiculous.Stephanie:I do too. It's great.Dan:I think TikTok is great, a really, really cheap channel, but you got to learn how to do it, but it's a harder curve so I think that's good. I think that there's a lot of ... YouTube, oh my God, YouTube, YouTube, YouTube, YouTube, YouTube. We haven't even hit how valuable YouTube is. I mean, they're going to be ridiculous. So I think between those two channels, figuring out video is going to be really, really important for companies across the channels with TikTok and YouTube. I think if you can't figure that out in the next five years, you're really going to struggle. There's a cool tool called Fleeq, F-L-E-E-Q.com, which will help you do that for video. So I think YouTube and TikTok are huge if you want to be successful. I think there are some other really surprising ones. Like I always try to tell people you should invest more in Bing. Bing's really cheap. I always think that's always really, really good.Stephanie:I haven't heard Bing yet. That's a new one. Okay.Dan:Yeah. It's just so cheap. Not as much volume, but just the per dollar comparison is good. And the last one that I'll just say is direct mail. Like, oh my gosh, it's so cheap.Stephanie:What are you guys doing in direct mail right now? Because that was also something I've brought up a couple of times of like so many people are now at home and I am delighted when I get mail that's not something spammy where I can actually look through a great catalog and like, oh, this is actually cool stuff. And I always mention the Trader Joe's pamphlet where I'm like, "They have really fun content that also sells their products as well." But it's, I mean, I look forward to that one. So how are you guys approaching the direct mail piece?Dan:Yeah, so depending upon what the integration ... I mean, there's a company called lob.com, which makes direct mail really, really easy. And we leverage autopilot as our automation tool and we've been able to, I mean, personalize tons of stuff. In regards to giving people recommendations, we are able to literally write text on the postcards saying the technologies they use through data enrichment. So there's a lot of stuff that you're able to do there, but we have to remember is like sending somebody a thank you card or a birthday card in the mail as direct mail like happy birthday. It's your birthday coming up soon. Right? Like that's not hard, but people love it. And with COVID, I think the best quote that I had somebody say to me into COVID, the most exciting part of my day is walking to the end of my driveway and collecting my mail. And I was like, "What?"Dan:So I think it's just a great medium to use. And if you build it as part of your automated personalization journey, I mean, once again, you don't have to know it's raining in somebody's area to send them direct mail. Right. But you can know that it's going to snow two weeks ahead of time or there's a good possibility, you could send them a coupon for snow boots. Right. Like I just, the options are endless. So yeah, I mean, I think it's great. Hey, you abandoned your cart and you left these three things on and you print like three things on there. I mean, the personalization is really, really crazy and awesome.Stephanie:Yeah. Yeah. Very cool. All right. So we have a quick lightning round brought to you by Salesforce commerce cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready?Dan:Can I admit I'm scared? Yeah.Stephanie:You can admit it. Yes. All right. I'll start with the easier ones first. So you sound like a little bookworm. What are the next three books on your list?Dan:Oh, next three books. I don't know. I'm not prepared for that one. I think Atomic Habits-Stephanie:I usually ask one, but I'm like, "That's too easy for you." You have to tell me three.Dan:Yeah. I'm slacking on my book thing because I had a goal at the end of the year to hit 20 books and I demolished it. So I could probably say my last three books, but Atomic Habits, Billionaire Plan and Maverick. Those are the three books that I want to finish right now.Stephanie:Cool. Where are you traveling to next when we can travel again more easily?Dan:Oh, well that's an easy one. I fly to Snowshoe West Virginia and less than four weeks to go snowboarding again and I'm super excited for that trip. I traveled multiple times during COVID so-Stephanie:Yeah. I mean, I have too, but some people haven't. So if you were to have a podcast, what would it be about and who would your first guest be?Dan:We are in the process of creating a podcast of what we call The Stack and we'll be talking to VPs of marketing and CEOs about their marketing technology, sales technology and customer success technology. My first interview is hopefully going to be with mission.org and figuring out how you guys manage your marketing tech stack.Stephanie:All right. Yeah. Bring us on. And we also have a whole marketing trends podcast where we interview CMOs. So then we'll have to bring you on that one as well.Dan:I think that'd be great. I think it would be a lot of fun. This has been awesome. You are amazing at this. Good, good work. I thought this was fun.Stephanie:Thanks. Yeah. I mean, we talked about in the beginning, what was our line was just don't be generic. So I think that was a good motto of our interview. All right. Two more questions. What's the nicest thing anyone's ever done for you?Dan:Nicest thing that anybody's ... My godfather took me for my first snowboarding lesson when I was like eight years old. It's the best memory I think of my entire life because it's something I've used forever.Stephanie:Oh, I like that. Alright. And then what one thing will have the biggest impact on ecommerce in the next few year? And it can't be the three things that you mentioned earlier.Dan:Oh, come on. The next biggest thing in ecommerce that's going to happen. Amazon will start to die. They're going to get ... I think Amazon is going to get split up because Jeff Bezos will want to do it. I think that's going to be one of the biggest things that happens in ecommerce in the next five to 10 years though. I don't know how long it's going to take, but I think that and Congress realizing that Amazon, they're too big.Stephanie:All right. Well, that's a good answer. I'm glad that I punted the other three so you had to think of a new one. All right, Dan. Well, this has been an awesome interview. Thank you for not being generic. Where can people find out more about you and McGaw.io?Dan:Yeah, so definitely you can go to McGaw.io, but I'm most active on LinkedIn, so go to LinkedIn and search up Dan McGaw. There's three of us, but you'll be able to find my pretty face. Go there and send me a connection request and play along. I've got over 25,000 followers there and I try to stay active.Stephanie:Amazing. All right. Thanks for joining us.Dan:Yeah, thanks so much. And the one thing I forgot, look up Build Cool Shit, my book which is all about how to build a marketing tech stack. If you go to McGaw.io, I'll send you a free copy. It's on the headline, but I forgot all about it. I have a book called Build Cool Shit. So I forgot that's-Stephanie:We will link it up. Don't you worry. Cool.Dan:Thank you very much.

Convenience is king. Everyone wants the easiest experience possible, but, they also expect that experience to be seamless and delightful at the same time. When it comes to shopping, ecommerce has been able to bring all those elements together better than in-store retailers. But even though brick and mortar retailers are facing an uphill battle, Joe Jensen believes that they aren’t going anywhere, and there are still massive innovations to be seen to make a more cohesive experience. Joe is a vice president in the Internet of Things Group and the general manager of the Retail, Banking, Hospitality and Education Group at Intel. He is helping brands across all industries and of all sizes become more nimble and data-centric. According to Joe, there are simple changes retailers can implement to solve big problems so long as you’re asking the right questions.. Like, what if you could solve all of your inventory issues with a simple technology that has already been in existence for years? And how can brands leverage in-store experiences as more of an enhancement to customers who typically enjoy online shopping but crave something more in-person?On this episode of Up Next in Commerce, Joe answers those questions and more. Plus, he explains how and why traditional retailers should be utilizing more data just like their ecommerce competitors, and he gives a first look into the technologies that will be making an impact on the future of retail.   Main Takeaways:Curation is the Cure: The role of retail is changing, and the retailers who lean into curated experiences will be able to better meet the new expectations of consumers. Rather than offering a little bit of everything, stores will want to give customers a deep dive into a specific brand experience, because that is what they crave when they are shopping offline.Bring On The Data: When digitally-native businesses start to open brick-and-mortar locations, they insist on having as much data captured as possible about the customers who enter their stores. Traditional retailers don’t want or feel they need the data simply because they’ve never used it before. But the nimble retailers that use all the data at their disposal will be the ones to win even against their data-heavy, digitally-native competition.Incoming Technology: From computer vision to full RFID implementation, technology is going to change the way shopping happens for both the customer and the business. But, don’t expect these changes too quickly. Despite the fact that using RFID technology would solve nearly all inventory issues, many brands are hesitant to implement that wholesale change. Why is that? And what will be the catalyst to finally change? Tune in to find out.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone and welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder at Mission.org. Today on the show we have Joe Jensen, vice president and general manager of Retail Banking, Hospitality and Education Business at Intel. Joe, how's it going?Joe:Oh, fantastic. Beautiful day here in Phoenix.Stephanie:Good. Yeah, I'm glad to hear it. That is a mouth full title, but I feel like you deserve it when you've been somewhere for 36 years, I saw?Joe:Isn't that scary. I didn't even think I'm 36 years old, so it's weird.Stephanie:That's amazing, actually. I want to just start there. Tell me how did your journey begin at Intel and what are you doing today? What's your day to day look like now versus 36 years ago?Joe:Well, I started as a product development engineer at Intel, and I worked in a bunch of different product disciplines as an engineer. My original life plan was really to leave Intel at about year 10 and go to a startup, but by year 10, Intel stock options were so attractive that I ended up being so that fully handcuffed into the company.Stephanie:Yeah. As with most tech companies, I was this close to staying at Google for the same reason. I'm like, "Oh, it's hard to leave. I see my options vesting in year three and five and seven," and you can just extrapolate it out and it'll keep you there. But it's good-Joe:I shifted from engineering to the business side in about year seven, and I've done a ton of different business startups in the company. I think one of the things I'm most proud of, I've started three businesses that were at zero and have hit over 500 million a year.Stephanie:Oh, wow. So what are the businesses that you've worked on?Joe:Two different ones in an embedded space, and then now the Retail Banking, Hospitality. Education is added into that, but that business started, gosh, it started at single digit millions and we grew it to, well, we're the largest business within the IoT space in Intel I can say.Stephanie:That's cool. So tell me a bit about when you're saying IoT, and then retail banking, now education, how do I imagine what you guys are doing for your partners? What are you providing them? What does that look like?Joe:In our space, the IoT space for Intel is really where IT for an enterprise meets the real world. So in the case of retail, it could be digital signs, point of sales systems, inventory management, building management, time clocks, any system that might be connecting into IT. If you go into the manufacturing side, which is in my space, the manufacturing units, it's where equipment data flows in off of manufacturing side flows into the enterprise.Stephanie:And how many opportunities are being missed right now by not implementing? I would say data analytics like you're talking about. When it comes to inventory I know that Walmart for a while was trying to figure out how to track out of stock issues and it was really hard even when they had the cameras going around the lanes because they couldn't see behind what was in front of it. I don't know if they figured it out yet, maybe you know better than me, but what opportunities are being missed by not having this implemented into retail stores?Joe:As an engineer, I really think about root cause and what's the underlying problem, and we really believe that inventory inaccuracy is one of the underlying problems in physical retail. The problem we have is if customer can't find it in the store, it's out of stock. It doesn't matter if it's in the backroom, doesn't matter if it's hidden behind some items on the shelf, it doesn't matter if it's misplaced. If the customer can't find it, it's out of stock. We have data and research that shows that 1% of customers who experience an out of stock will go through the whole journey of they search on the shelf for it, they go track down a staff person to go find it, they dig through the rack or they don't find it. They say, "Hey, hold on. Let me go check in the back." They go look in the back and then come out and then maybe they go to the POS and they look to see if another store has it, or they'll ship it to your house. 1% of the shoppers are that patient.Stephanie:That's me. I'm that 1%. I did that the other day at Pottery Barn. But then I was very upset at the end because I was like, just like what you said, let me look in the back. Not there. Let me look at our partner stores. Not there. Let me look online. Ooh, it's not the size you want. And at the end I'm like, "Ugh. Okay, goodbye. I never want to come back again." I love Pottery Barn, but.Joe:Talk about a study that showed that if a customer experiences that out of stock frustration five times in a store, they stopped going.Stephanie:Yeah, I can see that. So how do you go about solving something like that to get all your systems on top?Joe:It's really tough. I still think RFID is going to play a key role. Japan has a huge labor shortage problem. They just said because of the aging of their population, they don't have enough labor, and the government decided four or five years ago to put a big push on RFID, and they're mandating by 2025, all consumer goods that are sold in China have to come from the manufacturer RFID tagged. They've also funded a kind of research-Stephanie:And that essentially keeps everything inventoried, right? Then you don't have staff to work.Joe:Yes. What happens is you don't even need staff to check out now because consumers will put their items in a basket, step the basket on the checkouts, and it'll read all the tags and then we'll just pay and go.Stephanie:So it's like the Amazon Go store where they're experimenting with, but I don't know whatever actually happened to that. I went into one in Seattle maybe two years ago, but are they still around? What happened with the Amazon stores like that?Joe:They're still running. They do a tremendous amount of business. I don't know how much of it's because of convenience and how much of it is the novelty. I suspect that they're augmenting a lot of that with human capital behind the scenes. I do think that you're going to find retail bifurcating into two types of retail. You're going to see the hyper-convenient side, which is you just want to take all the friction out. How do I take all the hassle? How do I take all the friction out for the shopper? And I think for staples day to day things, you want to go pick up fast food, fast food should be fast. I won't throw the chain under the bus, but there's a new location near our house, and I swear there's a three-hour wait all day, every day.Stephanie:Oh my gosh.Joe:Fast food just isn't that good for me. I'm not going to wait in line for three hours to get my fast food. And so I think on the hyper-convenient side, that's a big part of retail. Then on the other side, we're calling hyper experience. With hyper experience, shopping is an enjoyment and a pastime for a lot of people. And during the pandemic, obviously you can't go to the mall. You can't go shopping like you used to, but that will come back, and that you want to go and get experiences. You don't want to go to department store A and then walk down the mall to the department store B. And if you close your eyes when you walked in, you wouldn't know which store you're in.Joe:Now, if they all have the same assortment, they all have the same brands, they all have the same brand micro stores inside their department store, what's the experience that you're delivering to the consumer? If you go try to find a piece of clothing and it's out of stock, how's that experience? That's not a very good experience. So yeah, it's funny. I had one of my engineers in China explaining how he really has everything delivered. All his groceries, all his food. China is just hyper convenient from that perspective. It's cool and I love it.Stephanie:But they're used to it. They grew up like that, though. I feel like here, if you try and introduce some of those conveniences, it'd be like everything should be done this way. I don't know. I think Americans are a little bit more like, "Oh, that's weird," because we just know we have to do like this.Joe:It's really cultural differences, but I love this quote from him. And he said, "If I'm going to bother to put pants on and leave my apartment, it'd better be worth it."Stephanie:That's pretty great, and true. I feel that.Joe:It's like if I need batteries, do I want to get in the car and drive and go buy batteries? Well, if I do that and go to the store and they don't have that special battery, then it's really disappointing because now I spent 20, 30 minutes going out of my house to go get something because I wanted it right now and then they don't have it. This is why consumers do it a few times, they just start ordering online.Stephanie:Yeah. And I think the product, like you said, has to be worth it. How are you guys thinking about the experiences piece? Because we've had quite a few guests come on the show who've talked about their retail locations and turning them more into an experiential place, where you go there and you've got the certain music, and the vibes, and maybe you've got a yoga class going on over here and you're going there, not just to maybe pick up your product that you did order online during this time period, but you're also going there to maybe experience something that you wouldn't get elsewhere.Stephanie:A lot of people are saying retail's dead and I definitely do not see that happening. I'm like there is pent up demand to go in person and to go into stores, but I do think now there's going to be a new level of expectations of the consumers, not just going to want to go and shop around, they're going to want something else. How do you do that?Joe:I think that the role for retail is changing in terms of what experience means. If you go back 30 years ago, 40 years ago, shoppers didn't know what the new fashions were until they went to their favorite store and they saw what the new fashions were. So you went to your favorite store whether you're a Neiman Marcus shopper or Macy's shopper or a Target shopper, you went to the store to see what's available, what's in now. And there was that discovery and learning and value proposition that that store was giving you by bringing you things that fit your demographic. Today people know what's current as the store learns what's current. It's what the celebrities are wearing between social media and how quick things are in internet time. There is really no discovery value proposition for mass merchandise things.Joe:Where we see real success is curation. So you go to a store that's not a little bit of everything. It's a store that dives deep into a lifestyle or deep into a fashion style or deep into a demographic, and you go there and you immerse yourself in that brand, and then you immerse yourself in what that brand is about. That's the discovery. If you're someone who likes West Elm, and the style that West Elm delivers, you go to West Elm to see things that would be hard to find on your own elsewhere. If you wanted to go find your own curation, it would take you months of time on the internet trying to go discover all that stuff. But you can go to a store where their buyers have pulled that look together for you.Joe:If you're a Pottery Barn shopper, same kind of thing. You go to Pottery Barn and they've curated a set of things that fit a certain demographic and the lifestyle that they're looking for. So I think you're going to see a lot more of that curation. We did tour in New York City a couple of years ago, and the stores that were really doing amazing well were really deep into that curation idea.Stephanie:Yeah. I love that. I completely agree. I'm thinking right now about going into a Crate and Barrel or something like that, and I'm looking to find new things of a similar style, instead of going somewhere that's exactly the same that I can just find online. That's a really interesting take. How are you viewing the omni-channel experience of making sure that's frictionless when someone's looking online and then going into the store and having a good experience online and offline?Joe:I think a few retailers are starting to really get it right. I think in the beginning, omni-channel was a poor band-aid for I'm out of stock in the store, and I think most customers didn't see that as a good solution. I think the right way to think of omni-channel is there used to be a really consistent funnel for how shoppers and the shopper journey went from just initial discovery all the way through purchase, and that funnel, I think, no longer exists. I think people find out about products all over the place. You might see it on a television show. You might hear about it from a friend, you might see it on social media, and your discovery happens in your life. Omni-channel really ought to enable you to easily find something you're interested in whenever you see it, or whenever you want to. There was an old Burger King commercial Have It Your Way, I think 30 years ago.Stephanie:I remember that.Joe:I think the omni-channel today really means that shoppers ought to be able to engage with a brand or engage with a product wherever and however they want to.Stephanie:And I like the idea too of picking up where you left off. Like if I'm shopping online and then I enter the store or get near it, a subtle reminder of, "Oh, hey. You were looking at this and it's actually here on aisle seven," or whatever it is, directing me to complete the consumer journey. But I don't feel like it's there yet. I know we've got beacons and ability to see when people are entering your store and track that, but it seems like not a lot of retailers have fully leaned into that method to make sure that the full experience is cohesive.Joe:Yeah. I think that we're coming from the early days of that. One of my favorite stories years ago, we were shopping for a Tiffany lamp years ago, a couple of years ago, Tiffany lamp. And I searched online one night, looked at some options. We went to a store and we bought a Tiffany lamp. And for the next two months, every banner ad I had on the internet was for Tiffany lamps.Stephanie:Yeah. It's like I'm past Tiffany now. I'm onto the next kind of lamp.Joe:I think that what's happened is there's been too much of trying to use algorithms and online searches and data to try to target individuals with things that you think they might be interested in and not enough focus on helping people build a cart of things that you are interested in. So, for example, imagine if you turn it around for a minute and the brand for an item that you're interested in has an ability for you to put something that you're interested in, in a basket. And then when you pass a store that carries that item, that has it in stock, they flag you that this thing you're interested is in this store, and it's almost turning it all the way around from the store or the brand pushing to having the brand help guide you to where you find things.Stephanie:Yeah, that's really good. That's the kind of world I would like to live in where it actually is helpful and not annoying. I was just speaking with another guest about text messages and how certain retail locations will be like, "Come on in for 20% off," and I'm like, it's not helpful when I'm sitting on my couch, watching The Bachelor. It's helpful when I'm walking into the store and they're like, "Hey, you better make sure you buy that rug from World Market because here's a coupon now. So make sure you finish the journey and you don't just walk in and out." But yeah-Joe:You're reaching to the point that's one of the things I think the retailers especially are missing, and I don't know what a good analogy is, but I think that discounts and sales and coupons are an overused tool and they influence a lot of people, but not everybody. I think that for some people being first is more important than getting it on sale. For other people something scarce and having access to it before it runs out. So I think there's a lot of opportunity, even just convenience. Take a grocery store, nearly every grocery store I've ever been in, they put all the staples in the back, and they run with 19th century's retail logic of, oh, if I make people walk all the way through the store, they might buy some more stuff.Stephanie:Not me, I got blinders on. I'm like I need my milk and goodbye.Joe:It turns out that the convenience stores like 7-Eleven sell a ton of milk. I don't know if you've ever bought a gallon of milk at 7-Eleven.Stephanie:I have, yeah. Hey, my two year old, desperate times desperate measures.Joe:And it's about convenience. So if I were in a grocery chain, in fact, I talked to one about this big chain recently and said, "Why don't you take your house brands of the staples and put them in a section in the front of the store where they're super convenient and mark them up, make them the same price or maybe even a little bit more than the branded stuff." And the answer was, "Well, we tried that and it didn't work." I'm like, "Oh, when did you do that?" "It was like 10 years ago." I'm like, "People have changed a lot in 10 years."Stephanie:Yeah. I'd rather pay more to get right to it. So what are some maybe interesting stories like that, where they have listened to your advice and they've seen good results? Or anything where you're like, "Oh, I remember this one customer did this and they increased revenue a bunch because of this one subtle tweak in the store layout or how they did their products or inventory," or whatever it may be.Joe:We'll start a little bit maybe with I think that pretty much in every case when we've helped a retailer test or try a technology, the results always exceed the indicators that they put forward. And the very be wilderness thing to us is that even though these solutions look to deliver tremendous results and impact, they still don't scale them.Stephanie:I don't think.Joe:Years ago we had a partner that was putting cameras in the ceiling to measure shopper engagement, how long does it take for a staff to engage a customer? And they happen to have as an artifact of that, I won't say the brand, but they had a brand of popular, very popular Cola was in the camera view on the shelf. And they observed that this diet version, this Cola was out of stock almost all the time. So they went to the head of all stores for this giant grocery chain and said, "Hey, I think that there's an opportunity for you to..." Actually it was, I'm sorry, the brand, they went to the brand and said, "You got a not at stock problem in this grocery chain." The guy they talked to said, "Oh, there's no way. I was head of merchandising in Southern California. We have people in that store twice a day checking inventory. Its inventory are stocked twice a week. We are never out of product."Joe:And I'm like, "Oh, really? Here's some video of how much you're out of stock." And it turned out that within a half a day that they stocked, they would sell out and they would be out of stock all day, for two days. The problem we run into is you put process in place and you tell people to follow the process and it may or may not happen. So they look at this and they're like, "Well, there's tremendous value in having this product in stock. It's a driver product for the store." If they're out of stock, and the store cares that they're out of stock. The cost of deploying the solution was probably $30 a month per store, not a huge thing for one of their top 70 driver products, and yet it never scaled.Stephanie:Interesting.Joe:And you feel this thing. There was another one where the labor, they showed this 30% increase in tool sales in a major chain by tracking the staff and shopper engagement and improving that. It was really simple solution. Almost never scales. Now one that we have seen scale, Theatro makes a Voice over IP ear piece set up for staff. So if you go to, I think, well Bass Pro Shops, as an example, who's the one that does jeans and apparel for teams? They all have an ear piece and a radio.Stephanie:Oh, Alister? Gap.Joe:Anyway, it doesn't matter. A lot of retailers use radios, and there's a cost in the radios, and for a parody, they can switch over to this Voice over IP, and this is one where we're seeing people test it, and then in a matter of weeks completely changed all their devices over. The value in that if you look at it, if you're on a radio network, everybody that has an ear piece in their ear hears all the chatter from everybody all day. With this new solution, you can address a message to an individual person. So only the person you want to talk to gets the message. Then there's the ability to ask for stock and deliveries and things like that. So they've also built the ability, some of their customers, if somebody drives up to do a pickup, you order online, pick up at the curb, you don't want there to be a high friction experience. You want to be able to pull up, very quickly have somebody bring your item and leave.Stephanie:So where do you think then the future of retail? What does it look like with all these new... Some of them feel like little tweaks, a radio where you just talk to who you want. To me, some of those things feel little. Are there not enough incentives for these retail stores to change? I know you had mentioned Wall Street maybe beating up on retailers a little bit when it comes to wanting to try new and innovative things. What do you think is holding back retail right now?Joe:I think a big part of it is Wall Street, again, back to that root cause problem. There's a set of retailers that we think of as digital media, and these are brands that started as a purely online brand, and now they're going to open up stores and they realize once they get to about a billion dollars or so in revenue to get to the next level, they've got to go physically open stores or expand their reach.Stephanie:Yeah, like Warby Parkers of the world.Joe:Yeah, exactly. And these digital native retailers, when they come into the physical world, they expect access to the same kind of insights that they've been getting with their online entity. They want to understand how many shoppers are coming in and when? What's the dwell? When people are picking things up and putting them down and not buying them, it's like something in your cart that you took back out. And they come in with a long list of insights that they'd like to be able to get in the retail operation. The question in Intel is how can you help me find people that can bring these solutions or help me deploy these solutions? And when I go to more traditional brick and mortar retail, the conversation is trying to convince them they should have these insights.Joe:So I think that a part of it is the digital natives come from a world of when you're online only, the only insights you have into your shopper is through the data trail they leave behind them. I think if you go to brick and mortar, they're not used to capitalizing and utilizing that data. Talked to one partner recently, they haven't validated this, but they said that the amount of data that Walmart generates in a day would take 26 years to upload to the cloud, being given traditional techniques.Stephanie:Wow.Joe:So there's a tremendous amount of data created in the enterprise of retail every day. And we think with IoT and the cost of compute coming down so much, and the ability to use AI to get insights, you can utilize a lot of this data at the edge without incurring the costs of moving it to the cloud and trying to process it there. I think that if you imagine that you're moving petabytes of data to the cloud, and you're trying to find the needles in the haystack, it's a really big haystack. How about if I just try to sift through the insights real time as they're occurring in the store?Joe:We talked to a major fast food chain who prides themselves on fresh product, and one of their major problems, I won't say what the product is, but they were throwing away 40% of their product to maintain the freshness, and they wanted to have a short wait because they understood freshness was important, and freshness was important for the brand, but they were having a huge product waste problem, and they wanted to use predictive analytics to understand what's happening in the parking lot? What's happening in the drive through and what's my queue look like in the store so they could predict when to put product in the cooker versus cooking it always, and then having it there just in case.Stephanie:Were you guys able to help with that?Joe:Absolutely. That kind of change drives tremendous business cost savings, but also ensures that your product is fresh and that your customers are satisfied in having to wait for product. So when done well, we think these insights deliver not only customer satisfaction, but also tremendous business impact.Stephanie:I mean, that also makes sense for why a lot of the more Legacy Retailers are scooping up all these DTC brands and keeping them separate and learning from them to see like, oh, what are you guys doing over there? And then starting to integrate them into the org to maybe be brought up to speed a bit with how maybe retail should operate from a digital perspective and what are the expectations coming in from someone who's used to that? And how can it get implemented into the org? We had someone on from Kellogg's who said just that. They would acquire different DTC brands, but then keep them off on their own so they didn't get too mixed into the Kellogg's culture because they wanted the DTC brands to stay as their own brand. So they didn't, I guess, turn too corporate if it happens. I don't know.Joe:Maybe not say corporate. I think you don't want to turn them old school.Stephanie:Yeah, exactly.Joe:[crosstalk] We see that same thing, and you mentioned the expectations. One of the ways we explained this consumer expectations, every time you have a better consumer experience on your mobile, better app experience, in the back of your mind, you wonder why every experience isn't that good. I'm old enough that I used to travel where you had to go to the ticket counter to get your boarding passes before you could print it at home, and then they went to kiosk where you could print them at the airport and it was an amazing improvement, and then they went to actually really pretty good apps. So airline apps, you can see if there's a meal on the plane, you can pick your seat. You can do quite a few things, check the status of the incoming flight, et cetera. Airline apps are really pretty good, and I travel a ton and I stay in hotels all the time. Why are the hotel apps worse than the airline apps? Why can't I pick my room?Stephanie:That's true. Why? I'm sure you probably asked them before.Joe:Well, and actually it's interesting. It turns out that the most hotel chains are using a third party service to assign and block rooms.Stephanie:Got it.Joe:So they don't actually have control over that, which is kind of crazy.Joe:And so I think what happens is anytime you have this better experience as a consumer, then it raises the bar on your expectations for every other experience. Cabs were, I've never enjoyed a cab ride. Not once in my life, I think.Stephanie:No, never.Joe:Uber realized early that there was a huge amount of friction in getting ride and people hated cabs. You'd call for a cab, all they would do is throw it on the radio network and maybe a cab responds, maybe not. You didn't have any predictability. When you get to your location, the last thing you want to do is sit there in the cab on the street corner and spend two or three minutes paying the cab driver.Stephanie:Yeah, awkward.Joe:And they understood that there was this huge friction. Well, now that Uber has taken the friction out of getting a ride, consumers see friction elsewhere in their life, and like why do I have this friction? Why is this not as good as an Uber?Stephanie:So what areas do you think are the biggest friction points when it comes to retail locations right now? And what do you wish things were looking like maybe over the next couple of years? What are you guys planning for? Where are you hoping the world will be in like three to five years?Joe:Well, we think that you're going to see a lot more delivery. I think that grocery delivery was very slowly ramping, pick up at the curb or delivery, and with the pandemic, a ton of people jumped in and tried it that probably wouldn't have tried it for a long time. So the adoption curve for that took a real steep spike up, and we don't think that that adoption is going to slow down. So I think that the grocery, and the grocery business is tough. They run really slim margins, and we talked to one major chain and they said, if you pick up at the curb, that they lose $5. And if they deliver, they lose 10 to 15. So the chains have to figure out how they're going to deal with that. There are a bunch of startups that are building essentially dark store technology. So instead of having a retail location with a giant parking lot and a big square footage and employees, they'll end up with a small industrial space with all the same inventory, but some robotics that will pull stuff off the shelf and pack totes.Stephanie:We actually just talked to a company called Wolseley who talked about how they see the future being... They're B2B also for plumbing and HVAC and things like that, but they're like, "I'm not so sure if retail for us anyways is the way to go anymore," instead of just having a small guide shop out front, and then just having a micro fulfillment center or a warehouse in the back, and then they get your stuff and give it to you on the curb. But why do you need to come in for their business anyways and shop around when a lot of times these contractors already know what they want. They don't need to walk around like they would at Home Depot.Joe:It's funny, I was at a home improvement store recently, and I'm waiting in customer service to make a return, and they're on the phone with a customer who very wisely placed an order for like 50 things, probably contractor, but he did an online pickup at the curb order. They were on hold with this guy and they're talking to each other saying, "We don't have the labor to have somebody spend an hour running around the store to pick all these stuff." What a smart contractor? Why not have the home improvement staff eat that labor versus him send somebody? And he said, "Hey, can you please call me once it's all picked?"Stephanie:That's smart. I mean, how can-Joe:And of course they had to say, "Sure." The manager's like, "Yeah, absolutely." So I think what's going to happen is these expectations are going to keep rising from consumers, and the retailers are going to have to figure out how to adapt.Stephanie:Yeah. It seems it's the pricing thing, though. Right now everyone is expecting a curbside delivery or something to be free because it's new and that's the expectation now, but I could see eventually being like, if you want someone to shop for you, just like you would with any of these grocery delivery shopping apps, you're going to have to pay a little bit to have them go and-Joe:But look at it this way. We talked, again, one of these companies building these systems and we talked to a big chain that's testing it. If you go to the normal financial model for a grocery store, big piece of real estate, prime location, huge parking lot, a lot of physical assets tied up. And if you go to a dark store, really cheap, industrial space real estate, so the real estate model's completely different, the staffing model's completely different, and the financials could be such that, and again, I don't know, but it actually might be cheaper to deliver groceries that way. Now, it's a new build add, it's a new approach, but again it's a huge change, but it doesn't necessarily have to mean higher prices for consumers. And I think what's going to happen is some will try to charge more and others will figure out how to go do it in a way that doesn't cost more.Stephanie:That's a good point. I like that. So how do you think about-Joe:It's competitiveness, right?Stephanie:Yeah. Hey, that's economics right there. Someone will figure it out and put the other one out of business possibly, or not. But how are you thinking about new technology right now? I know we were talking a bit about AI and how it's impacting retail and retail workers. What are your thoughts around that or other technologies that are maybe going to disrupt retail?Joe:Well, still really believe a lot in computer vision, and I think one of the things I'm really proud of for Intel is we've always been huge advocates and protectors of consumer privacy, personal privacy. So as a company, our core culture, our philosophy, our lobbying efforts are all around protecting privacy. Our point of view in using cameras in retail, and we've been helping people do this for many years, we only want to do it in a way that's totally anonymous. So it's not like I'm trying to detect Joe when Joe walks in the store. I want to look at the pattern of behavior that this shopper has anonymously, and what have people in the past that had that similar pattern of behavior been interested in, and how might I go send some staff over to do the right thing there. So take me, for example, if we go to the mall and I'm with my wife or daughters, I'm probably hanging out with him and I'm not really shopping. So I'm wandering in the store-Stephanie:You're that personally couch just chilling.Joe:Yeah, or I might be wandering around in the men's department, but I'm kind of killing time, but I'm probably open for somebody to come show me something, because I'm browsing and you could observe that, oh, this person is slowly walking around and looking at stuff. There's other times when I need another white dress shirt for a business trip, and I know exactly which door to park at, that's the shortest distance to the white dress shirts. And I'm walking in a direct line to a section. Computer vision and AI could detect that this shopper's not browsing, don't bother him. Don't send them a discount coupon or don't send him alert to some new item they might be interested in.Stephanie:Do you have retailers right now who are implementing that? Because that sounds awesome and a really good way to personalize to the shoppers coming in. Do you have anyone who's trying anything out yet?Joe:There've been lots of things to experiment and test, a lot of partners building solutions like that. I think the world of privacy right now is way too fragmented. Too many different points of view, too many different state perspectives on it. You've got some places where cameras are banned. You can't use a camera at all. And I think that the governments really need to get their act together and understand how is the data going to be used? How is the technologies? How can it be done in a way to protect privacy? In the implementations, we advocate no data ever leaves the edge, the system. The only thing that ever leaves the system it's account. This kind of shopper did this kind of pattern of behavior. Everything's fully anonymous. Back in the early days, we actually went and talked to governments across Europe where the privacy is even more simple, and every government entity we talked to was totally comfortable with the approach we were advocating.Joe:I think the computer vision that we think is really going to be profound, and it'll be used for mundane things like trying to understand out of stocks or inventory situation. Years ago, I won't say the name of the chain, but there was a study where they're comparing Amazon to a giant big-box retailer. They went to 25 locations of the big-box retailer and bought these 40 items and then they priced it out on Amazon. The headline for the story was Amazon was more expensive than the physical retail location, which was big news at the time because everybody thought Amazon is just winning on price. But the subtitle of the article, the second message was, but 25% of the items on average were out of stock at the brick and mortar retailer.Joe:We happened to be meeting with the executives in that company about a week after that, story came out and their heads were exploding because they thought they had a 5% out of stock problem. And it turns out that they did in terms of it was in the store, but it had a huge congestion of stuff in the back room that wasn't on the shelf yet. And as we dug into it further, we did a lot of work with them using computer vision and whatnot, this is years ago, and it turned out that one of the behaviors they had that they had to try to break is the people stocking the shelves would bring a box of say large size mint shampoo out and they needed to have the small and the large, but they didn't have the small, so they just filled the shelf up in the large.Joe:So when somebody came to look for the small, it's out of stock, and the shelf looked full because they would face it all out so that every front was full of product, but they didn't have all the products on the shelf. It was really because the people stocking the shelves were not following the process and they're being lazy, and that's where we thought to-Stephanie:Use robots then. Robots aren't lazy and they listen to whatever you tell them. So that must just be the way to fix things.Joe:Yeah, maybe. I guess as a tech company maybe that's a good thing for us, but I think that, again, if it's a staple, you just want it to be convenient, and convenient means the fastest, easiest way possible. To me it's like when I run out a catch-up, wouldn't it be amazing if it was just at my door automatically the moment I needed it? Well, we're not there yet, but at some point, somebody's going to figure out how to make my running out of ketchup something that won't happen.Stephanie:Yeah. I thought there were brands or companies working on that to track what's in your refrigerator and then reorder it if it's out. Maybe that never came to fruition and that was more just that [inaudible 00:36:00].Joe:They've been a lot. We actually had some partners who were doing that years ago as well. The challenge ran into it I think is how do you know what's in your fridge? Does the consumer scan all the barcodes? Do you have the discipline to scan a barcode when you run out. These problems certainly aren't easy to solve. We mentioned earlier out of stock, so I'm working at that problem. We worked with probably, I don't know, more than 20 big retailers on trying to see how RFID could help solve their inventory accuracy. Then we would always start with taking one of their stores and we would do a really deep physical inventory. We never found any retailer that had better than 65% of their skews correctly counted.Stephanie:Wow. That's sad.Joe:Then if you want to be able to compete with an online-only retailer who gives free shipping, you probably have to give free shipping, but wouldn't it be ideal if you could deliver all of your stuff from a local store so that you minimize the shipping time, you minimize the shipping cost. But if you don't know what your inventory is, then you take an order assuming you've got really close delivery, but then it's out of stock in the store. We talked to the department store who was really aggressively trying to do this fulfill from store, and they were spending on average 20 minutes per item to find it on the floor.Stephanie:Jeez, if they're taking 20 minutes-Joe:That's [crosstalk 00:37:26], right?Stephanie:Yeah, that's wild.Joe:So they were looking at RFID to try to be able to help with that as well. With RFID, you would know where things are in the store. This is another one too. We talked to, gosh, I'm try to really keep people anonymous here, a head of stores executive who came from a large brand who had a lot of stores, and they deployed RFID in all their products in the branded stores, and they've got their sales go up like 60%.Stephanie:So why wouldn't everyone do RFID? We're talking about Japan's doing it with all their stores now, brands who are implementing it, are taking off when it comes to sales. Why wouldn't people? What's the holdup? Why are more people-Joe:That's the big mystery? So if you can figure this out through your interview, please share.Stephanie:I will have to start asking around. I'm like it seems like a no brainer. Is it hard to get your manufacturers to do it?Joe:I think there's a lot of processes that get touched, is one of the problems. There's your supply chain, there's your distribution center, there's all the staff in the distribution center, there's process changes at the store. So there's a lot of pieces of this that end up getting touched. We talked to one retailer, big retailer, who they made the change on the POS. It was a touchscreen checkout for the staff. They had to do a training class to train people on this change, and it was a two hour training class for like 170,000 employees. And they said it was all extra time. You couldn't do it on the floor. So now you've got 340,000 extra hours of labor to make a simple change on a user interface.Joe:I think when it gets to doing these kinds of changes, what happens when there's a return? What happens when there's a return but the RFID tag is no longer in the item? So there's a lot of things that have to change. I think what's going to happen is we're going to see branded retail do this first because they control the supply chain, and you're going to see some really tremendous results. The example I gave you when they were head of brand and retail at one brand, and then went to another one, the challenge with the second one is they had a lot more suppliers, so they had to manage a lot of factories to supply their stores, even though they were all their own brand. It was still a supply chain challenge.Stephanie:Well, it seems like Whole Foods and Amazon are going to be the first ones that can do it. They've got the ability to, especially with Amazon's operations and processes, and they've got the Whole Foods brand going on. They control all their supply chain.Joe:And the Amazon could decide to spend a gigantic amount of cash modernizing Whole Foods infrastructure and Wall Street wouldn't blink an eye. Kroger could never do that because Wall Street wouldn't let them.Stephanie:That's sad, and also just shows how there's, I don't know. It makes you wonder about how a lot of companies right now aren't going the IPO route, and I get it. I get it hearing and seeing the incentives like that, or lack of incentives of wanting to... They talk about destroy your business to make an even better one and how some of the best companies had to do that, whether it be the Netflix of the worlds. But yeah, it seems like a lot is held back.Joe:What do you mean? Private equity, we're seeing more and more where private equity will come in and the leadership of the company will be in favor of a private equity takeover because it can pull themselves off the Wall Street treadmill for a bit to make these fundamental changes.Stephanie:But isn't it usually a bad sign when PE comes in? Don't most of those companies end up going bankrupt when this happens?Joe:I think there's a couple kinds of private equity. Look at Dell. Not a retail case, but Dell they needed to retool Dell and they needed to not be under the scrutiny of Wall Street for a while, and Dell has done amazing things through the use of private equity. I think if the company is fundamentally unsound, private equity might be vulture capital, where they come in and strip things down to the bones and get rid of it. But I think fundamentally sound business that needs to make changes that aren't really possible to Wall Street, I think this is going to be one of the areas where I think there's going to be a lot of money made where private equity is going to go look at some of these really good retailers that fundamentally have to change. And if wall street doesn't change the model P&L expectations, I think private equity will become a much bigger factor.Stephanie:That's a hot take. I like that. That's very interesting. So if there was some data right now that brands should be collecting at their retail locations, that's not really hard to implement, but they should be doing from the start, what comes to mind? Where you're like, "Right away, you should be collecting at least these five attributes on your customers as they come in and you don't need computer vision. You don't need beacons or RFID, but you should at least have this to be able to give a better experience to your consumer." Anything come to mind?Joe:I think that the thing that is most fundamental, and it's still shocking that all retailers don't do this, and that's just counting your traffic. Not counting it daily, but knowing what's happening with your traffic every minute.Joe:But I think understanding your traffic, that's the most important thing for an online business. What's my traffic? Dwell. How long was this shopper in the store? How long was this shopper on my site? What things did the shopper browse? What was their click path for my online? What was their path in the store? For me, if I were going to leave tech and move into retail, I would start with how does an online retailer excel? And how would I try to get all those same insights for brick and mortar? One of the things to me that... There's a tremendous amount of demand created real time in retail. So we saw one study that says 60% of purchases in stores in the US and Europe are for things people didn't know they were going to buy when they went to the store. So a huge amount of real-time demand. You see something, you like it, and you decide you want to buy it. Well, how disappointing is it when you see something you like and then it's out of stock in your size?Stephanie:That's worse sometimes.Joe:That goes from being a point of excitement. You got a little bit of excitement to buy something and then you're let down. What we would say is rather than having mannequins displaying items that the brand is paying you to show this week. We talked to retail after retailer after two or three days of something on the mannequin that sold out, but they're paid to run it for a week. So they're creating demand for something that's sold out because the contract of the brand said you need to show this item for a week. It's funny. If you talk to a giant apparel brand about this problem, honestly, one of the C-suite executive was like, "Oh my God, that's why stuff's always out of stock in the store." I'm like, "Yeah, you have some flexibility and freedom to the staff to put what they have too much of."Joe:We talked to one major department store chain that made that change a few years ago where they said, "Instead of getting paid to run things on the mannequins, we're going to have our staff every evening look at inventory and whatever they have too much of, put that on the mannequin for the next day." And it's amazing how much they were able to sell through inventory before they had the market down. We would advocate that at the front of the store where you've got posters and prints, maybe it's a department store and it's prom dress season, so you're showing prom dresses on the poster, that isn't really relevant to most of your shoppers. Most girls are not prom dress age. Most moms are not at the age of having daughters that are prom dress age. Most dads don't buy the prom dress.Joe:Put a more simple thing in it. Put a digital sign at the front of the store with a camera that will anonymously look at age and gender. And then if you're really sophisticated, you could say, "Okay, well now I'm going try in inventory system and I have too many of something." Phoenix it was a really dry winter. We have too many raincoats. I see a guy coming in and I've got too many men's raincoats. Throw a men's raincoat on the screen. And even the next step, we can estimate the size of the shopper. So I've got a really big guy coming in, but I'm out of extra large raincoats. Don't show them a raincoat. These subtle things, and it's not like every shopper is going to buy a raincoat, but suddenly putting something that's possibly more relevant on the screen than a prom dress is a great way to use that valuable real estate. That's the kind of thing that an online retailer will do. Like Zulily, they introduce thousands of new products every day.Stephanie:Zulily? Yeah.Joe:We met with them one day at one point, and they said in the morning, early in the morning, they have one landing page, and by 8:00 AM, they have 280 unique landing pages. Then they know what demographic, what bucket you fall in for them as a shopper. So when you go to their landing page at 10 in the morning, you're going to see something that's full of things likely to be relevant to you.Stephanie:We were talking with Lenovo way early on in the show and they were saying they have 85,000 different landing pages going on at any one point. I'm like, "Oh my gosh, how do you keep track of that?" But he's like, "Oh yeah, that's just how you test and know what people want." So it's just very interesting. But I think Zulily though, when they say how many landing pages they have, they are all about talking about being personalized and stuff, but I think a lot of times they just think having a new name isn't being personalized and they count that towards a new landing page. That does not count just saying, "Hi, Stephanie," or, "Hi, Joe."Joe:The way they were explaining to us is if you shop for baby clothes, you often are buying baby clothes, your landing page would have baby clothes on it. If you don't buy baby clothes, your landing page would not have baby clothes.Stephanie:Yeah. That's more personalized. I like that. Very cool.Joe:The key thing here is that this is a journey. I don't think anybody's going to go make all these changes overnight, but there's the ability to start using this information. I think one starting, know your shoppers. It's amazing how many retailers when we talk to them about what are your shopper's pain points? What are your shoppers not happy with? They don't have a good answer, which is really surprising. For me, when we're out trying to define solutions for the market, the first thing we look for is what's a business problem. And if I go into education, what is the problem that educators are having right now that they're worried about? We go into hospitality, what problem do they need help solving? I often tell people at Intel, we have 3,200 PhDs. If we understand your problem, we can figure out how to solve it. And it's amazing how many retailers don't spend time really understanding what friction or what pain points do their shoppers have.Stephanie:Yeah. I think they're going to have to now. I think now with everything that's happened and you had the acceleration of ecommerce, there will be, like you said, new expectations. And yeah, I think the theme is now there's also all these new technology to use and utilize, and maybe implement if it's allowed, but then putting that extra level of human curation on top of it when needed is going to be the way of the future. So use the tech, but also have it curated and have the human feel to it that people are going to miss over this next year, especially with how much we've been at home all by ourselves.Joe:And after people have really radically modified their behavior for a year. A few months it was one thing, but we're coming up on a year where people have had to change pretty fundamentally how they shop and live. How much of that's going to stick permanently? Like I said, I think grocery, and some of those things are going to way more people will be doing that post pandemic than did pre pandemic and they'll stick with it. What else is going to fundamentally change?Stephanie:Yeah, I agree. All right. Well, I know we're running up on time, so I want to shift over to the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Joe?Joe:I am ready.Stephanie:All right. What's the nicest thing anyone's ever done for you?Joe:Oh my gosh. Our twin daughters were born three months premature, and the amount of help and leaning in that we had as relatively young and new to Arizona couple was just staggering. Probably 80 families leaned in to help us, which is amazing,Stephanie:Man, I'm going to come to Arizona. That sounds like a nice spot to be. How old are your twins?Joe:They're 30 today. That was a long time ago.Stephanie:Nice. I also have twin boys, and I'm a twin.Joe:That's awesome.Stephanie:What's up next on your reading list?Joe:I'm really actually studying more around AI and frameworks and trying to get a bit smarter around the nerdy geek stuff. So I don't have any grade to casual reading. For me it's more about the tech.Stephanie:Hey, that's good. Well, I was just going to ask you what one thing do you not understand today that you wish you did? Is it AI, or are there other things that you wish you understood?Joe:I grew up as a silicon engineer and so I'm a hardware person and I'm not a software developer, I never have been. And so I'm really trying to understand the worldview of a software developer more than a hardware person. At least I think I know I don't know everything. So it's almost like the first step of the 12 step program, acknowledging that I don't know everything, I'm there.Stephanie:Well then maybe you want to check out the book I'm just starting to read. I think it's called Ask your Developer by the Twilio CEO. I just started reading it.Joe:That sounds good.Stephanie:Yeah, there you go. If you were to have a podcast, what would it be about? And who would your first guest be?Joe:My podcast would be on how technology is going to fundamentally transform shoppers' lives.Stephanie:I love that. Who would your first guest be?Joe:And my first guest, I would actually like to have Bezos.Stephanie:As do I. Let's go get him. Jeff, where are you at?Joe:See if he can help you with that.Stephanie:Yeah, I know. Is Moore's law dead?Joe:Moore's law, if you think about it purely as Silicon, which is when Gordon created that, it was really a silicon construct. We're no longer on that same track, but at a system level in terms of what a system does for you, we're on a similar curve. One of my favorite ways to explain this is, if you hold up your smartphone, the amount of compute in your smartphone 10 years ago was 100X the volume and the same thing's going to be true. So if you look at this amount of compute today is going to be one-100th the size in 10 years. Or you could say, "Hey, what would 100X?" It'd be a giant server room could be in your phone. And so if you think about it, it's not a matter of if I have enough compute to do something, it's a matter of when I have enough compute to do something.Stephanie:Got it.Joe:And I think that's probably to me the magic of Moore's law and some people really get it, and they really understand that it's just a matter of a few years until the compute is cheap enough to do what you want. We're talking about AI for a minute, if we go back 10 years ago at Intel, we had $100,000 computer workstation on every one of our factory tools and these are $50 million tools. Workstation and a huge number of engineers creating algorithms to optimize our manufacturing. So we were doing AI that was very expensive 10 years ago. Very few manufacturing processes can afford that. You jump forward to today and it's simple and cheap and easy to have that amount of compute, and the maturity of this AI computer environment is so much improved that anybody can really deploy what took an army of engineers and very expensive compute 10 years ago.Stephanie:Oh, I love that. I forget what show podcast I was listening to where they were talking about AI and saying a lot of the stuff that we have today, we had access to 10 years ago. We just didn't have the compute power and the ability to do it, but people knew it was coming. And I'd always be interested to hear from those people who could see the vision and be like, "I just need another five or 10 years of acceleration and then my product will work." It's very interesting.Joe:If you imagine the amount of compute that you can afford, whatever that number is, $1000, $100, whatever, but the amount of compute you can afford is going to double in performance every 18 months. Okay, double, you can imagine that, but you don't realize it's 10X in five years and 10X is really hard to comprehend.Stephanie:Yeah, it's hard to extrapolate things like that. Well, I appreciate you answering that question. I was like, "Hmm, I know Joe will have a good answer for this one, even though it's very maybe off of ecommerce." But Joe, thank you so much for coming on the show. Where can people find out more about you and your work?Joe:Well, I work for Intel, obviously. We do have a retail landing page at Intel. We actually don't sell anything to retailers. All of our work is done enabling suppliers to retail to build better solutions, and I try to spend all my time, if possible, talking to retailers to better understand the business problems they have so I can help guide my partners in building better solutions.Stephanie:Cool. Sounds good. Well, people will go and find you if they have any questions I'm sure then. Thanks so much.Joe:Thanks, Stephanie.

It doesn’t matter how great your product is if no one knows it exists. That’s why marketing matters. But not every company has the resources to go all out on a big-name CMO or to commit a large yearly budget to specific marketing efforts — especially when the digital world is changing so quickly. So what’s an ecommerce brand to do in order to get its message across to the right people?Erik Huberman founded Hawke Media to answer that question, and for more than seven years he and his team have been making marketing more accessible to businesses of all shapes, sizes and stages. On the episode of Up Next in Commerce, Erik explains how companies should be planning their marketing budgets and what the revenue threshold is that companies need to aim for before they can even think about scaling. Plus, he digs into his entrepreneurial and investor roots to give some advice to those out there who are just getting started, including the hard truth about what it means to be an entrepreneur, and some tips on new and emerging platforms where you can grow your personal and professional brands. (And yes, we are talking about Clubhouse!)Main Takeaways:Same Problems, Different Speeds: Even the biggest brands in the world face the same key struggles as the new start-up making waves: access to talent. The difference is the speed at which the companies at both ends of the spectrum can move. With more decision-makers involved and more stakeholders to answer to, bigger companies have to be more methodical and intentional about who they bring in to help, whereas smaller companies can make decisions fast, but there is more volatility with every choice. Join The Club: New platforms like Clubhouse are on the rise, and finding a way to capitalize on them is the biggest challenge currently facing businesses competing for market share. Listen in to hear Erik and Stephanie dive into the Clubhouse wormhole and the opportunities that await.I Get So Emotional: Marketing is about eliciting emotion from the person you’re selling to, whether it is B2B or B2C. By establishing an emotional connection and presenting a value proposition that a buyer can clearly see as a solution to a problem, a level of trust is created that will lead to a long-lasting relationship.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, Co-Founder at Mission.org. Today, on the show, we have Erik Huberman, the Founder and CEO at Hawke Media. Erik, welcome to the show.Erik:Thanks for having me.Stephanie:I am excited to have you on. I was just chatting up a bit before telling you how we are actually a client of Hawke Media, full disclosure to anyone listening. It's been amazing. But I would love it if you could go through what is Hawke Media for anyone who doesn't know?Erik:Yeah, sure. We're an outsourced CMO and marketing team to companies. So, what that means is we basically go into companies, identify what the holes are in their marketing, organization, or strategy. And then we can spin up different experts on an ala carte month-to-month basis, whether it's a Facebook marketer, an email marketer, a fractional CMO, et cetera. We've got about almost 200 full time people. We manage marketing for about 500 different companies from small startups to Fortune 100.Erik:Our mission, for lack of a better word, is to create accessibility to great marketing. So, the idea is we really saw that it was really hard to, for most companies, get access to great marketers. We wanted to make a place where we had amazing marketers, amazing talent, people that were top of their game, but it was super easy to work with them. That was a challenge we saw on the market that didn't exist, a solution didn't exist. That's how we got started.Stephanie:That's awesome. Yeah, it's been really fun. We did the CMO thing first. It was cool, because you do get access to people who have been CMOs at big companies before and they have all this expertise. But we had them for three months. And then they transitioned us on to the next stage of implementation of social and other things. It was just really fun to be able to have access to talent like that without actually having to hire them as an FTE or something.Erik:Yeah, that's exactly the model. I came from building and selling a couple ecommerce companies and just wish this existed. My last ecommerce company, we were heavily funded. So, I had a 10-person marketing team of talented people, but they all worked or they could have all worked half time or less and gotten what I needed to be done. So, we had toyed with the idea of, "Could we hire these guys out to other companies? Because they're a great team, but we don't need them all full time. But we need all their expertise." So, that's part of where it came from, the idea was born.Stephanie:Okay, cool. What ecommerce companies did you have before this?Erik:I had a company called Fame Wizard first, which was online music business coaching for musicians. Then a company called Swag of the Month. It was a T-shirt subscription company, long before Dollar Shave and all that. And then an activewear brand called Ellie that's still around, the E-L-L-I-E.Stephanie:That's awesome. So, what things did you learn at those companies that maybe you brought either to Hawke Media or to how you're maybe advising brands today?Erik:Yeah, really quick bullet points. Fame Wizard have a customer that has money. Having independent artists as your customer is really hard to build a business off of. Swag of the Month, the need for working capital and financing, which funny enough, we just launched our financing and working capital arm of Hawke Media a couple months ago. And then the third one, Ellie, don't overcomplicate it. If it's working, double down on it. Also, that I don't like having other people make decisions for me, because that's when I was working with a committee and I was not the main decision maker. They screwed up a lot.Stephanie:I like that you have bullet points. You're like, "I already got it covered. I already know."Erik:Yeah. I've definitely walked away with very specific, "Don't do that again."Stephanie:Yup. Yeah, that's great. So, are you able to share some brands that you work with? So, we can get the scope of who-Erik:Yeah.Stephanie:... that you guys are learning from and working with right now and teaching.Erik:Yeah, I mean, it's the full scale in terms of small startups, most people haven't heard of, and hopefully, we change that. Tamara Mellon, we started with it when they were a tiny business and skyrocketed them for a couple years. GREATS, the sneaker company, we built for three years with them and they sold to private equity. Incase, the phone case, until they sold to Incipio. It's ironic. We get a lot of companies to scale and then we get fired, but it's par for the course.Erik:And then we also work with big brands, Nike, Unilever, Estee Lauder, Red Bull, et cetera, as well. And then a lot of small brands that don't necessarily want to be the next big VC-backed company that are $3-, $4-, $5-, $10-million companies while we're working with them. That's what they want to be. They slowly grow and run a lifestyle business that pays them a couple million bucks a year and do great.Stephanie:Yup. Do you see the big brands having the same type of struggles as the smaller ones, or is it very separate where you have to put very different skill sets depending on the company size?Erik:No, the expertise are similar and the struggle is similar in the sense of access to talent is really one of the biggest... True knowledgeable, experienced talent is what everyone's struggling with. The way we have to operate is different, because when you're dealing with a small business, a lot of times you're dealing with the owner, CEO. They can do whatever they want. There's no one they're reporting to, even if they have investors who usually have control. When you're dealing with bigger companies, you're dealing with publicly traded companies, a lot more processes, a lot more checkboxes, a lot longer time to make decisions. So, it's a lot slower. So, that's why I look at our client base like a distributed portfolio.Erik:The startups are super fun, because you can do whatever you want, you can get going quickly, et cetera. But they're also super volatile on the other end, where they'll fire you overnight for one small thing. Whereas big companies, they take forever to sign, take forever to make changes, but they also stick with you forever. So, we've worked with a lot of these bigger companies for years and years and years, because they're used to signing three-, four-, five-year contracts, even if we are month to month.Stephanie:That's good. So, what are some challenges you're hearing right now around either marketing challenges or business challenges that you guys are tackling that's maybe different than what you were hearing in 2020 or 2019?Erik:Yeah, I mean, 2020 was all COVID, but the silver lining was the market share of spending online almost over doubled. So, our clients on average doubled their revenue on what we were operating for them. So, that was really good. What we saw what changed towards the later end of the year and now into this year, so, now that market share hasn't diminished that much. Instead of 13% of consumer spending, being online pre-COVID, it went up to 30. Now, I think it's at 27%. So, it's still massive increase.Erik:So, we are seeing that now, all the big CPG companies and all these bigger companies that back to the point can't make quick decisions, unless the world's falling apart, cut everything. They usually do that and then they slowly roll back. They're all really coming back strong into digital, because they're seeing so much more market share there. So, what happened was the cost to advertise on Facebook and Google during Q2 and part of Q3 dropped about 30%, because there was less competition on it. Q4, October and November were insane, October because of the election and then November, holidays hit. December, they carry over a little bit, but they do lessen.Erik:And then I think now, I am anticipating advertising continuing to get more costly, because now, again, 13% of these big companies marketing online is now 27, they're going to spend more to capture that market, which means you're going to compete with them. So, if you're a small or medium business competing, there's a good chance that cost to advertise online increases significantly. So, not necessary what companies are looking for but what they should be is ways to increase their ownership of their customers, because if it costs you more to get a customer, the way to combat that is to increase your lifetime value to a customer. It's a math equation. It's that simple.Erik:So, how do you do that? You find ways to increase your lifetime through merchandising, through retention, through customer experience. When I say merchandising, having other products and services you can sell to the same customer. There's just a lot of things you can do, and then just continuing the communication like email marketing, SMS, chatbots, ongoing content, just all the ways you can create a walled garden around your existing customer base for them to buy more from you. The companies are going to win, which is why you see Amazon just skyrocketing. They were a book company at one point. Now, they sell you anything.Stephanie:Yeah, I love The Everything Store talking about how he and his wife are going and dropping off books to try and ship them out. That was a good book for anyone who hasn't read it yet. So, I mean, I'm thinking about myself as a smaller company right now. We're talking about ad costs are going up. It's going to be harder to compete against bigger brands. If you haven't acquired those customers yet and you don't have anyone to talk to, it seems like there's definitely an opportunity to be more strategic of finding new channels, whether it's the TikToks of the world or the Clubhouse.Stephanie:Shout out to Hillary, you just got me onto Clubhouse. But it feels like there's a bunch of new channels popping up that could help democratize community building a bit more or yeah, finding your audience in different channels that bigger brands maybe won't hop on as quickly.Erik:That's funny. I just got accused of being addicted to Clubhouse. So, my wife has actually had to say, "When we're eating, put that thing away." It's just the past week, but that platform is taking off. Yeah, it's always about working for diversifying. The problem is Facebook and Google still perform so much better than these other platforms that they need to catch up. TikTok will absolutely compete as they build out their ad platform.Erik:I think it's a no brainer in the way that the platform's built, but they need to do a better job of their targeting and everything, which when I say that, no one's spamming. It's just too early. Snapchat seems to be getting their legs under on Twitter. Hopefully, we'll figure it out. Stephanie:Yup, yup. I agree. Are there any new places that maybe are lesser known, where you're like, "We're trying out this one little thing in the back alley here that no one else knows about"?Erik:I mean, your know about Clubhouse. Clubhouse doesn't plan on monetizing through advertising, but as a community builder, it's crazy. I've been on it one week. I've 11,000 followers. I'm not an influencer. Twitter, I have a bunch of followers, but that's unusual for me.Stephanie:What are you doing on Clubhouse then? Because I get on there, and I'm like, "Hi." For anyone who can't see this, my awkward waving in Zoom. I don't know what I'm doing on there.Erik:Yeah, I've been fortunate enough to spend the past decade building a pretty solid network. So, when I got on there, a bunch of my friends were the people on stage that people want to hear from. So, guys like Daymond John and Lewis Howes and [inaudible] were all pulling me up to talk with them. And then other guys, like Grant Cardone, who I never knew before this now, start pulling me around with them. So, it's been a week, but all of a sudden, I've connected with a bunch of these heavy hitters that I've never knew before, that now we're also jumping on calls offline and connecting. So, for me, basically, I was on two flights a week almost in 2019. So, I spent most of my time traveling to shows and conferences and meeting people. This is scratching that itch.Erik:So, for the people that really want to network and build that network and learn from other people, this is the perfect platform for someone like me. It's not for everyone. So, I've gotten on stage. I've talked a lot. I mean, there's millions of people on it. Thankfully, I've been very lucky to build what I've built. A lot of them are looking for advice on how to build their businesses. So, now at this point, this is my fifth business I built. We've bootstrapped it. I've invested in, I think, 30 other companies. I've had a few exits, had some successes there. So, a lot of times, I can give some quick guidance to someone on there. So, I've done a lot of that, which has been fun.Stephanie:Yeah. So, since no one else has talked about this, this is why I'm diving even deeper into this. So, someone that can listen and be like, "Okay, I'm going to try that out too," are you speaking on there when you're saying you're on stage? Are you getting invited from someone? Are you just creating a room yourself? Tell me a bit about how that's working.Erik:Yeah. So, I mean, just to recap the platform, basically, it's super simple. All you see is a person's headshot, their little icon. It's all voice. So, you just talk. So, there's the stage and then there's the audience. Whoever's on stage can talk and you can mute your mic and talk. You got as many people on stage as you want, like a panel, and then anyone can come in and listen. So, as mentioned before we started this, I like to talk. So, me sitting in a room and talking and I've been in rooms with 20 people on stage, 30 people on stage, where I chime in once every 30 minutes.Erik:A lot of the habits that are starting to come on there are just people rotating on the stage asking questions of the panelists and just doing Q&A for hours, but it's people asking about, "How do I build my business? I'm struggling with this. What do I do here?" And then what I've seen is a lot of altruism, which has been fun. I've opened up my direct messages on Instagram through that. So, it's like, "If anyone needs help, just hit me up." So, making connections to VCs, to funding, to whoever could be a good distributor or a partner, give them advice, trying to help people.Erik:What I've seen also is a lot of people that aren't in L.A., New York, Austin, or Silicon Valley, that don't have access to these networks are all of a sudden... There was a whole world of amazing entrepreneurs I didn't even know until I got on this thing. It's a lot of the BIPOC community is getting on there and really helping each other. Not that I am one of them, I tried to help and very passionate about diversity and inclusion. So, we do a lot of charity work around bridging the opportunity gap. So, I've seen this as an amazing tool for that, because there's so many people that don't have access to... I've grown up around entrepreneurs. My dad's successful frankly. I grew up around people that have started businesses. I had a pretty easy path of role models.Erik:Most of these people don't or a lot of these people don't and that are coming from inner cities, et cetera. They are now on this. I do get pinged maybe 100 times a day actually on that thing, asking to be their mentor. I'm like, "You don't have to make anything official here. What can I help with? Let me answer your questions," that kind of stuff. So, that's been super rewarding, but I do see this as we're all stuck at home right now, where you are means nothing.Erik:So, this is a way for everyone to be connecting. But without having to be on video, it also makes a lot more people comfortable having a conversation. With voice, people are not as rude, demeaning. Social media has a problem on the tech side. We all know it, where it's like when you can just text whatever you want... We deal with it all the time with clients. If we have an angry client and we're on email, we'll get hate mail. Then I pick up the phone and call them and they're like, "Hey, how are you?" It's like, "What?" Same thing, I really think there's something there.Erik:The curiosity I have is as a social media platform... I'm sorry, this is all going to Clubhouse. But just as a social media platform, on Facebook, you might spend 3 minutes, 5 minutes, 10 minutes at a time scrolling through Facebook. Clubhouse, I'm watching people spend 12 straight hours in a day. I've never seen a social platform that people just zoom in and go. So, I'm really curious what that turns into. I think they'll end up monetizing by adding tips to panels, so you can actually tip the panelists or paid speakers, I think that's what we're going to see. Because they said they want to make money for their content creators, and they don't plan on adding ads.Erik:So, I think that's going to be interesting. But for brands to answer your question, I think for personal brands, it's massive. You're a CEO or whoever you are, building your brand on there and starting to talk. I mean, we had a channel the other day, where it was a bunch of beauty entrepreneurs from the south, bunch of women that had built beauty brands bringing up young beauty brands to talk to them. There were women coming on stage to talk about their brand and then going, "I've made $300 in the past two months on my website. The audience just bought $7,000 worth of items."Stephanie:Wow.Erik:That's happening. It's an eight-month old platform, but really got popularity two weeks ago. So, it's interesting to see where that can go.Stephanie:Yeah, I mean, that makes sense, especially around the theme too of, I mean, bigger brands too leaning into becoming their own media companies and getting on there and leading not just from their brand perspective but being thought leaders. Their brand is behind the scenes. If you offer value, someone won't mind if it's coming from someone at a large company that's like, "Well, sounds so smart. So, I'm sure they work at whatever big company that is," but they're the one on there offering the best tips.Erik:Yup. That's the other thing is there's no BS-ing it. When you talk enough, people are going to know whether you know what you're talking about or not. I've seen it. The rest of the two people on the stage are like, "Wait, what?" People call each other out, because I think people feel responsible, including myself. The audience is taking this advice. I jumped into a panel yesterday that was talking about Bitcoin. Some guys said, "There's absolutely no risk in investing in Bitcoin. You just put as much money as you can." I was like, "Hold on for a fucking second. Excuse me." Yeah, so there's that too.Erik:And then I do think there's a whole community and personal aspects that were like 21 Savage is one of the biggest followed people on. He does DJ sets every night with Sir Mix-a-Lot and all sorts of other people. It's not just business. There is a lot of other fun conversations. Overheard LA did a whole thing where they were saying, "What's the weirdest story you've had in COVID around dating?" There's comedy shows. There's all sorts of fun stuff.Stephanie:Yeah, that's awesome. So, when you're on there giving tips to businesses and people who are trying to learn, what are the top questions that you're asked or what things do you talk about that resonate most with business owners?Erik:So everybody wants funding. These are all early, early businesses. Everybody goes, "How do I get funding? How do I get a grant or a loan or funding?" If you need money to get started, that's a bad sign. Don't get me wrong. There's high tech companies and certain companies that you can't get around it. But most of the initial funding for businesses comes from friends and family if you need it. If you need a heavy amount of funding and it's not something high tech, you have to be real if you're the right person to start that business. That's one. There's a lot of people that pitch for that while starting with the hardships story, something that's like, "This is what I'm struggling with." I've noticed that it doesn't get the reaction you'd hoped for.Erik:Compassion is a big thing. I think for help, people do, but if you lead with that to try to get someone to be part of you in business, it shows the wrong focus. It's not to diminish what people are going through. A lot of people have had a really hard time recently and in general, but I do notice that when you lead with that versus excitement and optimism, you're going to attract a lot more people with optimism.Stephanie:That's a good one. Yeah, I've definitely seen a lot of people who come with the story where you're like, "I should feel bad, but also as a businessperson who maybe is either going to invest or partner with you, we'd be in this together. I need to know that you have another reason to want to push this forward. It's not just this." So, that's a good point. All right, give me more.Erik:The COVID excuse, I'm not very nice about this one, but I have too many friends that have done well in spite of COVID. Not because they got lucky. Someone came on the other night as like, "I've launched my ecommerce company last a year ago, but because of COVID, we've had a really hard time." It was like, "Take a beat. Because of COVID, your ecommerce company has had a tough time." We just went over the stats of ecommerce. I was like, "Explain that." It wasn't ecommerce. It was the person couldn't get out of their way. So, that's generally the advice I end up giving to, because again, there's a lot of people trying to get started. It's just go.Erik:My biggest learning in entrepreneurship in general is no one's that smart. It's just people that went for it and got lucky. I really believe that, including myself. I don't think that I'm not impressive. I think I went for it. I timed it right, meaning I got lucky. Meaning, because of the way the world worked, I knew about ecommerce right when the world wanted to build all the ecommerce and I was one of the only free agents in LA with a reputation of being successful. So, that's a big one.Erik:So, with COVID, I have a friend that owns 20 gyms across Canada that got shut down overnight, done. He's been doing it for 20 years. He three days later decided to launch a virtual training platform and has done millions in revenue in 2020 as a gym owner and was able to keep his entire staff, pivot, not lose money, and now have a whole new revenue stream that when things do reopen, he's got both.Erik:So, I have a friend that owns a chain of restaurants in L.A. He's not thriving, but his businesses are all still open. He's making money. He's made a living. There's ways to operate that you can actually get through this. I watch some of our clients, ecommerce brands. They're like, "Cut everything." I'm like, "What do you mean cut everything? The numbers are good. I get that the news is scary, but you're doing well. Do not cut." The companies that cut, I don't know if any of them recovered, the companies that I know that cut with us. And then we had a whole bunch of other companies that stuck with us, our average client in Q2 doubled their revenue.Erik:So, interesting if you think about what happened in Q2 of 2020. So, yeah, getting back to it, the biggest one is like don't give yourself excuses, go for it. That's a lot of what we're talking about. And then we get into sometimes deeper marketing conversations like, "What do I do to get started in marketing? If I don't have a budget yet, where should I spend my money? Should I run Facebook ads right away?", those kind of questions.Stephanie:Yeah, I love that. It reminds me too of doing things in haste, there's a good quote. That was around investing, but it's like the person who's scrambling to themselves when the news sounds bad or something, they're never the ones who do well or find a good ROI. I thought I'd be the person sitting and waiting most times and play the long game, instead of reacting to the news or quickly stopping or starting something really quickly. It's probably never that necessary to jump on something.Erik:Correct. You have to give yourself that luxury, so to speak. So, what I learned myself out of this was I'm keeping more money in the bank going forward, so that I can take a beat. Even if I see my business losing money, I can go, "Deep breath. What's the right long term plan here?" Not just react because I got to stay in business tomorrow. That's where a lot of businesses got stuck is we're in such a great economy. People are just spending all their money on growth. All of a sudden, it cut off. So, you have no money in the bank, that can be a bad situation.Stephanie:Yeah, I agree. So, you're talking about many of them don't have budgets and they're trying to start marketing or launched an ecommerce shop or something. How would you go about that? Because I used to read quite a few books that talked about scrappy ways to do it, whether it was just putting up a landing page and then maybe linking to products, reselling them. There's so many things that we've been taught when it comes to being scrappy and starting something without having to invest money, but how would you do it now in 2021?Erik:Yeah. Everybody loves to throw around the MVP model, minimum viable product. The problem with it is people go to minimal and not viable. Meaning, you make a product that gets out there, but it's not really viable. It's not really what somebody's going to buy from. It's a landing page that sends you to a site that says you can check out but you can't or whatever it is. People think that just getting up and running is good. You got to commit.Erik:If you're just getting started, keep the day job, make money along the way. If you can't work a day job, then you get started on midnights and weekends, you're not going to be a good entrepreneur, because welcome to entrepreneurial life. So, that's actually a good way to get used to it in my opinion.Erik:Also, it never happens as fast as you want it to or almost never. So, it buys you time. You're not under some ultimatum that if this doesn't work in six months, I can go back to work. It's like well, just give yourself as much time as you need. Switch over when it can support your lifestyle. So, to get started, I mean, there's a few ways. If you're trying to launch a new product, you might need to put in 10, 20, 30, 50 grand to get started. That's actually a thing. That's where the friends and family come in if you're launching a new shoe line or something, but start small. Sell out. It's okay. Meaning, sell your product, not sell out as a jab or anything. It's okay to have a small run in the beginning.Erik:And then in terms of marketing, I've really honed in on this focus, actually, through a lot of answering these questions on Clubhouse is where we invest our investment threshold and where we like to look at companies is 20 grand a month in revenue. Because honestly, that's when you've been able to get over the scrappy period and you started to build a sustainable business. Still small, but there's something there. That's traction to us. To me, it's like get to that point without spending too much money.Erik:Partnerships, get someone that has your audience that you're trying to reach and find a way to make them talk about you to their audience. That could be press. That could be influencers. That could be other brands that collaborate with you. That could be many different ways. But start there, start building that organic reach groups. If you're selling shoes, not in COVID, but in general, sell them out of your trunk. Don't make it so it just has to be through your website either.Erik:My view is focus on one thing, and don't narrow yourself in other ways. The idea of being direct consumer and not opening up every other distribution channel for your brand is crazy to me. Go omni-channel, open up retail, open up everything else, and build a model that makes sense for all of those, and then see where the least path of resistance is. Maybe Nordstrom decides you got the coolest sneaker ever and you get a $5-million order. You're able to ask the right people, so you can protect yourself, because a lot of those big box will return the entire order when they don't put it on the shelves.Stephanie:Oh, wow.Erik:So, there's ways of that-Stephanie:[inaudible 00:25:50].Erik:That's why retail is hard. Walmart, they charge you for the products that don't sell and send it back to you. So, you got to be careful on those agreements and what you take on, but listen, it can also set you up for the rest of your life getting a deal like that. So, open it up to do all those things and be scrappy about it. Instead of throwing other people's money and trying to grow and hoping it works, find ways to make money right away. As someone that has bootstrapped a business and owns it with my partner, but the two of us, it's awesome. We tell our team all the time, "Anything you want to do, we can do it. Just ask." We're not reporting to anyone. We don't have people on our board or investors that we have to report to that are going, "I don't agree. I'm worried about the risk of my money." Not all investors do that, but some do. So, yeah, if you can keep ownership, it's a lot of fun. It's stressful at times too, because there's no one else backing me up. It all falls on you. But once you get through those hardships and get used to that challenge, because it never ends, it actually becomes pretty fun.Stephanie:Yeah, yeah, that's definitely my viewpoint on investors too. Unless they're very strategic, they're going to open up a network for you. They're going to give you something that you can't get otherwise. If you're just going after money, you probably needed to look elsewhere. I mean, my friends and family, not so much. I would have never been able to raise any money from them properly. But, thinking about it more strategically, instead of just, "Here's some dollars," because we had a guest on the show, who I forget who they were.Stephanie:Maybe Hillary can remind me in our prep doc here, but they're talking about how they built their company based off a Kickstarter Indiegogo type of thing, because they had this whole quote that was, "Don't rely on friends and family." Because if that's how you think you're going to fund your product, you're already going to fail. Account for them to maybe only be 3% of what you need or something like that. Only 3% of your product will be bought from them. The rest, you need to go out and form those email newsletters. Find your audience elsewhere, or else, there's no point in you trying if that's your only goal.Erik:Yeah, I would say that with smart money, which I agree with, if you're going to take money, take smart money that knows what they're doing and can help you. But a lot of times you can get that help without even taking their money. That's the other part. There's an anecdote about call someone for advice and they'll give you money. Call someone for money and they'll give you advice. So, if you want connections, most people that have been successful, most not all, but most are really willing to pay it forward, I've noticed. They want to help. They can't help everyone, but when you catch them at the right time... And then for anybody, it's a game of numbers. If you're looking for help, reach out to as many people as possible. Someone's going to say yes.Stephanie:Yup, I agree. So, the one area that we sometimes neglect on this show is B2B commerce, because of course, everyone's focused on B2C. But I saw that you put out a list of tips for B2B ecommerce companies. I was hoping you could walk through, what are you guys seeing for B2B companies? Do you work with B2B companies? How are you advising and marketing for them right now?Erik:Yeah, I mean, in the nutshell, B2B marketing is actually very similar to B2C, except for the end goal with B2C is a transaction. B2B generally is to drive a qualified lead, but you're still marketing to an individual. That's the part that I think people really forget. When I'm marketing to B2B, I'm not marketing to a business. I'm marketing to the decision maker at that business. So, it's still a person. So, instead of marketing to someone that likes dogs and biking, I'm marketing to someone that has this title at this type of company, who's a marketing manager at a Fortune 500, whatever it is. So, it's just a different targeting methodology.Erik:And then the way you position the company is still value proposition. You still want to get an emotional reaction. That doesn't mean like go crazy with it. So, don't take that too verbatim, but people justify emotion with logic. So, if you can hit the emotional reptilian side of the brain and get with any type of marketing and get them to feel like you're going to do something for them, that's the best way to get someone. So, Hawke Media is all B2B obviously. We don't use it that much now, but we're about to ramp it back up. Have you seen our commercial with the lemonade stand?Stephanie:No.Erik:Super fun. We filmed this less than a year into business, I think. I sat with my business partner. Again, we're marketing to business owners. That was our main target. They were like, "What do people like?" I'm like, "Puppies and kids." It was just when GoDaddy got banned from the Super Bowl for putting a puppy mill as a joke commercial. I was like, "No, let's not do that. So, let's go with kids." So, we basically created the commercial about a bunch of kids in a really corporate office.Erik:But when I say kids, eight, nine year old's running around, skateboarding, throwing paper airplanes, freaking out. The owner, this little blonde girl going like, "I can't take this. Who's handling our Facebook ads? Who's doing this?", and just freaking out. And then we come in and we got you. I was in the commercial too. We explained that. It shows them at the end, a bunch of kids making it rain with cash and dancing and having fun.Stephanie:That's cute.Erik:It was fun. It got people's attention, but the whole point was, "We got you. I know you're freaking out, but we're not and we got you." That's how it came off. That emotional connection, even though we're talking about B2B, which you'd think is super logical. How much do you cost? How much money you're going to make me? No. Why people hire us, the logic reason is bandwidth's our expertise. The emotional reason is, "Please someone just handle this. I don't know what's going on here. I just want to grow and I need someone to take it off my plate," or "I don't know what I'm doing." We need someone to just come in calmly and help us.Erik:Understanding that in B2B is super important, because then everything you do with positioning yourself is like, "We're here. We got you. We know what we're doing." You can sleep easy at night is our positioning. Now, you change that. And then how you execute on that, same channels, Facebook, search, email marketing, press, all the things we use for our clients, creating your own content is the stuff we use for ourselves.Erik:I'd say any marketing is aspirational. Not meaning I aspire to be like something great, but more like, "I'm currently at this state, and I want to be here." It's as simple as my socks have holes in them. I want comfortable socks and you go buy socks. This aspiration doesn't have to be something groundbreaking. So, understanding that you need to position yourself as that aspiration, the solution to getting the person from where they are to where they want to be, no matter what you're selling, B2C, B2B, is the most important part.Stephanie:That's really good. Yeah, I mean, I think about the ads to B2B and they're so lame. A lot of times, they make things so corporate. It's like, "I'm pretty sure any corporate citizen will not want to watch another corporate style ad." They want something new and different and love to just connect with the person. Even if it's a title that you're connecting with, there's someone behind that title. If you wouldn't like it, they probably won't either.Erik:Yes, exactly. That's been the awesome thing about Hawke and its marketing specifically is I'm the customer, literally, who would be buying from us. That's why I created it. So, I get to make things that I didn't want to see. You just nailed it. I hate the boring, stodgy, men and women in suits. We've been trusted for 25 years. Who cares? That's not why I'm hiring you.Stephanie:It's like the stock photography, where you go on there. It's like all these people in offices and business suits. I'm like, "Who's buying this stock photography? This is horrible."Erik:My favorite, I used it again recently. So, that's why it reminded me. Remember that photo shoot they did with the baboon doing stock photos in an office. I just found it. My brother-in-law asked me what I was up to this weekend, I sent him the baboon banging on the keyboard. I'm like, "Just working." That was a great shoot. That was so perfect. Yet so many people did not get the point of that, which is this is ridiculous. Why are we taking office stock photos?Stephanie:Yeah, yeah, that's funny, but I mean, a lot of people use them for a while. I guess it worked for probably a solid week, and then everyone realized it's not working anymore.Erik:No, no, a lot of people still use the office photos. Listen, that's not going to be the only driver of your business. You don't have to be perfect in marketing. If you have a good product or service, marketing helps, but it's not critical. So, a lot of people get away with really bad marketing and still have a really good business.Stephanie:Yeah, the one theme that I've heard from quite a few people on the show is that the organic videos and natural things are all performing way better than stock photography or anything that seems like it was built out of the box. Are you seeing that as well?Erik:It depends. It depends on what type of product it is. If it's a product that needs a lot of trust, you need production value. Meaning, a supplement or something that people are looking to solve a problem. They don't want to see that you threw something together. If it's like fashion or lifestyle products that people aren't really worried, you can get away with that a lot more.Stephanie:Yeah, I like that. So, one other thing, I don't know how much do you guys experiment with TV, because I was listening to a good episode. I forgot what podcast it was, but I think it was Gary Vaynerchuk, where he was essentially saying, "All TV is dead except for Super Bowl ads." That's the only ads that actually work. Every other TV commercial, they don't work anymore. They're dead.Erik:Gary's a friend and I think he has nailed what he's doing. He's a super bright guy, but I think a lot of times, he speaks in hyperbola. Nobody ever gets held to these big grandiose claims. I called a friend out for claiming that Bitcoin will be at 50 grand by Sunday. And then Sunday came around, I screenshot it and I sent it back. I'm like, "What the hell, man?" He's like, "Whatever, it'll happen in the next month." It's a habit that a lot of people got into, making these giant claims. I'll be real, TV does work. You got to buy it, right? Yeah, we do some TV, some radio. It's not a big part of our business. I'm not trying to hype it up.Erik:But once you have an amazing funnel and you really know who your customer is and you're really good at nurturing leads... Meaning, not just letting them come to your site and hopefully, they buy, but capturing email, capturing their phone number to text them and follow up and really nursing them. Again, you know your audience and you know your messaging. So, you know how to attract your audience and get them to buy. TV is still one of the cheapest places to get a 30-second impression from a massive audience. So, both TV and radio are still very viable options as you scale, but you can do a lot of digital before you have to go there.Stephanie:Yeah, yeah. Yeah, I agree. We had one of our podcasts aired on radio. They took it and turned into a one-hour special for Veterans Day. It's called The Story. Some people were like, "Radio is dead. Why would you want radio?" I'm like, "Do you know how many people still listen to radio?" Actually, it's still very legit if you can get on radio. I mean, it's huge.Erik:Most people are sitting in their car. They're not going anywhere. They're not changing the station either, because, frankly, there's not that many options. You can get a lot of people that are doing nothing. The hard part is to get them to remember things, but it works. We've had a lot of luck, especially event sales. When we're doing big events like TED and stuff like that and trying to sell tickets, DutyCon was a good one, radio works really well.Stephanie:Yup. Yeah, like you said, getting that CTA, where it's not something that's distracting or they crash, but seriously, going by what I just talked about.Erik:Yeah, exactly.Stephanie:All right, only couple minutes left. Let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready?Erik:I'm ready.Stephanie:All right. What's up next on your podcast list?Erik:Who is or what?Stephanie:Either, who or what? What are you listening to?Erik:Oh, well, we have our own. So, who would be Rachel Zoe.Stephanie:You have her coming up?Erik:Yeah, we've worked with her for years. She's awesome. Yeah, so that's the next one. And then after that is Rob Dyrdek, I think. I want to get more into How I Built This. He's awesome. I just think that that's always an interesting story. My podcast is more about their life story. His is really about how they built their company. So, I like the life story too. My podcast was I wish someone did this. So, I'm just going to do it and hit up cool people and find out how they got where they are. Yeah, so my podcast is Hawke Talk.Stephanie:Awesome. Yeah, I will be checking it out. What's up next on your reading list?Erik:Whatever my business partner assigns me. I am not a voracious reader, and my partner is. So, he's decided-Stephanie:He assigns it to you?Erik:He's decided as of last month that he's going to give the executive team including me a book a month that he wants us to read and be on the same page on. I'm all about it, because I don't have any motivation on my own to really do it. I'll pick up a book now and then probably a couple a year. Most of the time, I end up listening to it on Audible. I'll buy the book. I buy all my friends' books. My wife rolls her eyes every time. I got to support, but I don't read any of them. Sorry, guys. We're coming out with our own book towards the end of the year called The Hawke Method. It's how we grow companies, basically.Stephanie:That's awesome. I love that. What one thing do you not understand today that you wish you did?Erik:I wish I understood the public markets more. I've put money in it now and started to try to learn it, but I've surface level things I understand. But when we started getting into derivatives and the complicated side of finance, I'm still not completely clear. I've also shied away in some ways, but I think when you overcomplicate it, it's too complicated for everyone. That's when we get into the housing crisis and things like that, but I also would love to understand it so that I can call bullshit on it sometimes, because I realized in my entire career, no one's that smart. If it's complicated, it's probably a problem.Stephanie:Yup, that's a good one. What favorite piece of tech are you enjoying right now? It can be new or something you've used for a long time. It can be an app or anything.Erik:Yeah, I will say the one that surprised me the most is the Oculus, because I've been a naysayer of VR. I'm like, "VR is too isolating. It's stupid, blah, blah, blah." But once I got one and I ended up helping an organization called YPO do an event with Oculus and got one, and I'm like, "Oh, wow, no, this is interesting." There's actually something to VR and the experience you can have. Most people can only use it for 45 minutes at a time, but I think it's really cool. I think there's something coming down the pike with that that I think will be really cool.Stephanie:Yup, yeah, we wrote a 2021 Trends Report. That was something I'm keeping an eye on is how to use that when it comes to not only following influencers, but shopping from feeds and watching live events, but also being able to get it while watching it and stuff. I think there's a little work to be done, like you said. I know a lot of people especially myself still get dizzy and not feeling very good after, for me, 10 minutes, but it seems like once that gets a bit better, there's a lot of opportunity, especially for ecommerce companies if they can figure out how to make it an event and something fun that people want to attend.Stephanie:Plus, also, it's like The Container Store in Netflix series. You want to buy with the Netflix series ad, even though they don't really slap you over the head with Container Store stuff, but you're like, "But I need that specific box to put my scarves in."Erik:Yes, exactly. No, I think that's exactly it is. The business model needs to be fixed around the content for VR, because it's just not good enough yet to track enough content and things to do. But once that turns into a much more prolific platform, I think that you'll see it hockey stick quick.Stephanie:Yup. All right, last one, what is the nicest thing someone has ever done for you?Erik:Oh, I have to think of a nice thing, because I feel like if I'm going to say the nicest, it's going to be...Stephanie:Or you can say the meanest too. You're like, "Oh, this person was really mean to me."Erik:I had a business partner that really screwed me up, but I don't need to give it any credence. Not my term.Stephanie:Nicest then.Erik:I'm trying to think of nicest. I mean, the fortunate thing is many, many people have done a lot of nice things for me. A lot of people taking bets on me before I had any reason to deserve them. My parents were always great to me. My wife's great to me. I'm surrounded by people that do nice things for me. So, I will say a nice thing that stands out that I never give enough credence to is when I graduated college, I went into real estate a week before the whole banking industry collapsed. I made $350 that year.Erik:Six months in, a friend of mine's dad called me. I was a guitarist growing up. My drummer in my band's dad called me and said, "Hey, I've been watching you. You seem to be like a young, aspiring entrepreneur. I like your grind and your spirit here. I want to help people like my son, who is still pursuing music, figure out how to do the business side of things. So, they can actually at least make a living being a musician. I think there's a thing we could do here." I spent a couple months putting a business plan together, showed it to him. He not quite disappeared but went MIA for three months.Erik:Called me July of 2009 and said, "Hey, I'm putting in a quarter million dollars. I think I can raise this another $750,000. You're going to run it. Let's go." That became my first online company. So, that guy put in his own quarter million dollars, got his friends to put in $750,000 million invested in an online music company in 2009. And then put me in charge of it, gave me 5% of the company and paid me minimum wage, which I was grinding.Erik:It was a bet. Don't be wrong. It could have really worked out for him, but I also think of that as that guy set me up as an entrepreneur in a lot of ways too. I don't know what I would have been doing without that opportunity. I'd probably still have grinded through real estate unless something else popped up for something. That put me into digital. That did a lot of things for me. I'm still in touch with them, but that was a big one.Stephanie:That's a good story. I'm glad I asked. Yeah, that's really good. Cool. Well, Erik, this has been a very fun interview. I want to bring you back for another round in the future to hear how 2021 is going. Where can people find out more about you and Hawke Media?Erik:Definitely, Clubhouse.Stephanie:I'll see you there.Erik:Yeah, [erikhuberman on any social platform's fine. And then Hawke Media, if you ever want to reach out, is just hawkemedia.com. We do free consultations. Always happy to help.Stephanie:Cool. All right. Thanks so much for joining us.Erik:Yeah. Thanks for having me.

Imagine this: You’ve developed a new product. One that you know works… and that you know people need. There’s just one minor problem: Selling that product requires you to not only enter a battlefield filled with regulatory land mines, but face competition with billions of dollars at its disposal. We’re seeing this situation play out in the multi-trillion-dollar industry that is supplement and pharmaceutical sales. It’s an industry that entrepreneurs everywhere are trying to make waves in, and just like any other industry, finding success means coupling the right product with the right strategy.Zak Williams was able to kick the door open with his company, PYM, which sells all-natural amino acid-infused chews that have proven mental health benefits. Zak is the son of the late actor, Robin Williams, and he is using his own experiences navigating the ups and downs of mental health to help him build PYM into a company that advocates for mental health support in whatever way works best for the individual. Practically, that means working out a business strategy that allows PYM to not compete against big pharma, but sit alongside it. And it includes developing new kinds of convergent experiences that allow consumers to operate in a physical and digital world simultaneously. Zak explains all of that and more on this episode of Up Next in Commerce. Main Takeaways:Play Where You Can Win: For companies that are selling natural products, trying to sell in the same channels as big pharma would be a mistake. Not only will you not be able to make the same claims about proven solutions, but you will not be able to afford to acquire enough customers to make it worth it. Instead, find other channels or methods of marketing where you can stand out, either organically, or in a more affordable way.Do Your Research: Making wild, unproven claims has always been a bad strategy for brands, but it is especially reckless when it comes to how something can affect a person’s physical or mental health. Invest in real research to back up the claims you are making, and be authentic with your message. Rather than trying to convince customers your product can cure something, help them open their minds to new experiences and products that might be part of a daily ritual or personal blend of what works on an individual basis.Convergent Experiences: As a new normal emerges post-pandemic, brands will need to focus on creating convergent experiences that allow people to engage in the physical world while still using a digital experience to achieve goals and objectives.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. This your host, Stephanie Postles, co-founder at Mission. Today I'm chatting with Zak Williams, the co-founder and CEO at Pym. Zak, welcome to the show.Zak:Thank you so much, Stephanie. It's a pleasure to be here.Stephanie:Yeah. I'm very, very excited to have you on. I was going through my amazing prep dock, and I first thought that Hillary was playing a joke on me when she wrote down Zak's the son of actor Robin Williams. She likes to put in silly things to see if I'm going to go with it. Then I'm like, oh wait, this is actually real. I started reading a bit about your story and your company, and I would love for you to actually start with that. Tell me a bit about what led you to Pym, and yeah, expand on that, because I was really excited to hear about the full story.Zak:Yeah, certainly. What led me to starting Pym, the mental health support company, started very early on in life. I had anxiety throughout my teens that manifested into something more extreme after my dad, the entertainer, Robin Williams, died by suicide. I found myself experiencing bouts of depression, also extreme anxiety and stress episodes. I was feeling like my life was becoming unmanageable. I was trying to use alcohol to self medicate and was trying to find any other solution that would work. I tried cannabis products, had prescription pharmaceuticals, which work for many people. For me, I didn't find the solution that necessarily helped me in a way that would work in perpetuity. Then I found some help in things like talk therapy and alike.Zak:Through that experience, a couple things happened. One was I was diagnosed with post-traumatic stress disorder and was dealing with a lot of issues associated with that. The other thing is I started to find help and support through committing to service, specifically working with mental health organizations, not for profits; supporting them around things like governance, organizational development, fundraising initiatives, strategy, business development. Whatever it is they needed help with, I wanted to jump in and support because I found actually that commitment to mental health organizations really helped me. Through that experience, another thing started to happen, which I found that me sharing my story and what I went through really helped others while helping myself. I found that being vulnerable and taking a lens of vulnerability and opening up really ultimately ended up starting that process of healing for me. I found that mental health advocacy is one component.Zak:The second component is when I took self medication out of the equation, using alcohol, and by the end I was drinking alcoholically and it was just not good for my mental health. I was feeling very emotionally dysregulated and not having a great time. When I cut out alcohol, I was still really stressed and really anxious, and realized that I needed something to support me throughout the day. I found a solution that my wife introduced me to. My wife, Olivia June, who's also co-founder of Pym. She turned me on to amino acid formulations, which when I tried them were a game changer. They helped me feel clear and erased the anxiety that I was feeling and that was ultimately crippling me. She was introduced to this sublingual tincture by one of her doctors. When I tried it, I was just like wow, this is transformative.Zak:Armed with the insights of mental health advocacy is very healing for me, and amino acid formulations really helped support me throughout the day, I realized there was an opportunity to develop something that was very near and dear to my heart, but also helpful for people while focused on the core mission of mental health support. I started Pym with the lens of creating a brand that stands for mental health support, like Red Bull stands for energy. In starting the company, we kicked off the food science and product development element of that in 2019 and created something that was both safe and effective, while also being delicious. We worked with a food scientist named Lena Kwak, who was the director and research and development for The French Laundry, which is a restaurant in northern California; a very well-known internationally regarded restaurant in California. We wanted to create something that had a great taste and smell and a texture that felt unique but also toothsome.Zak:We came upon something that we ended up testing with our early beta testers that they liked and they found effective. We kicked off the commercialization phase when we decided that everything was in line with not only how we wanted it, but how our beta testers felt it should be. Through that process, we hired the chief operating officer of Sugarfina; a wonderful man named Scott Cuillard who came on as our chief operating officer, and he accelerated the process of commercialization by 200%. Now we're at market. We're just getting this feedback from our customers and early advocates that our product is a lifeline and it's helping people in a very significant way and we're doing these giveback campaigns where we're supporting mental health organizations, starting with Bring Change to Mind, which is an organization I'm on the board of that focuses on developing communities and high schools for mental health support, while launching campaigns to break down the stigma associated with mental health.Zak:Moving into 2021, we will be deepening our relationship with Bring Change to Mind and have a portion of our proceeds of every sale going to supporting building mental health communities and high schools. That's what we've been up to in a nutshell. The why behind it relates very much to mental health advocacy. We see ourselves as a brand that stands for advocacy and we want to really triple down on supporting the movement associated with mental health. That's what we're all about.Stephanie:That's great. It seems like this kind of product would have a lot of barriers to entry, because when I think about the market right now around mental health products and CBD and cannabis and all this stuff, there's already a market there. There's already been a lot of messaging, a lot of advertising before a product based on amino acids, which honestly, I haven't even really heard of that. Tell me a bit about how you overcame those barriers and educated new audiences or are starting to. I know you just recently launched, but tell me a little bit about that process to really get your product on the front of people's mind.Zak:Sure. Amino acid formulations for mental health support is not a new thing. We didn't miraculously come upon something that was new to the world. They were gaining momentum and popularity as a way to provide mental health support by balancing out the endocrine system in the 80s and 90s. Something happened in the 90s that set off an era of a pill to solve all your problems in life. Kind of that era of taking a curative approach to symptoms. Do you know what that event might be?Stephanie:I'm guessing you're talking about prescription pills, but I don't know what the event is.Zak:Yeah. Actually, it's a very specific prescription pill. It was the creation of Prozac. The profound thing about Prozac is it was a product that would function as an antidepressant that would not kill you if you took it in excess or stopped taking it, because at the time, the available toolkit of prescription pharmaceuticals had toxicity associated with them. In certain situations, you could take a product and if you stopped taking it, you would be at risk of severely debilitating affects in the like. Prozac created kind of a safe mechanism to provide mental health support. By the way, I'm a big believer in prescription medication being helpful for many, many millions of people. I don't want to make it seem like I'm not supportive, but the momentum that amino acid formulations were getting kind of fell by the wayside and didn't favor of this era that lasted a couple decades of a pill to solve all your problems.Zak:It's only been in the last five plus, just over five years, from my perspective, that the whole idea of seeing the individual as a system, as a collection of interacting organs and functions working together to help support and sustain the body, that idea and premise has really been embraced in a major way by the medical community. Going hand in hand with that is the idea and premise that you can take certain products, to kind of balance yourself out, because they provide support for a number of different systems and create kind of a balanced ecosystem to better help you. That's kind of where amino acid formulations kind of come into play.Zak:From our perspective, we just concentrated these existing amino acids in a way in which they actually provided a more comprehensive form of support for stress and anxiety with our first product. That's the story in brief, but the challenge is very specifically we need to popularize amino acid support as a way of providing mental health support, because there's science and research behind. Science, research and studies behind amino acids being helpful for people, but people aren't too aware of it.Zak:As part of forming the company and making the effort to formulate something that's helpful for people, we established the science advisory board from Harvard Medical School, UCSF, USC, and MIT, and with specific focus on neuroscience and neuroendocrinology, with some mental health epidemiology being an element of that as well. As part of that, we are in the process of establishing a pre-trial study, which we'll then use as a foundation to go into an actual clinical study that we'll be using to really get a deeper understanding of how we can provide decisive support for the mind and the body. We're kind of in the brave new world of natural compounds providing support both for the brain and the mind and also the body, but I'm an advocate and believer in compounds that are safe and effective.Stephanie:Yeah. It does feel like the timing's right. 2020 is a year where I've at least seen a very big shift in not only healthy living, but people actually looking into the source of what they're ingesting and thinking about healthy alternatives to not only their diet but also things they're taking, whether it's prescriptions or whatever it may be. Stephanie:It feels like the market's ready for it, but then figuring out ways, like you're doing, to pull it together and put it in an easily, I guess, consumable format where people kind of know, oh, here's the five things that are coming together, here's what they're going to do. Someone's already done the science behind me, instead of trying to piecemeal these extracts and things off of Amazon together to try and fix a need based on all the YouTubers and influencers and people who are telling you oh, this is good for this, and this is good for this. It's so much information now.Zak:Right. That's what I was doing. I was cobbling together an experience that helped me, but it was a bunch of different products. I agree. I think that there is a major opportunity on the research side too. There's some great companies that are focused on establishing more research through studies. Some registered, some focused more so on doing the research to really understand how things work prior to actually doing registered studies. There's organizations and companies that are focused on actually creating frameworks to do the testing. I will give a specific shout-out to my buddy, Jeff Chen, who was one of the founders of the Cannabis Research Initiative at UCLA, and he recently started a company focused on doing research around natural compounds. His new company, Radical Science, is hyper-focused on establishing frameworks, specifically clinical frameworks, around testing for natural products. It's so essential that people actually really start understanding what it is they're putting in their body to support themselves.Stephanie:How do you approach that regulatory field? Like you said, to me, it sounds so scary entering a market like this one where you're doing things for the first time, it's new, people aren't used to it. How did you approach this field and did you find any quick paths to get past some of the crazy rules and regulations to be able to actually start creating a product and testing it and seeing how it would work?Zak:Yeah. Great question. It wasn't a cold start for me. I have several years of experience working with complex compliance and regulatory environments due to investing, advising, working within the cannabis industry.Stephanie:Got it. Okay. That's good background. You weren't a newbie to this. I've done this before.Zak:No. The lens we take. I say we in terms of our team and our advisory board is prioritizing compliance and safety. In starting the company, we sought the most sophisticated advising we could get. We need to continue prioritizing safety as front and center with what we do. We're a dietary supplement as a product class, and it's important to consider how we make claims. We are very cautious with how we do so because from our perspective, we are given the privilege and opportunity to provide support for people given a specific framework, and we want to be considerate of that framework. The key thing for us is as we go about doing studies and the like is we want to develop a deeper understanding of how we're actually providing support for people.Stephanie:Is your goal to not just be a dietary supplement eventually?Zak:The big goal for us would be to become a doctor recommended product, or there's a class of products called a medical food. What a medical food is is a product that is meant to support specific disease states in the like. It's a product class. It means there's a lot of research behind how it's been effective to support different states. You can make specific sets of claims.Zak:From our lens, the reason why medical food establishing that type of status is important for us is because that way we can actually say we've done X amount of research, it's shown to be statistically significant, and we can really make these specific claims around supporting people. That's a process. That takes a long time to do. It's not inexpensive. There's stages that we're required to kind of get through to get to that point.Stephanie:How much money are you estimating it could cost to have your product become medically food stamped? That's a weird term.Zak:There's a range. Depends on what type of condition we're seeking to support and how long the study is meant to be conducted. Generally, these studies are months long. In some cases, over a year. It's not inexpensive. Let me frame it like that.Stephanie:Yeah. I guess that it what makes me worry about maybe new entrepreneurs who see opportunities or if they're like you, but they don't have connections and they don't have the story that you have and maybe the status. You'll probably be like, don't say that, but you have a lot of things that maybe a lot of others don't. It seems like innovation's going to kind of stall if it takes so much money to get something natural into the world, or a blend of something natural, and then to be recommended over top of prescription drugs where these pharmaceutical companies have huge amounts of money and marketing.Stephanie:I read this whole book about... what was it called? Let me think. It was called like the cure to cancer or cure of cancer. Something that was abour apricot oil and the apricot seed. I don't know if you've ever read this before, but it was about how this guy was showing that apricot oil, I think that's the kind of oil it was, was having a big impact on cancer and cells and all this. All a sudden, these big pharmaceutical companies start putting out hits on him. He had to go to a whole different country to prescribe it. It seems like an insane world to even try to do something new just to start, and then also not having a huge budget or connections. It doesn't feel like anyone can enter this market, really.Zak:There's ways to do it. The barrier to entry in terms of launching a natural product is not as high as, say, launching a pharmaceutical product. You have to make certain assertions to say hey, this product will be effective. It seems to help people, and you have to generate demand. We've very much in the business of demand-gen. From a Pharma perspective, I would say that pharmaceutical companies are actually taking a lens of openness towards utilizing natural compounds to better support people.Stephanie:They're not taking out hits on you.Zak:No. Where it gets challenging is if you're going out and saying, we have a mental health support solution, and you go in certain channels where you're trying to advertise, you just get squished. You just can't afford to acquire a customer when you're talking about going in a channel which people are seeking certain mental health support solutions through search, for example.Stephanie:You have to find ways to maybe be innovative to not have to rely on the same channels as maybe the big Pharma companies and find ways to get to the users who are probably looking for that, but they just don't know exactly what to look for or the terms to search for.Zak:The big advantage that entrepreneurs should look for when it comes to creating an edge, an unfair advantage in this space is distribution advantages.Stephanie:Tell me more about that.Zak:Direct to consumer, there are some advantages, but there's also some disadvantages. We have had limited success with paid search. It's just hard for us because when people are searching for specific needs, that can be very expensive from an SEM perspective.Stephanie:What do you do instead if paid search is expensive for us? What kind of channels are you maybe looking at instead or experimenting with where maybe you're finding better results?Zak:We've had enormous success with earned media and organic SEO in the like, but that's a strategy we set out from the get go in applying. I come by our company and the products very honestly. Part of what I do in mental health advocacy is just share on a story consistently and when it's combined with Pym, people are curious. Sometimes they end up being drawn and attracted to our product. The thing too, which we found has been helpful for folks is that we're not advocating for a product to be a cure-all. It's actually kind of I don't want to say the opposite, because that's not quite what it is, but it's kind of adjacent to that. Really what we're saying for is our product's a catalyst. We want to get people into the mindset of prioritizing mental health hygiene as part of their daily rituals. Hopefully our product's a catalyst. If they're taking our product as the solution for their mental health support over the course of their day, that's great, but ideally, they should be doing other things to best support themselves.Stephanie:I think that's the messaging that will win going forward. All the companies I've had on the show so far, so many people talk about authentic messaging and not just having the same kind of corporate speak like maybe they used to years prior or something. I think thinking about how to craft that going forward, it's actually more trustworthy if you say something like, this isn't a fix. This is meant to be a part of your daily routine along with exercise and eat healthy and whatever else you need to do to stay healthy.Zak:Yeah. The thing for us we really want to push for and advocate for, something I call enrichment loops. Meaning if you come to our product and take it on a consistent basis, hopefully it adds value every time. Meaning you're clear headed, you can learn something, you can engage in an activity that's helpful. If that's not the solution for you, then we're not going to push it on you. Do something else that helps you. Again, this is where prescription pharmaceuticals, if you're finding a solution with prescriptions, by all means, take that solution. If it's meditation, if it's mindfulness activity, if it's a fitness regimen, If it's nutrition. For most people, it's most likely a mix. For me, it's a mix of meditation, eating well, some fitness, but I could definitely be better on it. I take Pym because it helps me. I'm a big believer in talk therapy and community support groups. That's my mix.Zak:To close on the unfair advantages in distribution. If you have a digital channel like an app or something, we're exploring creating a companion experience. That gives you an ownership of being able to really provide unique insight, pushed out notifications, establish a foundation of data that better helps you understand what it is a customer needs and there's an advantage there. I think blending DTC with Omnichannel is a huge opportunity, but Omnichannel can often work as just establishing brand presence that ultimately pushes people into DTC, or vice versa. It could be DTC that ultimately pushes people into a daily loop, ideally an enrichment loop, around purchasing products at their natural grocer. Okay. I'll close at that, but I think focusing on unfair advantages in distribution is how entrepreneurs will get ahead in a very challenging space.Stephanie:The one thing I've heard a lot is a lot of entrepreneurs that I've talked to on the show, a lot of them have really good stories, but not everyone tells it. Some people are hesitant to tell their story. Did you experience this with everything that happened? Did you ever feel a need to pull back and you weren't sure if you wanted to share or you weren't sure what you wanted to talk about? Tell me a bit about how you thought about sharing your story and resonating with people. Were you scared at an point to do that, because I've heard a lot of people have been? I don't know to tell.Zak:Regarding story, look, the lens I take is that there's great strength in vulnerability. I've been guarded a large part of my life, and not sharing my experience and alike, I've realized that I was losing out on opportunities to help people. I was given many advantages in life, and there are elements that have been disadvantageous. Instead of seeing it as that and seeing it as kind of a foundation for resentment or being annoyed around certain things, I say, this is just part of my experience. There might be shared experiences or there might be something that would be unique to your experience or not very many people, and I think that needs to be embraced.Zak:My whole thing is share my perspective and story. As it relates to Pym, try to be considerate of really the advocacy that underlines what we're doing as well because that's what really matters at the end of the day. I think people just need to find what it is that they want to tell, and really understand that they're crafting their story in the present, in the now. You don't want someone else's story. Own your own. It's a muscle. I had a lot of fear and anxiety around sharing stuff for a large part of my life.Stephanie:Now you're talking about even before your dad's passing you were not very vulnerable. What pushed you to want to start sharing, and why do you think you were holding back before?Zak:I think I was doing certain things that I was ashamed of. Drinking has always been a problem for me. I'll be perfectly honest, and it was something that only came to a head where I was like whoa, this is getting out of control after my dad died by suicide, but prior to that, it was something that was a challenge and I wasn't liking doing it. I think there were elements of my story that I was ashamed of, perfectly frankly. To be perfectly frank about it. In that, I realized there's certain elements of my story that are private and I relate to being considerate of the sphere of individuals or communities that are titled to that. Then there's elements that I love to share and talk about. The thing for me is when it comes to mental health, talking about mental health and alike, I like talking about it because it's very healing for me.Stephanie:Mm-hmm (affirmative).Zak:Yeah.Stephanie:Very cool. Before the show started, we were talking a little bit about converging experiences, and I want to hear how you're thinking about this, especially with probably giving certain talks that now, this past year, had to all be virtual and not as much in person. Tell me a little bit about how you're thinking about online and offline blending and what you guys are betting on for next year.Zak:Well, the big bet we're making is that people will continue needing mental health support products.Stephanie:After 2020, yes.Zak:Yeah. Here's the thing is that relative to the pandemic, there's been a shift into the COVID pandemic. We can talk about the parallel mental health pandemic, which is a thing too. There's been a shift to kind of embracing and engaging, or customers, communities, populations embracing and engaging in digital experiences, whether it's telehealth, things like that or for meetings, remote work, Zoom, things like that. We're hitting the stage where we're starting to see what a post-pandemic world will look like. Just little glimpses of it. There will likely be people wanting to connect with other people in person, people wanting to go out and shop and dance and eat out in the open. There will be certain habits and there will be people who have become acclimated to digital experiences, but people will also want to go out into the world. I think it'll be interesting to see the blend of online and offline that's going to be this new paradigm. I think as we're thinking about it Pym, we're very much thinking about establishing a companion experience to support people throughout their daily activity. Zak:For us, there is a need to really establish a better understanding of how people are requiring mental health support products and experiences. In the neuroscience community, there's something called an adjuvant experience, which has shown to be very helpful. What adjuvant means is... it's very simple. It's just something in something else.Stephanie:Something in something else. Wait. What? Sounds simple, but I don't get it.Zak:No, it's just an adjuvant experience is talk therapy and some sort of prescription protocol.Stephanie:Oh. Okay. Blending two things together. Got it.Zak:Yeah. That's adjuvant experience. From our lens, we wanted to create an adjuvant experience that is fun, accessible and accretive in terms of delivering value and support for people. The two things that are most helpful, at least based upon my experience talking with researchers and doctors and scientists about how consumer oriented mental health support experiences can help people is insight and community. The insight component involves behavioral recommendations, maybe data, specific things that help people live a life that they want to live. The community component involves supporting authentic connection with people. Those are the hints in terms of how we're thinking about developing an adjuvant experience, which ideally we hope to be convergent.Zak:I see there's an enormous opportunity, and it's very hard to get right. I'll say that. It's in the cake walk, because you need to really factor in blending the online and offline experience into something that feels natural and seamless and ideally, fun. I think a lot of companies are going to be taking that tack, because events are going to be really big, people are going to start eating out again, people are going to start shopping beyond just kind of going out and doing a foray out into the wild and then coming back.Stephanie:Oh, it just went to Costco. What a blast.Zak:For instance, where Target has really done an excellent job is on their pick-up experience. It's been a game changer for Target this year in 2020. Where you shop, you order online, and then you go to Target and you pick things up. You pick stuff up. That's technically a convergent experience, blending online and offline because it involves you having to engage in the physical world and using a digital experience to achieve your goals and objectives. I think most companies are going to have to think about that in a very meaningful way in order to maintain an edge. I think telehealth platforms have achieved a huge boost this year, but there's going to be some reversion, and it's not going to be a reversion to the previous me. They need to think about okay, what is it that we can do to establish an edge to further support people when they go out into the world again?Stephanie:Mm-hmm (affirmative).Zak:That's essentially what I mean by convergent experience. From a mental health support perspective, it's really about developing an adjuvant experience. X and Y together at last to create better support for people than the individual parts.Stephanie:Got it. I love that. That's a very good example and description, and I feel like I learned a new word. This is a win all around.Zak:Hey, it's my pleasure.Stephanie:All right. We have about 10 minutes left. I want to shift over to the lightening round. The lightening round is brought to you by our friends at Salesforce commerce cloud. This is where I'm going to ask you a question, and you have one minute or less to answer. Do you think you're ready, Zak?Zak:Yes.Stephanie:All right. What's up next on your Netflix view or Hulu or whatever you use?Zak:I'm excited about watching The Crown. It's been on my list for ages, and we're starting to get through our queue. Stephanie:A lot of people have said that, so I'm guessing you're going to enjoy it. All right. What one thing do you not understand today that you wish you did?Zak:I wish I spoke Japanese.Stephanie:That's a good one. I love Japan. It's my favorite.Zak:I love Japan too. For me, the process of learning a new language is already daunting for me. I'm not a polyglot. I don't learn other languages easily. At some point, I should just take the plunge and just start. That's my goal, learning Japanese.Stephanie:That's awesome. Sounds like a good goal. If you were to have a podcast, what would it be about and who would your first guest be?Zak:My podcast would be about getting to the very core of people's experiences, like what's their truth. Whether they know it or not, hopefully we can uncover that truth. What is it that they're all about? My first guest would likely be one of my favorite people on the planet, Dr. Adam Gazzaley, who is an advisor for Pym and a scientist and a profoundly interesting person that I'd love to get to the bottom of finding his truth.Stephanie:This sounds like a good show. I think this needs to happen. What's the nicest thing someone's ever done for you?Zak:Well, I'm a big fan of my son, Mickey.Stephanie:That's good.Zak:Having my wife, Olivia, her having carried Mickey for nearly a year.Stephanie:That's sweet.Zak:That was extremely thoughtful and considerate of her.Stephanie:That was very sweet. I like that. All right. Well, I have two more. What's up next on your reading list?Zak:There's a bunch of things, but the main one is Jim Simons' biography.Stephanie:Cool. All right. Then the last one, what one thing will have the biggest impact on ecommerce in the next year?Zak:The one thing that will have the biggest impact on ecommerce in the next year would be, I think, oh man. That's a really good question. I think it very much relates to more seamless experiences, frictionless experiences. Even though it is quick and can be considered convenient, it could be so much more convenient. I think the disrupters that are establishing quick checkouts, embedded checkouts, connecting wallets to checkout experiences, things like that, that's going to be a game changer, because people who have an edge there are going to really be able to see the difference in their bottom line. I know that's a very tactical consideration.Stephanie:That's a good answer.Zak:I think that's really one of the game changers.Stephanie:Yeah. You'll have to check out our interview with the CEO of Fast. It was very fast, and a good interview and definitely opened up my eyes to what a frictionless ecommerce world could look like.Zak:I think Fast is great.Stephanie:Yeah. All right, Zak. Thanks so much for coming on here and sharing your story and being vulnerable. Where can people find out more about you and Pym?Zak:Well, you can find out more about me through tuning into this podcast and other advocacy work I do specifically. I'll push people to advocacy. I work with organizations called Bring Change to Mind, United for Global Mental Health, Inseparable, and then Project Healthy Minds. Those are the four mental health organizations I work with. You can find out more about me through the work that I do with those organizations, and then you can find out more about Pym at youcanpym.com. Y-O-U-C-A-N-P-Y-M dot com.Stephanie:Amazing. I will be checking it out after this. Thanks so much. It was really a pleasure to have you on and love to have you back in the future when your app is out.Zak:Awesome, Stephanie. Such a pleasure.

Let’s get this out of the way now: most companies will not have someone go from intern to CEO in a matter of months. That’s a situation unique to James Standley and Solé Bicycles. What isn’t out of the ordinary, though, are the many challenges and hurdles that James and his team had to deal with when scaling Solé into the success it is today.On this episode of Up Next in Commerce, James takes us through the trials and tribulations of the Solé journey, including various shipping and manufacturing disasters and lawsuits that nearly bankrupted the company, and he explains how he worked his way out of those troubles and what he learned along the way. Plus, he gives some secrets on what’s working well for Solé now, such as the strategy of finding different touchpoints to reach customers in a way that has absolutely nothing to do with selling to them. Main Takeaways:Starts With Heart: While the relationship with your supplier or manufacturer might seem like a cut-and-dry part of business, it has to go deeper than surface level. f you are working with overseas partners, taking the time to meet, and understand, the people you work with in person and form a relationship with them will carry you further and ease some pain if there are ever problems in the supply chain process.    What You’re Known For: Through unique partnerships and marketing opportunities, there is potential to reach people in different ways, even if that means you’re not necessarily selling them a product with every touchpoint. Having a relationship with customers is more important than selling to them at every opportunity, because if they know you for one thing and then find out you sell something else, they are more likely to buy from you across the board. Shot on an iPhone: There will always be a place for highly-produced, glossy marketing materials. But, more and more these days UGC and lower-budget content is what is resonating with consumers. As opposed to showing potential buyers something they have to aspire to, like a model, highlighting people and experiences that are familiar to them as they are now will convert better. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. This is Stephanie Postles and you're listening to Up Next in Commerce. Today on the show, we have James Standley. He's the president and founding partner at Sole bicycles. James, welcome.James:Hey, how are you guys doing?Stephanie:Doing good. Thanks for joining us.James:Yes, I'm super excited to talk about all things ecommerce with you guys.Stephanie:Yeah. I was just looking through your website and I am very excited to get a bicycle after this. I didn't even know I needed one, but now I do.James:Totally, totally, yeah. We have tons of great bikes and yeah, and tons of cool different colorways and options and a bike for just about anyone's kind of need.Stephanie:Awesome. Tell me a bit about how you started Sole. I think it was in college, right?James:Yeah. My business partners, that I ended up starting the business with and I, we met back, funny enough, my first venture, which was a music festival I helped start back in college. We were both partners in that.Stephanie:It was called the Coachella for the Mountains, right?James:Yeah. It was called Snowball, and the idea was Coachella meets on the mountains. Yeah, there was this guy, Chad Donnelley, who I knew through the lacrosse world. I played college lacrosse and he came up with the concept and I was always involved in music. Growing up, I was a concert pianist, and I had DJ'ed in college and been in bands growing up. We met through the lacrosse world, and he came up with this idea. He had reached out to me just to ask my opinion on the project and what I thought about it. At the time, I was a freshman in college and he was asking me about it and I ended up just going back to him and say, "Hey, I want to be a part of this. I think this is amazing."James:I was part of that initial team. We kicked off this event with ... Our first, we had Edward Sharpe and the Magnetic Zeros, and Bassnectar, and Pretty Lights, and Diplo and all these amazing artists come out and sold like 15,000 tickets. It was a really cool first venture and a first event. Yeah, so Jake and John, my original founders with Sole, they were partners in it as well, and they helped get some of the money for the project. We met, first year was a huge success and we stayed in contact. At the same time, they were coming up with the idea for Sole, and going back that summer, between my freshman year and my sophomore year of college, they were looking for some additional help on Sole.James:I said I'd come in and I've got a more like operational financial sort of background or mind, and they were more of the creatives and the visionary type of people. I came in, helped clean things up. We got the business off the ground. Then going through the summer, they ended up going and raising some money and starting another business, and I ended up taking over the business. I went from being technically an intern in May to the CEO in August. Yeah, so that's how I got involved. Shoot, that was 2011. So, we're going on nine years ago, and I've been CEO ever since.Stephanie:Wow. Very cool. That's a wild story. How many bikes were you guys selling when you took over, and where are you at now? So I can get the scale of the company.James:Totally, totally. Yeah. Our first year we were featured on this big Forbes article and the business sort of took off, and I think we sold maybe a thousand bikes our first year, which was a lot for a first year business. This past year we're going to sell about 15,000 bikes.Stephanie:Wow.James:Yeah. We've grown quite a bit.Stephanie:That's great. What is the selling point of Sole bikes? How's it different?James:Totally, totally. Yeah, for us, our main selling point is you go look at the bike and it's just going to look different than any other bike you've ever seen before. We're really heavy on our marketing and design and colorways and wanted to make something that's really, really simple, easy to use, easy to maintain, but also looks really beautiful, and something that has a personality, and really people can relate to. I think a bicycle, for most companies, is more of a utility product, something that's really spec-driven.James:For us, we wanted to make something that people were really, really proud of, and it's like, they can relate to, and find a colorway that really matches their personality, or they could this store music fixed tapes or find these other ways that people can relate to the product. That's really allowed us to set ourselves apart from other bike brands.Stephanie:Cool. It seems like pricing is also a big thing. The one thing I've always thought is, why the heck are bikes so expensive? Why? How'd you get your guys cost down so much?James:Totally. Totally. Yeah. Yeah. The biggest way we do it is we work directly with a manufacturer and we sell directly to our customers. Just the natural, by cutting out some of the normal distributors or middlemen, we're able to offer what would be a traditionally higher price point products for a lower price and pass those savings onto the consumer by selling direct.Stephanie:Tell me a bit more about that, because what did that look like finding a manufacturer? I think I saw you found, in the early days, your manufacturer on Alibaba. Right? Which I was like, oh, that's interesting because I feel like Alibaba ... I've been there before and there's a lot going on. There's a lot of people. It's hard to know who to trust, it's hard to know if they're going to send me something good. How did you guys go about finding a manufacturer there? Did it work out well? Give me some behind the scenes.James:Totally. Totally. Yeah. Our first, when we got the business kicked off, we actually were involved in this Ali-Baba business plan competition. Back when we were in college, Jake and John had applied for this business plan competition. They won it and we got a $15,000 grant from Alibaba. That grant or that money paid for them to initially go over, meet our first supplier who Alibaba had helped set up, and we got our first order of bikes in. That's what the initial financing that got the business kicked off. But over time, went through a few different suppliers and really had to iterate our process.James:I spent a lot of time over in China meeting with different suppliers, refining the product, getting it to a place where it is today. It took a lot of trips over there and a lot of refining.Stephanie:In the early days when you're picking your suppliers and manufacturers, what would you do differently this time around? What lessons did you learn or what things did you maybe stumble on in the early days that you can avoid if you were to redo it now?James:Totally. What I would recommend is, we got placed with the supplier via Alibaba, and we just worked with the first person we were placed with. I think we ended up switching a few different suppliers over time, but what really ended up getting us with a supplier that we were super happy with is we went over there, and I went to one of the big trade shows, and we ended up visiting another 15 or 20 during this trip I went on about year two or three, and that trip we ended up finding the supplier we worked with, still to this day.James:We really got to go out and meet these people and do your diligence and find the supplier that makes the most sense for you, and not just use the first one that you end up getting placed with or you end up meeting with. You got to go over there and develop a relationship with them. I mean, it's so important. They have this saying there. It's first, you drink tea, then you drink Maotai and then talk business. What I mean by that is, they want to meet you, the different suppliers and the different people over there want to meet you. They want to build a personal relationship, and then they want to talk business because it's so important there to have a personal relationship, as well as a business relationship.James:If you're going to try to source something from China or overseas, I'd recommend going over there and meeting these people and spending time with them, and learning, meeting them as people, and really developing a relationship, because that's going to help that business relationship over time and make a really, really strong business relationship.Stephanie:Yep. If you don't go and meet them and you didn't really do your due diligence, what kind of problems could a new company encounter? Did you encounter any issues in the early days with some of your suppliers that you stopped working with?James:Totally, totally. Yeah. The supply chain for a bicycle is pretty complex. For our product alone, there's over 50 parts. Those 50 parts come from 20 different other suppliers, and then those have to come into an assembler, the assembler puts the product together and then it's shipped over. There's a ton of different things that could go wrong. A good example would be we had one of our biggest shipments ever, at the time for the business. We had put in an order for summer, and it was like 2000 units. We had also set up a big sale online with a company called fab.com. At the time, they were having ... I don't know if you remember the company, fab.com, but they were one of the fastest companies to a billion dollar valuation, I think, and people were talking about it as the next Amazon.James:It was having this really big moment. We were selling really well on there. We partnered with them and we were like, hey, we're going to bring in a bunch of units. Let's have a really, really big sale. We have this massive sale. We sell like 1,500 to 2,000 units, pre-sell them, and ends up being the biggest sale ever on fab up to that point. So, do the sale, goods come in, and then we ship all the product out. Well, our manufacturer had packaged the bikes slightly incorrect to where ... The crank arm usually woven through the front wheel, which is detached, and then tucked to the side of the bike when it's shipped. They were all packaged slightly off that almost every single bike came with one of the spokes popped off.James:You get your brand new bike that you just bought offline, brand new, beautiful bike, you open it up, and one of the spokes popped off, which it's like ... You can't ride it, but it's a small problem, but it's not an easy problem to fix. Oh my gosh, that situation almost bankrupt us. What ended up happening we-Stephanie:What did you guys do?James:Yeah, we had the product on credit. We had given we had been sold the product on credit, so we went back to the supplier and we were like, hey, this is going to bankrupt us. We got to figure something out, and they refused to take any discount on it. Then, our advisor was like, "Hey, we're going to just hold payment until we get something settled." They ended up serving us a lawsuit. They came to America, served us a lawsuit.Stephanie:Oh my gosh.James:So we were served, and had to go through this entire ... Mind you, I'm like 21 years old at the time. I'm still in school. We get served a lawsuit. I'm like, oh my gosh, what is going on? So, we had to hire a lawyer who was our body. He was only like 30 and we didn't have a ton of money. We had to put together a case and actually go out and defend ourselves.Stephanie:Yeah, did you win?James:We go through this, and we hired this lawyer, and he's like, "Look, you guys don't have the money, [inaudible] afford me, so I'm going to teach you how to build this case." I went and actually built this timeline of everything that's happened, and we came up with a case theory and counter sued them. They responded and deposed me. I had to go through this 40 exhibit eight hour deposition. But we held our ground and got through it. After that, it got to the point where it was like, financially it made the most sense to settle and were able to settle for what ended up being about half off of what the original was. Yes.Stephanie:That's wild. I'm just imagining being in college, dealing with it. How was that experience being in college? I'm just thinking, all of a sudden, you have this company and you're having to go to China and now you're getting sued. What was the college experience like for you when you were having something very different than probably a lot of your peers go on?James:To be honest, it was really exciting. You felt like it was just so cool to be building something and going through this. We were so ignorant, I think, going through a lot of this stuff, which I think ended up actually helping us. It was just very shoot from the hip and like figure it out. Yeah, so many of these different scenarios could have totally bankrupt us or ended us, but I think it builds a lot of character by going through these different situations and surviving it and learning from it and growing from it. Yeah, it was exciting. It was really fun and exciting. The goal was just like, don't go bankrupt, don't die. Keep fighting and figure it out.Stephanie:That's good. I like that. I could see it also just making it seem like, well, what else ... Nothing can really scare me. I've gotten sued. I almost went bankrupt. There's nothing too scary out there after that. I think it's a good place to be.James:Yeah. I think it's part of building a business. You're going to face adversity and a lot of ... There's a reason nine out of 10 businesses fail. There's so many things that can go wrong with building a business, but you have to learn to embrace those challenges and know that you just got to fight through it. There's not always a way to figure it out, but there's oftentimes, if you keep working at it and keep fighting, you can find ways to get through these things. If you do get through them, these are like business cards, I guess you could say, or things that'll stick with you and you could grow and build on as you continue to build your business.James:After going through all this stuff over so many different situations over so many years, we've now learned to embrace the challenge and just know, hey, here there's going to be some new challenge, every year, there's going to be some new thing that's going to ... we're going to get hit with, and you just have to learn to embrace it and take it head on and not let it beat you up.Stephanie:Yeah. I love that. You guys seem really good at partnerships. I've seen some of the very well-known companies that you work with, who they get their own custom bikes built, and you've got things with artists going on and music and all that. How do you how do you view that strategy in your playbook to be able to access new customers and new markets, and how do you even develop those partnerships?James:Totally, totally. A lot of that was built from, again, when we started the company, we weren't the traditional bike guys. We were coming from the music background and fashion background. A huge art scene. We had all these relationships early on, and just out of pure having those relationships, we intertwined it in business, and you have the fixed tape series, which one of our early employees was a professional DJ, so he's like, "Hey, I got this idea. Let's create an hour long mix to listen to while I'm riding our bike, and we'll go get some other DJ friends to do it." That piece of content. Just that, that we created that and it's been rolling ever since. We just launched the Sofi Tukker one, which was, I think our 76th mix tape.Stephanie:That's cool.James:Then that artist creates that mix, and some of these DJs are very globally known DJs. We posted on our SoundCloud and they showed on their SoundCloud, and it creates this nice piece of content that people can come back to and find Sole, or find that mix each month. It's funny because we're not ... you wouldn't think of us as a music business or a bike business, but there's people out there in the world that only know us as the fixed tape company. There are people who'll find out, they'll be like, "Oh my gosh, you guys sell bikes. I thought you were just the fixed tape company or something." It's just organic sort of different little marketing tricks that we've, or little tactics we've built over the years.James:They just are organic, unique way to reach new customers and relate with our customers. We do the different partnerships. Again, I'll use the Sofi Tukker example. They're a big DJ group. If you don't know them, they're a big DJ group, globally known. I think one other fun facts, I think they have a platinum record in every country in the world except Antarctica. They're pretty big and they're up and coming. They had a song that's called Purple Hat. One of the lines in the song is purple hat cheetah print. We thought, how cool would it be to make a purple hat, their purple cheetah print bike? So, we had connections.James:One of their agencies or marketing companies or whatnot. So, we were able to get a pitch in front of them and they were super stoked on it. Yeah, now we're selling purple hat cheetah print bikes. Again, it's a cool way to ... What other bike companies are selling purple cheetah print bikes? It's just a unique way to reach new customers and provide a unique product and put a cool product out in the world that no one else was doing. I think it's just thinking that way with the bike industry has allowed us to build up these partnerships and set ourselves apart from other bike companies.Stephanie:Yeah. When you're doing these partnerships, these partners can also sell it on their website. Right? So, it's not all being sourced back to your website as a central hub. You're essentially letting these partners also sell the bikes on their websites as well. Right?James:Totally, totally. Yeah. For each partnership's bespoke and different in their own way. Sometimes like, we did a partnership with Wildfox, which is a women's centric fashion brand. We did these like really beautiful floral prints all over a bicycle. They took them in and they sold them through all their retail shops, as well as their partner wholesale shops, as well as their website, and we sold on our website. There's a bunch of different ways we can structure it. But yeah, it's usually just bespoke to whatever that partnership is.Stephanie:Well, that's a good segue into, I mean, when you're thinking about, you've got these mixed tapes going out and partnerships that aren't anywhere close to like the biking industry, how are you tracking conversions? Is your goal to try and get people to listen to these mixed tapes and then come back and buy bikes? Or how do you think about what your goals are around these different projects that you're doing?James:Totally, totally. With the fixed tapes, I think we're trying to push out a certain amount of content each month and each quarter. Then we go out and we build content calendars around what are different initiatives that we can tap into? I think when we're thinking about content, we like to look and start with email. Email is like one of our highest converting marketing channels. We're constantly filling and adding to our email list, and then from there, we're trying to push out two to three emails a week. We're mapping out our email pushes. We say, what are the different content initiatives that we can tap into? So, we try to do a fixed tape every two months. We try to do artist series every quarter and large-scale partnership once or twice a year.James:We map out all these different things we're trying to do, and then we funnel, and then that leads into email. With email, where you can't really just send very bland marketing type style emails every month. You're not going to get good engagement. So, we have to create stuff that's engaging. I think we've just gotten so good at creating this stuff very cost-effectively that it ends up paying for itself through the conversions of email. It's also a great brand building. They're all great brand building initiatives, and they all kind of build on themselves.James:If I do a big large-scale partnership with like a Sofi Tukker, that's going to come back and open up new opportunities down the road for other potential brands, or other potential artists. It's sort of all builds on itself as we go bigger and bigger.Stephanie:When you're talking about emails really high, when it comes to converting customers, how do you think about creating that engaging content? What pieces of content are working or what emails work best?James:I think one of them more interesting fun little emails that we came up with years ago and it's like the easiest thing [inaudible] to create ever, is we do what we call Sole Saturday. Sole Saturday, it's one photo by the Sole team and then three user-generated photos. Every bike we ship out has a little tag on it that says tag at Sole bicycles hashtag, and you use hashtag of the bicycle for a chance to be featured.James:Then, what we do is as we're spelling product, customers are going out and taking photos for us, and every Saturday we feature three of our customers. That, again, it's just like ... we're using user generated content and it's creating a nice email that people can go back to and see if they're featured. It's actually very high converting as well.Stephanie:That's fine. Do you think having actual customers and photos is where a lot of brands are going to be headed, less about the models and the people who look perfect and more about ... Is this someone who reminds me of myself and I can see myself riding that bicycle, yeah, feeling a better connection with them?James:Totally, totally. It's funny you say that. Because even when you look at ... you go to our paid spend or paid marketing, a lot of times the [inaudible] produced sort of content where it's on a really ... Get a really expensive content creator to produce it and it looks very professional, versus like content that's shot on iPhone or content that's just shot with customers' photos. That ends up converting a lot better than the higher produced stuff. I think that's just the people can relate more to it.Stephanie:Yeah. I agree. What kind of channels are you putting that content or the more natural looking content that your customers are creating? What channels are you finding are working best right now to convert customers?James:We're constantly testing when we're doing Facebook and Instagram ads. I've been serving different type of ads to different audiences on Facebook and Instagram with different types of content, the more professionals type of content versus the more just shot from iPhone vibe. Even like, over the last year, we've had a big uptick on our online business because of COVID, and people being at home and wanting to find a way to get outside and escape from this madness.James:One of the craziest things that we found was iPhone ads or the story ads-specific, so had to build just enough format for iPhones were converting at like crazy, crazy higher row ads versus just more static or traditional images or ads on the Facebook or Instagram. That was like a crazy thing we came up on this year.James:There's a very beautiful, simple ad where it's just like the bike on the beach and you have the sky in the background and then the sand below it. Then just the brand and a little copy below it. That little ad actually absolutely killed it for us this year.Stephanie:That's great. Are you still using, maybe not that ad, but still putting new ads into the story section on iPhones?James:Yeah. I recommend any brand out there that's doing ... I mean, I've been learning a lot of this as we go and trying to get better at it, but when you're creating your ads on Facebook and Instagram for when you're setting that ad up, you can actually split it so that it's like, you have this certain photo for the stack set up and then you have a different photo for when it's served on story. My biggest eyesore, or I hate is, when you're on a story and you get an ad, and it's like an ad that's built for the display. So, it has the kind of squared picture and then it has the words under that.James:I don't know if you guys have seen that, but it's such an eyesore to me compared to a beautiful ad that's like really built for the stories. Just making sure that you have the ad set, the story specific ads, it'll help your conversion so much. That's helped us a ton.Stephanie:Yeah, that's a really good point. What kind of return on spend should a brand expect from the iPhone story ads versus maybe Instagram or Facebook or Tik-Tok.James:That's a tough question. I think it's specific to the brand and the product they're selling, and then, even the time of the year. For us right now, our ROAS is way lower than like the middle of summer. It's almost like a 10th of what it was during the summer. That's just because it's seasonality, our product. We saw specific ... static first story during the summer, I think it was converting 3 or 4X of what it was static. But that's specific to us. I think every brand is different, every product's different. But yeah, I think that can give you an idea of the potential.Stephanie:Yeah, very cool. Is there any other new marketing channels that you're trying out, that you're like, I'm not sure if this will work, but we are allocating some funds here to try this out?James:No, for now we're focusing just on Facebook, Instagram. We're doing Google AdWords and media retargeting. I want to dip my toes in some other things. I want to try the Tik-Tok and I want to try some Pinterest. I've heard about the Tik-Tok, but the tracking is not that great on it. We haven't done anything yet. Also, Tik-Tok's I think for a little bit lower age or younger demographic than what our target audience is, so we haven't tried-Stephanie:I don't know. We've had a lot of people on here saying Tik-Tok works well. That originally, it was just the dancing videos and younger people and all that. People are like, it seems like there's still a good arbitrage opportunity on Tik-Tok right now, because the attribution and tracking might be worse, but you still get a lot of the benefit of going onto a new platform before they increase the pricing and actually understand what kind of conversions they're hitting. I don't know, [crosstalk] to check out.James:Totally, totally. There we go. That's my takeaway from this. We'll give it a go. We'll give it a go.Stephanie:Yeah, give it a whirl and see. When new customers are coming on your website, I want to talk a bit about like, how do you guide them through the funnel? How do you personalize things and show them, not only content, but also maybe a bike that would work for them or that might peak their interest?James:Totally. Totally. It's an interesting ... there's a few things we do. We have about our bikes page, where it's like, which Sole are you? That walks them through the different, we have like six different models. You have the single-speed fixed gear, you have the City Bike, you have the Dutch Step through, you have the three speed City Bike, and then you have the Coastal Cruiser. Top Bar and Coastal Cruiser are down and slanting more. We have a page that we'll walk the customers through the difference between all of those and the pros and the cons of each of those. That can explain the style.James:Then once you know the style, what we do different than maybe other companies is we actually ... Each product, each colorway has its own product variant versus like, you may go see a single-speed version of one of our competitors and they keep all the colors on one product page. We create the personality and each colorway has its own personality and its own page. It really helps customers, like okay, I like the red bike, and see the lifestyle on it, and just for that red bike. The red bike would be [inaudible] for a walk and it's got its own story, help the customer really fall in love with that product, and tell a story around each of them, versus them all being bundled up on the one page.Stephanie:That's great. Very cool. Then, I was seeing a couple of retail stores that you were partnering with, probably pre-COVID, but it seems like there'd be a really good opportunity to have those partners also kind of market and share for you while they're getting in front of their own new customers as well. It seems like they would kind of take on the budget, the marketing budget to then share your brand under their brand, if that makes sense.James:Totally, totally, totally. Yeah. We're seeing a big uptick with like these online third party wholesalers and distributors. That's been, for us, I think our product, it's got such a great look and feel to it that it can transcend from, not just traditional sporting goods or traditional bike-centric channels. We can sell on sites like an Urban Outfitters or on Zola, or some of these other more lifestyle driven sites that want a cool lifestyle product in the bike space.James:That's one of our big initiatives that we're trying to get on more of these like third-party digital wholesaler channels, because in the last year, what we've seen the biggest takeaway from all this is like, everything is going digital much faster than it was prior to COVID.Stephanie:Yep. Are those partners showcasing your brand? Are they more white labeling, like ordering the bikes and then putting under their brand to say, okay, this is an Urban Outfitters bike, or are they actually saying no, this is Sole [crosstalk 00:33:32].James:Yeah, we're selling us as Sole. Yeah, we're selling us Sole through these third parties.Stephanie:That's good. That's awesome. How are you getting in front of these big partners? Urban Outfitters is huge and super popular. How did you even get in front of them and convince them to partner with you guys to sell your bikes?James:Yeah, just cold email them. Right?Stephanie:I hear you cold emailing. Tell us your secrets. Come on, James.James:Very easy. Yeah, we'll go out there. If we believe our product could fit in someone's store or someone's space, then we'll hit them up. We're very confident in our product and our brand and we'll sell them on it. It works a ton. Then there's other partners that have reached out to us and want us to work with them. I think, a good example we were connecting ... Target reached out to us and we've just recently started selling on Target's website, which I think is ... It's interesting with them. Target's trying to, in each of their product categories, bring a more 21st century brand in. I think like we really fit that really lifestyle driven 21st century brand for a product.James:Normally, there's not a lot of brands in the space that have that kind of fit. I think we really fit those as well. That's an exciting one for us. Then, like I said, the Zola. Zola's a massive, or one of the biggest wedding registry sites. We're one of the only bike brands on there as well, and do really, really well on there.Stephanie:Ooh, that's a good angle. I wouldn't think to put a bike on a wedding registry website, but that's awesome, because a lot of times it's just the same old, same old. You're like, I don't need more plates, but I can go for a bike. I would put on my registry.James:We sell so many likes there. You'd be really, really surprised. It's a great wedding gift. We have a his and hers, so almost every single order that goes there, it's two bikes, obviously.Stephanie:Yeah. That's awesome. Really good strategy. How are you keeping up with fulfillment in the backend? Especially when you're integrating all these partners like Target and Urban Outfitters, what happens if target has a big surge and they've got a bunch of traffic come to their website, and all of a sudden, you've got 500 bike orders? How are you guys keeping up behind the scenes to make sure that you don't go out of stock or have issues on the backend?James:Totally, totally. This was something that this year that we've invested a lot of time and energy and effort into, is leveraging technology to make sure all of this stuff runs super smooth. We're using a third party warehouse that has their own systems. Then, we have to use an EDI software or partner to connect to a lot of these systems. It's just spending the time, energy and effort to really automate all this stuff and make sure all these systems talk to each other, and there's inventory pushes going out multiple times a day. You put in the front end work to automate all this stuff so that you can avoid those problems.James:There's systems that say, hey, there's inventory pushes that happen multiple times a day to all these systems, so if there's a big spike on say Target, that inventory is removed and pushed out to the other channels so that there's no overselling or minimal over selling. That still happens a little bit here and there because the inventory pushes don't go out all the time. It's a couple times a day, but yeah, it's just about leveraging. There's a ton of technology out there, like using the technology to your advantage to automate the stuff.Stephanie:What are some big bets that you guys at Sole are making over the next couple of years? Where do you think the bicycle market is headed? What are some things that you're betting on that you're not sure if they're going to pay off or not over the next couple of years?James:Yeah, totally. I think it goes back to digital. We're super focused on digital right now and we're super bullish on digital. We're investing in this technology to make sure that we're set up the scale and then we want to continue to expand where we're selling and who we're selling in front of. Then, on top of that, it's continuing to expand how we market our product and where we market our product and the media partners we can use to get in front of these different people. I think the biggest thing ... People having a stay at home as a result of COVID has set all these new habits. I think they say like, it takes three weeks to set a habit, and what? We've all been at home since April.James:Everyone's having to shop from shop online and shop at home. Once we come out of COVID, those habits, I don't think are going to go away. For us, we're super bullish on making sure we have a really solid foundation with, not only our website, but the online e-retail partners that we're selling through so that, as we come out of COVID, we continue to have really strong distribution digitally to the future.Stephanie:Yep. I could see some of the retail partners leaning on you guys also for maybe advice and best practices. I've seen some of the bigger companies kind of looking at, not that you're a startup, but looking at startups, looking at people who are able to be agile and move quickly, and trying to figure out like, well, what are you guys doing? Tell us what are the best practices right now, because what we've been doing for the past couple of years was just thrown up into the air and we have to rewrite how we do things now. So, do they ever hit you up and be like, "Hey James, how should we set this up? Or how are you guys doing this so we can replicate this?"James:Totally. No, no, no. There's always like other people in the industry that we're talking to. There's always people that we ... Whether it's people in the bike industry or other businesses, other friends that have businesses. Again, always happy to talk with them. For us, you say that we aren't a startup, we are a startup. We've been doing this for 10 years, I still feel like it's a startup. Our team's still pretty lean. There's only 10 of us. We're super nimble and able to move quick, which is great and allowed us to pivot and make changes when things like COVID happened, that bigger companies can't do.James:Once we find successes, we can double down and grow on those. Yeah, we're staying nimble and going with the flow and learning quick. Yeah.Stephanie:That's great. All right, cool. Let's jump over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, James?James:I am ready.Stephanie:All right. Stephanie:What is your favorite business book that you think about or refer back to [crosstalk 00:40:28]?James:It's not a business book per se, but it is You Can't Hurt Me by David Goggins.Stephanie:Oh, okay. I like that. I actually have not heard of that. I don't think.James:The quick hitter on it, it's about overcoming adversity and pushing yourself. I think that's so important in business is understanding that you can overcome adversity and always setting your bar higher and higher. Again, it's not technically a business book, but I think there's ton of good business lessons you can learn from it.Stephanie:I like that. That sounds good. I'll have to check it out. If you were to have a podcast, what would it be about, and who is your first guest be?James:Oh my gosh. If I were to have a podcast, I would talk about ... Personally, my favorite thing outside of business and bicycles is traveling. I would do a travel blog and my first guess would be, Oh my gosh, I would pick Barack Obama.Stephanie:There you go. I'd listen to that. That sounds good. What is the nicest thing anyone's ever done for you?James:Oh my gosh. The nicest thing that anyone has ever done for me. The nice thing, oh, this is big.Stephanie:Heavy.James:My friend, Mario and Ken, in the early days when we started up our USC shop, these guys would come out every year and work for back to school, which is our craziest time of year for that shop. We sell like a thousand bikes in two weeks, and they would come out and stay at my place, crash on my floor and help us every year for the first four years. So, shout out to Mario and Ken.Stephanie:Oh, that is really nice. That's a good answer. What trend or tech do you not understand today that you wish you did?James:What trend or tech? Tik-Tok.Stephanie:There you go.James:I don't get it, but I feel like I need to get it.Stephanie:Okay. I've had some other people say that as well, so you're in good company. Others don't also do not understand it. All right. Then the last bigger one. What one thing will have the biggest impact on ecommerce in the next year? It can't be COVID because we've had too many people say that.James:I think the big thing impact on ecommerce, I think it's going to be shipping. I feel like shipping is going to change drastically over the next one to five years. You have like Amazon starting to do their drones. We're starting to see in LA these little robots that are delivering food. Then, on top of that, FedEx and UPS are just killing everyone with all their fees and their pricing. We've been in peak surge charges since July. I just feel like there's so much potential for disruption there, shipping.Stephanie:Yep. Oh, that's a good answer. Yeah, I agree. I see a lot of companies, a couple of them actually are in Canada who are trying to get one and two day shipping. I think a lot of more companies will be leaning into that once they figure out how to make that work, and they also see how reliant they are on the FedExs, the UPSs, and how much it disrupts businesses.James:Totally, totally. Please someone come out here, please help us [inaudible 00:43:54], it's so expensive to ship bikes.Stephanie:Well, maybe James, that can be your next business. You've done a lot in your day. You might as well just start a shipping company as well.James:There we go. There we go.Stephanie:All right, James. Well, thanks for coming on the show. Where can people find out more about you and Sole bicycles?James:Totally. You can check us out at solebicycles.com, or our Instagram, which we update daily, @solebicycles, and then my personal is @JimmyStans.Stephanie:All right. Thanks so much.James:Thank you guys so much. Appreciate it.

There are some big-ticket items that most people have and need, but absolutely hate shopping for. Mattresses fall into that category. In fact, studies have shown that people would rather go to the dentist than buy a new mattress. Helix Sleep is trying to take the pain out of that experience. Adam Tishman is the co-founder and co-CEO of Helix Sleep, and on this episode of Up Next in Commerce, he explains why his DTC mattress company is different from the rest, and why those differences matter. He explains the reason it was critical to spend time researching, testing, and perfecting a product before bringing it to market and how that upfront effort created priceless brand equity. Adam also dives into personalization, but he takes it beyond the need to simply give customers a personalized experience, and explains why data-collection and a personalization strategy that includes personalized products can help you expand your business more successfully when you are ready.Main Takeaways:Slow And Steady: With a physical product that is dependent on reviews, rushing to market could spell disaster. Take the time to do the research, test, iterate, and develop a product that is review-ready before you present it to your customers.You’re Not Me: With certain products, there is a specific customer set or type of person for whom the product is made. With mattresses, every person has unique needs, so the product has to be personalized as much as possible. Finding the best way to understand your customers’ needs should be a top priority, and through multiple touchpoints and quizzes, you can gather the data necessary to provide the best experience and product.The Beginning of a Beautiful Friendship: By cultivating data and delivering personalized products and experiences for your customers, you are inherently forming a stronger relationship with them than a typical brand. Not only are you collecting insights that can be used to help you expand into new product lines, you are also creating a network of previous customers who are more likely to trust the brand and try something new.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. This is Stephanie Postles. Co-founder at mission.org, and your host. Today, we're chatting with Adam Tishman, the co-founder and co-CEO at HelixSleep. Adam, welcome to the show.Adam:Hey Stephanie, thanks so much for having me.Stephanie:Yeah, I'm excited to have you. so I have never said co-CEO before, which I kind of want to start there. Tell me a bit about being a co-CEO at a company.Adam:Yeah, definitely. So we founded the business, myself and two other co-founders, out of business school. And over the sort of evolution of the company and where we've been over the past five years, we actually run it with myself and one of the other co-founders as sort of the two headed dragon as co-CEOs. And then our third founder is our CFO and COO. And it works really well because it allows us to sort of manage different areas of the business at the CEO level and also work really collaboratively together as well.Stephanie:Awesome. So you co-founded HelixSleep and that was back in 2015, right?Adam:Yeah. So it was founded by myself and, as I said, two other co-founders back in business school, back in 2015. The three of us had moved to a new city to go to school, went through the process of buying a mattress just for ourselves. And it was sort of uniquely terrible in many ways, whether it was really confusing pricing and really expensive pricing in the store, really just bad in-store buying experience. We actually found out later doing research that buying a mattress is actually rated as a worse experience than going to the dentist. And the last thing was, it was just really confusing. If you don't buy mattresses all the time, which no one really does, and it's something that you buy somewhat infrequently, people have a really hard time understanding how to buy it. And so for us, we sort of saw the problem, saw some of the solutions that others in our category were trying to fix this problem, and felt like we could sort of come in and solve it in a much better, more efficient way.Stephanie:Got it. So five years ago it feels like so long ago, what was the market like back then? I mean, who were some of the up and coming people and what kind of unique angle did you guys see in the market at that time?Adam:Yeah, definitely. So five years ago, I would say the direct to consumer, or just generally buying mattresses online, was pretty nascent. It was predominantly, people were going into stores. There was actually a while where people were buying beds on phones, but we sort of saw the market, which is very consolidated at the traditional brand retail level. So you have sort of Simmon's, Tempur Sealy, Sleep Number, Casper, which is the most well known and largest player of the D to C mattress brands head launched recently and had really done a good job at showing that this was a category that could generate interest online, somewhat of an atypical category with low, as I mentioned, low ecommerce penetration. What we saw as the issues that I mentioned earlier, we felt that Casper and a lot of the other brands that were starting to pop up were sort of maybe filling in one friction, but replacing it with a different friction.Adam:So all of us, including Helix, offer products directly to consumers at much better price points, helping out that value chain issue with traditional retailers. Everyone tries to provide a much better buying experience through a really good user experience on the website, 100 night trial, free shipping, et cetera. The issue where we really differentiate at Helix is around the product itself. So what Casper did and what pretty much every other planner space did was said, "It's really challenging to choose a mattress. So we're going to just get rid of choice altogether, and offer one type of mattress for every single person."Adam:And what we found doing a whole ton of research and talking to people, and it sort of makes sense that if you think about it implicitly, is that there really is a wide variety of needs and preferences as it relates to your mattress and to the way that you sleep, the same way that we all don't fit in the same clothing. We all don't have the same exercise routine that works best for us, the same diet. Sleep is quite personal. Adam:So one of our missions was effectively, could we help customers understand the right products for them through a sleep quiz that asks questions about things that you knew about yourself? So your body type, your height, your weight, do you tend to sleep on your back or your stomach? Do you get hot at night? Do you get cold? Do you have back pain? Do you like a bed a little bit firmer or softer? And then we take that information and effectively translate it into the best mattress for you. So the order of the layers in the mattress, the density of those layers, the types of materials, the density of those materials, are all really important for getting the best night's sleep and effectively that's what we're doing. So we like to think of it as sort of providing a technology enriched solution as a salesperson. So instead of going into the store and sort of hanging out with sales person, we do that online through our quiz.Stephanie:Very cool. And yeah, what I love about what I read about you guys was that you did a ton of research. I think I read that you went through 100 plus page PhD dissertations, and you partnered with researchers in Europe to make sure you really understood how to create this algorithm and this quiz. Tell me a bit about your thought process there, because I think that's so different than a lot of D to C companies right now who are just trying to get that quick launch, take advantage of the market, and are just going really quickly instead of taking a step back and doing the research and figuring out how to solve the problem.Adam:100%. I think for us, none of the three of us came from a traditional mattress background, right? And so we did what three nerdy guys would do, which is we started to do research. And we actually had this idea and stumbled across a PhD dissertation on sleep ergonomics, which is the study of the sort of spinal alignment of your back while you're sleeping. You hear a lot about spinal alignment and ergonomics and sort of office chairs, but this was really the first PhD dissertation on that, with bodies lying down. And we actually noticed that at the bottom of the PhD dissertation, the head author had left his email address. And so we emailed him.Adam:A couple of days later, we got on a Skype call with him. They were located in Europe and then about a week and a half later, we actually flew to Europe and met with them and effectively worked with them to translate their initial science into the crux of our initial algorithm, which over the last five years, we've sort of wholly taken ownership of, and refined quite a lot. And so it was sort of a funny story because it really was, we got on a plane and went to Belgium and had to figure out where we were going and all those types of things. But it was really important because we felt like we had a scientific base for the hypothesis that we were making.Adam:I think to your second part of the question, it's really interesting, this tension around, do I want to get to market as quickly as possible, or do we want to take a step back, feel really confident in the research, the development, the product testing? As you mentioned, we went through many, many versions of the mattress, many, many versions of the algorithm on how we matched people. And the approach that we took was that you really only get to come out to the world and present your product once, at least in physical products, that's sort of our belief as differentiated, perhaps, from a more technical product where you can have an MVP. We couldn't really sell a mattress that was only 50% as good as we wanted it to be one day, because we would get terrible product reviews, and we couldn't sort of build brand equity that way. And so we did a lot of work upfront to make sure that the product is where we wanted it to be.Stephanie:That's great. I mean, it seems like there's a lot of room to partner with researchers around a bunch of different topics, but what was that partnership like? I mean, when you went over to Belgium and you're essentially building out a model or an algorithm based on this person's research, were they like, "I want a piece of the pie, I want a little equity," or were they ready to give you all the information for free?Adam:Yeah, definitely. So we ended up working out a deal with them where effectively, they provided consulting services in exchange for equity in the business. Of course, that could have been consulting services for money. At the time, this was literally very, very early days. It was actually before we started working with them before we had raised our seed round. So there wasn't any money to pay them really. And so we went ahead with an equity relationship, which we felt made sense at the time. We still feel like it makes sense today. We don't really work with them at all and have not for a while, but it was really helpful to sort of supercharge our learning and understanding in terms of the development of the product and the algorithm.Stephanie:Very cool. I mean, have you had to iterate the model? Do you see people requesting different sleeping habits or behaviors? Have things changed for the past five years where you've actually had to change the model a couple times?Adam:Yeah, a lot actually. It's one of the biggest, from a consumer perspective, our differentiation is about providing personalization and a more custom mattress buying experience, but from a business bottle perspective, our ability to look at our algorithm or our model and effectively improve it is a really big lever to what makes us unique. And so if you think about what we're doing, is we're taking, as I said, information about yourself, matching it to a mattress. And so over the years, we've effectively, having sold hundreds of thousands of beds, we just have a lot more data. So we've been able to improve both the way that we match you, so person A with these attributes, are you getting matched to bed XYZ, and sort of edit, that as well as making physical product improvements to the beds themselves.Adam:So a lot of people talk about AB testing and talk about opportunities with using data to improve your product as it relates to your digital product, right? Your onsite conversion or your UX or something like that. We have taken that mentality to the physical product as well. And we've actually been able to reduce our return rate, improve customer satisfaction, improve average order value, all the main metrics associated with product and product satisfaction, by effectively looking at it in that light.Stephanie:Got it. And I also it was reading that the return rate, if you overemphasize how you have free returns and the 100 day, night guarantee and all that, if you overdo that, you'll be able to sell a lot more just because people have peace of mind. Even though I think I saw at least, I mean, it was a Casper stat, but it was only 10% of the people or less actually returned their mattress. Do you guys go about that same way of thinking of overemphasize things to make people feel like it's a risk free purchase?Adam:Yeah, I think there's two things there. I think that in our category, offering a fairly long return period, it's typically 100 nights, is kind of necessary, because you need to make someone feel confident in purchasing such a large, but really expensive item, right? Average order values in our category are really high. And so people want to feel really confident in the product that they're ordering. And that's why all of these brands are offering free returns, free shipping. In many cases, or in most cases, really generous policies around warranties, et cetera. It's just offering more opportunity to make someone feel comfortable with spending those dollars. So we definitely approach it that way.Adam:I wouldn't say that we necessarily overemphasize it. The reality is, most people need around two to four weeks to get used to a new mattress. And then after that, you don't really need another 70 days, but people tend to like that process. And in terms of return rates, you're right that return rates, they're honestly, I mean, Casper's return rate is probably higher than that number you said, but they're not as bad as retail, traditional apparel or something where return rates are 40, 50% or something like that.Stephanie:Yep. What happens when a mattress is returned? Where does it go?Adam:Yeah, that's a good question. So we do a few things. So when customers want to return a product, first, we work with them to see why, because there are ways we actually can improve the product experience after the fact. So we can send you a topper that adjusts the feel or other things along those lines, but in cases where mattresses need to be returned,, at Helix, at least we actually donate the vast majority of them. So we have a network of donation partners across the country where we will donate them. In some cases, we cannot donate them, either because there's state laws against it, or city laws against it, or if someone's located in a somewhat remote area. And in which case, we work with junk removal partners that end up recycling them. So all of our beds are technically, in the 100 night period, considered lightly used. So they're eligible for donation.Stephanie:That's great. So I was reading there's about over 100 companies now that sell mattresses online. How do you show how different your mattresses are and the algorithm that you have going on? How do you showcase that value proposition on your website or your advertising?Adam:Yeah, definitely. So it's a good question. And it's funny. That quote comes up a lot, the 100 plus mattress companies. It's one of those weird categories where there is a very long tail of players. So you probably have 10 to 15 players that have reached any semblance of scale, and then 80 that are very, very small. I mean, you would almost consider them, the equivalent would be like a mom and pop shop in retail world. What I will say is that buying a mattress is a long lead process. So when you decide you want to buy a bed, you're typically in market for it for a week, a few weeks, months even.Adam:And what that means is that you have many touch points with multiple brands, right? And you can imagine it's like buying a car, it's like buying anything that's expensive. And so across that journey, we feel like we do a really good job of sort of elevating our brand proposition and really personalizing our messaging specifically to consumers in ways that really speak to them so that our differentiation shines. The other thing is that, because of the way that we customize beds, and also that we really spend a lot of time on making sure that the product quality is excellent, is we just win a lot of awards. So we were named GQ's best mattress, Wired best mattress, whole host of others. And then we also get awards for specific affinity groups. So best mattress for back sleepers, best mattress for plus size consumers, or something like that. And we're able to elevate those messages on individual mattresses.Stephanie:Got it. Yeah. I saw, I think it was your organic line that won an award. How did you guys think about developing a new product that was organic materials? And also, launching like that, does it make your other products maybe not look as good? Or how did you guys think about that? Will it help or hurt us putting out an organic line? Because when I looked at it and I look at any organic products, it always makes you think, "Oh, well, what's in the other one if this one's made of natural materials and no chemicals?" So how did you guys think about that balance?Adam:Yeah, that's a great question. So we actually thought about that question a lot, and where we ended up and it's almost the core strategy of Helix is that throughout the first three and a half years of our business, we were holistically a single D to C brand Helix, right? Started out as just mattresses and then extended into other sleep products, pillows, sheets, box springs, adjustable bases, et cetera. And then about a year and a half ago, we took a step back, saw what we were building, which was this really fast, growing profitable brand, and in a category that we were sort of one of the leaders in, but what we saw under the hood was this really excellent collection of skillsets across our team, across our technology, some in-house built technology, across our supply chain capabilities and relationships. Could we view ourselves less as a single brand and more as a platform on which we could build a portfolio of home good brands?Adam:And that is the strategy that we are currently on. And so Helix is our sort of most well-known largest brand, but Birch, which is our organic line, or our organic brand, was launched about a year ago. And it is actually a sort of related, but completely separate brand. So if you were to go to birchliving.com, you would effectively see an entirely organic ecosystem with the goal of really feeling, I mean, truthfully feeling authentic to consumers that care about organic products, that supply chain is 100% sustainable. It's just a much different consumer. And so we want to make sure we talk to that niche consumer in a specific way that is perhaps different than a typical Helix consumer. And we've extended that process out more recently with the launch of All Form, which is our actually our first step out of the bedroom into the living room, which is a modular furniture brand.Stephanie:I love that. I mean, that seems so smart because it's different consumers are looking for different things and like you were just mentioning, if you're comparing the two, then you might actually walk away feeling bad if you went with the one that wasn't organic, but when you have it on a completely different site, you're really meeting the needs of the person who's coming there instead of trying to put everything on one site. So I love that.Adam:Yeah. I think it's certainly a slightly different strategy, but we just feel like consumers, especially online consumers, want niche experiences and want experiences that really speak to who they are, and their preferences. And we were sort of already doing that on the product side with Helix, but it made sense to do it in this scenario on the brand side with Birch as well.Stephanie:Yep. How do you keep track of everything that's happening under the different brands and the different websites? I mean, how do you make sure any learnings that happen at Birch are maybe transferred over to Helix and over to the furniture line? How do you keep it cohesive when you essentially have now three or four different businesses running?Adam:Yeah. It's hard for sure. I think we're currently operating under a shared services model, so we don't have a team that just does Helix and a team that just does Birch or a team that just does All Form. We're just not there. The other two brands are just not at that scale yet, but so that makes this actually a little bit easier because you have the same people that work in a functional area,, working across all of the brands, but it's certainly challenging, for sure. And we've been able to take a lot of learnings from Helix specifically, which is an older brand. It just has a lot more data. It has more customers on a daily and monthly basis, and leverage those learnings across the other brands, which it's typically in that direction from a [inaudible 00:22:02].Stephanie:Yeah. I mean, there seems like there's a big opportunity to also re-target prior customers because you already know how to talk to them. You've already sold to them before, and then showing them your new furniture line or the pillows or bed frame, even if it's on a different website, you kind of already know how to communicate that to them in a way that has converted in the past.Adam:Yeah, absolutely. I mean, I think that's the core business case, right? And from a business perspective, we like that because it allows us to acquire a customer, build a lot of good will with that customer, and then sell them more products, right? Obviously, but from a consumer perspective, we also think it adds a lot of value to the customer journey because customers that are in market for things like mattresses tend to be in market for other home good products. Maybe you're moving, maybe you're renovating, maybe you got married, maybe you had a kid. Something is predicating your reason for being in market. And in many cases, if we can sort of create a lot of good will with you and then offer you more products, it's not just good for our business. It's also good for the customer because it makes shopping easier, right? it makes your purchase cycle and shopping and all of that a lot easier. And so that's what we're starting to do now. And where we're excited to move in the future.Stephanie:Okay, cool. So I also saw that you guys, I don't know if you still have showrooms, but you did have some showrooms in New York. And the process was that a customer would come in and they would take the quiz and then they would go to the showroom and maybe hang out for an hour, take a nap, try out the mattress. How has that model changed? And what's going on with maybe not having the ability to bring people into a showroom and try it out?Adam:Yeah, definitely. So we had a showroom in New York. It's obviously been closed for the last nine months. It was a really unique experience because it felt extremely personal, because it was really personal. It almost felt more like you were getting a piece of clothing tailored because you would show up, in many cases you would actually make an appointment in advance. We would have your information. We would actually build the bed for you on the spot. You'd be part of that process. And then you could hang out, test it, et cetera. And we tried to make the experience really, really great. It's unfortunate that we've had to close it. We have plans of moving into a more aggressive thoughts around potentially showrooms or retail units going forward.  Stephanie:And so when thinking about your marketing toolkit, what are some of your favorite channels to get in front of new customers right now?Adam:Yeah, so I think that we approach marketing extremely holistically. We have a very, very diversified marketing approach. Part of the reason for that is we think it just mitigates risk. It's very scary when 80% of your marketing budget is in one single channel, especially if one of those channels is a technology marketplace, or if it's Google or Facebook, and all of a sudden the Google algorithm changes, or Facebook gets rid of a targeted audience and that's it. And that actually happened in the home goods category a few years ago on Facebook.Stephanie:What did they take away?Adam:Yeah, I think it was 2018. They took away, there was a way that Facebook could help identify new movers, and they took that away, and we weren't super hit by it, but I know a lot of home goods brands and a lot of mattress companies, it was overnight, 30% of your ads disappeared, that kind of thing. So we don't do that.Stephanie:That's interesting that we're even talking about new movers because I'm in the process of moving right now and thinking about, "Do I just want to buy a new mattress, so when we get there, it's already set up?" Because it's going to take maybe a week or so to get all my stuff there. That's very smart to target people like me.Adam:Yeah. And so we try to avoid that just being too aggregated in a single channel. And so we're really diversified. The other thing is we operate almost all of our channels in house. It's just really important to us to be internal and holistic about it. So yeah, I mean in terms of channels that we love, it's nothing crazy. We're obviously across all the digital channels, radio, podcast, direct mail, all of those. I think if there is magic, the magic for us is really around thinking through the customer funnel holistically and making sure we understand and attribute accordingly with a pretty diversified marketing stack.Stephanie:Cool. So when thinking about 2021, what kind of trends are you most excited about, or new behaviors that you've seen occurring that you guys are excited about?Adam:Yeah. I think there's a lot. I think obviously just in general, COVID has really accelerated ecommerce adoption in atypical categories. And so I think that's pretty exciting to see where that settles once, hopefully, the world gets back to normal. I think a few areas that we're particularly interested in is there's a lot of movement on payment options and better opportunities for people to pay, which is sort of exciting. Another one is really around blending products and services. So sort of offering services and attaching them to products and using those as ways to better convert customers, and the tools available to do that are pretty interesting.Adam:Yeah, and then just for us, it's really around continuing to personalize our web experience, provide better customer experience, and those types of things. So I think 2021 is going to be a really interesting year. I think it's actually going to be two distinct years in one, the first half and the second half will be just completely different for a lot of businesses. And I actually would encourage anyone that's thinking about either starting a business or budgeting for a business to think about the world that way, you might actually want to have budgets for a beginning of the year plan and a second half of the year plan, because it's just really hard to know where we'll be. I feel confident in knowing where we'll be for the next three to four months, but after that, it's going to be a completely new experience.Stephanie:Yeah. Yeah. I completely agree. So I want to dig a bit more into, you were just mentioning about merging products and services, and I haven't heard anyone talk about that yet. So I want to hear more, what are you thinking around that? What kind of tools are popping up that you have top of mind?Adam:Yeah, so I think for us, merging products and services, there's a few forms of it. One, which is at its most face value, it's just offering more services as if they were products. So that would be things like white glove delivery, things like old mattress removal, those types of services, which technically aren't really physical products, but they help convert customers into buying your physical products. Perhaps the more interesting areas as it relates to customer experience, and can you empower your customer experience team to provide service as opposed to just being an answer center? Right?Adam:So I think a lot of people view customer experience or customer service as an area where people go and ask questions, but can you be more proactive in providing service, whether that service be design consultation, be helping think through answering questions, or whatever it might be that really activate almost a little bit more a sales channel. I think that that's really interesting as well for us. And then I know a lot of other people are thinking about other types of services they can offer. Obviously, this is just what we're thinking about. But I think that you're going to see a lot more web experiences that are trying to provide a service-like experience to a consumer in addition to a product.Stephanie:Got it. Yeah. And it seems like once some of those services start happening, though, a lot of times, they can become commoditized where then the consumer just starts to expect it. I mean, I'm even thinking about contactless delivery and things like that, where it might cost some businesses extra money to be able to do that, or take a mattress away or whatever it may be. But I think eventually it will become standard, and that businesses need to start planning for, what are the consumers looking for now? And what will eventually have to be absorbed into the margin because it's commoditized?Adam:Absolutely. Yeah. I mean, I think that if what you're adding is something that can be easily commoditized, it certainly will be. If what you're adding is differentiated, unique, and valuable, then you should be able to charge for that value, right? It's sort of that simple. And so I think the example I use, white glove delivery, that's not unique to us. We're not the only people that can do that obviously.Adam:And so offering that, perhaps, could be something that becomes table stakes, or something that consumers come to have a level of expectation, but offering really niche opportunities to engage with someone on our CX team to help you through the buying process, that's not a commodity, right? That's something that you can really get to an amazing place through training and through branding and through just the entirety of your ecosystem, in my opinion. And so I definitely agree that some of these things could be monetized, but if you're doing them right, you should be able to, either, it should show up in your financials somewhere, whether it's you can charge more, your conversion rate is better, et cetera.Stephanie:All right. Let's move over to the lightning round, brought to you by Salesforce Commerce Cloud. This is where I'm going to ask a question and you have a minute or less to answer. Are you ready, Adam?Adam:I hope so.Stephanie:All right. First up, if you had a podcast, what would it be about and who would your first guest be?Adam:If I had a podcast, I mean, this is a boring answer right now. It would be on effectively what I was just talking about, which is the future of D to C. And my first guest would probably be Jeff Raider from Harry's.Stephanie:Oh, that's a good one. Awesome. What's up next on your Netflix queue?Adam:I'm about to finish the last episode of Queen's Gambit and I love it. It's really cool. I like it a lot.Stephanie:So good. I like that too, it's awesome. What topic or trend do you not understand today that you wish you did?Adam:I dabbled in high-level cryptocurrency a year and a half ago and I just don't understand it at all. So I wish I knew it better because I think there's opportunity there, but I'm not sure I'm the guy that's going to find it.Stephanie:What's the nicest thing someone's ever done for you?Adam:Wow. The nicest thing someone's ever done for me?Stephanie:I get that response a lot. "Whoa, deep."Adam:Yeah, I mean that's deep. I don't know. I mean, my wife married me. That was pretty nice. I'm pretty happy about that.Stephanie:What a nice lady.Adam:I know, right? What a nice... I guess that the nicest thing... I'll just bring it back to Helix. I don't know if that's a boring answer or not, but we had some pretty awesome early advisers that really didn't need to give the time that they gave, and it was just immensely valuable. So I'll go with that.Stephanie:That's a good one. All right. And then the last one, what one thing will have the biggest impact on ecommerce in the next year?Adam:Well, the real answer is COVID and the vaccine, that is the answer. And I think that anyone that tells you it's not macroeconomic facts is lying. From an internal standpoint, I'll go back to something I said earlier. I think that the movement in payment processing is a pretty big deal and not a lot of people are thinking about it, and I think that's going to be a big deal.Stephanie:Yep. Cool. All right, Adam. Well, thanks so much for coming on the show. Where can people find out more about you and Helix?Adam:Yeah, definitely. So come check us out. It's HelixSleep.com for Helix. For Birch, it's BirchLiving.com. And for All Form, the modular sofa brand, it's AllForm.com. Yeah. And that's sort of the best place to check us out and learn more.Stephanie:Awesome. All right. Well, thanks so much and have a great night.Adam:All right. Thank you so much.

After his first trip down the eCommerce road ended in failure, Jay B. Sauceda swore to never again travel down that path. But life has this funny way of coming full circle and turning your failures into successes. Today, Jay is the founder and CEO of Texas Humor, an eCommerce shop so successful that Jay decided to take the leap and also build Sauceda Industries, which helps manage not only Texas Humor logistics, but the logistics of many other D2C companies.The journey from failure to repeated success was a winding one, and Jay takes us through it all on this episode of Up Next in Commerce. Along the way, he digs into what it takes to build a company from a base of loyal supporters and his advice to marketers, including how to be a trusted friend rather than a bother in a consumer’s life. Plus, he explains why customer expectations around fast shipping don’t always have to apply to the products you offer.  Main Takeaways:Small Now, Not Forever: Many eCommerce shops rightly want to outsource their logistics to a 3PL, but if your company is too small, many of those companies may not even be open to working with you. This is what Jay experienced in his early eCommerce days, and he has some ideas on how to approach this if you keep hearing “no”.A Good House Guest: Think of advertising like being a guest in someone’s home. You don’t want to walk in and overwhelm the conversation with talk of yourself. Your content shouldn’t act that way either. Bring something more to the table.I Want it Now!: Companies with fast shipping — the Amazons of the world — have led to new consumer expectations when it comes to delivery times. That may be true, but this may not be the expectation for every type of transaction. For necessary commodity goods, fast shipping is critical, but for unique items or products that customers are buying from a company they are loyal to, they actually are much more willing to accept a slower delivery timeline as long as there is transparency throughout the process.The COVID Effect: As the COVID-19 vaccines are approved and shipped, more logistical resources will be deployed to achieve that task. Stephanie thought that this could have a big impact on shipping, but Jay doesn’t necessarily agree. Tune in to hear his take!For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder at mission.org. Today, we're chatting with Jay B Sauceda, the CEO of Sauceda Industries. Jay, welcome.Jay:Hey, how's it going?Stephanie:I'm really excited to have you on. As we mentioned before the show, I'll be moving to your neck of the woods here in a month or so.Jay:It's a very popular thing to do these days.Stephanie:It is.Stephanie:Yeah. I'm excited to get there. So today I want to talk about two things that feel very dispersed. We are talking about Texas Humor and logistics, but I think the best place to start would be your background so then I can guide the listeners through the story in the way that makes the most sense.Jay:Yeah. I grew up Southeast of Houston in a blue collar town called La Porte, Texas, which is where there's a lot of the chemical plants refineries that most people can picture with the whole oil production industry of Texas. But the really great thing about La Porte that I loved was, it fostered really any kind of career development and adult development that you might want. So if you wanted to go to high school and upper education or undergrad education wasn't your thing, you could still graduate and go make 70, $80,000 working in the chemical plants close by and really support your family and do a really great thing. If you were a creative kid like I was, the high school there was really fantastic about fostering creativity of young people and developing their careers dependent upon what direction they wanted to go.Jay:So it wasn't like one of these small towns that you see in a movie where everybody works at the coal mine and you got generations of people doing the same thing like that. That may be the case for some people, but there was a lot of latitude to figure out what you're going to do and have people who could help you chase some of those dreams. So for me, I was always a creative kid and was really into photography and those types of endeavors. So I was able to exercise and work out those muscles creatively speaking when I was a kid, and then ultimately ended up coming to University of Texas, where originally I thought that I was going to study political science and which I did. But ultimately went down the path of advertising and the creative field.Jay:I spent four years at UT and ultimately just realized that doing the law school and the political science thing wasn't really my GM and ended up in advertising and working for a small ad agency here in Austin, which was the beginning of my creative career and ultimately what led to me ending up in e-commerce some years later.Stephanie:Okay. Cool. When I was doing a bit of research, I saw that the creative agency or advertising agency was only six people. So you were able to hear about the business deals, learn about the business side of things as long as the creative piece as well?Jay:Yeah. It was a great little firm called The Butler Bros. The two principals there, Adam and Marty Butler, both had some really high level well-positioned roles at the big ad agency here in Austin called GSD&M. They had that front row seat to these really large deals that bigger agencies deal with. But eventually went and started their own firm, and yeah, in those first few years there were just a handful of them. So I was able to sit in the room and as this college intern had access to a lot of conversations and things that I don't think that most ad agency interns would typically have access to. As a result, I really think that it propelled my career forward in a way that, when I ended up starting a little design studio with some friends and building out the early years of my career, I felt more prepared to operate ahead of my years because of some of those experiences and the things that you just pick up when you happen to be in the room with the principals of two companies.Stephanie:Yep. So where did you jump to next after the advertising company?Jay:I had done that for a while and then went freelance after working for them. They gave me some really great advice on the tail end of my career there. I was curious whether they were going to hire me to work for them or not. At the time they were indicating that not likely, that I hadn't really had enough of a specialty up until that point to make it worthwhile for me to be somebody who was there full time. So really great as an intern, but not so much as a full flung employee. So for that reason, their advice was to go out and try to specialize in something which ultimately ended up being photography.Jay:So I went and started to focus on photography as a whole and developed a career as a commercial photographer and ultimately did that for about 10 years. But I guess the eventual destination in this story that's worthwhile to your listeners is that, during that period, I started a small ad agency, a little designed firm called Public School with a group of friends. We had this motif that was all based off of the 1960s era of graphic design specifically around school books and textbooks. And so when we started publishing to our blog and publishing about our work, people really gravitated towards the t-shirts and the various pieces of collateral that we had designed for that brand.Jay:So we were really excited because we thought, "Well, why don't we capitalize on this and start an online store?" Which we did, and almost immediately had a ton of sales for t-shirts and various items that we were selling, which was massively exciting. But as with most people who sell things online, it's really funny to see, or it's real fun to see that money and those sales come in. It's not a ton of fun to have to deal with getting all those orders out after the fact. And ultimately that's what we ran into. It was a lot of excitement around making the money, but not a lot of excitement around having to deal with shipments. So the work associated with having to get those packages out the door was so time-consuming and unfun that I, after a while shut [inaudible] and then swore off ever getting back in the e-commerce again. So suffice it to say it's a little bit funny to find myself sitting here about 11 or 12 years later, the CEO of a e-commerce logistics brand shipping the number of packages that we are every day.Stephanie:That's great. So tell me a bit about, what year was the store live and did you shift right into the logistics business or did that come a bit later?Jay:No. I launched our online store in 2013. The social media audience for Texas Humor, I'd developed over a few years before that. Then in 2013, got it off the ground and started trying to get into scale. Initially, we were just shipping the orders out of my home garage, but over time, basically we had decided to try to outsource the work because we had just gotten so sick of dealing with the scale and having a tough time getting out of our own way as business owners. I reached out to some 3PLs and one of the ones here in Austin just had a very snarky and negative approach to telling me that it wasn't really the right time, which ultimately led to us just getting a little bit of a chip on our shoulder about it and decided to just do it ourselves.Stephanie:Mm-hmm (affirmative). What kind of pushback were you getting when you were reaching out to these 3PLs other than them saying that you were too small for what they probably wanted to work with?Jay:Yeah. Really, that sums it up. It's mostly, "You're too small for this to be worthwhile." And look, I don't have a problem with that. I run an organization that has to say that to people as well. The difference though, is that culturally our approach is to say that it's not a no, it's the not right now. And what we'd rather do is try to be a resource for some of these companies to help them understand what would make them qualify to work with the 3PL and/or make it cost effective for both parties to be in a mutually beneficial relationship. A lot of, I think, small merchants just get in this mindset that their business is worthwhile and they're ready to just offload and go. And in my case, I recognized that we were too small at the time. What I was trying to point out to the guy was that, "We're not big enough to be worthwhile today, but let me sit down and show you the marketing plan and all the things that we're going to do that will make us worthwhile in the near future."Jay:And that was just not something he was really willing to listen to. So that was very much an approach that just rubbed me the wrong way and was something that has definitely informed how we coach brands as they come to us and we have to turn them away because of a number of reasons. Sometimes it's just, we're going to be more expensive than it is even worthwhile for you to be working with us. So until you hit a certain level, you can be spending more money than you are making just to facilitate paying us to do the work and that's not a good position to be in for anybody. So let's avoid that and try to find something that's going to be beneficial for everyone. And that might mean not today, but in the near future. So let me help you fast forward by giving you some tips and some other things that can help you get there quicker.Stephanie:Yep. That's great. Before we dive too deep into the logistics piece, I was hoping you could touch a bit on Texas Humor so people know how you created Texas Humor, what it turned into and what you were trying to sell to even start talking to a 3PL.Jay:Yeah. Over my career, I've done a lot of this kind of audience building with our brand at our old studio. And for me personally, as a photographer, audience building has been a big aspect of what I've always done. And Texas Humor was just this idea that was born out of a discussion with one of the partners in the design studio I was in, in which we were just talking through what different audiences could we build and where could we go with that? And so I started from nothing, started just tweeting about Texas as a whole and that's ultimately really like where we developed the idea. There was no specific e-commerce goal in mind. But once we realized that we had a few million followers and this captive audience that we could do something with, that was the point at which we decided, "Why don't we try to make this into a little bit more of a business?" And ultimately where we got the idea to start texashumor.com.Jay:But it wasn't this big strategic thing in which we said, "Hey, we're going to go start this and we're going to build a store and we're going to do X, Y, and Z." It was far more organic than that. But I took the background that I had in marketing and advertising and leveraged that to really scale up what we were doing. Probably much faster than most organizations would, who would be doing something like what we were doing at the time.Stephanie:Yep. So how did you develop that audience and get in front of people? I think I see now that you have over 2 million followers on your social channels, and so, how long did it take to get a big enough audience that then you were like, "Oh, maybe we should try and sell something to them as well." And what did that process look like?Jay:It was a couple of years before we actually did try to actually sell anything to anybody, because at the time we were just so averse to e-commerce and wanting to develop any inventory position or anything like that. So we didn't come out of the gates thinking like, "Oh yeah, we're going to totally go do this thing and have it be focused on e-com." That was very much later on down the road. The goal that we had initially was to just try to make some form of money. But it by no means was, "Let's try to focus on e-commerce." Originally, it was more so of a content advertising play and that's really what drove it in the early years.Stephanie:Yep. Yeah. I saw that you were generating like 40,000 in revenue by the third month of operation with the content piece of it, right?Stephanie:What are some tips around building up that audience? What are some tactics and strategies that maybe you even use to this day to build up an audience?Jay:I'm a big believer that, I don't remember who told me this. Maybe I made it up, I don't know, but I just see content and advertising as like a guest in people's homes. Most people do not want someone who's going to come over to their house for dinner and just spend the entire time talking about themselves. And so as brands or content generation organizations, if the only thing we're doing is going me, me, me, then of course, people are going to be turned off by it. That's the exact definition of bad advertising. So for us, and for how I thought about building Texas Humor initially, it was really trying to think and put myself in the shoes of the people who were our audience and try to say the things that they had on their mind already.Jay:So there's no science to that necessarily, and I think it's why yes, there are probably some, I don't know, formulas for "going viral", but a lot of the things that do ultimately go viral have this weird X factor that people have a hard time wrapping their head around. And in my mind, that X factor is that it comes from the heart and it resonates with people. So if you really wanted to know what is it that we do that's different than everybody else, we're not the only brand or the only feed that talks about taxes, but I do think that we're the only one that tries not to just purely patronize people. And I think that that's really what set us apart early on. We were trying to be unique, we're trying to provide quality and we weren't just doing social media for the sake of doing social media.Jay:The store almost felt like a secondary function of the audience that we had built and not the other way around, which is where I think a lot of brands start. They say, "Well, how do we sell to everybody?" And then they think about everything after the fact, and in my mind, that's really the wrong way to approach it.Stephanie:Yeah. Yeah. I love the idea of building a community first and just focus on making that great. I know we've had someone from Food52 on the show previously, and they had the same experience where they're like, "We're just here to build a good blog, good content, make sure our community likes what they're getting from us and can also engage with each other. And then it was just obvious to start selling products and giving them what they wanted based on the recipes we were showing and the maybe materials we were using and whatnot."Jay:Exactly. Really, the strongest brands are the ones that think about the commerce secondly. It depends upon what it is you're selling. Your brand may be the content, but in our case, it's not. The content is the brand versus the brand being the content, if that makes sense. Really, the difference is we took that tact. Stephanie:So let's talk a little bit about the logistics arm of Sauceda Industries. Tell me why did you, or how did you even decide, "We're going to go into fulfillment and logistics?"Jay:Mostly for the reason I described earlier. We were already doing it for ourselves and it ultimately just was a way to cover the costs that we had as an organization. Most fulfillment operations are cost centered, not really a revenue driver. So those types of things tend to be an area where you're losing money or you're killing your margin. So we saw it as an opportunity to make some money rather than just have people carrying it as dead weight.Stephanie:What kind of mistakes do you see brands making today when they start exploring the path of working with a 3PL?Jay:I think most brands just make the assumption that their time is less valuable than they think it is, or the leaders of the brands tend to think that. And so as a result, they don't farm out the things that they should be. Not having accounting firms from outside handle your books, not working with a logistics company to handle fulfillment. There's this idea that most entrepreneurs have that they can do things for cheaper and faster than most people. And that's probably the case, but in terms of opportunity costs, having a CEO of a online brand handle all of the orders simply to save a little bit of money or to not have an invoice to have to pay for that it's like, that's not really the right way to be thinking about it. So we just really try to coach people on opportunity costs and help them understand those types of things.Stephanie:Yep. Are there any bets right now that you're making in the world of logistics where it's headed? It seems like consumer preferences and demands are definitely increasing around everyone wants one to two day shipping, Amazon's made everyone expect that now. What kind of things are you guys leaning into or investing in right now to keep up with those trends?Jay:Everybody says that, and I actually don't believe that at all. I think that everybody thinks that that's the case because that's, in my opinion, what the major news outlets say are pundits on TV, but I've not found that to be the case. I think if people are buying a toilet paper, yeah, they need that in one to two days. But if they're buying something very specific from your brand, they'll get it when they get it. I actually think that there's more price sensitivity to shipping than most people think. As a result, people know what they're paying for and in the case of Amazon, like sure, if what you sell is available from 75 other people on Amazon, yeah, you better hope that it's prime enabled and it's cheap and all of the above. But if you've built a brand that sells something very specific that only you carry, then if you build the desire, then people, they'll get it when they get it.Jay:But it's not this type of thing where just because they can get toilet paper or Mrs. Meyers baths or a kitchen soap in two days means that they need their Texas Humor shirt in two days too. I'm a pretty adamant person when it comes to that case because I get that question a ton and I think a lot of people say that, but no one has actually really proven to me that that's true. Now, if you ask people their preference, they're all going to tell you two days. But I think that we don't deal, or we don't work in this vacuum in which every single store and shopping experience that happens online is compared equally. I think most customers who are shopping online are doing so with it in mind that like, whatever it is that they're buying is unique to that experience.Jay:And so, so long as the brand is setting their expectations up front about what the experience is going to be for the customer, I really just don't think it's as much of a challenge as most people think it will be to get the orders out the door whenever they're going to get them out the door.Stephanie:Yep. Yeah. I definitely can see that. It definitely depends on what the product is, like you're saying. If it's diapers, yeah, I need that like right now, in an hour. First, because I probably didn't think about it until last minute versus, I just ordered earrings from this one company, Marjorie, I don't know how to say their name, but I don't mind if it comes in a week. That's okay because they're the only ones selling this product that I want and I'm okay with waiting.Jay:Correct. Correct. Yeah.Stephanie:Yeah. I definitely think there's a lot of room for brands to be more transparent around the shipping though. And I would rather have someone under-promise and over-deliver than tell me something where it might actually get delayed where I'm betting on that.Jay:No, and I think that that's absolutely correct. I do believe that there are a lot of brands who do a pretty poor job of being clear about those things. So no, I'm 100% with you on that. But I do think that a lot of people will just make the assumption that everybody's going to care about it more than they actually do. Which is partially why I'm adamant about trying to dispel with that rumor.Stephanie:Yeah. Well, you're doing it here. Yeah. The one thing I was just reading about too, was about delays in shipping and how there's going to be a lot of shake ups in that area, especially if the COVID vaccine gets approved. I don't know if you've read about this a bit, but how, if it starts being something that's going to be shipped everywhere, which is what would happen if it's approved, it's going to delay all the postage everywhere. Have you read any bit about this or thought about things like that, that are a little bit less predictable than other things that would maybe delay shipping [crosstalk 00:27:42]?Jay:Yeah. I've actually spoken with some people on the inside of FedEx and a few other places. There are two major vaccines that are out right now. There's the one by Pfizer and then there's another one by the other organization, I'm trying to blank on. Both of which require cold storage for the transit. The Pfizer vaccine in particular requires cold chain storage that is very, very specific to medical purposes. And so you're not sticking this on a FedEx truck. This is going on a very, very specific type of vehicle. None of which carry any of your packages from my store to your house. The other-Stephanie:The won't be shared, you're saying? Even if there was a cold storage company like a computer company or food, they would never be shared on the same truck anyways, so that it's not like a-Jay:Correct.Stephanie:... same pie that you're pulling from them then is what you're saying?Jay:Correct.Stephanie:Okay.Jay:It is not a similar supply chain, cold chain storage is wildly different or cold chain transit is wildly different than the type of process that we have in place for your regular parcel. So, yes, I would believe that a massive amount of distribution taking place all of a sudden would certainly strange FedEx as a organization but the van delivering packages to you from Amazon or from myStore, or any of the stores that service us is not the van who is going to be carrying these products to the end locations. Even the other vaccine, although it doesn't require the same -20 Celsius or whatever temperature requirement that the Pfizer one does, it does still require refrigerated storage on its way to the end point.Jay:I think it's a lot of people circling the word logistics and saying everything under this is going to be affected, but within logistics, there's so many different styles of shipping or needs around shipping. And for that reason, not everything in a Venn diagram of like who services what, in large part, the cold chain network is not really one that is as easily affected or would affect the networks that you and I typically expect our packages to come through.Stephanie:Got it. Okay. Yeah, that's interesting. I didn't read too much into it, but I'm like, "That's a good black swan event to prepare for, for some brands then if they do do the cold chain shipping."Jay:If you're buying food subscriptions and things like that from your... Like Blue Apron or one of these, yeah, you're more likely to, but you know what, more of that is actually the result of limited supply of dry ice. And that's the result... I can get into all of that, but the dry ice shortage is a result of less driving, which means lower cost of oil, which means less drilling for oil, which means less petroleum byproducts, which means less carbon dioxide, which ultimately means less frozen carbon dioxide, which is dry ice. So yes, there aren't aspects of the industry that will be affected, but the underwear that you're ordering from Amazon should not be affected by a ramp up in cold chain transit volume overall.Stephanie:True, good. I was worried about that. I really need my underwear on time.Jay:Yeah. Exactly.Stephanie:All right. Cool. The one thing I was thinking about too, when it comes to logistics, if I'm a new brand, and I'm thinking about having a 3PL to work with, what are some things that I need to get in order before going that route? Because I can imagine some companies coming to you with it being chaos behind the scenes, and you're like, "I can't work with you until you at least have this, this and this in order for us to plug and play." How should a brand prepare before even reaching out to 3PLs?Jay:I think a lot of brands will never really give things like their skews and the tags that they used and all of that, like a second thought. They're cobbling together a plan, and then you're two or three years in, and you've got a store with three different naming conventions and all that. And clean data is really what makes the world run smoothly in the logistics world. And so if there's not a really strong focus on attention to that, you end up with a pretty significant issue trying to work with the 3PLs, because you have to go back and clean all that up. So most of my suggestion is, look, try to think through that and it's the spring cleaning exercise that I think a lot of brands have or should go through every year looking back and saying, "Are the ways that I structure my data and my reporting the way that will allow me to be really successful at scale?"Jay:And if the answer is no to any of that, then go back to the drawing board and try to make sure that you're adjusting for that because it certainly creates a lot of issues as you try to scale your business up.Stephanie:Yep. That's a good point. Yeah. We've had a couple people on the show talk about making sure that you plan for your data dictionary and have it cleaned up from the very start, if you can, so that you're not trying to fix everything after the fact.Jay:Correct.Stephanie:It sounds like you've definitely been on top of the market or trends or even news, just like we mentioned earlier about the vaccine and stuff. What kind of trends or patterns are you excited about right now over the next couple of years?Jay:I think just in general, there's more attentiveness to better and more targeted marketing that I think people are going to be excited to interact with. So from a just overall perspective, I get excited by the idea that I'm not going to get emails that are just boring and seem to be broadly targeted to everybody. So I think that as more small brands leverage tools like Klaviyo and Shoelace and things like that, I think that just overall marketing as a competitive sport becomes more fun. And as a consumer, it's a lot more fun to watch.Stephanie:Yup. So how are you guys leaning into the targeted marketing a bit more? Jay:I think it's exactly what I said. Just mostly trying to think about, we're not just selling to one person sitting on a couch repeated 3000 times over. We're selling to 3000 different people. So I think if most marketers think that their job is done simply because they came up with a campaign, that's a bummer. I think the more work that gets put in to try to wow people so their brand can connect with them directly, the better. And when it comes to email, the way that we do that is through segmentation and we try to look at all the various segments of behaviors that people who might interact with our brand would be members of, and then trying to evolve the creative that we're developing in a way that seems to speak to them directly. So they feel like when they receive something from us, it's not just this blanket email that says, "Come shop at Texas Humor," it's really touching on the size of clothing that they've purchased in the past or the types of content that they're really into, those types of things.Stephanie:Got it. Okay. So you're looking at types of content or you're maybe showcasing things based on size. What other kinds of behaviors are you segmenting right now to be able to craft your message differently?Jay:The highest or the best way to say it is around recency and frequency. So we look at the various behaviors on a store and try to segment based off of the recency and frequency of them doing whatever that behavior might be. There's a lot more detail than I can probably go into on this show, but I would say that starting with that is a really great way to make sure that you're not just... I think the word email blast or the phrase email blast is a bad phrase because you definitely should not just be blasting people with anything. I think it's really critical that you be more surgical with how you send emails out to your customers. So that way people feel like they're having a conversation with the brands that are emailing them.Stephanie:Yep. Yeah. I think it'd be really great if I were to get an email that said, "Hey, Stephanie, we saw you're moving to Austin. Here's a bumper sticker for your drive or something." Being able to find data like that that connects with me in a different way of like, "Oh, wow, that's cool. I didn't think about a bumper sticker," or whatever it may be, but because you know a little bit about me like that, I'm going to come to your website and explore a bit more.Jay:Yeah, exactly.Stephanie:All right. So let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask a question and you have a minute or less. Are you ready, Jay?Jay:Yup.Stephanie:All right. What's up next on your reading list?Jay:I will say I haven't read much in the last couple of weeks because I've been so focused on getting everything out the door. But I'll probably actually read The Obstacle Is The Way by Ryan Holiday. I read Stillness Is The Key, which was great, but Obstacle Is The Way's one that a lot of people have been telling me I should read.Stephanie:Yep. Yeah. I read that. It is good. What is one trend or topic or piece of tech that you don't understand that you wish you did?Jay:I wish that I could personally write SQL queries and do more database work and business analysis myself.Stephanie:Yep. That is a good skill to have that I still appreciate to this day. I used to work at Fannie Mae and I'd be all up in SQL all the time, and it comes back even till today where I'm like, "Hey, I at least know what that query is looking for."Jay:Very good.Stephanie:And then the last one, what's up next on your Netflix queue?Jay:I'm eagerly awaiting the next season of The Crown. I know it's like two years away or something like that, but I'm absolutely eagerly awaiting that.Stephanie:Yeah, same. I'm excited about that. All right, Jay. Well, it's been a pleasure talking to you. Thanks so much for coming on here. Where can people find out more about you and Sauceda Industries?Jay:They can find out more about me on my Twitter account, which you can just find my full name, Jay B Sauceda. I'm everywhere on social media on that username. And then obviously our websites, saucedaindustries.com. So if you have any questions about the logistics space and how it relates to e-commerce or you're just curious about tips on how your brand can best work with the 3PL, happy to answer those or connect you with somebody on my team who can. We'd like to be a resource in our community for e-commerce crane owners, because we know that it's a big jungle out there and we have navigated it once or twice. So to the best of our ability, we'd love to help people take the shortcuts when we know where they are.Stephanie:Amazing. Thanks so much, Jay, and I'll see you in Austin.Jay:Sounds good. Thanks so much.

Think about the last ad you saw an ad that had an image of someone’s living room. What color was the throw pillow on the couch? Was there a dog present? How many people were pictured? You might not know the answer to those questions, but the marketers who put that creative together sure do, and you better believe that they thought long and hard about each of those aspects and dove deep into some data to decide exactly what to include in the adThose minuscule details may seem frivolous to the naked eye, but the data proves that every decision you make in your creative process has an impact on the bottom line, and the ecommerce businesses that pay attention to the data while still putting their own spin on the creative aspect are the ones that are rising to the top.R.J. Talyor is the founder and CEO of Pattern89, which uses A.I. and machine learning to analyze advertising and guide marketers toward the performance metrics that matter. On this episode of Up Next in Commerce, R.J. takes us through the most recent trends report that Pattern89 put out, which includes some important information about why businesses should be paying particular attention to copy and hashtags. Plus, R.J. gives tips on how to avoid the trap of following “best practices” and why creativity will always win.Main Takeaways:Big-Time Creative, Small Time Dimensions: Marketing creative is made up of tens of thousands of dimensions, all of which can be measured and distilled into performance metrics. And when those metrics are measured, you can utilize that data to inform the decisions you make about what elements are more beneficial to include in your ads (like an orange pillow versus a blue pillow and a cat versus a dog).#WorthIt?: Including hashtags in your marketing copy is a method to improve performance. The flip side of that argument is that hashtags have a cost, particularly if you overlay a hashtag on an image or video. The Same… But Different: When developing creative, marketers are often looking at the same data, trends and industry reports, and they are following the same “best practices.” The trick is to take the information and make it your own in order to develop creative that stands out rather than just gets lost in the sea of “what works.”For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. This is your host, Stephanie Postles. Joining us today is R.J. Talyor, the CEO and Founder at Pattern89. R.J., welcome.R.J.:Hey, thanks for having me. Appreciate it.Stephanie:Yeah, I'm excited to have you on the show. I just downloaded your report, as you saw, right before the interview and I feel like there's some good juicy stuff and the things that you guys are doing and we'll have a lot to talk about today.R.J.:Yeah. Great.Stephanie:So tell me a bit, what is Pattern89 and how did you go about creating that?R.J.:Pattern89, what we do is we predict creative performance with machine learning and AI, and I've worked in digital for almost 20 years now. I worked at ExactTarget and then at Salesforce and then at another social startup, and learned quickly that marketers are spending so much time creating journeys and figuring out who their audience is, but still use a lot of their gut on what creative to put in front of those audiences, or in the places in the journey. While data is being used to figure out what and who, it really is on the creative side, still kind of a gut decision. And so set out about four years ago to help marketers use AI and machine learning, to predict creative performance, and now we're a 25 person strong scale up and serving customers all over the globe.Stephanie:That's awesome. I was reading a bit about your data co-op and how many brands you have that you get to look through all the data, so give me a little bit of like the behind the scenes of what kind of brands do you have in there, if you can share, how many do you actually have, and how do you go about looking at all of their data?R.J.:Well, when we started the business, we knew we needed a giant data set in order for the machines to find patterns and outliers that would actually help creatives, and so we started offering a free scorecard or creative assessment in exchange for joining the co-op. We're almost at 2000 brands who-Stephanie:Wow.R.J.:... have connected their accounts to Pattern89. And our machines, they don't actually look at anything that's identifiable. Instead, they're looking at 49,000 different creative dimensions of a piece of creative and tying it to a performance metric. As an example, it might look at a picture of a living room and say, "All right, there's a couch, plants, window. Is there a human or not? What color is the couch? Is there a blanket on the couch? Is there a dog in the picture?"R.J.:Then associate that with a performance metric, like, did it drive X purchases or Y video views or X views, so then we can understand in aggregate what are the patterns and outliers that we're seeing across massive amounts of data, so that we know living rooms actually perform better when there's an orange throw pillow on the couch, for example, like the one small detail. So massive amounts of brands, massive amounts of data, and really granular creative insights.Stephanie:Very cool. How do you go about, if you're looking at that kind of anonymized data and you see something doing well, how do you know it's doing well? Maybe because it's a Nordstrom where it's like, well, of course they have brand recognition, it's very easy to buy from them, versus a brand new D2C company where maybe one of their ads is doing well, or it's not doing well and it's kind of getting skewed because they don't have that brand recognition.R.J.:Yeah. That is a big question. The first thing to know is that our data science team uses a set of statistical tests to kind of ferret out what is actually driving the performance or not driving the performance, so that we're not chasing after kind of red herrings. The other thing is from an audience perspective, the history of that audience use, so is it a brand new audience or is it a legacy audience? Is it a customer loyalty audience or something else like that? Those are all the components that are also taken into account so that we can distinguish between maybe the brand legacy of a Nordstrom versus an up-and-coming D2C startup and still provide statistical significance at over 95% competence.Stephanie:Got it. What things do you think are going to work in 2021? I mean, I was just going through the report that I mentioned earlier and I mean, it was cool because it's all the way down to "Here's certain emojis and colors and imagery is up, but maybe with multiple people or one person and video's down." So tell me a little bit about what you guys are seeing and predicting to work well when it comes to advertising and copy in 2021.R.J.:Yeah. Well, the first thing that it's important to notice, the creative lifecycle has shrunk and rom a creative life cycle perspective, it's just a lot shorter than it's ever been. In addition to the creative life cycle shortening, what is performance in those creatives is changing as well, so the best advertisers have a 2:1 image to video ratio. While video performs a lot better in general, image to video 2:1 is the best performer for top performers in the dataset, and we're seeing more and more emphasis on video and video performance, but videos tend to be more expensive, so 2:1 is a good framework.R.J.:Then taking a look at what's trending and what's forecasted to be a performant in 2021, we see things like TVs and electronics really improving cost per clicks, also spas and massages, those types of things. And then maybe not surprising, we're seeing a lot of isolated people, so one face in creatives and those people are reading or studying or doing something by themselves, which kind of reflects the world that we're living in, especially as we head into 2021.R.J.:One of the surprising things, and sorry for all the cat lovers out there, is that pets typically do very well, dogs and cats, but we're actually seeing cats driving performance down. So it's more expensive to advertise with cats in 2021, so just keep that in mind as you're here.Stephanie:That's funny. Don't put a cat in your ad.R.J.:Yes, exactly. Yeah. But consistent performers, things like images or videos of those people exercising, phones, images of cities, those types of things are really staying flat. This is all going to change by audience and by brand, but in aggregate, those are the things that we're seeing rise, staying steady, and then underperforming in terms of predictions.R.J.:The other thing that we analyze is color and the importance of color driving performance in 2021. In December, we're really seeing kind of teal colors and blues perform best, but what's trending up in 2021 are, it's kind of this peachy color, and I can give you the exact hex code for the designers out there, but peach and dark green are really trending up and they've been trending up over the last three years, while kind of a pinky and a brown color are really trending down for the last three years and will continue to trend down. It's kind of funny as we think about what background colors or what shirt colors our models should be wearing, or how we should stage a photo shoot, or even what stock photo or image or video to pull, these types of decisions can impact your CPMs, your CPCs, and your click-through rates and ultimately your performance, so it's good to have the data on your side.Stephanie:Yeah, that's great. The one thing a lot of guests have mentioned is that more organic videos, iPhone videos, even iPhone photos have been performing better for them then-R.J.:Yes.Stephanie:I mean, because a lot of them couldn't stage things anymore in their studio, or didn't really want to use the stock photos. Are you seeing the same thing?R.J.:Yes, and especially selfies, really driving performance up. So when influencers take a selfie video, which might've seen sort of not have been as polished as in the past, but selfie videos in the data is actually spiking in performance as well as popularity, so yes is the answer to that.Stephanie:Cool. Any other trends in that report that stood out to you that were maybe a bit surprising and you were like, "Why is that happening" or "Why is the data showing that" where you had to dig in a bit deeper?R.J.:One of the other things that's really surprising when you deep dive into the report is copy and the impact of copy alongside your creative. Oftentimes we spend a lot of time developing what the creative would be, and then maybe we'd just go with a standard message, but the impact of performance when you have copy that's like 5 to 15 characters long, that's what's going to drive the best performance for awareness or top of top of funnel campaigns, whereas body copy needs to have between like 40 and 60 characters and should include a hashtag.R.J.:What's a little bit surprising about hashtags specifically, is that including a hashtag overall improves your performance, but it's going to be a little bit more expensive. And then even further, if you put a hashtag as a text overlay on an image or on a video, you're going to see the costs go up even more. So it's funny how best practices intersect with performance in good and bad ways, and what we're kind of distilling down is how the algorithms at the individual platforms prioritize or deprioritize content, based on supply and demand, like what's popular and what's actually performing.R.J.:If you think about it from the platform perspective, they want creative diversity. They want you to be producing something that creates more thumb scrolling and more content engagement. So they're looking at how much of X do we have, how much of Y do we have, and then prioritizing content that favors newness and differentiation and engagement. Anyway, some of these things are like, need to put a hashtag in there because that's actually going to drive your performance up, but it might also drive your cost up so you've got to kind of weigh the pros and the cons of each creative dimension.Stephanie:Cool. I'm thinking about all this data and feedback that you're giving to customers, and how do you make sure that they don't all start doing the same thing where it's becoming like a self-fulfilling prophecy? Because I know a couple of guests prior who've been on the show previously have mentioned, like, "Don't go in the Facebook ad library and try and get inspiration from there, go to the books from the 1960s and check out what was happening back then. Don't just look at what your competitors are doing, because the second you start just doing what they're doing, you lose." So how do you make sure that your clients aren't just all doing the same thing, driving the same trends, driving the rates up or down because they are all hearing like, "Oh, the color green is like the way to go"?R.J.:Yeah. Well, I love what you're saying there because I have really railed against "best practices" as a way of doing marketing, and so much is changing that I think a lot of marketers go to "best practices" and then look at a creative forecast from Pattern89 or some sort of other data source and say, "All right, that's what we should do." The problem is exactly what you're saying, which is that if we all do the same thing, then the advantage goes away. Instead, we need to think about data and creative AI as a recipe. Every chef gets the same... I love watching food TV, like Food Network and all that stuff, and you can give Michelin star chefs the same recipe and they all make something different, even though the recipe components might be the same.R.J.:I think that that's how we have to think about creative. How does our brand interpret these recipes? How do we make it distinctly ours and so our brand message shines through while also honoring those creative elements that the algorithm cares about? A good example is we know that 40 to 60 body copy characters, so we should have a 40 to 60 characters in our body copy, and a hashtag. So don't go copy paste some body copy from a competitor and just change the brand name. Instead, what's the unique message that you want to tell in that? And then what hashtag can you use that actually spells out your brand message? Or if we know that images of people studying or reading books are important, what is the way that we can tell that brand story in a funny way, an engaging way, in a serious way? However it reflects your brand.R.J.:I've used this slide in a presentation where I actually have five different brands, Instagram posts, where they're all advertising athleisure wear, and they literally all look the same. It's all a woman who looks fit, who is exercising in her sort of ethereal-looking inside apartment. It's like literally the same creative and you can't distinguish between those ads, and I think that's where we're seeing kind of the "optimization to best practices" cause problems. Instead, we need to figure out how do we take this creative recipe and put our humanness or human creativity to tell that story in a new way? So be aware of best practices is the summary there, and instead use it as a recipe and create from there.Stephanie:Cool. Are you kind of guiding your clients when you're like, "Okay, we see these emojis are trending, these colors are trending, here's the copy limits that are trending, but here's maybe how to apply this to your brand" or like, "These photos are trending, like you said, but here's a funny spin that you can put on it individually." You're kind of giving like one-to-one advice instead of just like, "Everyone try that and figure it out for yourself." How do you go about guiding your clients?R.J.:Pattern89 is a platform, so we serve as a data service, effectively. When we get on a call with a customer, our creative agency will often say, "Here's what's trending up and here's how your data matches or doesn't match that trend. And then also, here's the counter-trend to it." Some customers are like, "No, we just want to kind of play it safe and go with the trend." Others say, "Hey, what's the counter trend? What's the outlier? What is the opportunity there?"R.J.:It just depends on if the brand likes to play it safe and predictably, or they're willing to take some creative risks, and it actually depends on their level of risk tolerance there, because some people just want the sure thing and, "We can follow the trend or the best practice." But then others say, "Hey, we're willing to take a risk. Our brand is about risk-taking or about X." So it depends based on that. Then sometimes we work through creative agencies and digital agencies and coach them to say, "Hey, here's the risk of going with the trend versus here's the counter trend" or "Here's how your data intersects or conflicts with that."Stephanie:Yeah, very cool. What kind of variables do your models look at to see? I mean, not only the cost behind things, or maybe what's doing well, but how do you know something's doing well? Is it engagement? Is it people clicking through on an ad? What's the success rate in figuring out what a trend is based on? One good example is someone was talking about influencers on the show and they said someone can get like a billion likes on their posts, but that doesn't mean they're an influencer. You need to look in the comments and see are people in there asking like, "Hey, where can I buy that shirt from" and actually consumers who are ready to convert and do what that person's saying. So what things are indicators to you in ads doing well and actually will create a conversion or a new customer?R.J.:Every prediction in Pattern89 or in the platform has two factors. One is who's the audience, and then two, what's the objective? The audience can be net new customers, it could be loyal customers, it can be previous purchasers, whatever the audience makeup is. Then the objective is what the machine understands. Are we trying to drive the lowest CPM? Are we trying to drive app downloads? Are we trying to drive purchases? Are we trying to drive likes and follows? Whatever that overall objective is, so the machine knows, "This is the audience, this is objective, and then this is the candidate set of creatives that we want to drive for one of those objectives for that audience."R.J.:So if the objective is purchase, then we can tell you exactly what's going to drive purchase. We can't predict sentiment of comments. As you're suggesting with influencers, that's just a limitation. But a good point to note that what the AI can do and can't do, so that you can set the engagement up for success.Stephanie:Is there any new advancements in tech data you're looking at to kind of gauge that sentiment? Or anything else where you're like, "We aren't there yet, but we're looking at this because we think it's an important field going forward"? I mean we just had yesterday, the VP of data science at Stitch Fix on, and she was kind of mentioning just that there's a new demographic coming on the market, they speak very differently, and so they need different types of natural language processing to figure out who this person is to then be able to respond to them how they want to be responded to. So is there anything like that that you're watching right now or looking into?R.J.:Well, just on that comment, I need some natural language processing to handle my 12 and 13 year old nieces who I'm like, "I don't... " When we text with them, I don't know really what they're saying and I thought I was cool. So I'm just using that to-Stephanie:Oh yeah, my-R.J.:Yeah.Stephanie:I feel that. My mom sends me screenshots that her students, because they're all doing Zoom calls right now, she's a teacher, and she's like, "These kids just talking, they're like 'NVM,' what's that mean? And then there's a U and then there's a two" and this and that. She's like, "I don't know." And apparently they gave her the acronym for "Pony hair, don't care," but they just put PDC or something and she's like, "What's that mean?" I'm like, "I honestly don't know." I don't think that means anything. And she was like, "I found it out. They were making fun of my ponytail." I'm like [inaudible 00:18:44].R.J.:I imagine Urban Dictionary is getting a lot of site traffic from people like me these days.Stephanie:Yeah. I mean, yes.R.J.:Well, I'll tell you, we've heard a lot of customers ask for sentiment, like you're describing. The other thing that's of particular interest is the multi-touch journey. With Pattern89, we can predict what people are going to do, like a one hop. So I can tell you if they're going to download the app, but I can't tell you if they're going to use it, or I can tell you that they're going to put something in their cart, but maybe not purchase it.R.J.:What marketers really want to understand is how do we actually predict creative against each of the steps of the marketing journey that they're setting up for the customer, versus like a point in time? That's what we are really locked in on, is how do we predict creative performance across that life cycle, versus just, they did one action on a social site or one action on as a result of seeing your ad on Google or something? So it's this multi-touch attribution issue.Stephanie:Where do you see the future of attribution going? Right now I'm interested in it because I was just listening to a bunch of podcasts about attribution with TV and other types of media and how it's very slow to evolve, but it's something that people are going to be very eager to figure out over the next couple of years, about how to like measure things. Is there anything that you guys are looking into in that area or just keeping tabs on?R.J.:Well, I'm keeping tabs on kind of there seem to be two counter trends going. One is that everyone's going to new payment options and new conversion options on their phone, and there just seems to be more and more like mobile payment, fractional payments, mobile wallet, Afterpay, all that type of stuff that I think is going to create even more data that we can understand the ultimate conversion especially in retail.R.J.:The counter-trend is a cookie list future and a highly-private world and GDPR, et cetera. Those seem to be counter trends to me where we could get to a fully anonymized world where you just have no idea what happens, or to whom, I guess. And then the opposite is we can know everything. So I don't know that I have an official prediction, but I'm certainly interested in those paths, diverging and where we end up. Yeah, I think that that's going to be super interesting as it accounts for attribution.Stephanie:Yeah, I'm definitely paying attention to the cookie list future, and I mean I think Facebook's fighting pretty hard at that so it seems like it might be a long process if it were even go through, because a lot of people are against it. That seems like a scary place though if you really can't show what you're doing.R.J.:It is, but I think... I have a creative background, I majored in English, I have a master's in creative writing, and I came into technology kind of thinking creative is the actual differentiation. But so many liberal arts people, so many marketers have been told to act like machines and just make only data backed decisions, and of course that makes a lot of sense, but I think we've kind of over-indexed under the data side and it kind of left creativity out to dry as kind of like, "Those are the crazy creative people over there" or something.R.J.:I think that the cookie-less future and all this, because ultimately we're going to lose some of the sight of the data that we were able to pull before, and instead, creative is going to win. Personally, I believe that as the CEO of Pattern89, creative is going to really matter as we head into the next 5 or 10 years, because we don't want to... To the earlier question about isn't AI or machine learning just optimizing to the same exact thing, well, yes is the answer. How do you diverge from that while you introduce new creative ideas? You differentiate your brand, you tell a different story, and I think that's super exciting. I think we're in this a reemergence of creativity that I nerd out on and I'm optimistic about.Stephanie:Yeah, I'm optimistic. I'm just wondering how would you know it wins? How do you know what does well if you can't even tell what happened?R.J.:That's true.Stephanie:When you can't track it?R.J.:That's true, that's true. That's fair.Stephanie:So as a creative, how do you go about sparking creativity? What does your process look like to maybe not only help you know yourself at your company, but also the brands you work with to try and also get them to think creatively?R.J.:Well, I mean, I guess ironically, it does start with data. We look at trends on a monthly basis and we forecast our monthly trends to understand what is it that's trending up, trending down, and then move that into, how we... I mean in startup land, we're always trying to figure out what is the counter trend? How do we stick out? Because we don't want to say the same things that big, big companies are saying. We want to see something different and something risky.R.J.:So that's what we kind of analyze the trends and then go against them to figure out how can we stand out? I'm a big proponent of running and swimming. I grew up swimming, I swam in college and I still swim, and running, swimming I think that provide that kind of meditative or that space to kind of let your brain sort of turn off, but still be on, you know? And then come back from a run or a swim or after you've looked at some of that data and then new ideas start to emerge, and start pitching them and then figure out if those ideas might work or not.Stephanie:Yep. Do you ever look through historical things, since what's old is always new again, eventually? So you go back to the archives and be like, "Here's something that worked in the 20s, let's try this."R.J.:Oh yeah, yeah, yeah, yeah. We're actually doing some 20s based stuff for 2021 and the kind of Roaring Twenties is coming back. We just did a cool campaign called DonDraiper.com, that was D-O-N D-R-A-I-P-E-R. So like putting the AI in the Don Draiper, and looking at all these 50s campaigns and 60s campaigns to understand what actually would be predicted to win now, and it is kind of amazing to see like copy as well as imagery that was being used at the time and in-color, and how those were resonating using REI to predict whether they would resonate with this audience in today. Yeah, I think that's a definitely a good place for inspiration.Stephanie:That's cool. Do you see some of those more vintage ads and photos and things like that working over the next couple of years?R.J.:Well, I don't know about the next couple of years, to be honest. I think in 2021 alone, we're going to see a lot of nostalgia and I think that that is going to be a big factor because we're all looking for comfort after 2020. I can tell you on 2021, yes, nostalgia I think is going to be a big, big trend.Stephanie:2021 will be nostalgia for 2019. "Ah, the good days. What happened in 2019? Let's bring back those vintage memories."R.J.:That's funny.Stephanie:Are there any new consumer shopping behaviors that you guys are watching right now that you think are going to continue post-COVID?R.J.:I think touchless everything, even in store, is a big one. And the one I mentioned earlier about mobile wallet, I think mobile wallet adoption is just going to spike, and then I think all sorts of augmented reality capabilities are also going to, because going to a showroom for example, to see a couch may or may not be something that an individual is willing to do anymore, to make that separate trip. So, "I want to see it in my space. I don't want to buy it without seeing it and then return it, have a hassle with the return, especially with a large purchase item for a home."R.J.:So I think that mobile wallet is going to explode. It already has, but coming from mobile land in my previous roles, it's amazing to see how that's taken off. Then I think augmented reality apps, they're just going to be driving the future of commerce.Stephanie:Cool. All right, well let's move over to the lightning round. Lightning round is brought to you by Salesforce Commerce Cloud, but this is where I'm going to ask you a question and you have a minute or less to answer.R.J.:Okay.Stephanie:Are you ready, R.J.?R.J.:I'm ready.Stephanie:All right. We'll start with the hard one first. What one thing will have the biggest impact on ecommerce the next year?R.J.:Creativity is going to be my answer, because actually our data shows it. For example, masks in ads, this is an interesting thing. So masks in ads are being more popular, but they don't perform as well because people don't want to see kind of the ugly truth when they're viewing creative. How do we creatively manage and creatively work through a situation that everyone is tired of feeling? I think the breakout brands and the commerce brands that find a way to tell an empathetic but inspiring story creatively are going to win.Stephanie:Yep. I like that. Yeah, that's a good point too, of just because it's happening doesn't mean people want to see it-R.J.:Right.Stephanie:... everywhere they look like. Sometimes people might want to see what the future could look like and inspiration.R.J.:Yes, exactly.Stephanie:What's up next on your Netflix queue?R.J.:Ooh, let's see. Mandalorian. It's not my Netflix queue, it's my Disney queue. I'm just like, eagerly awaiting each episode of Mandalorian, which is interesting because I'm not a big Star Wars fan, but I love that show. It's imaginative, it's creative, it's kind of melancholy. It's-Stephanie:I actually don't know that one. I need to check it out.R.J.:I'd recommend it, and I'm excited about that show.Stephanie:What age group is it for?R.J.:Well, they say that Star Wars fans love it.Stephanie:Okay, I like Star Wars, I guess.R.J.:Yeah. But like my eight year olds' buddy Charlie was like, "Man, that's my favorite show." So it also not only 40 year old men, but eight year olds like it. So it's a family favorite.Stephanie:Big range. Good. So they did well creating a show for all overall.R.J.:Yes, yes.Stephanie:Good. What topic or trend do you not understand today that you wish you did?R.J.:TikTok.Stephanie:Yeah.R.J.:I don't understand TikTok.Stephanie:I've gotten that answer a lot.R.J.:Yeah, I don't understand it. It feels very voyeuristic and it feels... I'm all for fun, but for whatever reason, it just doesn't... I don't understand why you would spend hours rehearsing a dance, for example, and then take a video of yourself doing a sort of ridiculous dance.Stephanie:I feel like your kid is probably listening and it's like, "Dad, anyone who says 'I'm all for fun' is not fun." If you have to start a sentence that way, you might not be all for fun.R.J.:I think you're right.Stephanie:Yeah. But I have had a lot of people say they don't understand TikTok.R.J.:Yeah. I think it's the age group.Stephanie:But that would be an interesting data set to pull in data and see what's engaging from there, because I have also had a lot of people say it converts really well and that there's a lot of [inaudible] that platform.R.J.:Yes. Yeah. We've got customers who use our data on Snapchat, but we've not moved into TikTok just yet, but it is interesting to see what trends might apply there. I think that again, personally why you do that, I feel like that's like a PhD or something that I could do is like, understand the motivation there or something. I don't know.Stephanie:Yeah. Well, you let me know how that research goes. We'll bring you back for your PhD on TikTok. What is a favorite book on business or creativity, or just one that you refer back to quite often?R.J.:Hm. My favorite author is a British author named Julian Barnes, who I love. I often try to not read a bunch of business books. I mean, I find some of them to be really good, but I like to look outside for inspiration, so I'm a big fan of Julian Barnes. His books are really creative and strange and weird, and he's a well-known British author but maybe not known as well in the US.R.J.:Then on the maybe non-fiction side, I read that book Evicted, which is again, not a business book, but just in regards to kind of some of the social issues we're after, I find that Matthew Desmond's book is really, really good as well. But I look to those for inspiration or to kind of take my brain outside of business.Stephanie:Cool. All right, and then the last one, what's up next in your travel destinations when we can travel again? Where are you and your family headed? Or just you if you're like, "Peace, family."R.J.:I don't know that my wife would be okay with that, but we actually had the good fortune, we went out to Idaho for about five weeks this summer and rented an Airbnb and loved it, and we want to go back.Stephanie:Where'd you go? Because I was just looking at Coeur d'Alene, which I think is in Idaho.R.J.:Yes, yes, yes.Stephanie:It's really pretty.R.J.:We were in Driggs, Idaho, which it's on the west side of the Tetons, about an hour from Yellowstone, and it is beautiful. I mean, it was wonderful and we're going to go back. We had all sorts of international travel ideas that my wife and I wanted to do with our kids, but I mean, we just had such a nice time out there that want to head back this summer and spend some time out there exploring the mountains.Stephanie:Oh, that's great. I want to check that out too. Idaho is such an undervalued area. No one talks about it, but when I started looking at the pictures, I'm like, "This place is pretty, come on people."R.J.:It is. It's wonderful. Yeah, it really is.Stephanie:All right R.J., well, it was a pleasure having you on. Where can people find out more about you and Pattern89?R.J.:Sure. Yeah, just Pattern89.com or I'm on Twitter @rjtalyor and would love to hear from you, or come on to Pattern89.com and check us out.Stephanie:Awesome. Thanks so much.R.J.:Thank you.

At this point, it’s old hat to say that 2020 was a pretty wild year — countless industry experts have waxed poetic about the long-term implications of the acceleration of ecommerce we’ve seen this year.  But Joe Manning hasn’t just been talking about adapting in the face of change, he’s working to make it happen.Joe is the Chief Business Officer at Shipt, an on-demand delivery service that connects customers with thousands of grocery items and retail shops like Target, Best Buy, CVS, and national and local grocery stores -- and they do it all through a single mobile app. This year Joe has been on the front lines of scaling Shipt while still delivering not only physical products, but exceptional experiences to Shipt customers, employees, and partners. Earlier this year, Shipt doubled the size of its shopper network to meet the growing demand for grocery delivery. And now, as the holiday season is in full swing, the company has added 100,000 more shoppers to its network. Not every company will have to scale quite that quickly or extensively, but ecommerce companies that will thrive moving forward will be the ones that are ready to jump into new markets, pivot quickly, and reach beyond their comfort zone.On this episode of Up Next in Commerce, Joe explains what it takes to do just that, including how to maintain a culture of happy workers and customers as your company grows and changes. Plus, he looks at what is ahead this holiday season and why last-mile delivery is an area ripe for innovation.  Main Takeaways:Super Market Sweep – When entering new markets, researching the dynamics of where you are expanding is a critical step. No two markets are the same, and each new market will require investments in different areas. Taking the time to get to know who your customers might be and what their needs are will provide you with a better idea of where you should invest your resources.Happy Employee, Happy Customer – Even if you are employing mostly gig workers, helping to build a good culture and work environment should still be at the core of your business strategy. When workers feel supported and connected, they in turn will deliver better customer experiences, which impacts the bottom line.Choose Your Own Adventure – The future of ecommerce is all about providing choice, personalization, and bringing the best of the in-store experience online. Companies that learn how to capitalize on the unique needs of every customer through gathering data, implementing technology and deploying resources — whether it’s last-mile delivery, seamless returns, or personalized shopping suggestions —  will lead the industry.Tech Talk – There will be more tech brought into the ecommerce experience, especially as it relates to grocery shopping. From barcode scanning, to robot shoppers, to maps to help customers navigate the aisles in-store, there is a lot coming down the pike.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to the number one ecommerce podcast. This is your host, Stephanie Postles, co-founder at Mission.org. Today on the show, we have Joe Manning, the Chief Business Officer at Shipt. Joe, welcome to the show.Joe:Well, thank you. Thank you for having me. I'm very excited to be here.Stephanie:I'm excited to have you too. How many podcasts have you done so far? You seem like a good veteran.Joe:This is my first.Stephanie:Ooh, really? Oh, this will be fun then. I love having people on for the first time.Joe:Cool.Stephanie:So before we dive into Shipt, I was hoping you could kind of touch on your background at Starbucks because I saw that you worked there, I think, for over 10 years. And I want to hear what you did there, your role and some of your learnings that you got from there.Joe:Absolutely. So, I had the opportunity to work for 10 years at Starbucks. Starbucks was an amazing company. And one of the things that I really loved about what Starbucks did, and does, and how that applies to Shipt, Starbucks is very focused on the human connection between the barista and the customer. And they're great at leveraging technology. But as an enabler for a human connection. And I think at Shipt, we're trying to do very much ... We are doing very much the same thing. We are all about creating great connections between shoppers and customers, and we're a people-first organization. And we recognize the technology is a great enabler for that. But it is about the human connection.Joe:And so when I was at Starbucks, I worked in a couple of different spots. One area was the licensed stores business, which is the store inside a store. So, if you go into a Target or an airport, that business model I worked with those retailers to really build out those businesses. And then in addition to that, I spent a few years on the CPG business, which is the coffee and the aisle at the grocery stores. And that retailers and I led the business development area for that for a few years as well. And as I said, it was a great experience and the commitment to partnerships and the human connection was really impactful. And really, I think, gave me great insights to bring to Shipt as we started to build out the Shipt business.Stephanie:That's great. So what's one of your favorite memories or stories when you were working at Starbucks and trying to get Starbucks within the stores, or getting it on those supermarket shelves? What do you have a fond memory of or a funny story from your days there?Joe:Well, I'd say, I think one of the pieces that we really focused a lot on the Starbucks cafe experiences is very unique. They take a lot of pride in that customer experience. And so it was exciting when we would bring the stories to the retailers about how to operate at Starbucks or what the brand should be within the cafe. And we started to hear where retailers were then using the same terminology that Starbucks had been using. So, it was really fun when we started to hear them repeat back to us the words and the phrases that we had used, which really signal to us that it was going to be a great partnership, that they really understood what we were trying to accomplish. And that they were embracing that for their own business purposes, which was great.Joe:So coffee is at the core of everything Starbucks does. And I had an opportunity to go to a coffee farm in Costa Rica. And I got to plant a coffee tree and connect with all the farmers, or a lot of the different farms in Costa Rica where we sourced or Starbucks sourced coffee. And it was just really inspirational. I mean, it was fun to do for sure, but hearing the stories from the farmers about how their lives have changed because of their opportunities to partner with Starbucks was really inspirational and really made us feel good that we were making a difference around the world, not just creating great coffee or creating great experiences in the cafes.Stephanie:That sounds like a really good life-changing trip. Very cool. So what had you go over to Shipt? What led you to Shipt?Joe:So in about end of 2015, 2016, everything in Northern California was focused on the gig economy. Airbnb was growing, Uber was growing, and grocery delivery was starting to grow. And I don't know, about 20 years before then, there had been a grocery delivery company called Webvan that had had some success, but then it did not last. And I had been working with grocers, and it really felt like the time was right for grocery delivery to really kind of flourish. And I started looking around at different gig economy delivery companies, and I came across Shipt and Shipt was a small company. It was headquartered out of Birmingham, Alabama still is. And the founder was talking about how the quality of the shoppers and the personal experiences between the shoppers and the customers where was the competitive advantage that Shipt was going to capitalize on.Joe:And I really thought that that really resonated with me. I do really believe people have a personal connection to the food that they consume, the foods that they have in their homes, and creating that model. And it was different than what a lot of other companies are talking about. A lot of other companies were talking about the technology, and how technology was so important, and it was changing the landscape. And again, technology is important, but I really love the way Shipt talked about the personal connection, and the quality of the shoppers, and how that was the area where Shipt was going to invest, and it was going to win.Joe:And then when I met with the founder and I met with the company, the culture was just phenomenal, and it still is today. Everybody is passionate about the mission for Shipt and really focused on doing right, making a difference in the communities, passionate about building the business, but they recognize that it's really about helping people. And if we do that, then the business results will follow.Stephanie:I love the fact that you guys are so focused on giving a good quality shopper that I can feel a connection with. Because so often, when I order from certain companies, I'll get things like an avocado that's so soft. I'm like, "Who would get this? I would never pick an avocado this soft. Or I would never pick tomatoes with fuzz on them. You obviously do not care about my groceries." So, I feel a very close connection to having someone who ... A shopper that is looking out for my best interest, and actually picking things that I want, and not just being like, "Ah, there's five avocados, throw them in a bag, or they're fine."Joe:Well, that's exactly right. And that's what we hear from customers too. It's again, produce is tough to pick. And we put a lot of effort into supporting our shoppers so that they can get the right produce. And even the product is set up so that when we ordered bananas, we order a couple of green and then three yellow because we know we're not going to consume them fast enough. And our shoppers are graded, selecting that for us, and we get what we want. And it really is impactful because getting products that you don't want or that aren't going to work for you defeats the whole value proposition and the convenience of grocery delivery.Stephanie:So tell me a bit about how Shipt has changed over this past year because it seems like ... I mean, especially with grocery delivery, people really just had to rip up their plans, and start over, and be like, "This is the new world. Now I need to figure out how I'm going to do shipping." And everything seems so hard when it comes to grocery delivery instead of like Amazon, where they're all on routes, and they can deliver 60 things in a day versus a grocery delivery just feels so one-to-one. So tell me, what kind of shakeups have you guys seen at Shipt, and what are you doing to tackle them?Joe:This year has been unreal and, obviously, unexpected. And one of the first things that we did is we ramped up our shopper network. We doubled the size of our shopper network early when COVID had spiked, and we knew demand was growing, and we knew people were just desirous of getting products delivered. And so, we wanted to be able to support as many customers as possible. So we invested a lot to ramp up the shopper network. And even as we've gotten into holiday now, we're going to add another hundred ... We are adding another 150,000 shoppers this holiday season. And so, building up the shopper network was first and foremost and what we need to do to support the demand. But then, in addition to that, we worked really closely with a lot of grocers and a lot of retailers to help them succeed in this space.Joe:And to your point, it's a complicated model. And as you said, it's a one-to-one model. So there isn't the ability to drive around, for numerous routes all day long, you really have to put the care and effort into each individual order. And the order sizes are 25 to 30 items in the basket. And so we've worked a lot with retailers, not only to enable them on the Shipt marketplace to reach more customers. But we invested a lot in our last-mile delivery business, which we call Shipt Driven, which has really helped a lot of groceries. And a lot of retailers extend their curbside program to last-mile delivery. And that's really been impactful certainly through COVID. And we're seeing it even more so now during the holiday when again, there's a little bit more of a COVID spike. But then, just during the holidays, every retailer is trying to put together the pieces to support their customers and enable them to get the products they want in a way that works for the customer.Stephanie:Are you also helping advise some of these retail partners around coming up with the economics to make it work? Because it seems like a big Safeway has a very different model and how to get scale and efficiencies than a local grocery might have. Are you working with them to be like, here's what I see works? Here's how to make the model work for you guys.Joe:Absolutely. And you're right. I mean, we work with a lot of awesome regional grocers. And to your point, they don't have the scale of some of the national grocers. And so, in putting our programs together, we work closely with them to make sure that not only is it a good experience for the customer, but that it's economically beneficial and profitable business for the retailer. And we'll do that in a couple of ways. We'll certainly work with them on the technology and the integration to manage that so that it's as cost-effective where they get the best return on investment that they can. But in addition, we'll create marketing programs together. We'll do merchandising programs together to add items to the basket. And then, we'll collaborate on operations efficiencies so that we can pull out costs from the system so that it can be a profitable endeavor for them.Stephanie:So earlier, you were mentioning how you scaled up your shopper network. I think you said 100,000 shoppers, right?Joe:150,000 in holiday. And it was as a 100,000 earlier in the year. So 250,000, over the last six months or so.Stephanie:I mean, that's a crazy number, especially if you're trying to keep quality high. So how did you all go about hiring those shoppers? I mean, even finding that many people and making sure that they're going to be the quality shoppers that you want. How did you go about scaling like that?Joe:Part of what we did was implemented some enhancements to our recruiting process so that we were able to move through applicants much more quickly and thoughtfully, but while still ensuring we're getting the great quality candidates.Joe:We also invested a lot, as you would imagine in sourcing applicants, but we also worked with a lot of retailers back in the spring. There were a lot of retailers who were shutting down stores. And so, both our partners, as well as other retailers. We partnered with them to enable their employees who were looking for work to get fast-tracked through the Shipt application process so that if they wanted to pick up some Shipt shopping opportunities, they could, and they were great partners with whom we worked. And we got a lot of great applicants through that.Joe:And then another piece that we did ... Doing the first shop can be intimidating for folks if they've never done it before. And so, we have a lot of resources available for shoppers to access. And we continue to build on those, especially around how to enable the first shop. Because once you do a shop or two, you get into a rhythm, and you feel good about it. But it takes a little encouragement sometimes to do that first shop. So we put in resources to really make it as easy as possible for our shoppers to get out there and do the first shop.Stephanie:That does seem kind of scary doing that first one. So, I mean, how do you think about onboarding people? Did you have to set up all-new systems for all these new people? Did you have to change a bunch of things to scale that?Joe:Fortunately, we had the systems in place and in part because Shipt has been expanding rapidly since 2016. And even in, I think it was 2018; we were launching three to four markets a week for a good portion of the year. So, we had really good systems in place for recruiting shoppers building the network. And so, it was really more of just kind of amplifying that so that we could go even quicker during this period of time as opposed to having to build out new systems.Stephanie:Got it. So when you are going into these new markets, and you're launching quickly, what are some of the biggest issues that you encounter when you're going into the new markets?Joe:So new markets they're exciting, but they can be challenging. And one of the great things is the market dynamics differ. Launching in a New York City is different than Savannah, Georgia, for instance. And so, one of the pieces that we do is, when we go into markets, we'll spend time there to really understand the market dynamics so that we're thoughtful about our investments. Not only in how to recruit the shoppers to succeed in that market, but how to tailor our messaging so that it resonates with potential customers and that we're knowledgeable about the markets. And we've built out a market operations team that works and serves in all the different markets in which we operate so that we have the local knowledge that we can tap into.Joe:But one of the things that is super exciting as we launched markets is, we will do a market launch gathering a couple of days before. And then the night before, we launched the market, and the intent there is to get together with shoppers, to engage with them. So, we understand how they're feeling about launching this market and supporting us. We'll partner with the retailers in those markets with whom we'll be working. And it's really a great opportunity. It's a celebration of sorts. There's a great opportunity to connect with the shoppers and really help them better understand what Shipt is all about. Help them understand the retailers with whom we're working, and to get them excited about launching the market. And then back to the Shipt culture, part of what happens is there's just a whole group of folks who are working through the night to make sure the launch goes off properly. They're in the market for the next couple of days, picking up orders if we need to, troubleshooting if anything happens.Joe:And again, it's a celebration, it's a lot of work, but it's really exciting. And listening and engaging with the shoppers is really fun because you really get to understand who they are as people. And again, how enabling these jobs is really kind of making a difference in the communities in which we operate.Stephanie:It seems like a really good way to also build a community among those shoppers where they could potentially get to know each other, talk about best practices. I mean, do you cultivate the community of shoppers so they can kind of have their own little network? Can you talk to me-Joe:Absolutely. You're exactly right. We support the shoppers, and through various Facebook lounges, there are shopper communities. But you're right. The shoppers build such an amazing community amongst themselves. And it's great because they share best practices. They share tips. They're great resources for new shoppers who again maybe are a little bit hesitant or uncertain about how to operate. And then they celebrate with each other. And there's been instances in which there'd be a surprise party at a particular store because a shopper is just on their 5,000 shops or something like that. And we see the pictures of it and you see the shoppers. They're just so excited for each other, and they really do support each other.Joe:And they recognize that the stronger the community they build, the better the customer experiences are going to be, which is going to drive more volume, which is going to be supportive for everybody. And it's really exciting to watch. And we do think it's something unique that we've helped create as what we've seen with other gig economy companies. They don't put the same effort into supporting their shoppers or their gig economy workers. And we do think it's a unique advantage that we have.Stephanie:And I think that's a really good lesson for gig economy type of employers because I think a lot of people who do that work aren't really celebrated. And you don't see the person being really proud to be working on that because I think the company is not cultivating a community where people can be excited to actually showcase the brand and say, "This is what I do." I mean, I think about shoppers right now. You wouldn't know looking around Whole Foods or something, who maybe is a shopper, who's not, they're not wearing a shirt. They're not walking around proud for the majority of shoppers or even delivery drivers or anything like that. And I think that the moment that you start incorporating people to be proud of their job like that, and wanting to celebrate the other people in that network and community, you're only going to scale quicker and also build a good experience for everyone.Joe:Totally agree. Totally agree. And that's I think too often, some of the technology companies look at the gig economy worker as a cost. And we look at it the other way. We celebrate them, they're a phenomenal brand representation, and they represent our brand, and they represent the retailers with whom we work. And so, the more they feel good about what they're doing, the more we can help support them to do a great job. Often, it'll show up in the customer experience, and that's so hugely important. And so, we are excited about that, and we do provide Shipt Swag, let's call it because-Stephanie:It actually sounds better.Joe:For sure, the shoppers wanted it. And it's great. And again, I mean, it's brand building, but it's really more ... It speaks to how excited they are about what they're doing. And then the stories we hear from the shoppers, they feel like they're making a difference in people's lives. And that's invaluable to growing and driving the business. And so, we're excited about that.Stephanie:I think people view ... I mean, at least out in Silicon Valley ... And you probably know this Joe, since you lived out here. But swag being a thing of like, "Oh, you get so much of it." Employees don't even want that anymore. Don't spend money; it's a waste. They just throw it away or whatever. But I think they aren't thinking about the rest of the country who actually still celebrates a great t-shirt or hoodie and how important that is to them. And that's still a good technique to keep your employees engaged and excited to get something great.Joe:Absolutely. Absolutely.Stephanie:So let's talk a bit about customer acquisition. I saw a few articles where you were giving Shipt, I think, memberships to the elderly for free, which I was like, "Wow, that is genius." Because these are people who maybe wouldn't have engaged with grocery delivery ever before, but it's a good way to not only help them right now but also have a long time customer, even when COVID and everything's done. So how do you think about growing your customer base, getting on their radar, people who maybe would never find you organically?Joe:And so, one of the things that came out through COVID, there were a lot of people who tried grocery delivery for the first time. And we saw a large increase in the senior population as well. And it makes sense there may be a little less or a little reluctant to go out to the stores. And so, from that, we began talking to different agencies across the country who support the senior population. As well as talking to some healthcare entities and talking about how do we work together to build awareness about grocery delivery, make it easy for folks to get grocery delivery, support them economically? And so, that's been an area that we are continuing to invest in because we're seeing good results. And again, we know it makes a difference in the community, and the feedback we've gotten from the agencies and the senior population has been phenomenal.Joe:In addition to that, I mean, again, desire for grocery delivery has skyrocketed this year. Previously, Shipt was a membership only option you had to buy and an annual membership. During this year, we expanded to offer a pay per order option. And then you can also one order, or you can buy passes and get multiple orders. But we did that because, again, we knew people wanted to try the service. They weren't certain that it was for them, and either they wanted to try it because they were in a need state for it or because it was just new to them. But by enabling the PPO option, we have greatly expanded the number of customers that we're reaching. And it's really been, again, it gets back to supporting customers in a way, where they are today. And sell by providing the individual orders or the passes we've greatly increased the number of customers that are accessing the Shipt service.Stephanie:So how did you think about retention when it comes to ... I mean, I think that's great to be able to allow someone to pay for order. I know that would be something I would do. Is like try it at once and if it works well, maybe do the subscription, or maybe just keep paying for order. But how did you think about retaining someone who might just try it out and then forget how do you keep that customer around for the longterm?Joe:Absolutely. And with our members, the usage and the retention is phenomenal, and it makes sense. They've committed to the membership with the PPO customers. We are very focused on connecting with them and engaging with them so that we're giving them multiple opportunities to use this service several times. What we've found is using the service several times, it starts to become part of your shopping pattern. And so, part of what we do is we continue to connect, to communicate with those customers to make it worthwhile for them to try it a second or a third time if they haven't.Joe:And what we've seen, we've been very pleased. What we've seen is the transition from PPO to either multiple passes or Shipt Everyday, which is our annual membership, has been very good. And what we do find is as they use the service a couple of times, the quality of the service they're very pleased with. And so that gets them to kind of continue. But to your point, we're absolutely focused on how do we continue to connect and communicate with them so that they aren't one-time customers, but they become a much bigger part of connecting with us.Stephanie:So this past year, I'm sure you guys have noticed customers coming to you from many different channels. Like new channels are popping up to tax, not very big. I mean, where have you seen your new customers coming from, and how are you also trying to differentiate yourself from all the other competitors right now? Because I'm thinking, if I'm a customer, and I'm scrambling, like, "I need eggs." I'm just going to go on there and be like, "Okay, either I can just go on Amazon, because I already have a Prime account or let me just try, Instacart or whatever. How do you make sure to separate yourself, and really show your value, and also get on new and different channels, and finding customers in new ways where maybe other brands aren't doing that?Joe:We think the quality of the experience that we provide continues to be our competitive differentiation, and the quality of our shoppers is far and away superior to others in the market. We've always been very good at digital marketing, and we continue to invest there. We've also done quite a fair number of social media campaigns that have created different avenues and exposed us to different customer demographics that have been really beneficial. And then we've also leaned in more to traditional marketing as, particularly for the grocery space; we find that to be an effective channel. And so, in working with our grocers and exploring traditional media, we've seen some very good results with that. And so, it's really quite a credit cross-section of investments across various channels. But we're seeing good success across all the different channels in which we invest.Stephanie:Cool. I could see there being some fun campaigns with just an image of a dirty little brown banana and being like, "Did you just get this delivered to you? Come on over to Shipt. It'll never happen."Joe:Absolutely. And one of the campaigns we did, we talked about again the quality of our shoppers. And there were fun little snippets of how the shoppers will go above and beyond to get you the right product. And I think there was a version of it was tongue in cheek. But a shopper going into a lake to make sure you're getting fresh fish or diving into the freezer at the grocery store to get you the right product. And really trying to capitalize on the quality of the shopper is really beneficial because you want to get the products that you want, and not have somebody who's just focused on trying to get in and out of the store as quickly as possible, and throwing whatever in the bag to deliver it to you.Stephanie:So, with the holidays coming, you hear a lot right now with ecommerce about there's going to be a ton more demand for shipping. Things are going to get held up. How are you guys approaching the holiday season right now since you don't only do grocery, you do other things as well?Joe:That's right. And so, as we said earlier, ramped up the shopper network so that we can continue to support the increased demand. One of the areas where we've invested a lot in 2020 is in our last-mile delivery, so, Shipt Driven. And that's a program where a customer will actually place an order of the retailer's property or ecommerce program, and our shopper will arrive at the store and pick up the order and drive it to the customer's home. So it's basically extending BOPUS to last-mile delivery. And that business has skyrocketed this year. And we've got a great lineup of retailers that go beyond just the grocery side. So, we work with Bed Bath & Beyond, and Best Buy, and CVS, and Office Depot.Joe:And one of the things we're doing closely, we work closely with those retailers. We are managing, or we're partnering on forecasting so that we understand not only holistically what kind of volume we're thinking there's going to be, but even down to the store level because we'll make sure that we're hiring the right shop. Not just the right number of shoppers, but the right shoppers in the right locations. And then in addition, we are really focused between both the driven business and the marketplace on communicating that you can get products delivered the same day.Joe:And I think particularly in the next couple of weeks as other services are going to take longer to get products, we're going to communicate to customers that whatever product you're looking for, you can get it that day and at the last minute. Gifting ideas and through the holiday, ensuring that people are getting the products before the holiday arrives is a big opportunity that we're going to focus on from a Shipt marketplace standpoint. But also in partnership with our retailers on the last mile piece, because we can enable same-day delivery for those retailers as well.Stephanie:That seems like a really good opportunity there. And so many people are trying to figure out that last-mile delivery. What are some of the hiccups you encountered when setting that up? Because that once again seems like a very hard problem to solve, starting to work with all different kinds of retailers and solving that problem for them.Joe:So, fortunately, we've got such a great network of shoppers that on our side for the logistics that's the foundation is in place. I think what we find with retailers is they're standing that up, and how we work with them. Fulfillment costs can be daunting. And particularly on the last mile piece, the retailer needs to be prepared to collect those orders and ship those orders so that we can then drive at the last mile. So, we work with them to try to help them think through how to forecast and then how to plan for that fulfillment piece because that is an area that we have experience in. But in this model, they're going to be managing that. So that's one piece.Joe:And then, working with them on the operations and the handoff, it's not difficult, but we do put effort in there. Their store associates need to know who Shipt is, and why we're showing up at the store, and collaborating on how we connect with the customer to ensure that we're communicating effectively with the customer. Both on when is the order ready, when we're picking it up, when it will be dropped off, and if for some reason there are returns or other items that we need to communicate, setting up that structure so that we're all communicating effectively. So, that is a great customer experience.Stephanie:So you mentioned forecasting a couple of times. And you share those plans with the retailers to also help them plan for inventory, and like you said, fulfillment and everything. Is that a pretty standard process, or does every retailer in market ... Is everyone having a different kind of forecast or a training procedure to work through to be prepared this year?Joe:Yeah. So, we do collaborate with retailers, and we'll let them know what kind of volume we're expecting, and they'll share with us as well so that we can do what we can to manage inventory positions. Every retailer has their own process for that, but we have a dedicated team. We call it the Partner Success Team. They're phenomenal, and they work closely. Every retailer gets a dedicated team that supports them. And again, I think it's an area where we've invested more than a lot of other companies because these retail partnerships are so hugely important that we want to make sure they're getting the support that they need.Joe:And the feedback we've gotten from the retailers is that far and away, our commitment to details or thoroughness, and our communication exceeds what they see with other partners that they have. But on the forecasting, we'll work closely with them. We'll communicate the numbers that we're seeing. They'll share what they're seeing, and we'll review it, certainly right now on a weekly basis because if there's going to be spikes in demand, we want to be prepared for that so that we can create great customer experiences.Stephanie:That'll be interesting to see what happens this holiday season. So, where do you see the future of app-based delivery headed? What are you all planning for?Joe:So, everything we see through the pandemic, grocery delivery is certainly going to continue to be a huge part of the grocery industry. And I was thinking about there's in 2016, a lot of people in the grocery space didn't think customers would ever really embrace ecommerce that they needed to be in the store. They needed to see the produce they needed to choose it for themselves. And since 2016, so many things have changed. And so, grocery commerce is still going to be a huge portion of the business. I think projections are 2025. There'll be no more than 20% of the business. So we don't think I don't see anything changing there.Joe:The other ... But in addition, and we do work with retailers outside of the grocery space. What I think the pandemic has created is, retailers are building out a broad ecosystem of ecommerce solutions for the customers. They're recognizing that customers are going to want to interact with them and their products in different ways. And they want to let the customer choose how they want to get the products. And whether that's a third-party marketplace like Shipt, or if they want to do pickup, or having the retailers enable last-mile delivery through their own ecommerce programs. That, to us, feels like the winning strategy. That's what we're seeing, the retailers who are creating multiple options in allowing the customer to choose. Those are the ones that appear to be gaining a share and taking more of the business in the market. And that's where we see the future going.Stephanie:I've heard that quite a few times where the market is headed to where the consumers now know that there's options and they should have all the options and it needs to be the best option that they get to choose. And that wasn't something that even a year or two ago was something that may be a lot of consumers expected. So, I think that's a fun place where it's headed, though.Joe:Yeah, I agree. And I think that's it. I think awareness has grown so much so; customers are way more aware right now. And like everything else, they want to choose. It's the same if you go into a store, into a category. There's lots of options because consumers want to have the right to choose what they want. And again, I think the pandemic has kind of accelerated that mindset a little bit. Particularly as awareness has grown so much.Stephanie:So what kind of tech advancements are you all most excited about, or what tech enablements are helping your business the most right now?Joe:I think, again, I'll talk a little bit about grocery. But it's consumers want the ecommerce experience that's convenient and fast, and they want it to replicate their experiences in the store in the good ways. And so, some of the pieces that we're excited about substitutions, is a big portion of the shopping experience. It's about 76% of orders will have an item that's not available in the store. And so, substitution is an option there for the customer. So, we're enabling proactive substitutions to make that as seamless as possible. And we know it resonates because again, the customer wants to get the products and they want ... If you think if you're in the aisle, I can make a choice there because I'm looking across it. So how do we bring that to life through the ecommerce experience?Joe:And so we've enabled some features there, and we'll continue to build on that savings and loyalty programs continue to be a big portion. We look to integrate in with retailers' loyalty programs as much as possible. We know the consumers like that. And they want to get rewarded for making the purchase, whether it's inside the store or through Shipt. And so we're bringing that to life. And the other piece is continuing to find ways to enable exploration through ecommerce, it's still the early stage, but if you think about all the different touchpoints inside a store in which a retailer can speak to a customer, how do we bring that to life through ecommerce.Joe:And then the extension of that is personalization, especially in the food space, everybody's eating habits are very different. And so, how do we continue to capitalize on personalization so that the way my interaction in the app is different than yours based on my preferences? And how do we gather those preferences? But then also, continue to enable that, so that I'm getting access or information about the products that are most relevant to me. So, I think from a customer experience those are some of the areas that we're really excited about.Stephanie:Cool. It seems like imagery too, is, such an important piece of it. I know when I've ordered food before, if they ... I mean, why I go to the grocery store is so I can maybe look around and be like, "Oh, I didn't know I wanted that goat cheese and red wine type of thing. But it's so beautiful looking, and it's very enticing. I'm going to get it." And I think that's something where if it was in an app and it showed it right next to something, I would right away probably add to cart. But sometimes, it feels like that's still lacking of having the right imagery and being able to showcase it in a way that really makes me want it just like I would in the store.Joe:Totally. That's right. I mean, and image coverage is not where it needs to be. And again, part of it is for a lot of the industry they weren't really built for ecommerce. And so, they're moving quickly to enable elements like that, but you're right. I mean, that's such a huge opportunity. And then, even I think with the patterns that may be the pandemic have created there's a lot more eating at home. So how do you continue to find variety and give consumers various options that fit in with what they want, but they may not be thinking about on their own? And I think that will continue to be a bigger opportunity. And I think that'll last post-pandemic as well.Stephanie:Do you know what I want? I want a surprise me button. I want my shopper to know me so well where I'm just like, "Here's $3, surprise me with something." Because that's why you go to the grocery store. Sometimes, you feel like, "Oh, I'm pleasantly surprised by what I just spent on like ..." Can my shopper do that for me?Joe:Totally, absolutely. And so, you should try it out. We have a special request portion of our product when ... So you can ... If for some reason you're not finding a product that you need, or if you have a special request, you can put that in. And so, you absolutely should. And I think the shoppers would love that. They totally enjoy that. And I mean, we've got two dogs, and there's a handful of shoppers that we see regularly, and the dogs love when the shopper pulls up because they know that food is coming, which they're excited about. But also, the shoppers have multiple times picked up a little treat that they've seen for the dogs. Because they just think it's fun. And so, you absolutely should test that out.Stephanie:That's fun. And what about things like personal barcode shopping and things like that, or ways to make the shoppers more efficient? But then you have to partner with retailers to enable that. Are there any technologies in that area that you guys are exploring right now?Joe:Yes. And so, creating the efficiencies is a big focus area for us and will continue to be. And so, a couple of the areas, you had hit on like the product catalog, and imagery, and attributes for the products, that's an area. But for driving the efficiencies, we work really closely with the retailers and out of stock information. We have real-time data because we have shoppers that are in the store and they're looking for particular products. And so, we share that with the retailers to help them incorporate that in with their logistics information to try to reduce out-of-stocks. And we've seen some really good results with retailers where our data was helpful as an additional data point to solve some out-of-stocks. And so that's a big area that we focus on.Joe:Getting good IO location data is really helpful for helping the shopper navigate through the store. And so, we'll work with retailers on that. And then, I think your barcode scanning, we call it scan and go technology. We've enabled that with a couple of retailers, we're going to continue to build on that. And that is just so helpful for moving through the store more quickly, reducing checkout time, and reducing some of the labor costs in the store because the more that we can simplify the checkout process, that's labor savings with the retailers. And then, we're at the early stage of looking at other kinds of automated opportunities. And how do we take advantage of some of the investments that the retailers are to generate efficiencies?Stephanie:I see. And they should [inaudible] Bigger ones like Walmart were experimenting with having robots going down the aisles to map the store and take inventory. But having just so many issues depending on things were all jumbled behind the one that was near the aisle or how high the aisles were. And it seems like a big problem to solve, but something that could really help a lot of ... Especially larger retailers like the Costcos of the world, who just have so much stuff to inventory all the time and are constantly running out of things.Joe:Absolutely. And that's I think the bigger stores. But even the traditional grocery store could have 45,000, 50,000 skews. So it's such a big opportunity. I think there's going to be a lot of investments and especially as ecommerce has grown. Again, in many ways, the grocery industry is still early in the ecommerce space. And so, I do think there's going to be a lot of good technologies developed that will really help generate efficiencies, which will ultimately be a great win for the consumer because the efficiencies will drive down costs.Stephanie:Yep. I agree. All right. Let's move over to the lightning round, brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question, and you have a minute or less to answer. Joe, are you ready?Joe:Yeah, I'm ready.Stephanie:All right. I feel like you're on a roll. So I'm going to start with the trickier question first. What one thing will have the biggest impact on ecommerce in the next year?Joe:Well, the pandemic is certainly going to continue to have an impact on ecommerce. But I think ultimately, it will be how quickly retailers can continue to build out a broad ecosystem. And I think that's what customers are looking for. And I think those who move quickly to enable that will be most successful.Stephanie:What is one of your favorite business or management books that you refer back to from time to time?Joe:Well, it's funny. I just had this conversation with somebody with one of my peers and we were talking about strategy, and Art of War is something that I have on my bookshelf, and I do refer to it on an ongoing basis. I just think it's ... I mean, it's a classic, but I find it to be really beneficial.Stephanie:I love that one. What do you not understand today that you wish you did?Joe:Oh gosh. There's not a limit there. I think the piece that I want to continue to more broadly understand is the customer buying patterns across retailers and how that will continue to change. Everybody's got their collection of retailers that they shop for. And I just had this conversation recently because we were driving down the road, and there was a little strip mall that we've never really gone in. Those stores, I'm sure, are great. It's all part of our pattern. So the psychology behind creating the patterns and the behaviors, and then what would it require to disrupt that.Stephanie:That's a good answer. I like that. If you were to have a podcast, what would the podcast be about, and who would your first guest be?Joe:So I-Stephanie:I think you've thought about this-Joe:I have. I think podcasts are awesome, and I'm so envious. So, an area that I've found to be more interesting of late, I kind of stumbled across this street art. And so, Denver has got a really good community of street artists. And so I think it's super cool. And if ... I mean, my goal and I would love to meet Banksy, who's a street artist out in the UK. And that's if I could have him on my podcast. That's how I would do my one episode, and I'd be done.Stephanie:Like mic drop, I'm good.Joe:Exactly.Stephanie:That'd be a good one. All right. And then the last one, what is the favorite app on your phone?Joe:So, my favorite app, I don't know if I should say, well, DraftKings is recently become legal in Colorado. I have two boys. And so, we like pro football. And so, every Sunday, we choose a game and put 10 bucks on it. And so that is ... It's probably not the best family forward kind of thing, but we're having fun with it.Stephanie:Sounds pretty family forward to me, so, you can do what you want, Joe.Joe:So let me know if you have any recommendations because we haven't been winning the last couple of weeks.Stephanie:Oh, man. You don't want recommendations from me. Trust me. I'll let you guys do your thing there. I'll trust you. All right, Joe. Well, this interview has been great. Where can people find out more about you and Shipt?Joe:So Shipt.com and download the Shipt app. And then I am on LinkedIn, and Joe Manning chipped up on LinkedIn.Stephanie:Awesome. Thanks so much for coming on.Joe:Thank you. I really appreciate it. 

How to succeed on Amazon is a mystery that many DTC brands have tried and failed to solve. There are tricks to winning on the mega ecommerce site — tricks that no one tells you when you first put your product up for sale in the Amazon jungle. That’s why we’ve invited Ju Rhyu on the show. There were a lot of things that Ju wished she knew before she and her co-founders decided to launch Hero Cosmetics on Amazon. Things like what is brand gating? And how do you win the buy box? And what do you do about counterfeit products that pop up right when you start to have a little success?Ju found the answers to all of those questions and learned so much more as she grew Hero into one of the buzziest skincare brands on the market, which went from 0 to $1 million in year one,  and now not only sells on its website and on Amazon, but is also featured in retailers like Target, Madewell, CVS Pharmacy and more.On this episode of Up Next in Commerce, Ju spills the beans on what it takes to win big on Amazon, and how you can level up from there.Main Takeaways:Boxing Out Your Opponent: On Amazon, the first steps to success are winning the buy box and brand gating. It takes time, but if you take the steps to prove that you are the true owner of your product or IP, you’ll be able to avoid much of the pain that comes with selling on Amazon.If You Build It, They Will Come: Getting your product into retail locations is a mix of luck, perseverance, and creating your own destiny. Relentlessly pitching your product to anyone who will listen, and then jumping on trend-seeking retailers is a strategy to get your foot in the door. Also, having a PR strategy to build buzz may help drive interest in your brand. Far Out Future: Because 2020 accelerated the adoption of ecommerce, DTC brands are in a position to set the stage for where business is headed. From bike delivery to the creation of a DTC mall, Ju has a lot of predictions on what to look out for down the road.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hello and welcome back to up next in ecommerce. This is your host, Stephanie Postles co-founder at mission.org. Today on the show we have Ju Rhyu the co-founder and CEO of Hero cosmetics. Welcome.Ju:Thank you. Thanks for having me.Stephanie:Yeah. I'm really excited that you took the time to call in from Paris. That's so fancy when I say Paris, maybe you're like, this is normal for me, but you feel fancy.Ju:It was a fun fact that I tell people, "Oh, by the way, I live in Paris."Stephanie:So tell me a little bit about Hero. I would love to hear the founding story of how you started it. I mean, it has tons of news coverage and I was reading so many different stories. And I want to hear from you though about how you came to found it.Ju:I mean, the story is I was living in Korea. I was working there as an expat in Seoul, South Korea, and I was suffering from adult acne. I don't know exactly what was causing it. Maybe it could have been the changing environment, the lower air quality change in lifestyle, or maybe stress, I'm not sure. I was really frustrated because I kept breaking out and it was always just hard for me to find a solution that worked for me. But in Korea I noticed a lot of people walking around with these acne patches on their faces. So I got really curious. I went to a pharmacy, I bought some, and then I was just amazed at how well it worked because it sucked everything out and protected me from touching the area and picking at it.Ju:It was really gentle on my skin. And then I immediately started wondering why I was learning about it then, and not like 15 years ago and why it wasn't more available in the US so I did some research and then that's when the idea of like, Hey, I should make this available in the US I think people would really like it.Stephanie:That's so cool. I mean, it seems like Korea, all the beauty trends right now are coming from there, everything when it comes to double cleansing and [inaudible]Ju:Well, the 12 step regimen.Stephanie:Yes. I try to follow the 12 step regimen. And I got a little overwhelmed. I'm like, Oh, this is a lot to clean my face. So you found this product in Korea. What did you do next? How did you have the idea? Because a lot of people find other products in other countries. I know, I at least have, or my oldest T brands really good, or Oh, this hammock is really good, whatever it may be. And I don't always think, I'm going to bring this back to the States and do this. So what were your next steps? Why was this the product that you wanted to bring back and start?Ju:First of all, for me, it solved a real problem that I was struggling with it worked better than anything else I had ever really used. And I just got to thinking if this is helping me, this could probably help a lot of other people state side as well. And then actually in Korea, when, if you're a cosmetics manufacturer or distributor, you're obligated to print the name of the manufacturer on the back of your package, that is not true in the US actually. And so the first thing that I did was I started contacting these patch manufacturers to see how much it would cost to buy them from them, how the manufacturing side would work. If they could work with me to develop something that I thought would be suitable for the US market. So I went to a bunch of pharmacies. I bought up a lot of packages. I looked at the backs of the boxes to see who the manufacturers were. And then I started my outreach.Stephanie:What were some of the biggest surprises when you're reaching out to these manufacturers?Ju:I mean, a lot of them didn't return my calls or my emails. I don't blame them. I mean something like random person contacting them about buying up a much of their patches for a business idea that was still very nascent. And so that was a little bit frustrating, but there were a few that did reply to and then there was a little bit of a language barrier just because I mean, I'm Korean American living and I was living in Korea. But my Korean isn't totally fluent. And so a little bit of a language barrier, but I got really lucky because I landed on the manufacturer that we work with today, who was more than happy to get my email was super easy to work with was very open and developing relationship. And that's how, probably how we got to where we are today. From that one cold email he happened to respond and we've been working together for now over three years.Stephanie:Oh, wow. That's really cool. So were they open to creating custom packaging? Because I know when I've looked into this space before, it seemed very black and white. You can have our packaging or something very expensive, but like it's still going to be our design. How willing were they to have something really custom?Ju:They were pretty willing. They were willing to customize design and basically customize anything that we really wanted. So they were pretty open to that. This is their business, they make products for other companies and other brands. And so they were pretty familiar with how that whole process works.Stephanie:And did you end up using a very similar or exact product of what you got in Korea that you started selling here? Or did you make any updates or changes?Ju:Yeah, I worked with the manufacturer to adjust to some things I thought were really important. So things like the adhesion or the stickiness or the absorption power of the actual patch of the hydrocolloid patch. So there were some customizations that were made for this product because I definitely wanted to create like the perfect acne patch. And that's how we landed on what we have now.Stephanie:That's great. And do you feel like you had a leg up because it looked like you've been working in the world of digital and e-commerce prior to Hero. Was there anything that you learned from your past life before Hero that you brought into founding the company?Ju:Oh yeah. All the time. So my background is I actually got my MBA at Columbia business school and then I worked in corporate America for a really long time. So I worked at Kraft foods, American express, I worked at Samsung. That's what brought me to Korea. And I mean, I still lean on my, on all those experiences. I lean particularly on my Kraft foods experience because that was in brand management where they train you in a certain way of thinking for marketing. So, consumer is always first to teach you about the retail landscape and there's a distinction between your consumer and your customer. They talk about like the brand ladder. There's so many things that I still fall back on and use to this day. And then for some of the other companies, things like processes or even knowing about email and open rates and how to really digest analytics like that, are things that I still use today.Stephanie:That's great. So I'm going to get a little crash course in craft methodology. So earlier you just mentioned distinction between consumer and customer. What do you mean by that and how do you practice that?Ju:Yeah, it's funny because in my mind they're very different, but I know sort of in the public, they both get used interchangeably, but the way that a lot of these CPG companies work is they didn't exist before at DTC world. So they always sold through a retailer like a Walmart or Costco or target, et cetera. And so those retailers were always referred to as the customer because those were the people that were actually buying your product. And then you would refer to the consumer as the end-user of the product. So the person who would inevitably eat your Oreo cookie or use your Clorox cleaning solution. Usually the consumer ended up being the consumer of the retailer. So it's really not like if you're working at Kraft foods the consumer is not technically your consumer. I mean, it is, but by way of the retailer. And so that distinction was always very important when it was written out.Stephanie:That's good. All right. So you've got your manufacturer, you've got your product being built. What next?Ju:Yeah. I have two co-founders Dwight and Andy, and then I do a lot of the product, the marketing, the PR basically the sales person. Dwight handles a lot of the supply chain ops. And then Andy, he does all our design and creative. So we had gotten together we decided the three of us were going to do this. We had the product concepts so it came. So the next thing was to come up with the brand and the product name, the brand name. And for me, it was really important that we choose a name that was very like evokes emotion or something emotive because I felt like acne was a very emotional category. There are a lot of people who feel bad about themselves or feel insecure when they have acne.Ju:And so I wanted a name that was really, I don't know like instilled confidence or was like a just evoked positive emotion. And so that's where we came up with the name Mighty Patch. And then we had to create designs does on the box really kind of create the whole brand feel of this product. And then the initial strategy was we were going to sell it on Amazon. So we launched it on Amazon. That was how we were going to distribute it. And then once we had the distribution part then came the other part, which is how do you sell it? So we had to get people to know about it buy it, leave us reviews and things like that.Stephanie:So let's dive a bit into launching on Amazon because I always hear very mixed emotions about selling on Amazon. And I want to hear your thought process about, starting their first. And did you do research on the platform to kind of see, what the space was like? Like what kind of things did you go through before deciding like Amazon's actually a good spot to start?Ju:Well, so we started this business almost like a side hustle. It was a side hustle and we were bootstrapped, we didn't raise money. And so for us, Amazon was like the most logical place to start because you have access to hundreds of millions of buyers. It doesn't take a lot of resources or investment to launch on Amazon. You can take advantage of their backend, like warehouses and fulfillment centers to help with the fulfillment part. So for us, like Amazon made so much sense and then also, back then it wasn't... we just had a hypothesis. And the hypothesis was that if we bring this product category to the US and position it more as a beauty product that it could do well.Ju:And so for us, the easiest way to test out that hypothesis was on a platform like Amazon. So rather than having to spend all the money to build a website and find a three PL and do things like that, the easiest and quickest way to test out our hypothesis was to put a page on Amazon. We said, let's see if people buy it. If people buy it, then we'll work on phase two, which would be launching a DTC channel.Stephanie:That's awesome. I think that's such a great way to have that, like MVP products. See if it works before investing too heavily into a big website and yeah, like you said, setting up three PLS. What kind of hiccups did you experience when you launched on Amazon or started that process?Ju:So one was we actually proved out our product market fit very quickly. And we actually ran out. We either I can't remember, but I think we almost ran out of inventory or we did run out of inventory. We had like our second order on a boat and it was supposed to be released, but like the timing didn't work out. And so it was really, really tight in terms of inventory planning. The other issue was we were getting people were now brand gated, but before we were brand gated, we're getting people attaching themselves to our listings as we were getting more and more popular. And so I don't know how many people know how Amazon really works, but a lot of times when you have a product page, it's not something that you own, unless you're brand gated.Ju:It's something that other people can sell that product, leveraging your product page. And then the idea is yeah, everyone has to win the buy box. And the buy box is when you're on an Amazon product page, and you add to cart, the person who's winning the buy box is the first person whose product you would add to your cart. So I didn't know any of this when we first started, I was like, why do you have to earn the buy box?Stephanie:I had no idea. I mean, I see that from a consumer side where it's like, you have other options, but I never go to those. It's like whoever's first is who I go with.Ju:Yeah. And it's really smart on Amazon's part, because as a seller, you have to earn it either by having really good reviews, like seller reviews or you have to earn it by having the best price. And so there are a lot of sellers, they'll price a penny cheaper, or like 5 cents cheaper, and then they'll win the buy box. Which inevitably is a very dangerous game because you can just sort of discount this product to zero. So anyways, we were getting people attaching themselves for a page, which wasn't good because we wanted to protect our products and our IP and all that. And then the other issue that we ran into was we started getting counterfeits mixed into our inventory. So there was a time where and I have a photo of it. It's like someone had literally ripped off our designs created like their own version of our box. I'll be at the designs were not like you could tell that it was fake. It wasn't a perfect copy. But somehow it had gotten mixed into our inventory. And then that fake product was getting shipped out to customers.Stephanie:How is that happen? I mean, was that like on the manufacturer or how does it get mixed into your inventory?Ju:I don't really know, but I think what happens is they probably attached themselves to our page at that time. And then won the buy box and started shipping this big products to these customers. I think some of them were returned, like people would return them and then it'd get mixed into our inventory that way. Stephanie:Oh, that's tricky. Yeah, because I've seen that in reviews on Amazon where people would be like, this is the authentic one. I've been buying this for five years and now it's a knock off. And I'm like well, how's that happened? But I guess he just didn't understand how that could happen, where I'm like well, the brand wouldn't have a knockoff, but yet now knowing how the buy box works and yeah, that can be really tricky. So how did you get those people off of your page when they started attaching themselves to your page? Like what did you do to rise above them?Ju:Yeah. So there's something that you can do on Amazon called brand gating. And you have to prove that you own the IP or the trademark to your brand name. So you present them, you submit all the evidence and then they will brand gate you, which means that you are sort of no longer a public page where people can attach themselves to your page. You and only you can can moderate or edit or sell on your page. And so that's what we did. And then since we've done that, it hasn't been a problem.Stephanie:Well, that's a really good lesson for anyone new trying to start out on Amazon. That is a possibility. Very good to know. So what's changed on Amazon since you launched there in 2017, what kind of things have changed?Ju:Well, our category now has just exploded. And it's funny because in September when we launched this September, 2017, it was us and maybe like one or two other products when you looked up acne patches, but now when you search for acne patches, there are like pages and pages and pages of acne patches that show up in the search results. And so sure competition [crosstalk 00:19:00]. We're the best seller, we have the best-seller badge.Stephanie:How did you get that? Just from actually being a bestseller or was there anything else behind that. I'm thinking way off course by looking at the Amazon page now.Ju:Yeah. So it's like a three-pronged strategy. One is you need to support your product and your page within the Amazon paid media ecosystem. As you need to run your sponsored product ads and your display ads. And so there's a whole advertising strategy. The other is you have to optimize your organic content. So your product titles, your page titles, your descriptions have the right key words, a plus content, video content, images. So that's the second strategy. And then the third part is kind of building your outside ecosystem. So having press point to your Amazon page or having influencers talk about your product and being available on Amazon and just sort of building your brand halo. So you have to be relentless. It definitely takes time. It took us about a year to get the bestsellers badge from the moment where we really started going after it.Stephanie:So let's talk a bit more about the competitive space, because like you said, beauty is very competitive. So many people are launching products. Like what do you all do to stay ahead from your competition?Ju:We will look at our messaging a lot. We always want to be sort of one step ahead in terms of how we message our products, why we're better really talking about our differentiation. We're also really evolving in terms of product portfolio. So we're best known for our patches, obviously that's whatever it is our bestseller on Amazon and elsewhere. But since then we've launched a lot of other products with like we have rescue bomb and then lightning won and then we're coming out with a bunch of other things next year to really build kind of a routine and regimen for acne. And so, I get the question a lot, like, why is your patch different from others? Like tell me about the patch. Like, they just want to know about the patch, but part of my job these days is really telling people that we're about much more than just the patch, we're really an acne brand. And so I think that tactic is something that is also differentiated from a lot of other competitors out there who may only have like a single patch product.Stephanie:Yeah. [inaudible] great because it shows that you're really invested in that whole market and you are always finding new products to offer to your customers, which is only going to help. Like how do you go about developing those new products and know what your customers want?Ju:It's a mix of art and science. It's some of it comes from well... We have a great PD team, product development team. Part of it comes from sort of research where we're always looking and reading at trends. And we're trying to react to white space that we see in the market. Part of it also just comes from our collective acne issues. Like sometimes I'll break out and I'll say, I really wish I had a product that did this. Why doesn't it exist? And then I'll talk to product development team. And then we'll create something that addresses that issue. Some of it also comes from research that we do with our customers or our consumers, excuse me. Well, we'll ask them what are you looking for? What else do you want to see from us? What other types of acne issues do you have that we could solve? So it's a little bit of like intuition comes from our own experiences. Some of it comes from data. It's kind of there's no perfect recipe, I guess we're coming up with your products.Stephanie:Yeah. Cool. So let's shift over a little bit into more wholesale deals and getting in retail, because I saw some of the retail locations that you're in, like Madewell and target J group. Very impressive. And so I'm sure everyone's like well, how did you get into those retail locations?Ju:Yeah. Okay. So we launched on Amazon September, 2017. I immediately started pitching retailers our product, and then anthropology was actually the first one to take us in January of 2018. And they took us as a-Stephanie:That's quick.Ju:Yeah. It was really quick which again, for me it just affirmed the idea that there was a need in the market for this type of product.Stephanie:What was your pitch? Tell us the magic.Ju:It was really like just a cold pitch email telling them what the product was, what it does, why it's gray included a picture in the email. So they had a visual really just use concise bullet points. And I mean, that's kind of it. I didn't attach a deck or anything like that.Stephanie:And did you have any data that you included that maybe won them over?Ju:I think I had talked about how acne patches in Korea were... so back then KBD was really hot. And I think I'd talked to them. I think I had mentioned that acne patches were really popular in Korea and that and there was a Korean brand that was quite popular. And so I wanted to bring like an American version of that product to the US so in a way that, buyers are usually trend seekers, they pay a lot of attention to the trends of their category. So I think she knew that acne patches a developing an emerging.Stephanie:That's great. So you got anthropology as your first retail partner. Was it easier to get the rest after you could point to anthropology and be like, see we're in here?Ju:I mean, it's definitely validation gives you street cred. But I think in 2018 when we launched in a lot of specialty retailers and I credit that to I'm a big believer in, if you build the demand, the retailers will come. And so once I started our PR push and we were mentioned in, into the gloss and business insider and Buzzfeed, I actually started getting quite a bit of inbound requests from buyers. So I remember like American Eagle was an inbound J crew, I believe was an inbound, Neiman Marcus was an inbound. So as we started getting more press and becoming more known on Instagram and things like that I actually started getting pitched from these buyers. They would email me and say, Hey, I heard about your product. I really want to try it. Can you send me some samples? And so that was sort of special.Stephanie:That's awesome. So how did you get this press to get in front of them? What kind of avenues were they finding you on, like, were they finding you from Instagram or was it actually in these articles that were somehow ending, ending up on their computer screen? How did that work?Ju:So there's a service that I used called Launch Grow Joy. I recommend to, I recommend them to like every entrepreneur that I've talked to, because it's sort of like DIY PR so you pay like a monthly or yearly fee, you log into their system and then they give you access to all these editors that are looking for content or products to talk about in their next article. I did all the pitching early on and like had mentioned before the first article that we really got was an into the gloss. And immediately after that article went up, I think I got like two or three inbound emails from retailers saying, Oh, I just read about your product. I really want to try it. And so I think if you know, what the buyers re like, usually depending on your category, they read certain things to know what the trends are and to know what's like new. So for beauty.Ju:And so the gloss is it's a publication that a lot of people read. And so I just got really lucky, I think with that first article and then just started pitching other beauty related publications and then sort of build [inaudible]Stephanie:That's really great. So now you're in many retail locations at that point? What kind of lessons did you learn that maybe you took to new retail partner you got?Ju:That's a good question. I think packaging is really, really important. I think that's why initially I think we stood out because our packaging was very colorful and it was very bright. And then it was pretty clear with product did on the packaging. And so for me, like anytime we make a packaging change, I always run it by our buyers. So when we launch new products and we're looking at a different color scheme or something like that, I'll always send it to our buyers to get quick feedback, because they'll know if it'll do well or won't do well. So that's a big one.Stephanie:Do you change packaging based on different retail locations whatever connects with anthropology might be very different than target.Ju:No, we don't, maybe we'll do different pack sizes, but we won't really change the design. So I think that's a big one. I mean, I've learned that working and staying close with the buyer is really important because they'll have a lot of input into your innovation too. Because, because sometimes like they're looking for a certain type of product and then they'll come to you and they'll be like, Oh, we'd love this. We'd love it if you made X, Y, Z product. And so I try to stay close with the buyers on innovation pipeline. I think it's really important to hold price. We started selling on Amazon. And then I actually was very worried in the beginning that no one would take us because we were on Amazon, because to your point, a lot of people have this love, hate relationship with Amazon.Ju:But actually what I found was that no one had a problem with it because we're three on Amazon. So we sell on their marketplace. Therefore we control the price because we could control the price. A lot of other retailers were okay with it. And in fact, they kind of see Amazon success as validation that it will probably do well at their store as well.Stephanie:Yeah, that makes sense. Very cool. So now with where the world's at today, and a lot of retail locations, declaring bankruptcy, what are you guys experiencing right now? And what's your go forward strategy?Ju:Yeah, this year has been an interesting year. We're luckily one of those businesses that actually benefited from COVID in a way and really two reasons, I think one reason is our distribution strategy. So the biggest channels that we sell in which are D to C, Amazon and Target are, they were always online or they never say it another way. They never had to close this year because like Target was considered an essential retailer, Amazon, they're online and then D to C is online. And so luckily we weren't a company that depended heavily on a retailer that did have to close so that, so we saw minimal impact. And then in fact, like, as these essential retailers, they get stronger. Our business actually just gets stronger as well. And then the other issue is since we all have to wear masks the masks because acne, and there's a term that people use is called [inaudible 00:33:08].Stephanie:Have not heard of that.Ju:Have you not? Its called [inaudible] And it's caused by either like the friction. So when you wear the mask, sometimes it rubs on her face and it causes friction and then that'll cause you to break out or I don't know if you've noticed this, but when I have the mask on it, it creates humidity when you talk like when you talk and when you breathe, it creates humidity. and that humidity gets trapped and creates bacteria, which causes you to break out. And so we've seen a lot of people suffer from mass MI looking for a solution and then they end up finding our products and our company. And so that's another reason why we've actually benefited from COVID in a way.Stephanie:Oh, that's good. So are you going after the masks masks me keyword or any other cameras coming?Ju:Yeah, actually when I first heard about maskne I don't know, maybe it was like April, like may or something like that, I immediately told my team and I said, Hey, we need to double down on this, on this word, let's write a blog post, let's do social content. We need to own maskne. I think we were the first ones probably to come up with like content around maskne and to do, to even create a bundle on our website for a mass me. And then since then I've seen some other people do that, but I saw that as definitely an opportunity for us.Stephanie:Yeah. That's, really good. So I want to move over into the mentorship category now, because I saw that you have Jamie Schmidt as your mentor and she created schmaltz and she started in a farmer's market and then ended up selling it to Unilever. So amazing mentor. I want to learn a bit about the types of things that she's guiding you on or the most memorable pieces of advice that she's given you.Ju:Oh gosh. So she helps me a lot with distribution because she also obviously had built and sold a company that's similar in terms of distribution strategy. Like they weren't just D to C. They also sold that big box retail and had a pretty extensive they had extensive distribution. And so I remember when we did a mentoring session for Inc magazine, one of the questions I asked her was around like succeeding at target and how to do that, how to ensure success because it's a really important relationship. You want to make sure you get it right. You don't really have a second chance. So she gave give a lot of really good advice and tips on that and also how they support it.Ju:I remember her saying that they ran a lot of geo-targeted ads and some of the top like 50 or a hundred stores to drive traffic to, to the target stores. So that was a really good idea. And even, even now I hadn't recently sent her an email about sort of international distribution, because I know they have quite a few international distributor partners how to navigate those relationships what those relationships should look like. And then people should definitely follow her on Twitter. She gives a lot of really good advice on Twitter for free. So I'm always following what she tweets.Stephanie:She's very smart. I follow her as well. So what kind of thoughts did she have around expanding internationally? And are you working towards doing that or are you already international?Ju:We're kind of international, like we sell on Amazon Canada, we sell at Liberty London in the UK. It hasn't been a big push for us just because US market alone is so big and then we already have so much work. But it's definitely something we have our eyes set on just because for us, acne, we want to make our products available for anyone who has acne. I think they really do help people who break out. And so that's obviously not just limited to the US it's really a global problem. Anyone who breaks out should be able to access our products. And so it is, yeah, it's in the strategy for sure. I think it's a matter of prioritizing it when we have the time.Stephanie:Cool. And so by taking a product that you found in Korea and bringing it back here, it seems like there'd be a lot of room to go other places and be like oh, and here's another product I can bring to the US and another one, like do you ever get tempted when you travel or traveling to buying other products and be like this worked once. Why wouldn't I just launch more things on Amazon?Ju:Yeah, I haven't had a product idea yet, but living in Paris I do see things here where I'm like oh, wow. I wish I could introduce this to the US. I think it could do really well.Stephanie:What are some things in Paris doing well, or unless you don't want people to steal your idea because we have many customers who might, I don't know.Ju:Well, I'll say there's a retail idea. There's a retail chain that does quite well here and that doesn't exist in the US and again, it was sort of the same thing. I'm like, why does it exist in the US? And I think you're right. I think that's like one of the great things about traveling is you get to really explore and learn a different culture and discover different products or different services that could be adaptable to a different country, a different market. And so I kind of have two ideas that are kind of like that already.Stephanie:All right. So I want to move into a couple more like higher level ecommerce questions because you've been in the industry for awhile. I want to hear what kind of trends or patterns are you most excited about right now?Ju:I think there's a lot of cool stuff in food that's happening. I think I'm really interested... For me personally, I'm really interested in the environment and sustainability, and I see a lot of cool ideas around local delivery by bike. So it's zero emission. It gets a product from point A to point B. It is a lot more sustainable. I think that's really interesting. I think food again is also interesting. And especially with COVID and this year and how I think the uptake with buying food online has probably skyrocketed. I think there are a lot of people who weren't used to doing their groceries online. So I'm really curious to see innovation that comes out with food. I'm also very interested in sort of this marketplace concept that I see coming up and popping up. There's a new marketplace called [inaudible 00:41:57].Stephanie:Yeah. I was just reading about that this morning.Ju:Yeah. So it's sort of like a D to C. I guess it's a good D to C marketplace or some marketplace for D to C brands, almost like an online mall, which I think sounds really interesting as well. So I don't know. I mean, there's just a ton of stuff going on. I think for sure, like ecomm is going to be it because we've seen the adoption just really increase in penetration over the past eight months, I guess. So I'm curious to see what the innovation is going to be like, but I already see a ton of ideas happening at the moment.Stephanie:Yeah. Awesome. All right. Let's move over to the lightning round, brought to you by Salesforce commerce cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready Ju?Ju:I'm ready?Stephanie:All right. So what's up next on your Netflix queue other than Emily and Paris, obviously?Ju:Oh, I'm watching the Crown, the newest season.Stephanie:Is it good? Someone just said that yesterday.Ju:Oh yeah. Because it's all about princess Diana and Prince Charles. So yes, it's good.Stephanie:Awesome. Where are you traveling to next when you're able to travel again?Ju:I really want to go to Korea actually. I want to go to Seol.Stephanie:Find more trends.Ju:Yeah. Find more trends. I want to see my relatives. I want to meet my vendors. Yeah, I would really like to go there.Stephanie:Fun. What do you not understand today that you wish you did?Ju:I wish I could understand TikTok better.Stephanie:Do you guys use TikTok?Ju:We're very heavy on TikTok. It's one of our most important social channels, but I don't know. I find it so time-intensive to make the videos and create the content and stuff, but there's some people who are amazing at it.Stephanie:So what kind of what are your best performing videos on TikTok?Ju:Oh, the peeling off the patch and that video. Yeah, because it's like kind of like a doctor Pimple Popper moment. It's kind of gross, but satisfying. And those videos will get like millions of views in like 48 hours.Stephanie:I had a feeling that was going to be what it was. I can advertise those videos all the time. I don't know what I clicked on at one point in my life, but I can all that advertised to me on Facebook and wherever I'm at. [inaudible] stop following me. Cool. If you were to have a podcast, what would it be about and who would your first guest be?Ju:Oh, that's a good question, because I actually thought about having a podcast. I would have a podcast around entrepreneurship. I don't know exactly how it would be different from other topics, but something around probably entrepreneurship, maybe how people made the first million dollars or something like that. And then my first guest would probably be Jim [inaudible 00:45:11].Stephanie:There you go. That's to mean you already have that connection, it sounds like a hit to me. All right. And the last one, we talked a little bit about trends or patterns you're excited about. This is a little bit different. What one thing do you think is going to have the biggest impact on ecommerce within the next year?Ju:Well, I mean, I guess the pandemic has already had its impact. In the next year... I don't know. I mean I think probably this big sustainability push is... I don't know if it will be in the next year, but I think we will start to see it impacting ecommerce in a significant way, in packaging in your carbon footprint. And I think we're going to see a lot more of it in the next year for sure.Stephanie:All right Ju, this has been a really fun interview. I love talking about how you launched on Amazon and how to get into retail. I feel like there's a lot to learn. Where can people find out more about you and your cosmetics?Ju:You can find more about Hero cosmetics either on Instagram. The handle is Hero cosmetics website, herocosmetics.com. And then for me, you can find me on Twitter. It's just my first name, last name, J-U-R-H-Y-U, and then same handle on Instagram.Stephanie:Awesome. Thanks so much for joining.

The ecommerce industry has historically been dominated by some familiar verticals: apparel, footwear, home goods. In 2020, the world of ecommerce exploded to include a few more at the top of the list, including grocery and fitness. One industry, though, hasn’t necessarily emerged as a leader in the ecommerce zeitgeist: home security. But just because you don’t always think about an industry as a part of ecommerce doesn’t mean that it isn’t making waves among its digital peers. The perfect example of this is Ring. Ring was founded in 2013 as a company called Doorbot, which failed to get the investment of any Shark Tank sharks, yet persevered to become a leader in home security before being acquired by Amazon in 2018. Today, Ring is valued at more than one billion dollars and, through its website sales, is bringing home security to customers everywhere. Robin Choe is the Head of Ecommerce at Ring, and on this episode of Up Next in Commerce, he explains how Ring has built a successful business through creating a community of neighbors and what it means to be driven by a shared goal. Plus, Robin touches on his past experience working in ecommerce overseas and what the differences are between the Asian market and what’s happening stateside. Robin also details why he believes that companies that are able to foster a sense of community and safety are the ones that will rise above the fray in the business world.  Main Takeaways:United Nations: China has been ahead of the curve in its ability to build a digital landscape that permeates throughout its society. The country is more adept at creating social connections via technology, building direct, dynamic marketplace models, and optimizing the supply chain. But other countries, including the U.S. are starting to close the gap and create more widespread access to those same experiences.If You Stand for Nothing, What Will You Fall For?: Leadership is critical in any organization, but it is even more important in one like Ring, which was acquired by Amazon, one of the biggest companies on the planet. Creating specific team-by-team missions that all ladder up to the top of the organization and then also falls in line with your parent company is a difficult task, but a necessary one if you want to have long-term success and buy-in from all parts of the company. Having those shared missions also sets up the possibility of setting measurable goals and a true north to strive for and build toward.Avoiding the Upsell: Customers don’t want to be sold to, they want to be offered solutions to real problems. Rather than trying to push products on people, a better approach would be to understand each customer’s specific use case and deliver personalized solutions to meet those needs. That technique is much more likely to lead to a sale than simply shoving the newest and coolest products at potential customers.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Everyone, this is the Up Next In Commerce Podcast. I'm your host, Stephanie Postles, Co-Founder at Mission.org. Today, we're chatting with Robin Choe, the Head of Ecommerce at Ring. Robin, thanks for joining us.Robin:Thanks for having me.Stephanie:So, I was looking through your background a bit. I wanted to start there, because I saw that you had worked previously at Mattel for a while. I think it's a good starting point. Then we go through your background in the world of ecommerce before coming back to Ring.Robin:Sure. Yeah, so I started in Mattel in 2008. My first role there was customer strategic planning, so everything around retail strategies and working closely with retailers to try and drive share of voice, market share, and ultimately, sales and brand growth at the retailers. What was unique around the starting point there was I had a hodgepodge of different channels and accounts. So, everything from Kmart, believe it or not back in the day, which is a much bigger retailer back then.Stephanie:Wow, bringing it back.Robin:Exactly. Also, working across what they call the emerging channels. Part of that emerging channel group, everything from grocery and department stores, drug channel, tried to grow our leadership share there. But Amazon was the one that really stood out to me back then, because it was still evolving, it was still smaller, but it was one that was growing substantially year over year and starting to catch the attention of our leadership and obviously something that I was preaching about internally to make sure that we're aligning and prepping ourselves to grow with them.Robin:From there, for about five years in the US, I moved to Hong Kong. I became the Head of Shopper Marketing or Customer Marketing for the Asia Pacific region. So, did that for about two years, and was also playing a hybrid role where I was the ecommerce excellence, best practice lead for the region, working closely with our regional accounts, our specific local accounts that are a lot bigger today like the Tmalls of the world, Lazadas, which are growing and ultimately trying to drive greater ecommerce best practices across the region.Robin:From there, I pivoted to a general manager role. So, I've had an unconventional career, where I was asked to take on the Country Manager role for Korea. So, everything from leadership across all the various functions, supply chain, finance, accounting to marketing and sales. And then my role expanded from Korea to North Asia. So, I had Japan, Korea, Hong Kong and Taiwan, which are all the best food markets, still residing in Korea. My role expanded to the North Asia cluster, again, driving all the sales and marketing commercial activities and leadership there.Robin:And then in 2018, decided to come back after being five years in Asia, and take on the role of Head of ecommerce for Mattel, which was quite unique. It was a newly formed role, where they consolidated a lot of different functions under one leader. Four different pillars that I would say we focused on, the first one was our direct-to-consumer site. So, think about Hot Wheels collector and Barbiecollector.com and trying to drive our sales and our engagement with them. Also, all websites across the world was under the first pillar. The second pillar was CRM acquisition, analytics and design to everything regarding fueling the acquisition efforts, engagement, and also the experiences on our sites. Also, even our retailer sites, believe it or not.Robin:Third one was digital operation. So, this is a team that really was sourcing the best-in-class assets and copy, everything that really fuels a great merchandising experience on our own sites, but also on our third-party retailer sites. So, we are basically managing all the PDPs, the brand stores for our bigger retailers like Amazon and Target and Walmart, and syndicating and deploying assets there. And then the last pillar was around digital customer marketing and digital shopper marketing, where we have a team that was specifically focused on growing our share of voice, our leadership share with Amazon.com, Target.com or Walmart.com.Robin:So, we had this full end-to-end scope of responsibilities where they were all connected. They were all in need of similar assets and strategies. Obviously, there was nuances between what we were doing internally and externally. But overall, it was a challenging experience but a great one, because it was broad, but also, we could see how things were lifting each other up as we're going through the process.Robin:And then about a year ago, made the move to Ring. Really the objective behind that was to go deeper into this ecommerce in general. I think I had a pretty broad role at Mattel. Even in my previous experience, I worked a lot with digital retailers. But being able to just dive into a brand that I love and that I was able to use as well before I even came to the company, just the mission around the brand of making neighborhoods safer, it was just one where everything just made sense for me to go in.Robin:It's pretty clear, and I made this clear with my boss back then. I'm not the most technical savvy guy. I'm not the guy that's going to be doing your coding and development. But I'm a guy that can come in and really drive some vision and strategy in terms of, "What are our immediate needs? How do we serve them? At the same time, how do we identify a vision for the mid- to long-term, so that we can be ready and planful and execute against what we believe to be the evolving changes that will happen and we can embrace them and ultimately deliver upon them in terms of customer expectations?" So, it's been quite a ride. Happy that I'm still here and that things are relatively going well.Stephanie:That's awesome. Yeah. So, I have Ring cameras around my house. Specifically, the one I love is the front camera with the floodlight on it, because it would blast people if they walk by and I think they're a little bit shady. But yeah, I really like Ring. It seems like a very different transition, going from Mattel to Ring, especially when you were for a little bit there focused in Asia, which in a lot of ways, I think Asia is actually very ahead when it comes to ecommerce and social stuff and community building. Were there any best practices that you learned throughout that journey that you're maybe bringing to Ring now?Robin:Sure, I think there is a ton to learn. Like you said, you had a variety of different business models out in Asia. For example, you had the direct model, which was unique. It wasn't normal like it is here in the US with Amazon, for example. But it's one where it's more of a marketplace model, where you're basically the manufacturer that's selling on a respective third-party platform. So, whether it's Timo, whether it's sites in Rakuten, in Japan or even in Korea, where you have coupon, you have such a dynamic and a different approach as it relates to how to connect with a customer.Robin:So, I would say some of the things that I was able to carry over here is you're right, it's very digitally connected in most of Asia. They are well advanced in terms of just being able to stay connected from a digital platform perspective, but also connecting with consumers in unique ways. So, I feel like maybe what they've done in terms of social commerce, for example, or being able to find ways to navigate supply chain challenges or complexities, they've done a great job to accelerate that. I think they've been ahead of the curve in terms of the US for probably another... They're probably ahead by one or two years, but I think the US has been catching up.Robin:So, I would say best practices, back to your question, it's basically how do you connect with the consumer in a way that is relevant for what they're looking for? For example, PDP pages in Asia are very long and extensive, meaning you could scroll for miles. That's what they're expecting there, because they want to make sure that they know what they're buying, that it's quality, that it's a trusted brand.Robin:Here in the US, it's not as long, obviously. You do have some scrolls to get to the bottom of the page, but you're not looking for as much. Maybe ratings and reviews are more important here in the US. It's also important there, but they're also featuring, "Is this the best seller? What's the ranking on the skew versus the category?" So, that's a good question. I think, for me, it's connecting with communities and also just best practices in terms of merchandising and how they do it differently and how we can take some of those and deploy that here in the US.Stephanie:Yes, yeah, I love that. I always think it's something good to watch, because I mean, they are much more mobile first. Whereas a lot of people here-Robin:Sure.Stephanie:... grew up on desktop. All those people actually just leapfrogged past desktop and have just been used to doing everything on mobile. I know especially around the podcasting space, it's an area that we also keep an eye on, because they have so many social functions that they're just used to. That I'm like, "Why don't we have that here?" So, it's always good to keep an eye on what other markets are doing.Robin:For sure.Stephanie:So, let's get back to Ring a little bit. So, Ring's owned by Amazon now, right?Robin:That's correct.Stephanie:So, I think that would be really good to talk about how that relationship is working, specifically around earlier you mentioned leadership. I want to touch on what that transition looked like from Ring being its own separate company to then being acquired. I'm sure you had new teams that you're working with. You had to really distill your mission and the shared values and everything that you had, the influence with the new team or company in general. So, I want to hear a little bit about how you led that or how you're leading it now.Robin:Sure, yeah. I think the beauty of Amazon and Ring is you're taking the strengths of each company and you're marrying them together. I've worked for big companies like Mattel. I've also worked for small companies and startups as well. So, I love the mash up between the two where you're able to be entrepreneurial. You're able to really be nimble and agile in this small setting of what Ring actually started off as, as a startup.Robin:And then taking the successes of a startup and then marrying that up with this successful company, Amazon, the biggest ecommerce company, at least in the US. In the world, I would say at least a leader. It's one where you're able to leverage the infrastructure, the resources, the mechanisms and the processes that they've been able to deploy, and they've been so successful with. So, that's something that I find to be very interesting.Robin:I think with Ring, we still are led by our founder today. He's our CEO and our Chief Inventor. It's one where he does drive a lot of vision and strategy in terms of not only the mission of establishing that, but also everything around products and services. That continues to grow as we speak. In terms of team and leadership, I apply the same model that I do in every circumstance that I've been in. It's like I spoke on earlier, I've moved to three countries in a matter of five years. That's not easy with-Stephanie:That's crazy.Robin:... a family of kids. Being able to embrace change and being able to pivot and establish yourself amongst different cultures and teams and environments and business models is quite hard, even with language barriers as well. So, I think coming into Ring, I applied a similar approach in terms of leadership. It's one where we have to pause as a team, because the team could be in any sort of condition in terms of their history. Whether they were without a leader in the past or they have gone through significant changes where they we're acquired, whatever the case may be, what I typically do is I come in. I spent some time, just parking time with the team and our leadership to say, "Hey, look, how do we get focused on what matters most?"Robin:The first thing I want to do is, "Let's establish a shared mission. Why do we exist? What's our purpose? Why are we here? Why do we get up every morning?" As an ecommerce Team at Ring, it's something that is really critical, because we're moving so fast. There's constant updates and changes and features and functions and migrations and transitions and new product launches, you name it. It's one where we got to slow down and establish, "Why are we here? Why do we exist?" I think that's even more important today, especially as we're navigating this pandemic.Robin:The second thing I also do is look at, "What's the shared vision look like? Where are we going? Where do we want to be three to five years from now?" Also, establishing values. So, we typically pick three values, whether it's trust, whether it's communication, whether it's collaboration. That's really what we center on. We'll spend time and it doesn't take a one-hour session. It takes multiple days and hours and dedication to really grind through and work through the rigor and discipline of saying, "Okay, this is why we exist. This is how it ladders up to Ring's mission of making neighborhoods safer. This is how it ladders up to Amazon's mission of being the Earth's most customer centric company." So that's really important.Robin:I think, because we did that and we do have an ecommerce Ring-specific shared mission, which is something that we identified and we have not just put on a wall, but it's really something that needs to live in our hearts. But I'll share that with you. So, our ecommerce group at Ring exists to communicate to our current and future neighbors, how we provide products and services that protect what is important to them. We do this by building strong relationships with our partners to deliver the best digital experiences for our neighbors. We call our neighbors, our customers, because it's just that important. So, that's really something that I do.Robin:I think what's been great is not only is it the shared mission and vision and values that you build upon and that you live by and you keep each other accountable to in terms of the way we behave and operate day to day, but it also helps to step back and say, "What are our key priorities? What are those big rocks that we need to move in the mid- to long-term? What are those things that we need to do in the short term to address the business needs and the evolving changes that are happening?"Robin:So, I would say that it starts with the team. It starts with having an aligned and a shared... It's not just my mission. It's a shared mission and vision and values. And then being able to build on processes like mechanisms, whether it's quarterly, weekly business reviews and roadmaps, and align that across not only the internal team, but across the organization. So, that you can drive success and make sure that your communication, your execution is as consistent and aligned to all objectives, at least the key priorities, that we deliver on a day-to-day basis.Stephanie:Yeah, yeah, I love that. I've definitely seen and heard of quite a few experiences that are full of friction when companies are getting acquired and on both sides. So, how do you work to garner trust from the employees who are getting acquired, where some people might not really want to go to a big corporation? They might want to stay at that startup vibe. On the other side as well, what do you do to actually get them to be on your side, be ready to move forward with the mission? Because I could see some people being not really on board with it, not really caring about the vision, being like, "Oh, that's just all words." How do you get in the weeds with them to really get them on the same page?Robin:Yeah, back to just leadership, I think it's really important that we stay in... This is my philosophy as well. It's servant leadership. It's also compassionate leadership. So, being empathetic, right? So, there's people that have come from all backgrounds and different experiences. Whether they were at the company before they got acquired, whether they joined afterwards, even for those that we haven't even seen in person post-COVID, it's empathy. It's about caring for people. People are people at the end of the day. They're not machines. They need to be cared for. They're not human doings. They're human beings.Robin:So, my philosophy and approach has always been around empathy and just trying to put myself in their shoes and understanding, "What are their goals? Are they aligned to our goals? How do I listen to them in ways that can really make them feel that they're heard?" That anything that may conflict or go against the mission or the goals or values, let's talk about it. If it's something that you feel differently and you're not aligned to this, maybe you don't belong here. Maybe this is not the right place for you.Robin:But in general, I would say the majority of the team and I guess the team overall, they are bought into the mission. I mean, we defined it together, which makes it powerful. I think that's where you nip that bud up front. You're able to just journey with each other through the ups and downs and challenges, but ultimately, the successes as well.Stephanie:Awesome. So, I was looking through Ring's website before this. I didn't even realize how many products you guys had, because like I was mentioning, I only have these two. I want to hear a little bit about, "What is the customer journey look like on the Ring website? How has it evolved, especially over the past maybe six months?"Robin:Sure, I would say the Ring website is quite unique, where Ring is not just the doorbell. Ring is a multitude of products that have continued to expand to meet and deliver that mission. So, if you look across our products, we have not only doorbells. We have security cameras. We have alarms. We have accessories too that attach to these various devices. We also got the Smart Lighting. We have third-party partnerships. I don't know if you recently heard about the announcement that we made, but we're coming out with even new categories, whether it's Always Home Cam, which is an autonomous drone that flies across the inside of your house.Stephanie:Wow.Robin:You can basically train it to go to certain parts of your house to check on whether your stove is on or your pet food has been eaten or any other areas where you may not have a camera setup. So, I think it's again innovation and evolving to a customer need or pain point that we're trying to deliver on.Stephanie:Okay, I need one of those.Robin:Yeah.Stephanie:Does it stay flying or does it go back to its little nest and then like get up-Robin:Yeah. So, it stays in the nest. And then based on whether if it's alarm, trigger or notification, it'll basically come out of the nest. There's obviously a sound so that you can hear it. We think about privacy always and security and keeping that in mind. It'll go to specific places of your house that you trained it to. So, you have to map that out-Stephanie:Got it.Robin:... and then ultimately, come back to its nest. So, I think it's going to be-Stephanie:Can it go outside?Robin:... amazing. Right now, we're not building it to go outside. I think it's one where it's not an actual design drone to go outside, but for now, we're keeping it in the house. We're calling it Always Home Cam.Robin:But yeah, so new categories, even car security. So, we're starting to expand there, because we're hearing a lot of times from our neighbors as well feedback around, "I wish you guys had car security that connected with my Ring app and my overall Ring ecosystem." So, that's really exciting as well. Whether it's your Tesla or card dash cam to even just the 99% of cars that are out there, just being able to have a peace of mind around bumps or doors opening are areas where you're not feeling as safe. So, that's another cool category we're entering into.Robin:Also, my favorite, which maybe is not everybody's favorite, but I love it, is like our mailbox sensor. So, imagine when you open your mailbox, you get a notification. That's also could be connected to your devices, whether your camera turns on in a specific area where your mailbox may be or your Alexa Echo Show 5 also is all integrated as well. So, that turns on. You can watch it and say, "Hey, Alexa, show me my front door. Show me my mailbox," whatever the case may be. It's one where you can again see and review and just make sure that you have a total sense of peace of mind.Robin:I would say also, to add to that, we also have our subscription plans as well, which you can view, record, share out, and also do professional monitoring. So, I think that's a really big benefit. We've heard countless stories. I also have my own use cases as well where neighbors are feeling so thankful that they had their alarm on at home. So, that they weren't going to show up when the burglar shows up or they're able to record specific event that leads to finding somebody or something or whatever the case may be. There's countless stories that you could find and you can hear about I'm sure when you talk to your friends and neighbors that do have some of our products that just really speak to the power of the brand and products and just the services that we provide.Robin:And then we also have our Neighbors app, which is great as well. That also lives within the ecosystem of being able to connect with your neighbors and understanding who they are and any notifications or alerts around the community and even also partnering with those in your community, especially in a time like this. So, I love the brand. I love the products, but I also love that it lives within this ecosystem that connects us to each other and gives us a peace of mind like never before.Stephanie:Yeah, so that was actually a perfect point where I wanted to touch on, the neighbors piece to it, because I think it's brilliant from a UGC perspective of your neighbors are generating this content that you don't even know them. I mean, I am addicted to watching what's happening to my neighbors. Like the other day, some dude was trying to break into their storage locker, someone's bike got stolen. I sit there. I will watch the video and see if I know the person. Obviously, I never do. But it's really good from a content generation perspective.Stephanie:I mean, I see you guys are using some of those videos on your website, which is very fun. And then also from, like you said, a community building perspective. So, I want to hear a bit more about, "How you guys are pursuing that UGC perspective? Is it mainly just for security, or do you see a community building aspect and actually turning into a social network is how it feels to me?"Robin:Yeah, I think it ladders back up to our mission, making the neighborhoods safer. It's one where it plays a role there. So, whether it's like public announcements around COVID to fires in your area or different ways to have safety preparations around different use cases. Yeah. So, I think it's a combination of trying to serve solutions for specific needs or things that may come up that we want to make sure that we are prepared for and also just connecting us with our neighbors.Robin:As people are home more than ever, whether it's working or school from home or shopping at home, it's one where our neighbors are critical for connection and also a peace of mind and watching out for each other. So, I would say that the Neighbor app definitely is a point of connection and also sharing relevant and pertinent information that can help to make neighborhoods safer.Stephanie:What's the craziest video you've ever seen? I guess that'd be real crazy.Robin:I think the fun ones for me are around animals. When a bear comes and just starts to get on top of a car and wants to get in there to eat some food. Where I live, there are a lot of coyotes. So, I get a lot of neighborhood posts and notifications that there's a coyote roaming around early in the morning. They're all in these different pockets and areas and just make sure I'm not jogging or walking that area during that early time in the morning.Stephanie:That's great. I've also seen little neighborhood tips breakout on my app anyways, where neighbors will argue about whether it was real or not. I don't know if you guys have seen that. It's pretty entertaining. Like I said, it feels like a social network sometimes.Robin:It does. I mean, it just shows you the reality of what people have to deal with and navigate every day. I think, if anything, it's like making neighborhoods safer. That's important to everybody. I have a family. I have kids. Especially as everybody's home more, it's like, "How do we help each other? How do we make sure that we can create a community that is in support of each other and ultimately safer neighborhoods?" So, I find that to be really powerful. It's one where I'll do everything in my power and I'm sure my neighbors will to help each other out during these times.Stephanie:So, maybe let's touch on the subscription model a little bit. So, a lot of people right now are interested, of course, in subscriptions. Everyone is thinking about trying it if it's right for their business. Tell me how you guys are exploring it and maybe any hiccups you've experienced and things that you've pivoted or changed, anything that other people could learn from?Robin:Today, we have two different subscription programs. Robin:I think as we continue to expand in various categories, we're constantly thinking about, "How do we offer a similar experience and that peace of mind, so that you can access and even store?" So, thinking about the car category, I'm sure they're thinking through what that could look like as well there. As we expand our categories and services, subscription will definitely be top of mind as part of the services that we'll look to offer.Stephanie:Yup, how do you position it in a way that a customer will sign up for a subscription before something bad happens? Because I know I've experienced this, before I had Ring, I had a bunch of cameras. I didn't feel the need to store things really until one day when I was like, "Oh, I actually wish I would have access to that." So how do you position maybe the language or the sell to actually get someone to sign up for that subscription before there's a catastrophe?Robin:Sure, I mean, the benefit is like when you buy device and you activate it, you'll get 30 days of free, call it, subscription. That's the Basic Plan. And then you get the choice after that to opt in or opt up to a Plus Plan. So, it's one where we try and make it as user friendly and in the control of the user, ultimately, to make that decision.Robin:I would say also that the benefit of the Ring subscription plan is that you're not locked into some contract. So, you get to basically opt in and opt out in any time of the month. Again, we're trying to create flexibility and user control, ultimately; versus locking them into an annual account where you pay hundreds of dollars, but you're frustrated because you're not being able to use it in a way that's easy and intuitive and also beneficial for your needs. Stephanie:Yeah. During that trial period, the one thing that I oftentimes see happening is that a user isn't interacting with the services until they're done. And then they're like, "Oh, I never got a chance to try it." Are there certain methods that you're trying to get the user to interact and learn and figure out the platform to see the benefits of it before these 30 days are done?Robin:Oh, for sure. I mean, that's really the efforts around different marketing levers that we're trying to deploy to make sure that they see the benefit of turning it on and the different features available. Whether it's a nudge here or email there or different types of messaging, that we're trying to make sure that they are not only purchasing the device, but they're utilizing it in its full capacity.Stephanie:Yup, got it. So, for your guys' website, specifically, tell me a little bit about how you guys think about selling on there? Are you selling mostly on desktop? How are you finding customers? How are you bringing them in? What does that process look like?Robin:Sure, sure. So, obviously, you have direct where they're showing up. I think Ring today is a very prominent brand, or at least, top of mind brand that has awareness, especially in a category that our Founder created, the video doorbell. Obviously, there's other folks that are in this space, but I would say Ring to me would be... That's the first thing I think about is Ring when I think about home security and starting at the doorbell and being across different parts inside and outside your house, for example. But I would say yeah, it starts with the direct.Robin:Also, there's a lot of obviously acquisition efforts to try and be on top of mind in terms of whether it's people searching for our products to different types of campaigns to drive traffic to our site, whether they're social related, UGC, like you said. We do a lot of social care types of activities to make sure that whether it's responding to different posts or things like that will point them to solutions that are being offered on our ecommerce site.Robin:And then as they come to the site, we want to make it as easy and seamless. I think this is the goal of every ecommerce company. As your portfolio grows, how do you make sure that you can train... Not train, so that's probably the wrong word. It's more around, "How do you help them find what they need?" That's the easy question to ask, but a hard question to answer. So, that's one where we're constantly thinking through user research and test.Robin:Yeah, I think what's different today is that a lot of companies are always trying to attach this or grow a market basket. It's all about increasing EOB. Those are all important. But to me, I think what's most important is that you're not just trying to upsell, but you're really trying to deliver on a solution. So, meaning, having a camera at your front door, for example, a video doorbell at your front door, that might be good for the first three months and then you may move to a bigger house. You'll need, for example, a floodlight cam like you have. So, that you feel a greater peace of mind that surrounds your house. So, you have this whole home solution, security solution that you could leverage and apply across different parts of your home as you continue to evolve and potentially move, or you want to just expand.Robin:So, it's one where we're thinking about, "How do we recommend the right products for you? How do we surface the right recommendations for you? How do we help you differentiate which doorbell to buy?" Because we do have quite a number of doorbells now. What's right for you basically, based on your use case? Or even the alarm, how big is your house? We have a quiz on our Alarm page, for example, that people engage with that they want to know like, "This is my square footage. This is how many windows I have. This is how many doors I have." How do we make sure that we get them to a place where we offer up a package solution that they can feel confident about and then purchase and ultimately experience the peace of mind that they were looking for?Stephanie:Cool. So, to talk a little bit more on Ring before we move into general ecommerce, I want to hear how you guys are staying ahead of the competition? Because there are other security companies out there, how do you really show that you're the best?Robin:Yeah, I mean, I can't really speak on the competition. I would say that our priority is to constantly push ourselves to empower users with affordable, effective ways to monitor and secure their home. So, back to the making neighborhoods safer, everything ladders up to that. I think about companies that offer a product or a specific service, and it's just that one thing. They're all about to selling that product.Robin:I think the mental model and the approach that we have is quite different at Ring, which I love, and I totally respect. It's one where we're constantly thinking about the mission. So, everything ladders up to that mission. So, whether it's a new product, whether it's a new service, whether it's a new feature on the site, or whether it's a new experience that we want to deliver that's thinking outside the box, that we're constantly trying to think outside the box, so that we can deliver upon that mission.Robin:That's the way that I would frame it up for you. That's different than just looking at the competition and saying, "What are they doing?" I'm sure we can learn a lot, but it's one where we're really focused on our customers and working backwards from them and ultimately inventing and delivering effective, affordable, easy-to-use products, all in pursuit of delivering on our mission.Stephanie:Cool. Yeah, I'm sure you guys get a lot of customer feedback. Do you implement that as you hear what customers are looking for? Does that have an influence on maybe products or the subscription model or the app or anything?Robin:Yes, we do get a lot of customer feedback. I think what's unique about Ring just even in my past year is our Founder's email is on every product. It's even on our websites. He is probably one of the most customer obsessed individuals that I know. I really respect that about him. It's one where he wants to hear feedback.Robin:We also get feedback internally that we can share and a way for us to facilitate that and hear it, because ultimately, our goal is we want to make the customers feel safer. Whether it's buying our products, calling into our customer service line, whether it's a recommendation on, "Hey, I didn't know that this product was featured with your subscription plan. You had this rich notification that comes with it," how do we surface that up in a way that's clear and transparent on our website, so that people don't have to ask a lot of questions that they can get everything they need in one place?Stephanie:Yup, cool. All right. So, you've been in the world of ecommerce for a while. So, I think you should have a good answer to this. What does the future of online commerce look like to you, maybe in the next five years or so? What does that world look like?Robin:Yeah, that's a great question. I think the reality is, is ecommerce and digital adoption has been accelerating rapidly. I hear all the time from colleagues in the industry, "The past six months, eight months, basically, we're able to accomplish what we would have in five years." A lot of that is just based on the times-Stephanie:Yup, a lot of guests have said that too.Robin:Yeah. I agree with that. It's one where, obviously, to lead in this environment, like in any environment, we need to embrace change. But I would say overall, the ecommerce future is bright. There's capabilities that continue to just wow me. It could be simple things to complex things, whether it's complex things like personalization.Robin:With all the millions of customers that are coming on your site, how do you make it as frictionless and just a great experience for them to get the checkout and personalizing that experience for them based on who they are as a cohort to even simple things. I see the simple things, especially in the area of digital retailing, meaning a lot of folks aren't going to stores as much, obviously. It's one where they're constantly thinking about how to pivot and embrace the change.Robin:I love recently what I saw with Target and how they were able to create this Halloween activation, where they are taking select stores. They're able to convert it into a Halloween environment and pass out some goodies and basically doing it all through the comfort of your car. So, imagine, Halloween is going to look very different this year. So, they're able to provide something that is going to be a memory and a delightful experience for users. But at the same time, they're directing traffic back to the site to say, "Hey, if you can't come to this event, maybe we're not featuring in your hometown. We got everything you need from a Halloween perspective."Robin:So, I think it's one where you can get very innovative and capabilities are there. The times today have forced us to really think bigger and to embrace the change and to pivot and be flexible and agile. No idea is a bad idea. I think any idea is relevant, just because we're trying to figure out how to address customer pain points and needs, especially as the times have evolved.Stephanie:Yup. Yeah, I completely agree. It's been fun seeing the levels of creativity that have come into some of these campaigns. Like you said, people now have to think on their feet and think of new ways to do things that they've never had to before. So, it seems like there's a lot of opportunity coming out not just in marketing, but just the way of doing business in general.Robin:I agree. The other thing I think there is boomers and how they're obviously being forced to shop online. I had my mother call me the other day, because she doesn't shop online as much. She was like, "Can I put my name and credit card number in there and shop?" I'm like, "Of course."Stephanie:No, mom. No.Robin:Yeah, exactly. So, it's one where they're not as digitally savvy, but they're being forced to be. It's one where how do you take the traditional models today, whether it's direct mail or whether it's phone calls or just the ways that are comfortable with the past and deliver that mixed with the digital experience?Robin:So, I'm thinking of things like virtual consultation. For example, the doctor, the hospitals, they call you now and they do a virtual consultation before coming in. It's one where how do you bridge the gap between folks that are coming on to the side for maybe some of them the first time, but getting them comfortable in ways that can help them transition into being fully digitally capable? So, those are things I think that are exciting as well in terms of getting back to a mix of the past but also the future.Stephanie:Yeah, that's exactly what I was going to say is that you've got this whole new group of people who never would have been your customers, probably at least not in five years. They're here. So, now, you have to adapt to that. But then I also think what's old is new. I mean, I've had quite a few people talk about direct mail. I think they'd have done some surveys of younger individuals who say they love direct mail, because they're not used to it. It feels very personal. It's fun to get something in the mail. Maybe older generations would be like, "What? That's normal. I'm used to getting catalogs, I'm used to that stuff." But maybe bringing that back might be a way of the future. It's a more personal things than maybe everything digital all day.Robin:I agree. I mean, I think some folks, especially parents, are probably limiting screen time for kids these days. Maybe there's some fatigue behind that, even for the younger generation, but it's one where I think companies are being forced to really think outside the box. Direct mail may be the way to go for certain categories.Robin:I just think about what Amazon has been doing. I was in the toy business before. Everything was digital, whether it was a holiday toy book. When Toys R Us and even the toy industry was disrupted with Toys R Us going bankrupt, that business model being gone from the overall environment, it's one where Amazon started doing physical holiday toy books along with the digital experience. They're trying to make it as they want to have the physical touch to the toy, because kids like writing down what they want for Christmas. They want to flip through the pages. At the same time, Amazon has a PDF toy book where you click on an item, and then it takes you directly to the PDP. You can purchase and add your products there.Robin:So, I just love seeing how things continue to evolve over the years based on the shifting of consumer demands. Also, it's staying true to what the patterns are in terms of behaviors around people using toy books and still wanting the physical touch and also providing it digitally. So, that you can transact and get it in your household in two days or one to two days.Stephanie:Yup. Yeah, completely agree. All right, let's jump over to the lightning round brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question. You have a minute or so to answer.Robin:Okay.Stephanie:Are you ready?Robin:I'm ready.Stephanie:All right, the first one, what one thing will have the biggest impact on ecommerce in the next year?Robin:I would say, the supply. What I mean by that is we're always going to have Christmas holiday, which is very big for respective categories. But it's one where the demand has shifted throughout the years based on people or companies being able to pivot and offer up Black Friday in October, for example, and starting early and trying to manage the flow of traffic to the stores and being cognizant of that. So, I would say supply. The second one just to add to that is contactless and touchless experiences, I think that'll disrupt the ecommerce industry.Stephanie:Yes, completely agree. What do you not understand today that you wish you did? It can be an ecommerce or at Ring, whatever comes to mind.Robin:There's a lot of things from that list. I think we're all a work in progress in terms of learning and growing. I have a ton to continue to learn and build on. So, I don't think there's one particular thing I can put my finger on, on that question.Stephanie:All right. What's next on your Netflix queue?Robin:My Netflix is controlled by my kids. So, the next one is The Octopus Teacher.Stephanie:Sounds intriguing.Robin:Yes.Stephanie:All right. If you were to have a podcast, what would it be about and who would your first guest be?Robin:I value leadership. I have mentors across different areas that I reach out to. So, to me, I love leadership, because companies are about people and not profit in my opinion. This is why I love Ring. It's one where leadership is really what helps you to emerge and helps you to navigate whether it's crazy times or great times. I think that's what holds true and keeps you grounded and successful.Stephanie:Cool, love that. The last one, what piece of tech are you playing around with right now that you're loving? It can be just personally, or it can be ecommerce tools that you're trying out or having success with.Robin:Yeah, I would say that one that I'm being forced to use nowadays is chat bots, just because of the inability to connect with the customer service agents at different companies. I mean, some of that is obviously trying to drive efficiency and automation, but it's one where it is pretty fascinating in terms of being able to try and address your question or your request, for example, into chat bots. And then having this AI, back machine powered on the back end that try and answer and address solutions.Robin:Sometimes it works. Sometimes it doesn't. Some people prefer just the person on the other side of the phone. But I think the chat bots and that area in terms of automation is something that I've been looking at. That's been pretty fascinating, but also at the same time, thinking through, "What would somebody really need that they want to just call the customer service line?" That's even great as well.Stephanie:Yeah, that's definitely an interesting area. I think I was just reading a research report that was talking about how most consumers would prefer a chatbot, if nothing. If it's no chatbot or having one, they want one, but then also make sure that you get it right where I feel like there's definitely still room to grow to make sure you can at least answer a few questions, especially if they keep coming up. And then if not, okay, go to a human or call or something. So, that is an interesting area. All right, Robin. Well, thanks for joining the show today. Where can people find out more about you and Ring?Robin:Yeah, so you can look me up on LinkedIn. You can go to our website, ring.com.Stephanie:All right. Awesome. Thanks so much, and we'll see you next time.Robin:Thank you.

Some brands are lucky enough to have a built-in audience of millions, while others need to develop an audience from scratch. Chris Mainenti has been on both sides of the coin and he knows that in either situation, once you have a base of potential customers paying attention to you, the next challenge is converting those browsers to buyers. Chris is the Director of Commerce Strategy at Discovery, Inc. where he is helping turn the millions of viewers who tune into Discovery’s channels such as HGTV, TLC, Food Network and more, into customers who buy across various platforms. On this episode of Up Next in Commerce, Chris explains how he put his history of building audiences at previous companies to work at Discovery — including some tips for young companies on how to utilize newsletters. And he discusses how to use the data you collect as a starting point for creating a more personalized, one-to-one relationship with your audience on various platforms. Plus, he looks into the future to predict how shoppable experiences will be made possible with universal add-to-cart and buy-now options. Main Takeaways:Developing Your Audience: Audience development goes beyond marketing. When you are building your audience, you have to know who you are as a brand and understand the audience you have and want to bring in, and what they want and need. In the early days of a brand, certain audience development strategies work better than others, including tapping into the power of newsletters.Lights, Camera, Take Action: Every company is collecting immeasurable amounts of data, which then needs to be sorted, analyzed and acted on. But the actions you take should be nuanced and applicable to the specific needs of specific audiences. For example, it would be wrong to lump together all of the women in your audience because a woman who is exploring your dot-com presence is likely looking for something different than a woman that is scanning a QR code on their TV. Those segments of women shop differently, and therefore should be approached in unique ways after the data tells you what they each want.Dreams of a Universal Cart Experience: Many believe the future of ecommerce revolves around the development of a universal cart experience. Every business wants to create shoppable moments and engage with customers across many different platforms. But getting to this nirvana means you also have to remove all the friction points.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next In Commerce. This is your host, Stephanie Postles co-founder of mission.org. Our guest today is Chris Mainenti, the director of commerce strategy at Discovery Inc. Chris, welcome to the show.Chris:Thank you, Stephanie. I appreciate you having me on and talking all things commerce here in the current climate that we're in.Stephanie:Yeah. I am very excited to have you guys on. I was just thinking about how long Discovery channel, and all the other channels, HGTV, and Food Network and Travel Channel have been in my life and with that, I want to hear a little bit about your role at Discovery. I mean, it seems like there's so much going on, so many digital portfolios that you guys have over there, and I think just a lot behind the scenes that an average consumer wouldn't even know. So, I'd love to hear what you're up to at Discovery. What is your day-to-day look like?Chris:Sure. So, I would say, first and foremost, for commerce specifically in the digital media space, we're probably slightly different than a lot of others. We're really multifaceted in terms of how we work, and who we work with across the org. Obviously, like you said, Discovery is huge, has a ton of major, major worldwide brands. So, we actually sit on the portfolio wide level with our lifestyle brands, and we're really in the weeds with them on the day-to-day basis. And, that really starts with, obviously, our editorial teams. That's our bread and butter, that's our voice and our authority in this space. So again, that's really where we begin, and that's obviously where we're doing our content output, and producing all of this great shopping content for our different audiences, and again pulling our experts from all of these different brands to come together.Chris:So again, folks are really getting the full spectrum of expertise in all of these different categories. And from there, it just really starts branching out into other groups. So, we work heavily with our ad sales and branded content teams, where we work on much larger partnerships and deeper integrations which we can talk about today as well. We have a licensing team, where we work on licensed products, and we take our learnings that we're seeing on our shopping content on a day-to-day basis, and analyze that, and then speak with licensing to see where there may be some room to actually create a new line with one of our partners.Chris:We also, believe it or not, and I know you don't know this, we have a video games team at Discovery, and we work closely with them as well on trying to find those shoppable moments, and again bringing our brand and our voice into those games when they're being built. So again, we're always serving the reader no matter who or where they are, and again pivoting as necessary. So, those are just a few groups, and obviously our marketing and ops, and audience development teams were heavily embedded with as well when it comes to promotion.Chris:So again, there are just, I would say, a lot of areas that we focus on. I know in the beginning it was always all about, commerce is part of diversifying your revenue streams at a digital club. But, we see it more as now, we're trying to diversify our commerce stream into all of these other areas. So again, a lot of exciting stuff has already happened, and we're working on some cool stuff too as we head into next year. So, a lot of exciting stuff in an area that's obviously blowing up for a variety of reasons.Stephanie:That's a lot going on there. It's actually really interesting because you just mentioned video games, and I just did a recap episode with one of my coworkers for the first 50 episodes of this show, and the one thing I was bringing up was like, "I think there's a big opportunity in having shoppable moments in these worlds or video games." And, we were mentioning Unreal and Epic Games specifically, that I hadn't really seen that yet. So, it's interesting that you guys are starting to explore that arena, because it feels like that's something of the future, but it's needed, and that's where everything's headed.Chris:Yeah. And again, I can't stress enough. I mean, our portfolio is just so suited for so many of these different, avenues that we could always find something where, again, we're not being gimmicky just to say we're there. This is our bread and butter, and we're making sure that we stick to our tried and blue, into who we are, and not shy off too much, and again just try to say, "We did something here or there." Really making sure we're always serving our audiences and giving them what they want on the platforms they want.Stephanie:Yeah. Which I think that's a really good jumping off point, then because that was actually my one biggest question I had of how do you strategically think about what an audience wants without disrupting the content? I mean, it seems so tricky, because you see a lot of shows, and whatever it may be where you might have product placement in a show or a movie, but it might not actually uplift sales, because it wasn't done correctly. Where I was also just talking about the Netflix original, the organizing show where they partnered with the container store, and how they had an instant, I think was a 17% uplift in sales after that show aired. That worked, and many others don't. So, how do you guys think about making those shoppable moments, and actually having it work?Chris:Sure. First and foremost, I think, you have to be honest and say, "Look, not everything is going to hit." And honestly, it's not always meant to always hit. So, I think we go into that, first being real with the current situation, and understanding not everyone is going to want every single thing. We're always talking about integrating, promoting, so on and so forth. So, I would say that's first. Secondly, again, we start with, what's our expertise? What do we believe in? And, what do we want to showcase to our various audiences across all of these different platforms? And then, from there is when we start to really start getting down to the nuances.Chris:And look, we have created what we dub internally as the commerce hub, where we're bringing in data feeds from all different platforms, our affiliate networks, our in-house reporting platforms, social, so on and so forth, bringing that all together. And again, understanding, what are people consuming? And, what is their mindset when they're on social, versus linear, versus a DTC, or our dot-coms. And, really starting to look and pull out trends from that. I always like to say I prefer the term data influenced versus data driven, because you can't just take a dashboard of data, and sort in descending or ascending order, and say, "Okay. Whatever is at the top or bottom, do or don't do." And, call it a day.Chris:We focus much more heavily on insights, and use that data as a jumping off point, but then do very, very deep analysis, and pull actionable insights out of that for all of our different brands and teams for when they're creating new content, or when we're optimizing old content. Again, wherever that is. And then, I think lastly with that comes, how do we visualize that to the audience. On digital.com, is it more about, again, really simple to read, simple call to actions to buy items. Again, on linear, what is that? A QR code experience? Is it some type of more deeper integration with a smart TV company on our TV E experiences? Is it more deeply integrated where you can actually tap to purchase within the app? So on and so forth.Chris:So again, there's just a lot of things that we're looking at. We never make it cut and dry, that's probably because personally I don't think anything is ever cut and dry, especially this space and shopping behaviors across, not only brands but the platforms those brands are on, and that's how we look at it. I know that's a lot, and that sounds a bit crazy, but we do really pride ourselves on, again, using these things as a jumping off point and then really diving in deep and making sure that we're serving our audiences, again, where they like to consume this content.Stephanie:Got it. Yeah. It sounds like everything is very custom, and every channel and project you start from scratch where you start figuring out what your audience might like. But, do you have any internal formulas where you're like, "Well, we always follow this in the beginning." and then, it goes crazy after that, because we find other things out. Is there anything that's similar among all the campaigns or projects that you're working on, at least from a starting point?Chris:Yeah. I think, honestly, it's probably not surprising whenever you're talking about items on sale, or whenever we're talking about certain merchants, or price points, or categories, like organizing and cleaning is always up there for us. We know very specific furniture categories that do very well for us. So, we do have our basic what we call playbooks that we start off with, but like you said, we still are always constantly learning and pivoting as necessary. I think a perfect example is in the beginning of the year, I don't think anyone in this world saw what was coming, so we were doing our thing, and then when everything started to unfold, we got together and we had to pivot. And again, the good thing about Discovery's brands is, again, we are so widespread in terms of the categories that we're experts in, that we were able to easily pivot and, again, make sure we're giving our audiences what they need at that moment.Stephanie:Do you see more companies starting to shift? Like media companies turning into ecommerce companies, and ecommerce companies turning into media companies. I've heard that saying quite a bit, especially over the past six months, but it feels like you guys have been there for a while. Do you see other companies looking to you for maybe best practices of like, "How do I make this shift?" Or, "Should I make this shift?"Chris:100%. I think, the beauty in that is that we can coexist and really do things that benefit each of us. I don't think this is an either, we succeed or they succeeded. This is, I think a space where we can coexist. The way I always like to frame this when I'm talking to our merchant partners, and talking internally, is we're really here to humanize the star review. When you come to us, you're not just going to see, again, this is a four out of five, or this is a five star, item, and that's it from the random ecosystem of the internet. We are heavily focused on saying, "Look, here are the things we recommend, and why." And, I think that's where our partners can really leverage us, and where you're really seeing us shine. Again, we don't have to just throw a bunch of random stuff out there and hope for the best.Chris:Again, given our brands and our standing in this space, we can really leverage our expertise and authority there when growing this portfolio with all of our partners. To be honest with you the thing that drove me to Discovery the most was, "Wow, these are huge brands, with huge audiences, and huge respect. Now, we just got to tie all of that together, and go from the moment of inspiration to action." And then again, that's what we've been working on.Stephanie:That's really cool. With all the data that you were mentioning earlier, since you joined have you seen any changes in consumer shopping behavior?Chris:So, yes. Obviously, the biggest one occurring this year, and that was with online grocery. I think it's no surprise that it's been building up now for a year or two in terms of mainstream, but it never really caught on. It's only a five to 10% of folks are really engaging and entertaining the online grocery space. But then again, obviously, earlier in the year when things started to shut down, and people were uneasy about going out, we did see huge spikes in that space, obviously, on our FoodNetwork.com site. And, I would say that continued for a bit, and did peter out a bit recent months which, again, is obviously expected. So, I think that's probably one of the big ones.Chris:The other thing that we have seen, not so much in terms of major shifts in shopping behaviors, just more increased sales in categories that we already know are performing. So, organizing and cleaning is always been a winner for us, and then as the months went on, we've just seen it doing better for us. I think we do a lot of buying guides where we talk about the best cast iron skillets on Food Network, or the best humidifiers on HGTV. We started to see those things gain more and more traction as we went, and we're attributing some of that to us really getting our audience to trust us, and now know that they can come to us as a trusted resource to really be a personal shopper for them.Chris:And again, we've seen that across the board in all of our main categories. The only other thing I'll say in terms of, not only, I wouldn't say shifts in behaviors, but just something else we've pulled out from the data is that, everyone loves a good deal and good price points, but our audience is willing to spend more, especially when those items are either offered at a discounted rate for a holiday or something, or if we've worked with the merchant to get an exclusive discount for our audience, so we have also seen uptakes in that as well. But again, holistically, we haven't seen any huge shifts outside of, like I said, the online grocery, which again is expected given the situation we've been in.Stephanie:Yeah. That makes sense. Yeah. I saw for the Food Network, I think you had a subscription platform and you partnered with Amazon. Was that something that was already in the works, or did that get sped up once everything was happening with COVID?Chris:Yeah. So, that was already in the works with our DTC group, and for folks who don't know that's our subscription platform on the Food Network side that we call internally FNK, because it's just easier. And yes, that was in the works, and again we're working more and more in getting that to more and more folks who are really looking to get more classes, get more recipes, just be more intimate with our brand. Stephanie:Yeah. It looked very cool. I was on there looking around at, "Oh, you can follow these chefs and have cooking classes with them, and then you can tell your Amazon Echo to order it for you the exact things you need." And, it looked like it would be really fun to engage with that.Chris:Exactly. It goes back to that 360 approach that we have really been focused on, when it comes to our shopping portfolio.Stephanie:Yeah, that's very fun. So, you've talked a lot about partnerships where you've touched on a bit. But, tell me a little about what does a partnership look like from beginning to end? What does that process look like when you're finding a partner, figuring out how to actually strategically partner with them in a way that benefits both parties? What does it look like behind the scenes?Chris:Sure. So, I think there's really two paths there, there's the partnership stuff that we handle directly with merchants through affiliate networks, and so on and so forth. And, for that we do a lot of research on our end, again we already know what type of product hits, what type of merchants hit. So, one thing we do is take that and then say, "Okay. What are similar merchants in this space?" And then, we'll reach out and discuss the opportunity of working together on that front. And then I would say, on the other side, bigger picture stuff is, again, we're heavily embedded with our ad sales team on much larger partnerships.Chris:And, I think a great example of that is our shop the look campaign with Wayfair, which is a deep integration that spans across linear and digital that, again, was really spearheaded by our sales team that we then came in and assisted with. But, for folks who don't know, basically what this is, when you go to any of our photo inspo on hgtv.com, you'll see a little flyout of all the products within the image that are shoppable on Wayfair.com. And obviously, that's not just a basic integration that you just wake up one day and do. So for that, we came together and we've said, again, "What can we do that is going to benefit both of us, that's going to serve our audiences for the long run, and really make a successful integration here?" So again, that's what turned into shop the look.Chris:It's one of our best partnerships that we have across our dot-coms right now, and it's super successful, our audience loves it. And again, I think It's always starting with, "Well, what is the goal? And, what do we want to achieve from this?" I think sometimes people get too focused on, "What looks cool?" And like, "Let's just do that." We wanted to really focus on, "Well, what's the goal here?" And, what do we think we can create that's actually going, again, to help our audiences that come to hgtv.com be inspired and feel comfortable, making purchases based off of what they're seeing.Chris:So, that's really how we approach these, we're super particular about who we work with, and what that looks like. You mentioned the Amazon partnership, we have a really strong relationship with them as well. And for us, again, it's always looking at the brand and our audiences first and saying, "What makes the most sense for them?" And then, that's when we start peeling the layers here, and figuring out what are those experiences that we could bring to them on different platforms.Stephanie:Yeah. I think that's really smart. Like you said, not to just do something because it looks cool or seems cool, but actually do something that you know the audience will like, and will convert into sales to also help the partner. What are some of the success metrics for the shop the look campaign for example? What did you go into hoping to achieve when you set up that partnership? Is it affiliate based, or what do you guys look for and be like, "Oh, this is a successful campaign versus the previous ones that were maybe okay, or good."?Chris:Yep. So, I think just simply put it, consumption and sales are the big ones. Consumption being, are we seeing more and more folks coming to these different integrations across our platform, and then again how are they translating into sales? Looking at things like, "Okay, so we are getting them to Wayfair.com, but once they're on Wayfair.com what are they doing?" So obviously again, looking at conversions, average order value, so on and so forth. Again, just to really gauge what these audiences are looking like, as the days, weeks, and months go by. I would say, one of the things that we were looking for, especially as COVID first hit was, "Are we seeing an increase, a decrease? What are we seeing in terms of shopping behaviors across our platform?" And again, the metrics we looked at for that was, obviously, click through rates, conversion rates, average order value. Because we even saw in some instances where experiences weren't driving as many views or clicks, but the average order value was much higher.Chris:And again, just goes to show that our audience is a very qualified audience that trusts us, and is willing to spend with us. So, we try to pull out all of these different metrics. I think one of the things with commerce that is either for better or worse, is that you can't just look at one metric and just live and die by that number. So again, that's why we have a handful. And look, we also pivot based on what that platform is, what the experience is, who the partner is, so on and so forth. So, we don't have a one size fits all solution, again, that was done by design. And, that's how we approach these things. And again, just making sure that we stay true to who we are, and we're benefiting everyone involved.Stephanie:Got it. How do you keep track of, if there's a TV viewer who's watching HGTV, and then you're trying to send them to maybe Wayfair to shop that look like, what are the best practices with converting those people, but also keeping track of them in a way that's not maybe creates friction? Are you telling them, "Go visit this URL."? Or how do you go about that?Chris:Yeah. So, totally right. I think, obviously, the most common ways of driving from linear to digital is the QR code experience. And, we're actually working on some of those solutions as we speak and trying to understand, again, what will it take to bring more linear folks from TV down to digital, and like you said, make this a frictionless seamless experience? So again, is that as simple as a QR code, or again is this more about a stronger deeper integration that's a bit more sophisticated and partnering up with folks who can actually understand what is on screen at any moment, and then surface that product on screen.Chris:Again, if you have a smart TV and allowing folks to enjoy that experience, or again, when it comes to TV E we have our go apps that you could log into with your cable subscription. And again, obviously, it could be more sophisticated on your mobile device. So, what does that look like? Is it again, while you're watching it at minute three or whatever, five minutes in, do you surface what is currently being seen in the screen and saying, "Look, shop this room?" And, what do you do from that point down to the device. Can it be as simple as just a tap to buy, or do you have to tap and then open up a new browser window? What do those integrations look like? Again, ultimately trying to find the most frictionless experience. So, I think we're still experimenting with that. I don't think anyone in this space has really nailed that down in terms of what is shoppable TV, or just shoppable video in general? And again, how do we go beyond what just looks cool and turn that into actionable?Stephanie:Yep. Yeah, I think creating a frictionless experience is key, and there's a lot of room for innovation in that area. I'm even thinking about just Instagram, where I'll find a blogger I like and I really like her outfit, and then it's like, "Okay. Well, now go to the link in my bio." And then, that's going to open a LIKEtoKNOW.it app, and then maybe you'll be able to find the outfit. But at that point, it's probably just on the home screen if that new app. And, it just feels like there's so many places for a customer to drop. I guess I was just really eager to look at that outfit, so I stuck with it. But any other time, I probably would been like, "Oh, that's too much work." It seems like there's just a lot of room for innovation around this shoppable moments, whether it's TV, social, video, audio, anything.Chris:Yeah. I mean, I think you nailed it right there. I think Instagram is a perfect example, and that's a platform we're looking at as we speak, and we have some ideas around that as well. Because like you said, our goal here is to, how do we cut out all of these extra steps that are unnatural? Normally, when you see a product you like, you want to be able to say, "Okay. Great. Let me buy that." Not let me go to a bio, let me click this link, let me wait for this page to load, let me do that checkout experience is completely different from the platform I was just on. And then obviously, you're playing around with browser settings and everything else.Chris:So, I think you're spot on, and again that's something we're heavily focused on, again, literally as we speak. And, what does a more integrated Instagram shopping experience look like for Discovery and our partners? So, there's going to be more to come on that soon. But, we are thinking about that, and trying to find, again, these ways to make it as frictionless and seamless as possible. Again, no matter where our audience is consuming our content.Stephanie:Yeah. Well, it seems like if anyone can figure it out, it would be all because it's not like you're trying to put your products on someone else's show, or having to utilize someone else's platform. You have your own platform, you have your own shows, you can build new shows, and try out different ways to influence. There's shopping behaviors. That seems like there's just a ton of opportunity for you to experiment with everything that you all have.Chris:Yeah. No. A 100%, and those are these ad conversations we're having with a lot of our partners as well, and understanding from their world how they see it, and then bringing our world into that, and marrying that together, again, so we can coexist here, and at the end of the day just create a better experience for our viewers.Stephanie:Yep. Love that. So, what are some of your favorite platforms that you guys are experimenting with right now? You said, you were looking into Instagram, but what's really performing for you, and what are some of the more moonshot platforms that you're trying out, and you think it will be good, but you're not so sure?Chris:Sure. Yeah. I mean, obviously, the bread and butter is our shopping content on our dot-coms, those are our top performers. But, I will say some of the more areas of interest, again we already spoke about Instagram. But, another one where we are seeing some really good traction, believe or not, is in the Apple News space, most notably on Food Network. We're getting a lot of traction on that platform, and seeing what our audiences are resonating with the most on Apple News, which I again I know it maybe a shock to some folks, but I think-Stephanie:Yeah. So, tell you more about that. I mean, I have an Apple phone, but I have not opened up Apple News probably since I got the phone, so tell me more about, what are you guys doing there?Chris:Sure. Yep.Stephanie:Because you're the first person who said this.Chris:Okay. All right. Again, understood I know that's not always the first thing that jumps into someone's mind when you're talking about commerce, and lifestyle brands, especially because they name Apple News. But again, I know you don't really use it, but again this is just the basic free version that's included with your device when you get it. And again, we're syndicating our day-to-day content onto that platform. And, we've built really strong audiences across Apple News. And again, it's a similar experience to our dot-coms, just slightly different because it has to fit obviously the specs of the Apple News platform. But again, we just have seen some really strong successes in different areas, again most notably in the buying guide space, or sales events that are happening, and dabbling with pushing notifications for that.Chris:Obviously, with some of the recent shopping events that occurred, we built a push notification strategy around that as well, and it did really well for us. So again, I think that's one of those ones that is also intriguing to us. But I think, again, the high level, we really are trying to be everywhere it makes sense, but also really tailoring our content and strategy based on what that platform is. So, for some of the stuff that's working on Apple News may not make sense for Instagram or vice versa, so on and so forth. So I think, again, those are two areas. And I would say, the last thing that we're really, or me personally is really intrigued by, is this universal cart experience/straight to cart experience that more and more folks are dabbling with. There's a handful of platforms out there that can help publishers do this.Chris:And for folks who aren't familiar with this, it's basically saying, if someone comes to HGTV, or FoodNetwork.com, or tlc.com, and they see an item they like on there, instead of saying, "Buy now on X merchant site." And getting thrown off to that merchant, you could hit buy now, or add to cart, and you could actually check out within our platform, which I think is definitely going to be a big piece of the puzzle for the future of commerce on digital publishers. I think the big question will just be adoption, and then what does that look like. I think, again, Discovery is in a perfect position for this, because folks are already coming to us for this expertise, and know and love our brands already. So, there won't be a lot of convincing in terms of like, "It's okay to check out with us as well."Chris:But again, we're anticipating some shopping behavior adoptions that are going to occur during that process. But again, I think that's an area where you really start to open up a lot of new doors here when it comes to shopping for digital media sites. And, I think that's when it gets even more exciting for deeper integrations with Instagram shopping for example.Stephanie:Yep. Yeah, I love that. I mean, I'm excited to look into the Apple News more. And, I was just intrigued by that, because I like hearing things that others have not said yet. Because I'm like, "Oh, that means there could be opportunity there if you know how to work with the platform." Especially, if you can set up a push notifications. That's huge to make it in front of Apple users. And then yeah, I completely agree about the being able to shop instantly from a page. We just had the CEO of Fast on, Domm. And, I thought it was really interesting how he was talking about how every website should have buy now buttons under every single individual products, and he went into the whole thing of, "You actually will have higher conversions." Because of course, I was like, "Well, then you have to get past the minimum shipping amounts, and maybe higher order values, if you let me add stuff to a cart." And he said, "Based on everything they've seen, people will buy more if they can buy it instantly." And, it'll batch it in the background and ship it out after the fact, all together. So-Chris:Yeah.Stephanie:... I think you said it.Chris:Yeah. Convenience is key. I mean, everyone likes convenience, and again that's our hypothesis as well here, that we do plan to see increased conversions by building a more intimate shopping experience across our dot-coms with a lot of our partners.Stephanie:Yeah, that's great. So, the one big topic I also want to touch on was about audience development. So, when you guys, you have these huge audiences that you can tap into, but for especially a smaller brand, I want to hear how you all think about building that audience to then eventually being able to sell some products to them as well. What does that process look like? And, how can a new brand do that?Chris:Sure. So, I think first and foremost, I think it's important to understand what is audience development as it relates to your brand and organization. I think the biggest misconception with the term audience development is, "Oh, yeah, it's just another word for marketing." But it's not, and this has been written about it as well. And, I think the easiest way to think about this just in a very basic form is, marketing is more about how you want to look to the world as you bring those audiences in initially. More on the branding side of things, whereas dev is now like, "Okay. So, who are we to the world?" And, really drilling down on understanding those audiences that were brought in and who they are, and then building those audiences through different engagement tactics and community tactics.Chris:So, I think that's always a good place to start, to understand how those two worlds kind of then meet. And then once that happens, to answer your specific question, again start with understanding who your audiences are, and where they are. I think sometimes and probably not so much now, but in the past when I was first getting into this space, I think a lot of people just thought that, "Well, content is content. It could be put anywhere, and it's going to work the same way everywhere. Obviously not the case, even more so for shopping content, and behaviors. So, it's really, again, drilling down and pulling out insights based on, "Okay. Who is my Facebook audience? Who is my newsletter audience? Who is my Apple News audience?Chris:And, really starting there, and once you understand high level who they are, what they like, what they're consuming. More specifically when you talk about newsletters, what type of keywords are working to increase open rates, and so on and so forth, then you could start drilling down on the specifics. Saying like, "Okay. High level, here are the different topics and content archetypes that are working, now how do we build out an editorial calendar with that in mind." Again, with the understanding that we're not just going to set this and forget this across the board. What this looks like in newsletters is going to be slightly different than how we're positioning it on Facebook for example, and so on and so forth. So, I really think that's the key right there, and using data to your advantage and saying, "Okay. Well, here's all the different metrics that we're currently compiling, which ones can we look at, and pull from to better understand what these audiences are coming to us for." And again, working with your editorial teams, and the branding teams to bring that all together and say, "Okay. Now here's the plan for output."Stephanie:Yep. Got it. So, if you don't have an audience, and you're starting really from scratch, where would you start? Because I read quite a few articles, maybe from your past life at other companies about you increasing conversion rates by 60%, through maybe newsletters or increasing newsletter subscriptions? Is that maybe a place that you would start? Or where would you recommend someone brand new, who's like, "I don't really have an audience. I have five followers on Instagram."? What's the best way to acquire an audience and then keep them around to build it?Chris:Yeah. So I would say, if we're talking about limited resources and funding, I do think newsletters are a great place to start. And that's really because, it gives you an opportunity to have this one-on-one intimate relationship with the folks on the other side that for the most part you're not having to be held against what the algorithm is going to decide to show at any given day. Obviously, you have to worry about, spam and junk mail and things like that. But for the most part, if you're running a really clean newsletter list or lists, you don't have to worry about that so much. So, I do think, starting in the newsletter space is a really low budget, friendly way to start growing audiences, and it's really great to use as a gut check to see what is resonating. You could look at your open rates, you could look at your click to open rates.Chris:Again, you can monitor what the churn is and stop to see if what you're producing is causing people to drop off for good, so on and so forth. So I do think, for publishers where it makes sense that is a great place to start. You can obviously acquire new users through a bunch of different audience development tactics, whether it's on site widgets or modals, or do some small paid spend to try to bring folks in, and do the sweepstake partnerships as well. Again, obviously I'm a little biased, just because that is part of my background. But again, over the years, newsletters, again, I know they're not the sexiest platform to talk about, but they have been the most consistent in terms of performance and really bringing your most loyal and engaged users from that platform.Stephanie:Yeah, I completely agree. And, you also get access to quite a bit of data that you don't on other platforms, and if you can figure out how to properly engage with them, you could have newsletter subscribers for years to come, which is everyone's goal.Chris:100%. Yeah. And, I think even to take that one step further, you could even start to get more and more personalized where you get to a point where you're launching a newsletter to half a million people, and no two newsletters are alike because it's all based on past user behaviors that you were seeing within email and the dot-com, and again adjusting that based on different predictive intelligence tools. So again, I think 100% there's a lot there, and if done correctly, and go a long way. I mean look, this has been tried and true in the space. We see a lot of folks who start there, we're even seeing in the news media space a lot of journalists, and editors, and things like that backing off from the larger brands, and going this newsletter route to get their word and opinion out. So yeah, I think email is here to stay, and it's going to be a huge piece of the puzzle moving forward.Stephanie:Yep. I agree. So, you've been in the media world for a while, I think I saw at least back to 2012, maybe even before then.Chris:Yeah.Stephanie:I went as far as I could on your LinkedIn, I think it cut off.Chris:No, you got it. Yeah. I have been in media basically since the day I got out of college. So-Stephanie:Okay. Well, this is the perfect question for you then. What do you think the future of online commerce in media look like? Maybe in 2025 or 2030, what does that world look like?Chris:Yeah. So, I think it's going to be an extension of what we talked about a little earlier about this universal cart experience, and turning digital publishers into this space where audiences can come and also feel comfortable making those purchases. And again, not being bounced off to third party sites, and really being able to start building an even stronger shopping relationship with your audiences, because again with a universal cart experience, also comes a lot more first party data where you could, again, focus on more one-to-one relationships with your audiences, again, specifically in the shopping space, which I think is key.Chris:And, I don't foresee a place where merchants are going to have a huge problem with this, because, again, you're just helping to legitimize their product. Like your previous guest said about increased conversions. I think that's another huge piece of this puzzle. So again, it's really just now, again, bringing this all together, this whole 360 approach and saying, "Look, you're not just coming to us for flat inspirational content, you're now coming to us for the inspiration, and the ability to take action immediately." Again, versus being bounced off to one, two, three other platforms depending on which platform you're on, like your experience with Instagram.Stephanie:Yep. Yeah, I love that answer. Really good. So, now that we're talking a little bit about the future, what do you not understand today that you wish you did?Chris:What do I not understand today that I wish I did? That's a that's a good question. So, as it relates to commerce?Stephanie:Yep. Or the world, where you're like, "I really just wish I knew more about this." But yeah, it could be a commerce one, that would be cool too.Chris:Sure. I would say, I think not so much about not understanding this, but more not understanding why it's not better. And, that goes back to, I would probably say, affiliate data, and what that data looks like, and what partners have access to, or don't have access to. Obviously, being a part of many different networks, and merchants being on all different networks and so on and so forth, it becomes, quite difficult to manage all of that data coming in, and really having a platform that can easily bring this all together in a unified way. We do have a really strong partner that we work with to aggregate a lot of this data. Again obviously, it's never going to be perfect, because you're pulling it from all different places, and you have to understand, "Well, how does this platform leverage conversion rates and click through rates, versus this platform?" And again, just like, "What do those measurements look like?" And, the methodology behind them.Chris:So, that becomes challenging. But, I do think that's probably one of the biggest things that I just wish. And, I know it's not easy, hence the reason why it hasn't really been done yet. But, finding a more universal way to bring all this data into one data warehouse. Again, we were working on some stuff along those lines, but just high level, just generally speaking in this space, I do think that's one of the more challenging situations that a lot of digital media folks are in when it comes to with the shopping space.Stephanie:Yeah. That's a great answer. It does feel like a lot of technologies in general started out in that way. Very chaotic, things are everywhere, data is everywhere, and then things eventually end up in a dashboard, or it starts coming together in a more useful way. So, I hope that world comes to be in the future as well.Chris:Yeah. I mean, look, at the end of the day, that's only going to help all parties. It's going to help the audience, it's going to help the media company, it's going to help the merchant, so there's definitely reason to really get this right. But again, then, to do a bit of a 180, I think that's why you're going to start seeing these universal cart experiences take off more and more, because it does make that a bit cleaner in terms of what you're going to have access to and when.Stephanie:Yep. Very cool. All right. So, we have a couple minutes left, and I want to jump into the lightning round, brought to you by our friends at Salesforce Commerce Cloud. They're the best. This is where I'm going to throw a question in your way and you have a minute or less to answer. Are you ready?Chris:Let's do it.Stephanie:All right. What's Up next on your... Well, do you have Netflix? I would say Netflix, and I'm like, "He's going to be like, "No.""Chris:I do.Stephanie:Okay. What's up on your queue? And then, you can also tell me what's up on your Discovery queue?Chris:Fair. So, I'll start with us first.Stephanie:All right. Go ahead.Chris:And, I think this is so obvious, but huge 90 Day Fiancé fans. And, I will say my wife actually started that. I wasn't always, but she was like, "Come on, we got to watch it." And, this was a couple years ago. And, once I started, we have been heavily invested ever since. So, from a brand standpoint, we're 90 Day through and through. So, I think again-Stephanie:I like it.Chris:Yeah. Probably obvious to a lot of folks just because of the success of it, but that is our thing there. And then, she's also actually a huge fan of Discovery ID, it's her favorite channel by far. So, we got both ends of the spectrum there, right?Stephanie:Yep.Chris:Discovery ID, the DLC. But again, that just goes to show the strength of our portfolio. And then, on a personal front, I would say, what we're actually currently watching is the Borgias on Showtime. If you haven't watched it, I highly recommend it. But, it's three seasons, so that's good for me. I'm not a huge binger, but I can get through a three season watch, so we're currently in the middle of that.Stephanie:Cool. I have to check that out. Yeah. 90 Day Fiancé, so I have a twin sister, and she's obsessed with that show, and she's been telling me I need to watch it. And, I've been like, "No, I'm not watching that." So, now that you say you also enjoy it, maybe I'll have to want to check that out.Chris:Yeah. Come on. It's only fitting now. You got to at least give it a shot.Stephanie:Yeah. I think I will after this. That'll be the rest of my day.Chris:Perfect. So, I've succeeded tonight.Stephanie:You did-Chris:I converted someone.Stephanie:You can tell everyone, "I got a conversion."Chris:Exactly.Stephanie:What's Up next on your reading list?Chris:On my reading list. So, this is also probably slightly depressing, but I'm actually currently reading the Plague.Stephanie:That's [inaudible 00:49:47]. I mean, I don't even know what that is, but I'm like, "No." I mean, is it good?Chris:Yeah. I mean, so far, I'm only maybe a quarter of the way in. it's just eerily similar to the situation we're currently in, and obviously this was not written recently. This is old Camus. But yes, so that that's what I'm currently reading. So, not exactly an uplifting read, but I do think interesting to say the least in seeing some of these parallels that, again, just six, seven months ago we thought were just crazy things you would read or watch on Netflix.Stephanie:Yeah. Well, if you enjoy the full read, let me know, maybe I'll check that out.Chris:Will do.Stephanie:Next up, if you were to have a podcast, what would it be about, and who would your first guest be?Chris:That is interesting. If I had a podcast. For me, I think I probably wouldn't fall into the current podcasting world that pulls a lot of talent from different areas, and makes that the centerpiece of their podcast. I would much rather try to get in the weeds with folks who are making a difference on a local level. I think especially in this political climate, I think that sometimes gets lost that we think it's only the top that matters, and nothing lower does, which I think is completely false. I think everything starts at the local level. So, I would love to give more exposure and light to those folks who are doing the dirty work on the ground which, again, sometimes gets lost in the standard media cycles, or across social media for example.Stephanie:Yes, I love that. It's also something we're exploring here at Mission is local level podcasts, because I think that's what people are leaning into now. They have lost that also a sense of community with everything that's been going on, and you might want to know what your neighbors or community is up to, and also what they're doing, like you said, on the ground level. The next one-Chris:100%. I think it's super important. Go ahead.Stephanie:Yeah. What does the best day in the office look like for you?Chris:The best day. So, when that was a thing-Stephanie:When you went to the office, and you weren't just in your house in New York.Chris:Exactly. Honestly, the best part about that is, being able to... And, now I feel it even more, is having that change of scenery, and being able to have those face-to-face interactions with folks. I recently read a study where, I think it came out that people were actually working longer hours, and having more meetings, while working from home, because they don't have those passerby conversations in the hall, or going in and out of the restroom, and so on and so forth. Which, again, I don't think people appreciate until it's gone. And for me, that's been a huge piece of the puzzle that's been missing during these times is that, human interaction. I think everyone wants to think that working from home is the future, I'm just not sold on that yet.Stephanie:Yeah. I think the flexibility, maybe, but I think a lot of people are eager to get back and see their coworkers, and have coffee together and whatnot. So, there'll be pent up demand, as economists would say.Chris:Exactly.Stephanie:All right, Chris. Well, this has been such a great interview, where can people find out more about you and all the fun work you're doing at Discovery?Chris:Sure. So personally, you can find me, Chris Mainenti on LinkedIn, and we can connect there if you'd like to chat further. But more importantly, if you love our brands, you know where to catch us on TV. And then, similar to dot-com, HGTV, Food Network, TLC, Travel Channel. We're everywhere and we look forward to continuing to serve our audiences wherever they are, and really helping them through these trying times that we're all in.Stephanie:Yep. And most of all, go watch 90 Day Fiancé, everyone. I mean, I feel like you need that fun.Chris:Exactly. For the handful who haven't yet, including you, obviously.Stephanie:Yeah. I know. Such a veil. All right. Thanks so much, Chris. It's been fun.Chris:Likewise. Thanks so much again. Bye-bye.

Entrepreneurs are, by nature, risk-takers. But most would still think it’s crazy to invest your entire life savings on 300 gallons of rosé. Nevertheless, that’s the true story of how Alix Peabody started her company, Bev. Sold online and in-store, Bev is a made-by-chick alcohol company famous for its canned rosé.  Alix says that Bev’s secret to success is built on some key pillars, the most important of which might surprise you: customer service. On this episode of Up Next in Commerce, Alix explains why ecommerce brands should be investing heavily into their customer service operations. Plus, she reveals how she is capitalizing on the huge percentage of buyers that come from mobile.  Main Takeaways:Integrate Customer Service into the Company Culture From the Start: Too many companies gloss over the importance of having a good customer service operation that is integrated into the company as a whole. There is a real importance to this team, and it is critical to understand how influential and impactful they are when it comes to new product development or flagging recurring issues that could turn into beasts down the road.The Influence on Mobile: A staggering percentage of ecommerce orders are taking place on mobile (I bet you can’t guess exactly how high this percentage is for Bev!), which makes investing in a frictionless mobile experience a must-do for brands.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome to Up Next In Commerce. This is your host Stephanie Postles, Co-Founder at Mission.org. Today on the show, we have Alix Peabody, the Founder and CEO at Bev. Alix, welcome.alix:Thank you so much for having me.Stephanie:I'm excited to have you on. It feels like the perfect environment to talk about beverages with everything that's going on.alix:Oh, my gosh. Yeah, I mean, so much consumption in my world for sure. It's been a little bit of a crazy time.Stephanie:These days, I have to limit myself. Wait, did I just have wine yesterday, the day before, and the day before? I need to chill. I have to pull myself [crosstalk 00:00:39].alix:Yeah, 100%. I mean, it's funny too, because we've got moms with kids working from home and people trying to separate their days and all that kind of stuff. So, I feel for them, but glad we can be here to help.Stephanie:Yes, me too. So, I have read your backstory a little bit of it. You have a crazy backstory of why you started this. I was hoping you could start there where you go through, "What led you to starting it?"alix:So, it's a crazy story. When I first moved to San Francisco, I was 24. I'd been working in finance for a couple of years. I moved out there thinking I wanted to learn a little bit more about the whole startup world and all that stuff. I took a job as an Executive Headhunter helping startups place C-suite level employees essentially. Right when I moved there, I got pretty sick. So, I had a whole bunch of issues with my reproductive health system. I was totally drowning in medical bills. I was trying to figure out, how I was going to pay for all this stuff. I had to freeze my eggs. It was a total nightmare. I started throwing these parties. I was charging tickets for these parties, which people didn't realize I was using to pay down a whole bunch of medical care.alix:I went to a school that was very frat centric. I worked in finance, and I was in tech. I've always cared a lot about gender dynamics and drinking culture and how we interact with one another when our guards are down. I started to notice that there was just a really different energy when you're in a female-owned social space. At that point, I realized that I wanted to do something that addressed that in a way that was positive and fun and approachable. So, I started looking around, realized that I was going to really need a product to sell if I wanted to have a brand and a mission. Alcohol seems like the lowest common denominator. So, I weirdly ended up in wine.Stephanie:At the perfect spot to land. I mean, so tell me a little bit about you come on to this decision that you want to start in the alcohol industry. What happened next?alix:Yeah. So, I knew nothing about booze, I knew nothing about the industry. I really wanted to make a voice for women, and we say, good dudes, in a space where there just really hasn't been much out there. So, I tried to figure out, "How was I going to sell this product?" There's so much legal stuff that goes into the industry in general. It's so hard to get on a shelf, because you have to go through all of these different loopholes. So, I realized that there was a loophole to the system, specifically in wine.alix:The reason for that is basically that if you're a California vineyard, you can have a tasting room and a wine club. So, I realized pretty quickly that I was going to need to have a wine-based product if I wanted to be able to sell online. So, that I could have a proof of concept before trying to get onto the shelf. That's how I ended up with rosé in can as our first product.Stephanie:And beautiful can.alix:Thank you. Thank you so much. It's funny. My cousin's handwriting is actually what's on the side of the can, once our origin logo.Stephanie:That's good handwriting. I would not have known that's handwriting.alix:Yeah, yeah, we had to make our own font. It's funny, but anyways, yeah. Basically, at that point, I realized I had a 401k from my first job, but I'd forgotten about. I cashed the whole thing, bought 300 gallons of rosé. We were off to the races.Stephanie:That's amazing. Where did you even send these 300 gallons of rosé?alix:Yeah. Actually, I wasn't even... Don't tell anyone I said this, just kidding to anyone who's listening, but I wasn't even licensed at the time when I made our first proof of concept. So, I wasn't allowed to sell it. I technically purchased it from a winery under their license as a direct to consumer sale. So, I used the product to go seed investors basically. I would bring it to all of these different parties. And then a couple days later, I asked for an introduction from a friend to a potential angel investor. They'd be like, "Oh, my gosh. That stuff was everywhere." But I actually put it there. So, it was just the hustle is starting together original around the funding.Stephanie:So, since you bought that 300 gallons of rosé for $20,000, have you changed the product? Is it a new different wine now? From where it started, where is it today?alix:Honestly, we hit it pretty well in the beginning. Wine is so interesting, because there's so much chemistry that goes into the profile of making it. So, we basically done a whole bunch of blind taste tests of a bunch of different types of rosé and just went to our winemakers. We're, like, "Build us this backwards." So, there's definitely been some fine tuning and making sure it's as delicious as possible and sugar free and all that stuff. But it's pretty similar to what it was at the beginning. Now we have additional products as well that all have a similar profile but are different varietals.Stephanie:Okay, cool. What's the strategy behind putting it in the can?alix:Yeah, at the beginning, people ask me this a lot, because they're like, "Oh, cans are exploding. This is such a new category." When I did it, it was not normal. It was super hard to find somebody who would even can it. We're talking three years ago before you really saw any canned wine on the shelf. The reason I did it was pretty practical. I had no money, right? So, I was like, "How am I going to make something that is branded, and that people recognize if you pour it into a glass and you don't know what it is?" Right?alix:So, in my mind, I was like, "Well, if I make it almost like Red Bull-esque, where it's a really identifiable can, it's cute, it's Instagram friendly, the product will start to market itself." That's how it ended up in a can't honestly. It was no real strategy at first, but I also wanted to really be able to play against the beer culture, which that seemed to make sense at the time.Stephanie:Yeah, I mean, that seems like such a great way to get that word of mouth marketing working for you, just like it worked in the beginning with investors, but also, having something that people share where it's different. I mean, even thinking about the amount of bottles of wine, I wouldn't think to share one of them or even remember half the time where it came from or the brand that's behind it. So, it seems like a really unique way to get people to share for you.alix:100%. If it's cute enough and fun looking enough and whatever, people want to take pictures with it. They want to be seen holding it. I think, beverage is such an interesting category, because people don't realize how emotional it is. But brands really drive a lot of the purchasing power in terms of what people choose to consume, because it says a lot about who you are. Think about Monster versus Red Bull, Fiji or whatever it's called versus smartwater. It's more emotional than people realize off the bat.Stephanie:Yeah, I love that. So, how are you going about garnering that emotion and developing that community, which seems like a very important part of why you even started this company? How do you do that day-to-day now?alix:Absolutely. I mean, there are so many different ways. I think we really are digitally native brands, which is such an overused term, but we've really been able to build out a community online and get our message across through our social platforms and all those types of things, where people really know what we're about and who we are and why we exist.alix:Originally like last year, there was a lot of event-based marketing that we did, where we had actual events that people could really get to know the brand and obviously that all came to a quick halt in early 2020. But now we have brand ambassador programs that actually have community ways that they communicate with each other. They find people to go out with together, even like housing. It's really become more than just a brand ambassador in the traditional way, but a real community where they are communicating with each other as well as with the company.Stephanie:That's great. Have you seen any success with virtual things? I mean, you mentioned that brand ambassador and building a community online, but are there other things that you took your event budget and moved it over to something new to try out virtually?alix:Yeah, I mean, we've done a few virtual events. I think people got a little tired from them a little early on. I think, where we've seen a lot of word of mouth growth and that kind of thing is actually because of the form factor, it's so easy for social distancing, right? You don't have to split a bottle of wine and use glasses. It's sanitary, stuff like that. We've seen a lot of word of mouth coming from people ordering cans and being able to sit outside far apart and enjoying the same thing, which has been pretty interesting and not something that I would have thought of originally when COVID hit. But that's definitely been something that's worked in our favor.Stephanie:Oh, that's really interesting. Are you leaning into that trend once you started seeing it pop up, starting to create conversations around that and showing, "Hey, look at what our other customers are doing"?alix:Oh, for sure, for sure. In addition to that, in what we call on premise, like bars and restaurants and stuff like that, it's so much easier for takeaway, right? Ordering something, being able to throw a can in a bag and go do your thing has been something that's been helping the category all around.Stephanie:So, when you were building out your ecommerce platform and thinking about building out a shopping experience to sell alcohol online, especially one that caters to women, how did you think about setting up your website in a way that someone would go there and be like, "Oh, I want to order this right now," or "I really feel a connection with this brand"? What things did you implement or personalization did you implement on the website? What things did you build out that really worked?alix:Yeah, I think it's funny, because when we first built the website and my Head of Marketing, who also happens to be my husband... He's awesome. Well, that actually happened second. He was recruited once after we got married. He was telling me, "We have to invest in the website. We have to invest in the website." At the time, honestly, I didn't get it, right? I was like, "Our website looks fine. It's cute. It's whatever." I'm so glad that he did, because it's made frictionless buying... I've started to realize just how important that is. Things like Apple Pay and making sure that the website's easy to navigate has really converted for us.alix:I think the other thing, from an emotional perspective, it's been important for us to really makes sure that who we are and why we are is front and center and easily accessible. That's something that, I think, people start to poke around the website. They start to really get, I mean, I hope so anyway, who we are, and that brings them into the family more. We've seen that our repeat purchase rates are really strong, because people become such advocates of not just the product but the brand.Stephanie:That's great. Because we've talked about this quite a bit, on-the-shelf brands like Bombas or Yellow Leaf Hammocks. There's always this tricky balance between selling the brand and everything you're doing around the brand, maybe the social good aspects or things like that, but then also selling the product and making sure people know the products very good. How do you think about that balance, especially on a website where someone could quickly just come on there, look at something, and then hop off?alix:For sure. My favorite compliment is, "Wow, it's actually delicious," because that means that... We get that all the time, where it's like, "Oh, this is actually really good." I'm like, "Well, yeah. I mean, duh. I'm not going to sell you something that I wouldn't want to drink." But I love that, because it means people don't expect it to taste how it does out of the can. It's great. But I think focus is so important when it comes to that. I think the way that we really try to attack marketing is making sure that the messages that we're sending aren't too many. They're very focused on what we want to do, right. So, for us, it's really Made by Chicks, zero sugar product. Our mission is break the glass, right? That's what we really try to hone in on.alix:I think there's a lot of A/B testing that goes into, "Okay, what consumers are really looking at the products and are buying for the first time, because of the product versus buying for the first time because of the brand and the mission?" I think a lot of the times people are going to buy a product that they're excited about or that they've heard about or that they want to try. If they if they like it, that's just straight table stakes. That's when you start to see repeat and people really start to become evangelists. So, it is a fine line and one that I think is constantly evolving, but something I think the team has done a pretty good job of navigating and just making sure that it's focused.Stephanie:Yeah, that makes sense. The brand can draw people in or the purpose can draw them in, but then you have to have a good product. That's how you get your repeat buyers.alix:Oh, for sure. Yeah. It's table stakes, right? If it's not delicious, it's not actually delicious.Stephanie:Yeah, actually good.alix:Yeah. If it's not actually good, then you're not going to get what you want.Stephanie:Yup. So, earlier, you're mentioning about investing the website. What were some of the biggest changes that you all made? You mentioned frictionless buying, but what other things did you update where you were surprised by increases in the metrics you're watching or performance or buying rates?alix:Yeah, well, everything. I mean, we had to redo the entire thing. For us specifically, there was a lot of programming that had to go to the back end to make sure that everything was compliant, because we are alcohol. There's a lot of legislation rather. There was a lot of build out that had to go into that. alix:And then I think the other things that helps are having things like a chat on the site, where you can reach out to customer service and these types of simple things. We're continuing to expand on that and stuff like loyalty programs, because the repeats are so strong. People want to recommend it to their friends. There's been a lot of different things of that nature. Also, just making sure that the tech stack on the back end is strong, so that we're learning right and evolving as we see customer behavior.Stephanie:So, you built out this new platform. You're trying out chat bots and everything. What kind of metrics are you monitoring to see if things are going well? What do you look at every day or week?alix:For sure, I mean, obviously, top line, we're looking at AOV, average order value. Lifetime repeat rates are huge. We have a subscription service on our website as well, because people really love their wine. So, making sure we're keeping an eye on churn. Things of that nature are pretty straightforward, but I think all of that is really important in understanding the health of the online business and the brand.Stephanie:How do you keep customers engaged? Whether they're in a subscription or they just bought for the first time, what kind of methods are you using to engage with them and keep them coming back and keep them subscribed?alix:Well, we have a fair amount of email marketing that we do that we found works really well. We try to make sure that we have content that's interactive. I think one of the things that really surprised me at the very beginning of takeoff is customer service and how critical that is, right? You can turn somebody from a "Karen," if you will, into an evangelist with a strong customer service team. I think people underestimate how revenue generating that can be. So, that's definitely been a big thing for us.alix:And then in addition, we've been doing SMS and a lot of things that keep us top of mind without oversaturating people's inboxes and having them unsubscribe or anything like that. The other thing that I think is important is just... My husband always says this, "Say what you do and do what you say," right? So, make sure that we are delivering orders on time. If we go out of stock, people will drop their subscriptions, because they got their most recent one later than they thought they would. Now they have too much wine or stuff like that. So, really making sure that the execution behind the marketing is there is so critical.Stephanie:So, I want to dive a bit deeper into that, building out a good customer service team, because I think that's something that's really important that I don't see enough brands investing in. I want to hear how do you go about building a team like that, who can, like you said, turn a Karen into a loyal customer? What kind of training are you giving them? How do you think about building up that team?alix:Yeah, so that team is really at the end of the day, the heart and soul of the organization. I think a lot of places make mistakes and not treating it as such. They're the voice of the brand. They're the literal person that people are communicating with. So, we actually have a policy where anyone who starts especially on the marketing team has to do two weeks of customer service, they have to understand who our customers are, how we talk to them, how we interact. It's critically important. I think that team has to be so well-trained on culture and brand voice and mission and making sure that they're constantly getting better and getting better, right?alix:So, implementing new systems, pulling insights from our customers, seeing what they're asking for, which helps us decide what new products to develop, all of those kinds of things. So, I think a lot of the time, those positions can be undervalued. At the end of the day, that's where you're going to get so much information and so much communication with your customer and so much insight into what you should be building.Stephanie:I can see there being a lot of value too with, like you're mentioning, gathering that feedback and seeing what customers are asking for, seeing what the conversations are, and then doing a full circle back to the team. So, then they know, "Okay, here's what other team members keep having to respond to. You probably will, too," and just using it as a training method as you ingest that data and getting it back to them.alix:Yeah, exactly.Stephanie:So, with that customer servicing, when you're getting all the feedback and all the data, how do you go about organizing it in a way that you can make decisions off of?alix:So that is really the team lead, right? She pulls together reports for us on a weekly basis that are major insights. The team under her flag certain things in different categories, whether it's major complaints that we're seeing or major requests or what some of the positive feedback might look like. Obviously, to me, the negative feedback is more important, because that's where the real learnings are going to be. But we have a system of tagging in various categories to make sure that we're pulling those insights into the metrics that we find important. If people are choosing to cancel, why are they choosing to cancel thing, things like that. So, that's reported up. We have consumer insights meeting at least every other week.Stephanie:Yup, that's cool. What are some of the most surprising insights or complaints that you've gotten that you were like, "Oh, I wouldn't have expected that"?alix:Unfortunately, some of the ones that I've found to be the most upsetting are people who like the product but don't agree with how we communicate about the social issues we care about.Stephanie:Oh, I see.alix:Yeah. That's been a tough line, because we're here with a very specific mission and purpose. We are about women and women and men treating each other right and addressing toxic masculinity in a happy way. We're very clear about our communication around things like sexual assault in our industry and date rape culture and all that stuff. I've had moments where people... They're like, "Keep your views to yourself, I would have kept drinking your product otherwise," or whatever it is.Stephanie:Oh, my gosh.Stephanie:Well, I am happy that you guys stood up to those people, because I think there's going to be room for more brands to start speaking up against crazies, because right now, I do feel like a lot of brands actually sometimes get bullied by whoever's loudest on the internet.Stephanie:I think there's a lot of room for more brands to speak up like that behind the decisions that they're making, instead of just conceding to the loudest person on the internet, which might not even present the majority.alix:100%. I mean, the loudest people are the ones that drive conversation a lot of the time. I think brands fail when they try to be everything to everyone. That's not a brand. That's just a thing. We are who we are. We care about what we care about. That's where you're going to be the difference between a product and a brand that has real lasting power.Stephanie:Yeah, I love that. That's a good quote. So, with everything's going on with a pandemic, have you seen buying behaviors change? Earlier, when you were mentioning about reasons people are canceling, have you seen new reasons pop up for why they're canceling that we're different than months ago or why they're buying that's very different than six months ago?alix:Yeah, I mean, six months ago, it was harder to get people to buy alcohol online, right? It's generally you're going from one place to another. It's oftentimes an impulse purchase. You're on your way to a friend's house or on your way to a party. I would say we've seen an uptick in the way people are purchasing our products more than we've seen some of the difficulties that other brands are seeing during the pandemic, because they don't want to go out. This is not something that historically people buy in a forward looking predetermine fashion, if that makes sense. That's changed. They want things at home. They don't want to have to really think about it. They're not going out as much. So, that's been huge for us, where we've actually seen a huge lift in online purchasing and online subscription.Stephanie:That's good. How are you guys leveraging mobile? I know earlier, you had mentioned SMS. How do you think about that, especially when it comes to mobile ordering?alix:We definitely do SMS marketing. Like I said before, making sure that the mobile experience at our website. Honestly, I believe it's about 70 to 80% of purchases are made on mobile.Stephanie:Oh, wow.alix:Which is crazy.Stephanie:On your website?alix:Yeah, on our website on mobile, which is pretty nuts. Yeah. I was really surprised by that that people are buying on their phones, because they're seeing it on Instagram and TikTok and all of these different outlets, where they're sitting on their phone and they're clicking through. So, making sure that process is seamless has been really important.Stephanie:That's huge. That's a very big number. I wouldn't expect it to be that high on your website. So, where are these customers coming from? What are your best channels right now, where you're getting the most customers from?alix:We're really trying to diversify away from just Facebook and Instagram. Though obviously, that's a big funnel for many brands, but it becomes addictive. It can be fickle and expensive. So, we're really trying to diversify different ways that we acquire customers that are more organic, whether again, that's our brand ambassador program, influencer programs. We've actually seen a lot of success on TikTok. That's not paid, because we're alcohol. So, we can't actually advertise on TikTok. So, all of that has to be organic and influencer driven. Funnily enough, I was pretty surprised, but we've seen a fair amount of return on podcast advertising as well.Stephanie:Oh, that makes sense, because podcast listening is up as we know. So, yeah, that makes sense for that to work out well.alix:Yeah. Our email marketing is pretty strong. So, once people are in the funnel, we do see a fair amount of lift with emails. Just making sure that all of it is on brand and the brand voice is really consistent and makes people feel like we're not just a bot, but we're real people that are reaching out to them, we've found to be something that consumers get excited about.Stephanie:That's cool. So, earlier, you just mentioned about influencers and TikTok, how are you going about partnering with influencers? Who do you find to be the best influencer? How do you find those people? How do you work with them? Because we've got a lot of listeners ask about working with influencers and that people don't really understand, "How do you start those relationships? Do they actually have a good ROI? How do you find good ones?" So, let's start with that.alix:Yeah, I mean, it's tough, right? I think we're in a very lucky position, because nobody is going to say no to free product.Stephanie:Okay, that's how you get them in. You offer them free products.alix:For the most part. Do you want to try this out? Here's what we're all about. Here's who we are. Making sure that those interactions are direct and actually a real person, not templating things. Doing your research on what these people are about, who their following is rather, how engage they are. Really doing your homework and being thoughtful in the way that you partner. I'm a huge advocate of quality over quantity. So, I would rather have a longer term partnership with a fewer number of people, where they're repeating rather than just one huge post from a large scale influencer. We've seen bigger ROIs on the smaller people with the higher engagement.Stephanie:Yeah, yeah, I've heard that same theme. Is there a certain level where you're like, "Up until this point, if they have this many followers or less, free product will win them over. And then after this point, then they're just going to be looking for money or something else"? Is there a certain barrier maybe?alix:It varies. It really varies, because I think, for us, people get excited about us for different reasons. As I mentioned before, whether it's product, whether it's the mission and they just want to get behind it, whether it's just being part of the community, right? So, we've seen people want to post and engage for all sorts of different reasons. There isn't really a fine math to it. I would say, the more macro the influencer is, we found the more that they want to get paid. But also, it really depends on who it is. But by and large, I would say that the returns are not as good.Stephanie:Yeah. Yeah, that's good to know. So, what is a favorite piece of content that either you've created, or an influencer has created, where you're like, "This is really fun or funny," or drove a lot of purchases, anything come to mind?alix:So, we have a small silly thing that we do. We have this weird sub cult of grandma's drinking Bev.Stephanie:Oh, my gosh. That's great.alix:Which is funny. So, there's this one influencer we've worked with called Ms. PattyCake. She's done the funniest content for us, where she's just this fab grandma. She'll like dress up in full extra clothes and be drinking our cans of wine and stuff like that. So, I mean, that's one of my personal favorites. Whether-Stephanie:That's greatalix:... it's going to drive the most traffic, I couldn't tell you. I mean, another partnership that we did that's been really great is Serena Kerrigan and her Instagram show, I don't know if you're familiar with that.Stephanie:I'm not. Tell me about it.alix:Yeah. Yeah, totally. So, during quarantine, she basically created like the first reality television show on Instagram. She started going on live dates on Instagram Live with random guys from her house. It became such a funny cult following thing, where people were just login. It's actually on Wednesdays at 8:30 most the time just to watch her go on a date, whether she goes on the second date or whatever. So, we sponsored her for her second season. I think that's one of the big things too. The bigger the influencer is, the more brands they're working with. We really like to find people who are fun and own themselves and very mission aligned and empowered that are earlier and up and coming. We found that to just be way more effective.Stephanie:That's great. I need to go and watch that. That sounds really funny. How did you find her? How do you find these smaller people? Because that always seems like the hardest part for me anyways. Think about like, "Oh, go find an influencer, who has a good following. These people will actually want what she has or he has, but they're not too big where they don't ask for crazy things." How do you find those people?alix:That is a great question. The team is really good at that. I'm not necessarily doing this all myself these days, but I would say that it's especially tough for younger brands, because there is such a capacity constraint in terms of time. It really, really is a full time job keeping your finger on the pulse on what's going on social, right? I think it changes so quickly. What people are doing online changes so quickly. I mean, they can change in the day, right?alix:Making sure that you're that you're responding without losing your authenticity, and also, just being engaged with your consumers and who are they following and what are they excited about and seeing if those audiences are like-minded people. It's a lot of keeping your finger on the pulse. Frankly, it's a lot. It's a lot of time.Stephanie:What are you seeing when you sponsor a series on Instagram like that, where it's more product placement, where it might not be something that that person is referencing but she's in the scene; versus the ROI on a platform, maybe like TikTok, where they're probably putting it more front and center? That's what their post is about. What kind of ROI should someone expect when utilizing these two different methods?alix:I mean, honestly, it varies, because a lot of the time in TikTok, it's not necessarily just about what the product is. A lot of the time, it is something that they just happen to be drinking while they're saying something funny. And then they might like off the cuff mention it. Whereas on Instagram, you're looking at more of a hard post. You can track the ROIs with specific codes that you're giving influencers and stuff like that.alix:So, it's something that I think we're really trying to fine tune in terms of, "How do you track those ROIs in an effective way?" But for us, we've seen that TikTok engagement in particular is really interesting, because it's still newer and the algorithms aren't as tightly figured out as Instagram is from what we've started to see. So, the ROIs can be much higher. But again, it totally varies, and it really depends on the content of the person.Stephanie:Got it. That makes sense. Are you working on any new crazy things like crazy marketing campaigns or channels that you're trying out or anything where you're like, "I have no idea if this will work, but we're going to try it"?alix:Absolutely. I mean, we're really trying to build out our own content marketing platforms. We launched a podcast that did quite well, that I was actually the host of.Stephanie:Nice.alix:It's called Made By Chicks. Yeah. So, figuring out we're trying to build out more of, "What does our newsletter look like? How are we bringing value-add content to people? How are we doing it in a way that's not necessarily just sales emails, but really addressing who we are and giving people value outside of our product alone?" Right? So that's one of the big challenges that I think we're going to see in 2021, is "How do we build that in a way that has a strong ROI? What do those ROIs look like? What kind of partnerships can we get involved with?" These types of things is something that we're really going to focus on for next year to get away from the Instagram addiction, if you will.Stephanie:Yup. Yeah, I think it's good to start exploring new things like that. Yeah, we work with companies all the time, who are thinking about building podcast or sponsoring podcasts. It's definitely a good avenue to explore, because it's only increasing. At least podcasting is only increasing, not people listening.alix:For sure, for sure.Stephanie:All right, so let's move over to the lightning round. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Alix?alix:I am so ready.Stephanie:Alright. First, we'll start with the hard one, what one thing will have the biggest impact on ecommerce in the next year?alix:What one thing was the biggest impact on ecommerce? I think the biggest thing that will have an impact on ecommerce is the social climate.Stephanie:Tell me a bit more.alix:I think it really depends on what happens with COVID and civil unrest and all those types of things, because that's what really starts to clog up people's feeds. They're seeing a lot of that. So, that's where we see tax increase dramatically is when there's a lot going on in the world around [inaudible 00:44:21].Stephanie:Got it. Makes sense. That's a good one. What's next on your reading list?alix:My reading list?Stephanie:Mm-hmm (affirmative).alix:Never Split the Difference, which is a negotiation book from I believe it's a CIA interrogator.Stephanie:Yeah, we just had someone else recommend that. I think it was just a couple of episodes ago.alix:Oh, really?Stephanie:Yeah, that's popular book. Definitely check it out now. What's up next on your Netflix queue?alix:Oh, I mean, obviously, The Crown, definitely watching that. The Queen's Gambit was amazing too.Stephanie:Yes, I'm watching The Queen's Gambit right now. It's so good.alix:It's amazing.Stephanie:I have to check out The Crown. I haven't seen that one yet though. I always just take recommendations from our guests. That's what guides my Netflix queue from all you guys, so.alix:Well, yeah, I would love any recommendations, because I feel like the whole world has just straight up run out of Netflix.Stephanie:I know. Yeah, we got to make more content. We need it.alix:Exactly, exactly. Give the people what they want, Netflix and Bev.Stephanie:What one thing do you not understand today that you wish you did?alix:Can it be about anything?Stephanie:Mm-hmm (affirmative).alix:I wish I had a better grasp on American history. I went to high school abroad. So, I actually missed my junior year when you're supposed to take American history. I was taking history abroad. So, I actually don't have a great background in that. I really wish I did, especially right now.Stephanie:Oh, that's a good one. I always say history repeats itself. Yeah, it's something I have to-alix:It does.Stephanie:... dive into deeper as well.alix:It does indeed. I wish I were better at reading biographies and historical books, but I'm not.Stephanie:Yeah. Well, hey, there's so much going on right now, but that's a good thing to lean into. The last one, what piece of tech is making you most efficient right now?alix:Superhuman with email.Stephanie:Oh, do you like it?alix:Yeah, I love it. It's definitely helped with my efficiency dramatically. Yeah, I wish I could say Asana. My team uses it very well. I'm a little bit of the slow adopter, but Superhuman has been really awesome.Stephanie:Cool. I have to check that out. Yeah, I've heard so much about it. Maybe something you can check out next. All right, Alix. It's been awesome having you come on the show. Where can people find out more about you and Bev?alix:Absolutely. So, you can check us out at drinkbev.com and follow us on Instagram, @drinkbev. Subscribe to our newsletters.Stephanie:Awesome. It's been a pleasure. Thanks for joining us.alix:Thanks so much.

They say that laughter is the best medicine. For Colin McIntosh, it’s also been a pretty good business strategy. After a couple of fits and starts in business, Colin found himself with no job but quite a few domain names in his possession, all of which were pun-based. So he cycled through what he owned and formed a plan to build a company in a disruptable industry where he could make a splash and earn some market share. What he landed on was Sheets & Giggles, a direct to consumer bedsheets company with a social good component that became the most successful bedsheets company to launch on the crowd-funding site, Indiegogo. Since then, Sheets & Giggles has grown to millions of dollars in sales. On this episode of Up Next in Commerce, Colin gives the behind-the-scenes story of building Sheets & Giggles, including how he worked backward to build an email list that led to an unprecedented 45% conversion rate. Plus, Colin dives into the pros and cons of selling on Amazon, and gives an exclusive preview of some of the ad copy he’s working on to bring more humor to the Sheets & Giggles campaigns across channels.   Main Takeaways:Going Backward: In order to meet your goals, it’s sometimes useful to work backward. Define what it is that you want to achieve and then reverse engineer the steps you need to take to get there. Navigating the Amazon Waters: DTC founders agree that Amazon is simultaneously the best and worst partner you can have. There are pros and cons to working on the platform, including massive discoverability but also deep cuts into profit margin. It’s important to weigh all the pros and cons of selling on the platform and find the strategy that works best for your brand and that leaves you with more of the pros than the cons. Laughing With You, Not At You: Selling with humor is an effective strategy if you can actually get potential customers to engage. Consumers are reading less and less, so if you are going to use humorous copy, it needs to really resonate, grab the attention of the customer, and get them to keep going along the customer journey. It’s easy to be funny just for the sake of being funny, but you have to remember that the ultimate goal is to sell the product, so there needs to be a call to action.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, this is Stephanie Postles, Co-Founder of mission.org, and your host of Up Next In Commerce. Welcome back. Our guest today is Colin McIntosh, the Founder and CEO of Sheets & Giggles. Colin, how's it going?Colin:Pretty good. Thanks so much for having me today.Stephanie:Yeah, thanks for coming on. I was very nervous about messing that name up. I'm sure you get that a lot.Colin:MacIntosh, McIntosh. Yeah, [crosstalk 00:00:28]-Stephanie:Oh, I meant your company name.Colin:Oh, Sheets & Giggles. Yeah. No, of course. Yeah, sorry. I feel like I've gotten so used to it now, I don't even register it anymore. But yeah, you can call it S&G for short, so that way you're not laughing every time.Stephanie:There you go. I like it. So, before the show started, we were going a little bit through your background, which I think people would like to hear before we get into Sheets & Giggles. So, I'd love for you to kind of start there. How did you come to founding Sheets & Giggles, and what came before that?Colin:Well, a lot came before. It depends on how far back you want to go. I graduated from Emory University's business school back in 2012, and I started my career at the world's largest hedge fund in Connecticut, a place called Bridgewater Associates. And, the founder there, a guy named Ray Dalio, is pretty famous nowadays. And, I got fired in about five months, which was great being 22 and losing your first job in a strange state that you don't know anybody in. And then-Stephanie:What happened?Colin:Well, I was terrible at my job. So, [crosstalk 00:01:33]-Stephanie:Five months is not enough time. How did they even know?Colin:No, Bridgewater is usually... They're famous for two months or two years.Stephanie:Okay.Colin:And so, I kind of had a weird little in between stay, where after two months we were all pretty sure it wasn't going to work out, but they were like, "Ah, this should work out," and they didn't want to really pull the plug. And then, eventually I remember, they were arguing in front of me one day about... I'll never forget this. They were re-interviewing me for a different role inside of the company, and... That's how they do it. You lose your "box," and then they try to find you a new box before they totally get rid of you, because they think you're a culture fit.Stephanie:Yep.Colin:And so, they were arguing in front of me. I'll never forget, these two guys, the two managers. One said, "You know, I think Colin is a six for this role," and the other manager says, "Well, I think he's more like a seven, and I think we should hire him into it." And, they're arguing six, seven, six, seven out of 10. And then, the arbiter goes, "Look, guys. He can't get hired into the role if he's not a seven. If he's a six, we can't give him the offer." And then they agree, "Okay, he's a six-and-a-half, and we'll need to have another meeting on it." And, I just remember I raised my hand and I go, "Guys, let me do this. Today's going to be my last day at Bridgewater." I just couldn't deal with that type of [crosstalk 00:02:50]-Stephanie:Yeah, rating you.Colin:It was crazy. Yeah. And so, that was my first job experience. And, from there I became a recruiter, a third-party agency, recruiting for banks, and hedge funds, and startups. That's where I got into technology, and startups, and software. Taught myself a lot about software development and software engineering, and ended up hiring a bunch of different engineers at a bunch of different companies. And, I ended up hiring myself at one of my clients in Seattle, in a really interesting B2B software space called Application Virtualization, which was really hot in 2014; it's still pretty hot.Colin:And I ended up moving up to Seattle. And then, about a year and a half later, I got an opportunity at a company that I helped co-found with some friends called Revel R, which was a wearable tech product that got into Techstars, which is for those listening, a really famous worldwide accelerator for startups. They give you a $100,000 for 6% of your company, and put you in a room with nine other companies for three months, and give you all the training, resources, connections, and mentorship that you could possibly need.Colin:And so I dropped everything I was doing in Seattle, drove 19 hours down to Denver on a week's notice, and became a Coloradan about five years ago. And, that company... I ended up working there for about two-and-a-half years. We all got laid off at 1:00 PM on a Sunday, as startups unfortunately go. And, it was really sad. We had raised millions of dollars, and we're in Target, and Brookstone, and HSN, QVC Deals, T-Mobile stores. But, that product, unfortunately, didn't have all the legs that we thought it did. And, three weeks after I got laid off xI incorporated Sheets & Giggles, and now it's been three years since that date. And, it is now the longest I'd ever worked anywhere in my career.Stephanie:That's great. So, what is Sheets & Giggles, and how did you have the idea to start it?Colin:Well, for anyone who hasn't heard of us, it's okay; although, I will hold it against you.Stephanie:Very rude.Colin:Very rude. We sell bedsheets that are sustainable, and they're made out of a material called Lyocell, which is made from eucalyptus trees. And so, if you Google or Amazon eucalyptus sheets, we're generally the first results. Lyocell sheets is another query we rank high for. And what our sheets do is, they actually save up to 96% of the water that cotton sheets use, which is about 96%... sorry, 1,000 gallon reduction. And then, they also save in energy, they use no pesticides, no insecticides; whereas, cotton can use 16-24% of the world's insecticides just by itself, as a crop.Colin:They also biodegrade faster than cotton, they're hypoallergenic, they're zero-static, and they're naturally softer and more cooling. So, if you're a hot sleeper, they're the best possible material. The eucalyptus Lyocell is for hot sleepers. And so, it's a really wonderful product. We began manufacturing at about two a half years ago, and we now have shipped tens of thousands of orders. We raised a couple of million dollars in capital, although we are mostly revenue funded, and we grow according to our revenue. And, we are just loving life right now. We're a very socially conscious company, and it's really wonderful to be able to have fun, do good, and make money at the same time.Stephanie:That's great. So, with your company, did you see an opportunity in the market from doing research, or did you just wake up one night sweaty like "Oh, I need to build better sheets. This is [crosstalk 00:06:32]." How did that happen?Colin:So, whenever I hear founder interviews from Brooklinen, or other bedsheets companies... And, I hate to throw Brooklinen under the bus. They're a great company, and I really respect... No, I really respect what they've built. They get $100 million dollars in trailing 12 months revenue. They're a wonderful company. But, their co-founders go on these-Stephanie:However.Colin:... podcasts, then they're like, "Oh, we were staying in these hotel sheets, and we were like, 'Oh, they're so lovely. And, let me find out how expensive they were,' and we were like, 'There had to be a better way.'"Nobody starts a company because they stayed at a hotel. They saw a really good business model. They found a manufacturer who would make really good products for them at an affordable price so they could resell it a higher price, and they went from there. And that's great, and they should be proud of that.Colin:And so, that's sort of, more or less, what happened with S&G, where it was actually a business model play first. And, I'm a big... a big, big advocate of sustainability, and climate change is one of my hot buttons. I've always had a bleeding heart. I've worked at startups trying to end animal euthanasia. My last startup, the wearable tech startup I talked about, we were trying to fight sexual assault and violence. We actually sent out 60,000 emergency alerts, saved a bunch of lives, which was really a wonderful... wonderful thing that the company did. But you know, this company, I really wanted to have a sustainability mission. And so, I kind of sat down and I wrote out my perfect business model with a sustainability mission.Colin:This is a true story. I looked at all the domains that I owned, and I owned SheetsGiggles.com because I thought it'd be a funny name for bedsheets company. I have a lot of pun-based domains that I own.Stephanie:What's some other ones? I want to hear them. Any others come to mind?Colin:I've got a few really good ones, Bodcasts.com...Stephanie:Oh my god.Colin:... B-O D-C-A-S-T-S.com. I love that. I would love to do podcasts for exercise, where you don't have to watch YouTube videos, and you can just have a platform for exercise physiologists and personal trainers to do listening-only routines. I also own SunglassesHalfFull.com for a sunglass company, GiraffeCarafe.com for carafes in the shape of giraffes. I own WorkFromRome.com. Why work from home when you can work from Rome? That's a travel company for remote work. I buy a lot of domains [crosstalk 00:09:13]-Stephanie:So many companies to start, so little time.Colin:Yeah. Romanhemperor is probably my favorite one that I'll probably start one day, a CBD company.Stephanie:That's good.Colin:My nephew's name is Roman, so he'll be my little CBD mascot.Stephanie:Perfect. I like it.Colin:Yeah, I'm sure my sister will love that.Stephanie:Yeah, I think she will.Colin:Yeah. But yeah. To answer your question, a lot of them. I owned SheetsGiggles.com. I thought, "Does bedding fit my criteria?" and it fit perfectly, $12 billion U.S. market growing 10% year over year, highly fragmented, the top five players only own about 27% of the market, and it wasn't fully online at that point. It was still mostly physical retail. I kind of just put my head down, and I fell in love with this brand. That was the other thing, is I just fell involved with the idea of a funny brand in a very boring space, especially if it's a sustainable, premium product and you can still do a funny brand. That's a really hard tight rope to walk, and I really fell in love with the branding challenge.Colin:That was kind of when I put my head down in October 2017. I created a brand, Identity Map, for this pun-based bedding empire, is what I would call it to people. Me and a couple of contractors just designed a logo, and I built my own website, wrote every single word of copy myself, would stay up until four in the morning, writing, wake up at 8:00 AM, start writing again, and just totally fell in love with this weird, little company that I was creating in my bed, in my underwear. In May 2018, we did our crowdfunding campaign on Indiegogo, raised $284,000 crowdfunded, love those crowdfunders and have a very special relationship with thousands of people who brought the company to life, and it's all been history of since there.Stephanie:That's really fun. What was your experience on Indiegogo? How did you get found? Because a lot of times on those crowdfunding platforms, it seems like there's so much noise nowadays. In the early days, it was [crosstalk] to get found.Colin:Yeah.Stephanie:Now it's like, "Oh my gosh, if I put something up there, there's thousands of other people trying to raise money for something." How did you make sure that people found your potential product?Colin:Yeah, absolutely. Even in 2018, it was still a pretty difficult task. There were still thousands of projects being launched every single day. 2013, 2014 would have done prime time to do a crowdfunding campaign. That was actually when, fun fact, I'm going to brag a little bit, Brooklyn did their Kickstarter in 2013 or 2014, and they did $236,000. We did ours in 2018, $284,000.Stephanie:Hey.Colin:Yes.Stephanie:Hello.Colin:Basically, there's a few hacks for crowdfunding campaigns. If anyone out there is thinking about doing a crowdfunding campaign, generally speaking, you want to do a few things. First and foremost, you want to set a goal that you can hit on day one because their algorithms reward percentage of goals hit in a period of time. They don't reward dollars raised. You don't want to go too low because then you've set expectations for people that, "Wow, you've blown away your goal, and now I expect the world from this company," but you don't want to go too high either and have a goal that takes you the full 30 days to hit because then you won't trend. For us, for example, internally, we wanted to do $100,000. Externally, we set our goal as $50,000. We thought that we could hit that in a couple of days based on our preparation.Colin:The second thing you want to do in order to come out of the noise is prepare. A lot of people... It's kind of sad. I see them launch a crowdfunding idea for something that maybe is a really cool idea or a cool project, but they don't do any preparation whatsoever, and they don't stop the think that even if they have 1,000 Facebook friends and 30 friends and family and 500 connections on LinkedIn and whatever it is, you just got to always assume a 3% conversion rate with anything, even your friends and family. If you have 1,000 people that you think you can count on, you're talking about 30 people that are actually going to pull the trigger and give you their credit card information when you end up buying. You don't want to rely on the friends-and-family model for crowdfunding. It's just not a good way to do it.Colin:What you want to rely on is an email list. I get asked all the time, "Where do you find your email list? Do you buy it? Do you build it?" The answer is, "You build it." You want to build it and get people to give you their emails who are interested, qualified leads, who are interested in buying into the brand that you're building. What we did was we worked backwards from our goal of $100,000 and said, "Okay, $100,000 in 30 days, generally speaking with the crowdfunding math, you want to make 30% of that on day one." That's just the way the crowdfunding works, big boost in the beginning, plateau in the middle, boost at the end. You want $30,000 on day one. We knew our sheets were going to cost $70 on average, which was a really low price. I really under-priced them. We knew our average order was probably going to be 1.5 units, so $100 average order value. If $30,000 on day one at $100 average order value is the goal, that means we need 300 customers on day one.Colin:If an email list converts at 3%, then that means that we need 10,000 emails in order to get 300 customers on day one. That became our singular focus, singular goal from February through April of 2018 was gathering those 10,000 emails, doing it at an affordable price that would end up translating into a low cost of acquisition, and we ended up spending about $9,000 to gather about 11,000 emails, converted at about a 45% rate, which was really unheard of. That was the first time I was ever very, very-Stephanie:That's really high.Colin:Yeah, I was very, very excited and confident that the crowdfunding campaign was going to go well when we saw the 45% email capture rate. We ended up converting at 4.5% on our email list on day one, and we had a $45,000 day one just like clockwork. Then we [crosstalk 00:15:05].Stephanie:That's awesome.Colin:Yeah.Stephanie:I like the idea of working backwards. I think enough people don't think of, "What do I want my end result to be, and how do I make sure to get there?" Like you said, they rely on, "I have enough friends who will buy," which I've also experienced does not work. Friends and family [crosstalk] can only go so far. Yeah.Colin:People forget. People get busy. They have busy mornings. They forget. You need a big boost all at once to come out of the noise on crowdfunding. We ended up being the number two trending topic on Indiegogo.Stephanie:That's awesome. How did you go about building your email list? Because acquiring emails for the price that you did is very good. Conversions are very good. You can get a ton of emails these days, but a lot of them probably wouldn't be qualified if you don't do it the right way. What kind of tactics did you use to get good emails who are qualified buyers to make sure that they actually ended up converting when you launched?Colin:That's a great question. First and foremost, if you're going to do a crowdfunding campaign, I would recommend hiring a digital agency that specializes in crowdfunding, but I would be very careful about whom because there's a ton of sharks and predators in this industry who will take your $2,000 set up fee, and they'll promise you the moon, right? Colin:There is one agency I'd recommend, my buddy, Will Russell, he's the man, Russell Marketing in New York. And I trust him with my life, so I hired Will. I had known him tangentially through the last place I worked at. And he basically flew out the boulder. We sat down and we white boarded things out February, 2018 about our plan for the crowdfunding campaign. And basically the method was he had these emails from past campaigns that were early adopters, right? There are people who had backed Kickstarter campaigns before, and you can get lists like that in other places. Then you begin to build one, two and 3% lookalike audiences on Facebook. From those lists, you're able to advertise to other people who are likely early adopters. You build a landing page. We use kickoff labs as the software for our landing pages that hooked into our Google analytics. We did a photo shoot all in for $500 with me and all my best friends in Denver, Colorado. We were smoking cigars, drinking whiskey, having fun in bed, playing with dogs, eating pizza.Colin:Basically, whatever makes us laugh is what put on camera. And so, that was what we did in February 2018. We built those landing pages and that content with our first photo shoots, and all the copy that we wrote was just coming from my two fingers or 10. And then we just basically ask people, Hey, do you want to walk into the best price you're ever going to get on the best bedsheets you're ever going to feel? And we had three core value propositions for any crowdfunding campaign. You generally need three core differentiation propositions. One was that it's literally softer and cooler than cotton. And I led with that because I think that people are selfish and won't buy a sustainable product, if it's not better than the unsustainable version.Stephanie:Yep.Colin:Value prop number two was that it was sustainable, and value prop number three was that because I knew how all these retailers worked, and I know the margin share that Bed, Bath and Beyond takes from this category, which was about 40%, the price that you're paying is going to be traumatically lower than the price you pay for comparable luxury, sustainable options in the store. And those were our three value props and it really resonated.Stephanie:That's great. So what is your customer acquisition strategy look like now that's different than maybe what you did with Indiegogo?Colin:Now? I mean, now I have an in-house marketing team, a four person team. They're absolutely wonderful. And Sarah, our VP of marketing, is total genius, and she is someone who on the performance marketing side I think is unmatched. And I basically give her, to be completely honest. I give her free rein at this stage because a founder's skillset is fundamentally different than a CEO skillset. And I'm doing my best to transition from founder to CEO. And part of that is not micro-managing. And frankly, being okay with a much more boring job of facilitating, supporting, financing and managing versus being the creative, being the brand voice, being the copywriter, being the photographer and the videographer, and the Facebook data analyzer, and the Amazon ads creator. I can't do that anymore because it just doesn't scale. And it's also a good way to get talented people to leave when they feel like they're being micromanaged.Colin:So in terms of our actual strategies, basically, it's all direct to consumer on our website, sheetsgiggles.com and Amazon. And we've got a core channels of Facebook, Instagram, Google, and Amazon as our digital spend. We do some podcasts advertising, so definitely get in touch about that. And we also do radio advertising on Colorado Public Radio and a few other stations. And then we've tried direct mail, we tried a few other funky things. Nothing has the [inaudible] that digital tends to have.Colin:And in terms of email strategy nowadays, we actually don't email people nearly as often as we used to. In the very beginning, when we launched them Indiegogo, we'd email people maybe once a week. Now we're probably emailing people once a quarter, which is really crazy for a direct to consumer brand. Like every direct consumer brand in my inbox blows up my inbox four times a week like, buy more of our shit.Stephanie:Yeah.Colin:And so, the amount of sandal emails that I get from my sandal company is ridiculous. And so we email people only when we want them to take a very specific action. And that leads to open rates of high forties on emails, which is really, really stellar for open rates on emails. And we make sure that we use that wisely and we don't over innovate people.Stephanie:Great. So what are your favorite channels right now? Of everything that you just mentioned, is there any channel that you're maybe putting more budget into, or that you're seeing higher success with?Colin:I can find a row ad that beats Facebook, I will pull all my Facebook tomorrow, but they're definitely the highest row ads. Branded search is obviously the thing that's going to be best in the long run. So we spend a lot of time building up our brand recognition with people and our brand affinity, and then just earned media is really good too. We have a PR agency that we employ and we got covered yesterday by the Daily Beast, and we've been covered by Real Simple and Forbes and Apartment Therapy. We are Apartment Therapy's Best at 2020 picks, and a lot of other publications. We've been on today.com and Amazon gives us a lot of shout outs because of the philanthropy that we do.Colin:And so that's been really helpful to have Amazon as a big partner in our PR and in our discovery and exposure. So overall I would say Facebook and earned media are probably our two biggest ones. And then I do love radio and podcasts advertising, and I'm trying to figure out how to make that funnier for the listener. And so I'm currently recording a few new podcast ads that I think are going to be really funny and not in a really bad Geico, not funny at all way, but actual bits on the radio.Stephanie:Oh, give me a bit. What are you working with it? [crosstalk] You can practice in here. There's no judgment.Colin:Okay, great. Great. Great. So, I've got one that I think is pretty funny in a meta sort of way where I want to go on a podcast and be like, hi. Have you ever the CEO of Harry's do his thing?Stephanie:Yeah.Colin:I'm not famous, but I'm the CEO of Harry's.Stephanie:Yeah.Colin:So, I'm like, hi, I'm Collin, the CEO of Sheets & Giggles. That's probably means nothing to you, which is depressing, a little sad. We're a young company, we're based in Denver. We do some good stuff. Oh, we sell bedsheets. I should probably lead with that. God, how does the Harry CEO do this? And basically go with that. And then, somebody in the background goes 10 seconds. 10 seconds? And I'm like we sell eucalyptus bedsheets. They're sustainable, they're softer than cotton. Go buy them at sheetsgiggles.com. And that's the end of that. And then-Stephanie:That's actually catchy. I like that because a few people were like, "What is this dude going to say?" And then [crosstalk 00:24:12].Colin:And then I want to record four or five versions of that, that run on different roles. And basically, it moves from okay, they gave me a second take, I got it this time, I'm calling, CEO Sheets and Giggles, again, we sell bed sheets. I feel like that's obvious, maybe not that obvious. I don't know. If it was just called sheets without the giggles, it'd be a little more obvious. And then somebody's like, "10 seconds. And I'm like, "Oh, my God," and then get back into it again. And so, I think that those little bits and the nonsequiturs and stuff is very much our comedy and the trailing off and the tangents. And so, I really want to write a few different bits like that, that really flow with one another.Stephanie:Yeah. That's pretty great. I can't wait to hear this on radio or other podcasts as I think those will all do well. How do you-Colin:Well, you heard it here first.Stephanie:Yeah. You heard it here first everyone. This is special. Do you ever feel like selling through humor, like that could hold you back in a way because sometimes I see some brands where that's so much their angle that it gets away from the product because they get so funny where you're like, "Wait, what are you actually selling again?" So, how do you guys balance that to make sure you're still selling, but in an innovative, new way, that's setting you apart from others.Colin:It's actually a stellar question. I see that all the time when I see an Instagram brand that's just pure, pure, pure, funny without ever talking about their products in any way or ever talking about their reviews or their sustainability. It's just, "Buy our shorts because we're funny." It's like, "Dude, they're polyester shorts. I'm not going to buy your polyester shorts because you're funny."Colin:But the thing that we do, I think, that is not unique, but I think is smart is we basically let our reviews do the talking for us. So, we always say we're not serious, but the sheets are. And that's our mantra is, "We don't need to sell the sheets. Our reviews sell the sheets. Our stats sell the sheets." The amount of water we save, the pesticides and insecticides we save, we plant a tree for every order. We've got 3000 reviews on our website, 4.8 stars and we don't hide our one star and two star reviews like a lot of other consumer brands do. We have 845 reviews on Amazon as of this morning, I check every single day. I personally, as a CEO, read every single review that comes in, we have a Slack plugin that pulls every single review and puts it in front of my face. Every time we get one in live time on Amazon, we're four and a half stars on Facebook. We're 4.7 with 116 reviews, I think.Colin:And so, that type of cross channel confidence in terms of review score is really important for the consumer. And then the sustainability, the planting of a tree for every order, we give you 10% off if you donate your own old sheets to a homeless shelter, we pledge 1% of our profits, time products and equity, to local Colorado charities, we've donated $40,000 this year to Colorado COVID-19 emergency relief. The stuff that we do, I think, really speaks for itself and we don't have to really broadcast it and advertise it, even though I just obviously did. Instead, we just lead with the humor and then let people read more if they want. And truth be told, I think the most limiting thing, and you kind of touched on this, is that not everybody's a reader, especially when you're talking about Americans, no offense to... I'm a red blooded American, but we don't read.Colin:My old mentor at a toy company told me with the packaging that they made, their mantra is, "If you're asking people to read, you'll lose." And so, that's probably the biggest limiter is that a lot of our comedy is very copy heavy. A lot of other people are more visual or meme based or slapstick and video and we're much more copy heavy. And so, I like to think about us as sort of like the Seinfeld of bedding brands, which is probably the first time that's been uttered in the sense.Stephanie:Was that your Techstars YC type of thing of I'm [crosstalk 00:28:24]?Colin:We went to Techstars. They were like, "Why should we have a bedding company in Techstars?" And I think I was just like, "Why not?" And they were like, "We never thought about it like that." I was like, "You're in." But yeah, the Seinfeld of bedding companies was the way that I always thought about it. It's a brand about nothing. And by being a brand about nothing, it really is a wonderful way for us to be a brand about everything. And that was the beauty of Seinfeld, which has been my favorite TV show obviously, is that every episode was about its own little subtopic and it didn't have to have this overarching theme or story arc and that's great with us.Colin:As one day, we can donate $12,000 to the world wildlife fund to save koalas, another day we can donate 40,000 to COVID-19 relief, another day we can donate thousands of dollars to Black Lives Matter organizations, another day we can plant 20,000 trees for last year's orders. And we don't have this kind of overarching thing that we push on people. Instead, they can just discover it if they want to keep reading. And then we just try to make the copy entertaining for them to find their way through our website.Stephanie:Cool. Yeah. That a good way to explain it and yeah, it makes sense how you guys do it. So-Colin:It is limiting though. Yeah. When you're building a brand, you want 20% of people to really viscerally resonate with it and 80% of people to either be mad or react poorly to it and then that way you just don't want indifference. That's the biggest thing is I see so many direct to consumer brands that are the next shiny thing like, oh, the best apparel you'll ever buy or the best makeup or the best food or... They're all the same exact brand and it bores me to tears. The white stuff on the white walls with the white curtains and the white room. It's like, "Oh, just kill me."Stephanie:Yeah, completely agree. So, how do you encourage reviews? You were mentioning that you have a ton of reviews. How do you get people to follow through and actually take the time to give you your reviews?Colin:We, again, brand about nothing. We give to people who leave reviews free pizzas every week for no reason. It's just like, why pizza? I don't know. Pizza's good. You like pizza.Stephanie:Okay.Colin:Does it have anything to do with bedding pizza? People eat pizza in bed, I guess.Stephanie:I guess. Yeah. Not on my nice eucalyptus sheets though I'm not going to.Colin:But they wash real easy. So, it's okay if you spill on it. No, but that's how we incentivize it is we just say, "Hey, if you leave a review there's a chance that you'll get two free pizzas this week," and who doesn't like free pizza? Communists that's who. And so-Stephanie:That's good.Colin:Actually, we say capitalists that's who. And so, we do bits like that and it's stuff like that, that I think really drives people into the brand and we get people who are like, "This is insulting. I'm a capitalist." And I'm like, "It's a bit. It's just a joke about free pizza." And so that's how we incentivize it mostly. And then again, really engaging copy. The subject line is good, we have high open rates on our review request emails, we make it so you can leave the review directly in the email-Stephanie:Oh, that's a good one.Colin:We don't overpay for review software. I can't stand the stuff that's thousands of dollars a month. There's really good, affordable review software out thereStephanie:Okay. Cool. How did you think about moving on to Amazon? Because we've had a couple of [DVC] companies on here. Quite a few. It's been kind of mixed where, some were very excited about Amazon. Some were like, "Oh, I pulled it off because it kind of walked down the brand and they could end up just copying us and making a white label," and so there's been a lot of mixed thoughts around working with Amazon. So what led you to wanting to utilize their platform? Obviously they're featuring you and helping you guys. What are your thoughts around having a DVC company on Amazon?Colin:Amazon is Amazon. It's the best partner you'll ever have and the worst partner you'll ever have, and exists simultaneously in the same platform. That's why you hear this sort of debate or dichotomy amongst founders where it's like, "Do you want to go on Amazon?" And the pros, right, are that 54% of Americans. I think it got up to 60% of Americans now start a product search on Amazon. They've trained the American populace to, when they're looking for a thing, go to amazon.com. Google has lost that battle. So it's a massive channel that you really... It's hard to avoid. You have discoverability. You could have channel dominance. If you rise to the top of search returns for a high volume query, you can just rack in cash with no marketing spend whatsoever for years, until somebody tries to come beat you.Colin:It's a really solid platform. The negatives are, of course, that Amazon is extremely impersonal as a company. It's hard to get people on the phone there, although we do have account managers now. It is expensive. They take 25 to 30% margin share all in when you end up calculating all the fees from most companies, which is a really, really difficult thing for a lot of small businesses to swallow. And then you wind up paying them more to advertise on their platform to give them money when you make a sale. And so they're really a good partner in a number of ways. They do a lot of really great things for their companies, especially the small business partners, but, overall it's a love, hate relationship for sure. And you can do one thing wrong and get your whole listing pulled. And that can be really devastating too. So overall for me, it's a no brainer because if more than half of your audience is starting a product search on a specific channel, you have to be on that channel, period. End of story. Even if you're only doing it for branded searches.Stephanie:Completely agree. So earlier you were talking about working with PR firms and different efforts to bring new people, new customers, your way. How do you guys have your backend set up to be able to handle fulfillments? What does your tech stack look like to be able to handle any surges in demand?Colin:Surges in demand are actually difficult because we... forecasting demand is extremely difficult. Forecasting inventory becomes extremely difficult and then you put those two things together and you have to forecast the amount of people that you have working on your warehouse team at any point in time, which is extremely difficult. And so when it comes to surges and spikes, we use a 3PL, third party logistics provider, to ship out all of our orders, both on our website and on Amazon. We do FBM on Amazon, instead of FDA. And so we are basically able to get probably 99% of orders shipped out within a 24 hour period. But when we do have big surges and big backlogs it can slip to 72 hours.Colin:Because we are paying for that 3PL service, they have a finite amount of people that they've forecasted to work on their thousand brand partners that use that share of the warehouse space. And it's a really good way to lower the cost overall and then, from a small warehouse operation, if you're running it yourself, because you're sharing that square footage with so many other brands and you're sharing a labor with so many other brands And it's a pretty straightforward process nowadays in terms of hooking up a 3PL. In the beginning for the first six months of the company, October 2018, through March 2019, I was shipping out almost every box myself, along with a three person team in Denver, Colorado. We had our own warehouse space. We had 1,000 square feet. We were packaging. We could do maybe 250 orders a day maximum. And we were just trying to burn getting through holiday 2018 on our own.Colin:It was crazy. It was so [crosstalk] hectic. I think I shipped 3,000 boxes in a three week period at one point in time with the rest of my team, working eight hours, 10 hours a day in the warehouse and buy everybody lunch every day. And it was great. I had my customer service team and they're working with me. But yeah, it was definitely a lot easier when you can scale up and use the 3PL. I do have some companies that run their own warehouse space that actually wind up with all the headaches that it comes with and migraines that it comes with. They do wind up having a lower cost per unit in terms of fulfillment than we do, so there's certainly something to be said for that. But I think that right now we're at the 3PL stage for sure.Stephanie:Yep. That makes sense. All right. So we have not too long left, so I want to jump into the lightning round because I think you're going to have some good or funny answers. Lightning round is brought to you by Salesforce Commerce Cloud, our sponsors. They're amazing. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready?Colin:Okay, I am ready.Stephanie:The first one, what is the biggest fail that comes to mind when starting a DTC company that you experienced?Colin:Our packaging was white in the beginning.Stephanie:Were they white walls, white sheets, white, everything?Colin:Well, the inside of the packaging was purple and the outside was white and our packaging was lovely. We've got knapsacks to wrap the sheets. We've got free eye masks in every box. It's lovely, but a white exterior box sent through any postal service is going to get absolutely destroyed. And so that was our biggest fail was we had boxes just showing up, just beat the hell from FedEx and UPS. And so we moved in, I believe, mid 2019 to purple exteriors and that's allowed us to be much more efficient with our shipping and have much better customer experience.Stephanie:That's good. I can imagine getting a white box knowing that my bedding is inside it going, "Ooh."Colin:So dominant. And so to protect them, we had to put them in polymailers and in brown cardboard boxes, which was a huge waste for the first six months of the company. Then we had people call us out on it. And I was like, "You're absolutely right. This is so dumb. Why are we doing this?" And so now we just slap a label on the outside the purple box, and it's so much better. Additionally, minor thing, a major thing, minor thing. We had plastic in the packaging for the first six months. We had a little plastic sheet around the sheets, inside the knapsack to keep them safe from any water damage during transit. And we got a couple of complaints from people, really peaceful, nice messages saying, "Hey, I expect better from a sustainability company to put plastic in the packaging, even if it's recyclable." And we said, "Okay." And so we removed the plastic and we put in tissue wrap now for a final piece of protection.Colin:So there's no markings on the sheets and I'm thrilled to have eliminated that plastic. And now we've shipped out tens of thousands of orders since then with zero plastic packaging. In fact, we're the only bedding company in the world that does not vacuum seal our comforters. And they ship in the box, ready to go directly on the bed straight from the box, no [crosstalk]Stephanie:That's a good one. I hadn't even thought about that and I was wondering, are you having issues so far? But if not, more people should be doing that.Colin:Oh, we had issues. We just replace them. I mean, it costs us money. Like, FedEx will rip a box and then they'll get damaged and they'll leave it outside in the rain and it'll get waterlogged, so we definitely have that. But I think it's worth it to eliminate the amount of plastic that we're saving.Stephanie:Yeah, I like it. What's up next on your Netflix queue?Colin:Oh. I just started Ratched last night.Stephanie:How is it? It looked too scary for me. I'm a baby.Colin:It's really good. You know, I like stuff like that that's a little trippy, and I'm also a huge Marvel nerd, so I'm still waiting for the next Marvel series, but that's a Disney Plus queue, so I cannot wait for WandaVision and Falcon and the Winter Soldier and the Mandalorian is in two weeks as well, so I'm really excited for that.Stephanie:You've got your whole queue set up. I like it.Colin:Yeah, I love that stuff.Stephanie:Well, I know you said people aren't readers, but do you have anything coming up on your reading list?Colin:Yes, I just started The Everything Store.Stephanie:Oh yeah, that's a good one.Colin:And I'm surprised I haven't read it yet, actually. And then I'm trying to read things from a different cultural perspective because I'm a 30-year-old white male who mostly hangs out with other 30-year-old white males, and so I've got a book called Well Behaved Indian Women that I just started, and I'm really enjoying it. It's a totally different cultural perspective. It's so foreign to me and it's really, really great to immerse myself in that. I'm trying to think if there's anything else up next, but those are the two big ones.Stephanie:I'll have to try that out. What new E-Commerce tool are you trying out right now or having success with?Colin:Oh, it's something called Gives, and I should get a referral fee for this. So basically, it is this really cool thing we're doing to allow people after check-out to, when they buy something, donate a percentage of their order to the charity of their choosing. So we just tested it this week for Prime Day because we had our Prime Day deal on Amazon and we had a lower percentage off on our website, but you could donate another percentage of your order as well, so it actually ended up being a lower price but part of that was donated versus just going into your pocket and it's really cool.Colin:So now, our customers moving forward, and we're trying to decide if we want to do this on only special occasions or on every day type of thing. We already plant a tree for every order, now we're going to be able to let our customers donate 10% or so of their order to a cause of their choosing, which I think is a really, really, really cool thing. I just don't know if the dollars and cents work, so we're testing it out to see what that looks like.Stephanie:Awesome. Yeah, that sounds like a good implementation. All right, the last one. What one thing will have the biggest impact on E-Commerce in the next year?Colin:I mean, COVID. COVID.Stephanie:Yeah.Colin:No doubt. It's blown up E-Commerce on a five to six year type of acceleration. The amount of people that are shopping online versus in-store has just grown dramatically, and I think that we're probably in this environment for another six to nine months, until a vaccine rolls out. So I think that this trend will only continue, and I think that that's been a huge, huge driver of E-Commerce, and I think it's both good and bad, obviously. It can be good for some industries and horrific for others, so it's also a logistics issue and everybody listening out there, when you order stuff online right now, it's not the brand's fault if it takes 14 days to get to you. FedEx is trying to hire 70,000 people by Christmas and they're not going to hit that, they're going to hit like 50,000, which is still a dramatic undertaking. But the amount of packages going out right now is just overwhelming the system that we built.Stephanie:Completely agree. All right, Colin, this has been a fun interview. Where can people find out more about Sheets and Giggles and yourself?Colin:I'm a pretty private person. I do have a public Twitter, Colin D. McIntosh. Sheets and Giggles, you can google us. SheetsGiggles.com is the website, no "and" in the URL, just SheetsGiggles.com, and then we're also on Amazon if you want to search for our sheets there, Sheets and Giggles. [inaudible] the sheets. And yeah, pretty easy to find. And then our social media, SheetsGiggles, so it's just at SheetsGiggles everywhere. On Instagram, Twitter, Facebook. We're a good follow, we promise. We don't just post pictures of our products all the time and people buy them. And we just hit 10,000 followers on Instagram, which I'm really excited about. We've never paid for a single follower, so it's fun to build this organic following over time.Stephanie:Oh, that's great. Yeah. Nice work there.Colin:Thanks.Stephanie:All right, Colin. Thanks so much for coming on. This has been a blast and we'll have to have you on again in the future.Colin:Thanks so much for having me. Hopefully when I come back on next time, we're a much bigger company and everybody's like, "Oh yeah, I've heard of that brand."Stephanie:They will have heard of it. Don't you worry.Colin:I hope so.

Ask and you shall receive! We did a survey of our audience a few months back, and the number one requested topic was influencer marketing. And for good reason! Influencer marketing has infiltrated every industry and has the ability to drive large ROI if done correctly. But many new or smaller brands are wondering if they can take part in this marketing channel. And the answer is yes! Eric Lam, is the co-founder of AspireIQ, and he is here to explain how the industry has become democratized and any brand can take part in it, as long as they go about it the right way.On this episode of Up Next in Commerce, he gets into all of that and more, including why he bet big on the idea of influencers when it was still a radical idea used mostly by large companies with large celebrities. Today, Eric says that there are certain mistakes that many companies are making when it comes to working with influencers, and he details exactly how you should go about measuring the ROI from your influencer strategy. Plus, Eric explains why he thinks platforms like TikTok are undervalued and he predicts the future of how the world of influencer marketing will grow. Main Takeaways:The ROI of the Storm: Understanding the attribution funnel of influencer marketing is a key metric to determine the ROI of your efforts. But what if there are other aspects of the partnership that should be considered, that many brands are missing?Can I See Your Manager?: One of the biggest challenges of influencer marketing is managing the various influencers you work with and the logistics of tracking and shipping the products your influencers are promoting. Building a platform and communication structure that solves that problem is what sets influencer community management companies apart.Democracy Now: Part of what social media has done is democratize content creation. Previously, brands and those with money were in control of what content was created, when, and who could see it. Now, individuals have the same capabilities in the palms of their hands, which not only leads to better content, but opens the door to revenue streams and opportunities for regular people to become influencers.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome to the Up Next In Commerce Podcast, I'm your host, Stephanie Postles. Co-Founder at mission.org. Today, we're talking all things influencers, but the co-founder of AspireIQ, Eric Lam. Eric, nice to meet you.Eric:Great to meet you as well. Thanks for having me.Stephanie:Yeah, I'm excited to have you on so no pressure, but we did a survey of our audience, and the number one thing that everyone wanted to hear about was influencers. Early, like we got dozens of responses of [crosstalk 00:00:32].Eric:Love to hear it.Stephanie:Yeah. This is the perfect interview.Eric:Fantastic. Well, that's really helpful for me to hear, especially for my team work in sales.Stephanie:There you go. Tell me a little bit about what is AspireIQ.Eric:We're a platform for brands to build and engage communities of influential people from traditional social media influencers to top customers and brand fans to experts and more. We actually started back in 2013. Even though it's mainstream now, back then, influencer marketing was a pretty new concept. Frankly, the idea of businesses using Instagram back then in a meaningful way was pretty rare. Of course, now 93% of brands and kind of based on your survey, it sounds like that's increasing, are using influencer marketing as a core part of their digital and social media strategies, and we're lucky to be partnered with over 300 brands on the platform from some of the biggest names like Samsung to leading [inaudible] brands like Glossier and Purple Mattress.Stephanie:Amazing. Tell me a little bit, how is the platform design? If I'm a new customer, what would I experience when I enter a platform and what do I get out of it?Eric:Yeah. Even back in the day, I think pretty much from the beginning, some of the biggest problems we've tried to solve in influencer marketing have come down to three parts, finding the right influencers to work with in terms of creating content and promoting your brand, to managing the complex workflow between your brand and potentially hundreds of influencers in your community, to analyzing the impact of these influencer communities on your marketing goals. I think that where we've really made our bread and butter is that second one, the building workflow. That's because if any of your listeners have built influencer marketing programs, and actually in our early days, probably our first two years, we didn't have our own software, so we experienced this ourselves when we were running influencer campaigns for our clients.Eric:The real work that goes into this is all the communication and the cumbersome project management, the data organization, the contracts, the product shipping, the payments, and just keeping track of all this stuff in one place, especially if you're working with more than, say 10 influencers at a given time, like that's where the real work is. That's where we really focused on building a platform that can provide meaningful scale to clients building this in a sophisticated way. I think at this point, we've got a range of sophistication levels from fortune 500 companies who have seven different teams working across different countries with outside agencies and the corporate office, to some of the biggest DTC brands in the world who have kind of built their secret sauce in influencer marketing, and almost need to design this customized system within our platform for how to do influencer marketing. So, it's come a long way in terms of the sophistication level that a lot of our clients have had.Stephanie:That's awesome. Since 2013, what kind of shifts in the market have you seen? Because when I think about influencers, especially back in the day, it's like, if you don't have a Kardashian, you don't have an influencer. Now it seems like way more about like micro influencers who have a trusted audience and people actually buy what they want. What kind of things have you seen like shifts in the market?Eric:Yeah, it's evolved in a lot of different, really interesting ways. You're exactly right. I think in the early days, well, frankly in the really early days, when we first started, almost no one was doing influencer marketing, which was obviously tough for our business because we were trying to go to every brand and convince them to spend even like a hundred bucks on an influencer.Stephanie:They're like, no, thanks. Out of budget.Eric:Yeah. I think that was already like pulling teeth. I think, back then, I think the only brands doing this were probably these emerging ecommerce brands where ... they can't compete on traditional advertising, so Instagram had become this place where they discovered already consumers were coming there to learn about what to buy, what to do, where to go. That was true, even though back then Instagram wasn't this kind of commercialized or sponsor place the way it is today. But even in our early days, what kept us going is that we talked to so many ecommerce brands and consistently what we heard was the biggest channel that they were focusing on was social media and specifically influencer marketing.Eric:Then I think, yeah, after a few years, maybe like 2015 and 2016, the industry kind of evolve to what you were talking about, where everybody was trying to work with Kardashians. It was all about working with the biggest fashion bloggers, the biggest celebrities. The bigger, the better. And you're thinking about these vanity metrics, like how many followers someone has, or how many likes they have, regardless of if they saw meaningful returns on investment. Those were the early cowboy days of influencer marketing. I think because of a lot of the mainstream brands got involved there, you started to then see an evolution of how a lot of the DTC, a lot of ecommerce brands were starting to think about influencer marketing because they were kind of getting priced out of these big macro celebrities.Eric:So, they started honing in on more specialized micro influencers, like you mentioned, who, they might not have as big of a following, but they were a lot more targeted, a lot more focused in the concept of created, which meant they were a great fit for more personalized experiences, more authentic content in terms of the segments they were trying to reach among their customers. I think the second thing that was really interesting about the way this evolved is that these same ecommerce brands started using influencers for more than just trying to reach their audiences like in an advertising way, and they started looking at them as holistic content creators, because when you think about what an influencer is, they're kind of like this studio photographer model all wrapped into one person, whose literal job it is to make engaging content for this generation.Eric:These brands started re-purposing a lot of their content and using it in all their different channels, from paid advertising, to ecommerce website, to email marketing and more because content became this King of everything they wanted to do across digital. Today, I think that's kind of even more the case where you're looking at even more long tail influencers, and even people that aren't considered traditional social media influencers, but are really important to the brands and their strategies from marketing perspective. Brands might be building programs where they're combining influencers, but they're also combining those with top customers, power users, experts, working professionals who do customer referrals, whichever groups of people who have the greatest word of mouth impact on the customers and trying to win over, regardless of if they have a social media following or not. I think it's a really exciting phase of influencer marketing we're heading into, where it really includes, even democratize, where brands are kind of looking for these authentic voices, no matter where they come from.Stephanie:Yep. I love that. Yeah, I was just going to say, it feels like now there's so much more opportunity for anyone to have an influencer if you find the right person, whereas before, not so much. But if you're thinking about finding an influencer in your space or finding someone to partner with or using your platform to find some, what kind of metrics would you look at to make sure they're a good fit? What should a brand be looking for to be like, "ah, this is my perfect person?"Eric:Yeah. I think a lot of it comes down to what the goals of this influencer program is. But I think, at the end of the day, a lot of that comes down to subjective type of qualities. Obviously, you can see if they have a big following, you can see if they have really high engagement rates, but at the end of the day, you want to look at, what are people talking about in their comment section? What's the type of narrative they're kind of build with their audience? And does that really resonate with the type of nuanced audience segment that you're trying to build with your audiences? Because that tells you a lot about how they're going to co-create this narrative with you.Eric:That's really what we tell people when we give them advice is, you should really be building relationships with these influencers and treat them as a part of your community rather than looking at it as a transaction. I think that one of the biggest mistakes I see a lot is that, people will look at influencer marketing almost as like buying ad space, and it's really not like buying ad space because content creators are people.Stephanie:Yeah, these are people.Eric:Yeah, these are people who have these like nuanced feelings about the content they make, what they feel comfortable with, what's authentic to them. This is like their livelihood. Communicating with that level of empathy is really important, and if you can find people that really match your brand values and are going to be true advocates for you, that really translates into the authenticity, both from what they're saying, but also the kind of content they make because influencer marketing is pretty mature now and audiences can smell inauthenticity from a mile away. So, it matters a lot to find people that really believe in your brand.Stephanie:How do you go about making sure that a relationship is built on your platform and that someone's not just going through and being like, "Okay, bye. I want this." How do you develop or encourage a relationship to be built before they start working together?Eric:Yeah, I think a lot of times, frankly, sometimes it starts not necessarily with a kind of a official collaboration or with an official contract or anything like that. A lot of brands, what they do is they'll do what's called product seeding, and they'll send these gift bags out to influencers or micro influencers. A lot of people try out the products. If they like the products, they'll have them give feedback, they'll invite them to some events, they'll have them be part of some community activities before they really kind of like level them up into true ambassadors for the brand that have these more formalized contracts and agreements and payment structures and things like that. I think, obviously not all of that is necessary, but it kind of creates this much more organic experience, where ambassadors almost like come to you or are built with you, rather than just saying to every person, hey, we've got this $10,000 campaign and here you go, who wants the money? Kind of going based on much more of a transactional experience.Eric:That's one way to go. I think other ways to go are influencers who can come to you and are creating a more of an inbound experience. What we see a lot is brands setting up kind of these programs and looking for new ambassadors and new influencers to the program. A lot of times those might be smaller, but getting people to kind of sign up when they're small, when they have smaller followings is a great way to almost like build this farm system of up and coming influencers that are working with you in their early days so that when they become really big and famous. Obviously they've been kind of long-term supporters, long-term advocates of your brand for quite a while.Stephanie:Yep. That's great. Yeah, I think I've mentioned a few times in different episodes that I was ... I forget who I was listening to, where they're discussing influencers and how to pick them, but they said you should zero in on the comments and how their followers are actually engaging, because if they're engaging in one way where it's just like, oh, that's pretty, I like that shirt or something, that might not actually be an influential person you should work with versus someone who's saying, "Where can I buy that shirt right now?" If you see a lot of that in the comments, even if they're small, like they have people waiting to buy whatever they wear. I thought that was always a good reminder.Eric:Yeah, totally. I think that a lot of times, that that comes from some of these smaller influencers, because they're so focused on the type of content they make and their audiences really trust them with that messaging. I think a lot of influencers just understand that when they take these sponsorship deals, they're doing it in a way where they really need to make sure it looks, and it is the fact that they really care about this brand. They believe in the values, they believe in the product. I think audiences are really attuned to that, and I think they can pick up on that.Stephanie:Yep. I agree. In previous episodes, we've had a lot of guests tell us that it's been really hard to accurately measure the ROI of an influencer campaign. A couple of people have tried it or quite a few of them have tried it, but they just didn't know if they got the results or they didn't know how long until I see results. What do you advise around, how do you make sure to measure things in a way that you can see an ROI or not, and when should they expect to see some kind of success?Eric:Yeah, that's a great question. Yeah, it is actually challenging. I think it's because, the reason is because I think influencer marketing sits at this unique intersection of brand and performance marketing where it's a little bit of both. I think if you're looking at as only one or only the other one, you're almost like undervaluing what you have in your influencer program. We actually have this internal marketing strategy team that works with all of our clients, and their job is basically to design this type of thing. Like, how are you going to measure the overall ROI of your program? Because it's so unique to every client. In terms of brand awareness, obviously that stuff is relatively straight forward. Like, how many views am I getting? How many video minutes are watched? How much engagement there are? What's the audience demographics that I'm trying to reach?Eric:Obviously this is an ecommerce podcast, so most people are interested in, how am I generating sales? That's where it gets really interesting, because like you said, it's not the easiest thing in the world to build the full attribution funnel for influencer marketing. Why is that? It's because all of this content sits somewhere that isn't pixel. It sits not on your own channel, and not even on your own Facebook. It sits on the influencer's Instagram page or their YouTube, and not all the time there's easy ways to click out of links. What we typically do is we build a combination of indirect and direct metrics to give you a sense of how your program is performing. There's definitely lots of ways to measure direct conversions. There's link tracking, coupon code redemptions, affiliate links, landing page sign-ups.Eric:Typically, those are very good ways of seeing directly attributable sales. Especially if you've built kind of this really great long tail of ambassadors who are all doing, like I said, whether your product seeding them, you're seeding them these gaskets, and you're not necessarily asking for anything, where you're building potentially hundreds or thousands of ambassadors who are ... you might not have a ton of following, but they really believe in the product and they're kind of posting about you. You'll start to see a lot of return in terms of referrals on that program, just based on kind of their channels clicking into those links and go into your website and buying things, something like that. But a lot of the times, when you're talking about influencer posts, because there's not an easy way to click out of this, of the posts, we tend to look at more indirect measures because a lot of times what happens is a consumer sees a post, they see the brand and then they exit to a browser and they go directly to the website.Eric:We say is that, hey, look at the indirect measures like referral sources from social channels, and that includes things like the Instagram shopping and checkout, which Facebook is investing a ton of money into all types of ways of commercializing your social channels. Then of course, there's the value of the content itself, which has been really interesting. Like I said, a lot of ecommerce brands are looking at these influencers as content creation vehicles, and so there's obviously the cost that it would've cost to create, potentially hundreds of purpose-built photos and videos, but what's even more is, what's the value of having 10 times the number of assets to personalize all these digital customer journeys from your paid ads, your ecommerce, your email marketing, and almost always what we see is our performance marketing clients will have an overall increase in their ROAS, but thanks to this kind of ongoing pipeline of constant.Eric:I think the last one that's super interesting thing has been really game changing over the last couple of years is actually using influencer channels themselves as paid ad vehicles. There's actually ... obviously there's easy functionality to boost posts that perform well, but there's actually, for in channels like Instagram, if an influencer has a business account, there's an option to grant advertiser access to a third party so that you can actually run a wide diversity of paid ads using the influencers content, where the ads are coming from the influencers channel themselves. This actually gives marketers almost this infinite number of channels to test on and has been an absolute game changer for brands looking to build more sophisticated paid social strategies. All those things are kind of like in combination, obviously are this complex web of how do you value the ROI of an influencer, but it's because there's this huge diversity of the ways that you could utilize them depending on your marketing strategy.Stephanie:That's great. Yeah. That's a really good summary, especially that last point. I don't think I have heard that, or I was not aware that you could leverage their accounts and kind of post from under their accounts. Yeah, that seems to be interesting.Eric:Yeah, it's little known, but it's become a lot more popularized, I think recently. Obviously you want to make sure that you have a firm agreement with the influencer. This is something that in our platform we kind of wrap up in a bow for you to be able to request, but obviously you're using their content, you're getting the right approvals from them, so they don't have their channel advertising to people or using content that they're not comfortable with. But assuming that they are, it's actually a win-win for both parties, because essentially what's happening is, as a brand, you're kind of leveraging them as a voice for your brand to kind of new audiences. For them, they're reaching new audiences themselves and in a way that can kind of get them more followers and more reach.Stephanie:Yeah, that's great. I could see there being a bit of like, making sure that whatever you write is in their voice, or is it like pretty transparent that this is a brand takeover of their account?Eric:I think it's typically a collaboration, and a lot of times what we'll advise is that, definitely having the influencer sign off on all the language and making sure that they're comfortable with what they're saying, because you don't want to get ... definitely don't want to misrepresent what they're saying, and it is in a partnership between brand and creator.Stephanie:Yep. Got it. All right. A little story time. First, we'll start with, what are some of the biggest missteps that you've seen brands experience when they've tried to set up their own influencer partnerships? What are some horror stories that you've heard in the industry? You know I like failure.Eric:Yeah, definitely I think a couple of common things that I see, and again, they kind of relate to this idea that, hey, these influencers are ads basically, and that leads to behaviors, like I said about not building relationships. I talked about that one already, but I think another one is basically taking too risk averse of an approach in the creative process. I won't name specific brands, but I think, especially when you're talking about like the bigger brands in the industry, the Fortune 500 brands, a lot of them struggle with the idea of kind of like merging their influencer strategy with their creative strategy, because they typically have this really rigid process of guidelines and brand safety that they apply usually to kind of $25,000 to $50,000 photo shoots, and they want to apply that same framework to influencers.Eric:And they're like, cool. They have to do this set of 20 guidelines, they have to check all these boxes in terms of what they're going to say, they have to say it in this way, and in this tone. At the end of the day, that just doesn't work because people are smart. Consumers are smart. Consumers know when something is super forced and inauthentic. At the end of the day, the whole point of working with influencers is that you're co-creating a narrative. You're supposed to be harnessing the personality and the creativity that's unique to each person, and by forcing them to kind of fit in this tightly defined box that is so clearly branded, that just leads to poor performing content. It's kind of defeating the purpose of using influencers in the first place. I would say that's the biggest misstep I tend to see, and it is typical among, I would say like the bigger brands in the industry.Stephanie:Got it. I could see brands, especially smaller ones, trying to find, of course, untapped influencers. What industries do you think there are a bunch of influencers that maybe you guys haven't even tapped into, and what's maybe bringing this question about, as I just did a recap episode with one of my coworkers around like the first 50 episodes, and we were talking about shoppable gaming and unreal and how there's influencers in these game worlds and how shopping is going to be in there soon. I was like, oh, it seems like there could be a lot of virtual influencers that maybe aren't tapped, but are there any industries like that where you're like, oh, we're exploring this or we see this being big in the future, but we haven't actually fully gotten it yet?Eric:Yeah. Well, I would say, even though it's been incredibly popularized in the last year or so, I would say TikTok is still wildly undervalued. I think not enough brands understand that TikTok has this enormous breadth and depth of not only audiences, but content creators, because I'm 38 years old and I look at a lot of like Parenting TikTok, I look at a lot of the Home Depot TikTok. It's so different than I think most perceptions are of, oh, it's just funny videos or teenagers dancing and things like that, because there's such a diversity of content and audience within TikTok that I think only a handful of brands are really taking advantage of. That's definitely, I would say a big focus for us going forward, is kind of getting in deep with tech talk and making sure that our brands can be successful there.Eric:I would say more to specifically your question around industries, I would say a lot of industries that we've seen that have kind of more emerging, I would say "influencers," not necessarily traditionally defined influencers, are more like professional fields. For example, one of my friends from business school named Trina Spear, she's founded this company FIGS Scrubs. I think they've had the strategy probably for ... maybe since they were founded, where they've almost created influencers out of nurses and doctors where, when they first started, there were no nurse influencers or doctor influencers or anything like that. But they started partnering with all these people that could just create really great content, and they might just be people in that professional field people that might have 500 followers, but posted really cool content and they would send the product, get them involved, get them bought into the mission and the vision of the brand.Eric:Now a lot of those people, they have tens of thousands of followers because of the partnership they've done with FIGS, and FIGS is an incredibly popular brand among the healthcare industry now, and has a really, really loyal following across ... up and down nurses and doctors and everything else.Stephanie:That's really cool. Yeah, I think we had FIGS on our list. I have to check with Hillary on that, but I think we had them potentially coming on maybe so. Yeah, that's really cool to hear how they do that.Eric:They're great. I look forward to listening to that one.Stephanie:Cool. How do you onboard new influencers, and who are some names of people that I would know? Because even though it's kind of vanity, I'm sure everyone listening is like, well, who are some names that I would know in your platform?Eric:Yeah. Interestingly, we don't really take that kind of approach when it comes to influencers, because a lot of times our influencers are brand-driven. What we try to do is we try to provide a system of record and a platform for our brands to manage all of their influencer programs themselves. This is actually an industry choice we've made, I think back in the founding of the company, where we decided pretty early that we were not going to win based on us having the most influencers or us having access to talent agencies or communities of people, because frankly, we were basically four guys who came from either a gaming company or a hedge fund, and so we were not going to win based on who we knew.Eric:What we decided to do is we said, okay, what we're going to do is we're going to build a platform that has incredible workflow and ability to scale up these influencer programs and have brands build the tools they need to manage them, and those brands will essentially onboard and essentially, almost onboard the influencers onto our platform themselves. It's actually played out pretty well where we now have hundreds of thousands of influencers on the platform. I think in a 95% of cases, those influencers were brought by some brand that we had on our platform who essentially invited those influencers themselves to the AspireIQ platform. This has been a really great way of feeding.Stephanie:Oh, that's smart.Eric:... a marketplace where when ... in [inaudible] teach about like, when you start a marketplace, you have to create standalone value for one of the sides, and that was our [inaudible] standalone value for the brands that they would essentially attract the influencers to the platform because we just didn't have them.Stephanie:Let's talk about the early days a little bit. I saw that you had worked at Pocket Gems, and I think it said you led a very large team who was mostly accountable for like 80 million in annual revenue. I want to hear a bit about your background and what you did at Pocket Gems that maybe helped influence AspireIQ.Eric:Yeah. I started my career in finance actually before business school, which is really disappointing for my dad because my dad was a computer science professor, so I didn't get into technology immediately the way that he wanted. But yeah, after business school, I went to Pocket Gems. Yeah, started as a product manager, built a couple of games there. Pocket Gems, for some background, is a mobile app gaming company. Really, it was an incredible experience because gaming, especially back then, I mean, you think about like, this pre-Zynga IPO and all the kind of the rise of mobile gaming, and everything was extremely data-driven and fast paced. It was a great environment to learn about how to build products that can grow and scale really quickly.Eric:But I think the biggest thing it taught me was essentially how much mobile and social were going to change the world, and pretty much changed the world so much more than I had ever conceptualized, I think, before joining, in almost a similar way with the way the internet changed everything in the late '90s. It's because of the fact that we have this super computer in our pockets that's like a high-definition video camera that makes any of this stuff possible. I think, as we were building games there, as we were building apps, as we were doing user acquisition, I could tell, based on the things that were working and the channels that we were working for, for our own growth, that all this was happening here organically. When you looked at social media, everyone can create this amazing content that's just as relevant and meaningful as what's done in studio, and it's completely democratized, giving a voice to anybody with a mobile phone and social media.Eric:I wanted to work on something following that, that could take advantage or basically capitalize on the fact that the world is essentially changing from what I call companies to people. Because when you open your phone, you look at most content nowadays, chances are it's something that a regular person made. It's not a company. It was kind of obvious, at the time, to a lot of us that were founding the company that people were going to be at the center of how these businesses or brands were built. That's what we were focused on doing. We didn't have it all figured out in terms of what we would do or the product we would build. We started with social media and went from there, but we just knew it was around this idea that brands and building a brand, building a marketing strategy needed to be much more people oriented, and around this idea that mobile and social were going to change the world.Stephanie:When you launched into aspire IQ, what were some maybe hiccups or missteps that you guys made in the beginning when trying to figure out this marketplace and building the platform, anything happened there of note?Eric:Yeah, it was funny because again, it was for people who didn't come from the marketing industry and we're trying to get into ... which I think, when I gave people advice, people would always ask me like, "Hey, are you going to ... should I start this company? I really want to do a startup." A lot of times the advice I give is, "Look, if this is something you have to do, it shouldn't matter what I say, that you're going to do it." I think this was really interesting thing where we all had this intense belief that this was going to be a thing, that this would work, even though none of us had come from the industry. I think, because none of us had come from the industry, that really put us at this disadvantage for, who to talk to. We were really scrapping trying to find our first sales and talk to any ecommerce brands that would listen to us, talk to any brands that would listen to us.Eric:It was such early days that we couldn't even charge any money for the product we made. We built this product in about a year, and we basically had to give it away for free because people just didn't value it. They didn't understand why they should pay a platform for influencer marketing. I think we actually had to create ... is really funny. In our first outreaches to influencers even, we were trying to scrape together these first influencer campaigns where we had to pretend that we were the platform, but actually underneath, it was just the four of us trying to run and match-make with different influencers. But we were saying like ...Stephanie:[crosstalk] service.Eric:Yeah, but we were saying like, oh yeah, there's something really like technological going on under the hood. Don't worry [inaudible] the brands. But it was actually just us trying to run the different influencers saying, "Hey, look, can you please join this campaign?" We had to use the pseudonym actually, because nobody would respond to our emails among influencers. They didn't believe that we were a real company. We had to use pseudonyms of people that sounded more legitimate to make sure these influencers would respond to us.Stephanie:Oh, that's crazy.Eric:In the early days, again, not only were brands not really doing a lot of influencer marketing, but the influencers themselves weren't doing a lot of "influencer marketing" among sponsorship opportunities. This wasn't as much of a business for them, where they're already and set up to take a lot of these inbound requests. In the early days, that matchmaking process, like you said, was quite difficult. Of course, nowadays, it's almost like a machine where everybody ... if you have like 5,000 followers, you might even have a manager at this point. Yeah, in those early days, it was a lot of a lot of talking on the phone to explain who we were and what we were trying to do.Stephanie:Yeah. That's great. I think that also is such an advantage that when you don't come from the industry, it reminds me of like us building up this media company like none of us really knew what we were doing in the early days, but from your perspective, I could see a lot of people thinking about building an influencer company and being like, I need to partner with Hollywood, I need to go to CAA. There's a certain way things are done around here. I think that's actually a huge advantage when you don't really know what you don't know and you just move forward and figure it out, and maybe do it differently.Eric:Yeah. I think that, that definitely helped us, I would say in the later stages of the company, because by the time, like I had said, in 2016, 2017, when this took off as an industry, we were one of the few companies that have built this as a true software platform, because all of this came from technology. So, how are we going to win? We weren't going to win because again, we were connected to the right people. So, we were just heads down, really building as much of the product we could essentially understand based on our own running of these campaigns. When the industry took off, we had assembled this immense product advantage versus a lot of our competitors that were essentially glorified agencies. Back then, I think a lot of companies were effectively ... because you might come from an agency, so you think that an agency is the way to solve this problem, this matchmaking problem.Eric:But what we saw was something much more nuanced, which was, okay after you've solved the matchmaking problem, what are you going to do with these influencers, and how are you going to make this a scalable program that will last the test of time? All those things were built into, essentially how do you create almost like a CRM workflow with analytics and all the different automation that we built into it that would be relevant, frankly, for people that weren't really doing anything back when we first started. We were basically lucky that we survived the first few years with almost like making no money, that we could make it to the maturity of the industry when our product became more relevant.Stephanie:Yeah, that's good. Because some people are a little too far ahead and you guys were ahead, but you ended up making it work, which is awesome.Eric:Yeah, absolutely.Stephanie:Now that we're talking a little bit about the future, I want to head into the future. What do you think the future of influencers looks like maybe in like five to 10 years?Eric:Yeah. I think that, like I said, I think influencer marketing is going to keep diversifying to ... just not people who necessarily have social media following it. I think it's going to be around who is influential for your brand specifically? Again, it could be professional, it could be experts, it could be customers. I think a lot of the brands we talk to that are on the bleeding edge, like a Glossier for example, is the gold standard, I would say, of this, who's one of our favorite partner customers. They figured out, I think first that, it doesn't really matter if you have this massive social following. They've built this community of fans, employees, even healthcare workers, things like that, and regardless of who you are, they do an incredible job of making you feel like a part of the community, probably because the brand started out of this shared love of Emily Weiss's beauty blog.Eric:Regardless if you have a following on social media, they highlight a lot of their community members in their marketing. They give them exclusive first looks so they can get feedback and build buzz around new product launches. They take an active interest in pretty much what all these different communities, how they respond to products, and that shapes a lot of the strategy that Glossier has as a brand. I would say they're one of the first, I would say community led brands. I would say that that's going to be, what I would say is the future of, not just influencer marketing, but building commerce brands in general, because what you see now it is there's such a dependence on third parties for a lot of ecommerce companies on generating leads from places like Facebook ads.Eric:That's almost becoming this increasing tax on the cost of doing business of running ecommerce. When you've built an advantage for a brand like Glossier, where you almost have your own channel of your community that generates all this buzz and brand awareness and referrals that, that becomes this competitive advantage, because you can build growth without relying on third parties doing all of your lead generation. I think that's what I'm really excited about as kind of the future of influencer marketing, but also the future of kind of commerce in the way brands will start to own their own communities and their own channels.Stephanie:Yeah. That's a great answer. I think that's the gold standard that a lot of brands probably want to figure out is like, how do you build that community that you can leverage and not always having to rely on external customer acquisition? But it'd be interesting to dive into their model of like, how do they actually build that up and build that community of fans to then have that network to launch to with their products and whatnot?Stephanie:All right, cool. With a few minutes left, let's dive into the lightning round brought to you by Salesforce Commerce Cloud. This is where I'm going to throw a question your way and you have a minute or less to answer. Are you ready, Eric?Eric:Fantastic. Ready. Stephanie:What's up next on your reading list?Eric:Ooh. I think that one book that I really love and just read is a book by Carrie Melissa Jones called Building Brand Communities. She goes into a lot about how you ... similar to the Glossier example, you really need to co-create an experience of communities with shared values, kind of mutual benefit, how is your community going to interact with you as a brand? I love that book. We actually sent it to I think all of our customers.Stephanie:Oh, nice. I'll have to check that out. That sounds like a good one. What is the best piece of advice you ever received?Eric:Yeah, I think the best advice I ever received was either from like a personal or professional level, are you growing as a person? Are you scaling? Are you developing new skills? I give that advice either to employees at the company or people who are asking you for advice. A lot of it has to do, its just kind of acceleration in any way that makes sense or is meaningful to you.Stephanie:I love that. That is good. What's up next on your Netflix queue. What are you enjoying these days?Eric:Oh, wow. Netflix. I just started watching Killing Eve. I think it's an older show, but that's ...Stephanie:Okay, is it good?Eric:Yeah. I love that show. I don't know if I'm as big of a fan of Sandra Oh, but it's a BBC show, and I love pretty much all BBC shows.Stephanie:Okay. I'll have check that out. I have not even heard of that one. What do you wish you understood better right now? It could be a trend, it could be a piece of tech, anything.Eric:I think the thing I wish I understood better is how Silicon Valley works. What's funny is we've never been kind of the favored child, I would say, of the tech industry here and in terms of raising money and things like that. I think marketing has never been the sexy object, the way crypto and those things were. I think I wish I understood the way VCs thought better.Stephanie:All right, Eric. Well, this has been a really fun interview. Where can people find out more about you and AspireIQ?Eric:Yeah. Definitely you can check out aspireiq.com/upnext. Yeah, we've got some interesting reading there. We've definitely got a case study on Purple Mattress and a bunch of other cool stuff to read.Stephanie:Ooh, nice. Awesome. Well, thanks so much for joining. We will have to have you back for round two, maybe even in person in the studio in the future.Eric:Hopefully the world works out that way. Thank you so much, Stephanie. It's great to be on. Fun time.

Rachel Drori has come a long way from the days of filling a shopping cart at Trader Joe's and packing up healthy, frozen meals for delivery to customers all around New York — all while being nine-months pregnant. As the Founder and CEO of Daily Harvest, Rachel bootstrapped her company from the very beginning, and eventually had a few big names reach out to invest, including folks like Serena Williams and Gwyneth Paltrow. In 2019, Daily Harvest generated more than $125M in revenue and the company is growing. So what makes her meal-delivery service different from the others? The heavy focus on customer-centricity.When Rachel founded Daily Harvest, her goal was to build a customer-driven company that connected people with food that was designed specifically for them. But what did that look like from a practical standpoint and what can others learn from Rachel’s journey? On this episode of Up Next in Commerce, we’ll give you the answers to just that, so stay tuned!Main Takeaways:Nimble and Agile: In marketing and customer acquisition, it’s a mistake to be reliant on any one channel. Having the ability to understand and follow the trends, and then meet potential customers where they are at the moment they are online will allow you to actually bring in new customers reliably.Call and Response: Customers are less interested in having a place to share their thoughts than they are in having their feedback responded to by the brand they are interacting with. In every channel, there should be a way to engage in two-way conversations with your customers and then a method to follow through on those customers’ needs in a way that everyone can see.High On Your Own Supply: Having control of your supply chain is one of the best ways to create agility within your organization. But sometimes it takes some technology investment to bring all your suppliers on board.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. This is Stephanie Postles, your host and co-founder of mission.org. Today on the show, we have Rachel Drori, the founder and CEO of Daily Harvest. Rachel, welcome, welcome.Rachel:Hi, thanks for having me.Stephanie:Thanks for coming on. So yesterday in the mail, I got an amazing box of Daily Harvest. And it was the perfect way for me to understand exactly what it was and enjoyed this morning. But to kick it off, maybe I'll let you explain what Daily Harvest is.Rachel:First of all, I need to know what you tried first, and then....Stephanie:I tried a smoothie, and today I'm going to be trying one of the soups in there. I think there was a lentil soup that you just add water to. I'm like, "This is what I need in my life, something that you just add water to or just add coconut water to make a smoothie and it's done."Rachel:I love it. Yes. So I started Daily Harvest about five years ago. And the mission is simple. It's really to take care of food so that food can take care of all of us. And we do this by starting at the root with our farmers. And we grow the best fruits and vegetables in the best way possible. And then we make incredible food, which I'm glad you got to try. [inaudible] smoothies and flatbreads, ice cream, alongside with people who eat it, our customers. And the idea is that you can then stock your home with convenient, but also clean and delicious food that's built on real fruits and vegetables. And part of our magic is really connecting people with food that was designed specifically for them so that you're really always stocked with a whole food kitchen of clean food when you want it and it's ready in minutes.Stephanie:I love that. I think on my Twitter, I posted a picture of my freezer and what it looks like. And it was kind of sad because there was like waffles next to one of them. I'm like, "What?" This is my life. I have waffles and then now a new experience that I don't think I'll be able to step away from after this.Rachel:Well, that's what I like to hear. But it's interesting, people buying additional freezers in the last few months. And I'm like, "I support this message. I support this very much."Stephanie:That is awesome. So tell me a little bit about the early days of when you were starting it. I mean, I'm thinking about all the different logistics and the supply chain and working with farmers. And I want to kind of hear how it all got started.Rachel:So as I started pulling on the strings really trying to figure out why the food that I wanted didn't exist, what I realized is that it was because food is not customer driven. The way food is created is actually really far from that. And the reason food is not customer driven is actually a true systemic problem. So as I set out to start Daily Harvest, part of what I wanted to do was really solve some of the systemic challenges with food. Not only the convenience and the health factor, but also why do we have to choose between preserving ourselves and preserving the planet all of the time with packaging and sustainability and regenerative farming practices and all the stuff that makes our food systems so broken? So back in those early days, I had these really grand ambitions, still have the grand ambitions, but less power to actually make them happen in those days. And what I did was I faked it all until I was actually able to do them.Rachel:So I was buying our ingredients at Trader Joe's. I wasn't telling stories of things that were going to happen in future but buying ingredients at Trader Joe's, got a commercial kitchen in Long Island City. And my right hand and my left hand were my first team members, bagging all those ingredients up into food that I knew solved all of the customer problems that I had surfaced to myself but also in friends and family, and started delivering across New York City and really trying to see if I was solving problems for people other than myself. And it turned out I was. And I'd quit my job and dove in head first.Stephanie:That is amazing. So were you personally delivering a lot of this items in the beginning?Rachel:I was delivering everything.Stephanie:Oh gosh. Any crazy stories of the delivery days?Rachel:Yeah. So I was nine months pregnant towards the end of the bootstrap MVP period. And I could no longer get behind the wheel of my car. But I had a 16-year-old nephew who could drive with an adult.Stephanie:Oh my gosh, getting his permit hours with you?Rachel:Yes, yes. It was ridiculous. So I would pick him up. I would pay him like $15 an hour to drive around and hop in and out. And I would sit in the car like a beached whale. And he would run these boxes up to people's apartments. And I would be like, "Nope, can't give us a ticket. I'm in here."Stephanie:And I'm pregnant. So even more of a reason. Don't try. That's awesome. So then around that time, it looks like you were also... Was that when you were also raising money?Rachel:So I did raise money... well, so I'd raised a few rounds at this point. I actually tried to raise money for a Series C at that phase and it didn't go very well to be honest. People didn't really understand how I had this grandiose vision and I was delivering smoothies. They just couldn't connect the dots. And I guess it was too much of a leap for people. So I decided to bootstrap for as long as I possibly could. And when I say bootstrap, I think people assume you have money to burn. When I say scrappy, literally doing things like having my nephew deliver the food, and I created the website entirely by myself and the packaging and printed everything. There was no money spent to be clear.Rachel:And raised money officially right after I had my first child and decided I needed... I was kind of choking off growth and needed to take it from the MVP stage to something much bigger. And we launched nationally in 2016, which was almost like a year after that period, and then raised our Series A actually when I was pregnant with my second child, which was super fun.Stephanie:What kind of experience did you have being pregnant and raising money or trying to raise money? What happened during that? Because I know I have some personal experiences that maybe weren't always the most positive of people just being like, "How do you plan on running a business and you're pregnant?" Even now, knowing I have three kids, people saying, "How do you plan on running a business with three kids?" And what kind of stories do you have around that? Hopefully, I'll get one. So I'm interested to hear.Rachel:Yeah. I mean, the positive and the negative. The positive was that I had no time to worry about being pregnant. I was just like, "Oh, yeah, this is just happening and I'm going to keep moving." And I think a lot of people in that moment of life and in that phase kind of stew in the moment. And it was great. Nine months later or 10 months later, a baby popped out and I was like, "Moving on." And the negative is it's funny exactly as you just phrased it. The question that came up not actually as frequently as I thought it might, but once or twice, I definitely got the question, how do you plan to be a good mother and run a business? And I'm like, "Interesting question that I'm not going to justify with an answer. But if what you're trying to ask is if I'm 100% committed to making Daily Harvest successful, the answer is yes."Stephanie:Yep. That's great. That's a good way to do it like, "I'm not even going to answer that."Rachel:What a ridiculous question?Stephanie:Yeah. I always say like I could never imagine someone asking like, "Oh, man, how do you plan on still working if your kids are on the way?" I can do that.Rachel:Totally.Stephanie:So I saw you have some really impressive names as investors like Serena Williams, Gwyneth Paltrow. Tell me a little bit about how you got these investors on board.Rachel:Yes. So each one is kind of its own story, but Serena is my favorite because I got a random email from Alexis Ohanian who's now her husband, at the time was Serena's boyfriend. And he was like, "My girlfriend and I eat Daily Harvest every day. We would love to talk to you." I had no idea who his girlfriend was. And the next thing I knew, I was on the phone with Serena Williams like, "Wait, what?"Stephanie:Oh my gosh. That is actually insane. I mean, I wouldn't have known that either because I don't really know names and stuff like that. So how did the conversation go?Rachel:I had no idea. I mean, it was amazing. She's so cool and was incredibly down to earth. And she was just saying how Daily Harvest really helped her eat the way that she wanted to eat, the way that she needed to eat in a pinch. And she loved the idea. And this was super early on. And I was like, "First of all, how do you even know about us? But amazing." And she asked if she could invest. And I was like, "Let me think about this for a second. Yes, absolutely."Stephanie:Oh, that's great. Stephanie:So after you landed Serena, did other investors come along when you could kind of point to like, "I've got Serena Williams. You win her out." How did the other ones go?Rachel:I mean, it's funny. We weren't really public with it until much later. So we had other investors reach out to us with interest, but it had nothing to do with Serena. It really was people finding us in pretty organic ways. And people just getting excited about the idea and the concept and seeing the problem that I stated earlier in their own life and seeing that we don't have to compromise, we can have it all, at least with our food. So each story, as I said, is pretty unique. But they really all were people who found us, which was pretty remarkable.Stephanie:Yeah, that's great. I mean, that's a testament to the product. Very, very cool. So when thinking about new customers finding you in organic or non-organic ways, how are you getting in front of people right now? And I'm asking this question because I went on your guys's Pinterest, and I saw you have like 4 million views a month. And I was like, "What? How are they getting 4 million views on Pinterest?" So I want to hear a little bit about your customer acquisition and how you're getting in front of people.Rachel:Yes. So we have a really robust marketing mix. My background is marketing. So we always started with the goal of, how are we not beholden to any one channel? Right? Because I think that that's just asking for trouble. And we built it in a really nimble and agile way so that as trends and algorithms and all sorts of things change, that we can then be nimble as a result. And we're lucky that we have a really high amount of our customers come in through word of mouth. But we've also done a lot of things to make that easier, to remove the friction of people sharing when they have a positive Daily Harvest experience.Rachel:But there are other things that I think have made us stand out on... I mean, literally, you name a marketing channel, we are on it. There's nothing that's like secret saucy there. But I really think it comes down to our differentiated messaging and our differentiated photography and really focusing on connecting with universal human truths where people are just like, "Oh, you get me. Yep, I understand. I'm going to learn more."Stephanie:Oh, that's great. So tell me a little bit about that differentiated messaging that you're talking about? How do you go about figuring out what you want to message and how do you know what will connect and what won't? Because what you might think is going to be a universal truth, I might be like, "Oh, that's not my truth." How do you guys go about making sure you're speaking to your customer?Rachel:Absolutely. It definitely is trial and error to understand what works, but we obviously have a mission. So we're looking for customers with whom our mission resonates. And there's just a lot of different ways where when you remove your marketing hat and you're like, "How would a normal human say this?" Or, "What is the way of saying something that gets somebody to stop their scroll or perk their ears while listening to something that they might otherwise fast forward past?" And then it's the same thing on the visual side, really focusing on photography and imagery that's visually arresting and beautiful. And also stuff that looks delicious. You can't underestimate the salivation factor of... I don't know if that's a real thing.Stephanie:I like that. Now it needs to be.Rachel:It totally does. How much of a photograph actually makes you salivate? Because that's tied to how hungry it makes you and how much it makes you want something.Stephanie:Yeah. I mean, pictures are everything. Even on your packaging and things like that, I mean, that's what makes me want to buy something, even when I'm on DoorDash or something, if an item doesn't have a picture on it, I'm like, "No, I'm not so sure if I want it," even if it sounds amazing. I want to see what it actually looks like. So it seems like you have very, very smart to have pictures on everything, especially Pinterest.Rachel:Yep. And because people have such short attention spans these days, and because there's so much media being thrown at you constantly, we also really focus on simplicity with it. So not only is it beautiful and drool-worthy, but it's also simplistic.Stephanie:That's great. So earlier, you mentioned also removing friction of having customers share their stories. How did you go about ensuring that a new customer or existing customer would share their stories and keep doing them?Rachel:Yeah. So what we have found is it's not so much about giving the customers places to share their thoughts and feelings. It's more about showing that you respond to them. So one of the things that we did really early on is we built a quite agile supply chain. And the goal of that was really to be able to respond to customer needs. We wanted to create a customer driven company. We had to be able to respond to customer needs. And it's one thing to have these amazing insights and to be innovative. And a lot of companies have the ability to do that. But if you can't respond in a timely manner, does it really matter? I'm not so sure.Rachel:So by showing customers, not just telling them, that we are actually listening to them and creating the food that they want to eat with them, and then connecting people with the food that was created for them, it sounds pretty simplistic. But there are really few companies that actually do it. So we're able to bring something to market in six to eight weeks from the time our customers tell us what they want. And I think that that is why customers love to share with us. And that is why we continue to be able to build these connections with our customers, those relationships.Stephanie:That's such a good point actually to show someone like you're not just submitting something into a black box and nothing's ever happening. What does the process look like? Where are they submitting their feedback? And then how do you interact with them in a way that is one on one, but then also shows your entire customer or new customer base, "Here's what we did for this one customer?" What does that process look like from start to finish?Rachel:Yeah. I mean, literally any channel that you can think of, we've built a way to interact. So whether it is through our app, whether it is through text message, whether it is through social media, you name it, we've made the conversation two ways. And what's interesting about it is if you think back to the story I told you earlier where kind of faking it till you make it, I'm air quoting, which you obviously can't see, but you're faking it but kind of faking it.Rachel:In the early days, our way of talking to our customers was every single team member at Daily Harvest would follow the Daily Harvest hashtag and every single day, it was the expectation that they would scroll through. And when somebody wrote something about Daily Harvest, the team engaged. Every single person on the team was asked to engage. So everyone from an engineer who might not under normal circumstances have any interaction with a customer directly to somebody on our culinary team. And it depends on what the customer put out there. But if it was something like your app is X, Y, Z, then an engineer would jump in and say, "Hey, can you tell me more about that?" And really just empowering the team to forge those relationships and to have those conversations I think is really what started it from a team culture perspective.Rachel:And then as we've grown, we've built tools in this way that allow it to happen. [inaudible 00:20:08], obviously, not everybody is scrolling through every single Daily Harvest hashtag these days, but we've empowered everybody to really think about how we maintain our vision of being truly customer driven.Stephanie:I love that. I mean, that's such a good experience. It's so different than, of course, corporate culture where you're probably told you are not allowed to engage with someone who tweets at us, and it has to be approved by PR. And there's so many rules and stuff. A lot of us had been taught in the past like, "Just don't say anything." And I can imagine how great of a culture you build by saying, "Everyone get on there. Respond to these people. It's on you to actually keep our customers happy." That seems like a transformative environment.Rachel:Absolutely. And then you have it scaled too. People really are thinking customer first at all times.Stephanie:Yeah, that's really cool. So when it comes to product request, I mean, it seems like there'd be an area that could be like a leaderboard where people can vote on the next products they want and actually determine that. Is there anything like that that you have going on to kind of create more social engagement and also people having an input in the product that maybe they wouldn't have just tweeted at you and said like, I want to have more figs?" They might not have that idea on their own, but they would like to maybe vote on it?Rachel:Totally. Yeah. I mean, we have all sorts of engagement opportunities for customers. But the important thing to know is that none of our skews or collections at Daily Harvest are created to be generally accepted. So we really focus on what people want from the perspective of their taste affinities, which is really differentiated.Rachel:So if you think about traditional product cycles and product development tools, people will look at things like demographics, psychographics, household income, credit card swipe data, and all of these things that when you kind of zoom out really never made sense to me because I can tell you, my husband and I live in the same house. We have the same household income. We share credit cards. We have the same credit card swipe data, same education, we met in school. But when it comes down to it, he orders from a very different restaurant than where I order from at night when we order in. So we really try to focus on what taste preferences are. And we try to create food for specific groups of people that have similar taste preferences, so nothing that we create is meant for general consumption. And that's where it gets really nuanced and really differentiated.Rachel:So yes, we will say to people, "We're thinking about creating X, Y, Z, and we would love your input." We take that into consideration, but we also take into consideration that, "Who is actually answering that question and where they're coming from and what their taste preferences are." Because I might like something that is, let's say, filled with greens, and you might like something that has no garlic in it or whatever it is because you might be allergic to garlic. And we're not going to like the same thing. So why should we try to make food for both of us?Stephanie:I love that idea of making sure that you actually focus on your customers because I think it's very easy, especially with all these new B2C companies that are launching right now to get distracted and not remember like, "Who did you actually build this for? What is your customer base? And what are you trying to do in this world?" Instead of being like, "Oh, and this person wants more sugar added to the matcha. Okay, I didn't really want to add a bunch of sugar to it, but this person wants it." It's a good reminder to not get distracted.Rachel:Right. But if we do have a group of customers that tell us that they want that same matcha that's a bit sweeter, we can accommodate that. It's just we would never target the same food to... We would know who we're targeting what to.Stephanie:Yep, very cool. So I'm very interested in the partnerships that you have with farmers and what your supply chain looks like behind the scenes that you can make these really quick product pivots or new products coming out in like six-day weeks. So can you speak a little about, what did that look like forming those partnerships? And any hiccups that you experienced in the early days of trying to get that worked out?Rachel:Yeah. I mean, as I said, it started with Trader Joe's because every time we reached out to a farm, they were like, "Who are you? Can you guarantee this entire crop?" And I was like, "I don't know."Stephanie:They were asking you to guarantee whole crops for them?Rachel:I mean, sometimes you have to if you want to be in control of how sweet it is, what the nutrition level is, you really have to be. And that was the vision because the way that I always envisioned taking care of food was really at the systemic level. So really to make change, you have to go to that level of scale in your purchasing. And we're incredibly meticulous about the ingredients that we use and how we source them. We actually have an entire team that's dedicated to finding the best farms. And we have over 400 farms that we work with directly. So we set incredibly rigorous standards that ensure not only are our partners using regenerative practices in their farming, things like increasing biodiversity, improving the water cycle, using organic farming practices, strengthening the health and vitality of our farm soil, using fair labor practices.Rachel:But we also are really particular about when we harvest our food. We want to make sure that the fig or the blueberry that you're eating is unparalleled not only from a nutrition perspective, but also from a taste perspective. So that means that we have to let every single ingredient reach its full nutritional and flavor potential on the vine or on the tree. And then we freeze everything within 24 hours of it being picked, which is really differentiated. And because of that rigor, our food is actually more nutritious than the stuff that you buy in the grocery store, which is something that a lot of people are surprised to hear. I think a lot of people see frozen as not as nutritious or inferior, when in fact, unless you are picking something straight from the farm and consuming it within three days, that's just not the case.Rachel:And we work with these farmers to also create entirely new supply chains, which is amazing. Our customers told us that they really wanted something with celery root last fall. And we worked with the farmer to create an entire supply chain of frozen celery root that had never existed before. And what's cool about a frozen supply chain is there's actually 50% less food waste and there's just so many benefits to the system overall. But we really think a lot about how we create the most nourishing, best tasting food and it really all comes back to those farm relationships.Stephanie:Wow, that's really cool. Yeah. I mean, I think a lot of people like you said don't understand the frozen aspect of why it's better because I know a while back, I heard that about fish too. But it's better to have frozen fish that's frozen right away when it's caught than getting something fresh. Fresh feels like it's healthier but actually it's more nutritional if you get the frozen one that was frozen right on the ship or boat or whatever it is.Rachel:When you think about the frozen aisle in the grocery store, most people associate it with like dinosaur shaped chicken nuggets.Stephanie:Yes, which may or may not be in my freezer right now.Rachel:I don't judge. When you ask most people what's in their freezer, it's like ice cream and vodka and ice cubes. I'm like, "These are not bad things, but it just shows you how the food system has evolved." And the microwave dinner was created not because it was healthy. It was because it was convenient and it was because it was created during this Industrial Revolution when food and science melded together in ways that is just so unnatural and we kind of just stayed there. So I think there's been a lot of... not I think. There's been a lot of education for customers to help them understand the benefits of frozen not only for themselves, not only for their taste buds, but also for the food system as a whole.Stephanie:Got it, that's great. So the one thing I'm thinking about too is working with farms, I can see them being on older tech stacks I'll call them or no tech stacks.Rachel:What tech stacks?Stephanie:Yeah. I'll just say non-existent tech stacks maybe unless they're like the very advanced farm with the drones going on.Rachel:No, [crosstalk 00:29:55].Stephanie:You're working with 400 farms. How are you placing these orders and getting things to happen quickly and making sure that it's up to your standards and that nothing's going to get backed up? How do you do that with farms that don't have a tech stack?Rachel:I mean, we built the technology for it.Stephanie:Tell me a bit about that. What did that process look like?Rachel:Yeah. So in the beginning, we only had a few farms, and it was easier to manage. But obviously, once you hit a certain scale, it becomes a little unwieldy and it's not just 400 farms. There's four crops a year and different ingredients. One farm might have six ingredients that they're growing for us. So it can get really complicated. But as I said, we have a large team that really focuses on this, and they're incredibly passionate. So what we did is we thought about how technology could make their job easier, how we can leverage technology to remove some of the friction in managing the quality of our food and the supply chain in general. And we really built a verification system that... I would say a trust but verify system where we set certain quality standards. Because we can't [inaudible] people who are on site at every farm with every harvest, and then there's like a verification system where they're sending us samples constantly to make sure that that everything is as we say it needs to be. And we're verifying nutrition after something is frozen to make sure that it's as it's supposed to be. And through every step, we are trusting and verifying. And all of that is rigorously notated in our technology stack.Stephanie:That's really cool. So it seems like you're bringing a lot of farmers online. Have they asked to reuse the technology with other partners too? They could be a whole separate business like, "Here's technology that you can now have with anyone else ordering from you."Rachel:Totally. I mean, we work with a lot of small farmers. So a lot of farmers don't have a lot of other business. We've really grown to a scale where most of our farmers are Daily Harvest farmers.Stephanie:Mm-hmm (affirmative). Oh, cool.Rachel:Really cool when you think about it. But yeah. I mean, we've definitely had people ask, but we've got to focus on our core competencies and what we're trying to achieve.Stephanie:Yep. That's great. So everyone's obviously looking into subscription businesses right now. It's always top of mind like, "Should this business be a subscription or not?" Everyone wants one. How do you think about retaining your customers and enticing them to stay with you for the long haul?Rachel:Yeah. So one thing that's interesting about Daily Harvest is on the outside, we kind of look like a subscription, but we're actually not a subscription. We're really what we call a replenishment business because once you sign up for Daily Harvest, our goal is to make sure that your freezer is always stocked. And it's not because that's good for us, it's because that's how we make sure that you have the food that you want when you want it. At that moment when you're hangry, when you're reaching for that bar, you need to have the right food in your freezer. Otherwise, you're going to make a different choice, right?Rachel:So we think a lot about what that replenishment looks like. And we also never want you to get an order of Daily Harvest that you don't want. Right? So we actually communicate with our customers ad nauseum to make sure that we're never sending them anything that they don't want, and they're only getting food when they do want it. And that's what makes us different from a subscription business where you have to consume your food or use your razor or whatever it is within a specific period of time and it's only good for that period of time. Because we're frozen, we're really not perishable, which is a huge benefit and allows us to be even more customer centric, but really thinking about maintaining our customer base.Rachel:Removing friction for our customers and making things as easy as possible for them, making their account as easy as possible to manage making sure that they're getting the food that they want when they want it. And we found that there's a direct correlation between removing that friction, being customer driven. We don't even think about about retention. We think about how can we be more customer driven? How can we get our customers exactly what they want? And what we found is that those things correlate really nicely.Stephanie:Yeah, I completely agree. So what does that back end account management look like for your customers? And one thing that's coming to mind is like the past couple interviews I've done, we've touched on one click ordering and how that's a big thing that a lot of people are expecting now. And I could see that maybe coming into play for you guys too where you're more about replenishing items. If I'm out of my matcha, or smoothie, or whatever it was that I really just enjoyed, going on to my account and just ordering that, and not having to have minimums or anything. Just being like, "That's what I want," and just doing it one off. How do you guys have the back end working?Rachel:Yeah. So we don't do that. And the reason why is because we really think of ourselves, as I said, as replenishment. So our customer behavior is much more going to shop at Costco, let's say. You don't go to Costco to buy one thing. It's never worth a shot.Stephanie:I need 10 pounds of butter when I go there.Rachel:Totally. But you have certain things that you go and you buy a lot of. So our customer really thinks about, how can Daily Harvest fill my entire freezer? When your inventory at home starts to dwindle, that's when you make your next purchase. So for us, one click ordering is not a thing. And we find that actually there's tension between how much cognitive load you reduce and how much customer friction you reduce, and people really getting the food that they want. So there's definitely a balance there. But what we do instead is we have an app and our app is incredibly customer driven. And it's about communication with our customers and making sure that, as I said, they're getting the food that they want when they want it. But it's definitely as easy as humanly possible, but not so easy that you're going to get something that you don't want.Stephanie:Mm-hmm (affirmative). That's great. Yeah. And I think that's a really good reminder, too, that everyone might be obsessed with a subscription model because that is good for businesses to lock people in. But that might actually leave a bad taste in a customer's mouth. And your model is completely different, which is like focus on what they want and what they need and make it easy for them to order and refill quickly without having to come back a thousand times.Rachel:Yep. And make it as easy as possible honestly for them to pause and cancel and do all the things they want to do because when you do that, they come back.Stephanie:Yep. I love that. Low friction, it's worth it. So to go to little more general commerce questions, what kind of disruptions do you see coming to commerce right now maybe in the next couple years?Rachel:I mean, look, I think COVID has been... it's been an interesting few months. But what it has done is it's really accelerated a bunch of trends that we've seen. And we've seen this huge adoption of ecommerce and people's willingness to stick around once they've tried it. So as you had early adopters previously who were signing up for food delivery or whatever it may be delivered to their home, what we're seeing now is people who are not early adopters, so more of the mainstream signing up. And there are different needs, and there's a different level of education, and there's all sorts of nuance to take into account with that trend. So we're thinking a lot about that, how we continue to remove friction for this different type of customer.Stephanie:Mm-hmm (affirmative). That's really great. So we have a couple minutes left and I want to jump over to the lightning round brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Rachel?Rachel:No.Stephanie:Prepare yourself to get some deep breaths. Get in the game. All right. We'll start with the easier ones first. What's Up next on your Netflix queue?Rachel:Oh, wait. I can't remember what it was called. It's The Man and the Company Castle. Hold on.Stephanie:Oh, that Amazon? The Man in the High Castle?Rachel:Yes. Not Netflix.Stephanie:That's okay. Yeah. Have you started it yet or?Rachel:I haven't but I am such a history nerd. And I don't know how I missed that this show existed, but I cannot tell you how excited I am to watch it.Stephanie:Yeah, it's very good.Rachel:Yeah. And I also feel like there's something about current state of affairs and dystopian society is that it really resonates. So let's see what it's got for us.Stephanie:Yeah. I mean, I like that one a lot. I think it's a good reminder I'm always very biased and ask about Netflix but Amazon, they've got some good stuff. I mean, I've binge-watched I think it was like Marvelous Mrs. Maisel if you knew to balance yourself out of it from dystopian to fun and cute. Also a very good series that I loved.Rachel:That show is amazing.Stephanie:Oh, you like it too? Yeah. It always leaves me with the happy feeling like, "Oh, this is cute. I love this."Rachel:All the time that I remind them of Rachel Brosnahan, and I'm like, "That is a huge compliment. Thank you."Stephanie:That is. She's awesome. Good. What's up next on your reading list? And it can be business or personal.Rachel:So it's Never Split the Difference which I've actually read before, but I like to read it every few years because I think it's the best negotiator out there and I'm not a natural negotiator. But it's obviously a huge part of my job. So it's coming up on time to read it once more.Stephanie:That's great. What is one thing that comes to mind when you think about that book? One lesson or principle where you're like, "Yeah, I'm not going to split the difference?" Anything high level other than what I just said which is just jacking the title.Rachel:So my favorite takeaway from the book, and it's just a reminder, it's really about listening. It's funny. I think a lot about toddler psychology these days because I have a three-year-old and a five-year-old. And there's a lot in common with the tactics in this book and toddler psychology, but it's really about validating people's emotions and feelings and creating trust and safety to be able to negotiate better.Stephanie:Oh, that's good. I like that. It shows that so many things are similar in life. Dealing with toddlers is the same thing as negotiating for your salary or investment money. Same thing.Rachel:It really is. It's crazy.Stephanie:I have to check that one out. What app or a piece of tech are you using right now that's making you more efficient in your life?Rachel:Okay. So this is such a weird one, but my husband just introduced me to the app for my cable provider. And I had no idea that this existed. I never watched TV ever. But given that we're in day three of the sit and wait for the results of our election, I've been able to just pop it up and have the news on live stream behind me. And it's been incredible because previously, I was refreshing my Twitter feed every 20 minutes or whatever it was. But just kind of having it in live feed behind me has been a huge unlock for my efficiency in this crazy time.Stephanie:That's great. I haven't even thought about apps from cable providers. So it's a good reminder for everyone. I like that.Rachel:It never occurred to me that one would even exist, and I'm very happy with it.Stephanie:That's great. What's one thing that you wish you knew more about? It could be a topic, a trend, a theme, anything.Rachel:Let's see. I really wish I knew more about human psychology. I feel like every time I read something or learn more, I get really excited and I want to dive in more but I really never have time to. And it's something that I feel would make me better at what I do every day if I really understood the psychology behind it.Stephanie:That's a good one. Yeah, I completely agree about that. Something I always want to dive into more and haven't had the time yet. So Rachel, this has been such a fun interview. Where can people find out more about you and Daily Harvest?Rachel:At dailyharvest.com.Stephanie:Awesome. Thanks so much for coming on the show.Rachel:Thanks for having me.

In the world of ecommerce, there is no greater thorn in the side of shop owners than cart abandonment. When you look at the data, which reveals that cart abandonment is somewhere between 80 to 85% across the board — it’s clear that this is a problem aching for a solution. The reason cart abandonment is so high is because the checkout process is often over-complicated, requires too many clicks, asks the customer to provide too much information, the list goes on. There is so much friction involved that customers with intent to buy never reach the point of conversion. But what if that process could become seamless?Domm Holland, the CEO of Fast, believes he’s achieved that frictionless experience thanks to a democratized one-click checkout solution that works across the internet. On this episode of Up Next in Commerce, Domm explains how that one-click solution works, and why it isn’t the answer to a payment problem, it’s actually solving an identity problem that permeates every industry.   Main Takeaways:It’s a Long Road Home: It is a common misconception that the checkout process happens simply when the customer hits the buy button. The truth is that there are many steps to the checkout process, and in most cases they have not been optimized — that’s why cart abandonment rates are so high. In order to get customers to stop abandoning their carts, ecommerce platforms are doing everything they can to create a frictionless experience every step of the way. One and Done: One-click ordering is the gold standard of frictionless checkout. Although some sites claim to have one-click checkout, you often are still multiple clicks away from actually finalizing an order, especially when you’re visiting for the first time, which requires you to fill out identification fields. By solving the identity problem for the consumer and by batching orders on the backend for merchants, Fast created a solution that delivers a true one-click checkout experience across the internet that can be installed directly on product pages.Open Your Mind: In the future, ecommerce will not take place only on ecommerce websites. From social media, to influencer content, to videos and more, one-click shopping will be coming to all of those channels so you will neve have to leave one site to shop on another. This means that opportunities for enterprising ecommerce minds will be there for the taking and those who take action quickly will unlock the value of a frictionless shopping experience and win customers for life.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. Welcome back to Up Next in Commerce. This is your host, Stephanie Postals, co-founder at mission.org. Joining us today, we have Domm Holland, the co-founder and CEO of Fast. Domm, welcome to the show.Domm:Hey Stephanie. Thanks so much for having me.Stephanie:Yeah, I'm really excited to have you. It's actually perfect because I was just going through a very poor checkout process, and I was like wow, what a perfect interview I have coming today. I think it took about 25 fields to fill in [crosstalk] and I was like I need Domm in my life. So tell me a little bit about Fast. What does Fast do, and how are you guys different?Domm:Yeah, so the simplest way to think of us is we're a one click checkout for the entire internet with no passwords. So it's a button that you'll see on websites that says Fast Checkout. When you click it, you'll instantly buy whatever you're looking at. And that could be a single item, so our button often sits above the add to cart button. So you can click Fast Checkout and just by the product instantly that you're looking at. You don't have to go add to cart, view cart, checkout and then go through 20 fields like you did, and then get to payment. It all happens in one click.Domm:Or you can click add to cart and sort of buy 20 items on the store and then use Fast Checkout at the end. Once you've used Fast Checkout to buy something, then you can track all your deliveries in one place. You can download all your receipts in one place. You can instantly reorder items you've ordered before through Fast from your Fast feed. So we have this fantastic and aggregated post purchase experience, which means again, you don't have to scramble to go back to remember the name of a site you bought something from a month ago and click a link from Gmail and then log in with a password you created for one store to try and find delivery date or something else. So yeah, we just try and make life easy and fast for consumers.Stephanie:That's amazing. So what led you to creating Fast? Was there a problem that you encountered yourself or what excited you about the payment ecosystem?Domm:Yeah, so originally it wasn't a payment problem. And fundamentally I think what Fast is solving for is actually an identity problem and payments is just one component of that. The original inception was I'm married with two little kids and my youngest child was in hospital for a few weeks, so we had my wife's grandmother staying with us and helping us out. One night she was sitting at the kitchen table ordering groceries for us and forgot a password and just couldn't order groceries. One of the largest supermarket chains in Australia, turn over $70 billion a year, just couldn't figure out how to charge a little old lady's credit card a couple hundred dollars for some food because of some broken string of text.Domm:It was just like a hard lockout. For her to be able to buy food, it didn't make sense. So at the time, I've got a [inaudible] of a passwords authentication system that can be used on ecommerce sites. The idea is granny could've just identified herself and then easily logged in and bought the groceries. But I think that I put it online, I had tens of thousands of people use it in a couple days and realize this is a big opportunity.Domm:But fundamentally, passwords aren't a problem, they're a symptom. Again, the problem is that each business requires us to re identify ourselves, which means create new account, create a new password. Login with this password created for one store. Fill in all these fields and forms from scratch. Give them payment information from scratch. Again, from a subscription standpoint, if you lose your credit card, suddenly your Netflix subscription doesn't work. Your [inaudible] subscriptions don't work. Everything is cut off because everyone has these siloed pools of data for us.Domm:So that's fundamentally what we solve for is just you not having to continually tell everyone who you are. I'm 33 years old. My name and date of birth and basic information hasn't changed in over three decades, yet I have to keep filling in forms and telling people as if it's brand new information. It doesn't make sense. So we solve for that and make that really easy. And payment is a part of that, an integral part of that, because it's part of the consumer experience. A lot of our consumer interactions involve financial transactions.Domm:But a lot of the time, it's just fundamentally making it easier for people to leverage their identity online.Stephanie:That's awesome. So earlier you were mentioning about your name and age not changing. What does the back end look like to solve for identity, and why hasn't this been done before?Domm:Yeah. Look, I think that there are companies had the opportunity to do this before. I think Facebook really had that opportunity. But [inaudible] didn't go down the identity space, they went down the advertising road. So rather than use your data to make your data portable and easy for consumers to use, they chose to your data for advertising.Domm:I don't think that from Facebook's perspective, I don't think it was a bad decision. Facebook makes a lot of money from doing that. But it's just a different... they can't then become your trusted source of data, if they're using your data for advertising as their primary source of revenue, then it's not really your trusted source for holding your private and sensitive information.Domm:So I think that there's been opportunities like that and I do think that advertising tends to kill identity products really quickly. But I think the other reality is that people have just kind of thought about things differently, or they've been solving their own problems, or they've been solving for business problems instead of consumer problems. And things like Apple, Apple building an ecosystem that you can now do log in sometimes, you can do check out if you're on Apple device on some sites and with some cards and that type of thing.Domm:They've got limited context, but basically they've got solutions to make it easier for people to perform certain actions if they're within their ecosystem. Same thing is kind of true of Google. Same thing is true of other ecommerce platforms for stores that are on those platforms. And basically what these companies are doing are reinforcing their existing ecosystems. Or further monetizing their existing base of merchants. But they obviously don't want to reward people who aren't in their ecosystem, right?Domm:And so they're fundamentally solving a different problem. Like for us, we're trying to solve the problem of granny being able to buy groceries, like how can we make it fast and easy for people to buy things? And how do we make it fast and easy for people to login? How do we make it fast and easy for people to securely use their data online? And it's just a very different value problem. Our product strategy differs because we're out there trying to solve a consumer problem and most of these companies aren't. I think that's the primary difference that you see shine through in products.Stephanie:Got it. I read that you are a self taught engineer, so tell me a little bit about that, and are you doing the engineering at Fast or no longer are you doing that?Domm:Yeah. Yeah, I've been programming since I was 13, 14. I'm 33 now, so a long time. I always liked to build things, always been fascinated with computers and programming and technology in general. I learned C programming when I was 13, 14 and been building ever sense. I fell in love with it. I built the original Fast V.1. Up until recently actually it was completely built and maintained by me. We now have a very big and strong engineering org and I can say unequivocally that no, I no longer build the Fast infrastructure. The team keep me far away. I don't think I'm the enterprise grade engineer that we need internally. But I'm still very technically involved and involved in a very close level at the product side. Very opinionated as how products should work, obviously.Domm:Allison, my co founder and I, both have very strong visions as to how we think the future of identity, future of payments, future of commerce should work. And really want to see that come to life through our products.Stephanie:That's great. So what was the first thing you built when you were 13? Do you remember?Domm:Yeah. So the first program I ever wrote was a script to determine if a word was a palindrome. My ex stepdad actually was a computer scientist and a programmer. He, myself, and the sys admin of a university in Australia, each wrote our own version of the script and then measured the speed and had a competition to see whose script would perform the fastest calculation. It was the first-Stephanie:That's great. How it all got started. I love that. So with everything that's happening right now with the pandemic, I can see a very big problem happening around new scans that are coming back because you have a lot more people who are now using digital payments that maybe they weren't doing that in the past. It seems like there's a big opportunity there for people to take advantage. So how are you guys approaching this landscape now? Is it different now than it maybe would have been a year ago, the problems that you're having to solve around security?Domm:Yeah. Internally, we've been absolutely focused on security since day one. So we hired a VP of security before we hired our first engineering manager. We really built out the security function very early. Honestly for a company of our stage, I would unequivocally say had the most sophisticated security posture of all. We have a lot of different programs in place. And really it's because we're managing data and payments. It's essentially our business. So we're just very intentional and have been about embedding into our culture as a culture of security and privacy from day one.Domm:And it's a really important piece. The reality is that it's not that interesting from a consumer's perspective. They're far less interested in security than they should be. So that doesn't mean that we shouldn't care about it, it just means that we don't talk about it a lot. It's not a benefit that's going to drive consumers in droves to sign up for Fast. One click check out drives consumers and drives to sign up for Fast. But the reality is, we need to keep them safe when they do, and security is an integral part of that. Same thing is true of merchants and in reducing fraud and charge [inaudible] and so forth.Domm:So we invest a lot into that at every level of our product from application design perspective and a system design perspective and infrastructure and internal policies and whatever else. We think about it a lot. The reality is that our product is extremely well poised to reduce both consumer fraud or merchant fraud and identity theft and so forth because we sit as an identity solution, as first and foremost. So when it comes to making a transaction, typically everyone's transactions are siloed. Everyone's data vaults are siloed. So every store is operating independently. They're kind of only looking at their own historical data primarily as the determinant risk. Whereas the beautiful thing about Fast is that because we sit across every store, because you can use your identity hold with Fast at every different merchant and all the different sites across the internet, we can in a really sophisticated manner, help to reduce that risk because we can gauge risk against your profile and past purchases and log in history and so forth, and identify anomalies. So it really means that we can keep consumers far more safe than basically any other solution.Stephanie:Yeah. That's really great. I think anyone who is working with you would feel really good about having those safety measures in place because I was just reading about how many people are now using debit cards, especially with contact less payments. But that a lot of merchants aren't asking for pins anymore because it's too much friction when it comes to payments. And I never even thought about that, that a merchant can be like, "Ah no, I'm not going to ask for the pin for your debit card because it takes too much time." That's a huge risk. Your debit card can be linked to your entire savings.Domm:Yeah. Look, absolutely. In Australia, we launched [inaudible] chip cards earlier than the US and really years ago [inaudible] chip cards were mandatorily introduced throughout the country, so we've been using them for a long time. We have less than $100 you don't use a pin, and over $100 you do. That's standard across the country. Whereas here, it's almost like the wild west where some stores enforce a pin on any transaction, so a dollar or something like that, you still have to use a pin.Domm:And then some stores, I've done hundreds of dollars in transactions and had no pin. Yeah, I think there is something to be said about having a set of standards and a strong set of standards to protect both consumer and the bank or the merchant. One is, your risk as a consumer and suddenly not having food in your account. And that's right, it's a debit card linked to your real money. And if that account is drained, even if you've got protection from the bank or whatnot, it's not going to come instantly. And so there's a real risk for people, and then again from the merchant's side, from card fraud.Stephanie:Yeah. Very scary. So when it comes to ecommerce shops, what tools are you integrated with right now? Who can actually use you? Or [crosstalk] in the future who do you plan to use, or who do you plan to partner with?Domm:Yeah, good question. So we launched last month in a partnership with Big Commerce. So every one of Big Commerce's 60,000 merchants can offer a fast checkout to their consumers and to their shoppers. Next month our launch with support for Woo Commerce, another large platform with over a million and a half active merchants. And Magento after that. And then next year we're going to be launching support for a Sales Force [inaudible 00:14:39]. I'm really excited to work with the Salesforce team and take their launch on commerce cloud.Stephanie:Amazing. I'm not biased or anything but I do think they're probably going to be the best partner.Domm:Without a doubt. The reality is, a lot of the world's favorite brands really do see it on Commerce Cloud, so it absolutely is a key partner and one we're excited to get off the ground.Stephanie:Love that. So to shift over to the merchant mindset a bit, because that is who listens for the most part to this show, I was looking on your co founder Allison's twitter and she had a stat on there saying that 50% of cart abandonment occurs at the payment stage in the US. And I wanted to hear a little bit about maybe a case study or metrics that you guys look at to see where a merchant should be looking at to see if their payment process is going well and how maybe... what is the average? What should they say like, "Oh, this is normal cart abandonment around this percent is normal, and this is too high"? How can a merchant think about whether they're doing well or not?Domm:Yeah, great question. I think that there are so many ways to look at this. The average cart abandonment is 80 to 85% across the board.Stephanie:Oh wow. It's higher than I thought.Domm:It's phenomenally high. And so the reality is, if you're doing less than that, than you're doing above and below industry average, so maybe you think that's good. The reality is, it's appalling. 80 to 85% of your customers who have given clear intent to purchase are leaving without buying something. So even if you're below that, I don't think it's good enough. It's not good enough because one, you're missing out on a lot of sales. And two, your customers are just having a terrible experience.Domm:Some people, like my granny story, it's just actually a hard [inaudible 00:16:24]. They're just unable to buy from you. Other people, it's just so long and inconvenient that they're just leaving. And the reality is, like we said, the typical flow is this add to cart, view, like everyone kind of thinks of checkout as a final stage of checkout. But it's not. The process of buying something is add to cart, view cart, checkout, and then you typically ask them for your email first and then you try to work out if they're a customer or not. If they are a customer, get them to log in. If they're not, then say, "Do you want to do guest checkout?" Then you give them a whole bunch of forms to fill out. And then at the end you ask them for payment.Domm:So Fast is really different. Every single site that has Fast on it, you will see a Fast checkout button on the product page. And you can also see it on the cart page, and you can also see it on the checkout page. But it's on every product page. And this is really the biggest difference because the fastest way, the easiest way for somebody to buy something is from the point that they're looking at what they want to buy. It's one click to be finished and order from the point that you're looking at the product with Fast. And that is just such a big difference. It's an actual one click check out. Whereas every other solution isn't one click anyway. The payment, it's normally at least two or three or five clicks or whatever. But it's one or two or three or five clicks after you've done like ten steps to get to the payment section of checkout. And it's really slow.Domm:So as a merchant, you can see very clearly in your analytics every stage of drop off. So from add to cart, how many people leave? From view cart, how many people leave? From checkout, from the email form, how many people leave? And so forth all the way down the train. Now if you've got 15 steps in that process, if you've got five steps in that process, then that's a lot more than one step. It's hard to have that levels of abandonment from a one step process. So that's why Fast is really just so different in market because we take what is a much, much longer process and just simplify it to the NTH degree.Stephanie:Got it. Are you advising the merchants when it comes to minimums? Because I could see me finding, I don't know, a mascara, it's only a couple of dollars, having fast check out on there, how do you set that up for the merchants so that they're still doing things and their profitable way but also allowing for that fast checkout, especially if they have lower priced items?Domm:You're talking about my favorite point here. The fear of merchants, and absolutely warranted, the reason that they would not put any other payment buttons on the product page. So it's not like no one else has ever asked to be on the product page, but merchants typically just say no to having PayPal, Apply Pay, Google Pay, like pick your payment button. They just say no to having it on the product page. And it's because the fear is, and an absolutely warranted fear, is that it will reduce average order values. It will reduce the average items per order. It will increase delivery costs. It will increase shipping costs. And they don't want to do that. Merchants don't want to reduce the amount of money that they're making.Domm:And the reality is, if you put an Apple Pay button onto a product page and a consumer uses that button, the merchant is guaranteeing that they're only selling one item. So if it's mascara for $4.99, then they're only selling mascara for $4.99. As a consumer, it also means that a consumer is going to pay individual shipping costs for an item. So typically the shipping might be six, seven dollars or something. So a five dollar mascara is suddenly more than double as expensive. So as a consumer, it's not a great outcome either. So it doesn't make sense.Domm:Even on higher value transactions, even if the product was $50, a merchant still wants to bundle multiple products into a transaction. So they still aren't incentivized to be pushing payment, like individual payment buttons onto product pages. The difference of Fast, and we spent a long time engineering something with this exact use case in mind, and it makes us absolutely different from every single payment button on the market because we're not just a payment button, is that we natively integrate batching. Which means, as a consumer, when you click Fast checkout, you instantly buy whatever you're looking to buy. The mascara, it's yours. Now you can keep browsing.Domm:And then a couple of minutes later, you decide that you want to buy eyeliner, and you click Fast checkout on the eyeliner, and now you've got one order with two products on it. Not two orders of one product. So for the merchant, the average order value is now increased. The average items per order is now increased. They only have to fulfill one order. So they only have one box. It's going to go out to the consumer, and so it's only going to be one delivery cost to them. And they're only going to be charged one transaction fee. So the consumer only has one charge on their credit card. The merchant only has one charge from Fast.Domm:It keeps average order value high, [inaudible] order. Even though we're on every single product page, and I can tell you that between 75 and 80% of every single checkout on Fast is from the product page. So it is absolutely overwhelming the impact that it has to businesses, to every single business that takes on Fast, that the majority of these sales coming from product page. And it makes all the sense in the world, yet our average items per order is over two. And a lot of stores, the average items per order, even without buttons on the product page, is less than two. It's like, 1.7, 1.6. So we are driving people, we are making it easy for people to buy things. People are buying things. People are buying more things. So businesses make far more money, can increase their order values, can increase the average items per order, can decrease their shipping cost, can decrease their payment cost, and yet still be increasing conversion rate much higher than they are now. And decreasing abandonment.Domm:Yeah. The button on the product page, the Fast checkout on product page, with our batching functionality, is just a next level for ecommerce.Stephanie:That's really cool to hear, how that works behind the scenes. And I can definitely see that working well. I mean I'm even thinking about how many times I've added a bunch of things to a cart, especially on my phone, and then just forgot about it and came back and it wasn't there anymore. And even within Amazon, I mean they have that Buy Now button, and I will buy the smallest things, just buy, buy, buy. I'm sure maybe they also batch that in the background, but it doesn't matter to me because I'm just going through quickly buying things that maybe otherwise would have sat in the cart for a week.Domm:You've hit the nail on the head. So Amazon is the only other company in the world that batches like we do. And they only batch like that for Amazon.com. So Amazon Pay doesn't do this. So what we have done is take that same functionality that the world's largest ecommerce site built for themselves and given it to every single other merchant. And it's just natively integrated out of the box. Merchants don't have to do anything. They just integrate Fast and we do the rest. So it's very, very sophisticated technology that decreases costs for business and everyone gets it by default. Yeah.Stephanie:Wow. That's awesome. So I also just read that you guys raised 20 million in funding, and I wanted to hear a little bit about what you plan to do with that.Domm:Yeah. So we raised $20 million dollar series [inaudible] by Stripe. Obviously Stripe is one of the largest payment processors, payment infrastructure businesses. And in fact, Strive recently just partnered with Sales Force and Strive is going to be integrated into Commerce Cloud as well. And they're sort of key partner of Commerce Cloud.Domm:Really, our goal is to enable as many consumers and as many businesses as possible to use Fast. So the money we raised is really to speed up that expansion. Our mission is to put these buttons on every website in the world, and partnering with people like Stripe, a huge distribution partner for Fast, and great partners for us. And we use Stripe's payment processing, which underpins Fast. But yeah, we're deploying the capital to build our network of merchants and offer Fast to every internet connected consumer in the world.Stephanie:That's awesome. So how are you approaching international markets? Have you started doing that yet? How are you thinking about that roll out plan? Because it seems like it could be tricky since everyone has a different idea of how payments should work, or what they're comfortable with, or how they pay.Domm:Yeah. It's a good point. So we already have merchants in five countries. We can support merchants in 42 countries. So we're expanding our roll out. And we support buyers all around the world, obviously. Ecommerce is kind of inherently global because you can buy from stores all around the world and have items shipped internationally quite easily these days. So there is definitely a large global component to our business.Domm:The reality is that typically payment processing has been dictated by merchants. And it's a cost driven exercise. It's more of a commodity product. And a consumer has no idea who Stripe is or [inaudible] or Braintree or these companies sit in the background that process money. Consumers don't know them. The consumer just interfaces with the business, gives them their credit card details, and away they go. The reality is that with Fast, we're a button system on the front end. Consumers get to know who we are, they choose to use the button because they get one click check out. It means that they get this entire post purchase experience for free that they didn't get before. Finally they get all of their orders in one place, all of their products in one place. It's a great experience for a consumer.Domm:And the consumer is now driving the decision as to how payment processing should be, rather than business. Now that's not to say businesses don't have a choice, obviously they get to put Fast on their website. But the reality is, the consumers are being far more active into which payment provider is being used because it's being driven by that front end decision. And I think that that's the biggest change that you'll see moving forward is that a lot of payment decisions get remade by consumers as opposed to businesses.Stephanie:Yep. I love that. So have you heard any feature requests from these new customers that you're onboarding that maybe you weren't expecting? Since you just launched six weeks ago, I'm sure you maybe have a couple people being like, "Hey, I would like this or that," and you're actually building something that you weren't planning to build before launching.Domm:Yeah. Look, our two biggest features that we get asked for all the time by merchants and consumers is returns and subscriptions. And we're going to be supporting both of those very early next year. We want you to be able to manage your subscriptions through Fast, and as a consumer, this means we put all of the power in a consumer's hand. So that all of the control, stuff that they don't have. At the moment, they don't get to see all of their purchases in one place. They don't get to see rich receipt information. They don't get to reorder products easily, so we're giving them that.Domm:But the same thing is true for subscriptions. Where are all the subscriptions managed that come out of our accounts every month? It's horrific, the state of subscriptions. And so we're building that support for our subscriptions for consumers. And obviously for business as well, that means that it comes very easy. One click for customers to sign up for a subscription with you. So it's a really great experience for both. And then returns as well. We want to make it easier for consumers to return things when they need to return things. And give them instant refunds on the money. Let them spend the money again straight away. Domm:And then the last one that I find really exciting is so we already offer the one click reorder from Fast from our online dashboard, but we're going to be bringing out instant reordering of physical products. So you can scan a code on the back of your shampoo when you run out and more shampoo will come [inaudible 00:28:09]. You can do the same thing with ketchup in your fridge, and more ketchup will come. So basically, every consumable good in your house you'll be able to reorder just by scanning the code on the back of the product.Stephanie:Wow. It feels like you guys are tackling a lot of different really important areas. I'm even thinking about some of those finance apps where they're like, "Let's analyze all the subscriptions that you're subscribed to." It seems like you guys are kind of building a dashboard that's going to cover that, cover the reordering of things, covering returns. You guys seem to be doing a lot that a lot of other individuals have maybe tried to build one off products to solve.Domm:Yeah. Exactly. And I think that you think about all these spaces. This has been the problem. Everyone has thought of all of these things as disjointed problems. Again, the core thing that we're solving is identity for consumers. When you walk into a doctor, you still have to fill in a paper based form. It's crazy. Everyone just has these siloed information. Move address, you've got to tell everyone your new address again. The state of the world, the world is broken because of identity. So that's fundamentally what we're solving.Domm:So we're giving consumers a home to manage their information. And that means when you buy things, give you a home to manage those purchases. When you subscribe to things, give you a home to manage those subscriptions. We really just think, "How do we provide a really secure and centralized spot for consumers where it puts them in control of their data?" As opposed to leaving businesses to being in control of their data.Stephanie:Yeah. Even thinking right now about every time I take my... I have six month old twins, I take them into the doctor, and I have to fill out the form twice with the same information. I'm like, "Ah. This is horrible."Domm:Exactly. Yeah. One hundred percent. I think of doctors as the best use case for us, as to how annoying it is and how frustrating. Yeah.Stephanie:So what channels are you all using to get the word out? What do you see success? And I'm asking this because I was looking at your website and then on Instagram, bam, there was Domm talking to me saying, "Hey. You checked out our website. Where did you go?" And I was like, "Whoa. That was quick and awesome retargeting." So what are you guys finding success in right now to get the word out about Fast?Domm:Yeah. So obviously social channels are great. We use all the major social channels. And a lot of different data retargeting tools. Especially for business customers, so these tools like [inaudible] really effectively target our core demographic. Really, for us, distribution actually comes through sellers. Sellers put the button on their website and really that's the biggest window into consumers. That's where we grow our fastest consumer generation. So we don't typically have to try and actively build or really drastically, productively build the consumer network, because it comes through sellers. 90% of buyers, our first time Fast customers, they come to us through a merchant site.Domm:But now, after the first time that they fill in the form once, now they have one click check out everywhere else. Even on that site. Once they click Fast checkout on a mascara, then they fill in their details, then they keep browsing and then they buy the second product, and the second product is one click. And then the same thing is true if they come back a month later or a week later or whatever, they can buy again. So for us, it's all about how do we bring on more merchants? And great thing about ecommerce is that every ecommerce site in the world is public. We can identify our entire market from [inaudible 00:31:44].Domm:We use Sales Force for our engine and we track virtually every ecommerce site in the world and know what technology they're on and know what payment processes they use and target them accordingly. Through both sales and marketing. And partner with platforms Big Commerce or Sales Force, Commerce Cloud or so forth to better selling to those ecosystems. But yeah, I think really just want to make use of all of the tools and channels available to us, all the relevant ones at least, and reach people wherever they are.Stephanie:Awesome. So it seems like also that you guys are very far ahead of certain topics. Certain products that you're building just feel far in the future that I didn't think those problems would get solved in a year, but it seems like you guys are tackling them. So I wanted to hear what the future of online commerce looks like to you. In 2025, what will the process look like and how should merchants be preparing right now?Domm:Yeah. Great question. It's so amazing to see all the value that you can unlock by enabling frictionless commerce. Is the idea of this sort of click and buy. And really it's been this nirvana or the epiphany of what people really want, and we've never gotten there. And that's exactly was Fast has delivered. So suddenly you can open up ecommerce opportunities everywhere. Not just through your site and then through some ten minute checkout process. If it's one click check out, it means you could just pay 50 cents and read an article, or subscribe to the Wall Street Journal in one click. Or watch a movie in one click, or you can land on a site after seeing an Instagram ad and actually just check out in one click once you like the product. Or check out from an ad itself. Some frictionless. Maybe it is a mascara, a bundle or something that you see in an ad, and just one click purchase from the ad itself. That has been the nirvana of advertising for a long time.Domm:But it also means through social media, one click purchase through social media. If you do see an influencer promoting a product that you like or something that you do want, then just unlocking the value a lot sooner, and having less barriers for consumers to actually buy the things that they want to buy and enjoy the things they want to enjoy. So there's a whole Rolodex of opportunity.Domm:I think things like our physical reorder product is going to just unlock a whole new wave of opportunity again. Because it's not limited to the [inaudible] who bought it originally. You could go to the supermarket and buy ketchup off the shelf and then take it home, and then when you're finished, then scan the code. Anyone in your house could scan the code and instantly more would be delivered. So it's not tied to a person, it's tied to a product. I think having that ability to mix real well to digital transactions that simply will just unlock opportunities that we can't even think about at the moment.Stephanie:I love that. I also think Tik Tok is big. My team always laughs at me about that, but I think about how many people I follow on there. And I was watching this one girl's video where she had some cup off Amazon and she was just doing a silly review, and apparently millions of people bought this cup just because of her review. But she didn't get any attribution back. And it would have been nice to have a Fast button in there where [crosstalk] buy that. I want that too.Domm:Yeah. Absolutely. We're going to run tests of one click check out just from links in Twitter later this year. But yeah, Tik Tok 100%. We'll be able to do it later this year from a QR code embedded in the Tik Tok videos or Instagram videos, which would give them attribution and affiliate fees and whatever else. But yeah, I think that there's so much we could do and we'd love to really expect to work a lot more closely with some of the large social networks over the next 12 months.Stephanie:That's really cool. Yeah, I'm excited to see where it transforms to. All right, so I want to shift over to the lightning round brought to you by Sales Force Commerce Cloud. This is where I'm going to ask a question and you have a minute or less to answer. Are you ready, Domm?Domm:Okay.Stephanie:All right. What's up next on your podcast list? Do you listen to podcasts or do you just join them?Domm:Yeah. So actually I'm listening to Business Wars at the moment. I am really enjoying hearing about one, the war of two companies I think is kind of interesting. But the history of companies as well. I had no idea that the founder of Adidas, one, how Adidas got its name, and then two, the brother of the founder of Adidas started Puma. Anyway, I find these stories amazing, so I'm digging my way through the many seasons of that podcast.Stephanie:Oh, that's great. So we have a podcast called The Story and we did a whole episode on the brothers and how they were building Adidas together and yeah, how they shifted over to having competing companies. It was a very interesting story.Domm:Yeah. Yeah. Amazing.Stephanie:What's up next in your travel destinations when you can travel? Where are you headed?Domm:I am Australian as you can hear, and I'm just addicted to the sun. I'm like a lizard. So it's always tropical beach. I'm hoping to be able to get to Hawaii. I'm optimistically, maybe naively optimistic about getting to Hawaii for Christmas. But anywhere with sun and water is my dream destination.Stephanie:That's great. What is your most recent impulse buy? What did you hit Fast checkout on recently?Domm:So solo [inaudible] great merchants now, but at a product that we actually just used at a beach last night. And it's a solo stove, so it's a fire pit. Beautiful fire pits, and they are really an amazing product and we went down to Ocean Beach last night and busted it out for the first time. We bought that with Fast checkout from the product page. But yeah, that was a really, really nice product to buy.Stephanie:That sounds nice. I need one of those. If you were to have a podcast, what would it be about and who would your first guest be?Domm:Oh. We're thinking about this at the moment. Who would my first guest be? I do think that there's lots of opportunity in ecommerce and a lot of the companies doing really interesting things, especially in the age of Covid. The world has changed so dramatically. I think Nike has been doing some really interesting things and rapidly changing their business model. Their CEO has come from a tech background. I think that would be a very interesting discussion to hear more about Nike's ongoing strategy and what the brand looks like moving forward.Stephanie:That would be a good one. All right and the last one, what one thing will have the biggest impact on ecommerce in the next year?Domm:Well I mean, I'll give you two things. One is the obvious, which is Covid. It is drastically shaping ecommerce. The second one is logistics. Again, [inaudible] because of Covid, but with increased ecommerce demand. But logistics is definitely going to be interesting to see how logistics plays out and changes ecommerce. Especially democratizing the Amazon effect across the internet.Stephanie:Yep. Yeah, I completely agree. Well Domm, this has been a very fast interview. I think we did your brand justice by how quick and how many hits we had in here. Where can people find out more about you and Fast?Domm:Great. Yeah, thanks. I had a blast. People may have to listen at a slower speed because I know I talk quickly. Fast, F-A-S-T dot co. You go on our website, have a look. Sign up as a consumer. If you're a merchant, hit us at sales@fast.co. We'd love to get in touch, or go to fast.co [inaudible 00:40:08]. Sellers, you can hit us on social media. We're very active on Twitter. We're active on all the channels, but Twitter is definitely our number one channel. You can go to twitter.comfast and you can engage with the business. If you want to talk to me directly, twitter.comdomm, D-O double M.Stephanie:That's a good handle. Perfect. Thanks so much, Domm.Domm:Pleasure. Thanks for having me.

Haven’t had a chance to listen to our first 50 episodes yet? Never fear, you’ve got time and they’re not going anywhere. In the meantime, we’ve created an epic recap episode to keep you up to date with this ever-changing world. Throughout the first 50 episodes of Up Next in Commerce, we’ve chatted with some of the fastest-growing startups - like Thrive Market and Haus - to the more well-known companies like Puma, Rosetta Stone, Bombas, and HP. Our guests have shared everything from their toughest lessons, to their secrets to success, to the must-know advice for every ecomm leader. And while every company is different and every story unique, over the last 50 episodes, several common themes have emerged. On today’s special episode of Up Next in Commerce, host Stephanie Postles is joined by Albert Chou, the VP of Operations at Mission.org, to dive into some of these top trends.The two discuss the supply chain shakeups companies have had to face this year, and they do a deep dive into the world of influencers and how brands can work with them in a way that leads to lasting ROI. Plus, they look into their crystal balls to try to predict how DTC companies will work with and compete against Amazon, debate on how voice search will impact shopping, and discuss what the future of shoppable worlds might look like. Main Takeaways:Supply Chain Shakeups: Everyone is competing against the hard-to-match expectations set by Amazon — but it’s not all about fast shipping. Processing returns effectively and managing every step of the supply chain so you are left with margins that actually allow you to grow are the main areas that all retailers are, and will continue to be, focused on. I’ll Take One Order of Influencers: Because influencer marketing has become so in demand, there are more strategies than ever to try to get the most ROI out of influencers. What is likely to happen in the future is the creation of a marketplace where brands can buy verified influencers, who are themselves driving the demand for more upfront payment.  Make It Worth It: Building an omnichannel strategy is about more than just offering a brick and mortar location for people to buy your products. Today’s shoppers are looking for experiences that are memorable and entertaining. But it’s important that while brands create those memorable experiences, they don’t forget that little goal of converting potential customers into real buyers.Turning Virtual Into Reality: Shoppable video and the increased offerings of digital products is going to set the stage for future commerce. The next generation is already using real cash to buy virtual products for their avatars in various games. In years to come, not only will you have the option for your avatar to have that virtual product, the real-life version will be offered in tandem for the user behind the screen.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone, and welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder of mission.org. Today, it's a new and interesting episode where I have our VP of ops, Albert Chou on the show, where we're going to go through the previous 50 episodes and talk about highlights, and then talk about future trends that maybe no one has talked about on the show so far. Albert, welcome.Albert:Yeah, thanks for having me. But to be clear, we're not going to go by the 50 episodes one by one because-Stephanie:We're doing one by one.Albert:No, that's terrible. We can't do it. Cannot do it.Stephanie:So, Albert, tell our listeners why did I invite you on the show?Albert:Well, I do have my own ecommerce business, www.[inaudible 00:00:41].com, I've also helped out on a couple others. The biggest one got to 10 million a year. And I worked for an ecommerce startup. One of the co-founders was a guest on the show AddShoppers. So, been working in the game of ecommerce probably since 2016 and still operating today, so learned from painful mistakes, as well as seeing other people have great success.Stephanie:Yeah, you always have some really good feedback and comments on our prep docs. Our amazing producer, Hilary, will put together an awesome prep doc for every episode for me, and then you come in along with all your other job responsibilities at mission, with the VP of ops, you do everything here, but you also come in and add some good questions and comments, and that's why I thought it would be fun to bring you on. So, thanks for hopping on here with me.Albert:Yeah, let's do it.Stephanie:So, to start, I thought we could kind of go through just some high level trends, because through all the episodes that I've had and all the guests we've had on the show so far, there's actually quite a bit of similarities that I heard. And starting with the first one, I think talking about supply chains is really interesting, because so many of the guests who've come on have talked about the shake up in supply chains that they've seen and how they're kind of pivoting and what they're experiencing, and I think that might be a good place to start.Albert:Well, when they talk about supply chain, everyone's competing against what Amazon has created, right? Amazon has created this expectation that you can get what you want, when you want it pretty darn fast. And so if you're any direct consumer brand, or any brand out there, if you're a retailer, that's what's becoming the now norm, right? Can you send it to your customer really fast, and can you take it back? That's like probably the most painful part of ecommerce is the fact that you do have a percentage of tolerance for returns. So, the tighter your supply chain is, the more margins you can create in the process, the more able you can take a return without losing everything. So, it makes total sense that every business is trying to figure this out, how to get closer to the consumer, how to make things closer to the customer, how to make sure that they can take back whatever is being sent back. So, it's just matching what the new customer expectation is.Stephanie:Yeah. I think it was also very interesting, talking to the ShipBob guy where he was talking about how you can basically tap into different fulfillment centers by using them, whereas before, everything with COVID, a lot of people actually were shipping all the way across the country and not really looking at maybe location based ordering. Maybe some people were, but I found that kind of a good shake up that now people are starting to think about how to do things more efficiently and how also not just to rely on one supply chain, because a lot of them maybe are going out of business right now, a lot of the warehouses are having issues, there's a lot of inventory issues. So, it's good to have not all your eggs in one basket.Albert:So, it's not just that. So, there's companies out there that are investing into logistics infrastructure specifically for other people to share. So, similar to ShipBob, there's other competitors in that field. But it goes further than that. If you take a look at some of the publicly traded companies, one of the larger ecommerce platforms, they have invested heavily in infrastructure and warehousing. I know that ChannelAdvisor did the same exact thing. They literally bought a warehousing logistics company. And ChannelAdvisor, for the longest time, has been a company that helps you as a merchant, list your products across the different marketplaces. So, if Stephanie's t-shirt company wants to list their product across Amazon, they want to list it across Rakuten, they want to list it across eBay, and maybe some others, she would still have to ship and fulfill from her own store.Albert:Now, why did ChannelAdvisor build that tool so you can list one product and get it plugged in everywhere? So, why did they invest in all these warehousing companies? Now, it hasn't come to full service yet but you can kind of see it down the road like the supply chain is where the innovation is going to occur. And I think you're going to continue to see that, you're going to see more entrance in it, and it's just non stop, that race will never stop. Basically, a customer can never get something fast enough. You know what I mean? There's always going to be this push to get it there faster.Stephanie:Yeah. It's also interesting hearing about certain companies trying to compete with shipping models against Amazon and trying to have one in two day shipping. It feels like such a hard thing to create from scratch now, but if you can figure that out, you're going to win.Albert:So, I don't know if you know this, Steph. I've also sold through FBA Amazon.Stephanie:I think you told me that?Albert:Do you know [crosstalk 00:05:37]?Stephanie:What did you sell, first of all?Albert:It was an adult card game.Stephanie:I don't want to hear anymore. This is a kid friendly show.Albert:It was not kid friendly. But how it worked is, so I got my order in China, and I had 5,000 pieces, literally shipped it to an FBA Center in New Jersey, never touched the product, and then Amazon automatically redistributed it across as its fulfillment network. And I would get updates like, "Oh, we're moving two boxes to Texas." "Why?" Because we predict, in Texas, someone will buy this, and therefore by moving it closer to the customer, we can reduce the shipping with our internal [crosstalk 00:06:20]."Stephanie:Do you have an influence over that prediction model.Albert:No.Stephanie:Because now more than ever, I'm like, how can anyone predict anything? I mean, there was a really good quote about like, should we be preparing for more people to buy Inkjet printers because they're all working from home, or extra freezers to prepare for the worst? It feels like there's no way to predict for that, so how do they even know that there's a couple in Texas who might want that?Albert:So, add to cart. I think add to cart is what they're doing, right? They're looking at how many people are adding to cart and then they're also looking at the percentage of conversion over time of people who do add to cart. So, if you see a bunch of cart adds for this product or a bunch of search volume increasing for a product in a specific area, you can automatically assume that that product is going to be in demand in that area. They've probably gotten it down to a super exact science.Stephanie:Yeah, I'm not going to question them. I'm sure they got it.Albert:Yeah. And since they're always moving products within their own fulfillment network everywhere, they see that there's a probability that this is going to happen, they just move it closer to you so that when they finally rely on last mile logistics, they've got it as close as possible so that they don't have to pay so much.Stephanie:Yeah, that makes sense. All right. So, the next one I want to kind of move into is influencers. So, first, we did a survey of our audience and a lot of people wanted to hear about influencers. How do I use influencers? What's a good way to actually get a good ROI on it? And a lot of our guests actually mentioned influencers as well. Some people were trying it out and were like, "I don't actually know if this is even working." Other people were having great success but were trying different models. So, I don't know if you've listened to the fancy.com CEO, Greg Spillane episode.Albert:I did.Stephanie:Okay. Well, first of all, that guy's a badass. I mean, making that company his stories. Like did you hear about how he went into a warehouse or a storage locker and found a bunch of credit cards that the founders were giving away with like $1,000 on it, and they were just giving it away to influencers just to try and get them to use fancy.com? Did you hear some of the stories that he was going through about what he experienced when coming into the company to try and turn it around?Albert:I mean, it's the classic, right? It's the classic problem in marketing, right? You're pretty sure some of it is going to work, some people say it's up to half, you just don't know which half, right? And so you're just blowing money trying to get more movement, but I get what they were originally trying to do makes total sense. I mean, you read about the stories of businesses like Gymshark, which built their whole business model off of influencers, and I think they just got a private equity valuation into the billions, so everyone wants to jump on that train.Albert:The problem is influencers themselves have created this marketplace, right? So, if you claim you're an influencer, and you have hundreds of thousands of followers on Instagram, now influencers, they don't want to work on commission, they want to work on upfront fees. So, there's this new network which you're now going to see tools come into place of helping merchants buy influence. And so that's the next wave, right? Because I mean, there's a lot of influencers that are frauds or they have no influence on their audience whatsoever, they just have a big Instagram following for whatever reason.Stephanie:Yeah. They just [crosstalk 00:09:30].Albert:That's why the merchants are so frustrated.Stephanie:Oh, yeah. I mean, it's hard to know. You can see someone with a million followers, and something that I saw that was actually a good reminder for anyone with a small business was they're talking about how you can see if those followers have an intent to buy. So, if you have some influencer on there and they're showcasing some purse, or some lipstick, or whatever it might be, and the people in the comments are like, "Oh cute," or, "Pretty" or just liking it, they actually don't have followers who have an intent to buy. Versus you might see more micro influencers, like people that follow from around the area or something, and the people in those comments are like, "Where do I get that jacket from?" Like, "Please link up your shirt."Stephanie:And those are the kind of influences you want to go after because you actually know that if you're in front of their audience, they're ready to buy because they trust that person, which seems like it's kind of shifting, whereas before it was like just get the big name, the big followers, and now it's more like, "Let's make sure we get an ROI. How do we make sure to track this stuff and see some good conversions from it?"Albert:Yeah. I mean, you don't know what you don't know, so all you're looking at is what you assume is a big audience. And so that's the biggest misconception in social media, it doesn't determine their purchasing behaviors. It's just, "I like this person because I think she looks good, or I think he looks good, or I think he's funny. I'm not going to buy anything.Stephanie:Yeah, I can definitely see tools coming out soon, or maybe they're already out in the world, showing like here are kind of the demographics of this person's followers. So, you can sign up with an influencer and also see the income level, the job title, so you know that what you're getting with that influencer is going to have good results because you can see the profile of their followers.Albert:So, interesting, right? Platforms now that are creating marketplaces of influencers. So, I'll name one. We have not had their CEO on the show, but grin.co, you should join the show.Stephanie:[crosstalk] here.Albert:Yeah. GRIN is pretty fascinating, because they've built this marketplace where you as a merchant can then log in and you can see all the influencers, you can search by category. Let's say I want surfing, or you want food, or you want outdoor, whatever it is you want, it'll pull up a list of influencers and then it'll show the basic vanity metrics. But it also has ratings of probability of sale, because they've already maybe done a campaign for another brand, so you as a brand kind of see those numbers. Now, the problem always is, as a consumer is, you kind of always get drawn to the big numbers, right? So, you'll see like, let's say, the superstar TikToker, girl Charli D'Amelio. How do you pronounce her last name? D'Amelio?Stephanie:I don't know, and I'm surprised you know anyone on TikTok.Albert:But Charli D'Amelio, you'll see her name and it'll show you significant likelihood to influence dollars, it'll be significant, right? But then as a brand, you have to determine can you afford her, because she doesn't tweet or TikTok for you for nothing, right? It'll be hilarious. It'll say her agency, and of course, she's repped by a huge agency. So, that's where even tools like that, the problem is, let's say, the signal to noise ratio is still overwhelmingly noise and the ones that have tremendous signal, well, the problem is you can't afford it. So, I think the tools have to try to figure out by budget, almost, like how much ROI are you going to get per $1,000 of spend or something like that? That's probably going to be the next wave of measurement.Stephanie:Yeah, I agree. I mean, I think also the platforms are trying to catch up to be able to actually attribute sales to these influencers. I know TikTok is trying to do that right now. Instagram's been trying to do that, but I think they are still implementing a lot of features to actually allow the influencers to get paid. So, I think with that, you'll see a whole new wave of new influencers and micro influencers as well because now they can actually get paid.Stephanie:I mean, I saw someone, they were talking about some... I think it was some coffee mug or, I don't know, a cup or something on TikTok, and it was on Amazon, but didn't have any links or anything, and it sold out on Amazon because this one girl was talking about the functionality of it and how much she liked it, and people were like, "Oh, how do I buy through your link? I want to make sure you get a cut of it." And she was like, "I don't need that. I just review stuff because it's fun." And so it's interesting seeing how you have influencers who really do care about that attribution and won't work without it versus the people who maybe are big influencers but aren't actually looking for that, at least not right off the bat, or maybe because there's friction right now, with setting up that model.Albert:Well, I think the bigger you get as an influencer, the more you could charge for your time than results. So, if you're a superstar, like, let's go with professional athletes, the original influencers, right? If you're LeBron James, you're Michael Jordan and someone wants to buy your name, you just charge them for the name. Like you're like, "I don't know if you'll get $1 of sales, I'm just telling you right now that I'm not repping your product unless you pay me this much money." Right?Albert:So, it's still this push and pull where brands want all this information, they want to know your audience, they want to know all that stuff, and then influencers themselves are getting so big. Like, we're reading about how these people on TikTok, kids, I call them kids, I'm old, but they're making 100 grand a month, and that's considered an average influencer. What are talking about? 100 grand a month to make TikTok dance videos, and yeah. So, I can see a brand wanting to be like, "Well, how much will I get for sales," and I can just see how tough it is when the kid on the other end says, "Well, I won't TikTok dance for you for under 100,000."Stephanie:I just read that the next generation is getting paid more than ever right now, not just for being influencers but just for a lot of things. They're demanding higher payment than any other generation before them. That's good, good intense though.Albert:Yeah. Listen, ask for whatever you want. If you can get it, you might as well ask for it. Why not?Stephanie:Very, very true. So, I think the high level summary for that one then it's just that most brands should be exploring influencers in your market, but also making sure that you're setting up the ROI and tracking it correctly, and maybe looking for those new tools that are coming out or that are already out to make sure that wherever you're devoting your budget to you actually can track it, where in the past maybe it wasn't as required by your company or yourself to have that many metrics behind it, but now you actually can, so I think it's worthwhile.Albert:Yeah. I actually think some of our other guests that really talked about investing significantly into the product and making sure that the customer experience from the moment that they sign up, to buy it, to they receive it, that that experience is airtight, because that's where you're going to find your influencers, right? I think a couple of the men's shaving companies like Supply and Beard Brand talked about how they built a community of people who move these products. Well, that's the ultimate influence right there, right? Constant good reviews of your products. And if you get lucky enough to find a Dogface 208, then you win. Albert:Dogface is the guy that skateboarded while singing Fleetwood Mac and drinking cranberry juice.Albert:Well, cranberry juice sales, all time high. So, this wasn't a paid campaign or paid activation, sales are at an all time high. They're talking about it might see Wisconsin cranberry farming industry. That's how much in demand cranberry juice is right now. So, if you have a great product, your likelihood of catching a wave I think is much greater than if you're just constantly paying influencers.Stephanie:Yeah. And I like that idea of make sure all your other ducks are in a row first before you start going after influencers. I think we've had a couple of guests who talked about you really need to make sure everything from start to finish, to unboxing, to follow up, that needs to be airtight before you start trying a bunch of other things, because then you are at risk of getting distracted and actually not being able to focus on, not only your core product, but also your customer experience.Albert:You got it.Stephanie:All right. So, the other thing that I think was interesting that a lot of people have talked about is, of course, like omnichannel, and one of our guests is talking about the reinvention of brick and mortar stores, and talking about how it's now turning to be more about experiential experiences instead of just going there to buy something, because so many people now are shifting to a place where they're actually very comfortable buying online, even if they never did before, and going into the store is more about having a good experience and something to draw them in there versus actually making a purchase in store. I think it's all about experiences now and people are going to expect something very different going forward than they ever expected before.Albert:Yeah. I mean, that's the magic question, right? People are trying to... I've read articles about re-envisioning the mall of the future. If I think about current present retailers that are doing a pretty good job, I mean, obviously, Apple Store seems to be like one of the leaders where I had not admittedly walked by an apple store recently, but I do remember back when I did, six months ago, there were a lot of people in there, a lot of people in there touching the products, getting a feel of the products, they made it a very hands-on experience. I can think of other businesses that have done a really good job. Like, why does every Bass Pro Shops have a giant aquarium in the middle of the store? Because they want you to go and look at it. You know what I mean? To pull you in. They know you're a hobbyist. So, I don't know how good businesses are going to be at doing that, but I know that they're all trying. I mean, they have to.Stephanie:Yeah, yeah. I mean, when we had little burgundy shoes on, they were talking about how they were actually partnering with other people, other shops or people that are on the same street as them, even if it was a bank they're partnering with, and they were kind of doing giveaways or doing just different social business events or things like that, to make sure to get people in the store because they're like, "We don't really mind if you buy, but just coming in and getting that customer experience that we have, and being able to get in the vibe of the music, and actually experiencing our brand, even if it's only for a moment, is worth so much more than... Buying online is important, but we also want you to know who we are, and if that means partnering with other brands around us to give you an added benefit..." I mean, that's where I can see a lot of other brands doing that partnership strategy to try and get different customers that you would maybe never touch before in the same place.Albert:Yeah. Really, it remains to be seen that it'll work, because I always think, when I hear about the people with the rain experience, I don't question it at all, but I think also to Borders Books or Barnes and Nobles books, I felt like those are really inviting places. They got nice couches, good coffee, it smelled great, there's always baked goods there, you can read whatever magazine you wanted, or check out books, and they never kicked you out or nothing if you're hanging out there, but it didn't work. There weren't enough people buying the books, they were just chilling, I guess. So, I guess that's the real delicate balance, which is how do you educate, entertain and inform but also do it so much in a way that a person purchases the product versus, I don't know, coming in there and staying all day long?Stephanie:Yeah. That makes me wonder just about the business model, though, of like, are you encouraging people to buy, because... I mean, I don't know how the Amazon bookstores are doing now, but when I went in to them when we were in Seattle, it was just a very different experience because what you could get in the store was not what you can get online, not what you would get at any other bookstore, because there was actually, "Here's a review that we picked out," so you can kind of get a feel for this book, or, "Here's some of our top charting books right in front of you."Stephanie:So, it was kind of like it was bringing an online experience offline as well but in a very different way where I wanted to go in there, I wanted to hang out, but then I also found myself buying online afterwards. I was taking pictures of books and then I was just going on Amazon and buying. So, it seems like they figured it out there, and they don't have too much inventory to where they're holding a bunch of books and expecting them to sell, but it seems like it needs to move more to that model instead of thousands of books hoping someone comes in and buys.Albert:I can see that in a more curated... I know Amazon's experimenting with their five star stores where it's only physical products that have earned an average of four and a half, five stars. So, it's more of a curated experience, which is what we're more used to online, instead of looking at your whole catalog of crap, we see exactly what we're looking at what we want to see or the best stuff right up front.Stephanie:Yeah. And that's also something a lot of guests have mentioned, it's about that personalized experience and making sure that what you're showing the new customers, what they want to see. And I think the idea of curation too. I mean, people are trusting, not only these influencers, but also just people that they trust in general, where it's like, "Oh, my friend likes this." So, making sure that you can kind of show that or have that curated experience I think will be important going forward.Albert:Yeah. So, this is interesting, because I think this is actually a self-fulfilling prophecy of what's happening with consumer behavior and curation, which is, the more curated things become, the more likely or the lower the tolerance a person's patience becomes for browsing. Because I've read stats about how the average web browser, or consumer, whatever, spending less time on pages, clicking through less links, because they're constantly being served, let's say, what they want sooner, faster, so then they react that way. So, it's like feeding itself, right?Stephanie:Feeding the beast.Albert:Yeah. The consumer expectations. Like, if you don't know what I want within two clicks, I'm bouncing.Stephanie:You're done.Albert:I don't got time for those three clicks. I'm out.Stephanie:Yeah. That's tricky. I mean, it is kind of like building up a monster in a way where everyone's going to have to keep leveling up their game with how their new customers or current customers experience their shops.Albert:Yeah, it's going to be painful for merchants to do this, I think, it's going to be very painful. Or they can look at it the other way. There's an opportunity for a technology vendor that can do it. You know what I mean?Stephanie:Oh, yeah. Anyone who's got those good recommendations, yeah, they're already ahead of the game if they're implementing that.Stephanie:All right. So, the next trend, which actually no one really talked about, but it's more around partnerships, but I saw a very interesting partnership. I don't know if you have heard of that show on Netflix called Get Organized. Have you? Where they were going into homes, Reese Witherspoon, and they're organizing her house, and it's very popular now. Maybe your wife watched it. Have you heard of that?Albert:I can conceptualize what it is but I have not seen it or heard of it.Stephanie:Okay. So, they partnered with a Container Store, and they did it in a really good organic way where, of course, they're putting everything in containers and organizing it, and it made the container sales jumped by like 17% after this series went out, and I thought that's a really good example of not just product placement, but doing it in a way that wasn't annoying, and having, not only a partnership from the product perspective, but they also partnered with Netflix in the marketing aspect.Stephanie:So, it's like a good, well-rounded approach, but it also didn't make the content suffer. And I haven't seen a lot of companies do it that well. You always can think of other companies... I mean, there's product placement in almost everything, but you don't walk away being like, "Oh, I really need that to complete my experience." And I can just see a lot of more or a lot more unique partnerships forming like that in the future, where people are thinking outside the box and are not just doing the typical like, "Oh, let's just try this and see how it works." I can see more people experimenting with this, maybe not on that large of a level, but I thought that was a really unique partnership, and especially being able to see the sales jump right afterwards, it shows that it paid off.Albert:Do you think that was because they were actively solving a problem? Right? You're disorganized. I'm going to show you how to get organized. So, inherently the audience that watches it is looking to solve that problem, so inherently they then go purchase those products, or source those products.Stephanie:Yeah. I mean, they definitely, of course, nailed the perfect person who would have an intent to buy as someone who's also trying to get organized, but I think the way they did it just wasn't like hitting you over the head with it, it was kind of like, "Well, here's what we use." It was like, "No big deal, if you want to use it too, this is what we use."Stephanie:And I think that's actually the perfect strategy of like, "We're not going to push this on you, and we're not going to be annoying about it, this isn't an ad, but this is just exactly what we use to make this look perfect." And I think there's a lot of opportunity for other brands to think about that, like, how do you do it in a way where the content is still good? It's not making you feel pressured, but it's in the back of your mind of like, "Oh, this is what I could use to be like Reese Witherspoon," which she's the best.Albert:It's the classic, like, is this a threat or is this an opportunity, right? Because it just depends on the eye of the beholder. But one of the things, to your point, that makes it a threat to existing brands is if they're not good at it. One of the opportunities influencer see is that it's now easier than ever to make and source their own products under their own brand labels, right? Think of the power that Chip and Joanna Gaines have gained, right?Albert:Now it's to the point where it's like they're going to be almost impossible to buy because Magnolia products is coming, and it's already here, and it's going to keep getting bigger and bigger, where they're going to... You already know they know how to organically insert their products into all their content of you already think their style is the best, you already think their builds are the best, you already think their personalities are the best, now they're not even doing the partnership deal, right? Now it's not like, "Oh, go to Target to get the Magnolia collection?" No, go to Magnolia to get the Magnolia collection, right? They're going to cut the distribution network out and just be like, "We're the distributors of this." And that's always a challenge, I think. I do think that's something that the brands get nervous about is because like, if you sponsor somebody and they do a really great job, well, what stops them from cutting you out of the equation?Stephanie:Yep. Which is also what a lot of brands are scared about with Amazon. I mean, we heard mixed messages about that where some people were very excited about partnering with them, they were getting championed on that platform, Amazon was promoting them, and they weren't really worried too much about it, they're like, "Why wouldn't you be on Amazon, because that's where everyone said you should be selling on there?" And then we heard quite a few other ecommerce leaders who were like, "No way would I get on there. You're not going to make as much money. You can't control the experience. You can't control where it's being seen. And I want to make sure my DTC company is being portrayed how I want it and I don't want it to be knocked off on Amazon." So, the same kind of thing there.Albert:Yeah, that's it, and that's never going to stop. Constant threat market share takeover.Stephanie:Oh, I know. Constant battle, but interesting to watch. I think those people should be on Amazon, though, because I do think that is where so many people are. It seems like, yeah, it's where you need to be.Albert:Yeah. Here's what's interesting. The biggest players have kind of stepped off, but like Nike, Nike has got so much... Nike has enough power, I think, to step off that platform, but if you're trying to be discovered, I mean, it just does seem overwhelmingly hard to do it without that distribution network. I think it's just tough.Stephanie:Yeah. When we were talking about ShoppableTV, I'm also thinking about... I mean, you might know this better since your kids are on some of these gaming type of platforms, but having Shoppable worlds, whatever that may be, seems like something that could be coming in the future but we're not there yet, probably. I mean, I know we are when it comes to virtually shopping for things, that like, "Oh, I want to make sure to get this. Whatever this is in this world, I want to buy it," but it seems like there could be an opportunity as well for implementing your products into those worlds that are being built up right now.Albert:Yeah. Personally, I'm not as bullish on that because I still think people want to... I don't know. I don't really know, maybe because I just don't do it myself, because I definitely see my kids being drawn in when they're playing games, like they recognize products. What's weird is, when kids. To me, it's what's weird. So, for anyone who has kids that play Roblox, my kids see things on Roblox and they want to buy them, and they're digital products.Stephanie:Yeah. What are they? What are they buying?Albert:Like the new sword? They're like, "I want this sword." It's like, "What sword?" It's like, "The digital sword." It's like, "What do you mean digital sword." It's like, "My character can carry this sword if I buy this with real cash." And that makes no sense to me. What are you talking about?Stephanie:Exactly. I think it could be transitioning eventually. I mean, yes, people will always want those digital swords, I heard that people are buying t-shirts in there. I want to make sure my little avatar guy is wearing the coolest t-shirt. I don't really understand that, but then I don't know if you heard about Fortnight had Travis Scott do a virtual concert and was watched by millions of people.Albert:Yep.Stephanie:There's a very big reason why people would be like, "Whatever he was wearing, I want to wear."Albert:Now, did you hear about Travis Scott's McDonald's deal?Stephanie:No. What's that?Albert:It was like the number one selling meal for the last couple months.Stephanie:Just McDonald's in in general or what's his meal?Albert:The Travis Scott meal. I don't know. It's literally his meal. You know what I mean? You can have a number one, you can have a number two, you can have a Travis Scott.Stephanie:It says the Travis Scott meal is a quarter pounder with cheese, lettuce, and bacon.Albert:I'm just saying that's the power of you talking about a digital world. Yeah. There's the power of influence too, but he's already a mega celebrity, right? But I view it as this, it's like, what people are into, and this is why, like I was saying before, I feel like I age out of this stuff very quickly, and we're talking about ever evolving change. I came from a time where if I didn't have a physical product in my hand, I didn't think was real. I remember when mp3s first came out, I was like, "Why would I buy an mp3?" It's like, "It's a digital version of your songs." "What if I lose it?" They would be like, "What if you use your CDs?" "But at least I'm in control of my CD." You know what I mean? Like, that's my CD. I know where it is. I take responsibility for it. I was slow to convert there.Albert:And I feel for me, I'm always slow to convert to digital products, but when I watch my kids, it's just unbelievable. I don't even think they're interested in physical products. They keep wanting digital things. They want more games, they want more currency for their players, they just want this stuff. So, that's why I kind of didn't answer that because I was thinking simultaneously in my head, this is never going to work, but I think I mean this is not going to work on me but this is going to work on my kids, because it's happening right now. I get things all the time on my Google Play app, iTunes account, like, "What is this?"Stephanie:Why don't you buy one more virtual sword?Albert:So, will company start integrating like t-shirt... All right. So, let's take one of our t-shirt clients, right? We've kind of asked our guests on Up Next in Commerce, we've asked this to all of them. How do you convey that your product is soft, silky, whatever their product descriptors are, to someone without them touching it? And so it makes you wonder, in the future, is someone going to see a yellow hammock in their virtual world and be like, "Huh," and it'll pop up a ding like, bing. "Not only can your character have a yellow hammock, you can have one too." It's like, "Oh, okay, cool."Stephanie:Yeah. Especially if you can kind of see it blowing in the wind, or you can see that shirt like, oh, that's form fitting on this person in my virtual world that I really like. If you can kind of see things and details about it that mimic it. I mean, it seems like there's an opportunity there, it might not be here just yet, and you definitely have to figure out the demographics behind it, because, yeah, I mean, like you said, you might not be interested in that.Stephanie:However, I was listening to a pretty good interview with this guy, Matthew Ball, he was the former head of strategy at Amazon Studios, and he had a really good episode talking about how he was the same as you like, "Oh, this just isn't my world, however, I see actually a lot of companies, they will start being able to adapt these same types of technologies to where the older generation will actually start adopting as well, they just are trying to figure that out right now like, what will they feel comfortable with and what are they looking for? Like, what problems can you solve to get them there?"Albert:It's going to be pretty fascinating when someone's upsell customer journey path is actually get the digital avatar to consume this product first and then offer the physical. You know what I mean? When we talk about the hammock, can you imagine that, like, "Oh, my avatar really likes this hammock. He seems great. I think I might get one for myself in real life." What?Stephanie:I mean, I kind of would. I would do it. You need to get in these worlds to really experience it, but I mean, it does just seem like that is where the world is trending right now, around these games. I mean, a company I follow really closely is Epic Games, I think they're-Albert:They're in out neighborhood. [crosstalk 00:35:26].Stephanie:I think their leadership team is brilliant around what they're doing with their platform and how they're essentially giving away almost all the underlying technology that other companies have been charging for for a really long time, and they're kind of building this really big moat to be able to expand in a bunch of different ways. So, I kind of keep tabs on them, and that also, of course, influences my commerce hat when I'm thinking about too like, "Oh, wow, these two worlds could blend together in a really unique way and whoever gets there first..." Usually, the first movers are the ones that can get that arbitrage. So, seems like an interesting spot to watch.Albert:Yes, the Unreal Engine, for our listeners that are not familiar. Epic built a platform called the Unreal Engine of which you can build your gaming world on so that you could use... think of it as less code, you had less code, less character development, it's all built for you, you just add your characters and they can build worlds for you. How they do it is they charge you a royalty fee, I believe it's like 5%, but only if your sales are over a specific number.Stephanie:Yeah, it's very beneficial to creators, and that's why a lot of people are moving to that platform now because they're used to having these apps where certain stores, they're taking like 30 and 40%, and if you move to Unreal, you're essentially keeping the majority of your sales.Albert:Yeah, and you don't have to pay until you reach a certain number. So, by the time you're paying Epic, you've already made it, and then you're fine with it, I guess. The number is tolerable. By the way, if you follow Epic Games founder, Tim Sweeney, on Twitter right now, he's in a constant fight with Apple over [crosstalk 00:36:56].Stephanie:Oh, I know.Albert:He does not like it.Stephanie:I wouldn't either.Albert:It's a fun follow, though. It's a great follow.Stephanie:Go, Tim. I'm going to follow you right now.Stephanie:All right. So, the last one that I want to talk about is... I think this is interesting. You might be like, "That's weird." But I think there's such a big opportunity for optimizing, not only your website for voice searches, but also potentially building out custom Alexa skills to solve a problem. I see people doing that right now, but not really in ecommerce as much, but think about having an Alexa where you're like, "Hey, Alexa, tell me what wine goes best with this kind of recipe." Or, "Hey, Alexa, suggest some outfit for me based on the weather today." And you kind of build a tool that's actually helpful that's also you know, of course, very close to your brand. And so you can become top of mind by building out those skills or just implementing voice search in general. I just think the world is headed in that way because the technology is starting to get better, but I don't see a lot of brands jumping on that right now.Albert:I think the ability for AI to understand intent and meaning isn't quite there yet. I'm trying to think of myself using my own consumer behavior, right? Do I use voice to text right now to enter searches? Yeah, because it's a lot easier than typing it in or swiping it in, right? So, if I want to ask Google a question, I will just click the mic button and talk. Would I do that to solve problems? I don't know, but I think I haven't yet because contextually, it's very difficult, but it won't be far, right. So, right now, I think a lot of people Google best. Do you know what I mean? Like you said, best way to do X for Y, right? And then the next level is going to be can NLP technology, AI technology, whatever it is going to be that understands the nuance and intent and meaning start making it super personalized recommendations?Albert:So, can you imagine if you went to Home Depot, because what you're talking about would be super cool, if you go to Home Depot and say, "Hey, my garbage disposal broke. How do I replace it?" And it just comes up with like, boom, "You're going to need this, this, this, this," and then it gives me a how-to guide of how I buy a garbage disposal, I'm going to need these tools, I'm gonna need the sealants, and getting them-Stephanie:Can you imagine saying that, like, "Here's exactly how you're going to fix it. Let me send you a video to your phone." And like, "You need like Albert's brand of screws." Like, they're literally dropping your own products in there like, "This is how I would fix it, and also, here's a how-to video," and you walk away being like, "Wow, I not only bought that brand stuff, maybe, or I didn't, but they're top of mind now. They actually helped me fix my garbage disposal." How cool would that be?Albert:So, speaking of this, there was a while ago where I believe it was the president of O'Reilly, I'm pretty sure it was. The O'Reilly Auto Parts basically came out and said that Amazon was not a threat because buying car parts is very complicated. I'm not saying he's wrong, right? Right now car parts really aren't bought on Amazon because you have to know what model you have, you have to know the year, the make, the model, you actually have to know something about fixing cars to even begin to find the part. But can you imagine a future where you can ask it a question like, you go to O'Reilly or wherever you go and you say, "My air conditioner is not cold," and it remembers your car models, "Oh, you're going to need X, Y, Z. Would you like me to book you an appointment if you can't do this yourself?" Like, "Yeah, book me one. I don't want to do this?"Stephanie:Yes, please. Yeah. No, I mean, that's where I think the world is headed. And I mean, we did have a good interview, it wasn't our first 50, it was one of our more recent ones, talking about the world of identity and how you should be able to go places and you shouldn't always have to refill in your info, it should know maybe what's your brand of car if you put it somewhere else before. I'm trying to think of what episode that was.Albert:Fast.Stephanie:Oh, yeah, Fast. Yeah, that was such an interesting episode. I mean, now it's coming up right after this one drops, but [inaudible 00:41:10], so interesting where he was going through. Not only are they doing payments and identity, but where the world was headed around you should always have a Buy Now button on every single one of your products and that you shouldn't just make people add stuff to cart and then do the shipping and all that, you should let them buy when they want to buy it. And he was talking about the conversions behind that. But all that gets back to the identity piece, which is what you're talking about, going into an auto part store, you should be able to say, "Here's what I'm looking for," and it should know, "Okay, based on the information I have about you, here's what I'm going to recommend for you," and make it seamless and frictionless.Albert:Yeah, everyone wants that.Stephanie:My future. I don't know what yours is, Albert?Albert:Well, I think it's going to get there. It's not a matter of if, but when, but I still know that NLP... for anyone that's used an AI chat bot yet and been frustrated because you asked a simple question and it's like, "I don't know what you're saying," it's like we're not there yet, but I think it's coming, for sure it's coming. The technology providers, though, are going to be the ones focusing on that the most. I don't know when the merchants can start tapping into that resource.Stephanie:Yeah. That's why it's interesting to kind of keep an eye on these new startups and new tech companies that are launching around this stuff, like Fast, or even like the technologies like GPT-3. When that came out, I was just reading a whole article about how this guy created a program where you essentially can just talk and it'll build a website for you. So, you can say, "Create a red button, have the drop down say this, have the picture do this, grab the picture from here." And it is no code. You are speaking and it is coding for you in the background.Stephanie:I think the world is headed there but you just have to try and stay on top of those trends or the companies and try things out, honestly, experiment with it and see if it could work without bogging things down. I know you have been the first to say that the amount of plugins that you add on your website are just going to bog it down, and website speed is number one, so there is that balance, but I think it's interesting to stay on top of the trends outside of just your current industry.Albert:Yeah. Are we going to get to the part where we all have our own Jarvis? I don't know. But if that happens, it will be cool. Jarvis from Iron Man, for anyone that's not familiar with what I'm talking about, right?Stephanie:I was actually familiar with that one.Albert:Yeah? There you go. Look at you watching movies and stuff.Stephanie:I know. Look at me. I'm so trendy.Albert:It's not trendy. It's definitely very old. I think it's like a decade old now.Stephanie:Yeah. Still great, though.Albert:Yeah.Stephanie:All right. Are there any other forward looking trends that you think are interesting right now. So, we essentially covered the things that were in the 50 episodes, which were awesome and really cool, high level themes, but all the episodes had really good, juicy nuggets in each one. And then we looked at some of the forward thinking themes that maybe weren't covered, but I just think are interesting. But anything else you can think of where you're like, "I think a lot of people aren't thinking about this or aren't paying enough attention to this world that could help an ecommerce store owner"?Albert:Well, we got to do a big shout out to my awesome producer, Hillary, who loves Peloton.Stephanie:She does.Albert:Because Peloton is a very fascinating-Stephanie:[crosstalk 00:44:23].Albert:So, I bought stock in Peloton, and here's the reason why. I've never encountered a brand that I can think of where people so emphatically talk about it. Peloton and maybe CrossFit. Everyone says, "The first rule of CrossFit is you can't stop talking about CrossFit," I think that's also applicable to Peloton, because people who have Peloton love Peloton. So, I think this concept of building community so that your product extends beyond the purchase of the product, meaning like you buy a physical bike but you would stay subscribed to Peloton services. Because I think every brand, or not every brand, because could you do it with a ball? I don't know.Albert:But brands and products companies are probably trying to figure out how do I create a subscription community? I think that is going to be a trend that you can capitalize on now because it doesn't require, I don't think, as much technology that doesn't exist, but it's more like how do you build ongoing services at a price point where customers never want to leave you? So, like, I don't know. Let's use my example of kitchenware. Should fork, and knife, and bowl companies have active cooking communities? I think they should.Stephanie:Yeah. I mean, that was our interview with Food52, Amanda Hesser, that's exactly what they did. They built up this huge online community first and then they started reselling other people's products, drop shipping them, and then they created their own brand, and they did it in a way where they're like, "By then we had this huge community that we were doing cooking things together."Albert:Yeah. They could already forecast their sales. They were like, "Oh, we can automatically assume how many people are going to buy this."Stephanie:I know. And that was a long haul for them. I mean, she was the first to say that, however, I'm like, you essentially are launching to an audience that trust you, trust your content, you have this love for just anything that you're doing after you build this community, but trying to figure out how to do that right or figuring out what actually keeps people coming back and how to keep them engaged I think is really difficult without being annoying and without pushing your product too much. When you start in a more content focused way, it seems like it can be a lot more organic to build up those followers to then shift into a product where you have that trust. But it does seem hard when you're launching a new like DTC company and also trying to do content at the same time, it seems hard to figure that piece out.Albert:Yeah. And if we go back in time, right, Michelin figured this out. Michelin figured out that people weren't driving enough, so they created their star review system because they wanted people to drive and experience things all over the world, to the point now where here we are today, people still talk about Michelin star ratings for restaurants. It's still that important. People can't put two together and say, "Why would a tire company create that?"Albert:So, if you have that today, I think that's probably the next biggest trend, and you can already kind of see it happening. I think more products are going to try to create worlds or problems that their products and services solve, or whether it's exploratory or problem solving, I don't know. But when it comes to Peloton, I just think about the community that they've built, the fact that people just rave about the product. We got our buddy Hillary here, she's got a bike, it's not broken. She says, "They launched a new bike. The screen tilts so I can do yoga and then get back on the bike." It had a price point, a really high price point. I mean, Hillary was considering getting a loan to get this thing, which, by the way, they offer, they offer financing.Stephanie:We're going to put Hillary's... her like affiliate code, I don't know if she one. She needs one.Albert:Well, I'm telling you, the brand love that she has... But it's not just her. I say Hillary because, Hillary, we obviously work with her, but people love this product.Stephanie:There you go. Are you looking at our prep doc? She says h_tag24. Peloton all the time.Albert:Okay. If you want to buy, h_tag24. If you want to follow our buddy Hillary on Peloton, not only will she kick your ass in all these calories, or I don't even know what you guys measure.Albert:However you score points, she's scoring all the points.Stephanie:I don't know if that's a thing.Albert:Outputs. I don't know.Stephanie:Okay, outputs got it. This has gone into a bad hole. I'm not sure what we're talking about here.Albert:Well, we were saying like, what's the next thing to be aware of? I mean, I think that is closer than all those voice searches and things like that that you talked about, which I think are coming, I think you're going to see more companies build communities, and I also think you're going to see more companies burning out customers by trying to make everything like SaaS. Because one of my favorite Twitter handle to follow, everyone check it out, it's called the Internet of Shit, it's just non stop products that don't work if you aren't subscribed to their services. So, businesses out there that try to make me subscribe to make my refrigerator work, I'm anti-you. All right? Definitely anti-you, don't want to hear about it. So, follow the Internet of Shit, if you guys are curious.Stephanie:I have follow that one.Albert:But that's the delicate balance, right? How do you build a community of value that you charge for versus, I don't know, putting someone in entrapment where you're forcing funds out of them every month just to use your product?Stephanie:Yeah. I especially think after everything with COVID, people are also going to be dying for that community, even if it has to be online, I think it's going to be bigger now than it ever was before, because people have been cooped up and haven't been able to have that community like they may have been used to or they're actually maybe cherishing it in a different way now and they're trying to look for that. So, I think it'll be a big opportunity.Albert:There you go.Stephanie:All right. Anything else on your mind? If not, I think this was a fun episode. It was a good one.Albert:I hope so. I can never tell.Stephanie:You're really not, yeah. You're almost like, "I'm not sure." But yeah, I think this episode was awesome, it's really fun just kind of reminiscing through all the episodes we did. I can't believe we've already had 50. If you have not given us a review and a rating and subscribed, please do, because that helps spread the word, and we would love to hear how we're doing. We also have some really good interviews coming up, like we were mentioning earlier, the CEO Fast is coming on, we have a really cool company, Handwrytten coming on with [inaudible 00:51:04], Sheets and Giggles, Ring. We've got some big names coming up here, and yeah, I'm excited to do this next recap after the next 50.Albert:Until then.Stephanie:Right. Thanks, Albert.

It is rare that a brand has such reach and such impact that people all over the world can not just recognize it, but have memories of using the product for generations. Crayola is one of those rarities. Of course, Crayola was built around the production of crayons, but throughout its more than 115 years in business, Crayola has vastly expanded its product offerings and worked to build a community of consumers who gather around the idea of creativity. But how do you sell that expanded brand and provide opportunities for customers to find and interact with you in new ways?On this episode of Up Next in Commerce, Josh Kroo, the Senior Vice President Brand Marketing and Digital Strategy at Crayola, joined us to discuss some of the strategies he is putting into place to increase brand awareness, expand digitally, and offer experiences for all kinds of audiences. Because whether your company is a century-old or a brand new startup, finding ways to adapt and expand will always be important. Main Takeaways:The YouTube Generation: A recent study reported that 81% of parents with children of children age 11 years and younger use YouTtube to find content for their kids. As more and more children — and parents — find their way onto the platform, brands need to be prepared to invest there if they want to stay relevant, as well in order to achieve relevance. Can I Interest You in Some Apps?: There are a number of ways to use apps, so you have to decide the purpose and KPIs of the app you are building and then deliver the type of experience that will bring the engagement you want. And it’s important to remember that one app doesn’t have to do it all. You can have different apps for different purposes and customers — one to drive discovery and brand awareness, another to drive conversions and sales.Every Kind of Experience Is Available: Physical experiences with brands — whether in store or at an event — have been the bedrock of creating a connection with customers. As the world changes, though, there is more opportunity to connect with customers in a new way – through digital and hybrid experiencesFor an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Welcome back to Up Next in Commerce. This your host, Stephanie Postles, co-founder of mission.org. Today on the show we have Josh Kroo, the senior vice president of brand marketing and digital strategy at Crayola. Josh, welcome.Josh:Hi, good to be here.Stephanie:It's really exciting to have you on. I was actually just playing with some crayons with my two-and-a-half-year-old right before this, trying to get [crosstalk] for the interview.Josh:Excellent, that's good. I like that.Stephanie:Yeah, it's top of mind now, yeah. So, I want to hear a little bit about what led you to Crayola?Josh:Sure. So, I grew up kind of in a traditional brand marketing capacity. I started my career at Kraft and Danon, and had spent a lot of time building businesses there, but when the opportunity came calling to come to Crayola, which is one of the most iconic brands in the world, it's one of those brands where people ... you say that you work at Crayola, and everyone sort of has A, a memory, and then B, their face lights up, and they generally ask you a fun question like, "Oh, who names the colors?"Josh:It's just one of those brands that has touched so many people, and pretty much everybody along the way, and so for me to get the opportunity ... I joined Crayola to lead the marketing communications group. It was an opportunity to be a part of that brand, part of the mission, which I think is really wonderful, which is all about celebrating, and nurturing, and helping to spark the creativity in children, and giving parents and teachers the tools to do that, and then the chance to bring some energy to the brand, and I don't want to say revitalize it, but contemporize it, make it relevant for today's kids and parents, and lead a great team through that process.Stephanie:Yeah, that's great. So, I mean, Crayola's been around since, I think it's the 1880s, right?Josh:Yeah, we are over 115 years old. So, started with eight little crayons. Edward Binney, our founder, his wife wanted kids to be able to color the world as they saw it, and so we launched with eight crayons. That's actually where Crayola comes from, cray meaning chalk, and ola is sort of like oily chalk with the colors. So, a lot has happened over the last 115 plus years in terms of the brand, but what's amazing is that the mission and the purpose of the company has still always really remained the same.Stephanie:Yeah, that's really cool. So, what does your day to day look like at Crayola, because I'm sure you've seen a lot of shifts happening over the many years that you've been there, or throughout the brand as a whole I'm sure you've heard of shifts, what are you doing now that maybe was different than a couple of years ago?Josh:Wow, there's a lot for unpack in that, I think-Stephanie:Yes.Josh:... first of all, my role has certainly evolved, but no, I think you can go ... or I personally can go from a meeting where we're talking about ecommerce marketing strategy, to looking at pieces of creative or creative work that we're building out for holiday, to a meeting where we're looking at what our strategy is going to be going forward from an annual planning perspective. I manage our interactive business right now, so it could be a meeting where we're looking at what are the next updates for the plans for our apps, and how are they performing? So, it really it can touch all different parts of the business, and I think that's part of the joy of working for a brand like this, and in my role. It's everything from all the brand marketing, but now most recently digging deeper into the digital and ecomm side of things, and helping to guide the company in that way. So, you never know what's going to come on any given day, but I think that's what keeps it fun.Stephanie:That's great. So, you were just mentioning apps, and I think that would be fun to kind of dive into Crayola's mobile efforts, because I think when I think of Crayola I, of course, think of the crayons that we have in our living room, but I'd love to hear how you guys think about building out apps, and how do you know what's going to work, or what doesn't? How do you think about what you want to invest in when it comes to that area?Josh:So, that's a great question. I think it's been a really interesting journey for us in the app space. We've actually been making apps for over a decade now-Stephanie:Oh, wow.Josh:... but the way that we've been doing it has really evolved. So, this predates my time even, but we had what we called here physical to digital apps, which was this idea of how do you merge physical creativity and digital creativity, and bringing them together in an app. We were working hard at that, we had the first augmented reality coloring books that were out there, we had augmented reality based animation, we had all these products, and I think ultimately what we figured out was we have to be okay with kids being creative in a digital space.Josh:I think overarching what you recognize is that if you look at kids' free time in a pie, they're spending more and more time with technology, depending on the age of the kid it can be upwards of 30 plus percent of their time with technology, and certainly within that, they're being creative. So, what is the best way for Crayola to play there? And we evolved from this kind of idea that you had to do something physical, or physically creative, which is at the core of what Crayola's been about for well over 100 years, to what does modern creativity look like for a kid? And I think that's really where we set out to build from, from an app perspective.Josh:So, looking at it, and then you start to ask yourself, and we've got a variety of different apps today, we've sort of got a flagship app called Create and Play, which is really the premium Crayola experience, everything that you could want for digital creativity that's sort of targeted to younger kids in that three to five space. And then we've got other apps that are out there that are supporting different brands or IP of products that act as a marketing vehicle. I think for our flagship app, what we really wanted was to create an experience that was if you think about opening a crayon box, what is the magical experience that a kid gets from opening a crayon box? I'm sure your two-and-a-half-year-old can relate to the smell of the crayons-Stephanie:I was going to say, the smell, yes.Josh:... the excitement of the color, so you've got all of that there, and how do you bring that into the app space, and how do you also empower kids to express themselves creatively? And what we wanted to do here was help kids learn through creativity, but without really knowing they were learning, so it's all through play. I think from a parent perspective, so two and a half maybe or maybe not be a little bit young for your kid, but parents want to feel good about what their kids are doing on an app, and so how can we give a wholesome experience as well? So, that was really the approach that we took there, and we built out a variety of different apps, and continue to expand on the content, and it's a really great way to foster digital creativity.Stephanie:Very cool. Do you have any tips or things that you found out along the way when you're trying to make sure that you're staying true to the brand that everyone loves, and like you said, being able to do things in the real world, like actually draw on stuff is an important part of it, while also moving forward in this digital arena?Josh:Yeah, so I think the fun part about being in an app is being okay with the fact that there are fantastical things that you can do to express yourself in the app space. So, for us, it's always about staying true to the essence of the brand, but our brand is really all about creativity. So, you can color with a crayon and make marks on paper, and that's wonderful. How do we exaggerate that in the app space so it's delivering that magical experience for a kid? So, you can color with flames in the app, for example, or you can express yourself in different ways.Josh:So, we have a whole area in the app that's all around pets, and pet play, and pet care, and you can dress them up, color on them, make music with them. It's all creativity in a different way, but I think for us it's really it's all about letting kids express themselves, whether it's physical or digital. I think for us, the other thing that is true about any, whether it's physical or digital creativity is there is no such thing as bad creativity. So, we celebrate everything, whether you made a random circle on a paper, or whether you painted a Picasso, it's all celebrated, it all goes into the gallery, and every kid should be proud of what they create.Stephanie:That's great. How do you stay ahead of what kids are looking for? It seems ... I mean, when I think about my kids I'm like, I have no idea, sometimes they like certain things that I'm very surprised by, or I think they're going to love something, and I buy them this really cool gift, and then it's like a flop. So, how do you guys stay innovating in that area and stay inside the kids' heads of knowing what they're going to enjoy and like?Josh:Well, certainly there's an aspect of just being immersed in the world of kids apps, and playing with other kids apps, and understanding what's out there, but then you're also always looking for what's trending, and making sure that we're staying on top of that from a trends' perspective, and you can sort of pick it up by just the amount of research that we do with kids, and talk to kids in general, you can sort of get a flavor for what they're doing. And then we also do a lot of user testing as well along the way to validate the concepts and the content that we're building out.Stephanie:Mm-hmm (affirmative), very cool. How do you think about like you're building these apps that, I would say, encourage the kids to play around for a long time, are you mostly focused on having someone really engage with these apps, or are you also building apps that are focused on conversions of maybe selling actual products, or is it kind of a little bit of both?Josh:It depends on the app. So, our flagship Create and Play app, that's actually a subscription app, so you can go into that app and you'll be able to play with, call it, a quarter of the app for free, but if you want the full experience we're monetizing it through subscription, and I think if you look at the app space in general in the kid space it's really moving in that direction from premium and freemium, and it has been for a few years since the subscription. The win for us there, certainly I'm happy that we're monetizing it, but we see kids on average playing 25 to 30 minutes a day deeply engaging in your brand, I mean, that's sort of hard experience to replicate.Josh:And then there are other apps where it is just free, so I think the most recent one we launched was probably nine or 10 months ago, it was called Scribble Scrubbie Pets, which is an IP that we have that's actually a toy-based app, and that really is ... it's a totally free experience. Again, we want kids to immerse and connect with the brand, and we'll see them averaging 20 plus minutes a day with it, and there are different things you can do. So, there's, call it, almost 40 different Scrubbie Pets in there, you can unlock them by either buying the product, and that's a shortcut to unlocking pets, or you can just continue to play and engage with the brand and do activities, and unlock the pets that way. So, the conversion will happen more down the line, and it really is about generating that brand awareness, and brand love.Stephanie:Cool. So, when thinking about your ecommerce and your website experience, what are you guys doing on that front right now, and what are you seeing that's working? Well maybe, what step of, or what stage are you guys in with selling online? Whereas I guess I still think of you as I would go to the store maybe to buy some crayons right now.Josh:Yeah, it's really interesting, it's been a total evolution for Crayola. If you go back 10 or 15 years ago, or maybe even shorter, two of our biggest customers were Toys "R" Us, and Kmart, and you know where they are-Stephanie:Yep. Yeah, Kmart.Josh:Exactly [crosstalk 00:11:59]-Stephanie:Forgot about them, yep.Josh:No, so we made a very concerted effort at Crayola probably three or four years ago recognizing that ecommerce and specifically Amazon were going to be a huge factor in how consumers shop, and we really pivoted the business, built out a totally siloed ecommerce team to grow that that was partnered with my team on the marketing side and the content side, and put a huge amount of organizational effort and resources against growing that part of the business. So, I'd say I feel like we're pretty far along from an ecomm perspective, both from just where our sales are coming from, and how consumers are buying our products, but also internally from a talent perspective, from a process perspective, from a knowledge-based perspective in terms of grabbing growth in that platform. But it's been a three, four year evolution in getting there, and now you see how things are playing out and it's even more accelerated when you look at the onset of the COVID pandemic, and I feel really good about the place that we're in right now to be where consumers are. Ultimately, that's kind of what we have to follow, right?Stephanie:Yep. Yeah so, what platforms did you guys move towards, and which ones are you seeing the most success with right now?Josh:So, we've had a DTC business for maybe close to five years right now, but I think we really prioritized growing with our retailer platforms, Amazon being the number one focus, but not far behind that are the Targets and the Walmarts of the world, and I think in the last six months we've seen just every retailer become an omnichannel retailer. But I'd say we put a tremendous focus on probably, if you can think about where our Crayola business goes through, those three players, with Amazon kind of leading the way obviously from a share of an ecommerce perspective, but I think we've taken the lessons from there and really extrapolated them and leveraged them across all the other selling platforms to put our best foot forward, and be everywhere that consumers are from an ecomm perspective.Stephanie:Yeah. So, what kind of lessons did you learn from Amazon that you're applying on the other platforms now?Josh:I think certainly understanding how to leverage search and paid search was a big one, and understanding how that sort of ... and even organizationally, we're a company that's been built on brick and mortar sales for 100 plus years, just adapting the mentality internally of understanding that there's an endless sea of products, and when you're buying search, or when you're buying those placements, you're basically merchandising yourself, and it's all about, call it "physical availability in the digital space". So, we spent a ton of time learning how to optimize that experience and finding the right partners to help us get there, and then have really leveraged those learnings. And then I'd say from a content perspective too, so Crayola ... I think when you're walking down a store you look at a shelf and you experience all sorts of different connections to the brand and triggers based on the products that you're seeing on a shelf.Josh:When you're shopping online it's a little bit harder, and so from a content perspective we've worked really hard, first of all, from a discovery, just written content, and driving traffic, and a lot of effort there in understanding that, but also from a visual content perspective, and now evolving much more into video content, because we want our products to come to life. At the end of the day, we want a parent or a kid who's looking at our product detail pages or seeing any visual content that we put online to have a connection and inspiration to what they can actually create with our products. So, there's been a lot of effort put around visual and video content to bring the product to life, and drive that conversion.Stephanie:Yeah. So, when you're making this video content are there any specific platforms that are working really well, whether it's YouTube, or what are you guys utilizing to get that content out into the world to be found?Josh:We'll typical host on YouTube, but we've spent more time, especially from a parent's perspective, focused around social platforms to drive a lot of the content, but then I think what we've found is that our consumers, when they get onto the product detail pages, are really looking through all of the images and videos, and now you're starting to see it be more prevalent even played up, call it, before you get to a product detail page. So, the use of videos on Amazon is certainly growing. So, we're kind of ... it really depends on where the audience is and what stage of the funnel they are, but we're leveraging video as much as possible everywhere, whether it's in our paid marketing or organic marketing on social platforms, and throughout ecommerce.Josh:I think YouTube is becoming a bigger and bigger focus for us, specifically from a kid perspective, and if you just look at ... I think there is a recent study that came out, 70% of kids are on YouTube. It depends on the age, obviously, but kids are literally spending upwards of 90 minutes a day on YouTube, and if you want to connect with kids it's kind of hard to say, "You shouldn't be there." You've got to be there, and I think we're seeing a tremendous amount of content focused to kids there, and we're no different in terms of how we think about specifically video content.Stephanie:Yeah. What about TikTok? Are you guys trying out the good old TikTok, or not yet?Josh:No, we actually have. So, most of our products are geared towards younger kids, the real sweet spot of Crayola is kind of in that, call it, four to seven, three to seven range, and I mean, some of those kids are on social media, although they shouldn't be, but we do have a few product lines, and certainly I think with the adult coloring phase that happened, if you remember that in 2016?Stephanie:Yes.Josh:I think it really inspired a lot of adults and teens and tweens to get back into the creative space and sort of find their own creativity. So, when TikTok came out we've been certainly dabbling in that space with a variety of our different brands. We have a line of writing tools called Take Note! that's all about expressing yourself through colorful note-taking, and we've played there a little bit. And I think there is a ton of just organic user generated content around Crayola, and it can be everything from the weirdest product we've ever launched like something called Globbles, where someone posts a video, it catches on virally, and all of a sudden it's selling out on Amazon like crazy. So, I think we're-Stephanie:What is a Globble?Josh:A Globble is a small ... I don't even know how to describe it. Think of it like the size of Silly Putty egg, but it's sticky, you can sort of mash them together and throw them at walls, and they'll stick to ceilings, and kind of just be creative in a weird way, but-Stephanie:That sounds very therapeutic.Josh:It is, it is therapeutic, and you can sort of get creative with them in ways to play with them. But it's the power of these different platforms you can see it in something as silly as that where we're still seeing a spike in search on Globbles on our DTC site.Stephanie:That's great.Josh:But for the most part to reach our audience I would imagine that similar to what we've seen with Facebook and Instagram you're already seeing it throughout the last six months that TikTok ... there're older people getting onto TikTok, and parents getting onto TikTok, and there's a place for us to continue to experiment there, for sure.Stephanie:Yeah, that's what was coming to mind. So, I'm on there, but I follow a lot of other moms, and right now a big trend is trying to figure out ways to keep your kids entertained with all the kids who are home and not going to school. I'm like, "Oh, it seems like a good opportunity to connect with fellow moms out there who are like, 'How do I keep my kids occupied?'"Josh:Well no, that's great, going back to your question about video content, I mean, what we're looking at is what social platforms can we get it out there, and for the last six months the team, from a content perspective, has been really focused on appointment programming, so this idea of, "Hey, we are going to have a creative activity for you every day.", and whether that's Crayola filmed or whether we're partnering with a ton of different, call it micro influencers that are out there, it can be in the crafting space, in the calligraphy space, in kids crafts, adult crafting, and so it's a great point that you raise of folks are at home, whether it's themselves or their kids, and looking for creative inspiration, and we're doing our best to be across all platforms to share that. So, I think it's a great point.Stephanie:So, you just mentioned micro influencers, how are you guys parenting with them, and how are you measuring if it's successful or not? Because that seems like a topic that a lot of people are trying, and we've had some guests say, "Oh, that doesn't work.", and then other guests say, "Oh, it's working really well for us." So, I want to hear how as a legacy brand partnering with someone like that, how are you guys tracking if it's successful or not?Josh:Yeah, I guess for me I don't necessarily look at that as performance marketing, for me it's all about generating brand awareness, and connectivity with consumers. I think part of the job that we have in the marketing group at Crayola is most people do think of us as the crayon company, and so even you yourself said at the beginning of the call, "Crayons.", but we have hundreds of other products in the space, and so for me I look at this as more upper funnel activity. So, we're looking at viewer engagement, video completes, and things of that nature, but I'm not necessarily trying to correlate it all the way through to conversion. I think still, throughout much of the year a large part of our conversion is going to happen at retail, and it's just not big enough necessarily to track back to that performance. But ultimately I want as many eyeballs on it, and watching as much of those videos as possible, because that's generating brand awareness for me.Stephanie:Yep. So, are you guys making an active effort to kind of be known as not just crayons but other things, or are you kind of just okay with being like, "We're being out great things, and if people are using it we're okay with not everyone associating us with those products.", like how are you think about that branding?Josh:I think we'll always be known as the crayon company to a degree, but no, not okay with it, I think our job is really to help consumers understand that we have everything from a full range of arts and crafts products to creative toys. I don't view our competitive set as crayons per se, I think our competitive set is really kids free time, and the more that we can help showcase all the different range of options and great products that we have available the more it will fit into kids' lives. I think when I think about what we're really enabling, and what we're about, we're about self-expression, and creativity, and we're a creativity company. So, I wouldn't want to define that by crayons, as we talked about before, we want you to be creative with Crayola in an app, I want you to be able to paint, or I want you to be able to color, and recolor your Scribble Scrubbie Pets, and be creative and express yourself in that way. I'm good with all of it.Stephanie:Great, yeah. That's a good answer. So, for going forward over the next couple years, or before this call you were mentioning that you were in a meeting talking about how to maybe invest around ecommerce, and I wanted to hear your thoughts on where are you guys headed, what are you looking to invest in, what new things are you trying out to meet the market either now or in the future?Josh:Yeah, so that's a great question. I think in the here and now when I think about the ecommerce space ... it was hard in the beginning to figure out what is the right amount to invest, and you heard all sorts of numbers thrown around, is it just whatever you can carve out of your budget and dedicate it there, is a percent of net revenue, a percent of gross revenue? But I think when you think about ecommerce, and it seems kind of silly looking back on it now, it really is a math model. It's the number of eyeballs you get times your conversion rate. So, how many eyeballs can I get to the product pages, and then what am I converting them at, and then what is my average sales price, or what are the products are they selling for?Josh:And that's eventually going to be how you generate your growth and your numbers, and so the way that I've been looking at it and been pushing the team to look at it has been, all right, what is the traffic that we need to drive, and look at every element in this, what's the traffic that we need to drive, and how are we going to get there? So, I think for us on many of the ecommerce platforms, whether you're talking about Amazon, or walmart.com, it's first and foremost, search is the lowest hanging fruit. How do we maximize that as much as possible? And we have enough historical data over the last few years that we can figure out and invest in that model on what it's going to take to get there.Josh:I think beyond that as we look towards the out years, because eventually we haven't reached nearly a point of diminishing returns there, but we're always trying to figure out, "Okay, if it's ecommerce, how do I drive those page views? Is it experimenting with different tools on Amazon's platform? Looking at them as a DSP, so am I looking at AMQ type tools, addressable TV, what else can I do to drive those eyeballs, but it comes back to the math and the return on ad spend, which certainly in the ecomm world we're very focused on.Josh:And then I think it's also about pulling the other levers. So, if I can move my conversion rate on a big business by a half a point, that's pretty significant. So, what are the areas that we're going to invest in from a content perspective as well to try to drive and pull every lever to ensure that we're continuing to drive growth. And I think broadly the mentality that we have as just a marketing team, I won't call it digital marketing, because I just think it's marketing, we embrace the test and learn mentality, and we're always looking out there, whether that's talking to our peers in the industry, partnering with agencies, just generally being consumers ourselves, what are the things that we're seeing that we should be testing? So, a great example now would be shoppable social, right?Stephanie:Mm-hmm (affirmative).Josh:If you think about our brand, and we're putting out all this inspirational content, how do we try and shorten that funnel and make the content more shoppable? I don't know if it's necessarily huge yet, but I believe it will be, and so how do we start to build our knowledge base and our skillset in that regard, too? So, I think there's different ways to look at different spaces of investment, but that's kind of how we're approaching it.Stephanie:I really like the point about shoppable experiences. I've actually thought that that seems so behind to me, even right now when I'm on Instagram, I mean, I know Pinterest is doing it now, but it seems like this is something that should've been around a long time ago, and it's just starting to pop up, but the experience still isn't there. Any thoughts on why it's been such a slow transition for something that I think should've been here ... well, it feels like a long time ago.Josh:I think it's all ... it's interesting for why maybe it has or has not caught on, certainly everyone's investing behind it, like interest ... sorry, Pinterest and their partnerships, looking at Instagram and where they're trying to go, I think it's got to be all about convenience. So, I'm curious to see what the consumer behavior is. Sometime you might be in a shopping mindset, other times you might just be looking to scroll through and do you really want to leave the platform. So, I'm sure, and we're seeing it, the investment, and how do we just create a more seamless, convenient experience that doesn't disrupt what you're trying to do?Josh:Ultimately, with anything in the digital space, I think kind of comes back to that, what mentality are you in, and how convenient is it going to be? I think we see that with the general ecomm growth that we're seeing, like the pandemic forces you to all of a sudden adopt new buying habits, whether you're on Instacart or wherever else, and then all of a sudden it's convenient, and so those are the types of things that stick. So, I'm just wondering if from a shoppable social perspective, have we truly hit the peak of convenience and ease, but I'm sure it's going to improve YouTube now investing in this space, so I think it's clearly an area of opportunity, but it seems to be that the industry's moving that way.Stephanie:Yeah, it also seems like there's a strategy there of building content that's focused on conversions where someone's going to be watching it, and they're going to want the things that are in that video, versus like you said, maybe someone goes to a video and they're not really in that mindset, but also maybe the content is not focused towards a conversion, or towards you need the products that are in there to be able to even do this.Josh:Yeah, and I think we're going to continue to see those two worlds blend, right?Stephanie:Mm-hmm (affirmative).Josh:The idea of sort of that kind of performance marketing mixed with content and converting the content into commerce. I know that's an area that we've been talking about for years from a Crayola perspective, because it's hard to look at a box of, making it up, metallic markers and understand what you can do with it, but if I can connect those metallic markers to a beautiful piece of what we call Crayoligraphy, and then I can connect that to a bundle that will teach you how to do it, now we're really starting to merge those things together, it's engaging from a viewing perspective, and there's a practical outlet for you to now go get creative and do it yourself.Stephanie:Yep. Yeah, and I think that also kind of circles back to what you were talking crating daily, in a way, lesson plans, or something to keep someone engaged constantly, but then it opens up a whole thing of like, "Okay, let me get my supplies for this digital lesson plan that I'm going to be following along with.", and it kind of creates a mote where you need to have Crayola's products wield up, go through this lesson plan, and have fun, and enjoy every step with the right products.Josh:Yep, and that's exactly kind of the areas that we've been experimenting in. So, we had a summer craft series with one of our micro influencer partners out there, and we're selling a craft box to get everything you need for that week of crafts along with it. So yeah, I think there's a world where, yeah, those things start to make sense, and the more we can inspire you, that's really winning for us. We want to inspire that creativity and give you the tools to do it.Stephanie:Yep, I love it. So, are there any brands that have been out there for a long time that you guys watch, or that you partner with, to kind of keep tabs on how they're doing things, or how they're going through maybe a digital transformation, or just kind of learning from them and watching where they go?Josh:For me, I think one of the best out there certainly is Lego. I just think they have absolutely mastered it from everything from entertainment, to community building, to best in class content, to leveraging user generated content, and tapping into passion points of consumers. So, I really love what they do, they're probably the number one brand that I would watch out there, and just look at ... I mentioned YouTube before, I think they just eclipsed 10 billion views of their videos on YouTube, I mean-Stephanie:Wow.Josh:... truly doing a lot of things right to grow their business. So, I think they're a really great case study out there of how to build out content, and really surround consumers, both kids and adults, with your brand, and then products to boot to go along with [crosstalk 00:32:44]-Stephanie:Yeah, I completely agree. I mean, even thinking about that Lego movie, which to me is so smart because I mean, it connected with kids, but I think it actually was very sticky with parents as well, I mean, that was the first thing that comes to mind when it comes to content that they were creating. Has Crayola thought about creating something like that, or backing a project like that, that would connect with kids and adults, but then also leave people talking about it?Josh:Yeah, I think it's certainly a place where there's opportunity. We haven't necessarily ventured there yet, but I wouldn't say ... I would say anything's on the table, certainly as, I think, the world of content is constantly evolving. And so, while it maybe is not necessarily entertainment in that sense, we actually have five Crayola Experiences that have opened up around the country, and that's depending on where you are that could be four to five floors of immersive creative experiences where parents and kids are coming in and spending three to four hours there and just delving into the brand. So, there's all sorts of ways from an experiential perspective to connect with consumers, and I think what you'll see from us, certainly in the YouTube spaces, starting to dip our toes into the water of content in that sense. So, I wouldn't say it's anything that is imminent, but certainly, you never know where it's going to go, and I think Crayola's one of those brands that can play in lots of spaces like that.Stephanie:Mm-hmm (affirmative), that's a really good point about creating experiences. I think there's going to be a lot of pent-up demand after staying at home for as long as we have, and having places that you can go to experience the brand and the product and have fun, it seems like a really strong strategy going forward after all this kind of calms down.Josh:Yeah, I think when you look at just general consumer sentiment and what they're saying, and it's been trending this ways for years is that people are looking for experiences. What's interesting is they can be physical, so in a store, or in a location like a Crayola Experience, but I do think there's an opportunity for digital experiences coming to life, too. I think I saw the other day L'Oréal sort of introducing a new way to buy your cosmetics and makeup, and making it more experiential. So, I think experience, and what that consumer experience is, and how they can engage with your brand in deeper and deeper ways once they're sort of at that interest point in the funnel, or at various points of the funnel, is going to continue to be an area of focus.Stephanie:Yep. What about community? How are you guys thinking about curating and building on a community to where I'm sure a lot of parents and kids would all want to talk and hang out, and show projects together, and I could see you guys having a really good angle there. How are you all approaching the community aspect of your brand? And building that up?Josh:It's a good question. I think with kids it's a little bit more challenging in that you've got all sorts of privacy regulations there, and so creating a closed community and getting kids to join that is a pretty tall order I think. From a parent perspective, we've actually really been more focused on that sense of community on social platforms rather than trying to create our own, and pushing out our content there, and engaging with consumers in that sense. So, I think we're trying to be where consumers are, versus necessarily building something big and trying to get them to come to us. I think we have the type of brand that can be relevant in all sorts of ways in peoples lives every day, and so following their lead and where they are, and that can be everything, again, from social platforms to native content that we're developing, et cetera. But I'd say that's kind of how we've approached community versus necessarily building it ourselves.Stephanie:That makes sense. So, I want to think a little bit higher level around just the ecommerce playing field in general, what kind of disruptions do you see coming to ecommerce?Josh:I think the demand of convenience will just continue to set the bar higher and higher for brands, and put more and more challenges on brands, and probably more retailers than brands themselves, but ultimately then it starts to come back to the brands themselves, or the suppliers in that in terms of how we supply product, where the inventory's being held, all those types of questions. So, I think we'll continue to see that push on convenience, and I think those are going to be the folks that win. I think Target's a perfect example right now of how they approached it, but I think it'll only continue to expand.Josh:I think ... it's hard to say it's a major disruption, but I think just this change is going to force a lot of organizations to look at themselves a little bit differently. There's all these organizations that have been built on brick and mortar businesses, and how does that ... it's going to continue to evolve, ecomm is not going away, I think to that earlier point of what becomes a part of peoples shopping habits is there, so how do you adapt internally as an organization to continue to put out product and content at the speed of which consumers are demanding it in that space? And then there's, I think, as more and more shopping shifts online, how does buy online/pick up in store disrupt what we're doing? How does a lack of impulse purchase disrupt what we're doing from a company? So, I think it's just going to be an evolution of how we go to market.Josh:I guess the other interesting thing that I've been thinking about recently is just the power of brands in this space, and again, the shift to ecomm, it's always been coming, maybe it's been accelerated, but it's coming more, but can bigger brands ... there's been a resurgence in bigger brands in this space, and is there a renewed emphasis on brand building as everyone starts to move online, will the big brands win? Will they win the search? Will they win the share of space, sort of the infinite shelf space? They're winning in the pandemic, can that continue?Stephanie:Yeah, that's a good point. I think that bigger brands seems like they would, of course, have a leg up, because the people who are coming online who maybe weren't always there before, they're already top of mind, or that's already someone that they trust, but it does seem like there's also a lot of room to kind of gather that new trust, or get that brand awareness out there in a way that wasn't done before.Josh:Yep. And I also just wonder if the standards are going to change for what that experience is going to be that you expect from a big brand. Sometimes digitally native brands can be more nimble, deliver more personalized experiences, so what are those ... is it a more experiential experience that you're looking for, whether that's in store or in the digital space, how do the expectations change from a go-to-market perspective? And I think that'll continue to evolve.Stephanie:Yeah, with so many of these new brands popping up now, I mean, it sounds like ... I mean, there's a lot of new great companies that are popping up, but it also seems very noisy, and that could also maybe hurt the consumer experience if they have a couple bad purchasing experiences with smaller brands. So, how do you guys stay focused, and not kind of get caught up in all the noise, and have like your true north of like, "This is where I'm headed, and this is what we need to do.", without getting caught up in maybe the trends, or the quick things that are going on right now?Josh:Yeah, I mean, for us I think it always has to be true ... our true north ultimately is the mission, and that funnels down into everything that we do. So, what kind of experiences do we want to give to people online, it's going to be in service of that mission. When we think of giving personalized experiences, it's how do we make that a better experience for you, but again, always in service to the mission. The creativity that, or the messaging, or the crafts that I offer up to someone who's coming in that's an adult with no kids versus a parent with a three-year-old, those should be different experiences. So, I think for us ... but it always comes back to inspiring creativity in the best and most relevant way possible. So, I think if you've got solid ground in that regard you can kind of cut through the noise and say, "Hey, these things are extraneous, but these things are in service of a better experience that brings our mission to the forefront.Stephanie:Yep, I love it. All right, so I want to shift over to the lightning round brought to you by Salesforce Commerce Cloud. This is where I'm going to ask a question, and you have a minute or less to answer, Josh.Josh:Okay, let's see how I do.Stephanie:Dun-dun-dun. What new ecommerce tool are you trying out and having success with right now?Josh:Interesting. I think one of the tools that ... I don't know if it's a tool. I do think shoppable social is an area that we have been focused on, as I mentioned. So, I think we've seen in our little test and learns some success in that space as we try to merge content and commerce, and we'll probably continue to expand on that.Stephanie:Cool. What is a favorite piece of tech or an app that makes you more efficient?Josh:That makes me more efficient?Stephanie:Or that you just love.Josh:I was going to say, I went to what app do I love right now-Stephanie:Yeah, there you go, what app are you loving right now?Josh:So, I would say it makes me more efficient ... you know what? I wasn't a fan of Teams in the beginning, but I have actually found that Microsoft Teams has really helped from a connectivity perspective during this time, and it really has become a very frequently used tool. The app that I'm loving right now is a tiny little app called Readwise, which I think is super fun, and Readwise basically, if you ever read on the Kindle and take notes, or if you're reading books in general, you will actually take the highlights and things that you've taken out of those notes, or if you've read a physical book it'll just take the most highlighted sections by other people of those books, and serve them up to you in whatever increments you want every day. So, if you wanted five highlights a day, seven, and it just helps to build and reinforce those memory structures of the things that you're reading at there, and that can be whether that's articles, or whether that's books, I think it's a neat app that I've grown to love over the last few months.Stephanie:That's cool, I'll have to check that one out. So, what are you reading these days?Josh:Man, a lot of books during the pandemic, some of the most recent ones were a couple of Brené Brown books, which is sort of all about workplace culture, been reading a bunch of the Tim Ferriss books that are out there, The Lean Startup, is a recent one that I read. So, I don't know, I can probably keep going on a bunch of other ones, but there's ... for whatever reason I've been reading a lot more recently.Stephanie:That's great. What's up next on your shopping list, or ... Actually, no, I have a different question, what is a favorite new product that Crayola just released? What is your favorite newer product that maybe a lot of people don't know about yet?Josh:Oh, my favorite product that a lot of people don't know about yet. So, I mentioned Scribble Scrubbie Pets-Stephanie:Yep.Josh:... I think that would be one of my favorite ones out there, and the other one is a line that we launched last year called Take Note! I mentioned that, that was sort of writing tools for teens and tweens, so it's got erasable highlighters, incredibly vibrant dry erase markers, gel pens, the whole works, and I really have grown to love that line of products and have many, many of them sitting on my desk in front of me and in my office here.Stephanie:Very cool. Well, Josh, thanks so much for joining us on the show. Where can people find out more about you and Crayola?Josh:So, certainly finding out about Crayola you can go to crayola.com. For me, I can't say that I'm a huge Twitter or LinkedIn poster, but @JoshKroo, you could follow me there, and yeah, generally just look for Crayola wherever you'd be looking for creative inspiration.Stephanie:Cool. I love it, thanks so much.

Brand loyalty is something that every company wants but few actually attain. To build a loyal customer base, you need to provide the best experiences possible, offer unique products or services, and deliver on quality and in a timely fashion. It’s a tough ask, and for those in the grocery industry, it’s even more difficult since differentiation between product selection is not as easy as it might be in other verticals.  But when it comes to customer loyalty, there are ways to separate yourself from the pack.  And that’s where Rachel Stephens comes in. As the Vice President of Marketing, Digital and Loyalty for Stop & Shop, a major grocery chain with more than 400 stores, she thinks about this every day. Thanks to a new online platform and through a loyalty program that customers actually want to engage in, Rachel explains that Stop & Shop is finally gaining access to some of the dark data it couldn’t access in the past.  On this episode of Up Next in Commerce, Rachel explains why that kind of data is a true game-changer for any brand. Plus she reveals some of the consumer psychology that she looks at when building loyalty programs, and she peers into the future at how the use of A.I., machine learning and natural language processing will further advance not just Stop & Shop’s ecommerce experience, but the entire ecommerce industry. Main Takeaways: Is it Actually on the Grocery List?: When building or improving loyalty programs, having an understanding of data is critical. Everyone has to take on the role of data scientist and look at the data analytically, especially as it relates to consumer behavior. Just because a customer says they want something or they intend to make a purchase, does not mean the data will always show that. Word for advice: trust the data and build a program around what is actually happening instead of what customers are saying.   Accessing Dark Data: For too long, grocery stores have asked only for customer phone numbers in order for them to have access to loyalty cards. But if that phone number isn’t linked to a real name or address, and is changing hands faster than an email address would, there is a huge amount of data left in the dark, which makes it impossible to build a meaningful database of customer information. To access that critical data, companies need to build programs that are truly enticing that customers want to share their data with that helps not only the brand but also the consumer. The Psychology of a Discount: Tune in to hear what Rachel saw in the data when reviewing their sales and discounts. Hint: higher is not always better. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next in Commerce, I'm your host Stephanie Postals, co-founder of Mission.org. Today we have Rachel Stevens on the show, vice president of marketing, digital and loyalty at Stop & Shop. Rachel, welcome. Rachel: Thank you very much for having me. Stephanie: Yeah, I'm really excited to have you on. I saw a little bit of your background before hopping on here and I got very excited when I saw that you have worked at the TJX companies, which I was hoping we could start there with your background. Rachel: Are you a brand fan? Stephanie: Oh, yes. I mean, I love TJ Maxx and when I saw that I'm like, "Ooh, this is my interview. This is the one." Rachel: Yeah, I was actually the assistant vice president of CRM Loyalty [inaudible] within TJX. And that really matched the TJX rewards program ... was a program that fell under my group and my responsibilities included the day to days and ensuring that our customers really wanted to participate in our program, our loyalty program so that we had clean data at the end of the day. And we were able to provide additional value in savings on top of what customers were already saving with the strong value that TJX stores provide. Stephanie: Very cool. How did you first get interested in the world of loyalty marketing, what lead you there? Rachel: I started actually in loyalty marketing at Pet Smart in their corporate headquarters in Phoenix and I think the thing that really appealed to me was marriage of data and customer communications, so understanding what customers say and what customers actually do is vital, I think, to the success of an organization because customers can say, "Yes, I have intent to purchase X,Y,Z." But when you look at the actual data, the data doesn't lie. Rachel: So, loyalty programs give you a vital tool for success within your organization to take a look at consumer data and then apply your marketing tactics really that are from acquisition, retention or reactivation perspective based on what that consumer is doing in a particular moment. So it's really, to me, such a great marriage of a lot of different areas within marketing and it just was something that I developed an immediate passion for. When I started there on the Pet Perks Program and then went to TJX to work on the loyalty program for TJ Maxx, Marshalls, Home Goods, [inaudible] Trading Post, and HomeSense, I feel like when I was there honed in on my skills within the loyalty space, so the position at Stop & Shop to really develop the role and develop what the new program was going to look like was incredibly appealing just because of my passion for this space and for retail. Stephanie: That's so much good experience to be able to bring to Stop & Shop. How have you seen consumer behaviors or loyalty programs having to change since you started? Rachel: Since I started in loyalty or since I started at Stop & Shop? Stephanie: I'd say in loyalty program, in loyalty overall. Since you started back in the pets days. Rachel: Yeah, I think there was a transactional nature to loyalty programs in the past. I think it was you give and get and that was usually based in points programs whereas today obviously I think more experiential programs have come about and providing more omni-channel experience, which wasn't really the case back when I first started within the loyalty space. I'd say that there's a number of people that really do a great job at this. I think Sephora's loyalty program is top notch. They do an excellent job at marrying the in-store and the online experience, really making it truly omni-channel tied in with their loyalty program. Rachel: I think that a lot of retailers have caught up and are doing a good job and I still think there's a lot of room to grow. And I think grocery retail was stuck in the loyalty stage of two tier pricing and I think we have a to model grocery loyalty programs more after what a lot of other retailers are doing in the loyalty space and even hotels. Airlines, I think that soft benefits and providing experiential benefits are really critical to the success of a program. Stephanie: Yep, yeah completely agree. Now that we're touching on grocery a bit I would love for you to explain what Stop & Shop is for anyone who doesn't know. Rachel: Sure, Stop & Shop is actually a grocery retailer with over 100 years in the industry. It started out as a very small grocery in the east coast and now we have over 400 stores and of course our online experience at Stop&Shop.com and the Stop & Shop app. Stephanie: That's great. And Stop & Shop, you guys just started moving into e-commerce, right? I think I saw that you launched a new platform just in a couple months ago, am I right? Rachel: We did actually, on July 28th in fact. We launched ... we had Peapod with a partner company. Peapod actually was owned by Ahold Delhaize, which is the parent company that owns Stop & Shop and we have integrated Peapod into Stop & Shop now. So, within Stop & Shop's footprint to order grocery delivery or to get pickup you actually now go to the Stop & Shop website or the Stop & Shop app versus Peapod. That integration occurred again at the end of July, and it's been going incredibly well so far. Stephanie: What was that transition ... what did that look like behind the scenes of not only integrating a current path that people are using but also I'm sure adding on additional functionalities that maybe weren't already there. What was the process behind the scenes or any maybe hiccups that you guys experienced when you were going through all this because it sounds like a big project. Rachel: Yes, yes. In fact, huge project. And all of our sister brands went through the same scope of work at the same time. We work with an internal agency who actually is responsible for all of that development work. And the agency actually had to develop the platform for all the brands. There was Giant Martin's out of Carlisle, Pennsylvania and Giant Foods in Maryland, also went through the same transition. Rachel: And there was obviously ... it requires a lot of work to marry the database, really marry those platforms. There was a Stop & Shop website, a Peapod website and H Brands app, so marrying those together was a huge, enormous undertaking that has taken approximately two years. And when I first started two and a half years ago actually that was really when we had worked on all the business requirements for this project. And it just takes a significant amount of time to match up all the data on our customers and combine those platforms and ensure that everything is running smoothly because if you think about the number of transactions that the Peapod site had going through it before and the number of customers that were going to the Stop & Shop site, you can imagine that there's just a tremendous amount of customers that we wanted to ensure were not left behind in this transition. Rachel: So, there's definitely a lot of work that went into this project and in terms of hiccups, of course there was a lot of those. But I think you try and block out all of the things that went wrong during the launch and you just only remember the good, right? Stephanie: Yep, that's great. And I'm also very familiar with Giant. I'm from Maryland. I'm sure everyone else is like, "What's that?" I know very well what that is. Rachel: Oh, great. That's great. Stephanie: Yeah, so when you guys are thinking about launching this new e-commerce platform, what kind of opportunities were you excited that it would open up? I'm sure you get access to new kind of data and you can have new offerings and you can send that data maybe to your other partners and maybe they can give you deals. What things were you most excited about that you didn't have access to before? Rachel: I think that what I'm most excited about is omni-channel data access. We did not, again, have that before because it was Peapod who really had all of the data for delivery and pickup and Stop & Shop who had all the brick & mortar data. The combination and looking at a consumer from an omni-channel, to me, is what's most exciting. Rachel: If I'm going to do a marketing campaign using digital tactics or any sort of in-store tactics I really need to know what you do as a customer. You could channel switch, you could go from pick-up to in-store to delivery all within a very short period of time. And so, I think the efficiency in marketing, by having that data to me is really what's most exciting. And being able to actually accurately talk to our customers is something that really interests me because how many time have you received communications from a company where you're like, "Wait, I was just in there. I just bought X, Y, Z and now they're sending me an offer for something," or the communication just seems out of left field. Rachel: And I think of years past when Starbucks didn't have a fully integrated data solution. If I was a coffee drinker and I always drank coffee once in a while I'd get tea offers and it just didn't make any sense to me. I think it was just bad use of data. Stephanie: Yeah, I still get that right now. I'll get things marketed to me around pregnancy. I'm like, "I am not pregnant and haven't been for a while." Rachel: You're not pregnant. Stephanie: In a while. Come on, about six months ago, stop that. Rachel: Right, exactly. Stephanie: That's smart. So, what are you excited for omni-channel in general outside of Stop & Shop. What do you think that landscape's going to look like in the next couple of years? Rachel: I think that COVID has certainly advanced a lot of, specifically in retail, advanced a lot of retailers. I think their technology and their offerings, I think omni-channel, to me, has to be that seamless experience in-store, online. And it has to be being able to look at you from a customer lens and understanding that you may channel switch and your experience or the offers that you're given or you're customer service shouldn't change. There shouldn't everybody anything remarkably different about whatever channel you're in. Rachel: So, for me I think that the omni-channel landscape is going to continue improving and COVID has definitely advanced that. Stephanie: To dive back into the loyalty program conversation, because I'm very interested in that, we haven't had a ton of people on the show who've talked about that, so I'll probably keep circling around that for a little bit. Rachel: Sure. Stephanie: I want to hear how you think about developing a successful loyalty program now. How do you get people to engage? How do you get them to be excited about it? Rachel: The most important thing is research. You have to understand what customers want first and foremost of course. That's the first step in any real loyalty program whether you're launching a loyalty program or enhancing a loyalty program or just completely transforming a loyalty program. You have to understand what research, what customers want. You have to look at the data and understand what they actually do. Rachel: So, it's the this is what I say I want and then this is what I actually do. And you rally have to be a data scientist and understand what it is that is bubbling to the top. If I know my to customers are coming in and I'm looking at the data that tells me they come in X amount of times per week and they shop for key products, then I can understand and I can translate that back into transactional offers. I can say, "Okay, these are the top products that I need to make sure are relevant to that consumer base on a regular basis." Rachel: But it doesn't get at really what drives them and motivates them to be loyal to the brand. So, I think that that research is such a critical step in really understanding how consumers really feel about your brand. You don't want to be the brand that customers just feel like you're on the corner and you're convenient so they have to shop you. You want to be the brand that they want to shop at. Loyalty isn't just about the program, it has to be about the total solution that retailer provides and your feelings about that retailer. Stephanie: It seems like there would be a lot dark data out there, especially for maybe grocery stores because I'm thinking, would my local grocery store even know that I go in and out because I don't interact with them online right now. I sometimes put my phone number in, sometimes don't. How would you make sure you have a good sample size of people to use for your research when building that out if maybe you still have quite a few of your customers that you don't even know yet. Rachel: No, I think that's a great question. I think you have to ... There are panels that you can go, usually your consumer insights team has access to panels of customers who volunteer to participate in research studies, so that's typically the first place that I go if we don't have enough data within the database. If there's enough data in the database to start with, usually that does require an e-mail address or a physical mailing address and not just phone number. Rachel: So, if your local grocery store only requires phone number and ... I'll say actually that was the case for Stop & Shop prior to the transformation of our new loyalty program where we really just ask for phone number point of sale. And that gave customers access to that two tier pricing. That doesn't do anything for a company, just having phone numbers and actually going to build off your database of course. Then you don't have a way to really round out that customer experience and understand. You got to be able to tap into that customer and ask them what they want. Rachel: It is really important that you're coming up with a program or if you have a program that it's enticing enough that customers want to give their data, they want to give you the right e-mail address or they want to give you the right mailing address so that they do participate in the program but they also are willing to give your opinion when you ask it. Stephanie: Yep. It also seems like making sure you have a seamless experience when asking for that data is really important because I can think of a number of times different stores have been like, "Oh, can you type in your e-mail?" Or just, "Read it off to me and I'll type it in very slowly." I'm like, "Ugh, just don't worry about it," or "I don't want to use your old type pad that's not really working and I'm going to have to delete it 10 times to get it right." Rachel: Right, exactly. Yeah, you're absolutely right it has to be simple, seamless. I think digital cards is a great way to make it simple and seamless. It's easy enough for a POS to scan a digital barcode that ties back to your loyalty card or phone number, provided the fact that the number actually is tied to a valid e-mail address or valid mailing address. Any way that you can provide convenience for consumers to access their program seamlessly, quickly is really important. Stephanie: Yeah, I completely agree. When you're setting this up, even If you don't have access to maybe huge amounts of data, are there any unifying themes that people just generally when it comes to loyalty or rewards programs where you're like, no matter where I've been it seems to always get someone to sign up if we have this or this offering. Rachel: Well, I think a based program, it has to be about savings, right? Every program is at it's core about saving, so hotel, airline, you're earning points to get free something or to save on something. And so, at it's core you have to have a savings in the value proposition. And then I think everything else that goes on top of that whether you have a tiered program where you're providing your top tier customers with more of those experiential benefits or more of those softer benefits is really, it's dependent on the industry and your ability to provide different levels of benefits to customers. Rachel: I think in the supermarket industry you don't see a lot of tiered programs. I think that that's mostly because there's not a lot of experiential benefits that you can provide that consumers really are interested in. I think a lot of customers look at grocery shopping as a chore. There are, there's certainly a core of customers who really enjoy it but for the most part a lot busy consumers today do look at it as a chore and I think that lingering in a store is not something that a lot of people are really interested in. Stephanie: Yep, yeah I completely agree. Is there any research that y'all have done when to what really matters from a savings perspective? What percent actually drives someone to purchase something they maybe wouldn't have purchased prior to seeing that savings? Maybe 5% eh, maybe not, 20% probably so. Anything that you've seen around that? Rachel: It's funny that the higher up you go in savings, a lot of times customers say they don't believe that. When you say save 20% or 25% or whatever, it seems somewhat unbelievable and I think a lot of customers question it. With our go rewards program we actually know that customers saved 15% or more. We did a lot of research because the and more was actually the savings is more like an average of 20% but customers really felt like, "That seems high, that seems really unbelievable." So, 15% we're like okay, let's just actually take that down because that seemed to be more palatable percent for customers for some reason. Stephanie: That's really interesting. Rachel: Isn't it? Stephanie: I know. I mean, when you see these shopping sites when it's like 75% off it actually makes you just one be like, "Well, was it ever worth the price that you listed it at?" And then are you going to get a 90% off. So I do question brands that have huge sales like that more than I do with someone who's consistently like, "You get 15 or 20% off no matter what promo code or coupon or anything that you get, it's never going to be higher than that. Rachel: Right, yeah. You start to question the quality and you say, "Oh, geez." I mean I'm sure the average consumer doesn't think in terms of margin but I start thinking about margin. Stephanie: I do too. Like minds, very like minds. [crosstalk 00:22:05]. "How much were you making before this?" Okay. Rachel: Exactly. Stephanie: That's great. How do you think about metrics when it comes to these loyalty programs. Are they unique and very different than maybe metrics for other e-commerce business or other programs that you might set up? Rachel: Well, I think first and foremost most companies will look at sales as a huge metric within their loyalty program because it's an investment for the organizations, so ROI is going to be important. But the ROI actually comes from retention and in some cases reactivation. You know that a lot of times it's true, the cost of getting a customer is equivalent to retaining eight. Rachel: So, I think if you can look at ... most organizations look at sales from the program and incremental sales from the program. I think that that is the real true metric. Engagement of course is also important. And customer satisfaction is vital. Stephanie: Yep, that makes sense. Are there any memorable campaigns that come to mind. You're like, this one was my favorite marketing or any other kind of campaign hat I've done that you want to share? I'm always interested in stories around that. Rachel: Yeah, no I think that I worked on so many great campaigns but the ones that are truly, fully integrated across every channel is that's what's really exciting. When you see a campaign, for example right now this might sound silly or small but we have this pizza campaign. We've got a commercial on air about the best pizza is your own pizza and we've got that campaign in every other channel, so digital, e-mail, social media, through my go rewards program, we throw in extra points when you buy certain products within the category. That's really what excites me is I think when you see it come to life and you see really the full ecosystem within marketing utilized to support something. That's when you really see the power of marketing come to life and you see how it actually makes sense obviously to have one point of view and to be more customer centric in your campaigns. Stephanie: Mm-hmm (affirmative). And it's like a better way to measure things as well if there's this one initiative going across many channels and you can look at it without having a bunch of other players messing the data up. Rachel: Right, right, exactly, exactly. I see some marketing campaigns right now and [inaudible] there's some big players out there that did all of these back to school campaigns and it drove me nuts because it's like we are not back in and it showed all the kids walking down the hall and of course I know that they had all these commercials shot in the can well before a lot of this happened but I feel like you're talking to a consumer base that is in a very different place right now. I think that obviously understanding what consumers are looking for and really being relevant like that pizza campaign. There's so many people who are at home cooking together right now. I feel like that's really where I get most excited is when I see obviously that relevance and then more of that omni-channel and cross channel campaign. I think that that's really where you see some good results from marketing. Stephanie: Yeah, that's as good point about people still running their commercials that they maybe shot a long time ago. The only one that I think has done really well in my mind that I've seen recently is either Trader Joe's or Target that had grab your back to school supplies and it was at a line rack. I'm like, "That's good, that's relevant and I'm going to get some [inaudible] now." Rachel: That's perfect. Stephanie: Yeah, really good. We had someone on this show who was also mentioning you should have different scenarios, especially at a time right now where you don't really know what's going to happen and you should be ready to pull your campaigns and slot something in really quickly. And it seems like a lot of larger brands or especially older brands just didn't think that way or maybe just thought, "Okay, let's just release this and see how it goes anyways." Why do you think that's the case? Why do they still put this out into the world when many of them probably knew it was not a good fit? Rachel: No, and I think it does more harm to your brand than anything to be honest because obviously if you're not relevant and you're not listening to what's going on in the world then I think that it does more home. At the beginning of COVID we did a lot of work around providing at-home solutions. We had a chef who actually did a cooking show within social media. I worked with this chef to come up with a series of cooking shows within Facebook and we did a number of other just activities to do with the kids at home and there was more relevance to our campaigns and it really resonated. Customers really appreciated the fact that we were giving them content that actually was valuable, interesting and just relevant to what was going on in the world. Rachel: You can't be deaf to what's happening and you have to really just make sure you're always paying attention and listening to what customers are saying. Stephanie: Yeah, completely agree. Earlier you were talking about the pizza campaign and how you put on many, many channels. Which channels are you finding are most successful or are there any new ones that you're experimenting with that you're finding some early success in. Rachel: I think that we do a lot within social media and I think that the channels in social media that we're finding some early success in would be Next Door and TikTok to some degree. I think with TikTok, youth are still clear we haven't done a whole lot there but I think that the brands that have been on TikTok and have done some really good work and have seen some great results. And I think the social media channels are probably the ones that give me the most excitement because I think there's such a great way. Rachel: We're working towards integrating commerce into social media. That's a big project that my team is working on right now and it's such a great way to capture an audience when they're just in their downtime. They're in a different kind of mindset and they're more open to maybe looking at inspirational content, recipes, things like that within Pinterest or within Facebook or Instagram. And they may want to buy it right then and there and they may want to say, "I want this recipe, I want it delivered to my house. This is great." So, I think that any of the campaigns that we've done in social have really been my favorites. Stephanie: You mentioned integrating commerce into social media. Are you all taking that initiative on yourself or are you more relying on the platforms to develop the solutions to tap into? What does that look like? Rachel: Yeah, we are relying on platforms. Obviously we have to, there's a lot of work that needs to be done still in this area. And I think that's a little trickier just for a supermarket because you're not going to buy just a tomato. Stephanie: [crosstalk] tomato from Stop & Shop. Rachel: Right, it's not like when you see a pair of shoes on Instagram and you have to have them. You don't really have to have that tomato on Instagram but you may want that full recipe so making sure that there's enough content that is actually worthwhile to the customer I think is the challenge and that's what my team is trying to figure out right now. Stephanie: Got it. When I'm thinking about commerce or social media, has Stop & Shop explored ... or maybe you guys already have this like your own products where it's like you can only get it from here. It's not a generic brand it's actually like ... I mean, that reminds me a lot of what Trader Joe's does. It's like if I want this one, well they discontinued this prune juice I really loved. [inaudible 00:32:00], yep. I love their prune juice, they discontinued it. Anyways, I knew that they were the only ones that I liked it, that's the only one I wanted to have. And so, have you explored something like that of creating certain things that will be top of mind where it's like Stop & Shop is the only one that actually has this kind of recipe of whatever it may be, prune juice. Rachel: Yes, actually in fact we have our own line, Nature's Promise is a proprietary line across the Ahold Delhaize brand. And we have our private label brand of course and then we have Taste of Inspirations which is a really nice higher end private label brand for us. And we are definitely doing more within that space, integrating with go rewards with our new program. When you buy a recipe that is all Nature's Promise ingredients you earn extra go points. Rachel: We have these recipes called take five that were featured within social media and we've got them in our circular and in other areas. And if it's all our Taste of Inspiration products you earn X amount of go points. We have a lot of those types of promotions that we're doing now and that's definitely what we'll be integration into our social media commerce platforms in the future. Stephanie: Very cool. And I feel like there's a lot of interesting opportunities too as you now explore ... you're going to have this new e-commerce platform to get new data and to see what people are really like and what's maybe swaying them to buy one thing versus the other. It seems like there's a lot of opportunity that'll come up around building new offerings that maybe you wouldn't have thought of otherwise. Rachel: Yeah, absolutely, absolutely. And I think if you look at solutions that's definitely really important to our customers right now. There's so many families that are just so busy and providing meal solutions, even a night, a couple nights or a week of meal solutions is such a huge time savings for a lot of families. Stephanie: Yes, I feel that with three boys now. I'm like anything to not have to cook from scratch would be appreciated. [inaudible] it's frozen, whatever it is. If it's edible it's cool. Where does personalization come into play or you guys? How do you think about showing offerings throughout your e-commerce experience or your apps that really connects with the person who's looking there? Rachel: Well, personalization [inaudible] success, so I think whether or not we get it right 100% of the time I think is something that remains to be seen. I think we have made some huge advances in personalization with the new platform, with our program. The more data we have about a consumer's shopping behavior, what they like, the better the offerings that we'll be able to give them. Rachel: So, if I purchase Doritos all of the time, hopefully I'm not getting a offer for something else, Lays potato chips, I should be getting offers for Doritos. So, that relevancy is really, really important. And that's something with this new program that we're providing customers whether it's through product coupons, which today now that I look in my coupon gallery on my app, I have six products that are relevant to what I purchase every week which is really great, so I know the algorithm is working correctly. Rachel: Then on top of that we also have more of those category offers. So, if I'm somebody that always buys fresh produce now we're actually doing more of the $5 off your purchase when you add a fresh produce. More of those category offers that are relevant to what I purchase every day. I think it's incredibly important. And then through the e-commerce journey this is really where I'd like to see us make some improvements. It's on recommendation engine type of logic, so if I'm putting a pizza dough in my basket on my e-commerce platform then hopefully somebody's going to be recommending some mozzarella and pizza sauce to me. Rachel: That type of a level of personalization is something that we strive for and want in the future. We have some degree of that today but that's certainly where I expect we will be going in the near future. Stephanie: Radical. When it comes to those recommendations are there any tools that you're relying on to build that out or is it everything you did in custom or how is that working behind the scenes? Rachel: Yeah, the recommendation actually is homegrown, so that's where our internal partner actually has been using all of the data from the loyalty program and understanding what customers buy, and there's propensity models that we have in place. So, somebody who has the same profile, who typically purchase X, Y, Z. "We actually build a model to say here are look alike customers and here's what we should recommend to them because it looks like that customer is similar so they may be interested in these types of products." And that's something that our internal data scientists have been able to build out for us. Stephanie: That's great. Is there anything when it comes to machine learning or the world of data that you guys have access to that you're maybe preparing for or different capabilities that you're building out right now that may be other grocers or other e-commerce stores are maybe a little bit behind on? Rachel: Yes, there definitely at the Ahold Delhaize level. I think that AI and certainly machine learning is something that everybody is going to have to be prepared to work on in the near future and be prepared to have teams working on that in the near future. And Ahold Delhaize does. Stop & Shop as a brand doesn't but at the Ahold Delhaize level we do. Stephanie: Very cool. And do they usually come up with something at the higher level and implement it within all of their stores or do they test it out and say, "Okay Stop & Shop you're going to pilot this and we'll learn from you and then we'll have our other brands try it as well," or how does that work? Rachel: That's exactly what it is, yeah exactly. And I see a big trend in experimentation and learning done with artificial intelligence, natural language processing. The first steps into conversational commerce and customer service. I think individually each of those is interesting but when you string it together it becomes really compelling and AI is now being given enough transactional information. And when combined with data science can match and predict customer behavior at a level not previously possible. So, natural language, processing and conversational tools really make it possible to help customers during the purchase journey and even more importantly in many aspects of customer service. Rachel: So, these previously somewhat academic technologies are being put in the hands of digital commerce managers and we begin to see the results. So, I fully expect that within the next couple of years what we're testing at a Ahold Delhaize level will be brought down to each of the brands. Stephanie: Yeah, it seems like there could be an interesting ... that you would get interesting results from the different brands because I can see very different consumers who are maybe shopping at Good old Giant back in Maryland. Rachel: Yes, you're absolutely right. Stephanie: How do you approach that when you're trying out different things and maybe you're like, "Oh, we see this with our customers at Stop & Shop, let's try this at another brand." And you're like womp womp that actually failed at that [inaudible] are so different. Rachel: Yeah, no it's a great call out and I say that all the time. I say what matters to somebody in the food [inaudible 00:40:18], so what matters to somebody maybe in North Carolina is different what matters to somebody in New York City. So, we have probably the toughest competitive market not only from a grocery retail perspective but even just from a media perspective and trying to ensure that our voice is heard within these difficult tough media markets. Rachel: So, for Stop & Shop really it's a little bit tricky and we do have to take a look at every single opportunity that comes our way and say, "Does this resonate with our consumer base?" Because a lot of times it won't. I think that there were a couple of examples of trying out even just a walk-up pickup service. In a city location you can walk to get your groceries handed to you. There've already been shop for you versus the traditional pickup where we load it to your car. That doesn't work everywhere obviously. [inaudible] work in the suburbs, it really only works at urban locations. That's one thing that comes to mind, there's a number of them that come to mind but each brand does have an option to opt out if it's not something that resonates within their base. Stephanie: Yeah, it makes sense. Try and implement that in New York city and all of a sudden these cars are being towed and then they're mad. Rachel: Right. Stephanie: [inaudible 00:41:48]. So, to go a little higher level I want to talk about general e-commerce themes and trends. I wanted to hear what kind of disruptions do you see coming to commerce that are not just from COVID or not just COVID because I think a lot people on here are like, "Oh, COVID's the big disruption." What else do you see happening in the world of e-commerce that's maybe coming down the pipe right now? Rachel: I mean one that's already here really is one stop shopping like Amazon. So, the retailers who adapt and constantly expand their options, shorten the supply chain, enhance customer service and develop great options for delivery and pick-up have the most success. So, I think that the model that Amazon has and Wayfair, the direct to consumer shipping is not as much as a disruption to e-commerce. That's here to stay and I think we have to learn from that and we have to adapt in order to stay competitive. And I think a lot of retailers are going to have to adapt in this new world. Everybody's going to have to be able to figure out how to provide that one stop shop because it's similar to brick & mortar shopping. You don't want to go to multiple locations on a Saturday afternoon. Rachel: It's the same thing, if you're going to pay for shipping you're going to pay for it once from one retailer or get free shipping, of course with a subscription service or promotion. And I think that's definitely here to stay. I think that convenience and the ease of finding everything in one place is that it's that big box retail mentality from back in the 80s when the big box retailers really exploded. Stephanie: Yep. Figuring out delivery and trying to compete with Amazon, man that seems very, very tough. Rachel: Very tough. Stephanie: Consumers have very high expectations now of what they want and yeah, it seems like they are quick to get upset if it's not one, two day shipping and, "Oh, it can't be here within two hours? Okay, I'm going to have to cancel the order." Rachel: Right, exactly. And "Oh, you don't have all the other things I need to? I need my face lotion and my bread. Wait, you don't have that?" Stephanie: Yeah, "Why would you not have that right next to each other?" Rachel: Right, exactly. Stephanie: Yeah, this has been awesome. Is there anything that I missed that you wanted to highlight before we jump into the lightning round? Rachel: No, I don't think so. Stephanie: Okay, cool. Well, I will pull us into the lightning round brought to you by SalesForce Commerce Cloud. This is where I'm going to ask a question and you have a minute or less to answer. Are you ready Rachel? Rachel: Oh, boy. Stephanie: All right, first one, what does the best day in the office look like for you? Rachel: Best day in the office today is at home. Stephanie: There you go. What does your virtual best day look like? Rachel: My virtual best day is when I actually have time between meetings to go get something to eat [inaudible 00:45:01]. Stephanie: That is actually a big problem I've heard from a lot of my old coworkers and talking about their whole day is now filled with meetings that maybe would've taken just a couple minutes to have a quick catch up and instead it's like, "Okay, 30 minute slots to discuss maybe one question." Rachel: Absolutely and you use your hour to the fullest extent and you're not moving around from meeting room to meeting room anymore. You're literally just sitting at your desk all day, so my best day is when I actually have a break to get up and go get something to eat because food is important to me. Stephanie: That seems like a crucial part of the day, so what's up next on your Netflix Queue. Rachel: That's a great question. I've actually blown through almost everything. Stephanie: And what was your most recent then? Rachel: I just watched the Enola Holmes. Stephanie: I'm watching that now, it's so cute. Rachel: Oh, it was excellent, I loved it, it was really great. I love Millie Bobby Brown, I think she's fantastic. Stephanie: Yeah, she was really good. Highly recommend that one. What's up next on your travel destinations when you can travel again? Rachel: Oh, gosh I want to go to Scotland so bad. Stephanie: Oh, fun. What do you want to go there for? Rachel: I want to golf. I love the countryside, just looks amazing, beautiful. I want to go hiking there. I have a lot of grand plans for Scotland and Ireland too as well. Stephanie: If you were to have a podcast what would it be about and who would your first guest be? Rachel: It would definitely be about true crime because I'm obsessed with true crime, which I know everybody is right now but I really do find it fascinating and I always have. This isn't just a fab for me, I always really liked it. Stephanie: Mm-hmm (affirmative). You started it, everyone else followed. Rachel: Yeah, exactly. I'm a trendsetter of course. Stephanie: Yes. And who would your guest be then? Will it be a serial killer? Rachel: Yeah, absolutely. I would love to interview a serial killer. I just want to know what goes on. I want to get deep for sure with a serial killer, name any one. Stephanie: All right, I mean I would listen to that. I hope they're behind bars when that happens. Rachel: Yes, yeah. I could do the interview behind bars for sure. Stephanie: There you go. And if you were to pick a virtual event right now for your team or if you already had one that you've done recently, what would it be that you think is engaging in these times? Rachel: I think there's a women's conference coming up in Boston that I would love for my team to attend. I just attended a women's leadership conference that was really amazing. It was very inspirational, even virtually I was really surprised at how well done it was and how just thought provoking the virtual conference could be. It was really fantastic. Stephanie: That sounds awesome. All right, and then the last one, what is a favorite app on your phone right now that you're loving? Rachel: This is bad but I have the CARROT app, which I don't know if you know, CARROT is the weather app. Stephanie: No, I actually don't. Rachel: It's a weather app that actually gives you a really sarcastic, snarky message every day when you open it up, so ... Stephanie: Oh, my gosh. That's great. I like that, that's really good. Well, Rachel this has been such a fun interview. Where can people find out more about you and Stop & Shop? Rachel: So, Stop&Shop.com Stop & Shop app and me, my LinkedIn profile, so Rachel Stephens, S-T-E-P-H-E-N-S. Stephanie: Awesome, well thanks so much for joining the show. Rachel: Thank you very much for having me.

Although many brands were forced to invest a bit more into their ecommerce operations in 2020 than they expected, many still have brick and mortar stores that need attention, too. Foot traffic is down at local malls and on Main Streets all over the world, but there is a way to bring people back to that in-store experience.  Audrey Gauthier is the Vice-President of Marketing and Ecommerce for Little Burgundy, a multi-brand footwear retailer owned by Genesco. She believes that an omnichannel approach and some creative partnerships are the answer to this widespread problem. On this episode of Up Next in Commerce, Audrey, (who called in all the way from Montréal) explains that customers who are comfortable with both in-store and online shopping will ultimately be your highest-value customers. She dives into how Little Burgundy is driving conversions in both areas through partnerships with local creatives and businesses that bring more in-store traffic while also providing new and exciting online shopping experiences. Plus, Audrey reminds us why concentrating on the basics of logistics and shipping is what ultimately builds confidence with your customer base.  Main Takeaways:   Is the Partnership Worth It?: There are common problems facing stores, malls, and other retailers in every country. If you can find a strategic partnership that benefits all parties, you can not only revive your own business but help bring more prosperity to an entire community. (Pro Tip: Metrics matter. When measuring the success of these kinds of partnerships, pay attention to the average order value, traffic, and engagement numbers.) National Reach With Local Flavor: Whether you are a mom and pop shop or a worldwide brand, connections are a key driver for success. Bringing local artists and creators into the in-store or online experience can help build a stronger connection to the people in the communities you’re working in that can carry your company even farther. Would You Like To Leave A Comment?: When there are open and transparent lines of communication through all levels of an organization, improvements that have real impact can be made much easier. When an in-store sales associate can easily present feedback she received from a customer to the ecommerce or marketing team, that customer insight which may have gone unnoticed before can instead be turned into a new solution or campaign.   For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to another episode of Up Next in Commerce. I'm your host, Stephanie Postles, co-founder of mission.org. Stephanie: Today on the show, we have Audrey Gauthier The vice-president of marketing and ecommerce for the Little Burgundy division of Genesco. Audrey, welcome. Audrey: Hi. Thank you. Stephanie: Thanks for coming on the show. Audrey: Yeah, sure. My pleasure. Stephanie: It feels like you're so far away. Where are you calling in from today? Audrey: I'm in Montreal, actually. That's where my accent is coming from as well. Stephanie: I love it. Are you guys opening up your retail stores of Little Burgundy or are you still strictly working from home? Audrey: We opened up the office. In Montreal, actually, we're allowed to have 25% of the employees working from the office, so we manage our calendar for people that want to go back to working from the office, but also everyone can actually work from home if they prefer as well. Stephanie: Very cool. So before we dive into Little Burgundy, I wanted to go through your background a bit. I saw that you've worked in the world of ecommerce for about a decade, and I wanted to hear what drew you to ecommerce, and a little bit about your journey. Audrey: Yeah, sure. I mean, I first started my career after a master in administration. At the beginning after my studies, I really wanted to work for ad agency, but after interviews had gotten me really into retail world, so I started for La Vie En Rose, which is also a Canadian-based retailer out of Montreal. It's a lingerie retailer, could be similar at the smaller case to Victoria's Secret. And I quickly fell in love with all the opportunities at ecommerce and the endless possibilities and creativity that goes really beyond the activation that we're doing, but also in terms of troubleshooting. So, really it's what got me in ecommerce. Audrey: And then after I got an opportunity within the Aldo Group and then continue my career in footwear since about seven to eight years now. Stephanie: Very cool. So what have been some of your favorite campaigns that you've worked on over the years? Audrey: One of my favorite campaign was actually the first time we shot abroad. We went to Mexico City and worked with combination of talents that we brought with us from Montreal and some others that were local based. That was just an amazing experience to be able to shoot abroad for a campaign that was going to live both in store and also in the digital side, so really exciting. And I would add to that that's recently just navigating to COVID and our new reality, coming up with our fall-winter campaign and trying to really connect with the customer with this new reality and just reinvent ourself was really fun and different and challenging, but a good end for me. Stephanie: I'd love it if you could highlight what Little Burgundy is. Audrey: Yeah. Yeah, sure. Little Burgundy is a multi brand retailer. We started back in 2008. We were initially launched by the Aldo Group and acquired by the Genesco Group back in 2015, so about five years ago. And, I mean, we're really boutique sale retailer, so we only have 38 stores. We're pretty strong on ecommerce as well. But even though we're a nationwide retailer, we really tend to do things locally and try to connect with local communities. Our stores look a bit different from every region. We try to partner also with local influencers, local artists and ambassadors. So, I would describe us as, really, a multi brand retailer that carry brands like Dr. Marten's, Converse, Vans, brands that you can get in a lot of other retail stores, but we even though we're multi brand, we really have a strong artistic brand DNA. Stephanie: That's great. So, when it comes to forming partnerships with the local talent or the artists, how do you guys approach that? Because I think that is really important when you're walking into a really fun, nice shoe store, you've got good music going, you've got good art around, but how do you guys think about finding new artists or finding people that are a good fit? Audrey: There's a lot of searching, I would say, especially if they came into consideration that doing business in Canada and most specifically in the Quebec province, we always love to do everything in French and English. And that goes as well for even the music in our stores. There's certain laws in Quebec that you need certain amounts of songs that play in your playlist in the store that needs to be in French, so we need to manage our playlist in store so we enough French songs and local artists from Montreal. But that goes as well from people that are connecting with artists. Our musician, for example, from Toronto or Ottawa are really different than the people that are connecting with more local based Montreal and French artists. Audrey: So there's a lot of researching from my team, either through connections and contacts or Instagram, Facebook ... just always trying to be in the know of who's up and coming. And also, we're still a pretty small player, so budget wise, in terms of collaboration, we really love to just be highlighting new artists that are up and coming, and [inaudible] the ones that have been seen around by every other retailers or partners. Stephanie: That's really fun. That seems like such a great way to lift up the community and really help out a lot of people, like you said, the artists and people who are doing really cool work. Audrey: Yeah, absolutely. Stephanie: Cool. So tell me a little bit about how you're thinking about, so you have your retail stores opening back up soon, and you also have your ecommerce stores going. Tell me a little bit about how you're thinking about the omnichannel approach and how you want to sync them together so it all feels similar. Audrey: I see really that regardless of the channel, we really need to provide the very best experience we can to our customer. In the recent months, there've been a lot of customer that for the time they shopped with us online. They used to be in-store customer. And we saw from the data that the customer that do shop in both channels are the one that are bringing the most revenue to the company if they're active in store, but as well online. Audrey: So I think moving forward, we're not only going to try to drive our business either online or in store, but really convert them both. And some initiative in regards to that, for us in our end will be solution like we call [Book Us 00:09:28] for example. So you buy it online and then you can go within the next hour in your favorite shop and maybe spend a bit less time in store, but at least it's reserved, it's for you, you can try it, try your size, especially in footwear, because it could be quite tricky in terms of size. So you can go in store, have that experience, but it's more fast and easy because you've done your pre shopping online, you reserved your item, you know it's waiting in store for you. The store's assistant is there to maybe offer you an alternative product if that doesn't work for you. Audrey: So, I think all of that omnichannel experience and improving both the in-store, but as well, the online is going to be key, same thing with just the shipping and return as well. So, I mean, if you decide to go in-store, try the product, we don't have it. We currently order it for you and then it can be delivered either to the store or your home. But we need to do a better job of just shipping faster, same-day delivery without pain, returning it the way you want, either in-store or to a delivery location without any cost, without any trouble to go through, or you don't have to call customer service. Audrey: So, I think on the logistic end, that's where we're actually going to win in the upcoming years of ecommerce. Stephanie: I love that. And I saw on your website that it said you could return shoe within 365 days. Is that right? Audrey: Yeah, exactly. That's something we always been actually doing with Genesco. The only thing is we've never really been pushing it, so through COVID and the culture of our stores, that was the type of messaging that we were putting up front of the customer, just to reassure them in their process, especially for the new digital customer that were used to maybe buy in store and become more comfortable with returning in store the next week or within the next two weeks. Stephanie: Yeah. I think that's so important to get someone to feel like there is no risk with buying if you can't get it back in a year. It sounds such a good idea, to have people come back and store so they can get comfortable with the experience and get a part of the in-person experience that you guys have built up. So how are you thinking about other ways to drive them in the store that maybe isn't competing with the free shipping? Because it seems like it'd be hard to want to go in store if I know that I could buy something online and ship it back for free for a whole year. Audrey: Yeah. It's been an ongoing question, to be honest, since we've been reopening our stores. I mean, traffic has been, even prior to COVID, it was a little bit down in malls, and it was already hard to get customer to actually go in-store. So, our job is even tougher in terms of really just increasing that traffic and really making sure that the customer do show up as well in store. So we're looking at doing special launches, special partnership as well. I think a good way of winning, especially in tough situation like we are is doing partnership maybe with other retailers. We recently done a partnership as well with RBC Bank in Canada. So that was a way to get new customers. Audrey: I mean, downtown is pretty much still dead for us in Montreal, as well as Toronto. The traffic has significantly decreased overall, not just in shops, but in restaurants and bars and every places, but for the ones that are still going downtown to maybe give a special promotion that they can get on their lunch break or something like that. Audrey: So we're really just trying to work more closely with other retailers, other partners, the malls also itself, or if it's a street store to work with, like the neighborhood, that store to find partnership and ways that we can all together bring more traffic to our stores. Stephanie: Very cool. So, what kind of launches or partnerships are you seeing success with right now? What kind of things are you trying out that are working? Audrey: The RBC partnership that we've done, it was basically giving an exclusive offer to the RBC Bank members. It was successful in the way that it brought a lot of new customer to Little Burgundy and they were also high-value customers that were spending more than average. So in a time where businesses is tough, definitely that was a good win for us. Audrey: Another one is we have this student price card in Canada, it's called SPC. And it's giving discount to members of SPC when they are student and could be applicable in multiple retail location. So that's another way that other partnership that we're seeing, that it doesn't change the entire business, but it does add up at the end with multiple type of partnership like this. Audrey: And I think another good way of winning is working closer definitely with the malls, because at the end of the day, we're in the same boat. We're all seeing either decrease of traffic and difficult business. So I think we need tighter communication with the malls and the partnership, if they're doing an event to really involve the retailers as well. With one of the mall regroupments here in Canada, Cadillac Fairview, they're doing a incentive during the holiday, so if a customer buy Cadillac Fairview $100 gift card, then they can get special items in certain participant store. So that's another way of, again, in terms of traffic and partnership, try to get more customer into our doors. Stephanie: Yeah. That seems like definitely the way of the future is figuring out how to partner with people who are around you to create really good experiences. Yeah. It seems very smart. Stephanie: Are there any metrics that you pay attention to when you're forming these partnerships and these spatial launches? Audrey: Mm-hmm (affirmative) As I was saying, with RBC, the average order value, the revenue it's bringing, but also in terms of long term, are they staying customer? The acquisition that we're doing through that partnership, are they going to redo a purchase in the next six months and then next year, or that was really just a one-time to get the promotion, so it's a little bit less valuable for us? So, these are definitely metrics that we're paying attention. Stephanie: That's great. So how do you keep customers coming back? Because there are so many shoe stores, so many competitors out there. How do you engage with your customers in a way that keeps you top of mind? Audrey: Yeah. Good question, and definitely a good challenge being a multi brand retailer, and with also increasing competition in terms of just the offer out there with the multiple retailers and also big players, even from the States that are coming in. Audrey: So, I mean, for us, a thing we've always been good at is showcasing the product in a different way than our competition does, but also than even the brands are doing themself. So we showcase a Vans product in a different style or different aspirational look than what Vans would do or what a Footlocker would do. So, I think that's what one of our advantage, because it seems to work with our customer, and from previous survey or focus group that we've done in the past, they always say that at Little Burgundy, we do things differently, but in a good way. We succeed to stand out, even though we're not the biggest player. Audrey: And even though we don't carry all the product, but we have the reputation of carrying a good selection of product. If you want a footwear that is on trend, it's maybe not the most fashion forward that you would see on a red carpet, but at the same time, it's a safe choice in terms of being on trend, so we're being one step ahead of maybe the core people, but at the same time still being affordable price. So we are in a good position in terms of our offer and all we presented. Stephanie: Yep. I think that's a good space to play in, because who really wants to wear the red carpet stuff anyways? Most of that looks a little crazy. Stephanie: So, on your website, you mentioned that you have a magazine that goes out every season. Tell me a little bit about that. Audrey: Yeah. Our magazine, we actually launched it since the very beginning of Little Burgundy. And it's always been at the heart of who we are. And I remember when we were part of Aldo, everyone wanted to work for the Little Burgundy division, because it was with our magazine and all our artistic direction, we're doing things always a bit more edgy. And that was just a really good vehicle for our brand DNA and to show Little Burgundy, again, differently than other multi brand retailers. Audrey: That being said, about three seasons ago, we stopped doing the printed magazine and really went more with digital version. So we still do those strong artistic direction campaign every single season, and we create a specific team for a season where we're going to do articles and work with artists, et cetera. Audrey: So, similar content with what we would have done for the magazine, but we're really doing it more for the digital. So assets are optimized for digital, we're doing more video content as well, we're uploading articles on the website. So we move away from the print and magazine, basically because of the cost of printing, but also we were just able to track a better return on investment with everything we're doing online. Audrey: So then a tough decision when we first started the magazine, because it's been part of our DNA and heritage of Little Burgundy. Even in the office, we have all our covers of the magazine that are showcased in the hallway. So we've all been super proud of it, but just with the world changing, we took a more digital direction in terms of content. And I'm not saying that we're never going to go back to a print version of the magazine, but for now we're really more focusing on still creating good content exclusive to Little Burgundy that has always a really defined angle, but then really optimizing that content more on the digital side. Stephanie: Yeah. So to dive in a little deeper on the digital magazine aspect, what kind of engagement are you seeing on that? When you send it, I'm guessing, through your email or wherever else, how many people, or how many of your customers engage with it and read the entire thing? Audrey: It's not a magazine like it used to be, a full issue. It's more we're releasing content as we go throughout the season. So it's more going to be through blog article and just a newsletter that is more informational. But it's not in a format of a full magazine, like page one, two, three, et cetera. Audrey: So, we see that like people are ... It's just funny to look at engagement of people in certain articles versus others. The latest one we released, I don't know if you got a chance to see it, it's really, really small article, but it was just of these dogs, so the dogs of people working at Little Burgundy, and obviously it involved dogs, not at all related to the shoes, but it was interesting because we got a very wide reach of people engaging with that article and just spending more time on our website. So at the end of the day, in terms of KPIs, we had a good returns, even though it was not direct sales. But again, it's content that are just making us a little bit stand out from the crowd, and our customer just going on our websites, spending time with us and engaging with Little Burgundy instead of spending that five minutes on Footlocker, for instance. Stephanie: I love that. I think anything with dogs or animals probably would perform we. Audrey: Yeah, definitely. Stephanie: So when you create content that, how do you also keep Little Burgundy branding on there so people know who brought this content to them without hitting them over the head with it? How do you make sure it's engaging, but also does the job? Audrey: In terms of letting the customer know that it's from Little Burgundy and this content that is brought to us through, let's say, paid advertising ads or ad on Facebook or Instagram, that's why we really launch campaign that are very different, that are very [inaudible] driven, that are a little bit more edgy than what you would see on maybe another retail or a medium. So we're really trying to have our ads running, but really with a strong artistic direction. So, if you see a Blundstone ad on your Instagram, and then you see a similar ad with the same background or the same artistic direction but for Vans on your Facebook, you can still relate that it's probably from Little Burgundy, just because of the artistic direction. Audrey: But it's really important for us, and I think it's one of our strength as a multi brand retailer to be able to tell a story to our blog, our newsletter, our in-store window, with our own tone of voice, even though we're going to market Dr. Martens, Adidas, Nike, like any other brands. Stephanie: Yep. So previously you guys were owned by Aldo, and then in 2015, Genesco acquired you, which is an American brand, what did that change look like? Did you have to change your tone of voice or your design, or were there no changes at all? Audrey: No, there was definitely tons of changes. And it's been a big journey, because, I mean, you're detaching a business that was already very tightly attached to another business and then you're reattaching it to another strong structure. So it's been a couple of years, actually, just going through that process and being able to be fully running on new platforms. Audrey: We've pretty much changed everything, like the POS in store, our shipping carrier, our warehouse, every single aspect of the business has been scoop out and look at, and we needed to confirm that, yeah, we're moving forward with that third party or not. So it's been a lot of work, I would say, in terms of acquisition from both and even from people working from Little Burgundy, but also with Aldo and the Genesco folks as well. Audrey: In terms of business, I feel really fortunate that it's actually Genesco who acquired us in terms of they're a multi brand, their expertise in retail, they've been around for ages. And being part of the Journeys family, they're a multi brand retailer, as well as us, while Aldo was a first class business. So we were always a little bit like the outsider within that structure. Audrey: Joining Journeys, they're really more similar to us in that sense of being a multi brand retailer. So for a small player like us from Canada being only 38 stores, I mean, it gave us access also to the management of certain brands we're working with. So we have always had our good, strong relationship with all our brand partners in Canada, but now we also have access to getting more involved and knowledgeable of this strategy more globally from our brands. So that was definite win for Little Burgundy within this acquisition, actually. Audrey: And if I can add to that, I'm also glad of our Aldo heritage, just because of I put us knowledgeable at footwear being from a first class company, that were working with manufacturer all around the world and creating their own line of products. So I feel we're the perfect situation that our previous family was actually making shoes and our new company, they're really strong in retail and with brands. So I feel we're really gaining from Little Burgundy in this acquisition. Stephanie: Yeah. That's great. I'm sure that Genesco and the brands within Genesco are learning a lot from you all, but what are some of the biggest insights that you learned from being able to see into these other brands that were similar to you? Stephanie: Like maybe where you have been able to see how other brands do things or how they track things or how they do things with retail where you were like, "Oh, we weren't doing that before, and now we're going to start implementing them." Audrey: I would say one of the big learning that I saw from being part of the Journeys family, they always have this tagline of "Journeys is a family with an attitude that cares." And that's true. They're really super transparent, sharing data, involving the team from the coordinator to the designers, the part time employee in store to the store manager, they're really involving everyone from the company to almost sit at the same table and really share knowledge. Audrey: An example of that is at the POS level in store. We have a button that is called Feedback Button. So anyone from the store employees can hit that button and send directly their feedback to the various team from the head office. And even all of the management team, we have access to the feedback from the store. Audrey: So I feel that transparent communication that we have within the company is such a eye opener for everyone, actually. And there's just a lot of transparency between what's actually happening from the sales floor to the office decisions that are being taken. So that's definitely a good learning with joining Journeys and seeing really that family vibe is just to connect more with people that are from the stores to know their reality, know their feedback from the customer, because they're really at the front line. So I feel that within this company, we do succeed with just bringing back together and the office team and the sales team, which has beneficial even for the web business, so many feedback that we get from the stores, then we're like, "Oh, okay. They hadn't thought of that even for ecomm so we can apply some changes as well for the website," from insight we're getting from the sales associate, in-store comment from a customer, for example. Stephanie: That's really smart. It seems like that's a great way to empower the retail employees, because I think we've all been in a retail store before where you can just tell the employees there are not happy, they don't feel excited to come into work, they don't feel a strong connection with the brand, but it seems really smart to start empowering them so then they feel like they are a part of the success. Stephanie: So what kind of disruptions are you preparing for within ecommerce? Audrey: There's been a lot of I mean, upgrades, like with the store closure in March, and just really putting all our focuses on actually the web business for a couple of months and seeing how it's overall helping the business, we've been fueling and investing a lot in ecommerce upgrade. Audrey: So, on our end, we've been even launching, for example, affiliate program or working with partners like Curalate for more UGC content on our website. We're going to do soon launching with PayBright, which is allowing to pay multiple payments as well. So for us, our average order value for goods, it's going to be quite good in terms of just helping overall conversion in the website. Audrey: Other big changes we're going to be seeing is in terms of just the inventory management, and being able for the customer to not only, again, make a purchase online and then add ship it to the store, but also go and pick it up within the next few hours at their favorite store to try them on. Audrey: So, those are some of the disruption in our model that we're seeing for the upcoming months and that we're just trying to fast forward and act a little bit faster than maybe we would have expected at the very beginning of the year, knowing that there's definitely a lot of opportunities with ecomm right now and that we're really on the hill that we're going up quite fast. I'm not sure if that sounds right in English. Stephanie: Yeah. We've actually heard that from quite a few brands, of the plans that they had for maybe three years are now happening in a matter of months. Audrey: Yeah, exactly. Stephanie: While you're doing all these ecommerce upgrades, are there any new pieces of technology or tools that you're implementing that you're excited about? Audrey: Yeah. So, PayBright, I'm actually quite excited about it. And funny enough, I think that the solution we're using in the US is Klarna. I'm excited about it. Prior to COVID, I was a little bit not sure about implementing a solution that will allow our customer to pay in multiple payment. I just felt doesn't necessarily feel right for just a pair of shoe enough like a big, so far or really expensive purchase, but now, a little bit the economic situation we're in, the uncertainty, the fact that so many people lost their job too, I feel a bit more confident and sure about adding it, and I'm curious to see also the result if it have conversions. So this one I'm quite happy. Audrey: But overall, our buy online, pick up in store and more real-time inventory is definitely the biggest change. I think there's a lot of good AI solution and a lot of good front end customization, but most of the retailers still have a little bit of trouble with their back in and just decreasing their numbers of cancellation or shipping faster or having good return process. So, the improvement we're doing more in terms of inventory management and being more reliable in that sense, that's definitely what I'm looking for the most, not the prettiest thing that we could see on the website or things like that, but it's really something that on the long end, it's just give confidence to our customer that we're able to commit to a fast delivery or just that if you order from us, you're actually going to get through your product and it's not going to get canceled, et cetera. So I'm really excited about just the basics. Stephanie: Yeah. That's cool. I mean, real-time inventory seems really tricky when you have multiple brands that you're working with. Audrey: Yeah, but at the same time we own the inventory and it's being either shipped from the stores or the warehouse, so it makes it a bit easier to manage. Stephanie: Cool. All right. So I'm going to shift this over to a lightning round. So the lightning round brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Audrey? Audrey: Yeah, I think. Stephanie: What's up next on your reading list? Audrey: Next on my reading list is a book from Margaret Atwood that I've been looking up for ages and just didn't took the time to read it, so I was always reading something else. It's called in French [Foreign Language 00:40:03], and English it's The Handmaid's Tale. I just never got to read it. I know everyone read it before, but it was never on my table. So that's the one I'm currently starting. Stephanie: That's great. You'll have to let me know how it is. Audrey: Yeah, sure. Stephanie: What's up next in your travel destinations, or where did you just go, since you were just on vacation? Audrey: I just come back from vacation on Monday at noon, actually. I went to, it's a small Island in Quebec, actually. It's called Magdalena Island. It's a fisherman island, really cute, red cliffs, and you're surrounded by the sea. There's tons of just really welcoming people. They have even a weird French accent, so for an Anglophone, it might be a little bit tricky, but it's definitely worth going there. Stephanie: Oh, that's fun. I'll have to check that out. What app are you enjoying most on your phone? Audrey: Currently, I've been spending a little bit too much time on TikTok, because we recently for Little Burgundy just launched a TikTok channel. I didn't even add it on my phone; I obviously knew what TikTok was involved, but I never spent time on it. So recently my team has been just pushing me videos to watch and just to be more aware of that platform and our customers that are on it. So I've been spending a little bit too much time on this app, actually. Stephanie: I feel you there. I end up going down a wormhole where I start with just a couple of videos, and then all of a sudden I'm like, "Whoa. I just spent 20 minutes watching dancing and makeup tutorials and organizing your house videos." But it seems a perfect platform for Little Burgundy. Audrey: Yeah, exactly. Stephanie: All right. And the last one, what one thing will have the biggest impact on ecommerce in the next year? Audrey: Tricky. There's so many things that are happening right now, but I think, for Canada, the cost of shipping is so expensive here. Obviously Amazon and big players are just setting up the bar very high for fast shipping, very low cost, et cetera. So for smaller retailers, for us, expectation from the customer is just getting higher. I think shipping carrier and negotiating prices will be very challenging but could be a key changer. Audrey: One of the company that you should actually maybe include in your next podcast, a guest from Canada, they're called [inaudible 00:43:18]. I think they might even be in their 30s, if I'm not mistaken, two guys from Montreal who launched that ecommerce website, and they just announced that they're doing same-day delivery currently in Montreal, but they're looking to launch as well in Toronto. So if you're from Montreal and you purchase before 1:00 PM in the afternoon, you're safe to get your order the same day. So these type of services are definite game changer, but I just think it's hard to get there still being profitable. So that's definitely an area that we're going to keep a close eye on. Stephanie: Yeah. That would be interesting to hear, the economics behind that business and how they guarantee that. That would be a good interview guest. Audrey: Yeah, definitely. Stephanie: All right. Audrey, well, this has been such a fun conversation. Where can people find out more about you and Little Burgundy Shoes? Audrey: Yeah. So about me, definitely on my LinkedIn, so Audrey Gauthier, if you can spell that right. And Little Burgundy, well, I invite you guys to go on our website, littleburgundyshoes.com. We currently don't ship in the US, but we're really looking forward to it eventually. So it's still worth to stay tuned and look at what we're offering. Stephanie: Very cool. Thanks so much for joining. Audrey: No problem. Thanks to you.

What happens when your customer clicks ‘order’ on your Ecommerce site?  Do your systems have rules that look at the customer location and choose the nearest warehouse to fulfill that order? Or are you relying on one fulfillment center and allowing days or weeks to pass before it arrives to your customer?   The real-world logistics behind each digital order can be a complex process… but if you could set up the proper systems, what if you could then compete with the new industry standard of two-day shipping? Understanding this logistical side of Ecommerce is vital for any store owner or executive team looking to master this world.  Today, we’re exploring the logistics side of Ecommerce with an industry expert.  Casey Armstrong, is the Chief Marketing Officer at ShipBob working hard to ensure that Ecommerce shops are able to get products to their customers effectively and efficiently.  On this episode of Up Next in Commerce, Casey takes us behind the scenes of what makes for a good third-party logistics partner, or 3PL. Plus he explains when companies might want to start thinking about finding a 3PL partner, and why Amazon, which is seen as the gold standard in fulfillment, might not actually be the best choice for your Ecommerce shop.  3 Takeaways:  Optimizing your 3PL Strategy: There are many options when it comes to choosing who to partner with as your 3PL partner. But making sure you ask the right questions is key. Do they help with creating a beautiful unboxing experience? Are they distributed? Can they grow and scale with your company? Tune in to hear all the things to consider when setting up your 3PL operations. Focus on The Product, Not The Fulfillment: So many entrepreneurs start off having to do everything themselves from marketing, to product development, to fulfillment. After a while, the fulfillment process will wind up taking up the majority of your time that should be spent on developing, talking to customers, and scaling the business.  Owning the Tech Stack: From top to bottom, when a 3PL owns the tech stack, it can provide data to its customers that can directly impact ROI. With easy access to data like inventory, distribution centers, customer location/preferences, an Ecommerce shop can make decisions about its fulfillment strategy with a sharper focus. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, co-founder of Mission.org. Today on the show, we have Casey Armstrong, the chief marketing officer at ShipBob. Casey, welcome. Casey: Hello. Thank you for having me. Stephanie: Yeah. Thanks for coming on the show. I am eager to have you on since we have not had anyone in your industry on yet. I think there's a lot to learn. Casey: Perfect. Stephanie: I want to hear before we dive into ShipBob, a little bit about your background and how you got into your current role of CMO. Casey: Yes. Thank you for the intro. As you mentioned, chief marketing officer over here at ShipBob. Where at ShipBob, we are an Ecommerce fulfillment solution essentially bringing that Amazon level two-day, three-day shipping experience to direct to consumer brands. We can get more into the specifics of ShipBob later. I'm not here just to pitch that, but we do that through our distributed fulfillment network. We've got 10 facilities around the world. Casey: Then before ShipBob, I actually was the VP of marketing over at BigCommerce, one of the leading Ecommerce platforms who also happen to go public in IPO last week. Another huge congrats to the BigCommerce team over there, that was a huge accomplishment. I'm just very proud of what they have accomplished. I know that they're just getting started. Then prior to that, I was the SVP at a company called Watchmaster. We were a luxury watch Ecommerce brand actually located over in Europe. Those were the last couple roles for me that brought me over to ShipBob. Stephanie: Tell me a little bit about ShipBob. What is it? How would you explain to someone who does not know even where to begin with that? Casey: Yeah. We ship off to really simplify it. Again, if I would really simplify it, we're a tech enabled 3PL which again means we store and ship your products. If you're a direct to consumer brand and you want to utilize ShipBob or let's say another 3PL, you would send us your inventory. We would store your inventory. Then, as orders come in, we ship it out on your behalf. We are not a carrier. We are not like FedEx or USPS. We partner with them. Casey: Every day they send multiple trucks to our facilities and pack that truck to the brim. Then, take those orders out to deliver to the end consumer. Yeah. I think that covers most of it. Stephanie: Yeah. That's good. You're kind of like the behind the scenes operation that can help fulfill products and orders for an Ecommerce shop? Casey: Exactly. We really are pushing the envelope to do a lot more than that. I mean, we are platform agnostic. We can connect on all the marketplaces. We don't really care how you are selling or where you are selling. We just ingest those orders. Then, we can ship the products to the end consumer. We're really enabling that entire e commerce experience regardless of how you are running or facilitating your business. Stephanie: How does ShipBob differentiate itself from other 3PLs? Casey: One of the ways, the most obvious ways is our fulfillment network. We have 10 facilities, eight in the US, one in Canada and one in Europe. Why that is important and why we're making a huge bet on the distributed fulfillment model is because then you're closer to the end consumer, which means that you can deliver your packages not only faster, but also much more cost effectively. That's a huge focus area of ours. Casey: Another very, let's say, obvious item too is the technology. I'll touch on two items there. One is we really are making our bet on controlling that entire stack. That goes from the merchant application, which should really be your go-to source for all inventory and order management. You don't have to use another tool. You get all of that within ShipBob. Another is the ShipBob fulfillment engine, which is really the logic of what and where and how to ship all products. That's what talks to our fulfillment centers. Then, it's our warehouse management system or WNS technology, which powers all the logic within the fulfillment centers. Casey: That's from how should we receive your inventory when you send it to us? Where should we store it? When the order comes in, which person in the fulfillment center should pick it? What box should they put it in? Which label should they print it out? When should they prioritize that within their day? All of that is ShipBob technology. The reason why we think that is so important is that's how we can create this unified fulfillment experience for our customers across all of our locations. That way, we can also be as cost effective and efficient with our time, so that we can then pass on those savings to our customers. Casey: Then, another item with the technology as well is that allows us to, again, not just optimize what happens there but share this data more transparently with our customers. For example, all of our customers get ... we're we actually going to turn this into a paid product, we decided because of how much value it drove to our customers, we just decided to open it up to our analytics dashboards. Customers can come in and just get some pretty robust data and analytics on how their business is performing from like an inventory and fulfillment perspective. Casey: They can even see things like with a click of a button, let's say they're storing all of their product in our southern California location. They actually see they're getting quite a few sales in the northeast. They can click one of our northeast locations and they can see, okay, this is the cost savings and the reduction in transit speed if I utilize two facilities. Sometimes, you're like, why wouldn't anybody use two or three or 10 facilities? You have to think through the business, which is it might cost incremental money to ship to multiple facilities or you might want to double up on inventory. Casey: There are pros and cons of both. That's just one of many examples of with a click of a button, you can really dive down in your business and see where there are some cost savings and time saving opportunities. Stephanie: That seems very good, very helpful. I will point though, would someone know like, okay, now is the time that I should maybe outsource my fulfillment. How big should they be? Or when will they know it's the right time to maybe hire or bring on a 3PL? Casey: Yeah. I think knowing the right time, I think that's the easier one to answer. I get this question all the time. Is it 100 orders a month? Is it 1000? What is it? Just like most answers to things in life is it depends. I think it's beneficial to pick and pack and ship products for maybe a little bit, maybe even just when you're getting started, because one you kind of learn the mechanics of it and what goes into it and just even things to optimize yourself. Casey: An example there is sometimes people want this extremely robust unboxing experience. They'll get these extremely customized boxes. Then they realize, oh, well it takes them 10 minutes to fold it all up together every time. That's not efficient for them and that won't be efficient for the 3PL. Also, I think it's actually just extremely important to understand who your customers are and so as these orders come in, and you can do this after you outsource it as well, but as orders come in, look them up. Casey: Is it Casey Armstrong? Okay, he lives where? Okay, he has children, he's into certain things. Who are these people? To really understand your customers. I'd say the time to outsource it is when you start getting close to a point where the fulfillment side of the business is eating into your time that can be better spent on sales and marketing and product development fulfillment is often a low leverage use of your time. There's a reason why people utilize companies like ShipBob. Casey: You should be spending your time on growing the business, again, sales and marketing and product development, probably not picking and packing boxes, which also takes a lot of time. Stephanie: Yeah, that makes sense. How would I think about you guys versus maybe like Amazon fulfillment? What is the difference there? Casey: Yes ... Stephanie: Would I pick you over Amazon? Or is it either or? Can I use both? Casey: You can use both. Sometimes, we're a replacement. Sometimes, you would utilize us instead and sometimes we're a compliment. With Amazon, it depends on what you're looking for. With us, we often work with Ecommerce brands. I definitely stress brands, people that care about owning that customer relationship and owning that data and having full control over what and how products are getting sent to their customers. Casey: With Amazon, which really sets the gold standard in logistics, no question, with them, it's really you ship stuff to their fulfillment centers, everything goes out in an Amazon box. You get extremely limited data if something goes wrong, or if they make changes. Like for example, they stopped shipping essentials or receiving essentials, early on in COVID. Most recently, they are limiting the amount of inventory you can store in their facilities. They're the end all be all. They make that decision and there's nothing you can do about it. Casey: You just have to conform your business to how they change. With us, you can include marketing inserts. You can include custom packaging. You get and own all of the data about your customers and about the fulfillment experience. If you want to pick up the phone and talk to somebody, you can. It's really weighing what is right for your business. Stephanie: Yeah, that makes sense. The one thing I've always kind of struggled with when thinking about 3PLs is the cost aspect. Because at one point, I don't remember what I was looking this up for but I was trying to find a good one here in California. They all use different metrics. I actually had to build a matrix in Google Sheets to be like, well, this person is quoting it based off of like, what are they called, partials or the big wooden blocks? Not blocks ... Casey: Pallets? Stephanie: Yeah, pallets. Hey, there you go. Yeah, they're quoting it based on pallets. Then, other people are talking about pieces. They all had different ways of talking about it. I felt like I didn't fully understand what cost to even consider when looking for different 3PLs. What do you advise if someone's going this route right now and thinking through it? Casey: Let's say, before even getting into the pricing equation is understanding what's important for you and that should hopefully allow you to whittle down your options because you probably are going to get handful of pricing agreements that are difficult to compare apples to apples. I mean, you could spend a little bit of time and get it to that point. Is connecting to certain technologies important? If so, you can probably cross a bunch of options off your list. Casey: Is having a location in a certain region or regions important? Do you want to split your inventory? Is certain things from a kidding or a packing or an unboxing experience important? If so, again, you can probably widdle some more off. With us, we really try to simplify it so you get billed off of receiving storage, and then what we call a total fulfillment cost. We try to simplify it some but again, even when you're looking at us versus others, you can't necessarily always get to this true apples to apples comparison but you can get pretty close. Stephanie: Yeah, that's a good point. If someone is doing a lot of other things like you mentioned like unboxing or having distributed fulfillment centers, that is probably even more important than just like how much will it cost to ship certain pieces. When thinking about the distributed fulfillment centers, how does the reduction, maybe like shipping days increase purchase size or cart abandonment? Have you seen any metrics around that where a quicker shipping time, I'm assuming helps with higher purchases, purchase volume? Casey: Yeah. We actually have a couple of case studies that are pretty interesting on our site today. I'll give two examples where one is with this one brand and they were utilizing our two-day express program. There, we split their inventory and we try to optimize everything or as much as possible to be shipped via ground, because we're going to pay ground versus air is night and day. That's why distributed fulfillment networks are important is because then you're getting access to a larger footprint of the US. Casey: Let's just say in this example, the continent of US for ground shipping because anybody can ship two day in air. That's easy. You can ship it from one facility, it's just going to be very expensive. Anyways, they were able to see slightly over 20% increase in their average order value by showcasing this two-day shipping experience. I think that's because they were really showing off that Amazon level experience. Amazon had a lot of data on just the additional spend, granted this isn't necessarily apples to apples but how much more the prime members spend versus a non-prime. Casey: Again, if somebody is using prime, they might have more ... maybe they're like in a higher income bracket or they put more emphasis on Ecommerce. We had another customer honestly that saw a 97% increase in average order value once they started showcasing this fast and free two-day shipping. I would not mark that as your baseline or your benchmark or target because doubling your average order value is pretty insane. It does go to show things that people, I think, think about a lot more now than they used to. That shipping and fulfillment experience both whether it be free for two days or free and two days can really move a lot of levers that will also help feed back into your ROI and your marketing. Stephanie: Yup. I think a lot of customers in the back their mind they know, if I don't get this in probably a week, I'm going to forget about it or I won't be as excited about it. I mean, that's at least how I am when I see maybe like seven to 14 days. I'm like, what am I going to be doing in 14 days? I don't even know if I want to wear that t-shirt in 14 days. Casey: Something that's really tough to calculate is how does that improve ... I mean, you can calculate like your net promoter score or NPS or your C-SAT or customer satisfaction score if you poll your customers. Maybe improvements in NPS improve word of mouth or improve customer retention as well. Something that I think about a lot is people always focus on email marketing or SMS or ads, but what is the number one place? Where do you get 100% open rate with your customers? Casey: That's on the products that you ship them. Everybody's going to open that box. From the speed and the experience and how they receive the package to maybe even the actual package to maybe what's inside the package is extremely important. Focusing on that because there's no better channel than word of mouth, but word of mouth is also the toughest to measure and also the toughest to grow. Stephanie: Yeah. I love that, especially the 100% open rate quote. How are you advising brands that you're working with when it comes to creating a delightful unboxing experience? Casey: It often depends on what they're selling. Stephanie: Yeah. Casey: I'd say it's more on not trying to do things overly complex. I think, back to the first website that I guess commissioned to be built. The poor developer who's actually the designer as well wanted to hang up the phone on me or delete my emails, because I just made what should have been so easy, so complicated, where I really just needed a homepage. Then, I needed a bunch of other let's call them child pages, but they could follow the same design template over and over again. Essentially, I just needed to build out two different design templates. Even if my website was going to be let's say, 50 pages. Casey: Where I came to him and I was like, I want the homepage to look like this. I want the blog to look like this. The about page to look like this. The service page to look like this. He's like, we haven't even got off the ground and you're asking for 50 things. The same thing with that packaging and unboxing experience, which is, let's say you're shipping in just standard brown boxes today or poly mailers today. How can you make just like an incremental step up? Maybe it's that brown box but it has your logo on it. Then, maybe make another incremental step forward from there. Casey: Because every time you add complexity, it's going to cost more money most likely to create these custom boxes. Also, your 3PL might charge you for kidding fees. There's a company that I'm a customer of, Lovevery, if you're familiar with them, I know you have little ones. Stephanie: Yeah, I've heard of them. Their unboxing experiences, it's beautiful. I know my wife and kids look forward to it every time it hits the door. You don't ... Stephanie: What does it look like? Tell me a little bit about it. Casey: From the box, and there's another company called KiwiCo that does the same. It's this beautiful box, you open it up, everything is laid out like in the order that you're going to use it from the instructions to the toys or the products you're going to use because they're more like educational toys. It's almost like this story or they're like hand holding you through this experience. Let's just put them at the far end of the spectrum of this amazing unboxing experience. You're going to maybe even pull out your phone and Instagram it or something. Casey: Maybe that's your future state goal. If right now, you're just throwing things in a brown box, don't try to do that overnight. Just try to make it like a little bit better and then just progress on that overtime. Stephanie: Yeah, that's a really good point, not just for boxing, but I think this advice in general, sometimes it's easy to want to go, let's do 1,000 things and then it's like you're frozen and you can't move forward. I'm sure you see a lot behind the scenes with a lot of new brands, probably approaching you and trying you guys out. What kind of trends are you seeing in the fulfillment world? Are there new things that have come up since the pandemic that maybe you weren't anticipating before that you guys are kind of pivoting to help out with that maybe you just didn't have customers asking for that prior to COVID? Casey: I don't know about trends of things that they're asking for that they weren't prior, I'd say, their sense of urgency is increased. We knew that we were going to roll out a few international locations, but the demand for those capabilities and the speed at which customers are trying to close themselves. For our business, it's actually rather welcoming, but it's been pretty fascinating to see that really accelerate over time. Casey: We rolled out our European and Canadian fulfillment centers this year and people just kind of been banging on the door to leverage those because Ecommerce demand everywhere has spiked. I'd say another that's been kind of interesting is while Amazon is still viewed very favorably, let's just say across the US, how people are evaluating Amazon as a 3PL, depending on their business, again, whether they put all their eggs in the Amazon basket versus like just viewing it as a compliment. Casey: I think this has really shed a huge light on the importance of owning your business and owning your distribution channels as much as possible and owning your customer data and owning that supply chain like the example that I gave earlier. Again, I have so much respect for Amazon. They push our industry forward, not just Ecommerce, but logistics as well, is when they can start limiting which products you can ship to them and when they can start limiting which products that you can store with them, which therefore dictates which items you can ship out, which is how you make money. Casey: That's a lot of power to give to a third party. They're doing it because they need to do what's best for them as a company. They need to do what's best for all of their third party sellers and aggregate. No matter how big you are, you're just one of those hundreds of thousands of businesses. Just making sure that you plan accordingly. Stephanie: Yeah, that makes sense. It seems like the shipping delays that happened with Amazon as well or when they started prioritizing essential stuff also gave a lot of DTC companies and people who aren't relying on Amazon a chance because all the people on Amazon are maybe used to that two-day shipping, that started turning to five and seven and two weeks, started looking elsewhere and started being open to other ideas other than just like Amazon is my source. Stephanie: I know myself included, I have actually been okay ordering from brands directly. Because I'm like, this brand is maybe four days, Amazon might be two to three, not that much of a difference. Whereas before this, I don't know, if I would have considered ordering directly from a brand if it was also on Amazon. Casey: You're spot on. That's what's going to be so interesting as COVID hopefully starts to dissipate and then hopefully it's in the rearview mirror, is the habits that we have formed over the last four to six months and which of those stick and people being comfortable with a slightly longer fulfillment time because they can buy directly from the brand or because whatever fear that they had has been reduced and so they'll trust these other websites more. Casey: Even I know when I was at BigCommerce like we had a quarter that was super focused on digital wallets. As that's evolved, digital wallets meaning like the PayPal buy button, the Amazon one click, I'm trying to think what else Visa and Apple Pay. Those also allow people to buy not just on desktop but also mobile so easily where you don't even need to go and get your wallet. It's just the ease of purchase is just so much easier now versus like on Amazon, they stored everything and it was very easy. Now, those digital wallets are also on a lot of these direct to consumer sites. Stephanie: Yeah. I think that's so important. It's like we have a Philz down the street and I used to always go in and order, use my credit card and whatnot. When they started doing only mobile ordering where you can only pick it up at their ... like outside, instantly, I'm all of a sudden ordering like two Philz a week. I'm out and I walk my dog I'm like, oh, I've got my phone I can order it. Payment is already set up. Something I never would have done before. Now, I'm like, why did I ever wait in line? What was wrong with me? Why didn't I get their app to begin with? Casey: Yeah. Great point. It's like this forcing mechanism for us to try these slightly more innovative products. Even somebody like myself has been in Ecommerce forever and buying stuff on Amazon, I'm sure you've ... since whenever you had a credit card, my wife and I, we never utilized like Whole Foods delivery or buying groceries on Amazon. Then, with this and with the little ones, we've just been very diligent on really living the quarantine life as fun as that is. We get multiple Whole Foods deliveries a week now. Casey: When before, we're like, I'm not sure about how the produce will be. What about getting meat? It's been great. I mean, the cons are usually you get about 85% of the things you put in your cart, because they don't have everything but they deliver right to you. There's just so many changes, just like your example, the coffee. Stephanie: Yeah, I'm starting to wonder too, if consumers will be ... I think there's going to be two sides of it, one where they're going to have very high expectations for things like they want to have trust in the brand. They want transparency. They want to see what's going on behind the scenes? Are they socially conscious? Then, I also think there's another side of the consumer where they're going to be okay with good enough. Like with your Whole Foods example, I was the same way like, I pick tomatoes out in a certain way or avocados and they just won't know how to pick out my avocado. Stephanie: Now I'm like, if four out of five of the avocados are good enough, I'm happy with it. I kind of see two ends of the spectrum of what this push consumers to be, which would be kind of hard to meet. Casey: I agree. I might be slightly biased and we're pushing ShipBob to deliver everything within, let's say, one to three days. Sometimes, a merchant can only store all their inventory in one location. Let's say, it's on the east coast and I know you're in California, as am I, and we order something, maybe it takes about four or five days to get to us. Am I willing to take that slightly longer delivery speed, because I know that I'm supporting entrepreneur that much more? Casey: I'll be curious to see how that changes just as we do are more conscious about supporting SMBs. We know that if we buy it directly from their website versus Amazon or elsewhere, that we put more money in their pocket. I'm very interested to see how that evolves over time. Stephanie: Yeah, no, that'll be really interesting. We're just talking about putting more money in the merchant's pocket. How do you advise or what best practices do you see when it comes to setting pricing? If I'm implementing a 3PL, should the retail price of something have like a 50% profit margin or 70? How do you advise someone to set their prices in a way that makes sense to make sure that their margins are good and not eaten up by 3PLs and returns and all that? Casey: I mean, every business will just be so different. I think what's important that you're getting at is, and something that not everybody fully carves off the time to understand off the top of their head, like all these numbers off the top of their head. What are their true costs of goods sold? How much does it cost for them to receive these products? As they scale over time is there opportunity to reduce those cogs so that they can improve their margins? Casey: You start with something like that. Then it's like today and then as they forecast in the future, what are their customer acquisition costs or CAC? Then, understanding that, because then that tells you how much money you still have left over for fulfillment. What are your true shipping and your total shipping and fulfillment costs? I think a lot of people focus just on reducing their customer acquisition costs without understanding all the levers that they can pull. Casey: Again, it's just knowing your metrics extremely well. Then from there, identifying which are the biggest numbers and how can you start pulling levers to reduce those or increase those over time? Stephanie: The other thing I'm thinking about when you're talking about opening up fulfillment centers in Europe, what does a brand need to consider when they are thinking about using a fulfillment center overseas, if they are in a California or New York? Is there anything special that they have to take into consideration before utilizing fulfillment center overseas? Casey: Yeah. We'll keep this relatively succinct because this can ... Stephanie: Be a whole episode? Casey: Exactly. I guess, are there any regulatory issues with me getting my products into a certain country? For example, I know certain cosmetics, it's actually more difficult to get into Canada and ship from there versus it is to get into Europe. It's understanding that. Then, number two, which where you'll spend most of your time is just that value added tax. What do you have to pay to get your products in? Then, how do you need to include that within your pricing? Casey: Every single country in Europe has their own batch structure. You can just spend a lot of time there. Or like what we're working on is allowing people just to think of that as in Europe is like one country. Then, we do a lot of the heavy lifting on the, let's say, peripheral or outside and so you really only need to think of that once versus that differently for every country. Stephanie: That's a good thing to consider. You guys are kind of taking care of that for them in a way so they don't have to do all the research on the different locales and what to charge and whatnot. Casey: Exactly. There are different types of that. With Watchmaster, for example, sometimes we would buy watches in the south in a country like Greece, where I think their VAT is like 22 or 23%. Then, we'd sell them in the north. Let's say Germany, where I believe the VAT is 18%. There alone, let's say in Greece it's 23% and in Germany's 18%, that's a 5% delta. Even if we sold the watch, for the same exact price, we have 5% margin just because of the delta in the VAT. Casey: I'm simplifying this greatly. Just as an example of like there's just so much complexity and that's just one product in two different countries. Stephanie: That makes sense. Then, do you guys, I mean, I'm sure things get caught up in customs, do you also help keep track of that? Or is that something that they need to get it to the warehouse or center in Europe, and then you guys help take care of it from there? Casey: If we're shipping things from the US internationally, that's one thing. There's duties you can pay in advance and then there's also unpaid. Then, from getting the stuff into the country and into our facility, we will help some there, but it's usually utilizing partners of ours. We're not a freight forwarding company. Stephanie: Yup. Cool. That makes sense. With everything you guys are doing behind the scenes, I wanted to touch a bit on the technology because it just seems like you have a lot going on. Like you said, you guys are tech enabled. What kind of technology are you using to make the fulfillment process seamless? Any AI you're implementing? Or new leading or cutting edge technologies that you're implementing to make that process work? Casey: Yeah. We do use a lot of machine learning. Our bet also is building a lot of this stuff ourselves. That's utilizing from connecting our solution and APIs to third party solutions, to then building all the logic and intelligence internally. Again, that's utilized a lot of machine learning. Then, that's driving the decision making. Really, I'd say the biggest bet with us on the technology is owning the entire stack from what our customers are using to how those orders are being sent to the fulfillment centers and the technology in the fulfillment centers. Casey: It's not using let's say like a third party warehouse management system. Stephanie: Got it. When you're talking about integrating seamlessly and partners, what kind of partners are important to have integrated with your 3PL? Who are you guys making sure that you're partnered with to make it a seamless experience? Casey: Yeah. Definitely, at the top, it's the Ecommerce platforms. Then, on the output side, it is the carriers. It's making sure that we're able to get the best pricing within the right timeframe across FedEx and UPS and USPS and DHL and some of the local carriers so that we can make sure that we're making the best cost efficient and time efficient decision on behalf of our customers. Stephanie: Cool. The one thing I always love is stories. I'd love to hear any mistakes that merchants have made where they come to you and you're like, we've been doing it this way for 10 years, or like, this is how we do things now and you're like, oh, that's bad. Any stories like that that other people could learn from like don't do this? Casey: One that sticks actually off the top of my head. This was something I thought about a lot when I decided to make the jump over to ShipBob was when I was at BigCommerce, we were doing this big film series and we were visiting a bunch of our merchants. I met this one merchant. This husband wife duo where ... and I love their story and they're doing really well. Certain businesses run their way for certain reason. Casey: I love their story because the wife, she started the business initially by herself. She ran it by herself for a couple years, where she signed up for the two-week trial. She literally hit the Launch button from a Starbucks. It's like the American Dream version for Ecommerce. Stephanie: All the pictures show that you're in a coffee shop and today is the day. I'm hitting go live website. Casey: Exactly and still free, you're on the trial. Fast forward however long it had been, like five years from when I'm sitting in their "office", which is essentially just a mini fulfillment center. The place was packed to the brim. Now, it was the husband and the wife and they were doing all things sales, all things marketing, all things website development. They were doing everything except for the storing the inventory, picking it, packing it, handling returns, putting the labels on the box, taping up the boxes. Casey: They had 18 employees so 90% of the workforce, including them, were doing fulfillment work. They were the only people focused on building the community and sales and marketing and product development. I knew at the time this is before honestly, they even knew about ShipBob, this is not right mix. When I left, they were actually going across the street to negotiate extending their warehousing space, so they can move across the street to store even more inventory. Casey: Now, you're adding all these fixed costs, such as your rent and also fixed costs with all your employees. While you can maybe get rid of the employees, if things go bad, you're most likely going to be stuck with the rents. Whereas if you utilize a third party logistics solution, you're often paying them on performance. The more you sell, the more you pay them. The less you sell, the less you pay them. It's more of this variable rate versus this fixed rate. Casey: I just was blown away because these people were going to do over 15 million that year. It was really just two people doing everything except for fulfillment. Stephanie: My gosh, I blame Shark Tank for that. You know all the ads they show where they're like, we started in our basement and here we are with our whole family packaging everything. If you show that ad enough, people would be like, that's how you do it. Casey: I'm not going to name names. We have customers and it's kind of unfortunate. We have customers that will throw up their Instagram stories every week of them picking and packing boxes and storing a bunch of stuff in their spare bedroom and all this stuff because they're selling the dream to their community. They get it to an extent. Then, all of their followers were trying to do things themselves. They're replicating these false mistakes when I'm like, what? Stephanie: Oh, gosh, yeah, that's really good, though. I mean, I think that's an important lesson all around is like there's a certain point when you can do that. Then, after that, you need to be focusing on the product. It can only get you so far when you're doing everything on your own. Casey: Mm-hmm (affirmative). Stephanie: What kind of disruptions do you see coming to the world of fulfillment? Casey: Some news that just broke the other day that I think will be interesting to watch is a lot of these older retail spaces. A big question is what's going to happen with these malls? I think a lot of that also comes down to ... and with these retailers. It comes down to I think it was signing property but it was these large mall operators and owners, what are they going to do with the space? Casey: Amazon unsurprisingly is right in the mix. Are they going to start leveraging these now vacant or near vacant malls, where they can be very close to ... because these malls are often in suburban areas, which are close to a lot of the end consumer. Can they start leveraging these mall facilities for their last mile operations? That'll be interesting. It's definitely something that we've looked at. We're definitely building our technology in a way that individual store owners could possibly even utilize it at some point, people could start injecting it in the malls. Casey: I think that's going to be pretty fascinating to watch. Then, another thing less on like the innovative side, just more of like the blocking and tackling stuff is like, with Q4 coming up, how big of upswing in sales are we going to see? Usually we see between let's say 30 to 50% uptick in sales volume. With unemployment and everything, not in the best space, are we still going to see that? If so, these brands that are trying to get ahead of the curve and store all their products, now, Amazon's already said that they're not going to allow unlimited inventory like they had in the past. Casey: We've come out and taken the opposite stance where we're not going to restrict because of COVID. How are a lot of these mom and pop 3PLs that really only have one facility are going to be able to do things and just how are a lot of people are going to be able to conform. That's just the kind of boring work of I just need to literally store my product somewhere and then ship it out. I think it'd be interesting to see how a lot of brands navigate that. Stephanie: Yeah, completely agree. That'll be a good area to watch. All right. We have a couple minutes left and we do something called a lightning round brought to you by Salesforce Commerce Cloud. This is where I will ask a question and you have a minute or less to answer. Casey, are you ready? Casey: I am ready. Stephanie: What's up next on your reading list? Casey: My reading list. Oh, man, I've been buying way too many books lately. I actually bought this book. Here, let me grab it, I actually have it next to me. Stephanie: Yeah. Casey: I've been trying to get a lot more into finance and so I actually I bought Titan by Chernow and then I bought Reminiscence Of A Stock Operator. The one I'm reading right now is called How Finance Works. It's by this Harvard PhD or Harvard professor that just really kind of uses some humor, but really gets you hands on and breaking down a lot of things from a finance perspective. Casey: I historically read a ton of fiction, but now I'm reading this and maybe that's why I'm falling asleep faster at night. Stephanie: I'll have to check that out. I mean, I love finance. I will be checking that out. What's up next on your Netflix queue? Casey: Oh man. Because I have little ones probably like Rescue Bots or something. Stephanie: Yup. I feel you there. Casey: Yeah. I think I've exhausted the rest of Netflix. Stephanie: That's all right. Kid stuff. I'm on the same page as you. Casey: There we go. Stephanie: If you were to have a podcast, what would it be about and who would your first guest be? Casey: Gosh. I've thought of this idea quite a bit. I mean, there's a bunch on the business side, but I think it'd be ... I just love sports. I'd say probably Shaq, Shaquille O'Neal. I want to understand what was the catalyst for him to get very business savvy for an example like he ... I don't think it was maybe like his rookie year, but very early on he never touched a paycheck because he was making so much money from endorsements. Casey: Basically, all of his NBA salary would go to his bank. From there, he's just invested in ... he owns like a ton of like Popeye's and a bunch of car washes. He just very diversified the assets that he owns and where he makes money. It's just fascinating to see how he was just so early in that. Then, you see people like James Harden and Steph Curry and others, and I think Kevin Durant recently did buying minor shares in MLS teams. Casey: I think that the athlete getting more business savvy is just a fascinating concept and would allow me to geek out about sports. I know that's not a lightning answer, but it's my long winded answer. Stephanie: All right. The last one is what app or piece of tech are you using right now that's making the most efficient in life or business? Casey: I'd say an app that I have a love hate relationship with like most people will be Twitter, because sometimes I'm like, is this just an absolute waste of my time? I don't necessarily tweet over too often, but using it as something I've actually been doing a lot more over email to is just cold email, cold outreach. The connections you can make with people to send direct messages. It's fascinating. Casey: Then, as you evolve those relationships over time like there's no way to even put an ROI on that. Just opening the doors in different business opportunities and partnerships and stuff, it's just been fascinating and it's free. It's insane. Anyways, I'd say for now it's Twitter. Stephanie: I need to try more of that. DMs make me nervous. I'm like, I don't know if I should do it. I should just go for it. Start DMing everyone. Casey: You should. I mean, worst case, they don't reply and that's where you were in the first place. Stephanie: Yeah, so true. All right, Casey, well, thanks so much for coming on the podcast. Where can people find out more about you and ShipBob? Casey: Yeah, shipbob.com. Come check us out. As I mentioned, I'm on Twitter CaseyA. Come hit us up over at ShipBob. Let us know how we can help. Stephanie: Awesome. Thanks so much. Casey: Thank you.

In the music industry, having talent is often not enough to succeed. You need to find a way to stand out and be unique. That’s true when it comes to marketing and ecommerce in the music industry as well.  Eamon Mulligan is the VP of Product & eCommerce at EMPIRE, and it’s his job to help lead a team toward ecommerce success. The way he does that is through creativity and partnerships that have proven to drive traffic in big ways. What kind of unique ideas have they tried, how do they manage to achieve a high ROI on SMS marketing, and what do memes have to do with all of this? Find out on this episode of Up Next in Commerce.  Main Takeaways: Think Outside the Box: In a sector as saturated as the music industry, you need to do everything you can to stand out and get your messaging and products in front of fans. Everyone is still using the traditional channels, but if you think outside the box and test ad content on different platforms — like meme websites — your impact might be larger than you expect. Employ Creative Partnerships and Campaigns: When you partner with artists and get them to buy-in to a creative marketing idea, they can put it out to their fans and followers who will be more likely to see credibility in the product because it’s coming from an artist they already trust. Stay Unintrusive: When utilizing something like SMS marketing, it’s important to be as unobtrusive as possible. It’s also critical to make transacting through text easy by providing direct links and easy access to the store or the cart they left behind. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome, everyone, to Up Next in Commerce. This is Stephanie Postles, your host, and today on the show, we have Eamon Mulligan, the VP of Product and eCommerce at EMPIRE. Eamon, welcome. Eamon: Thank you for having me. Stephanie: How's it going? Eamon: Good. Just hanging out at my home office and plugging away. Stephanie: Yeah? Eamon: Yeah. Stephanie: That is good. I've never had anyone on the show in this industry before, in the music industry, so I'm really excited to hear all about it. But first I want to start with you and your background. I saw you have a long history in the music industry, so I wanted to hear how you got involved in that. Eamon: Sure. I guess not to go back too far, but as a kid I always loved music and wanted to be in it somehow. I grew up originally in Napa, California, which is not necessarily a hotbed of the music industry. [crosstalk 00:01:04]. Stephanie: Unless you get too much wine. I guess. Eamon: Yeah. I spent a lot of time traveling down to the Bay Area and watching local groups perform and eventually really attached and followed a local group called Living Legends and befriended them at the time webmaster, this is probably 1999, 2000 ish. And I didn't really know anything, what I was doing at the time, I was talking to the webmaster and asking, I read all these magazines and I see that mentioned in there, but there's never been a full on article, how does that happen? And then he went on to say, "That requires a publicist and BIOS and press kits." So then I started interviewing the guys and putting together BIOS and press kits, which I wish I still had today because I'm sure I would laugh at them. Eamon: And eventually, the Living Legends in 2005 asked me to go on tour with them to assist the tour manager. Previously I had been helping them with online stuff. I had started their MySpace page, their YouTube channel, was helping with an email newsletter. So that was where I cut my teeth a lot in the digital space. And then they had me go on tour. I was the assistant to the tour manager who was also doing merchandise. So I was helping set up the Merch booth, and she was teaching me how to sell stuff and keep tracking everything and all that stuff. Eamon: And then, with two shows left, she had left the tour ... the tour was ending right before Thanksgiving. And she left early, and they were like, "Okay, you're the tour manager now." And then I was like, "What?" Stephanie: Push you right into it. Eamon: Yeah, and they were like, "It's not that hard, it's not rocket science." And they just forced me into it Eamon: I had never gone to college, and so I eventually went back to school. And then so when I finally graduated from school, I initially was thinking, the music industry was fine, maybe I should try my hand at something else. And so I started taking interviews with a couple of ad agencies, advertising was interesting to me. I had taken a couple of the classes while I was in school. Eamon: Nothing really panned out. But at the same time, there was all these music opportunities that kept presenting themselves to me. I looked at that as like, "Okay, I think the universe is trying to tell me something here." And so we had put a release out with EMPIRE in 2011. And Ghazi, the CEO and founder, and I just built rapport, he's a Bay Area guy, grew up, born and raised in the Bay. So we just always kept in touch. And when I got out I shot him an email and said, "Hey, I'm looking for something to supplement my income, I'm still managing, but do you have anything going on?" So we went back and forth for a little bit and then he eventually brought me on to help with the physical distribution side of things and merchandise, which has been a long tale in building [crosstalk 00:07:09]. Stephanie: Tell me a little bit about what EMPIRE is at a high level and what your role looks like there. Eamon: Yeah. So, EMPIRE is really like an all encompassing company. So it originally started as a digital distribution company. Ghazi the founder just completely bootstrapped, was never taken a dime of investments, refuses to sell anything, retain 100%, that kind of autonomy. And eventually the company grew into adding label services with a lot of the distribution that we did. And one of the things that set EMPIRE apart originally was for the distribution deals. He was doing non-exclusive distribution deals. And that was unheard of at the time. People would often catch when he was giving out non-exclusive distribution deals and be like pretty crazy, what are you doing? Stephanie: Yeah. Jump at that. Eamon: Yeah. His thought process was, I'm not in the business of holding people hostage. If anything, hold us accountable, because then we have to earn the business, and it keeps us honest. And so that's been one of the guiding principles of the company to this day. And so, eventually, we started adding more services and more departments. And it's grown into a full fledged record label at this point. And then we also have a publishing arm. So right now we have a distribution, record label, publishing and merchandise. Stephanie: That's awesome. Any artists that I would know? Eamon: Yeah, we work with Snoop Dogg. We just released Adam Lambert album earlier this year. We were instrumental in XXXTentacion career, unfortunately who's passed, Anderson Paak, we were a part of early. We've helped grow a lot of early artists and we're still doing that and also working with a lot of legendary artists as well. Stephanie: Very cool. Yeah, I do know a lot of those names. So that's very impressive. So tell me a little bit about your role at the company as the VP of product and eCommerce when it comes to thinking of record labels. I don't always think eCommerce and of course, when I started looking at you and I was like, oh, yeah, obviously they are. But tell me what your day to day looks like there? Eamon: Sure, I manage our physical distribution and our merchandise team. So on the physical side that looks like setting up and gathering assets for a physical release and setting it up with our physical distribution partners, and getting stuff the product made, so CD, vinyl, cassette, and then making sure that it is getting into all the right stores. We'll also do a lot of exclusive things with Urban Outfitters and Vinyl Me, Please and other retailers, Turntable Lab, et cetera. Eamon: And then on the merchant side that looks like managing ... we have a team of people that's, our account management and web admin and marketing and production. So we're talking with the artists that are signed to our label that we have merchandise rights with and building out merchandise items and coming up with creative ideas. Sometimes it comes all from us, sometimes it's collaborative effort, sometimes the artist has things ready to go. And then we're just helping manufacture a market. But that's ... it ranges from building out the creative, building out web stores, building out marketing assets, as well as back end automation marketing as well. And then ultimately reporting and paying out the artists. Stephanie: All right, cool. So when it comes to thinking about being a label, because I would think some artists might be like, "Oh I'll start up my own eCommerce platform and sell my own merchandise." What makes them want to work with you guys and have you do that for them? Eamon: Sure. A lot of ... we're living in a very independent-minded world in music, especially right now. And that's very different than what it used to be. So, we also have that spirit, but a big part of it is the production and the fulfillment process. A lot of people can build the website and put up a product image just that they made in Photoshop, but when it comes to fulfilling stuff and getting stuff out to customers on time, and then getting things made and knowing how to prep your files and all fun stuff. Those are the areas where they definitely lean on us. Stephanie: Got it. How does the creativity process when it comes to creating merchandise, and making sure that you're creating good merchandise, because I'm sure artists have a lot of ideas around like, here's the thousand things you can do. But I'm guessing that you guys have a lot of insights into like, we've been doing this for a lot of other artists, and we know what sells and doesn't sell. How do you guide them in that creative process? Eamon: Delicately. Stephanie: You have to be creative. You've got to be careful. Eamon: Yeah. It's definitely ... a lot of artists I feel ... I'll say this, that I think a lot of artists are very savvy. And they are watching what's going on, seeing what their peers are doing, and also other artists that they look up to. And they have a lot of great ideas and then some of those ideas maybe a little ahead of where they are in their career. For instance a lot of artists might want to do a cut and sew piece, which means cut and sew, and so it's like you know you're actually fabricating a garment from scratch. You're not buying a blank garment and then just silkscreen something on it. Eamon: Which is possible, but there's high minimums for it to make sense financially. So, sometimes an artist will come to us and say, "Hey, I want to do X, Y, and Z." And then we'll come back and say, "Okay, we can do it, but we have to make like 300 of them." Eamon: And they're like, "We can just make 50?" And I wish we could. There are places that can do it, but the unit cost is going to be really high. So unless you feel like you have a diehard fan base that will pay a premium price on something, it's hard to do. So a lot of times explaining the mechanics of things, helps artists understand it. One of the principles that the company deals transparency and education. We want to educate the artists, we don't want to hoard the knowledge. We want to let them know, "Hey, this is a really cool idea, but it's going to cost this much and we would have to sell it for even more for it to make sense financially." Eamon: And then, a lot of times when you have that conversation they'll say, "Oh, okay, I get it now, let's try to figure something else out." So yeah, that's like ... I think education is probably the biggest tool. Stephanie: Yeah, that makes sense. And how do you guys go about selling With the actual merchandise, is that all under EMPIRE's website or are you putting in other outlets as well? Eamon: So yeah, we have a couple of different ways but we have a general EMPIRE store and so anything that we feel might just be a one off project or might be something that is not going to require a full own store themselves, we'll build out on the EMPIRE store and then things that are larger, it's going to be a longer relationship, we'll build out their own store for them. Those are our two primary sales channels. And then we also have a partnership with another company called Merchbar where they aggregate the products from our back end to artists, Spotify and YouTube channels. Eamon: So when a consumer goes to listen to Spotify and they're on the page and they're scrolling through their profile, they'll see a couple of Merch offerings on the profile. And then similarly on YouTube, if you may have seen it, if you're watching a video, just below the video, there's a merchandise shelf and so there'll be products there. So those are our bigger things. And then we have doubled a little bit in the live event stuff, but obviously right now that's not taking place. Stephanie: So when it comes to the EMPIRE brand, as a fan, maybe I'm not always aware of the label that's behind the artist, so how do you guys think about getting the fans attention from a label perspective, if at all? Eamon: That's a good question. Early in the company's history, we were all about not forcing that, and playing the background as we've grown, and we've become more of a label and less of a distributor. We've definitely made that play a little bit more. So it's like little things from ... we're making a CD or a vinyl including our logo on it, and billboards or advertising, we'll have our logo on it, and sending our artists, EMPIRE sweatsuits so that they wear them and they'll take pictures on them. There's pictures of Diddy in our sweat suits. Stephanie: That's great. Eamon: Cool. Yeah. Stephanie: I need a sweatsuit. Eamon: Yeah, send me your address. I'll get you on. And then we also do a lot of events around larger industry events or around the Grammys, around BET weekend. We throw parties that are widely attended and hard to get into. But that definitely helps spread the name. I would say that, a lot of ... probably right now more of the industry knows about us than the actual consumer. But I think that that's shifting the more we grow and have higher caliber artists. A lot of consumers that are knowledgeable or super fans, excuse me are going to Spotify and looking at the label line and realizing like, "Oh, this is another EMPIRE artist." So, I'll talk to a lot of people who will say, "I didn't know you guys had this artist and that artist and this artist. I saw on Spotify that you guys were the label name." Eamon: So I think that also helps too. I know as a kid, as an avid music listener, I would read all the liner notes, which unfortunately don't exist as much anymore in the digital space. But they're working on correcting that a lot of the DSPs and Spotify and Apples of the world are starting to include a lot of that metadata now. But I think having that information available and then the fans that are in the know will find it. Stephanie: What is your most successful marketing channels or advertising channels for your artists? Because I heard a little bit about EMPIRE you guys do events and billboards and things like that but is it a completely different strategy for marketing your artists? Eamon: General marketing it's a whole suite of things from ... that all connect and play with each other. So it's like putting out content. Isn't like the first part, whether that's audio or a music video. And then making sure that that audio and music video get seen through ads, serving as the fans, letting them know that the album is out, letting Know that new video is out and then direct email marketing. Retargeting, on the merchandise side we use a lot of retargeting apps and services. Especially one that works really well for us is SMS retargeting, and then outdoor advertising billboards. We paste guerilla marketing and then we also have our radio team. Eamon: We have our own radio team and so they're working records at radio. Radio is still a very large discovery platform for people. So that definitely helps bring artists into the general knowledge and then in the digital space, doing things on with a bunch of the meme pages and running that kind of content on there. Stephanie: That's cool. So I want to dive into three of these. Maybe first I want to start with meme advertising. I haven't heard of anyone doing that yet on the show, and I want to hear about how you guys think about doing that and how are you converting people over to either the merchandise or the music or whatnot? Eamon: Yeah. It's really just more of an awareness, like top of the funnel. So it's making sure the content is out there on all these pages that a lot of people are following. So it's like that. And then TikTok has been also a big part of that. So if something catches on TikTok, that's a huge driver for streaming because then people will go and find the song. Who knows what will eventually end up happening with TikTok. But that's been something that's really been cool as well and seeing if something goes viral on TikTok. That's always not something ... we can't control if something goes viral, we can help with the kindling of it, you know what I mean? But ultimately, if it catches it catches, if it doesn't, it doesn't. But the TikTok thing if something goes viral, we've seen huge spikes in the streaming numbers. Stephanie: Do you see any similarities between your videos that are going viral versus the ones that are duds? Eamon: That's a good question. A lot of them are ... on TikTok it's something that a lot of ... if it's anything that people can recreate and take a part of, or take part in sorry in the trend, then that's something that we'll catch. So if it's either doing some dance or doing some little skit or something like that, then those really take off, usually. Those are the ones that we've seen go. And then ... but sometimes it doesn't happen either. And sometimes it happens on songs that we weren't even thinking about. And all of a sudden we'll see that some song is going viral that we didn't even know about. Stephanie: Yeah. I think that's a good reminder of why testing and doing more rather than less is so important, because we see that with some of our ads that we surface too. Some of the most random ads that we use would be the best performing ones, but the ones that we really thought hard about they don't even work a lot. Stephanie: So the other two areas that I'm interested in, you said SMS is working well for you. What kind of messages are you sending to fans in a way that's not annoying and actually helpful? Not intrusive. Eamon: Yeah, it's basically, we're not being intrusive. Well, hopefully we're not, but a part of it on the commerce side it's basically like an abandoned cart email. So it only works also if the customer inputs their number. So if they get all the way to the point where they're filling out the payment information and put their phone number in and maybe their dog ran off the leash or whatever happened, or they don't complete the purchase. There will be a text that gets sent to them automatically and remind them like, "Hey, you left this in your cart." And there'll be a direct link to their cart. And we've seen astronomical return on investment on that, where we'll spend very little money and get thousands of dollars back. Stephanie: That's great. I haven't ... because I do get those texts sometimes. But I don't always have the link that just brings me right to my cart. That seems like a very great way to make sure it's easy, because oftentimes, it'll maybe link back to what I was looking at. But then maybe I'm on a different ... I was on desktop before or maybe now I'm on mobile, and it's a very different experience and actually hard to even purchase or [crosstalk] again. Eamon: Navigating back to where ... yeah. Stephanie: Yeah, that's awesome. Eamon: And then also just like digital marketing, we have a digital street team per se. So we have a general EMPIRE phone number that people can text and they'll get added to the list and then we'll blast out things that we feel are relevant or big announcements. And then we have artists setup as well with that. So a lot of artists have a phone number, and they can actually send text themselves and actually respond to people themselves, if they want to, it depends on the level of engagement they want to be committed to. But it's a good way to ... and you can also geo target that. Eamon: So if we were in a world where touring was going on, you can still, "Okay, I'm going to be in, where Seattle next week so let me send a text message to everyone with the Seattle area code." And say, "Hey, my show is next week, the show box, here's the ticket link." So, like helps in that way and then any new releases, album, merchandise, videos, can also be communicated through those channels. Stephanie: That seems really smart from a lot of companies and brands going more at the local level right now. And engaging with your local community, but how are you encouraging people to actually text you and so that you can even have them on the list to begin with? Because that seems like the initial hiccups to even get people to want to text you in the first place. Eamon: The acquisition. Stephanie: Yeah. Eamon: A lot of it is hinged on the artist and then posting something that says, "Hey, give me a text, shoot me a text and I'll text you back or." There's always some call to action or [inaudible] that's like, I'll text you back or you'll get a sneak peek of new music or a certain percent off my merchandise store, something like that. So there's always some incentive to sign up for the fan. Stephanie: That's great. So with everything's happening with the pandemic, and events and concerts being canceled, what are you guys doing instead? Because it seems like eCommerce is probably something that you're leaning even more heavily into, so what have you changed or plan on changing going forward? Eamon: We've definitely seen an uptakd of inbound requests with people wanting to set up eCommerce with us. So just, one being able to provide that option to people where they might not have the infrastructure on their own to do it has been helpful. And then we're also looking at different ways to partner up with delivery services. So for one of the releases I'm working on doing something with DoorDash. And so it'll be a custom facing restaurants. And then there'll be a couple of Merch items that are available through that. And so if you order the food you can also order a piece of merchandise and it will come with your food order. Stephanie: Oh, interesting. Tell me a bit more about that partnership. How did that idea come about and how are you convincing restaurants to also show Merch which maybe could distract someone if they're like, "I'm just trying to order sushi." And then they're like, "Oh, now I'm going down a [inaudible] of [crosstalk] as well" What does that feel like? Eamon: Yeah. So the project I'm doing on is the whole theme of albums are restaurant themed. So it made sense. The idea initially ... we were talking about it right as the quarantine happened, and at that time, it was like, "Oh, maybe it'll be done in a month." And so we were thinking of doing an actual pop up restaurant, like a physical pop up and like a restaurant in LA. And then as time went by, and we realized this is not going to end in a month We started thinking of other ways we could effectively do the same thing but not do it in a physical space where we would be having people come and gather. So we have a partnership team and I believe we have a connection to DoorDash and a couple of other delivery services, Postmates and maybe Uber Eats. Eamon: And we just reached out to DoorDash and presented the idea and they were into it. So it's still in the final phases right now of being launched. But the DoorDash team is handling the restaurant end of things. So they're basically going to be partnering with restaurants and going to specific restaurants and asking if they can provide a specific menu or menu items. And then within the app, it'll be basically a virtual pop up. So it'll be in its own restaurant and people will be able to order from there. But it's really on the back end, like an actual restaurant. Eamon: And it was also a cool way for us to try to support some of that, because the restaurant sector just took such a hard hit with the pandemic. We were like, how can we do this and not and also help that sector of the economy? Stephanie: Yeah, I love the creativity behind that. Eamon: Yeah. Stephanie: Yeah that's really great. What are other creative campaigns or projects that you've done like that before that either they worked really and you're like, "Oh, that's surprising." There's just a funny or random idea that worked well, or maybe one that you set up and you're really betting on and then it just didn't do anything? Because a lot of the things you're mentioning now when it comes to your marketing and channels you're trying out, you're probably one of the more creative companies we've had on the show that's literally trying a bunch of different things and new things that I've never heard of. So I want to hear a little bit more about this. Eamon: Yeah, we're definitely not afraid to take a leap and try things. One of the cool things that we did last year, we put out Snoop Dogg's album, "I Wanna Thank Me" and this was one of those things where we did it. We thought it was awesome, and we didn't feel like it fully connected. But we basically ... our digital team had someone build an augmented reality filter on Snapchat of the album cover. And so If you scanned ... on the marking sticker for the album, we put the little Snapchat like QR code and said, "Scan this code in Snapchat to hear a special message from Snoop Dogg." So you open Snapchat, you scan it, and then you put the album cover in your viewfinder on the phone and then the album cover comes to life and it was Snoop Dogg. He had, I forget what award show was that he had given a speech saying ... when people accept the words [inaudible 00:39:33], I want to thank God, I want to thank my family, blah, blah. Eamon: And he got to, I want to thank me because without me, without my hard work ... it's like a very endearing speech. And that was fully animated and you could move it in different angles, and it was like 360. And that was really cool, but I don't feel like that really virally took off at least. But that was one of the things that was different and unique that we did. Right now we're actually doing a giveaway for one of our artists Young Dolph, he is giving away his Lamborghini and to enter you basically buy Merch product that's bundled with the album on pre order. So yeah, that's a- Stephanie: I want a Lambo. Eamon: Yeah. Store.youngdolph.com. Stephanie: Go do that. Eamon: Yeah. So that's something that we're doing right now that we've never done. That's we're testing out. The first couple of days were really big and now we're trying to figure out how to keep it going. Stephanie: Have you seen any hesitancy with consumers with ... you've got all the stuff that like, I'll give you Bitcoin if you do this, and you'll win a free car if you do this. And it seems like it's a good mix between spammers and scamming people and fraud and then actual real competitions going on or giveaways. How are you balancing that in a way that people trust like, "Oh, yeah this person is real, or they're actually going to give away their Lamborghini or whatnot." Eamon: Yeah, I think that probably there's probably still some skepticism on the fans end at some level at all times, but the artist has posted on his social media so that always helps. That's helped one drive traffic to the store to ... it shows that it's coming directly from the artist and not just this unknown entity. So that definitely helps. There's a bunch of legal language on the site that explains everything if you feel so inclined to read legalese, but it's all there [inaudible] Stephanie: I do not. Eamon: Yeah. Stephanie: Okay, got it. So I guess one last bigger question before we jump into a lightning round is what is your guidance on larger brands being creative, having creative partnerships, marketing campaigns, how would you tell another brand to come up with these creative ideas or to really get into a mode of experimentation? Eamon: I think there's a couple elements. One it's having ... I think a part of it comes top down. Our founder and CEO, Ghazi he's always been like, try it if it doesn't work, then move on, but try something. So he's always been encouraging of that. So I think if you have that culture in your DNA, as a company, then I think that helps. The other thing is, I think obviously hiring the right talent, and having the right minds and skill sets they can think of and structure and eventually execute these things. [inaudible] we have a lot of young creative minds on the team and then some people that are a little bit older, they can help execute things that maybe have a little bit more experience of seeing things through or just executing. Eamon: I think the end of the last one, I think would probably just be ... what do I want to use here? The right infrastructure. If the company is really big, there's probably a lot of bureaucracy and red tape. We are lucky because we are independently owned, we're a small company so we can be nimble. So we are able to move and react quickly. But I think having the courage, I guess to jump out and try something is probably one of the bigger things. Stephanie: Yeah, I completely agree. And execution, like you mentioned is so key. Earlier, you were like, "Oh, we just reached out to DoorDash and just ask them if they want to partner." I think a lot of people might have an idea like that and then not just think, let me just email them and see if they'll want to partner on this which is Just [inaudible 00:45:21]. Eamon: Yeah, We are experts at not taking no for an answer. We are just like, keep trying and try to find different ways to get it done. Stephanie: Yeah, I will get to DoorDash. Just [inaudible] keep sending emails. That's good. Cool. I was thinking now we can move into the lightning round, if you're ready. It's a quick lightning round where I ask you a question and you have a minute or less to answer. Eamon: Sure. Stephanie: All right. What new up and coming artists are you all most excited about right now? Eamon: We're growing a lot in the African space. We recently opened an outlet in Nigeria. So there's a lot of good music coming out of there. Patoranking is one, Fireboy DML is another and then I also work with an artist to plug a little bit but with EMPIRE but Tobi Lou is another artist that I'm working with, that I'm really excited about. Stephanie: Cool. I'll have to check out all those artists. What app or piece of tech are you most enjoying right now? Eamon: I would say the standby Instagram, I guess. I probably spend the most time on that app just scrolling through and seeing what's going on. Stephanie: Yeah, I agree. I love Instagram. And then the last one if you were to create a Netflix or Hulu original or documentary, what would it be about? Eamon: Maybe about us, maybe about EMPIRE. I think that'll be interesting. Stephanie: There you go. If you don't celebrate yourself, no one else will you. I like that. Cool. Well, Eamon this has been such a fun interview. Where can people find out more about EMPIRE and you? Eamon: You can find out more about EMPIRE at our websites empi.re. No dot com, no dot net, just empi.re/empire. I think all social channels. So Instagram, Twitter, et cetera. And then for myself, Instagram/eamon E-A-M-O-N. Stephanie: Awesome. And thanks so much for coming on the show. It's been a blast. Eamon: Thank you for having me.

When you’re entering a new company or a new market, there are lessons to be learned from the past and opportunities to grab hold of to propel yourself and your company forward. Paul Lanham entered a new company and industry all at once when he became the Chief Information and E-Commerce Officer at Charlotte's Web, a CBD company.   On this episode of Up Next in Commerce, Paul details how he used his experience at companies such as Crocs, HCL and Brookstone to help guide him as he helped grow the Ecommerce business at Charlotte’s Web to the point where it now represents 65% of the business. Paul explains the methods he has used to generate qualified traffic, conversions and a high retention rate, and he discusses the technology he thinks is going to make a huge impact on Ecommerce in the future. Main Takeaways: Respect The Work That Came Before You: As a leader coming into a new company, there can be a tendency to try to change too much too fast. Instead, acknowledge and respect the work that was happening prior to your arrival, and then try to evolve that work into something more.  Let the Tools Handle the Work: Humans are excellent at many things, but we all have inherent biases and miss certain correlations or connections. Rather than trying to analyze all the data you have on your own, employ technology like A.I. that will ignore most (unprogrammed) bias and can do the deep work a human brain is incapable of. Tech is Catching Up To Personalization: For so long, there has been a promise of technology that could interact in a human way with customers in real-time. That technology is finally starting to become a reality and those that can implement it properly can take personalization of their Ecommerce experiences to the next level. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next In Commerce. This is Stephanie Postles, co-founder of Mission.org and your host. Today we have Paul Lanham on the show, the Chief Information and Ecommerce Officer at Charlotte's Web. Paul, welcome. Paul: Hi, nice to be here. Stephanie: I'm glad to have you. Yeah, I'm really excited. I've used Charlotte's Web products before. So, when I saw that you were in our queue for interviews, I was like, "Oh, this is going to be a good interview." Paul: That's good to hear you have some perspective then. Stephanie: To start, I was looking through your background and was really impressed by some of the companies that you've worked at. I'd love for you to first before talking about Charlotte's Web, kind of go through a little bit about your history and then what brought you to Charlotte's Web. Paul: Sure. As you just noted, I have a pretty diverse background mostly in the retial and CBG and technology industries. What's really colored my career is that I've been given a lot of opportunities, some of which I hadn't had a lot of experience in including Ecommerce when I started in its infancy in the mid '90s when you had to build everything. You couldn't really go to the corner shop and buy an Ecommerce server. Paul: But I basically have touched on virtually every aspect of Ecommerce over the past 20 somewhat years. I've been a C level executive for about 25 years and worked for a diverse group of companies, a variety of sizes. Some startups. Paul: I started my own tech company and now it's Charlotte's Web, which I have to say is very much different in terms of its make up versus the companies I've worked for in the past. Stephanie: Yes. And just for people to know the difference, it would be great if you could name drop a bit. I know people hate name dropping, but I'd love to hear what were some of the companies, the largest ones you've worked at? I think you can compare it to Charlotte's Web. Paul: Sure. I worked for what was a startup, Crocs. I think people will recognize the infamous shoe company that is just located down the street from where I work. Paul: I've worked for Jones Apparel Group, which is a mega apparel conglomerate that own companies like Barneys New York, Jones New York, Apollo Jeans, et cetera, in the apparel industry. Paul: I started a tech company that eventually became a subsidiary of HCL Technologies, which is a global tech firm based in India. Paul: And Brookstone, which is the gadget shop, competing with Sharper Image. Again, near its infancy as well. So, a diverse group of experiences. Stephanie: Yeah, that's amazing. With some of these companies you've worked at previously, are there a lot of lessons that you were able to bring to Charlotte's Web or is it just such a different beast that you kind of had to just start over and had a completely new hat on? Paul: Well, basically if you've been a C level executive for a number of years you have some successes and you have some failures and hopefully you learn from the failures, and I've had them too. Paul: Implemented virtually every kind of system you can imagine. Been on the business side from an Ecommerce perspective and learned a lot of different things that I've been able to bring to Charlotte's Web. Paul: Back to the diversity of my career, one thing I can note, I probably have been in just about every function that you can imagine from finance, to marketing, to sales, to Ecommerce, et cetera, et cetera. Paul: So, I think that brings somewhat of a unique perspective to a company like Charlotte's Web, where I frankly I have a lot of empathy for my peers in other departments because I've done a lot of their jobs. Stephanie: Yeah, that is so important. I've worked at previous companies where someone doesn't understand I worked in finance back in the day and people do not understand the complexity or why there are certain procedures set up and you can definitely see tension between certain groups if they've never worked in that team before. So, that's key I think. Paul: Absolutely, and financial people can be fun. Most people don't know that. Stephanie: They can be. Just like me, I'm fun. You're fun Paul. I'd love to hear or I'd love for you to explain what is Charlotte's Web and maybe even starting with the story behind it, behind the name. Paul: Sure. Charlotte's Web is CBD company that was founded by the seven Stanley Brothers and that's a wonderful story in it of itself in that they grew up in the Cannabis industry. Paul: But the company's namesake, Charlotte Figi, who many people may remember from the Sanjay Gupta CNN Specials from years back and most recently illustrating how there was this trajectory of various peoples and things to help a little child basically survive. Paul: So, our namesake Charlotte really is like our guiding star or north star in the context of our mission, which is to help people through natural products that Charlotte's Web produces. Paul: So, it's a young industry, it's a young company where we are a market leader. Obviously we are commercial, but we're always grounded by our original mission and we still do help quite a few people to where our product is very essential like the Charlottes olive oil. Stephanie: Yeah. I was looking at the I am Charlotte video on your website and it definitely gave me goosebumps. When did you guys create that campaign? Paul: Well, it's basically been the past year. The point is with her passing it really shook us all to our core because frankly it was probably one of the core reasons that most of us joined the company. I was fortunate to be able to meet Charlotte and her mother Paige a couple of times. Paul: But many people in my company, and obviously the Stanley Brothers basically grew up in this company attached to Charlotte's story. The I am Charlotte campaign is currently just obviously a testimony and our take on how beloved she is and still is. Stephanie: Yeah, I love that. The CBD industry as you mentioned, it is kind of a new-ish industry. When you're in California it seems like it's been around forever, but when you go to other states or back to my hometown, people still kind of have they either don't know what it is or yeah, are just very unclear about what it is. You have different preconceived notions, you can say. Stephanie: So, how do you all think about kind of educating the public or new buyers who come to your site for the first time? Paul: Certainly. Two points, actually about 15% of households have had some experience with CBD in the United States. And still because it's such an emerging industry, word of mouth is still very important. Typically, people first get exposed to CBD by a relative or a friend or somebody mentioning it that it helped them. Paul: When they go to search for it, we basically are actually a leader at Charlotte's Web because we rank very high on the first page, in the first third with what is CBD. To that point, we spend a good deal of time on our site through blog entries and various educational videos that we put out to educate our customer on the difference, for example, between hemp and cannabis or what is the efficacy of CBD and various in-depth, I guess, videos to illustrate the depth of what they could know about CBD. Paul: So, it very much is still an educational process as you've mentioned to evangelize the use of CBD. Stephanie: Yeah. Yeah, I completely agree. How did you all become a market leader? I know you were not first, but you definitely were some of the early leaders or even starting up in this industry. But how did you go about making sure people had your name as the household name when it came to CBD? Paul: Sure. They were among the first and the brand story between the Stanley Brothers and Charlotte really resonated. It was made for this industry and the mission that the Stanley Brothers inoculated into the company and we still have in terms of evangelizing the product and natural products to the world to help people, I think resonate with people. Paul: When you talk about, for example, our end-to-end integration from seed to shelf, our quality, et cetera, all those things kind of are confluence in terms of being perceived as a quality brand and a premium brand to a consumer. Paul: There are a lot of smart business decisions along the way, frankly, in terms of becoming that market leader. Stephanie: What kind of smart business decisions? Now you've piqued my interest. Paul: Okay. For example, going really strong in Ecommerce initially in that the nature of the industry is that there's been a slower adoption in the major retailers because hemp frankly, from a federal perspective, wasn't quite legal until a couple of years ago based on the format. Paul: There are some reticence in terms of conservative retailers to carry the product. So, they were very smart in not necessarily going the mom-and-pop route even though we have a big natural store population on the retail side. Paul: But going very strong with Ecommerce and hiring the right people right off the bat a couple few years ago to basically push the commercial side of this. Ecommerce right now represents about 65% of our business as was in the first quarter. That's somewhat of a higher percentage than many of our competitors. Stephanie: What do you think is attributed to that higher percentage? Paul: Being first out of the gate. Being very professional about it. But the primary drivers, they're a couple, back to the brand story that really resonated, was beautifully presented on the site and for media. Paul: Secondarily, the quality that we bring to the table that we try to communicate to other consumers. From that seed to shelf continuum, we test the product 20 times, we track each individual bottle or tincture or the like back to a specific lot and seeds. We could document virtually anything anyone needs to know about that particular product. Paul: So, particularly in this industry where you have an influx of competitors, some of which frankly are not quite as sophisticated in the context of testing and the branding. You can really stand out by basically taking care of those issues. Stephanie: Yeah. Yeah, I completely agree. That is how I found you guys in the early days was because quality to me is the biggest factor when it comes to CBD. Paul: Absolutely. Stephanie: And it's also something that a lot of people worried about early on because you do hear horror stories and it felt good going to a company knowing yeah, they've already got everything figured out. They've got the dosing down to its seed. They've got it's non-GMO and yeah, I think that's so important with an industry like this. Paul: Absolutely. Stephanie: The one thing I was thinking about was consumer journeys. Everyone is coming to your website maybe at a different place like we were mentioning before. Some people are brand new or they've maybe never even heard of it, where education is key. Stephanie: Some people have heard about it. You've got the people who maybe are hiding their browsers when they're looking for it or the people like me it's like, "Yeah, this is an obvious thing that can help you." Paul: Sure, sure. Stephanie: How do you personalize either your Ecommerce experience or your marketing efforts to kind of go after all those people and meet them where they are? Paul: Well that's a good question because when I mentioned sophisticated we invested in tools that enable us to personalize that journey. So, for example, back to my comment on what is CBD. Paul: If somebody enters that as a search term and they have to click on our link, we will take them initially to the education materials and will kind of guide them through the process from the Ecommerce perspective of walking them through that journey and hopefully they purchase. Paul: We do that in the context of segmenting our email channel. We have a variety of channels and we handle each one differently. Our affiliate channel, for example, is very strong in terms of the partners we deal with like a Healthline.com, which yet again is another educational component in that we're very strong with them. Paul: So, depending on the channel, depending on the entry point of our consumer, we will treat them differently in the context of where we land them on the website, what we offer to them in the context of their journey through the website, and what promotional activity we engage with them. Stephanie: Got it. Yeah that make sense. When it comes to affiliate programs, how did you all think about setting that up and is that still a big part of your strategy or did you kind of pull back on that once you started becoming more of a household name? Paul: It's still and will be a very big part of our strategy in that penetration of CBD from a search to perspective is still relatively low compared to what I've experienced in the past so that we're still in an emerging phase where we need to use and leverage every channel we can. Paul: So, as strong as our Ecommerce business is, which happens to be frankly Ecommerce alone at Charlotte's Web is a market leader in revenue compared to every other CBD company, just alone. It kind of tells you the scale of our business. Paul: But what I'm getting at, the Healthline.com affiliate is very important to us in that it is the number one rated medical advice site, I believe, if I look at the statistics recently. Paul: Every entry point is different for every consumer and we need to leverage all those different entry points. We can't, for example, rely solely on organic search as an example, not that we would. But we basically go through every venue. Stephanie: Got it. What does it look like setting up a partnership like that? Because, I think that is really important kind of finding someone who has a good reputation that a lot of people trust. But what did that look like setting that partnership up and making it so both sides feel like it's a win-win? Paul: Well to your point, it's important to vet the partner because obviously you don't want to be presented on a site that doesn't quite meet your value set or your brand image. So, we're fairly choosy in terms of the affiliate partners that we work with. Paul: Obviously, in some cases it's a longer negotiation in that obviously we want to do it on advantageous terms in terms of the share basically. So, we don't cast a wide swath in the context of the affiliate partners we deal with. We're very selective. Stephanie: Got it. So, the one thing that I was wondering earlier when you were mentioning failures and you of course have a huge backlog of experience at other companies, what did your first 90 days look like coming in to Charlotte's Web and what big things did you change from the start based on maybe past failures or successes that you've had at prior companies? Paul: Well, like entries in the most companies it's a rush. My story, this is pre-COVID times obviously, I talked on the phone with a board member and my boss, the CEO, on a Friday. I flew over the weekend, got there on Monday. I took the job sight unseen after a phone call. Stephanie: Wow. Paul: I was so enamored of it. I've never done that before. And Danny has never hired anybody like that before, it just went so well. I showed up on Monday and I didn't leave for 90 days, much to the consonation of my significant other in Boston. So, we worked it out. Paul: But it was just a rush of understanding the industry in-depth, doing triage in the context it was still a start mentality, triage in the context of building a business intelligence stack, revamping the Ecommerce organization, planning the next iterations and improvements, setting up for the holiday season for example. Paul: When I joined, literally the week after I joined we kicked off a new platform upgrade that we only had a couple of months to do prior to holidays. So, it was a lot of long days. Stephanie: Was that something that you feel like you could step into because I'm sure you've done many re-platforming experiences before? Paul: Yeah. There is some muscle memory and back to my point, you always want to learn from your failures and not do them again or at least understand the context and admit them. Basically one of those issues is that one has to listen very carefully. Paul: I parachuted into a company that was going 1,000 miles an hour and one of the lessons I've learned in the past is honor the past because there was a great deal of work and a lot of great work done that I took the attitude of evolving and adding to as opposed to turning the part which many C level executives take that as their mandate. Paul: I've never really done that. It's one of the failures I've learned from in my past that basically sometimes evolution is better than tearing things apart. Stephanie: Yeah. Yeah, I love that and I think the quote too. Paul: Yes. Stephanie: So, I'm sure another thing that you kind of the change of thinking on would be how you track the success of a business or the Ecommerce site. What kind of metrics, did you maybe look at prior companies where you were like this is our set of metrics that always made sense versus what do you look at now at Charlotte's Web? Paul: Well, there are quite a few. You know the Ecommerce business, there are probably 20 things that you look on a daily basis. That's my routine in the morning, I get up and I look at basically all the metrics. Paul: But what's important here, more so than perhaps, it's always in the top three conversion for example, on unbalanced traffic. It's significant here because you're engagement with a new customer and maybe fleeting because of the nature of the industry, the curiosity about CBD, people not knowing about it. Paul: I actually had to look at that statistic or those statistics several times because they didn't believe them, they were so high. That's a testament to the people and the staff that were here in that whether it's educating the consumer, or the customer experience on the site, or customer care on the backend, we have a high percentage of sales that convert. Paul: So, that probably is a much more important stat that I've paid attention to in the past. It's always been in the top three or four. Paul: Retention of consumers. Again, in this sort of industry because of the fleeting interaction with your customers, we have a very strong subscription program that is very important to us, which are typically customers who deem the product to be essential to their wellbeing. Paul: So, we've put a good deal of emphasis on that as well as retaining customers, and again, without divulging the statistics, it's much higher than I've experienced in my past 20 plus years of experience in Ecommerce. Stephanie: What do you think is making it so high? How are you all retaining customers so well or encouraging people to subscribe? Paul: Well, it's high because I guess in a way our traffic is more qualified, then again I've experience in the past. When they come through the site and they've been educated, there's a slightly high degree of propensity to buy. So, that's a factor. Paul: Plus some of our tools really facilitate the conversion in that. Not that we're pushy but we don't let go in the context of okay, this isn't right for you, maybe this or how about this promotion or have you rethought this through the customer journey in the site? Stephanie: Yeah. Paul: Basically, there's a pre-decisive to buy basically once they get to our site. Stephanie: Is there any initiatives that you've implemented when it comes to, like you said, it's nice you don't let go and you make sure to make to keep reminding them or showing them new products or new ideas. Stephanie: Is there anything that you've implemented recently around those kind of initiatives that have increased conversions or increased subscription rates or anything, or anything that you've done where you're like that was a big flop, don't try that? Paul: Well yeah. Again, getting much more sophisticated, I don't think anybody else has implemented the suite of what I call campaign tools and analytical tools. Typically, people use the standard GA or Google tools and we've gone past that and utilizing tools that I've used in much bigger companies without naming the company. Paul: So, we can have a high degree of personalization in terms of how we treat our customers as they kind of navigate through our site. A much higher capability in terms of test and react and basically inoculating those scenarios and situations into our campaigns eventually down to the individual level. Paul: So, we're still learning some of those. We've implemented those over the past three or four months. The company is still, my staff is still learning some of the aspects of those tools. Paul: On top of that from an analytic standpoint, which is a little unusual in the industry, we dived in with both feet from an artificial intelligence perspective because I joke with my staff and they read too rapidly that my experience doesn't always mean anything. I think I know everything about my customer and I'm confounded constantly in terms of why I was wrong on that. Paul: It comes down to the data and what artificial intelligence does for example, is that it makes those deep correlations that none of us would have thought of, I would have never thought of with my 20 plus years of experience of how our customers actually interact with our site or what are they thinking in the context of their purchase strength. Paul: So, when you put all those things together from a capability perspective, I love it in terms of being data driven, in terms of understanding our consumer at a deeper and deeper level and being able to provide the best experience and the best service that we can on an ongoing basis. Stephanie: Got it. That makes sense. When you're implementing AI, first can I ask what platform are you using for that and what kind of surprises have you found when you implemented AI? What were the consumers doing that you would never have guessed before? Paul: Well it's a third party app. It's a bunch of data scientists who basically provide the service for us. They're conduit for the massive amount of data that we have. To your question of surprises or those correlations or what people have affinities for in terms of say, an add-on purchase that we would never think of, what prompts them to basically make that leap to make the purchase in the context of their journey through the site. Some of which are counterintuitive to some of our experience particularly for certain segment of our consumer base. Paul: It's just some of those interesting nuggets of information. The hard part of it is, there's so many correlations that we have to rank them and we basically test each correlation over a period of time to vet out the action. Paul: Our challenge at this point is basically getting into a much more test and react cycle on these correlations. Stephanie: That's really interesting. Paul: Yes. Stephanie: So, if you were to implement AI all over again or you had someone who does not have that on their site right now, what would you do maybe differently or if you were like we could go back and maybe I would change the way we did this or think about it differently when implementing it, what are some advice around that? Paul: Well what slowed us down was the notion of producing what I call hypothesis based on our prior knowledge. That tends to put you into silos of information and doesn't quite give you the breadth of correlations that AI can do for you. Paul: So again, it was all of my advice that hey, I think I really know this aspect of consumer behavior. I'm really interested in terms of their conversion activity when they do X, when they do Y. Paul: I wouldn't be so structured in those hypothesis going into it and probably a little more open minded in the context of looking at the correlations in a much different broader way. Stephanie: I love that. That's such a good reminder about the kind of biases you bring when looking at data or your consumers and why all that should be scraped from the beginning and just let the technology work for you? Paul: Absolutely, absolutely. Stephanie: In your industry I'm sure you probably get a lot of questions around this. But I'm thinking about all the regulations you have to deal with especially on a state level and when it comes to having Ecommerce be such a large part of your business, what does that look like behind the scenes when it comes to shipping or selling in certain states? Paul: Well, it's mostly an impediment from a retailer, particularly a major retailer perspective because to your point, there's a hodgepodge of regulation in the state. Even though hemp was 0.3%, THC less than 3% as federally allowed, depending on the nuisances of what is in California or Florida, et cetera, retailers may be averse to getting into ingestibles as opposed to topicals. Paul: So, back to our point, one of the reasons why we're industry leaders we've invested heavily in internal, external lobbyists that can guide different parties and factions, whether it be congress at the federal level or legislations at the state level or associations to evangelize the notion of CBD. Paul: One thing that people miss the point on, we welcome more defined regulation from the FDA because we feel that we're heads and shoulders above most of our competitors in the context of how we test, how safe our product is, how we document it and the like. Paul: So, it's an ongoing journey that hopefully more clarity will emerge at both the state and federal level whether it's with the FDA or with various state legislatures to make the retail sales of CBD more palatable. We do ship to all states in the Ecommerce perspective. Stephanie: Okay. Yeah, I like that idea around encouraging the FDA to look into it and implement regulations because you're like my product is so good, we should have the other products regulated and be held to a high standard as well because that is what can maybe hurt the industry as a whole, is having people making subpar products that aren't as high quality as Charlotte's Web. Paul: Yes. It's kind of adding to that, major business publications have basically stated and make the articles that CBD is here to stay. It's a multi-billion dollar business growing at a rapid rate and it's frankly grown so fast and it's a new industry that regulations haven't quite caught up with it. Stephanie: Yeah. I was reading a bit about demand surges especially during the pandemic right now. I think maybe it was your CEO who was mentioning like, oh we had a surge in demand for two weeks and then people kind of pulled back for a little bit. Stephanie: I was wondering how you guys are keeping up your inventory levels, how you manage that and then if you're changing anything going forward after seeing these surges of hopefully consumers that are going to stick around going forward? Paul: We've been really gratified and continuing to serve our customer because the majority of the customers consider our product to be essential for their wellbeing whether it's the type of tincture they use or the ointment or the like. So, it's been relatively stable for us. Stephanie: Okay. Paul: Now from an notary perspective, as a growing company our processes have become more sophisticated and over the past year we've implemented an NSLOP process or production planning process that I'm more familiar with in my CBG background to really dial into marrying strategic plans to budgets, to demand forecast and skew level and doing a relatively sophisticated job of planning product demand. Paul: Now the flip side of that, this industry is volatile in the context of demand in general because retailers, some are still adverse to taking the product, so it's hard to predict demand in that context. Paul: So, we place a little more emphasis on safety stock and agility in the context of the co-manufacturers we deal with and the like. Stephanie: Got it. What are some of the best practices you set up when it comes to setting up that forecasting process because I know you've had a lot, like you mentioned, a lot experience with that. What did you bring to Charlotte's Web that maybe they weren't doing before? Paul: Well, they had started it but I amplified from an Ecommerce perspective, a rigorous skew demand process that is three dimensional and that it adds up from top to bottom and extremely rigorous analytical process of continually revising those forecasts taking into account promotional cadence, taking into account day-to-day iterations of different campaigns. Paul: So, it's a fairly in-depth forecasting process in Ecommerce so that our accuracy is much higher. It's in the 90 percentile by skew in terms of our monthly demand, for example. Paul: One of the things I've learned in my past is that sometimes you have to take a leap of faith on a particular product because you don't know how high you can go. On the other hand, that's what safety stock is for. Stephanie: Got it. What does that look like when it comes to thinking of new products? How do you influence your decision behind that, like you were mentioning, behind the sales channels and the marketing channels that help you influence your ideas or thoughts behind it. What does that look like when it comes to new products? Paul: We do have outside data and with a caveat that it's such a rapidly growing industry that tends to change overtime. But I feel is obviously one of the standard firms we use in the context of a longer term view, in terms of product categories and growth and certain segments and the like and we use that as a baseline. Paul: Obviously we use our trend and my counterpart on the retail side and myself where basically experience marketers and sales people and that we have our own opinions in terms of how we correlate our thoughts on category growth versus what we're seeing in external data, for example, like Brightview. Paul: So, we listen very closely to our consumer in terms of what categories we're pushing. Stephanie: I was just going to say I'm sure you guys get a lot of customer feedback of what people want or what they're looking for. Paul: Yes we do. Stephanie: How do you grab all that and put it in a meaningful way because you probably know best. So, a lot of times consumers might ask for something and then not actually buy it or not really want it. Paul: This is true. They certainly vote with their dollars. But on the other hand, we have a pretty good customer care department that is in my peer bid where I've managed those sorts of departments in the past but this is in an interesting one, the group of individuals that the empathy, because of the nature of the product and the stories they hear and the people they try to help, the empathy they exhibit in terms of comments from customer is just outstanding. Paul: So, it's not only commercial, but to the extent that it's practical based on the information they have, they are advisors to the customers that call in and we have a high volume of calls that come in not necessarily about order standard things, but really what should I do? What about this product? Paul: The other aspect is we have a fairly rich library of customer reviews and the technology we use enables us to slice and dice some of the categories of the customer reviews and try to get to a gist of what's working versus not, whether it's from a product efficacy perspective or perhaps a defect of some sort. Paul: The dropper may not work exactly the way we wanted to and the like. So, we have multiple sources of information of customer contact. Stephanie: I think that's so key to be able to call in and actually talk to someone. That's the perfect way to develop trust is by having someone that you can actually get on a phone with and be like, "Okay, I don't know what to do now. Tell me exactly what I should be doing." Or same with reviews, being able to see someone who sounds like me reviewing the product just seems like a great way to develop trust all around. Paul: Absolutely. From a hiring perspective, I have lunch, a virtual lunch nowadays with every associate in my group at some point. Today I just, prior to this meeting, I had lunch with three of our associates just to kind of get a feeling of that. Paul: When it comes to our customer care associates, I've never met such a group of people that are truly empathetic to where they hear a story and they're crying on the phone with the consumer. They're doing everything. They have a wide latitude of actions they can take to help our customers more so than I'd had in the past in much larger companies. Paul: But they really have the right mindset, I think, as opposed to working in a call center. Stephanie: Yeah. That's so key and so important. Paul: Absolutely. Absolutely. Stephanie: So to shift a little bit into more of a marketing mindset, I wanted to hear a bit about how you guys are investing in different digital channels. What's working and what's not? Paul: Sure. Just the overview is that you may have seen our Trust The Earth campaign, which I loved, we started last fall that kind of instills what our brand messaging is. Basically, a lot of our marketing efforts go to that because again we're an emerging industry, we're maintaining our market lead, we want to convey a certain image, just a random stat based on our efforts here today. Paul: We have over 400 billion impressions from the various things we've done versus, I think our closest competitor from the stats that I've seen were about two billion and it dropped rapidly. So, marketing our digital efforts from a broad perspective are very effective and that shows in the context of where we are in organic search or educating the consumer, long ways to go. Paul: From a digital perspective obviously we're active in every social media component and we're very assertive in terms of educating our consumer through that channel, conveying our brand message. Paul: The industry is in a place right now, there are some restrictions in terms of how aggressive that you can market CBD on social media like on Facebook, for example, or Twitter. But that's not a real problem for me right now because for me we want to activate understanding and education and our brand story at this stage of our growth in the social media channels. Paul: So, a lot of our digital, aside from our paid media, which we're very good at I believe, a lot of our digital is focused on building our brand. Stephanie: How are you thinking about expanding into other markets? I think I saw that you were looking at going into a few other countries. How are you guys exploring that right now? Paul: Well, we're basically putting our markers out there. We have a staff of people who are very experienced internationally. I have a good deal of international experience as well from an Ecommerce perspective in retial. Paul: But one of the constraints still is the regulatory environment in that we won't sell in any country that obviously it's not allowed. There aren't too many countries that actually allow it. So, we're basically putting the building blocks in place if in case that would be our strategy to understand what the international market would mean to us. Paul: But it's still evolving because it's basically not allowed from a regulatory standpoint in quite a few countries. Stephanie: Got it. So now that we're kind of predicting our future a little bit, I'm wondering what kind of Ecommerce trends are you excited about or preparing for right now? Paul: Well, in general, like I have for a number of years it's the technology keeping up with my visions of personalization. In the perfect world I'm interacting real time with the individual consumer in the context of whether we're educating them or guiding their journey and the like and the technology is starting to catch up with that capability even at a company of our scale. Paul: So, that's the trend that has been there for a little while but the promise has been there, but the reality is starting to catch up. The other one I mentioned is using deep technology to a point within certain boundaries to understand our customers behavior and needs and wants and applying, point number one, the personalization with that. Stephanie: Yeah. That makes sense. Is there any new tech that you're experimenting with right now that you guys are loving? Paul: Well, I've experimented with in the past in terms of client side speed of devices. Every Ecommerce and you know all the tropes about how conversion is impacted by site speed and page loading and all those different things. Paul: But what I've been enamored of in the past couple of years is utilizing technology to tailor the experience on whatever the device our consumer has. You know there's somebody out there who's still on dial-up, if that still exists. Stephanie: You caught me Paul. Paul: With a new browser, right. It doesn't matter how efficient your site is or your servers are like, you have to tailor the experience, strip down the page load, the content, rejigger the Java script on the fly depending on that individual's device because as far as they're concerned, they may have a iPhone 5 that hasn't been updated in five years but they still like that experience. Stephanie: Yeah. I completely agree. That's really important because I think a lot of people assume that users are always on a newest and the latest and greatest. The one thing, yeah, I had, let's see, we're doing a study on I think Google maps users in India and the majority of them were on such outdated versions that they were never seeing updated streets or an update at all in maybe a year or two. Stephanie: I think it's just a good reminder that a lot of people are on older versions of things, not just in other countries but here too. Like you said, some people still use dial-up. Sowe have a quick lightning round coming up. But before that, I wanted to ask you one last question because I love your excitement towards the company and your energy behind it and I wanted to hear what is the best day in the office look like for you? Paul: The best day in the office, let me think about that for a moment. Stephanie: Yeah. Paul: As I mentioned before I'm usually willing to go every day. It's when I'm in the thick of it, I'm a great delegator I believe, and I think the people who work with and for me would say so. Paul: But I'm most happy when I'm in the thick of it, not being Mr. Executive and my people interacting with, like a peer to some degree, in terms of coming up with ideas, debating certain concepts, making things happens. Paul: It's still small enough company where many people I'll be a jack of all trades and that's where I've shined in my past of, okay, rolling the sleeves up and figuring it out and having to learn things. Paul: Many of my jobs have reflected that. So, that's when I'm happiest, when I'm learning something new. I think I've been told I'm really, really curious to a fault. I ask too many questions sometimes. Stephanie: I think that's a good thing. Paul: Yeah, I guess so. But that's what jazzes me, being in the thick of things, making things happen. Now having said that, as a C level executive you have certain programs and responsibilities to create a conducive environment for your people to work in to make them feel trusted, to stretch them to the extent of their capabilities giving them a vision. Paul: On the other hand, I've always been a believer of an executive being able to walk the talk having done something. Being able to do it, without actually doing it. That lends a certain amount of credibility in your interaction with your staff. So, I think that's very important. Back to your point, that's what makes me happy is just being in the thick of it. Stephanie: Yeah. Yeah, I completely agree. I like that idea and I heard a ratio or it was a metric that an executive used called the say do ratio, and it was how much do you do what you're going to say you do, and that's how he gained the trust with a new company he was joining, was he actually tracked it. Paul: Well in a small company I think my first interaction with an associate at CW is riding up the elevator that Monday, they had heard of me, and they asked my name and they heard that I was a tech guy. I was really the Ecommerce business guy and tech guy and they asked me about an email problem they were having. Stephanie: A personal or a company one? Paul: A company one, yeah. Stephanie: Okay. Paul: "I can't quite get this to do this." It was a sales executive or a sales manager that we had. She asked me a question not knowing exactly what I did so I spent a half hour tracking it down and getting back to her. Paul: Later when she learned, you're in charge of Ecommerce and tech and all that stuff. To me, in a small company like ours, you have to be personal, you have to be willing to help anybody with anything and follow up on it and get it done as opposed to always delegating and there's a balance obviously in terms of the work balance. Paul: But you have to show that direct interest in everybody's issue in what they're doing. Stephanie: Yeah, I love that. That is such a good mindset to be in, like you said. Especially coming from a larger company where employees might be like, "Oh this guy is going to just delegate everything," like showing them you're willing to get your hands dirty and help them with their needs and stuff. It's also crucial. Paul: Yes. Stephanie: All right. Next we have the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Paul: Okay, lightning round it is. Stephanie: Are you ready? Paul: I'm ready. Stephanie: Roll up your sleeves, get ready. All right. Paul: They're already rolled up. Stephanie: First, I'll start with an easy one. Paul: Yes. Stephanie: What's up next on your Netflix or Hulu queue? What are you watching these days? Paul: On my Netflix queue let's see, geez I don't watch a lot of TV so you're going to stop me. I have 30 seconds left. Mostly about historical dramas. I've always wanted to watch The Crown, which everybody has watched. So, that's probably next on my queue. Stephanie: Cool. I haven't watched that yet. You'll have to let me know how it is. Paul: There you go. Stephanie: All right. What's up next on your travel destinations when you can travel again? Paul: Wow. When I can travel again? I'd like to go back to Tokyo. I've traveled so much in my career personally. One point I spent about 50% of my time overseas. Stephanie: Oh my gosh. Paul: But Tokyo because I was born in Tokyo. Stephanie: Cool. Paul: And an American descent. But when I traveled I was always able to get there and see my cousins three or four times a year. But it's been a while. That would be my first place to basically get back to my roots. Stephanie: That is a good one. I love Japan. Paul: Yeah. Stephanie: What app or piece of tech are you most enjoying right now? Paul: I'm most enjoying, this is an odd app, is a password saver. I won't say the name of it, but I've been searching for the perfect one because I'm all about convenience and security and all those things at the same time. So, it's an odd choice but I found the perfect passwords saver. Stephanie: Yeah. That is actually a very good piece of tech. We recently implemented that at the company not too long ago and I was like, "Wow, this saves a lot of time. Who knew?" Paul: Absolutely. Get rid of the sticky notes. Stephanie: Yeah. All right. If you were to create a podcast, what would it be about and who would your first guest be? Paul: My first guest I'm thinking big. Stephanie: Go for it. Paul: Because I'm thinking really, really big because I'm enamored of her career. I was actually at her first rally, Elizabeth Warren. It tells you a little bit about politics and no offense. Stephanie: That's okay. Paul: But I was still in Boston, I went to her first rally and I was just enamored, I've always been enamored of her and not withstanding what happens in the near future. I would just be fascinated to talk to her about her career and how she made that mid career shift and the [inaudible] plan. Stephanie: That's cool. So, it would be politics focused or more human centric on what's important when it comes to you? Paul: More human centric with a tinge of politics because I am interested in politics. Elizabeth Warren would be it. Stephanie: We could get her on the show. I would make that happen for you. Paul: You could make that happen? Stephanie: Yeah. Paul: That would be so cool. Stephanie: I could do it. Elizabeth call us. We're ready for you. Paul: Absolutely. I remember I've actually seen her a few times, in the crowd obviously. The last time was at a protest at the Boston Common and she was quite compelling in her speech. Stephanie: Well that's great. I will have to see if I can find that online. Paul: Yeah. Stephanie: The last hard one which you've kind of already answered this, but I'll throw it anyways at your way. What one thing will have the biggest impact on Ecommerce in the next year? Paul: I think the biggest impact is the turmoil going around the big guys whether it's Facebook, Google, to some degree Amazon. What is the regulatory landscape, what is the antitrust landscape, how will they evolve, how monolithic will it be? Paul: I think I actually think about that quite often in terms of how do we enact with them, do businesses, make the leap into Amazon as a third party do, how do the algorithms evolve from a group perspective. How does privacy work? Paul: That really weighs on me in the context of thinking through how do those outside forces that are so monolithic in the tech industry impact Ecommerce. Stephanie: Well that's a big juicy one. We'll have to have a whole nother episode just to talk about your thoughts on that. Paul: Right, right. Stephanie: Well Paul it's been such a pleasure having you on this show. Like I said, I use Charlotte's Web. I've been around it for a while and I really appreciate you coming on and taking the time. Where can people find out more about you and Charlotte's Web? Paul: Well obviously our website, Charlotte'sWeb.com and I have a pretty fulsome linked in profile that shows you how haphazard my career has been but it's been a fun ride. Stephanie: Yeah. That's where I found out all about you. Well thanks so much for coming on. We'll have to have you back for round two in the future. It's been great. Paul: Absolutely enjoyed it. Thank you very much.

How does a guy who used to sell fighter jets move on to build an Ecommerce company that sells single-blade razors? It’s an interesting question with an even more interesting answer, and on this episode of Up Next in Commerce, Patrick Coddou tells the tale, and gives some insights into the world of Ecommerce along the way. Patrick is the founder and CEO of Supply, and even though the company has been in business since 2015, has seen 80% of its total profits have come in over just the last several months. So what’s Patrick’s secret? In today’s interview, Patrick dives into the nitty-gritty of what changed, including how he finally discovered exactly what profit margins he — and most companies — need to hit in order to achieve sustained success. Learn what that number is and more, on this episode.  Main Takeaways: Always Be Testing: To achieve the best user experience and optimize sales, you need to constantly test new ideas. Whether it’s pop-ups to showcase new items, implementing a legacy program, or experimenting with video, you learn something new every time you test. Plus, sometimes the failed tests are even more valuable than the successful ones.    It’s All About the Margins: Businesses live and die based on their gross margins. If you are not charging enough and/or pay too much to have your products made, you’re putting an unnecessary financial strain on your business that could break it. Riding the Ecommerce Waves: There is a ton of volatility in the Ecommerce industry. In order to achieve sustained success, companies need to be nimble and able to adapt to the changing tides. Keep overhead low, focus on your P&L and build processes that allow you to make quick shifts when needed. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome to another episode of Up Next in Commerce. This is your host, Stephanie Postles and today on the show, we have the founder of Supply, Patrick Coddou. Patrick, welcome. Patrick: Thank you for having me. Stephanie: Yeah, we're excited to have you on. I was doing a little bit of LinkedIn stalking and your background... At first, when I stumbled on your LinkedIn, I'm like, "Is this the right guy?" I saw a background in selling fighter jets and I wanted to start there with you of kind of like a little bit of your background before you founded Supply. Patrick: Sure. So I spent my education as a mechanical engineering and before starting this company, I spent eight and a half years in the corporate world. I worked in the aerospace industry and in particular I worked on military aircraft. We make some fighter aircraft here in Fort Worth, Texas where I'm from. Stephanie: Very cool. And what does that look like behind the scenes of working on aircraft? I saw that you did, I think an $8 billion deal. So I want to hear a little bit more details around that. Patrick: Yes. I worked on it. It would be very, very arrogant of me to claim that I was responsible for that deal. Yeah. So in general, and I'm happy to go deeper if you want to, but in general, the US government works with foreign militaries to arm and equip them with certain pieces of equipment that we think that are necessary for them to have and to support interoperability between allies. So one of those aircraft was called the F-35. And I think the deal you're talking about was maybe the deal with South Korea we did probably five or six years ago where the US government sold, I don't remember how many, 60, 70 aircraft to South Korea. Patrick: So that was a really phenomenal experience getting to fly there and negotiate with our partners over in South Korea and spent a lot of time kind of immersing myself in their culture. Just a cool, cool thing to be a part of. So I learned a lot there, but at the same time was ready to get out when I left. Stephanie: Yeah. So let's hear a little bit about you're almost a decade at, I think Lockheed Martin and you're starting to get the entrepreneurial itch. So what was happening while you were there and what had you make the jump. Patrick: Yeah. So as outrageously cool as the subject matter was of what I worked on in my previous life, it was... As awesome as the subject was, it was as equally terrible to work in a corporate environment like that one for me personally. Not for everybody, but for me. And especially working with the US government. Just procedures and processes and just layers of bureaucracy. It just led to boredom and frankly anxiety and depression personally. Just wanting to be fulfilled in my work and not finding the ability to be so in what I was doing. Patrick: I tend to plan and think ahead a lot. When I visualize the future of my life there, it was like I could literally see myself sitting at the same desk like doing the same things that I had been doing for like the next 30 years of my life. For years, I wasn't raised as an entrepreneur. I don't really have that in my family. I didn't know the first thing about starting a business, but for years I was always thinking about kind of what is kind of my path out of this life and kind of into the next one. Patrick: I always had ideas and never really kind of jumped on them because I wasn't a risk taker, I was an engineer. Taking risk was the furthest thing from what I was used to. And I finally have this idea for a razor that I wanted to invent, and we can kind of get into that if we want to, but in general I've always kind of struggled with irritation and ingrown hairs with shaving since the first day I started shaving. I came across this old style of shaving, shaving with a single blade safety razor and just fell in love with it and decided I wanted to try to kind of make a modern version of this old razor that I found. Patrick: Then in addition to that just decided like this is kind of... It's kind of now or never to make the leap from this job to doing something on my own. So it was kind of a perfect storm of the idea came and the necessity came and the opportunity came at the same time and just decided to go for it. Stephanie: Yeah, that's awesome. I think a lot of people probably have those same feelings of getting stuck somewhere. I know I have in the past. There was a point in my previous life when I was working at Fannie Mae and I had the same kind of thing. I'm like, "Oh my gosh. Do I want to end up in a semi-government job or corporate job?" And even at Google, it's like, "Oh, things feel so great right now. Should I leave? I feel like I'll stay here for a long time because it's so comfy." So I think a lot of people have the same kind of feeling of now or never. I better jump before I get stuck here for the rest of my life. Patrick: And the further you go in those career paths like the harder it is to leave. What can an aerospace engineer that has worked as an aerospace engineer for 20 years do other than that after they've been there so long? Stephanie: Yeah. I had the same feeling. What year did you start Supply or did you start something before then or was Supply your first company? Patrick: Yes, Supply is my first kind of real company. Prior to starting Supply which we started in... The company started in January of 2015, but we launched publicly in August of 2015 with our first Kickstarter campaign. And prior to that, I started a website with one of my best buddies called razorpedia.com and that was like, I think, we started in 2012 or 2013. Long story short, it was a kind of razor review website that really was kind of a... Just kind of a stupid fun thing to do with a buddy on weekends where we wanted to kind of test razors and try to find the best razor on the market. Actually, the website ended up getting pretty popular and we ended up selling it later. But that's really where the razor kind of story began with shaving. Stephanie: Yeah. I mean, I read that the Razorpedia was like the number one google search result and it had like 1 million organic page views over 30 months. So it sounds like it was actually a pretty big deal. Patrick: Yeah, it was pretty successful. We were fortunate enough to like... We literally launched I think the same week that Harry's launched. Stephanie: Good timing. Patrick: Yeah. It was good timing and we wrote a blog like the same week about Harry's. We ended up like kind of being... If you searched razor reviews online or Harry's razor review, we were right at the top of the search results. So it was kind of dumb luck. So we started to kind of monetize it with ads. We didn't know what we were doing. We were making it up as we went. The best thing that came out of that was the realization that all these multi-blade razors that we tested were all... In my opinion, were all trash and just not good razors. It was that website that actually led me down the path to find this old style of shaving, which is this single blade style shave. Stephanie: It's really interesting how marketing can really train us like "Oh, the more blades the better, and this one has two. Oh, this one has three." You wouldn't even think like getting back to the roots of like you're talking about a single blade is maybe actually the best way of doing things. Patrick: Yeah. There's an old Onion article from like 2002 and I think the most blades in a razor was maybe three or four at that time, and the title of the article was Screw It, We're Doing Five Blades. So they actually foresaw the five blade razor. I think you can actually buy a seven blade razor today. Stephanie: Oh my gosh. So you have this idea of Supply. What did the early days look like? I mean you have this old-time razor where you're like, "Oh, this actually works really well." What was it like to actually start the company and find a way to create and manufacture this razor? Patrick: It was very challenging to say the least. So I had the good fortune of one of my friends. I wanted to just make the leap and just go cold turkey and go all in on the company and the idea from day one. I had the good fortune of having some friends in my life that I listened to that said, "Why don't you try to figure out how to make this product work before you just leave your paycheck behind?" That turned out to be really good advice because it took me about a year and a half if not two years to go from Kickstarter campaign, which was kind of the initial rough prototype to no kidding supply chain or product that I could actually sell at scale. Patrick: I have no background in consumer products at all, whatsoever. So a lot of that kind of two-ish years was just me making it up. I had no investors. I had no real network or people to rely on to help me figure out how to kind of make this product. So a lot of it was just kind of figuring it out as I went and making a lot of mistakes and fixing those mistakes when they happened. Stephanie: So how were you finding ways to... I mean, you get a really well-funded Kickstarter. What was the next steps after that? Did you go and start meeting with people who manufacture razors already and you're like, "Here's my new design idea?" Or since you're an engineer, were you actually like trying to make your own? Patrick: Yeah. No, I did not make my own. We've always done outsourced supply chain and production since day one. We're currently actually not working with any of our early manufacturing partners. We've got a really phenomenal network of manufacturers that we work with today. But in the early days, it was a lot of googling although that doesn't really get you too far when it comes to manufacturing. Patrick: And then just a lot of calling and cold outreach to anybody that I could get to pick up the phone. So I think I probably called somewhere around 50 or 60 different suppliers that I just found through Google or recommendation from somebody who would talk to me, but didn't want to do the work for me or something like that. I eventually settled on... And this is a very common practice in the consumer products space. I eventually settled on... I never really know what to call them, but kind of an outsourcing kind of middleman sort of company where they're a... This is what they do is they go find factories to make you your product. Stephanie: Oh, interesting. Patrick: Yeah, I found a guy local to me. I don't remember how I found him. I think he was on Upwork maybe and he managed the manufacturing of our first batch for me. Stephanie: Very cool. So what led you to change manufacturers? You said in the early days, you had one manufacturer two and then you don't use them now. What happened and what kind of lessons did you learn through switching manufacturers? Patrick: So we launched our campaign August of 2015. I promised delivery by March of 2015, and that was in my mind plenty... That was more than enough time. That was like I was being generous with that timeline. And the manufacturer knew that. They were on track with that. March came and went. No products. April came and went no products. May. And then June I finally... I'll never forget, he literally shows up on my doorstep with a big old dolly of... I think we had ordered maybe 2,000 razors or something like that and he drops him off inside my house. Then as he's walking out the door, he says, "Oh, by the way, there's a problem within." Patrick: I'm like, "Oh, now, you're going to tell me there's a problem." Anyways, it turned out there was an issue with the razor to where if it wasn't used properly, it actually wouldn't even really shave at all and you couldn't load a blade. Stephanie: Oh my gosh. Patrick: Yeah, just a little problem, which was just devastating because I had already spent all my money that I had raised, I think about $8,000 on that production batch. Essentially what we did over the next kind of two to three months is I set up a little shop in my garage to try to kind of adjust the razors to make them work and we did the best we could with that. We were very open with our backers and that's always like number one thing. I always tell young founders or operators is like when things go wrong trying to cover it up or not being honest about it with your customers is just going to make it worse. Patrick: You need to kind of be honest. We were telling our customers what's up like here's what happened, here's what we're trying to make right about it. Oh by the way, if you want to wait, we're going to start up a second batch with a new manufacturer, but it's just going to take some time. Patrick: Anyways, we ended up kind of salvaging some of that initial bash. We ended up having to scrap a lot of it, lost a lot of money on that first batch and then we started up a second production line and eventually made it right with our backers and delivered everything we promised, but it took... I think it was the following March before we finished delivering what we had promised. So it took a year longer than what we had told people it would take. The lesson for me is and has always been at the end of the day, all I have personally that's keeping my business alive is the relationships with the people that I work with. Patrick: Those relationships and that trust is everything. It's extremely difficult to, on the front end, determine if you can trust somebody. But I always highly leverage towards trust when I'm evaluating a new partner rather than capability, right? Because capability is just kind of table stakes for us to even have a conversation. Something is going to go wrong and what happens when it goes wrong is what makes all the difference. Patrick: So that first vendor, his true colors were showed when something went wrong. The vendors, I'm with now, things go wrong all the time, but what happens is they make it right. So that's kind of the biggest learning lesson for me and the biggest advice I can give people is going into business with people that you not only enjoy working with, but can trust to make things right when things go wrong because that's literally all you have. What's written on the contract doesn't even really matter when you're as small as me, right? Because I can't sue somebody. It's just... Anyway. Stephanie: Too much time, too much money to even try and do that to begin with. Patrick: Yeah, exactly. So it's all about relationships. Stephanie: Yeah, that's a really good point. So on your Twitter I think I saw that... I mean, you guys have been in business for a few years, but 80% of your lifetime profit has come in the last six months and I was wondering what's the catalyst behind that? Why are all the profits coming in now? Is it better marketing? What's behind the scenes to drive that profit now? Patrick: Two things, supply and demand. So on the supply side, I worked all last year. This is another kind of big learning point. I've gathered over the years. I worked all last year to significantly improve our gross margins or essentially how much our products cost to make versus what we sell them. The first four basically years of my company, I wasn't charging enough for my products and they were costing me too much to make. So 2019 was a big kind of cost cutting year for us. Patrick: Then in addition to that... So those cost cutting initiatives went into effect on November 1st. So that's the supply side and then the demand side is November 3rd we aired on Shark Tank. So that was the beginning of a big tidal wave of orders. So those two things coincided very nicely to bring us to a place to where we're significantly profitable in the way that we've never been before and that really changes a lot of things for us. Stephanie: That's awesome. So how did you go about figuring out what areas needed to have cost cut down? What does that process look like? Patrick: Yeah, for us, I mean it's less about... We've always had very low overhead. Started the business with my wife. We've barely ever paid ourselves much... We've had a very small team always. We worked out of our house for the first three years. So overhead has always been very low for us. I always, always, always urge young businesses and founders to keep overhead as low as possible. I think a lot of the reason you're seeing a lot of companies go out of business or have issues this year since COVID hit is they don't have the flexibility in their overhead to withstand volatility in the marketplace which is what's going on right now. Patrick: So that's always been low for us. It's always been a thing that I've held important. What it costs us to make our products versus what we charge for them, I had what I'd consider a friend/mentor get on a phone with me. He runs a very successful men's clothing business that's probably 10 times larger than mine. He shared with me, "If you're not charging at least 4X for your products what you make them for, you're never going to be able to scale in a meaningful way because customer acquisition costs are just too high to let you be able to scale with any less margin than that." And he's right. Stephanie: Did you take his advice exactly and do 4X of how much it costed you? Patrick: Yes, I did. Stephanie: Cool. And what was the price before for a razor and what did that jump to? Patrick: Without getting into the engineering side which is maybe a little boring, but we didn't really necessarily change the price of the razor. We have two versions. We have what we call an alloy version and a steel version. The steel version we increased the price probably about 20 to 30% and we introduced an alloy version which is a lot less expensive to manufacture and we actually kept and almost kind of lowered the price on that one because we were able to bring our production costs down so much. Stephanie: Got it. When you're lowering your production costs, I know you mentioned overhead is a big thing, but was there anything with your production costs or the materials that you also looked at decreasing the prices for? Patrick: No. I mean, we kind of kept the packaging the same. Another thing that you'll probably hear a lot of people, supply chain guys talk about is we're always trying to get like ahead of the curve when it comes to ordering because historically we've always had to rush shipments via air. Not all of our stuff, but a lot of our stuff is made overseas and air shipments cost anywhere from five to 10X more than ocean shipments. So that's always really painful when you got to spend 20 to 30 grand just to ship something versus two to three grand. Patrick: So getting better forecasting so that we can order far enough ahead of time to put something on the ocean instead of the air is another big thing we're doing. Otherwise, it's just like constant... I live in my profit and loss statement where I'm just counting every single penny that goes into my cost of goods sold whether it's the cost to ship to me, whether it's cost to ship to my customer, the fees I'm getting charged by my credit card companies, cost of my boxes. Patrick: I mean, it just requires relentless dedication to constantly being in the numbers to make sure that... It's just like... It's like entropy. All things tend towards chaos. Well, everything in your P&L tends towards higher costs if you don't stay on top of it because you're just going to spend more and more money. Stephanie: Yeah, I completely agree. I think a lot of founders oftentimes avoid looking at it because, one, it's kind of hard to read a P&L or a balance sheet or something like that if you haven't taken the time to figure out what all the line items mean. But then also like you said like a lot of things start adding up behind the scenes whether it's subscriptions or just stuff where you're like, "Whoa, I didn't realize my credit card fee is this." Maybe it's actually cheaper just to you know get a loan or do this and start thinking differently about how you're spending your money. Because a lot of those costs do add up especially in the early days. Patrick: They do, and software too. Stephanie: Oh, yeah. Software is a big one. And forecasting. I thought that's a really good point about forecasting in a way that you don't have to airship things. We actually haven't had someone on the show talk about air versus ocean, so I found that very interesting. Patrick: Yep. Stephanie: So the other thing I was wondering I would love to hear more about is your Shark Tank experience. We've had quite a few Shark Tankers on here and everyone's had a slightly different experience. I want to hear a little bit about what that looked like. Patrick: Awesome. I mean, it was a once-in-a-lifetime sort of deal. Never will forget it. We had a blast. I went on with my wife. We both pitched. We filmed in June of last year, so June of 2019 and then we aired in November of 2019. Just all the way through from the very... I applied three years in a row. It took me three years to get on the show and from the first day I applied the first time all the way through the last interaction I had with them after filming, it's just a really class act. Up and down, just phenomenal people. Patrick: I'm not talking necessarily about the sharks, although they're all great. You work with them for literally 30 minutes to an hour. You never see them again, but all the people behind the scenes are just a class act. Just the experience of standing in front of these people that you've watched for close to a decade, if not more than a decade on TV and actually talking to them and them talking back to you and saying your name. It's just like this very kind of out of body experience to where you kind of like in a sense like black out a little bit. Like don't even really remember what happened, at least personally. But we had an absolute blast. We ended up getting an offer from Robert and accepted his offer. We actually didn't end up closing that deal, but just had an absolute blast. Stephanie: Oh, and you said you didn't end up closing it?   Patrick: No, we did not. Stephanie: I think that's also interesting to know that not all the deals close and there's things that maybe happen afterwards that could impact that on both sides. Patrick: Yeah. About half of them don't close. Stephanie: Yeah. So what was it like after you went on the show? I'm sure you had a large increase in demand? Did you guys have any website issues or inventory issues or what did that look like? Patrick: Yeah, a huge increase in demand. I think in November, we did you know 4X our previous monthly record. So big increase in demand. It really strained our customer service. It strained our supply... Not our supply chain, our warehouse a bit although we had just onboarded with Shopify Fulfillment Network. They were doing a phenomenal job of keeping up with things. It was more of what was straining was getting stuff in stock from our vendors on time. Patrick: So we had some orders that took us like three to four weeks to ship and that made some customers pretty upset since they were Christmas presents. We did get everybody everything they needed before Christmas which was like my one thing that I wasn't going to sacrifice on. We ended up getting it done. But between November 3rd and Christmas, it was pretty painful, in a good way. But the response was pretty phenomenal. Stephanie: Yeah, that's great. And are you seeing continued demand from that or did you start leveraging other maybe customer acquisition strategies or marketing tactics to kind of build on that demand? Patrick: Yeah, so it really put a ton of wind in our sales. It's really helped us kind of upgrade a lot of our business kind of to the next level. But in terms of like sustained demand, no, you're not getting a ton of like post Shark tank people streaming it and coming to your website. Although, I'm sure that happens. What it has done for us is it's given us kind of a social proof of being on this national platform. Patrick: So we've used a lot of footage and assets from the airing in our advertising. So if you go to our website, you'll probably get retargeted with some Shark Tank style ads. And just in general, it's given us the ability to taking us from this quiet kind of nobody brand to... I won't call us a household name, because we're certainly not, but a lot more people recognize us like, "Oh yeah, I've seen that before." Patrick: So it helps with everything. I mean, it helps with not only the company but your partners and your vendors are now even more excited to work with you. Press finds you that hasn't found you in the past. We'll be in The Wall Street Journal this weekend. Stephanie: Oh, cool. Patrick: We are in GQ's best single blade razor of 2020. These things just kind of slowly snowball. It's been a really phenomenal experience. We're very grateful for it. Stephanie: Yeah, that's great. It's such a good reminder of how PR can work if it's done the right way because there's all these PR companies who always say that they can help you, but it depends and that's just a good reminder that it can work well if you get the right outlet and getting featured in like Wall Street Journal or places like that. Very beneficial. Stephanie: So what kind of digital channels are you finding the most success in right now when you're going about... You're talking about retargeting and different marketing tactics. What kind of channels are you finding success in? Patrick: Sure. I mean, no surprise Facebook, Instagram and Google in that order for volume. We've always wanted to test these other channels like Snapchat and Tik-Tok and whatever and we probably will sooner or later. But there are some other things we want to spend some more time on building before then. We do a little bit of affiliate. We do a tiny bit of influencer, and that's really kind of I think what we're going to start turning our eye to for maybe the next phase of our growth. But yeah, those are really the big channels for us. Stephanie: Yeah, cool. So when you were building up supply and you mentioned Harry's earlier. The razor market feels like it's been pretty popular for people to start companies in. You've got Dollar Shave Club, you've got Harry's. How did you think about that competition and making sure that you stood out among the other brands that were launching? Patrick: Yeah. So our value proposition is very much kind of anti-Harry's and anti-Dollar Shave Club. Then our positioning and our pricing is similarly the complete opposite. So they're clearly competitors of ours, but I don't really consider them necessarily direct competitors. What I do consider them is people that I can steal my customers from. So it's a single blade. I haven't really talked much about the product. It's a single blade. Stephanie: Yeah, let's hear about that. Patrick: Yeah. It's a premium single blade razor and the value propositions are there's a few. Number one, it's not a cheap product. It's a $75 handle, but the value prop is you invest a lot up front, but then you save tons of money over time. So our blades are 75 cents a piece and they last somewhere between eight to 10 shaves. So after you buy the handle, you're spending... If you're shaving every day, you're spending maybe 24 bucks on blades a year. Then you've got this handle that lasts forever. We actually guarantee it for life. Patrick: So you never have to buy the handle again. But then aside from that, the value prop is a single blade gives you just as close of a shave as a multi-blade razor. But for roughly 30% of guys, they experience like myself a really severe razor burn and or bumps typically on the neck or in the sensitive parts of the face. And a lot of that is caused by multi-blade razors. We don't have to go that deep into it, but the way they're designed is works for some guys in terms of giving you a close shave, but for guys like me who have sensitive skin, it actually does the opposite. It makes things worse for you. Patrick: Anyways, so going back to Harry's and Dollar Shave Club. So a lot of guys, they just use these razors and they just think like this is the way everybody shaves and they just have to deal with this issue and just deal with the razor burn or just not shave. So what we're telling them is no, it's not the case. You can actually shave and enjoy it and not have your face be a train wreck after you shave. Patrick: So we're slowly helping guys kind of wake up from this myth that multi-blades are better and that's like the only way to shave. If it doesn't work for you, then too bad. Just keep shaving and tearing up your face. Stephanie: Yeah. How are you going about that education process because I was going to say that it does seem like there's quite a bit of education required for that and just for like... I mean, you mentioned shaving eight to 10 times. I'm like, "Oh, I think a lot of people probably shave with the same blade for long time." I'm thinking about myself, I'm like, "Oh, man. I'm pretty bad at that." So how do you go about getting people to change their behavior? Patrick: Yeah. Honestly, it's tough. I mean, I'll give you an example. We present in our ads like why multi-blade razors are bad for your skin and we literally present it the same... We present the same data that Gillette presents. It's on their website. Multi-blade razors are literally designed to lift... The first blade tugs the hair out of the skin and like the second and third blade kind of cuts it below the surface of the skin. That's literally how Gillette has designed them to work. Patrick: People accuse of us of lying and making that up. And it's like, "No, just google it." You'll see it straight out of the horse's mouth. So the point is like it takes a lot of education. When they don't even believe that you're just saying what your competitor says, clearly they they need a lot of education. Patrick: So we do it through video. For example, if you buy the razor, you get four emails from me, the first four days after you buy it and each one is a short 60-second training video. It's not like this outrageously complex course of learning how to shave with our razor. It's 60-second videos. But guys, we've learned are very prone to throw instructions out so they don't read anything that we include with the product. Stephanie: You think they fancy videos like you call them, "Hey, come look at this." Patrick: Exactly. It continues to be a challenge, but in general video seems to work the best in terms of teaching guys how to do. And actually, we're starting up our YouTube channel next week to kind of help that process as well. Stephanie: That's really interesting. Another thing I read. I don't even know why I know anything about razors because I did read an article about the marketing behind them, how a lot of the traditional companies show the razor getting like water all over it and sitting in the shower and that actually degrades the blades and then you have to change it more frequently and that was like their whole plan. Do you think that's true or am I just reading conspiracy theories behind razor blades? Patrick: Yeah, I don't know exactly what you've read, but I mean it is true that water, what it does, I mean, if it sits on a blade it causes it to rust which degrades the edge. I mean, we tell our customers don't leave your razor in the shower in a damp environment. We tell our customers not to do that because that's very... That's true. Stephanie: Yeah. I mean, all these things I think most people probably are doing right now, I'm thinking of myself and our producers typing in there that how long she goes from changing her blades. So I think there's a lot of education to do in the market in general. How are you guys also thinking about new products because these are designed for men, but I'm like women definitely have a lot of the same issues. Are you thinking about launching new products geared towards women as well or are you just strictly focused on men's products? Patrick: The short term, we're focused on men's products. We do have women as customers. My wife and my co-founder is a user of our product. So we're more than happy to have the ladies buy from us. But what's really, really difficult or at least I've found is to position our product as both a men's and women's product at the same time. I don't know the best. I'm sure there's a good way to do it, but I don't know what it is because shaving your face and shaving your legs are too... They seem similar, but they're very, very different things. Patrick: I'd love to do like maybe different landing pages or product pages because the value props are basically different, right? So I don't know, man. Maybe I could use some advice for how to sell... Maybe the problem is I just don't know yet how to sell razors to women. Stephanie: It sounds like my team. We've got ideas and we'll team up with your wife and we can all figure it out together. Patrick: Yeah, yeah exactly. It is on the to-do list. It's just something we haven't been able to get to yet. Stephanie: Very cool. So tell me a little bit about how you developed your website like the experience... I mean, when you're selling something that kind of needs to be tried out or you need to hold like the handle to see like wow, this is a good quality like piece of steel here, how do you convey that to the customers who are coming on and how did you develop your website experience. Patrick: Yeah. It's tough, it's really tough. I don't think we've arrived by any stretch, but certainly, certainly made a lot of progress. We have a very, very talented development company. We work with agency called Fuel Made. Good friends, just good people and they do amazing work. So they handle just from the front end and the back end design. They're handling most of that for me. Patrick: Prior to that when we were smaller, I think it's a complete, complete waste of money to spend any money on complex web design. There are so many free or very cheap templates out there that work so well. I would encourage people to not spend any money on development and take any money you have and invest it all in creative and start with just phenomenal photography. Patrick: Find a very, very talented photographer and spend your money there if you're going to spend your money anywhere. So I have a very good friend of mine who is that person and he takes all of our photographs. And so we over index on beautiful photography. We're now at a point to where we can afford kind of an expensive agency to develop our site and otherwise, we do just tons of AB testing. Every month, we're testing something new or we're launching a new feature. Sometimes it works, sometimes it fails miserably. Each month is just an opportunity to get better. Stephanie: What kind of tests have you seen work versus fail because I think a lot of people may be thinking about trying out some of the same kind of features or tests that you're thinking about. So is there anything that comes to mind where you're like this really worked well with conversions or increase cart value versus this one did not work at all and it seems like it would have. Patrick: Yeah. I probably have more this didn't work than this does work. Stephanie: Let's hear it. I like those stories just as much. Patrick: Well, man, I'm really sad about this one. We just did one where once you add the razor to the cart, there's a pop-up that immediately shows up that says, "Hey, do you want to upgrade this to our starter set which is our second best seller aside from our razor?" We tested different variations of that pop-up. We tested it against no pop-up and there was like no clear winner after, I think it was two weeks and a very significant amount of traffic. No clear winner. Patrick: So we decided not to go with that pop-up. I launched a membership/loyalty program in April. The way I designed it was outrageously complex and I put a lot of development work and dollars into it, let it run for eight weeks and then I canned it. That was painful to do because it was just too complex. Stephanie: What made it complex? Because I've actually heard similar themes from a few other people who've been on the show who said that they thought that a loyalty program would work for them, but it ended up not working like they thought. So what do you think made it too complex or would you have done it differently or are you just like, "We're not trying that again?" Patrick: Yeah. Two things on the front end and on the back end. So on the back end, the code, it was completely custom designed from a code using scripts on Shopify and it just got really complicated. But on the front end, it was kind of confusing to the customer. So the program was essentially like it was kind of like buy a razor and get a free lifetime of blades offer which sounds like a really compelling offer, but there's always kind of... There's got to be a caveat to that statement. Patrick: So it was like you could get a shipment every quarter of blades, just pay for shipping or you could buy our premium membership, which was like 20 bucks a year and then get the blade shipped to you once a quarter, which is a great deal, but offering them those two options was really confusing and then just the way we made them sign up for it was confusing. Patrick: In general, we're going to try to launch another program in the future, but it will be far less complicated. If you can't explain it in a sentence or less and have people get it immediately, then you've set yourself up for failure. And that's what we did. I've explained the program to people and they'd be like, "Okay, wait. But if I buy this, what happens?" Stephanie: I need my Google spreadsheet out like which way will I save an extra dollar? Patrick: Yeah. So anyways, things that have worked. We actually launched international currency on our website because we do a pretty big chunk of business overseas and that actually increases conversion rates quite a bit for us. I'm blanking right now. We've had other wins, but I'm blanking on it right now. Stephanie: That's all right. If you think of any more, we can circle back because I actually think it's very interesting diving into some of these tests like this because I'm sure other founders are thinking about similar tests. Patrick: For sure. Stephanie: Very cool. So a couple general Ecommerce questions. Now, that you've been in the world for a while and kind of doing a bunch of tests and you launched your company, what kind of trends or patterns do you see coming down the pipe right now especially with everything with the pandemic. Are there any changes that you see coming in the future around Ecommerce? Patrick: I guess this is probably cliché, but the only thing I know is that I have no idea what's coming next. I think there's a ton of opportunity in the future and a ton of volatility in the future for Ecommerce. I'm very, very grateful, number one to be in the industry I'm in to continue to operate and be healthy and growing. I have friends in the restaurant business that cannot say that. Patrick: So I'm very bullish and grateful for the industry I'm in. I'm not planning on changing anytime soon, but at the same time, I think consumer behavior is going to continue to be like challenging to kind of forecast. People say this all the time on Twitter, but I just don't get the fact that our stock market is so high and our GDP is so low and so many people are out of business. Patrick: To me, it's like, okay, when is this... Part of me is waiting for the other shoe to drop and when is this all going to come crashing down and the other part of me is like eCommerce is 30% of retail now and like that's not showing any sign of stopping anytime soon. So I don't know if that's a direct answer, but in general what I'm doing is I'm doubling down. I'm building processes and teams for growth. Patrick: So we actually just left our long time marketing agency that I had a great relationship and love and really enjoyed working with and it was really difficult to leave them. But the main reason I left is like I'm convinced the brands that are super nimble and able to react and adapt really quickly are going to be the ones that survive and thrive in this environment, in this volatile environment. Patrick: So whether Facebook CPMs are up or down or what's going on, I think we're just going to be really flexible and part of what I'm doing to be flexible is building more internal teams to move quickly rather than just being a bit slower. Stephanie: Yeah. That's such a great point and I think a lot of other companies are probably starting to think about that too especially around like being able to move quickly and not having costs that are recurring for like the next three years that you can't get out of or long-term contracts and even around like not relying on just a single manufacturer and being able to kind of like move around if needed. So definitely being more nimble will probably be how a lot of companies are thinking about this going forward. Patrick: Yeah, and it's tough because at the same time you also, I think... We started the call off kind of like this, it's like you have to keep overhead low at the same time. So you've got these competing priorities to be able to move fast and have an internal team, but then also not have a bloated internal team that you just can't respond. Your overhead can't respond quick enough to any kind of unforeseen events. Stephanie: Yep. Completely agree. So is there anything that you wish I would have asked you that I did not bring up? Patrick: Let me see. I don't think so. No, nothing I can think of. Stephanie: Man, I'm just the best. All right. Cool. Then we can move on to a quick lightning round, if that sounds good. Patrick: That works for me. Stephanie: All right. So the lightning round brought to you by SalesForce Commerce Cloud. This is where I will ask you a question and you have a minute or less to answer. Are you ready, Patrick? Patrick: I am ready. Stephanie: Cool. So if you were to start a podcast, what would it be about and who would your first guest be? Patrick: Okay. I know the answer to this one. Stephanie: You're prepared. Patrick: This is no offense to you at all. Stephanie: All right. I'll try not to be offended. Patrick: I would start not like a one-on-one podcast, but like a round table debate style podcast with roughly three to five people. I want vigorous like vitriolic... I don't know if that's a word, but debate. I want people that are so ingrained in their opinion that they're willing to fight other people to the death about what they have to say. The topics would be all Ecommerce or retail related. Stephanie: Okay. Patrick: So anyways. Stephanie: I feel like I see that happening on Twitter right now though. Patrick: Yes, it's Twitter and podcast form. That's exactly what it is. Stephanie: Yeah. I see all these people getting very angry about stuff with certain Ecommerce or someone calls something like D2C and they're like, "That's not data saved." I'm like oh my gosh. Patrick: That's exactly what I'm talking about. Stephanie: That's funny. We at Mission have done roundtables before, but they're usually with like three CMOs and then one of us hosting it. So it does not get that heated. So I'd be very interested to see how your podcast goes. Patrick: Yeah, it would be a requirement for yelling to happen. Stephanie: That sounds great. What's up next on your reading list? Patrick: Let's see. I just downloaded been a book by Ben Horowitz. I don't remember the name of it but it's about building culture. Stephanie: Oh, yeah. What is that new one? Patrick: I don't remember. But it's all related to this kind of transition I'm going through right now is what I call a transition from founder to CEO and focusing less on doing things myself and focusing more about delegating and building a team that can accomplish things without me involved. So a huge, huge, huge part of that is culture and I have no clue how to build good culture. So I want to learn from the best. Stephanie: What You Do Is Who You Are? Patrick: Yes, that's it. Is that new or is that old? Stephanie: Yeah. That one is his newer book. I was listening to it on Audible and I like it because it ties in history along with building a culture, but it's like here's what happened a long time ago and why these themes are still relevant. So I'd recommend that one as well. Patrick: So you liked it? That's good. Stephanie: Yeah. I thought it was great. Patrick: Okay, good. Stephanie: What's up next on your Netflix queue? Patrick: I don't really watch a whole lot of Netflix. Stephanie: No? Nothing? Everyone always starts by saying that and they're like, "Oh, wait. I just did this. I just watched this whole series." Patrick: It's funny. Me and Jennifer will turn on Netflix to watch something new and we always default to just watching The Office. Stephanie: That's a good one. That's a good go to, to Keep you smiling. Patrick: I will say we did just start. We dug up an old DVD set of Seinfeld and now we're watching Seinfeld right now. Stephanie: Oh, nice. Pulling out the DVDs. That's awesome. Patrick: Yeah, the DVD. Blu-Ray though, yeah. Stephanie: Yeah, got to be. What app do you enjoy most on your phone? Patrick: What app? I use twitter probably too much. It's a good thing and a bad thing. A lot of the good things that have happened to me over the past year have been through connections on Twitter, but it can also be a time suck. Stephanie: Yes, I agree. All right. And then the last one, what is a favorite piece of tech that you use or a trying out that's making you or your team more efficient right now? Patrick: More efficient. Well, we're trying out a productivity app called ClickUp? Have you ever heard of it? Stephanie: I think I have. Tell me a little bit more about it. Patrick: It's kind of like a monday.com or an Asana. So like project management, task management. I've never found one I like or that works. We've tried doing it in Notion before, although I love Notion. So we're trying that in ClickUp. I don't know. We'll see. I like it so far. Stephanie: Cool. Yeah, we'll have to check that out. We use Basecamp for almost everything, but I'm open to other things. Patrick: Go ahead. Stephanie: Oh, go ahead. Patrick: I was just going to say, I don't know that I'm a huge fan of Basecamp. I could never get it to work for some reason. Stephanie: Yeah. It is a little high when it comes to like starting up and teaching the team and everyone learning from it, but it gets better. Patrick: Yeah. Stephanie: All right. Well, this has been such a fun interview, Patrick. Thank you for coming on the show. Where can people find out more about you and Supply? Patrick: You can find me on Twitter where I spend most of my time. My handle sounds like canoe. Because my last name sounds like canoe, it's Patrick Coddou. So you can find me there and that's really where I spend all my time. And then our website is supply.co. You can see our company and all of our products there. Stephanie: Awesome. Thanks so much and have a great day. Patrick: Thank you.  

Not many people trade in both a successful finance career and the chance to get a Harvard diploma for the opportunity to launch a business. But that’s what Sarah Paiji Yoo did. And when she found success and sold her first company, she knew that she could never satisfy that entrepreneurial itch by doing anything but building another company. Sarah went on to co-found a start-up studio and helped launch a number of other companies, including M.Gemi and Rockets of Awesome, but she craved more. Ultimately, she wanted to dig into something that served a deeper purpose.  Today, Sarah is a co-founder of Blueland, a consumer products company on a mission to eliminate single-use plastic packaging. The way Sarah and her team are accomplishing that mission has started with creating a new way to develop and use cleaning products and has included a stop along the way in the Shark Tank, where Mr. Wonderful himself, Kevin O’Leary, bought into the company.  On this episode of Up Next in Commerce, Sarah sheds light on common mistakes that young entrepreneurs make when they are starting out, as well as shares the secrets for avoiding those mistakes. Plus, she explains what the holy grail metric is for judging the health of your company.  3 Takeaways: In the early days when you only have one or two products that consumers buy, it’s easy to keep track of how people get funneled through. As you begin to expand your product offerings, measuring acquisition behavior and retention becomes more important in being able to judge the health of the company and the new products brought to market.  The importance of focusing on product-market fit can’t be overstated. Often, young companies and their founders get caught in the trap of trying to please investors or race to profitability through clever marketing or other shortcuts. The only way to achieve meaningful, sustained success is to know you have product-market fit from the get-go, and then optimizing your strategy from there.   You can still do something even if you don’t have all the pieces to the puzzle. Even though an idea seems simple, there are always going to be complications to work through. Being tenacious and having grit are the keys to being able to see you vision through to completion. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone. This is Stephanie Postles, your host of Up Next in Commerce. Today we have Sarah Paiji Yoo on the show, the co-founder and CEO at Blueland. Sarah, how are you? Sarah: I'm great, how are you, Stephanie? Stephanie: Doing well. And you're calling in from New York, right? Sarah: Yeah. Good, old New York City. Stephanie: Yeah, how's New York life right now? Sarah: New York life, it certainly feels ... It's funny, because I feel like in the beginning, we definitely were the hotspot of coronavirus. But now it feels like one of the safer places to be, given the high immunity. So, it's good. I think it's a little unfortunate that summer now, it's my favorite season in New York, so, it's unfortunate that we're still, for the most part, having to stay at home. But I think we got in our groove and it has definitely given at least my family the opportunity to force ourselves to find other ways to explore nature right outside New York City. Stephanie: So, I'd love to dive a bit into your background before we get into Blueland. Because I read some interesting things about you about having some Ecommerce companies in the past and dropping out of Harvard MBA program and I'd love to hear a bit about your journey of how you got to where you are today. Sarah: Yeah, absolutely. So, I guess if I were to start way back, I started my career actually pretty traditionally in finance and consulting. Certainly early in my career I actually had no aspirations to be an entrepreneur. I always consider myself relatively risk-averve so it is interesting to see how life unfolds. But yeah, I started my career very traditionally after those stints in consulting and finance, which I actually wouldn't trade for the world. I really appreciate the experiences and the skillsets that I picked up and the frameworks it gave me to really think about the world and business. Sarah: But after those stints I decided to go back to Harvard for business school, to really, most of all to be able to have the time to step back and reflect on what it was that I wanted to do next. Because I think my early experiences, if anything, taught me that I wasn't a lifer in terms of professional services, I really wanted to be more in the driver's seat and wanted to be at a company versus advising the company. And so, yeah, I made the decision to go to business school. And when I got to business school it was a really interesting time because there had been, right before I came, a series of female founders that had started very impressive companies, GuildCrew, Birchbox, Rent the Runway, LearnVest, Katrina who started Stitch Fix with just one year ahead of me in business school. Sarah: And that was extremely inspiring for me just to see a set of women who were young and had a very similar background or set of experience as myself and see them so quote, unquote, early in their career, setting out to build their own business. And I decided that given business school ... You can make what you want of business school but it doesn't have to be particularly rigorous. And so, I had more time on my hands than I did previously what I was working in, so I decided to really use that time and try to start a business while I was in business school. And a few months in I ended up starting work on my first startup, which was Snapette, which was a mobile shopping app that helps consumers find products and stores around them. Sarah: I was really excited about everything that I was seeing around smartphones and the mobile space. And this was still pretty early on. So, this was almost 10 years ago, pre Instagram days, if you can imagine a world before Instagram. Stephanie: Tough world to start in. Sarah: Yeah. Yeah, exactly. But yeah, that's the first business I decided to start while in school. I ended up raising a round of venture capital that summer between my first and what was supposed to be my second year of business school. And so made ... it was actually a very easy decision, to drop out of Harvard and continue to just work on Snapette. And I ended up scaling that business for the next about three and a half years to a small team, about 20 people. And then we ended up selling that business to one of the world's largest stock search engines at the time, called PriceGrabber. Again, almost four years in. And- Stephanie: That's amazing. What was the process like, selling the company? Did you actively go about selling your company or were you approached? Or how did that look? I heard a good quote the other day that companies don't just get acquired, you actually need to actively go and sell your company if you want it to be sold sometimes. Sarah: It's interesting because I've also heard the opposite. Stephanie: Oh, interesting. Sarah: Which I can related to both [inaudible 00:05:48]. I was actually worried with the phrase, but we were lucky in terms of we received an inbound. Stephanie: Oh, nice. Sarah: That tipped us off to, "Oh, this might actually be a good time to sell. And the context of that period was, I started Snapette at a time when Mary Meeker and a lot of these industry experts were saying, "Oh, mobile's going to be the future. People are going to spend more time on their phones than on their desktop," and that seemed inconceivable, the early days as she was saying that. And when we sold, that's when we were seeing about 30% of site traffic, to many of the major sites coming from mobile instead of desktop. So, it still hadn't flipped yet. Sarah: But it definitely felt like it was coming. And so, yeah, we had an inbound from a traditional, online, non-mobile player. And that kick started me to reach out to a few more folks in the space that had a similar profile, because if we were going to engage in these conversations I thought, "Let's run a robust process," because obviously competition can always help drive a better outcome. And so that's what I did. And ended up not really engaging a bank or anything. That's where my former finance experience definitely did come in handy because I did have experience buying and selling companies and so I understood ad a high level what that process looked like. And so, yeah, we were able to quarter back that process in-house and get a few offers and ultimately find an acquirer for our business. Stephanie: That's amazing. So, at that point you got the itch to start another company? You're like, "This is great. I'm going for round two." Sarah: Yeah. Yeah, yeah. Exactly, exactly. So, initially we had ... Not initially. We had a one year lockup with the parent company. And so our whole team moved over. And it was interesting, I think initially I was extremely excited about the prospect of being part of a much larger organization, that had much higher revenues and much larger budget. And I didn't expect how quickly ... I feel like day one, post-acquisition all of a sudden, the speed at which we were running, everything came to a halt. And all of a sudden my calendar was full of just meetings with lots of people back to back. Sarah: And I think it was hard. I think it was hard going from also this small, mobile startup where Apple would make an announcement about the newest feature and then I would get together with my team and our engineers and really think about like, "Oh, how can we integrate this? How can really use this to push our product forward?" And in a larger organization, completely understandably you have much longer product roadmaps, you need to justify why a change that you want to make is going to add more value to the company than some much larger initiatives that maybe underway. Sarah: And we were dealing with 18 month, plus product roadmaps, which to me at the time felt like, "Oh my god, if I have to wait 18 months to start working on some of these things, I'm going to be dead." So, it was an interesting contrast for me. And so, I certainly, definitely developed that itch to go back out and start something again. And I think also as a first time founder with Snapette, I had made so many mistakes along the way. And I was just dying to do it again but be better the next time around. Stephanie: So, then where did you go after that [crosstalk 00:09:35]? Sarah: Yeah, so after that, it's interesting, because I think ... my career, my life had been so linear til pre Snapette. But I think that startup journey really showed me both the joys and the benefits of just being being open to what life may bring and that really just reaffirming the Steve Jobs quote, "If you can't connect the dots forward, only looking back." And so, at that point I knew I wanted to get back into early stage company building. I wasn't proactively looking for my next business or the next idea, but I ended up reconnecting with a former acquaintance in the Ecomm space, Ben Fischman, who had also sold his startup, Rue La La, which was one of the first flash sale sites here in the U.S. Sarah: And he had sold his company right around the same time I sold Snapette. And he was exploring the idea of raising a fund and to start a series of new businesses. So, it wouldn't be a venture capital fund, but it would be more like a startup studio. And the thesis that we both share was that, at this point it was 2013, we believed that it was still very early innings in terms of direct-to-consumer. So, at that point Warby Parker was our, in way, that preeminent example of direct-to-consumer. But it was our belief that we would continue to see whole categories move direct-to-consumer, and many of which we've seen now come into fruition. I remember at that point thinking about, "Oh, we're going to see everything from shoes to socks to tampons to vitamins, etc. Everything is going to develop a new brand and find more efficient ways to directly reach and communicate with consumers." Sarah: And so, yeah, he was like, "You should come do this with me." And at that point, again, I didn't have a specific idea in mind. I knew that I wanted to be back in the company building stage. I loved the tech and direct-to-consumer space. And so, yeah, I jumped onboard with him and was a founding member and partner of that team. And so, that startup studio was called LAUNCH, or is called LAUNCH, it's still around today. And the goal was to then launch one new business per year, which is what we ended up doing. So, over the next four years we launched M.Gemi in our first year, Rockets of Awesome. M.Gemi is a direct-to-consumer footwear business. And then we launches Rockets of Awesome the second year, which is a direct-to-consumer subscription kids apparel business. And then we launched Follain, which is a clean beauty retailer. And in the last year that I was with LAUNCH, LAUNCH Trade, which is a direct-to-consumer coffee marketplace. Stephanie: Very cool. How did those individual companies do? Sarah: The individual companies have all been doing great. They're still around today, very proud of how far they've come. But it was definitely a crazy time. Certainly in a period where we've seen over funding and collapses, you know many important DTC businesses I think very proud to say that all those businesses are in great shape and still around today. Stephanie: Yeah, that sounds really fun. Chaotic and crazy but fun. Were there any universal truths that you learned? Even though the companies sound very different that you were launching there, was there anything that you found a best practice and then you could apply it to future businesses? Sarah: Yeah, I think the biggest takeaway, probably from launching multiple businesses is just the importance of focus and the importance especially of focus on product market that in early days I think it's very easy, especially when you are venture backed, either with access to capital or with this immense pressure to grow quickly, to grow into the valuations that you may have raised that it can be easy to fall into the trap to shift a lot of your focus to marketing and growing. But ultimately the best marketing is an amazing product or service that drives strong retention, strong word of mouth. Sarah: And any marketing spend that you deploy is going to be so much more efficient and effective if you don't have a leaky bucket. And I think that's one that is certainly harder, especially in this world where we celebrate large fundings and also companies growing very quickly. And I just think there's so much value, especially early days of almost staying smaller so that especially the founders can really focus entirely on product-market fit and making all the tweaks necessary to really optimize the product, service or offering. Stephanie: Yeah, I completely agree about that. How did you all go about finding or knowing when you had product-market fit? Were you like, "This is the one, let's move forward."? Sarah: Yeah, yeah, yeah. I think it's hard to draw that line in the sand, for sure. I think an important metric or area of metrics to look at certainly are around retention and repeat. Because ultimately there is a lot of focus, especially in D2C, on acquisition. And whether it's customer acquisition cost or cost per acquired customer, ultimately, that doesn't give you the full picture. That just tells you that you were able to have a clever ad and maybe you have attracted someone to make that first purchase. But it's certainly a lot cheaper to have your customer purchase again and repeat with you than having to go out into the market and pay for a brand new customer. And so, we've always been extremely focused on the retention metrics as a leading indicator to help the business. Stephanie: Yeah. yeah, that's great. So, then, at what point were you at LAUNCH where you were, once again, "It's time for me to move on, do my own thing again."? Sarah: Yeah. Yeah. So, I had a crazy journey and it was an amazing ride. I learned a ton about launching new business, having to do that back to back. But I think after my fourth year, after the fourth business, I developed a deep seated desire to do something that was a little more personally meaningful. I think for so many years simply the challenge and excitement of bringing a new brand or product to market that had never existed before was enough for me and it was incredibly energizing. And I still love that aspect of it. But at that point I was looking to build something beyond selling more shoes or beauty products. Sarah: And I think that also was heavily influenced by my becoming a new mom around that time. So, it's not coincidence that the number of years I've been working on Blueland is about the same number of years as my son's age. Stephanie: Yeah, it's funny how all of a sudden, same with me, you get interested in what's organic and what's actually natural and- Sarah: Hard to miss it. Stephanie: Yeah, it's something I never paid attention to that much until having kids. Sarah: Yeah, no, exactly, exactly, exactly. And I think you also start questioning how you're spending your time. You have very limited time, and thinking once you have children and a family it highlights more clearly for you the trade offs between work and rest of life. And I think, I was very open to how I would feel on the other side of motherhood. I was very open to maybe I wasn't going to want to work at all. Maybe I was going to be so obsessed with my child that I was going to want to spend every waking moment with him, which would also have been a fine outcome. But interestingly, after having my son, for me, I realized that I still really did love working. I loved my work a lot but I think I just needed to find more meaning in it if it was going to take up so many hours of my day and taking away from my child. Stephanie: Cool. So, then, what was the first step when it came to ... what really led you to creating Blueland? Was there an aha moment, was there something ... Tell me a little bit about what Blueland is maybe first and then how you came up with the idea. Sarah: Yeah. So, Blueland is a consumer products company, we are on a mission to eliminate single use plastic packaging. And we are starting with cleaning products. And so, the first set of products that we launched, when we launched about a year ago were a set of cleaning sprays and hand soap. And what was really unique about our products was that instead of selling you a bottle of liquid, these products are traditionally about 90% water, we've shrunk these products down to these tablets that are about the size of a quarter so that instead of buying a new plastic bottle every time, instead of paying for all this water which you already have at home, you can use one of our beautiful, reusable bottles and simply fill them up with warm water, drop in one of our tablets and it starts to bubble on its own, there's no shaking or stirring or weird chemistry required. And at the end of a few minutes, you have a full bottle of hand soap or cleaning spray. Stephanie: Yeah, that's cool. Sarah: And our cleaning sprays include a multi-surface cleaner, glass and mirror and a bathroom cleaner. Stephanie: Yeah, it remind me of a Alka-Seltzer, where you drop it in and then all of a sudden you have this big big bottle of cleaning solution. Sarah: Exactly, exactly, exactly. And we stared there because we found that it was very intuitive for people even though it was something that had never been done before, it was brand new to market, it was something that people could see and quickly understand like, "Oh, that makes sense. That water and the tablet can make a bottle cleaner." And so, yeah, those are the products we started with. Happy to say last month we released our newest category which is the dish category. So, we launched a dish soap and dishwasher tablets. And in a similar vein, these products were created as part of a reusable, refillable system. So, upfront we sell you a permanent, forever container that you can refill with our refills that come packaged in paper based compostable packaging instead of plastic. Sarah: And so, our dish soap is actually a powder. But it's used very similarly to liquid, to the extent that you just sprinkle it directly onto your sponge, you add water and then you get a nice, rich foam. And yeah, our dishwasher tablets are naked, to the extent that they don't come individually wrapped in that plastic film that you'll find, with most all dishwasher packs. Stephanie: I've never really thought about, "Where does that film go? Does it just go down the drain? Sarah: Yeah. So, it's unfortunate because it- Stephanie: That's sad. Sarah: Yeah, it is sad. It is sad. Because I think the assumption for a lot of people, understandably, is that because it dissolves, that it just goes away. But unfortunately, because it is a synthetic petroleum based plastic film, the plastic molecules do still remain and enter our water systems and majority of it is then ultimately released into the oceans, rivers and anything else. Stephanie: So, when building this company, I read that you had reached out to over 50 manufacturers who all turned you down. And I wanted to hear- Sarah: Oh my goodness. Stephanie: I wanted to hear that story a bit, because I think most people maybe after 10 woudlve been like, "Well, it's not possible." Or, "We can't find how to contain these tablets." Or, "No one knows how to do it." Tell me a bit about what was that process like when starting to build the products out and trying to find people to partner with to make them? Sarah: Yeah, yeah, yeah. So, I think a big piece of being a entrepreneur, it's not rocket science, it's just being tenacious and having grit and not taking no for an answer and not assuming that because it's never been done, that means that it can't be done. And so, yeah, I think when we initially came up with this idea for Blueland, it was a crazy idea. And we had a lot of questions from people like, "Well, if it's so easy, why hasn't it been done?" And we're like, "Well, somebody has to be the first." Sarah: And so, yeah, initially, the natural place to start was to reach out to manufacturers, because typically, whether it's in the food space or the cleaning space or in the beauty space, a lot of these spaces are fashion. A company usually works with a contract manufacturer to actually make their products. And so, first choice was finding someone with the existing infrastructure that could just make this for us. Not surprising, in retrospect, hindsight's always 20/20, that no one could do this for us. We were reaching out to cleaning products manufacturers who were creating these products as liquids, and they were pretty much telling us how, "We don't know how to deal with solids, like we don't even have tableting machinery. And in fact, many of the ingredients that we buy for our liquid products actually come in liquid form. And so not even sure how we would then transform that into a dry product." Stephanie: But did you have an ingredient list? Were you like, "This is what I want in it?" Because that [crosstalk] seems hard to me of like, how would I make a multi-surface cleaner? Sarah: Exactly, exactly. So, in the beginning it's just this huge chicken or egg problem. So, we reached out to many manufacturers. And at that point it became also just less so in terms of ... we didn't necessarily think we were going to find an end-all, be-all solution with one of these calls but our hope was that we were going to get enough smart people in the space, who had been in the space for decades to talk to us in each of these conversations, we were going to glean a little bit more information. And if they couldn't do it, they would potentially know someone else who could. Whether it was a scientist ... because a lot of these contract manufacturers also work with contractor chemists, et cetera, they might know of an ingredient that they heard of that would be able to help us do this and so it really was just our form of Googling around, when Google could only get us so far on these niche topics that no one had a reason to read up about online. Sarah: But yeah, I think it became apparent through these conversations that someone was going to be able do just do this for us and everyone was recommending that we would need to come to them with a formula. And at that point felt like we hit another wall because my co-founder and I, we didn't have any chemists in our direct network. We had no idea where to even begin. We were both business people. And so, we, after asking our network, not really finding any leads to any reputable chemists, certainly no chemists with a cleaning products background, we just turned to LinkedIn. Stephanie: Ooh. Sarah: That was just a natural place to turn to, to be able to search for experts based on their experiences and at that point ended up going down another, very long rabbit hole of collecting ... We still have that spreadsheet today of hundreds of names of chemists that we found on LinkedIn and wrote up what their background was and ranked them and then just started reaching out to them, just [inaudible] reaching out to them on LinkedIn and just trying to get as many people as we could on the phone with us, like we were doing with the manufacturers. Stephanie: Did you get a good response rate from people or was it slow? Sarah: It was definitely slow. In LinkedIn there's all these limitations of if you're not connected, they may not readily see your message, also turns out a lot of chemists aren't actively checking their LinkedIn or messages. We also were just two random people that were messaging about this crazy idea that most recipients on the other side probably had like, "I don't know how to do what they want to do," or, "This idea seems crazy," or, "Why are they soliciting me for a job? Why would I leave my big company, well paid job to go do this?" Sarah: So yeah, I think suffice to say response rate wasn't great. But to some extent, it also was a numbers game, which is why we did reach out to so many people. And we were able to get a good number of people also just to get on the phone with us. And there definitely were a set of folks that we're so thankful to that were inspired by our mission and the audacity of at least the vision, and were willing to chat to see if they could be helpful. And that is ultimately also how we found our incredible head of R&D, Syed, it was through LinkedIn. Sarah: He was formerly at method, which is one of the world's largest non-toxic cleaning products companies. And prior to that, he had the perfect background because prior to cleaning products he was actually working in nutritional supplements. So, vitamins. So, he also had that hard, tabled-like form factor experience. Stephanie: That's amazing. So, how many tablets are you selling today? And how much plastic is it removing from the environment if someone chooses that versus a normal alternative? Sarah: Yeah, yeah, absolutely. For us today, I forget the latest numbers. But we've sold tablets in the millions- Stephanie: Wow. Sarah: ... at this point, which is exciting because that means that our impact has also certainly been in the millions of plastic bottles eliminated. I think people are always surprised to hear that five billion plastic cleaning bottles are discarded each year, because there is so much focus on the water bottles and the coffee cups and the straws. Rightly so, because those numbers are even larger. But people are always surprised to hear how much of ian impact you can do by also just swapping out your cleaning products to a reusable solution. Stephanie: Yeah, yeah. That's amazing. Nice work. So, I'm guessing there has to be some kind of convincing and education factor that had to go on because a lot of customers at first, they all worry about maybe the anti-microbial factor and everyone's probably ... at least when I think about it I'm like, "Just throw some Lysol on it or bleach or something, that'll clean up anything." How do you go about convincing people that your product has the same benefits and even though it's natural, it'll still work? What does that education piece look like? Sarah: Yeah. So, that education piece is obviously so important and has become even more important during this period of time and COVID where people are very focused at keeping germs, bacterias and viruses at bay. We received, especially in March and April, that was the number one question that we were getting, especially around hand soap, actually. Where people were asking if our hand soap was antibacterial, whether our hand soap would kill COVID. And there we were very direct with the answer that ultimately, no, our hand soap is not antibacterial, it's not disinfecting, we cannot make the claim that it kills COVID. But it was an educational moment for us because at that point we could start the conversation with consumers that also are rooted in many studies that suggest that antibacterial soaps might actually be doing more harm than good, as well as if you look at the FDA, they've made official statements that say, "Regular, non-antibacterial soap is effective for the removal of bacteria and viruses," and that hand washing with plain, non-antibacterial soap is a great way to prevent the contraction and spread of illnesses. Sarah: And so, I think most people that hear that get it, and it will even link them to the FDA site on proper hand washing techniques and just to just reassure people this, "By no means are we looking to mislead or brainwash," but that it's just more the education of, you know, many times I think there's this perception you need a certain set of ingredients to get a certain job done. But- Stephanie: It's part of the marketing behind that too, for people who do have the antimicrobial stuff in it, they're pushing it so hard, "You need this," when I've read the same research about you actually don't really need that and you can still have very clean hands afterwards. Sarah: Yeah, yeah. Exactly, exactly, exactly. And so, it's been nice. It's been a nice period where we can also provide that education, because we are staunch supporters of non-toxic formulations. And so, any opportunity that we have to speak more to the efficacy of non-toxic products as well is always, we think, a good thing, not just for us but for the broader industry and for people on the planet. Stephanie: Yeah. So, how do you get people to find you? I'm thinking, if I'm going to the grocery store, that's maybe where I'll pick up a cleaning product when I run out or something. Are you in retail or were you planning on going into retail before COVID or are you staying strictly B to C? Or how are you thinking about that? Because it seems like it'd be hard to bring people over to buying online when maybe they've never thought to do that unless it's through maybe Amazon Prime or something, I don't know. Sarah: Yeah, yeah. No, it's definitely one of the larger areas of friction that we recognize. To the extent that it's interesting when you think about it from a direct-to-consumer perspective or context because I definitely went into this eyes wide open, as to this is a category that's going to be harder to convince people to go to a separate, online destination to buy the products. Because in my past, I've been in shoes, I've been in apparel, I've been in beauty, and for all of those, especially something like shoes or swimwear, I would argue it's easier to convince someone for a one-off special purchase, like glasses, to go to a separate destination. Sarah: But to your point, with the cleaning products, this is a product that even early surveys have found that over 80% of people would prefer to just purchase these either in brick and mortar stores or just as part of the shopping that they're doing regularly anyways, whether it's weekly or biweekly grocery shopping, whether it's all on Amazon or at their local Target or Walmart. And I think that because of that, retail will definitely have to be an important part of our future. At the moment we are still a most all direct-to-consumer business. We have a handful of retailers that we sell through but still pretty minimal like we're with Goop or with West Elm, we're with Nordstrom. But I think- Stephanie: Those are some pretty good names. Sarah: Yeah. Those are definitely great names, but those are more I think we still view brand enhancing names and not necessarily the place where people are going to every week to traditionally buy these products. But I think it all comes back to focus and we also always knew that direct-to-consumer was going to be an important component of launching the brand. I think there's so many benefits, especially from a brand building and story telling perspective and explaining the mission and as a new brand to market just explaining who we are. And it's certainly an efficient enough channel to be able to get to early adopters and a set of consumers. But we do believe that if we are going to truly maximize our environmental impact and reach as many households as we can, then absolutely, we do need to, at one point, go into retail, physical retail and traditional retail. Stephanie: Cool, so, how do you get in front of the early adopters that you just mentioned? What kind of digital channels are you exploring? How are you doing your marketing? How are you finding customers and bringing them back? Sarah: Yeah, yeah, definitely. Instagram has been an invaluable channel for us, especially on the organic side. I think we've had great success there. So, we've been live for probably just about a year now, we have over 170,000 followers on Instagram, all of it organic. We haven't really done any paid influence or promotion or anything. And I think it's really helped that because our mission is so integrated into our product offering, we are a mission driven company but that could mean different things for different companies. And for some companies that means it's a donation that they're making or a philanthropy in addition to whatever their core product or service is. And for us, our mission is just 100% integrated into the products that we sell. And that's given us the ability to, on social speak across a range of topics and speak more broadly about climate change and plastic pollution and tips on how we can each do our part. Sarah: And it's been so exciting to see how much that's resonated with the community on instagram and how quickly we've grown and it certainly is one of our largest channels. So, it's exciting to see that organic is something that that can work for a direct-to-consumer brand. Stephanie: Yeah, especially if you have that. Sustainability is a hot topic right now and like you said, if you're able to lean into those groups and people and tags and stuff, that opens up a whole new market where maybe other DTC companies who are just trying to sell their product and create brand new content, very different. So, it seems like that'd be a very helpful way to get new customers and access to an audience that maybe you wouldn't get access to otherwise if you weren't building a sustainable product. Sarah: Definitely, definitely, definitely. And it's also been a really great amplifier for word of mouth. I think we're fortunate that we have a product that people feel more inclined to share. So, everyday we get hundreds of people story-ing our products and their unboxings. And I think that's being driven by two things. One is just the mission I think that gives people a real reason or additional reason to want to share our product with their friends, because also saving the planet is something that we have to do together and they understand that the more they can raise awareness for things that help this planet, to their friends and community, the better place we'll all be in. But also, our products are very visual and experiential. The process of making the solutions, dropping the tablet, showing the tablets dissolved. Sarah: I was very worried, before we launched Blueland that that would be one of the largest hurdles to our success because undoubtedly it is more work for a consumer than just going out and picking up a bottle of solution. But I think it's hugely benefited us, especially in a world with video, Instagram stories, et cetera. Stephanie: So, when you're thinking of the health of Blueland, as you're building it, what kind of metrics are you looking at? Specifically maybe around your website and how to know if you're really doing well? Sarah: Yeah, it's definitely starting to get a lot more complicated now that we have so many more products. I think early days it was a lot simpler ... I would say early days it was a lot more straightforward given ... I think over 90% of our new customers were coming in through the same kit. They were all purchasing our four piece kit. And because it that initial basket was pretty uniform, it was much easier to track those cohorts over time and understand both acquisition behavior and success as well as retention behavior and success. I think now, as we look at our business, there's a lot more granularity. We've layered in more fragrances, we have at this point I think six different kit permutations that you could opt into. Sarah: There isn't a clear kit that all new customers opt into. We also have many people that are adding refill packs now to their kits and their first purchase, which changes the way we have to think about repeat curves and retention because a customer, if they're loading up a dozen multi-surface cleaning tablets in their first purchase, that's actually a great thing for business. It drives higher AOP, it's certainly also better for the environment because we're only shipping that package to them once and they may not need another package from us for a year, at least on the multi-surface cleaner side. But as you can imagine, we then need to look at our data in a much more nuanced way and cut in so many more different ways to really understand what is happening. But yeah, largely we are very focused on customer acquisition cost, the conversion on our site at every part of the funnel and then repeat basket size based on original basket size and channel. Stephanie: Yeah, that makes sense. So, is there any best practices when all of a sudden you have a lot more data to work with and you're trying to actually see trends and parse out the noise. Is there anything that ... I'm assuming with your finance background, you're probably already very good at data. I also have a finance background and how long I had to be in sheets and looking at numbers all day was crazy. But, you do learn how to actually parse through large data sets. Like, what are some best practices that you say worked when it came to expanding your product catalog and actually trying to find trends and things to pay attention to? Sarah: Yeah, absolutely. I think the main thing is making sure that you're being thoughtful about the tests that you set up and setting them up in a way where the data will be valuable and also just taking into account what you're in or how much volume you're getting and so not trying to test too much all at one time. Because I think, and I bring up testing because sometimes it's hard to look at just the organic data that you're getting and make a determination as to what the value drivers are. So, for example, a question that we're trying to solve at the moment is that, are there better kits for people to start on? Do we have a preference as to, is the customer going to be more likely to stay with this? Is the customer more valuable if they buy into kit one very kit four? Sarah: And it's hard to look at the data that you have without setting up a clean test because there maybe other factors that have driven certain consumers to a kit one versus a kit four, that would then make their retention characteristics different. So, to do a very clean test, you would want ideally place randomize and drop off a set of consumers to either kit one or kit four and then see if those two cohorts perform differently over time. Sarah: But it's just making sure that we're being really thoughtful with the test, making sure that there's not other confounding variables that we're introducing, like for example making sure we're using the same ad creative to drop people off on kit one versus kit four, taking into account, again, how much traffic we expect to drive, how quickly that test will wrap up. Because certainly you could think, "Well, we're going to do this test for kit one through seven and do seven kits that we're landing on." But it may also just take forever to get any type of answer of statistical significance if we're dividing up our volume in that way. Sarah: Yeah, so things like that. But certainly something that we're thinking a lot about and is certainly far from straightforward. Stephanie: Yeah, tough problems to solve but I'm sure very informative and helpful for the future. So, I know we don't have too much longer but I did want to ask, we've been on a Shark Tank kick lately, we've been a couple of companies who've been on Shark Tank before you as well, and I wanted to hear- Sarah: Awesome. Stephanie: ... very high level, doesn't have to be a really long story, but how the experience was for you and how you dealt with the increase demand and your inventory and everything that came after being on the show? Sarah: Yeah, yeah, yeah. What a wild experience. It's always actually been facetious, half serious dream of mine to go on shark tank. So, it was really exciting. I think we over prepared every step of the way, which was right in terms of I don't say that negatively. But everything from leading up into the pitch, to making sure that we were ready from a site perspective. Our team still says today that we've never been so prepared for anything outside of Shark Tank. Stephanie: That's amazing. Sarah: So, it's something that we always point to, even with our new product launches or other things that we're trying to do. Because especially in startup world, you're rushing, it's never ... And we always point to, "Look how well Shark Tank went, because we spent the time, we were organized, we put the time in and it definitely pays off." Stephanie: What kind of things did you prepare? If you were to look back and say, "These two things were the best things that we did to prepare? Or what were some of the levers there that you were working on? Sarah: Yeah, yeah, definitely. So, I think before filming on that side, it really was all hands on deck, full team for that week leading up to our Shark Tank filming we pretty much focused on Shark Tank. Especially Syed, our head of R&D and myself were going to go into the tank. But even the rest of the team, we were required probably at least twice a day, for about an hour and a half each, so about three hours a day, whole team would be on just grilling us every which way, with the hardest questions they could throw, with the most inappropriate questions they could throw at us. Stephanie: That's fun. Sarah: It's fun. And it was, in the beginning it definitely was incredibly embarrassing because it was so hard. You're just like ... But after that, it really did prepare us for anything that could come our way in the tank. So, that was great. Including lots of, they just threw lots of mental math at us, which if anything, I don't know if they got us better at mental math that it got me better controlling my facial expression when I didn't know something. Stephanie: Yeah, or just delaying the response so long they forget what they asked, maybe? Sarah: Exactly, exactly, exactly. So, that was very valuable. And then from a site perspective, we really did everything we could possibly do to make sure that the site didn't come down. We spoke with a lot of other companies who had aired on Shark Tank to get their tips for what to do, and that was really helpful. Like the guys at Plated had a landing page ready. Because their site did go down. And so, they were very thankful that they did have a landing page ready to capture email addresses. And they were able to capture a ton of email addresses that way and then email the people when they were back up and running. So, we did that. Someone, another company had a really great idea to swap out all the videos or gifs we had running through the site. So, anything that was heavy that takes up a lot of speed or memory and just pairing back to replace all the videos on our site with images. Again, just to lighten up the site as much as we can. Stephanie: Cool. Yeah, that definitely seems like some good due diligence. And you guys ended up getting a deal, right? Sarah: Yeah. We ended up getting a deal with Kevin O'Leary, who has been fantastic and really supportive and shockingly accessible. Stephanie: I was going to ask that, do you actually get time with him and is he actually helpful? Sarah: Yeah, yeah. We get a lot of- Stephanie: Give me all the gossip. Sarah: Yeah. We get a lot. Early days, I was like, "Is this too much time? I have other things to do." But we probably speak by phone or text once every two weeks or so. And definitely- Stephanie: Wow. Sarah: Yeah, yeah, and [crosstalk 00:52:50]- Stephanie: That's way more than I actually thought. Sarah: Yeah. Yeah, in early stage I feel like I was talking to him multiple times a week, especially right coming off of Shark Tank when we had a lot of opportunities and he brought us onto QVC the week after Shark Tank aired. Stephanie: Oh, nice. Sarah: We've done multiple press interviews on TV together. It's been great. It's been really great. Stephanie: That's really cool. Yeah, thanks for sharing that story. So, now we're running out of time. Is there anything you wanted to cover before we jump into a quick lightning round? Sarah: No. I think we covered a lot of ground. Stephanie: All right. Cool, well, let's jump into the lightning round brought to you by Salesforce Commerce Cloud, this is where I will ask you a question and you have a minute or less to answer with whatever comes to mind. Sarah: Okay, great. Stephanie: Are you ready, Sarah? Sarah: Yes, let's do it. Stephanie: All right. I'm going to start with the hardest question first because you've been in the industry for a while and I feel like you'll have a good answer to this, what one thing will the ... Oh, let me rephrase that. What one thing will have the biggest impact on Ecommerce in the next year? Sarah: Ooh, in the next year. Oh, that one's harder. In the next year ... I would say packaging. It's a non-traditional answer. But I do feel like we're seeing the tides are shifting. I've just started to receive my first set of Amazon packages that for once are coming in paper based envelopes instead of plastic based envelopes. And I think that's going to send a great signal to the industry of, "We need to be a lot more thoughtful about with all this Ecommerce comes an incredible amount of packaging waste and consumers are becoming so much more knowledgeable and mindful about the waste that they're creating." And I think we'll start demanding this stuff of companies. Stephanie: Love that answer. What's up next on your reading list? Sarah: What's up next on my reading list? So, I've been incredibly inspired by the Black Lives movement, Black Lives Matter movement. And so, I have picked up a ton of books in that process. And my next one actually, by my bed right now is White Rage. Stephanie: Nice. And have you started it yet? Sarah: I have not started it yet. Stephanie: Cool, we'll have to circle back and let me know what you think of it. Sarah: Yes. Stephanie: If you were to build another company, which I feel like you will probably be doing in your lifetime, what would that next company be? Sarah: Oh, geez. That's so hard, that's so hard. that's so hard because I love the company I'm building at the moment. I always tell my co-founder that I don't think I'd want to sell this business because I don't know what I would work on next. It's just an incredible mix of product development, science and really doing things that I believe will make a huge difference in the world, as well as just educating people in areas outside of our products, which has been incredibly gratifying, just being able to talk about ... Email's probably a couple times a month and certainly social posts multiple times a week where we're just talking about things that have nothing to do with our products but just ways that you could cut out single use plastic from your day to day life. I do think that if I do move on past Blueland, it certainly is going to be something around the space as well in terms of where- Stephanie: Sustainability. Sarah: Sustainability, exactly, sustainability and climate change. Stephanie: Cool. It would seem sad to throw away all the knowledge. I've heard that quite often where a lot of times founders will just get eager to move onto the next thing and they don't always properly value all the knowledge they built up either from their current company they're at or what industry they're in. And so, yeah, that seems great. Sarah: Totally. Stephanie: What's up next on your Netflix queue? Sarah: So, next up on our Netflix queue is season two of The Politician. I know I'm a few weeks late, but I've actually heard that ... my husband and I loved season one and we heard season two there's actually a lot of focus on plastic pollution and there's actually a character who's really leading the charge on eliminating plastic from her and other day to day lifestyles, so, it'll be interesting to see their spin on that. Stephanie: Yeah. No, that sounds cool. Yeah, there's also a series, I don't know if you've heard of it, it's with Zac Efron, which at first I was like, "No, how is he going to do a series on big problems and sustainability and things like that?" It's actually quite interesting. They ... Sarah: Oh. Stephanie: I'm trying to think what it's called. Maybe producer, Hilary can look that up for me and put it in our notes here. But yeah, he went through, first he visited Iceland and was showing there all of the renewable energy that they generate for Iceland. And then episode two was talking about water and it went into France's water system and how they purify it in a much better way than a lot of places in the U.S. do it, so, another one to just put on your radar. But I don't know the name of it, I just know Zac Efron's hosting it. Sarah: No, that's great. I haven't seen him in anything since High School Musical so I'm actually- Stephanie: I know. Sarah: ... excited to see him all grown up. Stephanie: I know, when I saw him on there I was a little bit confused. I was like, "Wait, what?" And then I was like, "Okay, yeah. You're doing a good job. This is cool." Oh, let's see, Hillary put it in there. Down to Earth with Zac Efron. Pretty good one, very interesting. Sarah: Great. Great, great, great. I'm going to add that to my queue. Stephanie: All right. And then the last one that I've recently started asking, what is the number one tool or app or technology that you use day to day that's most helpful to you or that you either learn the most from or that you loved the most? Sarah: Yeah. It's got to be Instagram. I wish I had a more creative answer but ... Stephanie: No, I love Instagram. Sarah: ... I learn so much from others and from incredible resources and I think most recently I think the Black Lives Matter movement has been an eyeopening one for me in so many ways and I think in so many ways that we're trying to even as a company make sure that we are sustaining that moment, but really have been grateful for that platform as a source of education. Stephanie: Yeah, yeah, completely agree. All right, Sarah, well, it's been so much fun talking to you about this. Where can people find out more about you and Blueland? Sarah: Yeah, so, people can check out our products and learn more about our products at blueland.com. You can also follow us along @blueland. And I also post lifestyle tips frequently to my personal account, @spaiji. That's S-P-A-I-J-I. Stephanie: Awesome. Well, thanks so much for coming on the show and we will definitely be following along in your journey. Sarah: Amazing. Thank you so much for having me.  

In this digitally-native world, it might be surprising to learn that an old-school marketing tool is actually one of the most effective customer acquisition and retention tools.  On this episode of Up Next in Commerce, Renee Lopes Halvorsen, the VP of Marketing & Ecommerce at Marine Layer, joined us to dive deep into the merits of catalog marketing. Renee cut her teeth in the marketing, eCommerce and omnichannel world at the Gap and Athleta. Now she is guiding the team at Marine Layer using a data-driven and blended approach to marketing that has led to profitable customer acquisition, high lifetime customer value and retention, and a fully engaged customer base that is coming to stores with more buying intent than ever. How is she doing it? Find out on this episode. 3 Takeaways: Long-term vision is key: You can spend a lot of time and money on the “cheap thrills” of marketing promotions, but those customers will never repeat buy. Instead, focus on retention and getting those high-value customers.  Catalog Crazy: There are certain page and product count requirements that will determine whether or not a catalog is the right tool for a company. When those numbers are met, though, there are few better avenues to tell your brand story and drive conversions… and it may even perform in ways that an Instagram ad never could The cost to acquire customers: There is a high amount of risk involved when you acquire customers at a loss. You can predict customer behavior pretty accurately in the short term, but predicting long-term trends and purchasing is much more difficult. Therefore, it may not benefit you to model out a one-or two-year strategy toward profitability when it comes to customer acquisition.   For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome everybody to Up Next in Commerce, the number one show for all things eCommerce. This is your host, Stephanie Postles. And today, we're chatting with Renee Lopes Halvorsen, the VP of Marketing and Ecommerce at Marine Layer. Renee, welcome to the show. Renee: Hey, Stephanie, how's it going? Stephanie: It's going well. Yeah, excited to have you on. Renee: Yeah. I'm excited to be here too. This is my first podcast, but I'm an avid podcast consumer. So, I'm excited about this. Stephanie: Oh, we are very eager to have your first. So, I saw that you have a very interesting background of working at some good name brands, and I was hoping we could start there where you tell me a little bit about some of the previous work that you've done, and what brought you to Marine Layer? Renee: So, I've been at Marine Layer now for about five years. But about before that, I spent eight years at Gap Inc. I graduated college and like a lot of my peers, thought it would be a good idea to get into investment banking. But then about a year and a half of that, I was like, "What am I doing with my life? This is exhausting, and I'm not particularly interested." Renee: I think I was working on a petrochemical deal at one point. So, I wanted to join a company I was excited about and I found Gap. They were hiring in San Francisco. And Gap is amazing because I think they give you a lot of opportunity at the entry level to move around in the organization. So, I feel like I really got a rad retail background experience in all things. Renee: I started in real estate finance, and then I was able to join a corporate strategy team, where we were really looking at international expansion opportunities for Gap Inc and acquisition opportunities. And then, after about a year and a half of that, Gap Inc had just acquired Athleta brand. And I was a female athlete in college, always a huge advocate of women in sports. Renee: So, really wanted to join their team in whatever capacity I could get my way into the organization. And they were hiring in marketing strategy, which was ended up being perfect for me. Because I think I have a real passion for business analytics. But then, I also love just consumer trends, and consumer behavior, and just how those things roll up on a macro level. Renee: So, I joined the marketing strategy team. It was initially brought in to really look at a lot of the ways that Athleta was spending their marketing spend, and inform if they were overspending. I think Gap was particularly concerned about how much I thought it was spending on their catalog. So, they wanted more of an objective strategy team to look at that investment, and prove out that it was really driving incremental demand. Renee: And it ended up just being like the most incredible experience. I spent close to five years there, and started looking at the efficiency of catalogs to drive incremental demand. It ended up being when digital marketing was really taking off as an acquisition channel, and retention channel. So, spent a lot of time also weigh out what's a stronger growth tool catalog, or digital marketing. Renee: I was there and they're opening up a lot of their stores. So, I was thinking a lot about omni channel, customer health. So, love that job. And I think after spending a little while, it's like, "Gosh, I want to take all this newfound knowledge, and apply it to somewhere that's in a younger growth stage." And ended up meeting the CEO of Marine Layer, we hit off. Renee: He told me that he really wanted to start a catalog, and I was like, "Gosh, I think I'm probably one of the youngest people in our industry that knows a lot about catalog." Stephanie: Yeah. I haven't actually heard that term in any of the interviews referencing at catalog. Renee: Oh, yeah, it's funny. It's like an offline way to really do customer look alike modeling. I think people think of it as super old school. But when I look at what's happening, like on Facebook, or within digital marketing generally, it's the same things that the catalog industry has been doing for 30 years. Stephanie: How interesting. Renee: Yeah. It's just like using customer LTV assumptions to inform how much you're willing to spend to acquire a buyer. That's the core principle that I think has been a part of catalog investing for 30 years. And I think now, that's a huge part, that's the biggest part of a digital marketing acquisition too. Stephanie: Okay, cool. So, what learnings did you take from Gap, especially around the catalog versus digital marketing, and bring to Marine Layer? Renee: I think my biggest takeaway was actually the importance of not being promotional. And the importance of being really focused on long-term customer health. Renee: It was like a stark contrast for me, I think working in the Gap, Banana Republic world, and then shifting over to the Athleta world where they had super, super high percentage of their transactions happening at full price. But I just think getting into a discount space, it's a super slippery slope. Renee: And I think it was so exciting to watch within the Athleta environment that you might have to spend a little bit more on marketing, spend more on brand, but what you end up driving is really high rates of retention. I think it makes your business a lot more predictable, and healthy in the long term. So, it's super high level, it's focusing on long term brand health versus finding those cheap thrills with little promotions here or there. Stephanie: Yeah. When you joined Marine Layer, did you have to shift your thinking because I'm thinking the people who are at Gap or the consumers of Gap are maybe different than Athleta versus Marine Layer? Have you seen different buying profiles, and ways to connect with that audience, and get people to buy full price? Renee: So, Athleta and Marine Layer actually were more similar, but definitely Athleta and the other brands, I think are super different. The AOVs are pretty similar for Athleta and Marine Layer. I think the other category tends to be a really big driver of retention. So, it's known in our industry that if you are a bottoms-focused purveyor that you generally have a higher retention rate. Renee: I think that's what it benefits from being a bottoms-focused activewear brand. So, the retention rate is a little higher than what I was expecting coming into Marine Layer. Stephanie: How did you shift, yeah, when the consumer is may be different. Marine Layer and Athleta, you're saying are similar. Versus Gap, maybe they are used to sales and things like that. How do you shift your strategies and your learnings that you took from those two brands to Marine Layer? Renee: Yeah, okay. Absolutely. So, I think it's really around how you focus on measurement of your marketing channels. I think when you're focusing on discounting, it's pretty easy to focus on what was the comp over last week, or how many units have been moved through? But I think when you're focusing on long-term premium brands, you're really focusing on was it incremental? Renee: Could I have gotten more in the long term if I'd done it differently? What was the impact to customer LTV? What's the quality of customer that I'm bringing into my brand? I guess a big difference is that for Marine Layer, we won't do a lot of promotions in the acquisition stage. Because it's been proven for us that if you bring in a customer, or a lower price point item, or a lower overall transaction, or just a bigger discount. Renee: Those buyers won't repeat buy from you. So, basically, you've wasted that unit in selling to them on their first transaction on a buyer that's not going to be a big part of our brand a year from now. So, it definitely changes the marketing channels that you're looking at, and also changes the way that you measure them. Stephanie: That's a really good point about not showcasing maybe, like here's our discount $3 item, and then wondering like, "Oh, hey, why didn't they come back and repeat buyer, or where'd they go?" That's a really good point. Renee: Yeah. And even more recently, we've been having a lot of internal conversations on whether or not we should be selling our cloth face coverings in digital acquisition tools. So, you're probably seeing there had been a lot of brands out there that are including them in the way that they're trying to bring in customers to their brand. Our face coverings as a company are very reasonably priced. Renee: We're doing them more as a service than a real growth driver for our business. So, I think if we put them on our paid social channels, and use them to acquire buyers, I'm sure it would get a lot of acquisitions. But I just don't know how healthy those acquisitions are a year from now. I don't know if they're going to be buying from us in 2021 and 2022. Stephanie: Yeah. That long term vision. So, well, maybe before I keep having you dive deeper and deeper, it'd be good to have you tell people who don't know what is Marine Layer and what is your role? What is your day-to-day at Marine Layer? Renee: Yeah, absolutely. I get so excited talking about marketing. It's easy to forget the high-level stuff. Stephanie: Oh, me too. I was great after 1,000 more questions in the week. I'm like, "Oh, wait, we probably should talk about the brand first so everyone knows what you do." Renee: Totally. So, I'm the VP of Marketing and Ecommerce for Marine Layer. I joined the company five years ago as our Director of Ecommerce because Marine Layer was actually, it's a DTC emerging DTC brand, but grew at store base faster than it grew its Ecommerce business. When I joined in 2015, we had 10 stores. Now, we have 45. Renee: And really, our online channel was considered something to help with replenishment for people that were acquired in store, and then they wanted to buy it again online. So, I think that's where my role started. Over time, we just started building out these new marketing channels to drive online growth separate from the retail channel. Renee: So, my responsibility started to include more and more marketing functions. And then, more recently, I've started also leading our creative and brand teams, which I really, really loved doing because I think there's so much value in finding good tension between big brand ideas, and then long-term health of brand, and near-term sales goals. Renee: I guess zooming out again, Marine Layer is a casual clothing apparel brand. We are based in San Francisco. Our company was founded in 2010 because our CEO, his girlfriend threw out his favorite shirt, and he set out to recreate that incredibly soft, broken in shirt. And he did that. So, it was really founded on the best ever men's t shirts. Our shirts are just absolutely absurdly soft when you touch them. They make a wreath- Stephanie: Yes. I can vouch for that. Renee: That's awesome. And then, he started expanding the assortment for men's beyond t-shirts. And then, I want to say a few years later than that, he started expanding into women's shirts. It's definitely more of a tops focused business than bottoms. Although now, we have some really strong business in women's bottoms in particular. Renee: But now, it's a full assortment of California casual. We really focus on making everything comfortable, soft. We want it to be your favorite. We talked about the importance of it being like a top of the stack t-shirt, the go-to item that you go for. You're looking for it when it's coming out of the dryer because you want to wear it even though you have other ones in your closet. Renee: So, there's a lot of intention, and love, and care that goes into every single item of clothing that we make, whether it's a dress, or a t-shirt, or outerwear. It's really just around creating timeless, emotional, comfortable pieces. Stephanie: That's great. So, how do you convey that messaging on your website about how soft the fabric is? What techniques do you use? Especially, since you just got into helping tell the brand story, and the product stories, and all that. What are you finding works when it comes to talking about something that ultimately, it'd be nice to touch before you buy it? But if you can't do that, how are you conveying that message? Renee: So, lots of little ways. I'd also just definitely say that this is something we're always working on improving as the technology changes a little bit online. I think for us, it's communicating that our stuff is special, and that it has a fun, emotional connection to your stuff. It's not just any old t-shirt. We want you to feel like our brand is maybe an old friend of yours, or it's a comfortable place to be. Renee: So, it's in every single tiny touch point. The models that we use, how we style them, the copy that we write for our shirts, it's not going to be just like a bunch of bullet points with the fiber makeup of the shirt. It's going to be describing what you could put in the pocket, or where we used to wear this shirt, or what it was inspired by. Our model notes I think will be like so and so is a size medium, and 5'10", but he also plays in a band on the weekends. It's really. I think- Stephanie: That's right. Renee: And bringing the product to life in a way that feels unexpected, but then at the same time, just familiar and fun. Stephanie: I love that. Renee: Yeah. I think we'd like to play with more ways to test video on our site to really convey softness. And then, the other thing I would just say is that I think our store experience is a really big part of our brand experience. And I do think it's what makes our site so successful. Our best customers, this is true everywhere, but are the customers that shop online, and in store. Renee: And I think it's because those customers have the benefit of touching our stuff, interacting with like, are extremely friendly, and mellow store associates, and they understand what's special about it, even without the context of the site. And yeah, and then I'd also just add that it's another reason why I love catalog marketing. Renee: Because it just gives us more space to express the fun of our brand, and show off our lifestyle beyond just what you see in a flatter online experience. We love just shooting and fun inspirational locations. Our copy, I think is so funny and on point. I always love when I read the first draft of catalogs coming through that they can just make me smile. So, yeah, it's a multitouch approach to really bring that softness to life, even if you're not in store. Stephanie: That's great. Yeah. I definitely am in the same camp that if copy makes me smile. Renee: Yeah. Shopping should be fun. I think that's a big part of what guides our store experience and our site experience. We don't want to over iterate on it. We don't need to be the most innovative provider out there. We just want it to be fun, and make you smile where we can, just bring a little bit more joy into your life. Not in a cheesy way, but just an honest, approachable, fun way. Stephanie: Yep. Yeah. I think Trader Joe's does a really good job too with the pamphlets they send out. Renee: Totally. Stephanie: And I've either read them, but they have really good copy in them. And you also learn something, and you're smiling throughout it, and you're like, "Oh, I want to buy that bag of plantain chips also." Renee: Yeah. And I think it makes a lasting impression. When you're thinking about where you're going to go shopping, you're like, "Gosh, I guess I'll go to Trader Joe's." We think really intentionally about our promotions that way too. We don't want to do a sale and have it just be a sale. The lead story can't just be 70% off, although we would never go that deep, or even 20% off. Renee: There has to be a story behind it. Is it a funny story about a dad joke if it's a father's day story, or is it like, "Oh my gosh, my favorite promotions we ever did was when there was a blackout in San Francisco." Probably like, I think we all woke up that day, and nobody had any power. And we all came into the office, terrible shower situations, looking terrible. Renee: And we're like, "Let's just do a blackout sale, a sale until the lights come back on." And I think there's a shared experience that you have with your customer. And it makes your content just more memorable and honestly, I think people are more likely to participate with a smile on their face. Stephanie: Yeah, yeah, I completely agree. So, we mentioned catalogs earlier, but I want to dive a little bit deeper, because like I said, you're the first one who's come on the show who's really mentioned it, and talked about this. And I'd love to hear about how you think about brands, should they or should they not have a catalog? How do you measure performance, and how do you think about that as one of your acquisition or marketing channels? Renee: Yeah. Great, I love talking about catalog, so we can do this all day. I think it's a real great way to drive the story of a brand lifestyle. So, I feel like that lets you know right off the bat. It's not just a product, if we're just talking about a couple of skews that we're building on top of, then I think it's hard to pull together a catalog. Renee: But if you have an assortment of over 100 items, and there's a lifestyle component that you're trying to celebrate, then I feel like there might be good space for you to test into a catalog. I think it can also seem super intimidating from a cost standpoint, but there's ways to pull together photoshoots in a super scrappy way. Renee: Gosh, I think the first catalog Marine Layer I ever sent out, we use models that were good friends of the brand, and we shot locally, I think in the woods outside of Calistoga. So, it doesn't- Stephanie: Great. Renee: Yeah. When I was at Athleta, the budgets that we had for catalog content were much, much bigger than the type of stuff that we do for Marine Layer. Although, we have definitely professionalized our setup a little bit more. So, I don't think the creative cost needs to be super big. It's more about making sure that you have the breadth of assortment to support a catalog. Renee: And I think in order to send something meaty out there that's really going to drive results, you want to send out at least a 44-page catalog. So, that's where I'm getting to, like you probably want about 100 different styles that you want to market in there. So, yeah, we started mailing catalogs in 2015. And our books are about 44 pages. Renee: And now, our assortment has grown, and so as our catalog page counts, and also our catalog meal frequency, and I think what's really powerful about them is, again, just making that lasting impression on a customer about who you are, and what you stand for, and the breadth of assortment that you make. I think people really knew Marine Layer as a t-shirt brand and the catalog, especially for online buyers. Renee: And even now, people that maybe buy their first product off of Instagram or something like that, and it's just one item. It just shows them how much more we do, and what we're excited about. I think- Stephanie: That's great. Renee: They're also very easy to overlook, as I'm sure once people start sniffing around at the cost per piece, and the CPAs associated with catalogs, they're not cheap. But what I found at Athleta, and definitely at Marine Layer is that people that you bring into the brand on catalog tend to be a lot more productive in the long run. So, they're much, much healthier buyers than somebody that we may be acquire through an Instagram ad. Stephanie: Very cool. So, what is the average CPA to expect if someone were to start a catalog, and how do you track that incrementality, and ROI on that? Renee: It's going to vary for so many different reasons, but gosh, I feel like anywhere between a $70 CPA to $100 CPA would make a lot of sense. I feel like people are always so fascinated by how you do catalog tracking. I always get questions like do you just track all the orders that come in through the phone? Stephanie: Oh, my gosh, I wasn't going to ask that. I'm interested in tracking, but I wasn't like, "Are you talking to people on the phone?" Renee: No, no, no. No one is calling in to place orders. A couple of people do per season, but it's not like you're getting tons and tons of people calling in to place orders. It's more about like you're in the catalog match back process. So, you will know who you mailed your catalog to. And then, you can use third party providers to help you understand with all of the orders that were placed in the last two to four weeks when the catalog got in home. Renee: How many of them matched back to somebody who received a catalog? And then, I think beyond that, once you start mailing a little bit, people can start to ask, well did these people place an order because they received a catalog, or because I launched this new collection? And then, I think you can start to holdout testing to see for the folks that mailed a catalog versus didn't mail a catalog, how powerful was the catalog for driving new demand? Renee: So, all those things are things that you can do to measure performance. But in my experience, I think and in talking to other industry professionals, usually the first time you mail a catalog, you feel it. Your business was operating at a certain level for the last four weeks, and then all of a sudden, it's operating a different level for the next couple of weeks. So, that's good. Stephanie: Are you mailing catalogs to only current customers, or are you also doing people who've never bought before? Renee: So, we do a mix, and we do to new customers, and to existing buyers. As an existing buyer, I think it's a really good retention tool. And it was exciting, we've been measuring CLV for a while now. It's like you see the CLV of our brand for the average customers brought into our company. And then, when that catalog started getting mailed in June 2015, it just moves up, and then it starts at a new baseline. Renee: So, I definitely feel like it shifts our retention of our buyers. And then, we also do it for customer acquisition. So, we work with data co-ops, where we can rent names. So, we never actually take possession of those names. I don't know who I'm mailing, but I just know that I'm mailing customers that look like my customers. Stephanie: Very cool. Yeah, that's great. When it comes to performance, if a lot of people come in, and they have their digital marketing hat on, and you're talking about catalogs, how should someone level set expectations for here's the type of performance and ROI you can expect with catalogs versus digital marketing? How do you level set that? Renee: Yeah. I think we look at the CPA-LTV ratio. So, over a three-month time period, or a six-month time period, or a year. So, even though your CPAs are going to be higher for your catalog and for your digital acquisition business, I would expect that your LTVs will be a lot higher too. So, for us, the ratio ends up working out the same, or in a lot of years, sometimes even the ratio is a little higher for catalog. Stephanie: Got it. Renee: The complexity of catalog too that I just want to throw out there is definitely less nimble, which is, I think, frustrating for a lot of new age DTC folks. You have to send your catalog, create it about a month in advance, and you can't always control exactly when it gets in home. If there's a tornado, then the post office is going to mail it to certain post offices across the country. Renee: And so, I think what can be frustrating is that you can try to get it right in the catalog creative, and then when the catalog gets in home, maybe you're sold out of a certain item, or you didn't get something, you have to presell something because it's not actually available when you thought it was going to be available. Renee: All those little things that are hard, like those bigger moving pieces, they can really impact catalog performance. And I think with digital marketing, you can be just like super nimble. If the item is not in stock, you just don't market that item. Pros and cons to both. Stephanie: Yeah. That makes sense. So, in our research, I saw that customer lifetime value is your number one metric. And I was wondering, are you willing to acquire customers at a lost? And if so, how much are you willing to take on? Renee: So, we don't acquire customers at a loss. We focus on being profitable upon acquisition, or I'm sorry, being profitable upon acquisition, or zero to positive dollars coming in on the first transaction. That's changed over the last couple of years. I think in some years, we've let it get up to about a zero to six-month profitability time window. Renee: So, we expect to be back in black, six months after customers are acquired, I'm not an advocate for one year to two-year time periods. I just think there's too much risk involved. I have a pretty good idea what's going to happen in the next six months, and customers can be pretty predictable. But to focus on those longer time horizons, I don't know. Renee: That's just never really been my appetite for risk, or my company's appetite for risk. But I really feel like that decision is just a super specific decision made for every company based on where they are in their growth stage, and what access to capital they have. I think it's changed For Marine Layer. Renee: And I think it's fun for me now that we're focusing on being profitable on acquisition or better because I can take those dollars that we're getting at the first acquisition, and I can invest them in new tools, or I can invest them in improving our brand. And so, it feels like a healthier ecosystem for us to operate in. Stephanie: Yep. Yeah. I completely agree. It seems like a better approach, especially with everything that's going on right now. Renee: Oh, my gosh, I know. Stephanie: It's hard to predict going to happen next month, which makes me want to ask the question, how are you guys moving forward in this COVID environment? You were mentioning retail locations before, what's changing, and what are some things that you're doing differently going forward? Renee: Yeah, gosh. It's so funny because recently as a leadership team, we were looking back at our goals for the beginning of the year, and asked to rethink those, given that everything's changed. And the one that stood out to me that makes me laugh now is I had some goals around doing bigger campaign marketing planning. We're a really scrappy organization. Renee: And sometimes in January of this year, I thought we were almost too good at whipping things into shape last minute, and reworking copy, or reworking direction of campaign really close to the finish line, to the point where it inhibited our ability to tell bigger stories across more marketing channels. But now, I'm like, "Oh, my goodness, it's an awesome value and strength to have to be really, really nimble." Renee: Our big change for us during COVID is that we're really reviewing all of our emails, really close to when they get sent. We're not trying to create content on a Monday and send it on a Thursday. We might create a first draft or something on a Monday, but we'll keep reviewing it and make sure that the voice, and tone, and products that we're featuring all mix in up until a few hours before final send time. Renee: So, we're definitely just reviewing content, and we're also talking to our customers more frequently. I think in March, when everything was changing so quickly, and also our business was seeing a lot more softness, as I think COVID was becoming a huge, huge, huge reality. And the change was we were experiencing it personally, and our customers were experiencing it. Renee: There were moments when it just felt like you were paralyzed into not wanting to do anything, not wanting to send an email because you weren't sure what to say, or not wanting to post on social because you didn't know what to say. Stephanie: Yeah. I saw so many articles about that too, like how should your brand discuss COVID, and it's tricky because you can get in trouble for anything these days, and it feels hard to take a risk on any messaging, or yeah, move forward at all. Renee: Oh, totally. And I feel like I even had conversations with my CEO about pulling entire catalog mailings, and just like these very, very huge changes that weren't just about the next couple of weeks, but longer-term stuff too. And what I think worked for my company is to just not stop, to keep moving in the dark room. There's that metaphor when the lights go off, and you just stop. Renee: And we just didn't do that. We forced ourselves to write the really hard email copy. And I think we used to have like me and my copywriter, and my CEO review copy. And instead, we invited the larger group to really help us think through what felt right. And that really helped. We started emailing more frequently. Renee: So, rather than sending emails two to three times a week, we started emailing four to five times a week. Just because it felt like rather than sending these huge, big, long stories, we could just tell these smaller-point-in-time stories, and just keep our finger on the pulse more often. And that seemed to really work for our customer. Renee: And then, I also think we just force ourselves to try new ideas that we've never tried before, and make them work. We ended up shooting a catalog entirely in studio because we couldn't get outside. And it actually is one of my favorite catalogs we've ever created. So, it got- Stephanie: Oh, that's great. Renee: ... May of this year. And I feel like it just forced our creative team to just think differently about everything we were doing. And it was really raw and vulnerable. But it's really awesome, and you see that it yields great content. And then, I'm also really proud for my company to speak up around Black Lives Matter. I think, as a company, we've definitely made it known that we're more of a progressive organization. Renee: But I think never made such a bold statement around an issue that we are passionate about. And I honestly think that going through March, and just learning how to be honest, and real with each other, and connecting with our customers in the way that we did, it really made us feel more empowered that we should be making bold statements across our platform about things that we believe in. Renee: Especially, when it has to do with human rights. And so, it really helped us guide how we responded to the Black Lives Matter movement in organic, social, and email, and just what we've been doing as a brand. Stephanie: Yeah. That's great. I like the idea of leaning into it not being scared to publish things. And just that we agree with that method of doing thing. So, are there any brands that you watched? Oh, go ahead. Renee: Oh, as I said, the other thing that I think we do now that we weren't doing beforehand is, well, one, we use Slack all the time, which I love Slack. It's funny to me that we are late to the game on that one. But the other thing I was going to say is that we actually have team meetings every single morning, and I feel like we over invite. Renee: When you're in the office, I feel like we have a tendency to try to limit meeting attendance because sometimes meetings just explode. And then, you feel like they are becoming unproductive. And I feel like we've been taking the opposite approach during COVID. We have a 30-minute meeting with my entire team. And that includes customer service, to eCommerce channel managers, to somebody on our brand creative team, and our copywriter. Renee: And it just helps to just connect really quickly in the beginning of the day, and make sure that everybody has the same information starting point for what's happening. I'm sure that there's a lot of people that don't need to be there, but I think it's replicating that like water cooler environment, or that you're walking, and making eye contact with somebody, or catching somebody in the bathroom. That's made a big difference too. Stephanie: Do you think that you all will continue doing larger meetings like that? Because I agree, having people onboard so you're not having to retell things, or having one person tell another person, tell another person, and the message is completely off. Do you think you're going to continue doing things like that even after when we can return to offices? Renee: I hope so. I'm going to force them to have a meeting every morning when we get in. I think there is something really nice. I think we've actually come together. We support each other more. I also think like role clarity has solidified itself in a really strong way. And I think there's not land grabbing around projects. Renee: Everyone is just super clear around who's doing what, and there is no like, "Oh, I wish I was working on that, or I wish I could contribute to that." It feels like there's more support across team members to get projects done. Stephanie: Yeah, very cool. So, earlier, we were talking about acquiring customers, and you mentioned that you had a scrappy marketing team, or your marketing efforts are scrappy. And I wanted to dive into that a bit about how you're acquiring your customers, and what channels you're finding the most success in, and what that looks like behind the scenes? Renee: Sure. So, like team structure, or more just channels that we're using or both? Stephanie: Yeah. I'd say channels, or marketing campaigns that are doing well, or how you think about setting that up to drive conversions, and new customers, and all that. Renee: Yeah. The last couple of months have been a weird time for everything. But I actually think for us, it's actually meant not really focusing on new channels. I'm starting to do that a little bit more now. Poke my head up, and think about what I want to test, and do in 2021. But for us, it's really been just focusing on things that we're already good at, and just being really, really thoughtful about brand creative. Renee: So, the channels that have been most successful are paid social, Facebook, and Instagram, and catalog continues to be really successful for us. Usually, retail is an awesome channel for us to introduce ourselves to a lot of people. But our stores were closed for three months. So, obviously, that had a big impact on our business. But yeah, so those channels have been working for us. Renee: And then, we have a pretty scrappy team. We do all of our own in-house creative, which again, I think has been really helpful, and iterative, and making sure that we feel all of our content is on brand. Yeah. Stephanie: All right, cool. For the retail stores closing, are all of them opening back up, or is it making you rethink your retail strategy at all, or what's your plans going forward with that? Renee: Yeah. I think, gosh, it changes every couple of days. I want to say 90% of our stores are opened. I think some of the stores in New York might still be closed, and I'm not sure when this air, so that might be different then. But for the most part, our stores are back open. We've been seeing that buyers are coming in, and even though our traffic is down, that buyers are coming in with a lot of intent. Renee: And we're seeing much higher basket sizes, and much higher conversion. So, overall, I think positively encouraged by what we're seeing in our retail channel around customer engagement through the pandemic. But I think what's been really exciting, and maybe that's the wrong word. I feel like nothing is really exciting. But when stores closed, I was nervous about how much we would lose the engagement from those buyers. Renee: Buyers that tend to participate in your retail channel, they do that for a reason. They're people that really like to touch the stuff before they buy it. And so, I wasn't really sure what to expect from those buyers in shifting their purchases to online, and how much, I call it retail migration, we would see. But for the most part, it's been a lot higher than what I was expecting. Renee: So, I feel good that our higher contact strategy that we've had in the web channel, or the web marketing tools has helped us engage with all of our buyers, even if they're traditionally retail buyers. Stephanie: Got it. Did you have different marketing strategies to keep those retail buyers engaged, and reaching out to them more, maybe not through email offerings, but direct mail or something like that? Renee: Not really. We talked about it a few times. But then I feel like, it's hard to create so many different creative iterations. I think we just came from like, "Hey, it's one customer out there. So, who are we talking to? We're talking to all these people." And I think what we've been talking about hasn't really been channel specific. It's more like Zeitgeist specific to everything that's happening in the world. So, I think that's worked for us. Stephanie: Cool. So, the one thing I was reading a bit about was something called the Re-Spun program. I was hoping you could talk a little bit about that because I was trying to think about how that model works, and the operating cost behind it, and all of that, and I was hoping you could touch on that a bit? Renee: Sure, I would love to. Re-Spun is a program that Marine Layer launched in November 2018, where we actually recycle old customer t-shirts into new tees and sweatshirts. And what's cool about it is that we take any old shirt that our customers had, does not need to be a Marine Layer shirt. We give customers $5 per shirt of Marine Layer credit. Renee: And then, we'd take their old shirts, we'd break them down to pulpy fiber, and re-spin them into upcycled cotton. And we also blend that upcycled cotton with a little bit of recycled poly, and then use that new thread to make new shirts, and new sweatshirts that are still absurdly soft Marine Layer caliber product. But it's actually being made from 100% either upcycled or recycled materials. Renee: It's a cool program because I think it does a lot of things. One, it defers shirts from landfills. So, we've actually collected, this number is probably a little old Knox. It's from January of this year, but over 170,000 shirts from our customers. Stephanie: Oh, wow. Renee: I think it's fun that we get to reward them, and give them Marine Layer credit. But I also think it really solves a problem for a lot of people out there. If you go back to why Marine Layer was founded, it was because our CEO did not want to get rid of his old favorite shirt. He wanted to keep wearing it, and he loved it so much. And I think there really is an emotional attachment to your clothing. Renee: That's what we try to do in every single piece that we create. And when you have an emotional attachment to something, it feels very sad to throw it away, or give it to Goodwill, and not really know what's happening to it. So, I think when we introduced this program, we were honestly blown away by the interest in donating old shirts. Renee: And we've actually had a lot of fun even going through them because we processed them at our headquarters. But some of them are old sorority fun run shirts, but some of them are like, there's really incredible stories behind the shirt. Renee: We've even reached out to some customers and shared that on our Instagram. We also did a contest just sharing the funniest shirt that we've received through this program. So, it's a nice way to connect with our customers, and understand more about what their stories are behind their clothes. And then- Stephanie: That's really fun. Renee: Yeah. And then, lastly, because I know this is an ecommerce-driven podcast. In some ways, we think about Re-Spun like our loyalty program. So, it's our way of rewarding customers for sharing our values, and creating clothing in a more responsible way. Renee: I think overall, just the response to the program, that's been just so awesome. Renee: We're just trying to expand it in a much bigger way. So, I'm looking for ways to include recycled materials, not just in this small assortment of Re-Spun tees, and sweatshirts, but how do we include recycled materials in everything that we're making. So, it's been fun to focus on this value of making clothing more sustainably, and using more recycled materials, and applying it to our whole brand. Stephanie: Yeah. That's amazing. So, to take a little step back into the world of eCommerce a bit more, and building actual websites, and all that stuff. What tools do you love using right now, or are you testing out, and you see them really working well with either not just customer acquisition, but conversions, or website performance? Anything in the nitty gritty that you're like, "This is really working well for us?" Renee: I feel like it's nothing. Stephanie: Feel free to go into the weeds. Renee: Yeah, I know. I'm trying to think. I feel like it's nothing particularly new. Well, if we've been having more fun with email flows lately, and looking at the frequency at which we're sending those, because it does seem that there's just an overall appetite to hear from Marine Layer more often. So, we were not sending our abandoned cart emails until two days after. Renee: But now I think we've moved that up to a few hours later, trying to monitor and see what happens there. I think because we are sending emails more frequently too, looking for more ways to segment our email file so that we can tell, again, more specific messages to certain audiences. And yeah, I think it's not really been not a lot of new in the last couple of months, it's mostly been focused on looking what we're doing, and seeing what we can make better. Stephanie: Yeah. What content are you sending if you're sending emails more frequently? I'm guessing it can't just be more product emails, or just the abandoned cart ones. I'm sure you're sending some content that's keeping the subscriber happy and engaged. How do you think about that when you're sending more emails? Renee: Yeah. Some of it is just as simple as segmenting by product gender. So, focusing on sending men's focused emails to people that tend to buy men's product, and women's focus emails to women's product buyers. But then, I also think a lot of branded messages. I think one thing that I love that Marine Layer does, that I didn't see happening as much out there is sometimes, we just send emails with no performance expectations against them. Renee: We send a really fun email, fun might be the funny adjective for it, but in March, where we just profiled what our employees were wearing while they were working from home, and- Stephanie: That's fun. Renee: Yeah. It wasn't even product that we are currently selling. We tried to focus on Marine Layer products, but our employees tend to have stuff from two or three years ago. So, we more just wanted to tell a story of being comfortable, and trying to find ease, and optimism wherever you are. Yeah. We also send that email usually around Father's Day or Mother's Day where we just like, "Oh, I love the Mother's Day on this year actually." We all sent in images of Facetiming with our moms. Stephanie: Oh, that's cute. Renee: And just talked about like, "We miss you, mom, we love you." And then, I think the Father's Day when we did this year was just around taking vintage images of all of our super cool dad styles, and sharing them on our email, and through our Instagram. So, yeah, I think we've had more creative license, just send emails that are just fun, and emotional, and make us feel happy rather than feeling like they're performance driven. Stephanie: Yeah, I love that. That's really fun, and I will be signing up just to see those emails [inaudible 00:47:30]. Stephanie: All right, cool. So, the lightning round is where I'll ask a question, and you have a minute or less to answer, tan-tan-tan. Renee: Yes, I'm ready. Stephanie: So, this one I'm asking for our producer [Hilary] because she put it on the list. We heard you're a Bachelor fan. So, who's favorite bachelor or bachelorette? Renee: Oh, my God, that's so funny. I love Kaitlyn Bristowe. I just love Kaitlyn Bristowe. Stephanie: She is the best. Renee: Yeah. I feel like she ushered in a new era of Bachelor viewers, and I love The Bachelor. But then I also really love this funny podcast called Here To Make Friends. And it's like a feminist take on The Bachelor, and they rank episodes of things where feminist fails, and it's fun. I used to have a lot of roommates, and we would all watch it together. And then I got married, and I didn't have anyone else that would watch the show with me. So, now, I got to resort to podcasts. Stephanie: I love that. Well, then that's a good transition to what's your favorite podcast that you're listening to? Renee: Ooh, that's a really hard question. So, top of my head, I would say Radiolab and Fresh Air. Those are easy answers. But Fresh Air in particular, I love Terry Gross. I just think she asks such thoughtful questions. And I'm always surprised by the content that comes out of her interviews. And some of my favorite ones are with unexpected guests. If anyone hasn't listened to the Jay-Z interview with Terry Gross, go and find it. I think it's from 2013. It's so funny. It's so good. Stephanie: Oh, that sounds good. I have to check that one out. Renee: Yeah. Stephanie: What is your favorite learning tool or resource that you leverage along the way when it comes to running either marketing, or eCommerce, or something like that, where you're like, I constantly think about this book, or this article, or this person? Who do you look to, or what do you look to? Renee: Definitely my time Athleta. I would say it's more just the incredible coaches that I had at Athleta, and leaders that I had there that were just incredibly passionate about customer analytics, and customer health as a driver of long-term business health. I could list off folks, but Scott Key was our CEO. He's incredible. Renee: Mike O'Reilly was our leadership for marketing and eCommerce. And Irene Wong, my boss at the time, just a really, really powerful, thoughtful team that cared so much about the success of Athleta, and wanted to just try looking at a new way. They still inspire me all the time. Stephanie: That's amazing. What's up next on your Netflix queue? Renee: Ooh, this is embarrassing, but I'm going to say it anyways. How adorable is Baby-Sitters Club? Is anybody else watching that? Stephanie: I have not watched that yet, but I will have to check it out. I'm down to watch that. Not embarrassing at all. Renee: Okay, good. I have a three-year-old little girl, and I watched Baby-Sitters Club, and it just gave me a little spark of optimism that maybe the world is going to be okay if there's more 13-year-olds in the world that act like the Baby-Sitters Club. So, I'll throw that out there, and then also, Expecting Amy. We're two episodes in, and that's pretty good. Stephanie: Yep. Yeah. That's funny, too. What app do you have in your phone that you enjoy the most? Renee: This is going to be boring, but probably Google Analytics and Instagram. Stephanie: That's all right. Hey, those are not boring. I love Google Analytics and Instagram. Of course, is great. Renee: Yeah. I have to hand it to Google Analytics. Their app is very functional. I like that you can do different comparison periods real time stuff, it's helpful. Stephanie: Yeah. No, I completely agree. And then, the last one, if you were to create a Netflix original, what would it be about? Renee: Fun question. I have thought about this. Stephanie: Oh, wow. Okay. Renee: Well, I guess I feel I would like for there to be more stories about female professionals, and especially about female professionals that are comfortable being feminine and vulnerable, like Brene Brown take on what it's like to be in a workforce now. And I feel like there're podcasts that I think have done that really well that inspire me a lot. Renee: But I'd like to see that story told more. And I'm sick of stories about working mothers that are balancing their work life and their home. That's too complicated and too much to unpack there. But there is a lot to tell about just this new era of vulnerable women in the workforce. And I think a lot of them are moms, and I am very inspired by that. Stephanie: Yeah. I would definitely watch that. Renee, it's been such a fun interview. I loved how deep we get into a lot of things. And we will definitely have to have you back for round two. Where can people find out more about you and Marine Layer? Renee: marinelayer.com. So, that's a pretty straightforward one, and then definitely come and visit our stores. And for me, I don't know, send me a DM on Instagram. I'm @renielo, or you can send me an email at renee@marinelayer.com. Stephanie: Cool. It's been a blast. Yeah. Thanks for coming on the show. Renee: Okay. Thanks. It was great talking to you, too.  

There are a lot of twists and turns in Joe Demin’s journey to founding Yellow Leaf Hammocks. It opens with a childhood refugee turned successful real estate developer, then twists into a story of entrepreneurship and an appearance on Shark Tank, and then turns again when a request for $400,000 became a $1 million investment. Through it all, though, Joe was guided by a singular idea to build a business that could actually have a measurable, sustainable positive impact on people.  On this episode of Up Next in Commerce, Joe guides us through his quest to make Yellow Leaf a success. Tucked within this incredible story are some critical bits of knowledge about running a successful eCommerce shop, including the challenges of selling on Amazon and the ways to optimize your Amazon strategy, plus some of the pitfalls to watch out for if you decide to pursue a path into retail.  3 Takeaways: There are challenges to selling on Amazon, and it all comes down to whether you choose the seller-central or vendor-central route. If you choose seller-central, you have more control, but have to provide the inventory and warehouse the product on your own. With vendor-central, Amazon purchases directly from you, but then they resell on the Amazon site and the algorithm sets the price, so you have to constantly monitor that aspect to make sure you are not cannibalizing your own business  Today, there are many companies that have a social good aspect to what they do. However, very few take the steps toward setting up an actual sustainable enterprise that truly benefits the people you are trying to help. By providing jobs and then programs that teach financial literacy and other skills, you create an impact that lasts longer  There are certain pitfalls that small businesses encounter when pursuing the retail path. Whether that is claiming shelf space, creating market-ready packaging or understanding inventory needs and retail term agreements, there are headaches involved, so you need to be prepared to deal with them or find a different strategy For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone, and welcome back to Up Next in Commerce. This is Stephanie Postles from mission.org. And today we have Joe Demin on the show, the founder and chief relaxation officer of Yellow Leaf Hammocks. Joe, how's it going? Joe: Going really well Stephanie: So, your title, I don't think I've ever had anyone on the show with a title of chief relaxation officer. I was very excited when I saw that. Joe: Yeah, we're laid back, so we can't take our titles too seriously. Stephanie: Yeah, completely agree. Joe: It's a fun job. Stephanie: So, when I was looking over a little bit about you, you have a very interesting background and I was hoping you could start from the beginning actually, which I don't ask from a lot of my guests. But I mean, I want you to go way back, like age five. Joe: Yeah, wow. Stephanie: Tell me a little bit about your journey to where you're at now. Joe: Yeah. I mean, I appreciate the question and definitely I think a lot of what I'm doing now is sprouted from my background. So, I came to the U.S when I was five as a Jewish refugee from the former Soviet Union and had, I guess, natural hustle built in just from my experience growing up in a kind of a rougher part of Boston and just worked my way up through into college. And was, I would say, on a track to do something entrepreneurial. Joe: And early on in college, I fell in love with real estate development for various reasons. We can probably have a whole separate podcast on that, but ended up getting a really amazing job, like a dream job and where I got to lead a lot of high profile development projects. And through that experience, that was my first foray into fusing positive impact with making money in business. Joe: And this is around the time where green building was just starting to become a more of a mainstream topic. And as one of the younger people at the firm, I spearheaded efforts to reposition the firm as a leader in green building and sustainable development. And part of that philosophy that I had early on was this realization that we can actually increase profitability by building things that were better, more sustainable, that had a better health impact, creating healthier communities and so forth. Joe: It was definitely driven by wanting to do good but also realizing that you can do good and have a profitable enterprise. And as 2006 came around, the recession started and real estate was really the first. I graduated in 2006 and so I lasted a couple of years through the recession and ended up taking a job, more of an institutional finance position, but focusing on affordable housing. And a similar philosophy there where if you roll up your sleeves, you can actually take on a part of the sector that wasn't necessarily as sexy, but also had real impact on people, and again, keeping on profitability. Joe: And around this whole time of being in real estate, I was starting to get exposed to other entrepreneurs more in the consumer product space who were some of the early pioneers in sustainable agriculture and fashion, those types of areas and they were doing it in ways that were really impactful. Joe: And so, I caught that bug and had no idea what I was going to do next, but real estate was not the place to be at the time. And I was basically planning to go to business school. And right before going and applying for business school, I saved up all my vacation days and ended up going to visit a good friend in Thailand who was living abroad with four of my other close friends from growing up. Joe: And it was on that trip where the idea for Yellow Leaf came to be, but it all transpired on that trip, but driven by this experience that I had and exposure that I had to other social entrepreneurs. Stephanie: Okay, cool. So what happened in Thailand where you were like, "Uh-huh, I need to start Yellow Leaf." What did that look like? How did you find the hammock? What was the story behind that? Joe: So, I was originally on a remote island and reading a local guide book trying to figure out what to do with my day. We're sitting on the beach one morning and in this book, there was a story, it was a basically said, there's a little shop on the other end of the island in the old part of the island. Joe: And in the shop, there's a map that they give out for free that's a locals' only knowledge type of thing where it'll tell you the secret waterfall and the secret beach. And I was like, "Okay, I got to go check this out." So, I hopped on my motorbike, zipped through to the other end of the island and ended up getting to the shop and it was closed. So I was pretty exhausted by the time I got there. I sat down, someone came and opened the shop and I asked for the map. Joe: And then I also noticed that there was just a plethora of hammocks that were beautiful. And I immediately jumped in. I had loved hammocks before this never thinking that I would be in the hammock business. But I jumped in and was immediately struck by how soft the yarn was, the intricate weave. And I started asking questions about this hammock thinking that I would buy some and bring them home. Joe: And I was told the story of the Mlabri tribe and an aid worker who was working with this tribe and how literally through hammock weaving they had gone from being on the brink of extinction as a culture and they were trapped in indentured servitude. And through hammock weaving, they were able to provide enough income in their community where they were able to self-sustain themselves and build a path out of poverty or were on track to do that. Joe: The impact that they were creating for themselves that was driven by themselves and not an outside aid organization was really interesting to me. I had been familiar with the Toms Shoes model, the handout approach to creating impact. And so, this struck me as something really different. And I learned that these hammocks were not sold really anywhere else outside of a few places in Thailand. Joe: And so, a week later, that story of this community and what they were doing and the hammocks really stuck with me and I contacted the shop and I asked if I can go visit. And they connected me with the village. And long story short, I convinced the cab driver to drive me 600 miles to the village. Stephanie: Gosh. Joe: And I went there and I got to meet the women making the hammocks and spent a whole day in the community. And I learned that people would hike as far away as the Laotian border to this village because they heard how much money they could earn, how well they could be treated. And they were being turned away because there just weren't enough sales. Joe: And immediately I was like, "Well, this is a great product." Naively I was like, "Oh, I can sell some hammocks. We can provide work in this community. And I came home with a backpack stuffed full of hammocks and all this energy and excitement, threw them down on the bed when I got home and with my now wife was who was my girlfriend at the time we were living together. And told her about my experience and it all just snowballed from there. And I basically decided not to go to business school and start doing this on the side and diving into it and slowly getting to where we are today. Stephanie: Okay, cool. Yeah, that's such an amazing story. Where are you guys today? How many hammocks are you selling? Joe: Oh, God. Well, we have over 200 trained weavers. We started with about eight women when we first decided to do this full time. So, we've grown quite a bit in terms of annual units. I mean, tens of thousands that we've sold. And we're actually growing a ton right now. But yeah, it's definitely a very sustainable business. We're past the ideation stage and more into growth right now, so. Stephanie: For sure. Yeah. And I love that idea of giving jobs and actually, like you said, developing a market, a bigger market and providing an opportunity instead of just giving things to someone. Because I do think that's a much more sustainable path and one that I'm always very interested in. How has it changed though from when just a few women making these hammocks? What does it look like now with all these weavers? Are you ingrained in the training process? How do you keep up product quality? It seems like there's so many questions when you're working with a village in Thailand. Joe: Oh my God. Yeah. I don't even know where to start. There's a lot that we've learned and I think we've built a really, hopefully, a model that others can replicate for the artisan sector. But basically, when we started, we were, well, one of the first things we did was update the designs and we learned early on that... Joe: I guess to just step back even a little bit. When I first came back from Thailand, my co-founder Rachel's idea was that we needed to test the market and see if other people thought these hammocks were as great as I thought and that I wasn't just crazy. And that proved to be a really valuable process that we went through where we started selling hammocks at local markets and different fairs around New England, where we were at the time. And we didn't share the impact story. We just tried to sell the product and we led with product first. Joe: And through that experience, we gained a lot of feedback around design and being really design-focused. And so, one of the first things we did as we were starting to really grow was update a lot of the aesthetic to be more on trend with color and pattern and things like that. Upgraded materials so they were really built for the outdoor use and using performance materials. Joe: And so, as we were introducing these things, our weavers were really receptive to that. And we really engaged them in the process. But some of the things we've done as we've continued to grow and looking at how do we create more impact? Layering in like we built a financial literacy program, we have this amazing partnership with kiva.org where we're able to provide zero interest flexible loans to our weavers. Joe: And thinking about how do we provide additional support or bring in partners that can provide additional support in the communities to make it truly sustainable because the first step is giving somebody an opportunity to earn a great living wage and helping people evolve to the middle class. But then it's taking that next step. And so, we've done some work around that and really focusing on quality control from the beginning as well has been super important for us. Stephanie: That's amazing. So, how do you manage inventory levels? I saw you were on Shark Tank, which I'd love to hear the story behind that, but it also made me be like, "Oh my gosh, when you're on Shark Tank, I'm sure you got a million orders." How did these weavers keep up? So maybe first, if I can hear a bit about the Shark Tank story and what that is like, and then move on to how you manage inventory from that surplus of sales I'm sure you have. Joe: Yeah. Yeah, Shark Tank was quite the experience for us. I think we have an ideal product to showcase on Shark Tank, especially during today's times where people are spending more time at home. But for us going on Shark Tank was really, it's catapulted us truly. First off, we've had our first infusion of capital. I guess I can give away what happened. Joe: We received a million dollar investment from one of the guest sharks, Daniel Lubetzky, who's the founder of KIND Snacks. So, he's a very mission-driven investor who has a similar track record as us in terms of rolling up his sleeves and taking 10 years to build what he's built. And so, he's been through the trenches, but our experience in Shark Tank was, I mean, since Shark Tank, we've definitely seen a huge uptick in sales and we've been able to put some systems in place to really shift our business towards more of a direct-to-consumer model. Joe: And it's only been a month and a half since we were on the show. So, we're still living through a lot of the chaos that comes after you're on the show. Stephanie: Mm-hmm (affirmative). So what kind of unexpected chaos came? Because I'm sure you're like, "Oh, we're for sure going to get more sales," but what things happened or what surprising things happened after you were on the show or maybe during the show? Joe: Well, we honestly had no idea what to expect. We talked to some other entrepreneurs that have been on the show and have learned that it's different for everyone. It depends on what's going on in the world at the time that your episode airs. I talked to one person who was on the show during a massive snow storm and people were at home watching and he had a product that really fit the times. And so he did really well. Joe: And I talked to other people who were like, "Oh, it was okay." So, we just had no idea. And then going into this also, we're going through such a crazy time where we just didn't know if people are, how bad people are impacted economically. And so, we didn't know how to prepare inventory-wise, we didn't want to overinvest in inventory. That's been something we've really tried to hone in on and not hold inventory too long, have some of those kind of basic business principles baked in. Joe: But we've seen sales have far exceeded our expectations and it's broke a lot of the systems that we've had and created a lot of inefficiency now as we're trying to catch up. And going back to your question around the supply chain, on the one hand it's been a challenge, but we've also been able to catch up pretty quickly. And I think having a vertically integrated supply chain like we do and really great relationships with our weavers is what's allowed us to not lose out on, we're not leaving too many sales on the table and trying to take advantage of everything that's going on, keeping our foot on the gas. Joe: But it's been just the uptick in order volume within a short amount of time and sustained order volume has been something that's new to us. And so, it's been a fun challenge to work on. Stephanie: Yeah, that's amazing. Congratulations. Getting a million dollars from Shark Tank is awesome. And you went in only asking for 400,000, right? Joe: 400,000, yeah. Stephanie: That's crazy. Joe: Yeah, they have a great clip at the end where Kevin O'Leary goes, "It's never happened before in Shark Tank where someone comes in for 400,000 and comes out with a million." And honestly, we had no intention of raising a million dollars on Shark Tank. I think, yeah, we're still like, "Did that just happen?" Stephanie: Did it hit your bank account pretty instantly or was there a whole process behind it? Joe: There was definitely a whole process. You go through due diligence after, it's more of a handshake agreement on the show. And so, we ended up closing and then went to work afterwards just preparing to be on the show, making sure that everything was in place for us to have a successful airing. Joe: And this was before COVID existed, so we did not anticipate what the world would look like when the episode actually aired. But it's great to see some money in our account for the first time and actually be able to think a little more strategically, so- Stephanie: That's always a good feeling. Joe: ... definitely a different business today than, yeah. Yeah. Stephanie: So, what was the first thing that you invested in after that cash hit? Did you have a plan for it or what did that look like? Joe: So, we knew we needed to build our marketing engine. Prior to getting investment, we were very bootstrapped, we would reinvest all our profit and we were always getting pulled in a lot of different directions. And for once we can actually focus in on updating our website and really making sure we're telling our story and being a little more deliberate in the communications through our website. And so that was several months of a project and also focusing more on product development. We've got this new product called the hammock throne, which is a new category of its own. Stephanie: I need the throne because I consider myself a queen, so I like that. Joe: So, putting money towards that and making sure that we're positioned for this next phase of growth with product development and a really good Ecommerce experience was the first two things. And we're continuing to reinvest into those areas right now. Stephanie: Very cool. Do you ever test with the messaging on your website? And if so, what kind of testing do you do and what do you see works best to tell the story? Joe: Yeah, we've done some light testing. And the one thing we've tested the most, I would say, is how we message the product and the impact. And it's always odd to us if we ever lead with impact and the artisan story, it doesn't resonate as well as telling the product story. And so, we continue to test and we continue to iterate how we're communicating that because obviously impact is super important to us. It's baked into our business model, it's why we started, but the product is what makes it sustainable. Joe: And so, we're trying to really weave that into the storytelling more, but that's one thing we've, every time we test it, product story always wins. But we're starting to really get that striking a chord with more about how we tell the impact and how the impact story really contributes to making the product superior and what the benefit is to our customers. Stephanie: Yeah, that makes sense. I did go on your about page and I was watching more of the story of the weavers and I couldn't stop watching. It was like one of those addicting memes or videos where you're watching someone knit something and I'm like, "Oh, I can't look away." That's a really good video. Joe: Thank you. Yeah, and that's how we're now figuring out how to really tell that impact story of showing how it's made, showing the people that are making it. Every hammock is also signed on the label by the woman who made it. Stephanie: Oh, cool. Joe: And so, we really want to connect customers to, there are real people that are so enthusiastic about every single sale that we get. It's awesome. And we want to connect our customers with our weavers. And so, that video is something that it took us a while to get. Again, just not having raised money up until recently, everything came naturally and organically and over time, but those are things that we've tested out and seen how once we're able to show how it's made, that's one of our advantages. A lot of products are just made in I guess more of a boring way. I'm not sure, but just not in the same environment. And so, there's this beautiful craftsmanship that we want to showcase. Stephanie: Yep. Yeah, I probably would not watch how my office chair was made, but yeah, that I could not look away from. Joe: I did just get back from an office chair factory as we were figuring out the hammock [inaudible] that's was... I do think... Stephanie: What were you doing there? Joe: We were sourcing components for the hammock [inaudible] because we're getting into furniture. And I think that just showing how things are made should be done more. I think it creates more transparency and connects people to where things are coming from, which is important for sustainability and just awareness around that's important stuff. I would challenge that and say, even the way office chairs are made, at least maybe I'm just a geek around manufacturing and production, but I think there's some, I don't know, I saw some cool things that I thought other people would be interested in. Stephanie: Well, if you take a good video, I will be open to watching it and- Joe: Absolutely. Stephanie: ... seeing if it's as enticing as watching someone weave a hammock together. Joe: Yeah. Stephanie: So, when it comes to new products, you just mentioned that you guys are looking into getting into new products. But one thing I saw on your site was that you could actually build a custom hammock and it made me just think about, how did you decide that you would allow consumers to build a custom hammock and how does that get to the weavers? Because it seems like it would be easier just to have like, "Here's our three products, and this is what the weavers know how to do, and this is all you can order." What was that thought process like allowing a customer to create their own? Joe: Yeah. We had a lot of debate around whether or not we wanted to pursue that because it does add extra work for us. We figured out what would be the premium cost. I think it's a $50 premium to make a custom hammock. The process has evolved over time and we're getting more towards a tech-oriented solution in this next iteration. But there's a design guide that we share out with customers. Joe: Right now it's pretty manual. You order the custom hammock, we then email you a design guide, a PDF that you fill out. So you can't actually see the hammock, but we have a lot of examples in that design guide and you can see the different colors. And it's worked really well, but what inspired us to do that was more around just realizing we have the ability. Joe: We have a very design-oriented customer, or at least one segment of our customers are very, in that interior design world. We also were previously, we did a lot of collaborations with companies like Anthropologie — we made all the hammocks for Tommy Bahama and other brands and realizing that they wanted something unique to them and limited edition collections and things like that and that we have the ability to do that. We realized maybe individual customers also have that preference and to make something that really fits their space as they're designing that area in their home or backyard. Joe: And so, we tested it out and we got a pretty good response and realized it was something we can do. And it's allowed us to differentiate as well, but also just another way to add value to people. And I think there's this broader trend around customization and less mass market products and things that really represent your personality and your style and things like that. So, we really lean towards that and wanted to empower our customers to be able to do that. Stephanie: Yeah. That's awesome. So, are you guys in retail or are you only doing direct-to-consumer? Joe: When we first started the business, we basically were trying to get any sale we can get. There's that bootstrap approach, just hit profitability as quickly as possible. We weren't really deliberate about where our sales were coming from, didn't have the resources for one strategy or the other. And as we grew and started reinvesting and we became a little more strategic and we focused on, our business was at, a year ago, it was probably 50/50 between retail partnerships and Ecommerce. Joe: And we've obviously started shifting heavily towards direct-to-consumer with stores being shut down, but other reasons as well, I think we were going in that direction anyway of being more direct-to-consumer. And the other thing that we're focusing on, thinking about more longterm is, I don't think we're going to not sell into retail. We're just going to be more strategic around who we work with and making sure that our story is really told well, the product showcased well, it's definitely a hard product to merchandise. And it's an easier story to tell on the internet with video like you mentioned and being able to really focus more on storytelling, which is a big part of our brand. Stephanie: Yeah. That makes sense. What kind of issues did you run into when you were going into retail, outside of COVID and everything, but what problems did you encounter? Joe: Well, taking up space on store shelves, packaging, we didn't really have retail ready packaging. And so, going through a couple of iterations of different displays, things like that, it took so much time to develop. Also, payment terms aren't flexible with most retailers, things like that. We pay our weavers immediately upon completion of the hammocks and some in advance. Joe: And so, just the whole retail business model wasn't really friendly for our art model. And we constantly were up against having to negotiate for better terms, having to figure out how to display the product in a store. And it's always just been so much easier to do it online. Stephanie: Yep. So, earlier you mentioned that when you started getting more orders, a bunch of things broke. What kind of things started breaking first and how did you go about fixing them? Or are there any best practices where you're like, "Well, when you have this happen, we saw this work, then this didn't?" Joe: So, I would say on the supply chain side, a lot of the efficiency that we had created just broke in the sense of... So, when we first were working with eight women, we were able to really go to someone's house and collect hammocks. And it was very manual and individual. As we grew to 200 weavers, we created a little bit more of a schedule around when we would drop off yarn, created a central location and standardized some of the things around collecting hammocks and payments. Joe: And after the Shark Tank appearance, our sales, we far exceeded what we expected to sell. And so, we ended up going on back order and still working through a lot of that right now as we speak and ended up having to go door to door again, completely lost all the efficiencies that we had, just trying to get the hammocks to the customers as quickly as possible. Joe: We started drop shipping directly from the communities where they're made in Thailand direct to customers homes. And so, a lot of the efficiencies just broke down and those things are compounded as you continue to stand back order. And so, that's one thing. The other is that when we relaunched our website in the beginning right before we went on Shark Tank, we had all these plans to continue innovating testing and a lot of those plans just fell by the wayside because we were putting out so many fires around being on back order, trying to get more yarn. Joe: There are so many challenges right now with global logistics. So, getting hit from a lot of angles. Stephanie: Yep. Do you see the industry evolving around logistics in the future? Because it seems like so many brands were maybe dependent on one location or these couple of factories or something. And if they're down for the count, you're in a pinch, how do you see things evolving in that part of the business going forward? Joe: Yeah, that's a really interesting thought to try to predict what will happen. But I definitely think a lot of brands are reliant on just one manufacturer and there's reasons to maybe figure out other backup solutions. I think we'll definitely start seeing that it's definitely wise to not just be fully dependent on one supplier. But it's going to be really tricky because in the U.S we're just not set up to manufacture a lot of things that people buy here. And so, it's not like it's going to be a sudden shift to bring manufacturing back. Joe: And globalization, personally, I feel like has had a positive impact on prices of products for people and accessibility to different things, but we're retracting a little bit, so I don't know. I'm definitely closely watching it and thinking about how do we look at different yarn suppliers and raw materials and maybe have more options just in case. Joe: But I think we're also inclined to not create a problem and just stick with the status quo. I think a lot of businesses are that way, so it's a little bit of a balance of putting some resources towards planning for worst case and also keeping your foot on the gas and keeping up with what's actually working now, but things will certainly be changing in the coming year. Stephanie: Yeah. Completely agree. So, with everything going on and all the chaos that you just mentioned, have you been able to focus on your content and marketing strategy? And if so, what does that look like for you all? Joe: Yeah, we've been definitely trying to scale up our content strategy. It's a little too early for us to report anything significant, but one of our, an area that I think we've done it really well in is having a lot of user-generated content. And if you look at our website, most of the photos on there are actually taken by our customers and this might have been a benefit of being bootstrapped and that we didn't have the resources to do a lot of these full-on photo shoots that bigger brands have been able to do. Joe: And that's allowed us to have real people in our products and to be able to show that to our customers, creating that relate-ability. And we're definitely wanting to continue that, and we're hiring now, trying to build out the content arm of Yellow Leaf more and focusing more around what a hammock represents in your life and relaxation and really shifting our mission a little bit more towards making relaxation a daily ritual in your life. And so, focusing our content strategy more towards that. Joe: And so, being a little bit more deliberate around our photography too and really showing the product in different places and how to use it. It's a little bit of a technical product in terms of how do you set it up? Where do you place it? And so, going forward, we're really focusing on being able to create content that showcases and answers a lot of those questions. Stephanie: Yeah. Yeah. That's definitely a good move. I also saw on the reviews, people were able to select where they place their hammock, and I thought that was so important because then you can be like, "Oh, she's like me and she put it in her backyard," or they put it in their kid's room. And it just helped you visualize, "Okay, it must not be that hard if a bunch of people are able to do it." Joe: Yeah, exactly. And that's where the user-generated photos that we have come into play. We also included a 12 page hammocking 101 guide book with every purchase. Stephanie: That's good. Joe: So, it has a lot of resources on how to hang it, where to hang it. Everybody sets it up a little bit differently. And so, as we look ahead, developing products that allow you to really be able to hang a hammock anywhere, there's more of our focus going forward. I think we've done really well with perfecting the woven hammock and now making sure that we can increase the amount of hammocks we can sell and the way people can use hammocks and making it a more integral part of our culture in the U.S. And so, that's the biggest focus for us in this next phase with solving that how to hang problem. Stephanie: So, when it comes to, you were mentioning UGC earlier, how do you encourage your customers to post those images? Joe: Well, I think for us, we're fortunate in that it's the type of product that people like to brag about. So, we definitely see a lot of people who are excited to use it. And so they're like, "Hey, take a photo of me," and they share it. And we try to really monitor social channels. I wouldn't say we have a massive audience compared to others yet. It's growing right now, but we try to really connect with people individually and have them share those photos with us directly so we can reuse them and just engaging with people one-on-one has helped. Joe: And then, more people see others sharing and they share. And so, it just builds on itself. Obviously, we send out the post-purchase review requests and anytime we communicate with customers we're always like, "Oh, we'd love to see your photos." And it makes our day to see that. And I think they're excited to share. And so, we try to keep that momentum going post-purchase. Stephanie: That's great. So, for a product that's pretty durable, probably going to last many years, what's your idea around increasing the lifetime value of a customer? How do you bring them back? How are you trying to get them to buy more than one product? What does that strategy look like? Joe: Yeah. With hammocks, it's obviously you would think a onetime purchase, and we were really surprised with our findings once we started really looking at the numbers behind our sales. And for us, it's about just under 20% repurchase rate within first year of purchase. And so, we were just shocked that for a hammock that we were seeing that. Joe: And what we learned was that this was such a great gift for people. And we started communicating that more once we discovered that so many people were gifting hammocks to a new, if someone, a friend buys a new home, get them a hammock. That's a great wedding gift. It's unique, it's different. And so, we've started really showcasing a lot of that gift giving more. And so, that's helped with the repeat sale. Joe: But that aside, we're also looking at how do we add more products? How do we build out, there's that space in your backyard that compliments the hammock? So, you buy a hammock, but there's other things. What else are you buying to create that space? And thinking about building more of a robust home and backyard brand centered around the idea of creating that relaxation space. And so, what can we do to add more value there? That's the product philosophy is more around hammock-inspired products, I guess. Stephanie: So, earlier you were talking about creating different messaging around relaxation or gift giving and things like that. What kind of marketing channels are you seeing success with? Joe: I would say right now, definitely the basics of being on Facebook and Instagram, especially for a very visual product like ours is great. We see a lot of success there and we've really tried to focus in on those. In the earlier days when we were starting to really focus more on digital marketing, we cast a little bit of a wider net. We found Google to be really expensive, really competitive and narrowed it down to, let's really figure out Facebook and Instagram before we start branching out elsewhere. Joe: And so, that's what our key focus right now. And we're also seeing with a lot of bigger brands moving off of Facebook right now with things happening politically, we're seeing prices come down a little bit. So, it's a smaller brand, it's honestly benefiting us. And so, we're trying to take advantage of that to be totally transparent. Stephanie: Oh, yeah. We've had a lot of brands, smaller brands say that as well, so you're not the only one. Joe: Okay. Yeah, and it's great. I mean, I think things are always shifting. The more people jump on a particular marketing channel, the cost increase, so you have to be really nimble. And for us, this is also new. We're also focusing more on Amazon these days. And so, I would say that's another really, it's been a great sales channel for us too. Stephanie: What was that process or what does it look like selling on Amazon versus B2C? What kind of things do you encounter while selling through their platform? Joe: Definitely very different. You lose a lot of control. Amazon's broken up between seller central and vendor central. And seller central you warehouse the product on your own either in your warehouse or put it in Amazon's warehouse so that you can offer prime shipping if you do that. But you have more control on that end. And on vendor central, they purchase direct from you and on the inventory and therefore their algorithm prices your product. Joe: And so, if you have a minimum asking price map pricing like we do, we never really discount our products. And so, you're constantly having to monitor and make sure that the product is represented the way you want it, which is really challenging. But at the same time, so many people are shopping on Amazon. Joe: And I think when we were first starting to shift more towards direct to consumer, we had a little bit of pride around thinking, "Oh, we're just going to be on our own website and some select retail channels." And really again, I don't think that's wise, I think you want to be where your customers are, particularly for your category. And for hammocks, we had an opportunity to really stand out on Amazon because it's such a commoditized category. Joe: And so, we definitely, yeah, we made this decision and it's worked out well for us, but there's definitely challenges around being in control of how your product is showcased and there's less customization and so forth, but a lot of people [crosstalk 00:43:39]. Stephanie: How do you stand out on Amazon? Joe: You can pay a little bit of money to be able to create your page. I think it's called A+ pages. And really you're still working with their templated sections, but really focusing in on like, what are the core things you want to showcase? And you have to stick within those walls. But trying to make that section mirror our website as much as possible and just having good customer service on Amazon as well is important. Joe: You do lose a lot of that control when you're selling on Amazon, especially if you have such a, you're trying to build a brand and not just another kind of a trinket type product. But again, if people are especially already aware of your brand, like for us, we saw after Shark Tank, people would go to our website, but also people would check Amazon just because Amazon has such a strong reputation for quick delivery, easy returns. And so, why compete against Amazon when you could be on there and increase your sales to reach more customers? Stephanie: Yup. That makes sense. So, how do you build, I mean, we've had a lot of our, we do a survey for some of our listeners and many people ask about selling on Amazon. So, what kind of optimizations do you do to your page, or are you experimenting with where you're like, "This is working really well or make sure you pay attention to this part." What kind of things are you looking at when it comes to creating a different page that gets found and it's enticing and still tells your product story and the background and all that? Joe: I would say we're still learning a lot, but one thing that's worked for us was to move all of our products under a single page so you can click through the different views all in one page. And for a while, we thought that would be a bad thing to do because if you're searching for a particular product and you only see one design, you might not click on it. We found that to not be true. Joe: Once you click on, you actually land on the product page, you can click through the different designs. And so, keeping people all on one page. And I guess you can apply this to your website as well. And Amazon obviously tests these things and we started just following whatever their best practices are. And it also allows you to have all the reviews for all of the products on all in that one page versus broken out across 30 plus views. Joe: So yeah, I mean, generally we're just trying to follow their best practices and take their advice on how to set your page up and just stick to the basics and good photography obviously is a given too, so that's been important. Stephanie: Yeah. A previous guest also mentioned that, let the algorithm do its job, or like you said, let Amazon tell you best practices, because he was just saying that a lot of people will try and just do something different because they think they know more and instead it's like stick with what works and what the brand is telling you what works and see how that goes first. So, yeah. Joe: Yeah. Yeah. Stephanie: That's good. So, earlier you were mentioning your website, is there any new tools or technologies that you're playing around with right now that you're seeing help conversions or maybe before you were seeing cart abandonment and now you're not, or you were dropping off traffic from the homepage and now you're not anymore? Anything that you've had success with on your website? Joe: For us having the live chat functionality is really great. And rather than having something that pops up and is in your face right away, just having a subtle message in a corner that you can click on and you can ask questions and if we're on, you can chat with somebody right away. Oftentimes it's been turned off lately just because we still have a pretty small team. Joe: But you can, instead of going to a contact us page, having that there, we learned that for our customers, that was really important. A lot of people have questions before purchasing. And so, making that readily available without a way that's super intrusive to their site browse-ability. And then having a popup with really good messaging around. What's the value to you to sign up to our newsletter and not just trying to throw another discount in your face, because again, for us we're not able to really discount heavily. Joe: And so, those two things have been probably the greatest for us. But we're continuing to develop our site more and add a little more functionality and features. And so, but yeah, we're just, again, sticking to what works and following... We oftentimes look at maybe what other brands are doing and get inspiration from them. Joe: If you're small like us, what we've learned is that there's no point in reinventing the wheel. And bigger companies like Amazon and other Ecommerce companies that have huge markets that are testing things constantly, you can really learn a lot by looking at what they're doing. And so, yeah, we're testing on our own, but also taking cue from others. Stephanie: Well, that's a good question then. What kind of other brands are you looking at? What Ecommerce companies do you keep an eye on? Joe: Definitely some of the big marketplaces like Amazon and Wayfair, very different from our website and they're more of a marketplace but just what their experience is like for customers is great. Actually, another company that we look at our category specifically, The Inside, who I think was on your podcast. They do an amazing job. We were looking at a lot of furniture and direct-to-consumer brands who are also selling products that require a lot of thought before purchase and how they're communicating some of the questions that people have when they're shopping for their home like Parachute Home, Floyd, or another furniture company. Joe: And also I would say some of the early pioneers and direct-to-consumer brands like Warby Parker, Away travel, who's done a really great job. And so, yeah, looking at the companies that have been able to raise a ton of money, grow super fast, build those departments out, what are they doing and how can we tailor some of those best practices towards our own business has helped. Stephanie: Cool. Yeah, I love that. So, before I move into a quick lightning round, is there anything that I missed that you were like, "Man, I really wish we had talked about this?" Joe: I mean, no, I think we covered so much. Stephanie: We did. All encompassing. Well, cool. Then we can move right into lightning round brought to you by Salesforce Commerce Cloud. So, this is where I ask you a question and you have one minute or less to answer. Are you ready to go? Joe: Ooh, great. Let's do it. Stephanie: All right. What's up next on your reading list? Joe: Ooh. I am really looking forward to reading something that is non-fiction. Honestly, I've had my head down for so long that I have not had a chance to actually kick back in one of our own hammocks. And maybe I have to do a little staycation. So, I'm looking for a book that can take me away from all the work stress and everything else. I can't say I have one right now. But I would encourage people to... I'm sure a lot of your listeners are always looking for ways to improve, innovate like I am. And I think I've always found value in trying to step away from that. And so, I would say I don't have a book on my list, but I would recommend A Gentleman in Moscow, which totally takes you to a whole different world. Stephanie: I like it. Joe: And that requires all sorts of great creativity when you do that. Stephanie: Yep, completely agree. What is your number one recommended spot when you go to Thailand that you would tell other people, "You have to go here?" Joe: I would say if you're going to Southern Thailand and doing more of the beach thing, take the extra step to go further from, a lot of people go to Phuket, which is great, but get on a boat, travel a couple hours further. And there's hundreds of islands to choose from. Honestly, pick any one of those. I would say Ko Lanta is great. It has a little bit of everything, but just, yeah. Go a little bit further, a little bit further away from the people and allow yourself to have that experience of truly being remote. Stephanie: Yeah. That's awesome. What is the favorite piece of tech that makes you more efficient? Joe: I would say, I mean, I love my MacBook Pro. Stephanie: Same. Joe: Yeah, thing is great, I take it everywhere. But everyone's got a computer these days. I would say, I don't know. Lately it's been just my computer because I've been staring at it for so long lately. Stephanie: Makes sense. Yeah. As is all of us. If you were to have a podcast, what would it be about and who would your first guest be? Joe: It would be around relaxation and how to live a more values-oriented life. And my first guest would probably be, I would say, Wim Hof, maybe. Stephanie: Ooh, that's a good one. Joe: Yeah. Stephanie: I was just watching a series about Iceland. It reminded me of him doing his cold plunges and yeah, he's great. Joe: Yeah. He's figured some things up. Stephanie: All right. Well, this was a great lightning round. Where can people find out more about you and Yellow Leaf Hammocks? Joe: So, our website would be the first place we recommend yellowleafhammocks.com and also our Instagram which is Yellow Leaf Hammocks. So yeah, looking forward to, yeah, seeing where things take us after this, but thank you so much for having me on. It's always a pleasure to share our story and hopefully add value to others. Stephanie: Yep. Yeah, it was awesome. Thanks so much for coming on Joe, and we will have to bring you back after all the Shark Tank craziness dies down and see how you're doing in six months to a year. So, that'd be fun. Joe: Yeah, that would be amazing, Stephanie. Stephanie: All right. Thanks Joe, have a great day. Joe: You too, bye.

If you really stop to think about your clothing and the prices you pay for it, you might find that you’re left with a few questions. For example, how can a t-shirt cost less than your morning cup of coffee? Surely the materials and labor involved in designing, making, and shipping a t-shirt are more costly than a few coffee beans and some milk.  That low-cost t-shirt is the result of the fast-fashion business model which has swept through the fashion industry. The result is that we may have more access to cheap clothes, but the quality is poor and the environmental and humanitarian cost could potentially be catastrophic. Zana Nanic is the Founder and CEO of Reclaim, a slow-fashion Ecommerce brand, and she is on a mission to change the way people buy clothes.  On this episode of Up Next in Commerce, Zana explains how she started Reclaim after becoming fed up with the business casual, fast-fashion norms of Silicon Valley. Plus, she dives into what you have to learn from your customers during the initial launch of your business, and why she believes that an omnichannel approach is the best way to find success in the future. 3 Takeaways:   First impressions matter. You have very little time to make a lasting impression when someone visits your page. Relaying the information that will get them to convert must be delivered in the first few seconds a potential customer visits your page. Returning customers is the holy grail metric for a small or start-up company, especially as it relates to the slow-fashion industry. When customers return to buy more, it tells you that they value you and your products and you can build a stronger relationship with them. Invest in pop-up shops and omnichannel strategies to help convey the quality of the clothing. These tactics yield a more valuable and loyal customer.   For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone, and welcome back to up next in commerce. This is your host Stephanie Postles and today, we have... Let me get the name right. Today, we have Zana Nanic on the show, the CEO and founder of Reclaim. Zana, welcome to the show. Zana: Thank you so much for having me. Stephanie: Yeah, I'm really excited. I'd love to hear a little bit about Reclaim. Zana: My story is not the typical story of she liked fashion and therefore she's super creative and wanted to do fashion. I am originally Croatian and I moved to Italy because Croatia was in the middle of a civil war. I grew up in Italy as a refugee and my parents, I remember, they were trying to get a job and they couldn't get any job because they didn't speak fluent Italian. Somehow, it was the early '90s them and fashion was the thing to do in Italy. Somehow, they started working in the fashion industry, very, very small and they were lucky enough to have a pretty successful run with it. Zana: But to me growing up, fashion was this amazing tool for empowerment. It was something that you could wear and forget a little bit of your identity. I had this very heavy label I was carrying with me, I'm a refugee, a foreigner, an immigrant, and as a child, sometime, it was pretty heavy. But when you had the right outfit and you look really nice, people just assume different things and admired you and were inspired by you. Zana: Fashion became a little bit my armor and then going into my adult life, it really became a tool I would leverage and use to present myself in a certain way. Giving you an example, when I was at Uber, I was one of the youngest people there and I was already managing. Having the appropriate dress code that made me look a little bit older than my age was essential for my confidence. Very much today as well. Zana: Reclaim really is this testament to how do I help women connect to themselves more and just open up opportunities so they don't have to worry about their outfit, but worry about much bigger and much more important things in their life. Zana: Reclaim is a fashion brand we started eight months ago and we focus on a very limited collection, all the wardrobe staples that every woman needs. But what we try to do is combine Italian craftsmanship and artisans. I'm Italian and my family is in Italian manufacturing. I literally grew up and made in Italy fashion. We tried to combine that aspect of fashion where beautiful aesthetic and a beautiful detail with love for practicality and function. Zana: I currently live in San Francisco, very Silicon Valley. Everybody's superefficient, super go getter. We try to incorporate those to [inaudible] and the clothes, and we have a very limited collection of things that are practical, functional but also extremely beautiful. Stephanie: Very cool. I was reading a little bit about your story of how you were in pencil skirts and heels and then you came to Silicon Valley and everyone was wearing hoodies and jeans and you're like, "I want something a little better." Zana: Yeah, that was a bit of a shocker because I grew up in Italy, where fashion is part of your identity, such a country that has a sensibility for beauty and art and culture, and fashion is a form of art. I was coming from a very corporate world. I wear pencil skirt, high heels, very formal wear was the day today. Zana: And then my first job at Silicon Valley was working for Google. I remember showing up there and everybody was wearing jeans and sneakers and T-shirts. I adapted to that lifestyle in the work outfit. But I also felt super underdressed. I'm like, "Ah, last time I wore this outfit, I was 15 and in high school." Is there anything a little bit more elevated? I feel like an adult and a woman with a career but still appropriate for business casual, and this is a little bit where Reclaim came from was how can we define a business casual aesthetic that is elevated but still very approachable and affordable Stephanie: Yeah, I love that. It's funny. I also worked at Google and if you would even get what would be considered maybe dressed up, they'd be like, "Oh, where are you going today? Do you have a date afterwards?" You're like, "No, I just want to wear a dress today. I just want to wear something cute." Zana: 100%. It will be, "Are you interviewing for a different job?" Stephanie: Yes, I would get that too. You're working at Google, what did your career look like before Reclaim at Google or some of the other corporations? Were you in eCommerce or was that a big shift for you? Zana: It was a little bit of a shift. I mentioned before my family's in fashion so they have boutiques on the Italian coast stuff but very old school. They barely have a website and they do a lot of manufacturing and older clientele hasn't been the same for 30 years. I grew up in commerce but not eCommerce, a different generation. Zana: When I graduated college, I didn't think about fashion as a career option to be honest. I was like, "I want to do something that is different." Everybody I knew was in fashion. I was like, "I want to do something completely different and break the path with what my family is doing." I ended up in consulting. I ended up in management consulting and I didn't work for some fashion clients, but mostly I did a lot of projects and hardcore heavy industry, and after that I worked at Uber. Zana: I was managing Uber Eats in Italy which is different than fashion but is related to commerce and how to get conversion and how to get people to purchase your products. Some of the themes were similar and then the Google role was a mix of the two. It's a little bit of strategy and a little bit of execution and was focused on growing this smart home business. Zana: I would say that the career path I took was not a fashion career path and then this shift happened in business school. When I went to business school, I realized actually I do want to embrace my roots and there is a lot I know and I can offer and I spotted this niche in the market and this gap that was really needed. Honestly, it was my pain point. I was like, "I really don't know where to shop and I want to wear beautiful clothes but I also don't ever want to go dry clean them." That was the perfect solution. Stephanie: Yeah, that's super important. I remember one time I had dresses to dry clean only I'm like, "I'm going to throw that dress away. I'm not going to do that. I don't do dry clean." Zana: I also have a lot of beautiful cashmere sweaters and I wear them once per season because they end up in my pile of stuff I need to bring to dry cleaning and it takes me months to go. Stephanie: When you're shifting into creating Reclaim, did you tap into your family say, "Hey, here's what I'm doing," and start brainstorming with them since they are the experts but not in eCommerce but maybe in the industry when it comes to high end retail? Zana: 100%. They were my first consultants, advisors, investors. They heard it all. My family business was a little bit like the sounding board for Reclaim and I spend a lot of time with the people in my family business and my family contacts. Like our pattern maker, for example, that we use in Reclaim she's a person that I met through my family. She's based in Florence. She's super, super talented and I designed with her most of the clothes that you see in the Reclaim collection because I would bring in the creative perspective and the vision, but then the nitty gritty manufacturing specs, somebody who's an expert has to do them. A lot of the concepts come from my family background. Stephanie: That network that seems a great way to start a company when you have different connections that you can tap into like that and different lessons that you can bring with you. That's awesome. What did the early days of Reclaim look like? Tell me a little bit about starting it up and building the website presence and how you were thinking about attracting your first few customers. Zana: The early days... We launched last summer. That was our first collection launch. I'd say the early day was a little bit like still discovery. I want to say that that lasted for the first few months. From launch to beginning of January was a discovery moment. You come in and you've done a lot... At least, when I launched the website, I talked with more than 2000 women at that point. I thought I know it all. I've talked to them. I understood what they want. Zana: I have a crystal clear picture what is needed, but then, when you have a website is when you start learning for real because one thing is the people that you have face to face what are they telling you and another thing is, "Oh, how are people interacting on my website? What products are they looking at? What are they purchasing? Which ones are asking questions? Which product are getting returned?" Zana: I would say the real learning starts when you are putting something in front of people's faces and you're asking them, "Put your credit card information and buy." That's when you're learning. Do you have product market fit? Or is there something you need to change? Zana: The early days were very, very busy. A lot of documentation and a lot of learning. We really cared about nailing it. Our first 300 to 400 customers, I would personally give them a call and just ask them, "How come you purchased? What convinced you? What did you like?" And just spend a lot of time learning and writing all that knowledge down and taking that feedback in. At the end of the day, we'd be like, "What did we learn today?" And just the bad thing and improving what you're doing. Zana: I wouldn't say that commerce is you have an idea, you put it out there and build it and they'll come. It doesn't really work like that. It's literally like take a lot of pride into changing things every day and iterating as fast as possible. Stephanie: I love that. You had a good point of a lot of people sometimes think build it and they'll come. But oftentimes, that's not the case even if you have an epic product or website or whatever it may be. How did you find your first couple of customers? How did they find your website? How did you get in front of people? Did you do some marketing? Zana: Marketing is a great way to attract people. Our first customers came from the Stanford network. I went to Stanford Business School. The first purchaser were people within my network. People that graduated from Stanford, Stanford alumni, or people that were affiliated with the university because we market it in the university network. And then following that, we had a lot of word of mouth. People who were wearing our products will tell their friends. We had a lot of referral. Our first batch of people that started using the product were referral, learned about us through referral, and then paid marketing. Zana: We did paid marketing on Instagram and Facebook. That is a channel that you use to raise awareness about your brand and your product. Our second wave was through paid marketing. Stephanie: Very cool. How often are you all launching products or new lines? Zana: We are a slow fashion company. Let's say, Zara. Zara would launch 20 collections a year, something that is not like fast fashion but still a high fashion. They would launch 14 collections a year which is a huge number. We're a slow fashion company so what we do we launch very, very few products, but we spent an enormous amount of time making sure that those products are amazing and they're done with the best material and the construction and fit are very well done. Zana: In total so far, we have launched one collection last summer and then we're coming up with our second one this coming August and it's a fall and winter collection and we're having just four products, four basic products, but they're done so much better than what's out in the market. Stephanie: Very cool. When you say four basic products, am I thinking like a T-shirt, a black dress like that kind of product? Zana: Yeah, I can tell you more. We're going to have white button down and the special thing about this white button down is that the front layer is actually made out of two different layers of fabric. You can 100% be sure that your white button down is not going to be see through which is a common problem every woman faces. And then material is the tencel material which is only produced in Germany, is highly sustainable, and it's one of the most ethically conscious materials. Zana: Another thing we're launching is two-piece jumpsuit and it's also made in tencel, so super nice fabric. We made it two-piece because, I don't know if that happens to you but it always happens to me, when you're wearing a jumpsuit and you're feeling amazing and then you go to the bathroom and you have this humbling moment where you're completely naked in your office bathroom. We're like, "No, it has to be practical." We made it look like it's only one piece but it's actually two pieces. Stephanie: That's awesome. I think every woman who's either tried on a jumpsuit or worn one you're like, "Oh, this is kind of awkward." Zana: Yeah, you look great and then the first moment where you actually have to live your life, you're like, "Oh, this is going to be difficult." Zana: And then the third product we're launching are... Those were our bestsellers in our first collection so we made some tweaks to them, but it's a pair of pants. They're made out of a super stretchy fabric but basically you're wearing a pair of black pants that look very nice and professional, but they're absurdly comfortable because the fabric is a 4-way stretch. You're feeling like you're wearing yoga pants but you look like you're wearing a really nice pair of black jeans. Stephanie: That's good. I need that. Zana: Our customers love them. We've got the most responses on those because they're such a good cheat. You're super comfortable but not inappropriate. Zana: And then the fourth product we're producing is going to be a camel coat. This one, the fabric is amazing. It's 30% cashmere and the rest is merino wool. It's super nice and soft. You literally want to sleep with the fabric, just the fabric price is $250 worth of fabric. It's super expensive but going direct to consumer, we will be able to price this product at a 350. It's one of the most affordable best quality materials that you'll be able to find. Stephanie: That's great. How are you conveying this quality and value to consumers or new customers when they're coming on your website? It's hard if you can't feel the fabric or try something on or know the backstory behind it that it's coming from Germany or Italy. How are you conveying that message on your website? Zana: That's a great question. Honestly, that is one of the hardest things to do because in a store, it's very easy. Somebody walks in, you touch it, you try it on, you talk with a store associate and you understand the message. In e commerce, you have roughly 10 seconds to make an impression. That's how much time people spend on one page before they decide. "Will I shop here?" Or they'll just bounce and go somewhere else. Zana: I think here is one of the areas where we did the most learning. Initially, we would have a lot of marketing language to be honest. The highlight or have some bullet points. Now, our learning is actually, no, like the women are coming on our website they really want to learn. We do exactly how I described them to you. We have lengthy copy, we go into the details, we give people the story. You don't have to read it. Zana: But if you're interested, there are pages into story of the material, what is the German fabric that is making this material. We provide all of that information out there and then we do big visual. Visuals and images is what converse the best and what people are resonating the most. We combine the text and the rich information with images, beautiful lifestyle images that people can see a zoomed in image of the fabric and reviews. Zana: We have also a lot of product reviews where every single customer that purchased with us we've reached back and asked them if they want to review the product if they loved it and oftentimes they do, which is great. Stephanie: That's awesome. How are you encouraging those reviews when a customer buys? Zana: We have an entire review post purchase encouragement system. The first attempt is always just to ask and usually... We have an email where I just introduce myself and tell them the story of our brand and how valuable their reviews are and that's where most of the people do their reviews. And then our second or third interaction is we provide them with a discount to a future purchase in exchange for a review. Stephanie: That's cool. Is there any split testing you do there that you've seen that worked better? I know we were speaking, I think, a couple weeks ago to the founder of Hous and she was talking about how she puts an image of her and her husband on a pamphlet every time they send a box or a thank you or something like that and that helps convert. Have you seen any best practices around that? Zana: The reason why we use my personal email for the reviews and I introduced myself is because people do like the personal touch. I'm sure that the founder of Hous was putting an image of her and her husband... People form a connection. My customers have the feeling that they know me and they're purchasing from an actual person. That is a real bond. Zana: I had one customer who bought a pair of pants from us and then she wore those pants on her family photo shoot with her newborn baby. She emailed me afterwards and she was like, "Oh, I want you to have the photos of our family photo shoot because I wore your pants and I look so great and the photos are beautiful." And I was just shocked. I was like, "This is so nice. This is amazing." Zana: I don't think I've ever emailed a brand to share like, "Oh, I wore this for an important moment of my life." I felt so attached. I remembered that made my day. The fact that something that I came up with and I designed and produced and spent time thinking up on, it's something that made her photo shoot more special and she felt prettier and more confident was very meaningful to me. Stephanie: That's really cool. That is a good customer to have. Hopefully, you can keep her long term. Zana: We have the craziest customer. We had one customer who purchased our perfect pants, the pants that are super comfy but they look professional. She purchased one pair. She loved them so much that she purchased 12 of the same size, the same... I remember seeing this order and I was like, "There must be a mistake." Zana: We email her because we thought there was a mistake or a glitch in the system and she was like, "No, I really love your pants. I want to have one for everyday of the week and I always want to have one ready because those are the pants I wore the most, so I just purchased 12." And I was just like, "I love you. You're amazing. Where do I find more customers like you?" Stephanie: Yeah, really. If you know, you know. That's great. Are you trying to also cross sell to a customer? I'm guessing when someone comes on your website and there's not a huge product catalog, it's probably beneficial to be able to say, "You're looking at this sweater. You should try this pair of pants with it too." How are you thinking about showing other products and are you personalizing at all? Zana: Yeah. The collection that we're launching is only four pieces and you're meant to have them all and they work as a capsule. All the colors are in the same color palette and they're all made to be mixed and matched. The idea is that you do purchase the entire catalog, and we're very mindful. Zana: The collection that we're coming up now is very much in line with the one we had before just a different cuts and different styles, but all the ones we are going to do in the future we're going to keep the same color palette and consistent materials so that people that decide to be Reclaim customers will have a trusted brand where they can have the entire wardrobe being a Reclaim wardrobe and it will always work for them because we're not going to have crazy fashion forward pieces that you buy once and they don't go with anything that you own. All the colors that we pick are very much neutral, creams, beige, black, and white. But it's a palette made to be mixed and matched and to do cross selling. Stephanie: Got it. Do you see people normally do buy multiple products at once? Or is there a little bit of convincing afterwards? If someone's like, "Oh, I'm just going to buy the button up and pants," are you then saying, "You forgot the sweater. You forgot the jumpsuit." Zana: Both. On average, people buy two products. That's our website average. But oftentimes people who bought and liked the products come back to the website and either buy more or just like fill their carts to try new products. Both things are true. Average first order is at least two items and then we have a lot of returning customers. Stephanie: Cool. Is there analytics that you're checking out to either see did they add something to their cart and removed it or were they hovering over something for a long time? Or is there any metrics that you look at behind the scenes to target those customers? Zana: 100%. We have an abandoned cart flow. We call them flow. When we see somebody put something in their cart and then they ended up not checking out, basically an email follows them and ad follows them for a few days just to remind them that they still have this product in their cart and if they want to purchase it, then people who do purchase get an introduction to every product of the collection. They will receive emails to learn about the different products. If somebody, for example, bought the camel coat and then the following weekend then email about the pants. They can go back and purchase the pants. Zana: But there are some Holy Grail metrics that we look at as a startup. For us, returning customer is super important, even more than customer acquisition, even more than value of the basket size. Returning customer is what we really care about because that's the metric that shows how do people like you and how do people trust you and how well do they like your product. Stephanie: How do you reengage a customer if you have your... I think you mentioned slow fashion is the industry that you're in. How do you reengage someone when you might not have another product launch for six months or a year? Zana: You don't. That is a little bit the tradeoff. You can either have customers who are going to buy lots of pieces with you and you're going to have a high lifetime value of that customer, but they might not like you that much. They might consider you as us. "I bought it because it was cheap and it was on sale and I keep it in my wardrobe." But then the first Marie Kondo moment you have and you go through your wardrobe that is the first item that doesn't give you joy. Zana: Our model is very different. Our model is we're going to do fewer much better pieces and a customer will wait for our collection to come because they know it's going to be superior quality and it's going to be a piece that they will buy and keep for years. Stephanie: That's a good idea. Is there any education that you give your customers around why they should move away from the idea of the fast fashion industry or how to think about that? Any education behind the scenes that you're also doing? Zana: We are vocal about it in our Instagram but we're also considering starting a blog just to educate about what is this little fashion movement. But I would say that in 2020, a lot of the people that we interact with are extremely conscious consumers especially the younger generation. They know if a product is sustainable. They care if a product has an impact on the environment. Zana: I would say that it's the age of information. If somebody wants to know how ethical a company is and how much they honored your commitment, it's very easy to learn that. I don't know. I remember 15 years ago when fashion companies were like, "Oh, everybody's telling us we're not green." And they all started doing marketing campaigns in the middle of the forest. Get away with that. Literally, it's a practice called greenwashing. Stephanie: I had never heard about that but I do remember seeing images of people in new outfits and whatnot marketing them while they were sitting on a tree branch or standing in a field. Zana: Yeah, literally. That is called greenwashing where you basically show some images that could make your customers think that you're greener or more ethical than you actually are. I despise that. I don't want to be that kind of company ever. Zana: For us, it's very important just the customer that we have care and we do too. I'm okay if somebody who is not our ideal customer doesn't want to shop with us. I'm okay with that. If our price point is too high or if being sustainable is too expensive, I'm happy to have a smaller market but be company that is worth having in this world, than compromising on my morals and having great profitability. Stephanie: Yeah, that makes sense. It seems like your consumers would be interested in the community aspect of... You have a great personal story. You have a good story behind your company, a fun process, probably if they wanted to see behind the scenes of who's making what and how you're thinking about your designs and coming up with ideas and balancing all that out. How do you think about building a community around your brand? Zana: Our social media is our most powerful channel to share. We always post stories of behind the scenes and what's happening and what are we going through. That is the channel where the community is starting to mobilize. But in general, we do a lot of in person events. Not now because COVID changed that. But before COVID we would do brunch and browse, shop and sit. We would do events like this or and we target professional women in San Francisco because this is where we're based. We were very active on Facebook groups for professional women. Zana: We would have events where women can just come together and talk about their challenges and how they're advancing their career and simultaneously try on new great clothes. That is something that we help foster a lot. Stephanie: That's fun. I want to do one of the brunch and browses. That sounds awesome. Were you doing popup shops? Or how were people were they browsing? Online while in person or how do you think about the in person experience and retail locations? Zana: We have a partnership with a company like... We have multiple partnerships with companies that only have stores. We were in a Re:store in downtown San Francisco. They had our products on for six months. Now, they're close but they're reopening soon. And then we're opening our location in L.A. and one in New York with [inaudible 00:28:27]. We have partnerships with companies that basically bring URL brands and products in real life events. Stephanie: That's cool. How do you think about creating those partnerships and finding the right person, the right store? How would if someone was brand new go about finding a partnership like that? Zana: You have to make sure that is the right path you want to go on. I say that because retail distribution at this moment is not something that we could afford because we are a direct to consumer brand. We use premium materials and we make sure that our materials are done in an ethical and sustainable way. Our product cost is pretty high. We still keep prices as affordable as we can. Therefore, we don't have enough margin to pay a store or retailer and have a big distribution. Therefore, the partnership that we use we see them more as an opportunity to have a marketing presence in L.A. or New York. Zana: If somebody wants to touch our products and learn more about them, they can actually go and have a physical retail presence but it's more an exercise and a way to discover products rather than a sales channel for us. Our direct to consumer website is our number one channel for sure. It's the place that we use because that is the only way we can pass on as much price saving to the customer as we can. Stephanie: Yep. That makes sense. How have you seen conversions when it comes to people seeing something in person and then buying it online? Were you tracking that? Have you seen success in that model? Zana: What we noticed is that people who discover us in person are very loyal. The people who have had the chance to try on pieces and have had the chance to touch all the materials, they are the ones who end up buying. Most of the products have the highest basket size and they're the ones coming back just because they had the opportunity to discover everything and literally touch it with their own hands rather than seeing it on a website. There was definitely a benefit to that. Zana: But as I said, we are thinking about a model where in the future you can have a store where you discovered a product and touch and feel it but the growth will still come from eCommerce rather than opening stores across America. That's not something that we're thinking about at all. Stephanie: Got it. Maybe having like guide shops style where people can go in and look at it and then still go online and order to keep your margins down where you guys have now or close to it, I guess, not where they're at. Exactly. Very cool. To shift into more general eCommerce questions, what kind of trends are you most excited about over the next year or two around e commerce? Because a lot of things are shaking up right now, so I'm sure there's a lot on your mind. Zana: Yeah. Oh my God. eCommerce has been exploding. COVID definitely helped the eCommerce grow, but we're seeing multiple trends. One trend was definitely... Apparel did suffer a little bit. Zana: When COVID started in March, we saw an impact on our sales because everybody was scared. Most people are working from home. Our pieces are investment pieces to make you look great when you go to work or when you're out and about. It's not at leisure. And suddenly, the world is shopping for pajamas. We saw there was an impact to our sales. But the trend is quickly changing. Already in April, we saw a bump in sales and we think it's stimulus check giving an impetus to, "Let's buy nice beautiful clothes." We're seeing different trends. Zana: In terms of things I'm excited about, I'm very excited about sustainability. I'm very excited about slow fashion, the fact that consumers really care and want to purchase companies that our ethical. Zana: I'm most excited that customers are seeing that fast fashion and buying on sale and buying seasonal pieces is not something that they want to keep on doing. It's something that it's okay for your early 20s when you're broke and you want to be on trend, but the moment you're in your 30s or 40s, you want to have a more of a... They call it like a French lady aesthetic. Few pieces, very well done, super high quality, but not always make you look very chic rather than a bunch of things that do not make sense together. Stephanie: There's this one company that always targets me on Instagram and they drop new products, I think, it's every week and it got to a point where it's like, "Is this even quality? How can you drop new product lines every single week?" I started looking into it and you're like, "The reviews are pretty bad." "Oh, it's not..." Like you said there's no good ethical practices that are happening behind the scenes, but they're just very good at marketing. Zana: Ask yourself. If you see a T-shirt that is being priced six, $7, think about it. If the cost of Starbucks coffee is four or $5 and making your coffee is much easier than making a T-shirt that requires fabric, people sewing it, machines, transportation, it just makes you think. Somewhere in the supply chain, they must be taking some shortcuts. Stephanie: Yeah, I completely agree. It definitely is a good time too around apparel for a lot of people to rethink, like you said, what they're wearing, what's important because right now everyone's been in workout clothes and now even myself, it's like, "What do I really want to invest in going forward?" Because up until now, I've only had to worry about my top half and just have a nice looking shirt on maybe. Stephanie: But once it starts going back to work and going out into the world, I do think there will be a big shift in the consumers mind around, "What do I actually want to wear going forward and not just, like you said, for a season or a few weeks and then be done with it and clog up your closet space?" Zana: Exactly. That's definitely a trend that we want to participate in where if you already have a limited disposable income because the world is an uncertain place right now rather than spending it on things that are not going to last or that are questionable, spend a little bit more on fewer things which ends up being the same amount of money at the end of the day. But you're 100% happier with the premium pieces. Stephanie: All right. Let's move on to the lightning round brought to you by Salesforce Commerce Cloud. It's where I send a question your way and you have one minute or less to answer. Are you ready? Zana: Yeah. Stephanie: What's up next on your reading list? Zana: The Wheel of Time. It's a fantasy book. Stephanie: I haven't heard of it. I have to check it out. What's up next on your Netflix or Hulu queue? Zana: Oh my God, don't judge me for this but I think it's going to be The Bold Type or Selling Sunset. Don't hate me for this. I watch everything that was watchable on Netflix. Now I'm starting to trash watching. Stephanie: I actually can't judge you. It's funny because I was just watching Selling Sunset last night. I'm like, "This is so embarrassing but I'm going to keep watching it because it's really funny and I ran out of things to watch." No judgment coming from my side. Stephanie: Next on your travel destinations when you're able to travel again? Zana: I want to go to Italy. I know it's cheating but because I'm international in America, the recent visa immigration policies have been really difficult. I haven't seen my family in a year now and the moment this is all over, I'm going to Italy. I'm going to vacation for a month and I'm going to make all my friends jealous on Instagram. I don't care but I deserve it. Stephanie: I think I'm just going to come with you. You don't even have to worry about me. I'll just get behind the scenes. I'll be like, "Hey, mom and dad, where's my pasta?" Zana: We can go to Italy and watch Selling Sunset. I think we have a plan. Stephanie: Yeah, there we go. It'll be a perfect girls' trip. Stephanie: What's up next on your shopping list? Zana: I actually want to buy a nice desk. I'm eyeing this beautiful wood desk on AllModern. I think that's going to be my next purchase. Stephanie: Oh, that sounds great. If you were able to pick anyone to go to brunch with, other than me because that'd be a blast, who would you pick? It can be a celebrity or whoever you want. Zana: Oprah. I'll definitely go to brunch with Oprah or AOC, one of the two. I have a big girl crush on both of them so I should decide which one. Stephanie: You can bring them both. That sounds fun. And the last harder one, what one thing do you think will have the biggest impact on eCommerce in the next year? Zana: Next year? Stephanie: In the next year, yep. Zana: This one is a hard one. I don't know if under one minute it's answerable, but I think different forms of creative so Tik Tok is exploding. How to leverage different platforms like Tik Tok or just different forms of creating than the usual that we've been accustomed to see. Stephanie: Cool, great answer. It's been super fun having you on here. Where can people find out more about you and Reclaim? Zana: They can always shop and this is reclaim.com and follow us on our Instagram @thisisreclaim. Stephanie: Awesome. Thanks so much for coming on the show. It was really fun and we'll have to have you back in the future. Zana: Awesome. Thank you so much for having me.  

What is the right percent profit margin you should target for your products? How do you get the most out of your Facebook ad buys? How much should you really pay attention to conversion rate? These are just a few of the questions that every small business and Ecommerce shop wants the answers to. On this episode of Up Next in Commerce, we picked the brain of Andrew Faris, the CEO of 4x400, a company that has helped grow numerous Ecommerce companies from less than 500,000 into the tens of millions. Today, Andrew spills some of his advertising secrets, including how to make Facebook your core driver for customer acquisition. Here’s a mini spoiler: human bias is leading you astray, but there is a simple way to correct course. Find out that, and more, on this episode! Main Takeaways: Conversion rate is so context-specific that it's not that helpful of a metric. Instead, analyze conversion rate relative to average order value and relative to the traffic sources the customer came from. Before you invest in anything else, you need to drive traffic to the top of the funnel. Currently, Facebook ads are the core driver of customer acquisition for online shopping. Andrew suggests that most Ecommerce brands should invest in the platform and then trust the algorithm to put you in front of the right audiences. You have to take big swings with your experiments. Don’t get hung up on micro-details like the color of your buttons or rewriting your copy. Instead, find big ways to make changes and then see how the outcomes stack up. Because we are all riddled with our own biases, we often cannot predict accurate models of the future on our own. Instead, use data as your guide as you peer into the future. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone. This is Stephanie Postles, co-founder of Mission.org and your host of Up Next in Commerce. Today on the show, we have the CEO of 4x400, Andrew Faris. Andrew, thanks for taking the time. Andrew: Stephanie, I am very glad to be able to do this. I have never been accused of not liking to talk about Ecommerce in particular, but just in general. So this is fun. Stephanie: Well, you're my perfect guest then. I was creeping as one does on your LinkedIn. I saw an interesting thing that you have a background in religion and theology. I was wondering how you transitioned into the world of business from that background. Andrew: Yeah. I can always tell when somebody has looked at my LinkedIn or not because that's maybe the only place where that's found anymore. Stephanie: You're welcome. Andrew: Yeah, yeah. No, I went to school for biblical studies, and then got a master's degree in New Testament. So that was my whole pathway, was to go into that and actually was a pastor for a while. Did that, and then about ... gosh, how long ago? Five and a half years ago stepped out of that not because anything in my faith changed per se, but just because I was just rethinking a bunch of stuff in my life and reworking a bunch of stuff in my life. So it's just total life change in all kinds of crazy ways. I didn't have a clue what I was going to do actually. Andrew: That educational pathway doesn't have a direct connection to almost anything that's not work in a church or academic setting or something like that in theology. So, I really loved that education a lot, but I was figuring it out. So I called a friend of mine named Taylor Holiday, who ... and I was talking to him about if there's any available work in his world of work. Just basically as an in between thing while I figured it out. I just thought I'll just go do something for a couple months to figure out what I want to do. He said, sure, and brought me to a company called QALO, Q-A-L-O. If you've seen the silicon wedding rings that are for- Stephanie: Oh, yeah. Andrew: .. on the internet a lot, QALO was the first big company of those. QALO went zero to 20 million in a year and a half and was not funded. So, I was bootstrapped. I went there and it was just growing super, super fast. Also, being not funded and being a bunch of people like that, it just meant that they just were, in those worlds probably some of your listeners probably know this story a little bit, which is like, you just find people who can do stuff in that setting. I literally started in the warehouse. At one point, I sat down with Taylor, who's now one of my partners. Taylor was running marketing for QALO at the time. His brother was one of the founders. Taylor said, "Hey, you've got a mind for numbers," which he knew because we were in a Fantasy Baseball League together and knew that I was a big baseball stat nerd. Andrew: May not be interesting to many of your listeners I'm sure, but I have a lot to say about the interplay of thinking about sports through statistical lens and thinking about Ecommerce. Anyway, so that was the origin. We had been in this fantasy baseball for a while, "I know you have a mind for numbers, why don't you learn Facebook ads and Google ads and learn digital marketing?" I said, sure, but still I was not really sure what I wanted to do in the longer term. But I was like, "All right, that sounds fun." So, did that and loved it. Andrew: I mean, I was so totally unaware of what was happening, but I still remember the first conversation I had with Taylor in a bank where he told me what I'd be doing. He's explaining to me how Facebook ads, Google ads worked and said, "Is it okay? Well, here's the deal. You get customers into the funnel with your ads and then you drive ..." and I stopped him in the middle of that sentence and said, "What's the funnel?" That was where my digital marketing knowledge was at. From there, that ended up being the pathway to the digital marketing and Ecommerce career growth. So I was at QALO for a while, went to CTC, the agency that owns our company, owns the majority of it and became the head of strategy there. And then now I run 4x400. Andrew: Yeah, it was a crazy set of circumstances with Taylor. We actually went to junior high together, but had not reconnected because of that. We reconnected outside of that. So, just weird circumstances. Stephanie: That's interesting. Andrew: This gets into my life philosophy a little bit. I'm a believer in divine providence and think there was some of that happening around. Stephanie: For sure. Yeah, that's awesome. Always good to be in business with someone who's willing to bet on you because you have that beginner's mindset and it's probably why you're doing so well. But I'd love for you to detail a little bit about the structure of CTC and 4x400 in the holding company structure because we haven't had anyone on the show quite like this. So, any details around what 4x400 is and how it's connected to CTC would be great. Andrew: Yeah, sure. Common Thread Collective, it grew out of ... Taylor was building the agency alongside the growth of QALO. Started really focusing on Facebook ads. CTC does a lot more in that now, but CTC is now a full service digital sales agency. We said digital sales sell digital marketing because what we're doing is selling things on the internet, it's consumer goods, really focusing on Ecommerce entrepreneurs. The mission of CTC is to help entrepreneurs achieve their dreams. So that's really what we're about. We're specifically really good taking people in somewhere in the journey from zero to 30 million. Andrew: I was a strategist there and then became the head of strategy there. CTC continues to grow and do well. Taylor Holiday, as I mentioned is the managing partner of CTC. Andrew: In the midst of that, we also were like ... I mean, we came from this background of starting QALO. Taylor also was early on with another one of our partners named Josh Rodarmel who founded Power Balance. If you don't know Power Balance, Power Balance was the really popular silicon bracelets that were worn by athletes for a long time, still are worn by some. Andrew: That company was another super crazy fast growth company. I think they were zero to 50 in a year and a half. Yeah, I think that was the number. But anyway, I did on the brand side selling consumer goods in those worlds. We're like, why don't we launch our own brands as well? So, that's how 4x400 started. Eventually I went over to that side of the business. We started with building our own brand from scratch. It totally saw giant failure called [inaudible] company, just a huge waste of money. It doesn't exist anymore. It was sports themed baby goods and it just ... there are a lot of reasons that didn't work Stephanie: Wait, sports themed baby goods, so- Andrew: Yeah, yeah. Stephanie: ... like onesies. Andrew: Yeah. Like onesies that look like football uniforms. They're adorable. I don't know why nobody bought them. Stephanie: Okay, that's super cute. I'll buy one from you. Andrew: Yeah. I think that you'd have to go find a flea market in Northern California somewhere. I had to go get it every day. Stephanie: I will find one, I actually need to for my twin. So, it'll be a long journey, but I'm going to do it. Andrew: Okay. You're in Northern California, right? Stephanie: Yeah. Andrew: Yeah, I think that's who we sold to, so [inaudible] don't worry. We did that, and then realized actually most of our skill at this point ... most last couple years that we have really been spent after we'd gotten out of the brand side so much growing brands, not so much building brands. So we thought, why don't we just do that? Now our model is, at 4x400, we work with entrepreneurs who are in early stages and feel a little stalled out. We provide them with a team around them that can help them grow it. 4x400 mission is also to help entrepreneurs achieve their dreams. We just do it in a different way than CTC. Andrew: CTC does that the traditional client relationship 4x400, takes the majority share of the brand. And then our goal is to make it so that by bringing us on as a partner and all of the expertise and resources we have around finance operations, marketing, growth customer service, even just really thinking through the whole system of what it means to be a great Ecommerce brand, we can help brands grow. We just closed actually our fifth brand that is currently in our portfolio. We're hoping to close another one soon. Who knows by the time it comes out, if that will happen? We're trying to work with brands who are doing less than half a million in revenue and saying like "We can try to grow you from there." CTC is the majority owner 4x400. 4x400 is the majority owner of these brands. So there's this giant web of relationships there. Stephanie: Yeah, okay. That helps me understand the landscape a bit more. How do you think about acquiring brands, how do you find brands that are willing to say, "Okay, we'll give you a majority share and come under your company"? Andrew: Yeah. Well, there's a few ways. CTC is a magnet for some of them. Sometimes brands will come to CTC and CTC will say, we're not the right partner for you. You're not a place where you can afford us. One piece of advice I have for a lot of it was like, if you are paying an agency not very much money you should really think about whether the agency is good because agency economics just require, for you to get great service, they typically require a pretty good investment. Just think about it. Agencies exist by marking up people's time. So, an agency works well if they are able to attract and train great talent by nature of access to large amounts of information. Andrew: The value of an agency is that they are spending millions and millions of dollars of other people's money on stuff. So, it's information arbitrage in that respect. You can come to an agency and get that information applied to your brand in a way that maybe an in house resource can't always do because they just are not going to have the visibility to as much of what's going on. For that to work, then you have to mark up that time of high quality, talented people who are probably not cheap. And then also for something like Facebook ads, Google ads, and then oftentimes there's a creative element of that and a writing element of that, and a strap gentleman have that, so that means you got to pay designers and other people like that too. And then there's web dev parts of it. You start to put that all together and if it's too cheap, then you have to be going like, wait a minute, what am I actually getting here? Andrew: Some brands in the early days, will come to ... they'll be stalled out or come to CTC for resources. CTC will say to them, actually you can't really afford this. What we actually think is a better solution for you is to talk about a deeper investment where we can really surround you with more stuff. What we find is a lot of entrepreneurs love product building and customer communication in certain ways. They love their customer, they love their product idea people, but they don't necessarily have all of the skills around everything else it takes to grow a brand. In fact, they don't want to do those things. Andrew: Most entrepreneurs don't start brands because they love finance, they don't. They don't even necessarily love tactical marketing. A lot of times what we can say to them is, "Let us take all that stuff that you hate doing anyway from you, you feel overwhelmed and stalled all the time anyway. You come with us, we'll pay you a consistent salary," which is also a big help to some people who are going like, I just don't even know if I can perform this anymore. We'll help you grow. Some entrepreneurs want to stay on, some don't, some just wants to take it. So it really depends on each entrepreneur, but that's basically a lot of how we think about it. Andrew: And then for us, we evaluate the brand by saying like, "Does it have basic product market fit and basic fundamentals to where we think as we bring in all of our tactical expertise and all of our specific expertise in various disciplines that we can then apply that to the brand and grow it?" A brand who comes to us who hasn't really invested much in paid media, but has done 100 to $300,000 in revenue, we look at that and say, "That's ..." Actually, we have a really high amount of respect for that. It's really hard to do that, it's hard to do $100,000 without being good at Facebook ads. It's not easy. So we look at that and say like, "Good job. We don't think you're a failure. If you come to us and want our help, we think we get it." We look at that and say, "That's very impressive. Let us surround you now with resources that we can scale this to 10, $20 million in revenue." Stephanie: Very cool. How are your brands performing now? Andrew: Yeah, good. They're doing good. Andrew: I think COVID really helped Ecommerce brands massively. Two things happen at the same time. One of them is that large corporations who have diversity of sales channels, but were spending lots of money on advertising, pulled their advertising budgets the way the heck back. Of course, lots of other companies couldn't produce products. So they couldn't sell products in retail settings, so they pulled a lot of the budget back. They couldn't produce products because of supply chain problems. And then at the same time ... So that meant that in large auction based advertising work universes like Facebook ads and Google ads, ads got suddenly way cheaper really fast. Andrew: The way that works is that because those are built on an auction, if a lot of people leave the auction everybody's prices get cheaper. We've looked at this data across CTC accounts. There was a giant plummeting of advertising CPMs in those worlds. And then at the same time in the last couple months, conversion rate on websites went up because the only place to capture demand was online. You couldn't go buy stuff in the store. So if you're selling things on the internet, that's where people are buying things from. And then of course, the stimulus checks it. As people have noted, that actually ended up being one of the largest increases in revenue to the average American family in history. So, all of a sudden, people have money to spend. Whether or not they should have spent it on consumer goods is a different question, I don't really know. But they had money to spend. Andrew: The less places for that demand to be captured mostly on Ecommerce stores. And then also, it got a lot cheaper to reach those people with ads. You put that all together and Ecommerce did really, really, really well for a couple months. So that really helped us. There's no question about it. We're still feeling some of the positive effects of that. It feels weird to be a winner in COVID, but there's no question that Ecommerce brands were .. To varying degrees depending on the category you're in, for sure. Andrew: We have three brands that are in the established stage and not in the start it up stage. Stephanie: What account is established, is it a revenue metric or- Andrew: Yeah, a good question. I'd say a million dollars during 12 months, or a million dollar run rate. We would look at and say, "Okay, we're growing at the pace that we want." I can just give you some numbers. We're projected this year to go to have one of our brains go to 8 million, that brand did 100,000 in 2017. Last year, we really took it over halfway through the year. I think we ended at 750 for the year. So, that's definitely our fastest growing brand right now. Stephanie: That's [crosstalk 00:16:47]. Andrew: Another one- Stephanie: ... some good growth right there. Andrew: Yeah. We feel good about that. That's profitable too, which is definitely in our model. We took on a little bit of funding early, but not a ton of funding. We function more like a bootstrapped company. And then another one went from ... just a little over two years ago, we acquired it. It was basically doing no revenue, it'll do 3 million this year. Yeah, that's a different story. And then another one went from 250 to a million to just under two, this year, we'll do four to four and a half probably. So those ones are all we feel established growing at the pace we want, we feel really good about. Stephanie: Yeah. That's some impressive number. How do you grow these brands? What are some of your tactics and strategies that you rely on those, what do you see success with? How can someone else learn from what y'all are doing to grow their Ecommerce companies? Andrew: Yeah. Facebook ads is the core driver of customer acquisition for us. I mean, selling consumer goods direct to consumer online, Facebook ads is still the most powerful tool in the world for reaching people. I'm hearing chatter about other things, YouTube, Snap, even Tik Tok, Google ads, product's changing. I just think still at this point, at scale, depending on what you mean by scale, people define that word differently. But for us, that's the core, top of the funnel way that we get traffic to our website. Andrew: I mean, you think about what Facebook ads is, it's not buying ads so much as buying traffic. I guess it's both really. But we look at that and say, "If we can make the traffic worth more than we're paying for it, worth enough more that we're paying for it to cover the cost of goods and things like that," I should say, "Then we can win." That's how we drive top of funnel traffic for us. And then after that, we try to do everything that we think great brands should do, which is like create a beautiful website that treats their customers great, has generous returns and shipping policies as much as we can afford to do it basically, which varies from brand to brand, depending on a number of factors. Do a great job with your retention email and other automated flow stuff. Constantly testing conversion rate optimization on our site in various ways. There's just a whole bunch of that kind of stuff that we're doing on the backend of that. Andrew: We are also certainly looking to invest in other top of the funnel type metrics, our traffic drivers as well. I would think of Google search as mid funnel and Google shopping as mid funnel. So, we're definitely investing there as well. I think we'll keep doing other stuff. That won't work forever. There's going to be a cap to how much Facebook ads does the driver work and we fully intend to add to our customer acquisition approach when we can. But our goal has been to grow profitably and we think that's one of the best ways to do it right now. Andrew: The other thing is it's not just one of the best ways to do it, it's just that we also have deep expertise in it. So, I'm just a believer that do the thing you do well as much as you can. I think it works for leadership and working with teams. Just as much as we can set up our team members to be doing the things that they love doing and they're good at. As long as the things that people love doing and are good at create value for the company, then you should pay them to do it. So that's the way we look at it too. Andrew: Just coming from the agency side, I personally have managed, I don't know, 25 ad accounts, that's probably more than that. Seen a lot more of that when I was the head of strategy and working with other strategists. I don't mean that to brag. It means that now I have some intellectual capital built up on what works. So, that's what we use from there. Stephanie: Cool. To drill in a little bit deeper then for the Facebook ads because I think a lot of companies probably have looked at Facebook ads, maybe they're using it. I haven't heard of anyone growing liked you guys are growing your brands consistently. So what tactics are you using specifically, or what do you see works well? Andrew: Yeah, there's a lot I can say about that. I think this is going to sound so fishy, but if you're getting serious about that, there's a couple of things ... The thing I would actually tell you to do, if you don't know where to start and you're getting serious about it, is to go visit your admission.co. I don't know, maybe I can give you a link to this, Stephanie, at some- Stephanie: Yeah, we can link it up. Andrew: Cool, yeah. So that is CTC's education program. It's not a course, it's different than every other education thing I know of in this world. It's actually a moderated community with access to ... Taylor, the CEO of CTC is in there doing webinars like our team members, our brand managers and people like that. Also, might jump in there and do webinars exclusively for that community. What we're doing is teaching all of the things that are ... what we believe are really the best practices for Facebook ads from the perspective of creative, from the perspective of targeting, bidding, all that kind of stuff. Bringing people through all of those things and then giving them continued support with access to the actual CTC teams who are doing that same thing that I was describing, which is spending millions of dollars of other people's money, so you can have access to that knowledge set. I think it's 500 bucks a month right now. Andrew: I even say sometimes there's even executive level people who will take their whole team through it. It's not like you're going to be in it for forever. The point is that you can do that and get access to what we believe works best. We're always evaluating that. There are certainly other things to do there, but that'll give you what we ... We try to be really honest and transparent where we can about what we're seeing. So that will give you mental ways to think about that problem. Andrew: I think one of the things that can go wrong is you could listen to me talk about this, and maybe you're an entrepreneur and you hear my numbers and you go like, I'm going to go do that. You just blow money because you make simple mistakes that somebody could help you not make, if you've just got some support. There is no way to learn besides doing it really. You're going to make mistakes, it's okay. In my view, creative needs to be really product focused in the sense that it's on Facebook ads and Instagram ads. You are driving high quality traffic by giving people a clear sense of what your product is right away. Clear wins over everything else first as a baseline. Andrew: Clear doesn't make you give you the best out in the world. They're clear plus some other things do that, but clear establishes a baseline of what you can expect and at least drives what I consider high quality traffic to your side. People who are interested in you because of your product. So that's probably the first basic principle I would say is focus on being clear in your creative before you focus on being clever or funny, or any of those kinds of things. You can drive a lot of very cheap traffic to your website with Clickbait tactics, but they won't buy anything. Ultimately, it won't matter how cheap the traffic is if they don't buy anything. So that's the kind of thing I would say. Andrew: And then the other big thing I'm a huge believer in is trust the algorithm. There was a world where people talk about Facebook ads as the value of micro-targeting that was one of the phrases people would talk about. This idea that you'd go find exactly your customer really specifically target them without everybody else. I think there was a time when that was part of how you did it. Those times are gone. What I would say is what you want to do is give Facebook as much information as possible and let Facebook's algorithm predict the future for you because humans are terrible at predicting the future. Algorithms are pretty good at it. So, algorithms do a really good job of looking at the data set of who's responding to your advertising. And then going and saying, here's some more people like that to put you out in front of. So, we believe in really broad targeting. Andrew: Let Facebook have as much freedom as you can to go and find the next person to put you out in front of. Over time, not even over that much time, Facebook's amazing in this regard much quicker than Google is at this. Facebook will find who those people are. So that's the broad principles I would say is trust the algorithm, be clear with your creative. There you go. There's just so much more I could say about the Stephanie, but I'm going to stop there. So I don't take up the entire rest of the podcast. Stephanie: Okay, cool. Yeah, we will definitely link that up. I think it's a really important point too to segment a piece of your ad budget for testing. I know we do that internally as I'll tell. Our team members are like, "Hey, you have this much money. If you spend it and you just learn from it, that's okay. Versus this amount let's actually protected and make sure we drive results with it." So I think it's good to go into a mindset being okay with using a portion of ads for an R&D type testing project. So, you feel like you can learn from it, but not blow your entire budget on it. Andrew: Okay, no question. Constantly testing is super crucial. What I'd say about that is, when I want to test on Facebook ads, the place I want to test most is take big swings with your tests. The common thing you hear people say with testing, you'll hear people like, I've seen so many articles trumpeting like, oh, we changed our CTC button color or we changed it from [inaudible] now and it was a 15% lift. Andrew: First of all, I just don't believe those studies anymore. Secondly, the reason you're writing about it is because it's exceptional. It doesn't happen all the time. I just think that's a waste of people's time. But most people need to do, if they're looking to go from not successful to successful, the larger the difference in outcome you want, the bigger the change you need to make. You can't just change the background color of your ad and expect that it give you wildly different results. That's once you have results you like and now you're just dialing in and trying to grab an extra 2% of value here and there. I just rarely see that thing work. Andrew: What I would say is much better to think to test is something like, what's the offer that you're giving people? What's the product you're starting with and leading with? That can create wildly different results. We just ran something for our jewelry company that we ... 31 Bits, which is our other most recent acquisition, our fourth brand. We started with a batch of ads focusing on one set of products were necklaces and bracelets and things like that. We were getting a dollar of 50 clicks, low click through rates, et cetera, and very poor conversion rate. Andrew: We changed the product set, same exact brand, similar styles of photography, but just different products to a whole different category of product and saw triple or more the performance suddenly CTC went way down. Click through rate, went way up, conversion went way up. The reason why is really obvious, it's jewelry, some people like some bracelets better than others. If you just use the same stuff all the time, people are going to respond to it the same way over time. There's no magic to that. That's how people shop for something that you wear. It's about what it looks like. So, by changing the products that we led with that made a huge difference. So that's what I'd say is for Ecommerce consumer good people, that's the kind of test you want to be running. Andrew: Give it a whole different products out, a whole different offer, a whole different way of framing the offer, don't just change little bits of the creative and copy if you want to change your outcome in a big way. Stephanie: Yeah. I love that. People I talk to sometimes are focused on those micro adjustments that you're talking about or just the minimal incremental pieces that they could change, whether it's button colors or all that. That's a good point too. Yeah. Focus on the higher level things. But how did you decide on what new products to show? Andrew: In that case, part of it was what new products ... there's a change in our product development, that's going to make it so, or in our manufacturing that was going to make it to that, we're phasing out some products anyway. We always start by looking at most products over various periods of time. This is a simple way to start. I mean, there's not a lot of science to it in that respect. I think we're just looking around- Stephanie: Just seeing what it's doing well in the market. Andrew: Yeah. And what's done well on our side. Honestly, part of it is for a place to start your testing just like make a hypothesis and test it. I mean, it's not- Stephanie: Yeah. What timeframe are you looking at? When you do the test, are you looking at 30 days? Let's see how it does and try something new, or is it like after a couple of days you'll know and try something different? Andrew: Yeah. I'd say budget is probably a bigger factor than time. So if you're spending thousands of dollars a day, it doesn't take very long good answers. If you're spending a couple $100 a day, it takes a little longer. It also changes relative to your average order value. What you need is a statistically significant number of responses and really a statistically significant number of conversions. You can think of conversions as micro conversions as well. For example, a click on an ad is a conversion in a sense. Clicks as a percentage of impressions is a conversion. Because it's pretty cheap to run Facebook ads, you can actually figure out a reliable statistically significant performance in a click through rate pretty fast without having to see how those clicks convert. Andrew: In that case, it took us, I mean, I think we're got 100 bucks, when we knew that this new round of ads was way, way better performing because the gap and click through rate was so significant between the two. That's another core principle here. The larger the gap and the outcome, or the larger the disparity in the outcome, the more likely it is that it's a reliable result, if that makes sense. In that case, I think we spent between the two products, that's a total of 1,500 bucks. The whole goal of that was to test those while we went and ordered new products to try and start scaling a little bit for a larger test in the future. I didn't really care what the actual result was. The goal is a bigger goal to win bigger over time. Stephanie: Yeah, that makes sense. When talking about growing, I saw that you guys live by a central Ecommerce growth formula. I was hoping you could go into that a bit. Andrew: Yeah. This is changing a little bit in some ways. I'll give you the baseline version of it, which is visitors tasks conversion rate times average order value. This is actually really simple. Every business in the world only actually has three factors that make up the value that you get from a purchase, or that make up your revenue actually. The first factor is how many people come to your business. This could be people walk into your store, it doesn't have to be a website. But just never people who show up. And then you multiply that by the conversion rate. So, what percentage of those people buy something from you? And then you multiply that by how much they spend. Andrew: When you look at that, that will equal your revenue. If you just say, how many people get there, how many of those people buy and how much they spend when they do? That's the entirety that makes up the revenue. That's incredibly simple and intuitive in a lot of ways. But what I find is that in the fog of war, people lose sight of that very simple concept. So, they start making tests and changes without a really clear idea of which one or multiple of those variables they're actually trying to affect. Of course, those all relate to each other. For example, your average order value goes up, your conversion rate goes down, that's a general rule of thumb, it's true across everything. It's intuitive when you think about it. Andrew: A smaller percentage of people are going to buy a $1,000 item than a $10 item. As you drive more traffic, it's highly likely that you're driving lower and lower quality traffic. Everybody exists along in the world, exists along a continuum of people likely to buy your product and unlikely to buy your product from your mother, who's the most likely person in the world to buy your product to- Stephanie: That is number one. Andrew: Yes. To a subsistence farmer who doesn't have the internet is the least likely person. The farther you go from your mom to the subsistence farmer, the more expensive it is to acquire that customer. So as traffic grows, then your conversion rate is likely to go down. That's just another helpful concept, I think. These are rules of thumb to heuristics they're not always true, but that's a basic way of thinking about it. We think about those three levers in what we do and really try to understand when we test something at any point in our funnel, whether it's on the website or ad level or whatever, which one of those am I actually trying to affect? Where's the problem in my business? Andrew: I've talked with friends of mine who own CrossFit gyms, and I've said to them like ... I'm thinking of a friend in particular whose gym was struggling. I was trying to help him think this way, which of these is the problem for you? Are not enough people showing up to your gym? Or when they show up, do they not buy a membership? Or do they buy a cheap membership or you give them a month free and then they don't spend any money after that? Which one of these is the problem? That probably gets towards LTV as well, or CLV, Customer lifetime Value as something to think about in the midst of all this as well. This is where you can make it a little more complicated, but that basic principle is true. Across the gym, just like on my consumer goods websites, it's the same problem. You just have to figure out which one of those things has the highest upside at the lowest cost to fix next. That's where you should put your energy. Stephanie: Yeah, I love that. Have you ever pitched a brand to be taken over by a 4x400 that you believed in where everyone else on your team didn't believe in it? Andrew: Oh yeah. This is where it helps to be coldly rational. Gosh, I don't mean rational like smart, I'm always right. I just mean my approach is unemotional to a lot of this stuff. To the probably emotional dysfunction in other ways in my life or something like that, I'm not saying you should emulate this necessarily. But that's why there's therap, so it's fine. So, sorry? I know there's some noise there. A lot of times, if we're tweeting about a new brand acquisition. People will say privately like, "I do believe in this," or "I don't believe in this." I just started think that's like ... I think without having the view that I have in the acquisition process, I just don't even know what somebody is judging that on. People just go by their general sense of what they believe about if it's a good brand or not. Andrew: First of all, other people are not like you. Your subjective sense of that may not reflect at all what I brought population to potential customers is. Secondly, to me, you can validate this pretty clearly by looking at simple product market fit, things like margin is a huge question, which makes businesses work and it makes other businesses fail, is one of the problems of opening day. We made a huge mistake by just giving ourselves away too little margin on the products. Stephanie: What's the little margin, what do you consider small? Andrew: Yeah. Well, I think if you're going to try and grow a brand with ... I'll just tell you, we target 70 points plus of margin for brands that we are trying to grow with our method of growth. And then that's really important. If you have other growth mechanisms that might not matter as much. But for us, we want 70 points plus landed margin. We can deal with a little less than that, but if you're going to try and grow a brand with Facebook ads, you're going to need to be able to exist at a two to one return on your money on ads probably. It's hard to really beat that number, if not withstanding something like coronavirus throwing those small. So we target that. That becomes a big question for us, if we think we can do that. Andrew: Sometimes actually it's part of the first thing we have to fix for a brand is, we see supply chain processes that are in our view broken and we would say like, "We love everything about this brand. It's convergent on site, is great relative to its average order value, relative to its traffic sources." We dig into all that stuff, and say, "But your margin is not good enough, but we think we can solve that. W can help with getting your shipping cost down by repackaging it differently, or thinking about what products to focus on or not, or changing your manufacturer or something like that." We don't want to ever do that at the expense of giving people a good product. We haven't compromised on that at this point, which I'm happy about. But yeah, those are all the things that we can look at as potentially something to fix. But in our view, 70 points plus, makes the game a lot easier for sure. Stephanie: Got it. I like that point too about, what would someone know when they're doubting a brand? Because that is definitely a human flaw thinking about ... even when I'm thinking about those rubber bracelets from a while back, for me to say, "Oh, that's dumb," I don't need to be balanced or anything, or I need help with that. It's funny because it's like, well, apparently a lot of other people did because look how many people bought it. Yeah, I think that's also a good lesson for anyone starting something up. If they hear someone say like, "Oh, that's dumb, you shouldn't do that." Probably good to take a step back and be like, well, that's just one person's opinion and not let it deter you from trying at least. Andrew: Yes, especially relative to the set of metrics I have in front of me, which are going to tell me something a little bit different. This is one of the things that's so great about data is that I'm just wrong, Stephanie, about so many things in life, I just know I am. So having some source outside of my own brain that I can look at. When my own eyes are lying to me, humans are just biased machines. We're just machines of bad thinking about stuff. So, finding ways to be aware of my priors going into something and my bias going into something, check those against some sorts of truths that exist outside myself. Of course, people can lie with data and data can be poorly collected. There's all kinds of ways that can go wrong too. But in light of all those things, I just think that it becomes really helpful to do that, to go and have a source like that to go check in. So that's what we do in our process. Andrew: There's various levels of excitement about brands even internally. But there's no question that ... We sincerely believe it can work based on the data set in front of us and a few other old principals. So that's what we do. Stephanie: That's cool. We're mentioning data, stick with the data when it comes to it and don't just listen to unfounded opinions. What kind of metrics do you look at that you think a lot of other brands aren't utilizing enough? There's obvious ones like conversions and click-through rates and all that kind of stuff and revenue obviously, but is there anything that you look at that you think enough people aren't paying attention to? Andrew: There's no magic here. After we acquired 31 Bits, this jewelry company ... really super cool brand. This brand was started by women who were anthropology majors in college and wanted to provide good quality jobs to people who could not access them by nature of where they lived in the world. So they started in Uganda after a trip there and had these women making these really cool beads. This started in 2009. These women were out to change the world with this brand. It's just totally authentic, beautiful brand story around all of this stuff. When we acquired that, I on my podcast, it's called- Stephanie: What is your podcast? Andrew: Yeah, yeah. I feel so lame doing this right now, but- Stephanie: Oh, sorry, Andrew. Andrew: I know. There's a tangent there. But anyway, if somebody really wants to hear how I think about this question, I spent about 45 minutes with Taylor, the head of our agency, talking about exactly why we acquired 31 Bits. We did an episode about that. I'll find it and send it to you for the show notes as well. And then we interviewed the ladies from the brand for the next episode after that, so people could kinda hear why they chose us as well. We tried to be really honest about why we think it'll work and why we think it could fail. I would say the metrics related to that, that I care about, it's not just conversion rate it's conversion rate relative to average order value and relative to traffic sources. That's a huge one for us. Andrew: Conversion rate itself is actually so context specific that it's not that helpful of a metric. I mean, think about the conversion rate of a direct click. Somebody comes to the website, types in 31bits.com, presses enter. Let's take a 45 year old female on a desktop computer direct versus a 25 year old male on their cellphone through a display ad on the internet, saying conversion rates to describe what both of those people are doing and getting a baseline is not going to be helpful at all because the baseline for those two different customers of what you'd expect, they're so different. I mean, just the device issue you're twice as likely to convert on desktop than you are as mobile before you talk about any of the rest of the demographic's software or anything like that. Andrew: We try to really give some specificity of the context of something like conversion rate. Even one thing you'll see there is like, sometimes the brand's conversion rate will look low, but it's actually not low. The reason it looks low is because they're getting a ton of blog traffic via organic search SEO essentially. That blog traffic is technically on their URL, but it's not at all related to their product and it's not people looking for their product. Therefore, that blog traffic will have an incredibly low conversion rate and will therefore negatively influenced the total conversion rate. If you bucket that blog traffic out, it turns out the conversion and the brand is fine and their website works great and you just didn't realize that. I don't know if that example made sense. But there's- Stephanie: It does make sense. Andrew: ... there's just all of these kinds of contexts, things like that, that I think are really crucial to look at all the way around. We look at some other stuff like we've looked at entire funnel on our site, so we'll look at not just the conversion rate thing. If somebody doesn't buy something on your website, there's a question of why did they not buy? Because they made it to your website, so what happened next? Did they never add anything to cart or did they add to cart and then drop off once they got to checkout or did they never even make it to checkout or what? We look at each of those things and try to understand what's going on. Andrew: If somebody adds to cart and makes them check out and then drops off, why? The answer to that question is probably because you're shipping cost is too much a lot of times, or it's going to get shipped slowly, or they're not confident in return policy or whatever. So we'll look at some of that stuff too. We have a value of 4x400, which is understanding before you act and paired with that is hard problems require deep focus, or require deep work. The basic concept is like, before I go and throw out a million solutions, I want to really understand as clear of terms as possible exactly what's wrong. Andrew: When I hear somebody say my Facebook ads are broken, the thing I want to say is, "What do you mean? What's happening? What broken- Stephanie: What are you doing? Andrew: Right, yeah. "Is the conversion rate broken? Are the clicks too expensive? Where is the problem? Are you not getting a high enough AOV? When you say it's broken, what do you mean?" To try to help people answer that question because then it can guide where to think about the next problem. Stephanie: Cool. I love that. Yeah, that was a really good example. Stephanie: Are there any things, technology or otherwise tools that you're using right now that are maybe new that you're excited about? Andrew: Well, I'll tell you what I think that is, it's not the answer you're looking for, but I think it's the answer that I get. Stephanie: Go for it. Andrew: My answer is no I don't. We will get there to where we'll need to do that, but I just think this is a massive distraction for a lot of people. I think people love to go chase the next new thing. They'll even say things like, "well, my customer is on Tik Tok." I don't really know what that means. Yes- Stephanie: I don't really know who's on Tik Tok right now. Andrew: I'm 36. First all, I'm 36, I'm too old and I don't get Tik Tok. I've never had Facebook on my phone, so I'm just the worst social media marketer ever in that respect. I do not understand what's happening in the world. I just don't always know what that kind of thing means. I think your customers probably also want Instagram because there's a lot of people on Instagram. So I could be wrong about that, I guess. I'd be so happy for somebody to correct me if that's the case and reach out and tell me, "You're not looking at this right." Anyway, I just think it becomes a huge distraction for people to go and try and find another new thing to go do instead of to get really good in one or two areas. Andrew: We will expand channels over time. I think we're really trying to build out more search and shopping as a next step for us, that is not a new channel at all. It's actually the oldest digital marketing channel, search in particular,. I'm playing around with some ideas from SEO, but really I'm just trying to make my customer more valuable at this point. So, just trying to really get better via email, post-purchase, via my unboxing experience, trying to think about how unboxing and product experience creates retention in word of mouth. I'm trying to dig deeper and get better at the things I'm already doing rather than adding a whole lot, I think. Stephanie: With everything happening in the world right now, it does seem like there, like you mentioned early on the show, there're a lot of changes happening, especially around Ecommerce. I know you're talking about focusing on what's working and all that, but is there anything you're preparing for over the next three to five years that you're anticipating around Ecommerce trends? Andrew: Yeah, all right. This is my coronavirus beat right non. This is a really fun question and is a great podcast fodder. I do not fault you for asking it and I don't want you to hear my answer to this as condescending. But there's no possible way in the world that I could predict the future that far out. Here's what I believe about predicting the future. The more complex the system you're project predicting with the more inputs that there are there, over the longer the timeline, the harder it is to project. So, I might be able to give you some sense of what's happening next week, but then also last week, all these companies started saying they're going to pull their Facebook ad spend. Stephanie: Yeah. I didn't why I mention that, but I'm like well, that seems like it's a good opportunity then, like you're mentioning to get on Facebook. Andrew: Yeah, yeah. Stephanie: I think Zuckerberg even said they'll be back or something like that, which is just funny. Andrew: First of all, who could have predicted over that timeline, that kind of thing would happen? Before you even talk about Zuckerberg, who ... There's just so many elements. The system of macroeconomics in the U.S., before you even talk to the world, is so big with so many inputs and so complex that I just don't believe in anybody's ability to really predict that. So what I think is that it's not helpful generally to do that. I'll say three to five years, the one thing I feel broadly, fairly comfortable with though, I think even this has, there's some basic questions is that Ecommerce, as an industry, Ecommerce is a share of U.S. retail spending, will continue to grow. Andrew: I mean, I just have no possible way of predicting that. So I feel like it's a good place to be if you're in Ecom, I think you should be investing in Ecom broadly. I just don't think otherwise it's very possible to do that. I mean, just look at what we were all saying about coronavirus two months ago and the models that we were all looking at about what this thing could be. It's been devastating. I don't want to underplay that, but it has not been in the U.S. the millions of deaths at this point, at least. Who knows that people were predicting? I just look at that and go like, that's because predicting that many things for something with that much unknown is really, really hard. Andrew: My take on this is to go read Nate Silver's book, The Signal and the Noise and to hone your skills thinking about what kinds of things you can and can't project, and even how to think about projecting things. And then to go from there, which means the way you win is not by predicting the future, but by honing your fundamentals and carving really good thought processes. This is what I really believe in the most. To think about this all like poker, which is that good poker players don't win by winning a hand, they win by playing lots of hands really well and by making the right move over and over. Understanding the game that there are going to be times when they're going to be in a big spot with a lot of money in the pot and the card will come up and go the wrong way. But if they play enough big pots and enough money in it, the law of large numbers says that they'll win over time. I think that's the way to think about it. Andrew: Get really good at understanding something like visitors and conversion rate times average order value and asking the right questions about that. Get really good at following your profit margins everywhere you can . Get as much clarity about them as you possibly can that way you know where your money is going and where you're making money and where you're not. If you can do those things over a long period of time and just get good at finding good people to work with and get good at those sorts of things, you will win. So ultimately, I bought into the partnership at CTC with my own money, I'm not rich. Andrew: The reason I put my money into that is because I believe in the humans that are the partner group there, and I believe that those people overall given enough chances will win. That's the way I think you should think about your brand and your business is find partners and find brands and businesses that you believe will play the right hand the most times and are people of high character. That is part of the right hand of what you're play, you're going to have a relationship with these people. Every part of your business, if you can do those things, then I think over the aggregate, you're going to win. Stephanie: That's great. That actually took a very nice spin because at first I'm like, okay, no one's going to disagree with you that Ecommerce is going to grow. But I like the spin that you just took on it about what you should focus on instead. So, good answer. Andrew: Thanks. Yeah, I know. It's a compound answer in some ways, but it's really what I believe is true about the world. It's so sexy to say, okay, over the next month, this is going to happen and this is going to happen. Next time somebody on the show gives you that answer, bring them back on in six months and ask them what happened and- Stephanie: I was just going to say that. I think the world is still missing a little bit of the accountability piece because I see people still on Twitter, even the people who are talking about the end of the world, no one's following up with these people, how come this guy has had a billboard out around California for a long time saying the end of the world was going to happen, I guess, a few weeks ago, and it didn't? What now, are we going to follow up with him and be like, "Hey, what happened?" Andrew: Yeah, that's a very California story. I like that. Stephanie: All right. We're going to shift now into something called the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a quick question and you have a minute or less to answer. Are you ready, Andrew? Andrew: I am. But this is the ultimate challenge for me. Stephanie: This will be the hardest part of the interview. Andrew: Yeah, it probably are. All right, I'll do my best. Stephanie: I actually feel like you're going to have some great answers, that's why I've been excited to get to this. All right. If you were to have a podcast, who would your first guest be and what would the show be about? Other than the podcast that you're running now, you can't say that one. Andrew: Okay. I think it would be about exploring. Does it my guess have to be a live or can I pick anybody? Stephanie: No. Andrew: Okay. I think it would be about exploring big ideas about the world like theology, philosophy kind of stuff, but for the every man or woman. So, it would try not to be too much in the clouds, my guess would be C. S. Lewis, not because he's the most interesting thinker in the history of the world, although he's a really interesting thinker, but because he says things in really interesting ways. So, I think he would be a fascinating guy to just sit and talk with. When I think of a historical person I'd want to talk with most, would be that. Either that or a baseball ball guest. Stephanie: All right. Well, that's cool. That's a good answer. What's up next on your reading list? Andrew: Books I'm in the middle of or after? Stephanie: I'd say, you can do both, middle of and ones that you're looking back on like, that was a good book. Andrew: Okay. The Color of Law is the book I'm in the middle of right now. Richard Rothstein going through the history of government and forced racism in the U.S. incredibly helpful book for me so far. I'm three quarters away through. Highly recommended to try and get your head on straight about what's going on with race in the U.S. just pure history. It's really good. And then I am reading a Christian book called Money, Possessions and Eternity about how to use your money for compassion and care for people instead of for yourself. So, that's what I'm in the middle of right now. And a baseball book called Ball Four, which is a famous book. Stephanie: That's cool. If you were to pick a country to focus on to maybe buy a new brand from, what country would you look into? Andrew: A country? Stephanie: Yeah. If you were to bet big, I'm going to go for something in India, that's top of mind right now because I just read the whole thing between India and China and turning off Tik Tok in India. So, it's very interesting to me thinking about, if you were to bet on brands from a certain country or are you looking to go international, where would you go? Andrew: I think the answer is India. I think that's probably the right answer. The cost of reaching people in India is very cheap and India's economy seems to be growing very fast. But I'm just bullish on global economy in general. So, I think you could probably broadly pick out. In the last 50 years, massive amounts of extreme poverty have been alleviated in the world thanks to globalization and technology and all kinds of things like that. The world is a much better place than people make it sound. That's another book record recommendation, Factfulness by Hans Rosling. Go read that book- Stephanie: Factfulness. Andrew: ... it will help you look at the world totally different. Factfulness. Forget my other book my other book and finish reading that one. Stephanie: I'll link of that one. Yeah, no, I think that's where I would bet too because I think I just read that, it's a billion and a half people there only a third of them, I think have cell phones right now. They're coming online at a very quick rate. So, I think- Andrew: Yeah. I mean, it's incredible how much better life has gotten in the world for so many people. There's very hard life in the world for a lot of people, so to not to underplay that. But it's just crazy and it's going to keep happening. Stephanie: Yeah, I agree. What's up next in your travel destinations? Andrew: Anywhere- Stephanie: When you can travel. I think, just outside my neighborhood. Andrew: Yeah. I like Austin, Minnesota where my family is, hopefully in a couple of weeks, but we'll see. As far as other places, I love Boston. Would like to go with my wife there. I have a seven month old though, so the actual answer to this question is probably nowhere for a while. Stephanie: Yeah. That's my life too. I have four month old twin boys and a two year old. Someone asked me like, "Oh, where are you going to go on vacation?" I'm like, "Nowhere outside of 10 miles away." It's a mess to get into the car that would be- Andrew: Four-year-old twin boys? Stephanie: Yeah, yeah. Andrew: I think it's awesome. Congratulations. That's beautiful. Stephanie: Thanks. Yeah, it's a wild ride. All right, the last one ... Yeah, you know. What's up next on your Netflix queue? Andrew: I just watch the same shows over and over again with my wife. Stephanie: Does she get to choose? Andrew: She does most times, yeah. Stephanie: So you guys are watching Selling Sunset and things like that? Andrew: No. We watched Parks and Rec, 30 Rock and The Good Place- Stephanie: Okay, those are very ones. Andrew: ... over and over and over again. That's probably all we watch. I don't know. The decision fatigue I have on this particular issues, we just created a Slack channel that worked for media recommendations because I just don't know even what to do anymore about where to look next. So, I wish I had a better answer than that. It would- Stephanie: Let us know if you find something from your Slack channel. Andrew: Yeah. It's probably another episode of The Good place. My team is really hot on Yellowstone right now, so there you go. Stephanie: Okay. I don't know what that is, that just shows I am not with it either. So I'll have to check that out. Andrew: Kevin Costner intense ranching family season three. Stephanie: Okay. I'll have to dive into that one. All right, that was a good lightning round. Is there anything that you were hoping to cover, are there any last words of advice before we hop off? Andrew: I think just that in situations like this, I always just want to say that when somebody asks you for answers on a podcast, it's super easy to make it sound easy in some ways. But it's really hard actually to do these things and to grow business and to work in a team and all these things. So, I think the parting word for me is always just to say, it's not actually as easy as it maybe. I hope I didn't make it sound like that. It's just challenging at times. So, keep at it and surround herself with good people. Yeah, I think that's it. I think I just properly took all the wind out of the point that I was making by monitoring it at the end there. Maybe out of [inaudible 01:02:52]. That's the big piece for me, is just you can do it, it is harder than it sounds a lot of times. Stephanie: Yeah, I like it. Well, Andrew, thanks so much for coming on the show. It was a lot of fun and ... Yeah, thanks for taking the time. Andrew: Thanks, Stephanie, for having me. It's super fun.

As Randy Goldberg says, ‘no one dreams of going into the sock business.’ But if there is one sock company you can name off the top of your head, it’s probably the one Randy built with co-founder Dave Heath. Bombas Socks has grown from a small Ecommerce company with a mission into a $100-million dollar enterprise, and the success they’ve had all boils down to remembering the fundamentals.  On this episode of Up Next in Commerce, Randy takes us through his journey to Bombas. He details why founders need to avoid ‘shiny object syndrome’ and focus their sights on the basics if they want to succeed. Plus, he talks about Bombas’ culture of transparency and how to decide between leading with the company mission or the merits of the product when trying to attract customers. Key Takeaways: Bring in the Right People. Scaling requires people — employees, execs, investors, and mentors. Lean on your network, ask questions, hire carefully, and create a dialog with other D2C companies to learn from them. Pro tip: It’s time to bring someone else in when you start to ask questions that neither you nor anyone on your team can answer Ask Yourself, “What Matters More?” When it comes to getting better conversions, don’t let shiny objects distract you. For example, changing the copy or placement of a video matters a lot less than the speed of the site. The faster your site speed, the more conversions you will have. Stay focused on what investments really convert Transparency Impacts the Bottom Line. When employees feel invested in the company and comfortable in the environment you create, they begin to ask more questions, buy-in to the company mission, and work harder to achieve success for themselves and the company For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, co-founder of mission.org. Today, I'm really excited to have Randy Goldberg on the show, the co-founder and Chief Brand Officer at Bombas. Randy, welcome. Randy: Thank you for having me. Happy to be here. Stephanie: Really excited to have you. Thanks for taking the time. I'd love to dive into your background a little bit before we get into Bombas, a little bit about what brought you into the world of Ecommerce and starting Bombas. Randy: Yeah, I guess, we have a sock company, an Ecommerce sock company. I say this a lot, but I don't think anybody ever really grows up dreaming of being in the sock business. It was kind of a winding path for me to arrive at Bombas and to think about this company. My background is in branding, so I was a copywriter and a strategist, and I worked for digital agencies and I worked for a lot of brands through the years. Writing brand books, trying to find out where they had gone astray, brands that were sort of struggling a little bit. I think through that work, I gained a perspective on what I thought a good company looked like, talked like, acted like. At some point, I moved from the agency side to the media side and I was working at a digital media company, and that's where I met Dave Heath, my co-founder in Bombas, and we sort of cooked up the idea when we were working together way back then in 2011. Stephanie: Cool. Why did you guys think, I want to start a sock company? Did you both want to start this or did one have to pitch to the other? Randy: Yeah. Well, I don't think we thought of it as a pitch. We were friends and we were both very entrepreneurial in our outlook. Our families were entrepreneurs. We just, I think, had that same point of view on the world, and we liked the idea of maybe starting a business one day. We weren't actively writing things on a whiteboard and crossing off a list, but we would just talk about things and the business landscape at the time. It wasn't, we need to get this done this year, we were just having a regular day, and Dave was on Facebook, and he saw a campaign that the Salvation Army had been doing with Hanes. Randy: The Salvation Army, they had a quote in there that said socks are the most requested clothing item in homeless shelters. We were having lunch, and Dave said, "I saw this quote, did you have any idea about socks and homeless shelters?" And I said, "No, and I don't even understand why." We started to call around to some shelters in New York, and we were talking to people and we just realized that there was a real problem here. If you're living on the streets, a fresh pair of socks, foot hygiene means a lot. You might be walking more and have less frequent opportunities to wash your clothing. And then, shelters don't accept used socks for donations. So they were always having a shortage and it was always a big need and people would have to buy new socks and then donate them. Randy: People just tended to donate the things that they had worn or gently used. We really just wanted to help solve the problem. So, we started thinking about that, we started buying socks and donating them. Then, I guess just the way our minds work, we started to think there's probably an opportunity here. We looked at the success that Toms had been having and saw their one-for-one business model, and Warby Parker had just launched at the time and they had a charitably inclined business. We thought, maybe this business model really works for this product. It really maps well to it. Just because this is a product that people really aren't allowed to donate on their own. Randy: Then we started to think about socks and we just got obsessed with socks. We were like, socks just haven't changed in 50 years. Athletic socks look the same. They're cardboard, they're white or they're black. Even if you're somebody who cares tremendously about the things that you wear, where they come from, what you're putting on your body, the last thing you get to generally is socks. We thought there was an opportunity to make something really great, to really improve on a product that people take for granted, and that are afterthought in the consumer market, to help solve a problem that's an afterthought sort of for shelters and organization. Randy: Just like, if we can make something really great, we'll sell a lot, and if we sell a lot, we can donate a lot, and if we donate a lot, we can help solve a problem in the community where we work and live. It's easy to look back and say that, but at the time, it just took a while for us to wrap our head around this and think about it as a business idea. Stephanie: Very cool. I will say that I'm definitely someone who had socks as an afterthought, but I will say when I tried on Bombas, I was like, this is a whole different level of socks. I didn't realize I cared about them at all. I would normally just get black ones and just be like, whatever, as long as they're short, I don't care. Then I tried them on, I'm like, oh, these are game changing. They're amazing. Randy: Thank you. I think that's what we're going for. We want to change the way people think about socks, and make it hard for you to go back once you put on a pair of Bombas. Stephanie: Oh yeah. You can't. In the early days, when you were starting out, how did you think through the economics of developing the one to one program? Randy: The early days for us, that meant making sure that we could, from the start, bake into the unit economics, the donation pair, so that no matter what anyone said along the path, if we were raising money, if we were building the business, that there's nothing anybody could do because we were ironclad around the donation model. We built it into the covenant of the business. We've codified it. It's just something no one could ever really take away, but just focusing on it from the beginning and making sure that we could afford to do it, as a for profit enterprise, was a big early step. We've grown and we've gotten smarter about it and we've built a big network of giving inside of the company. It's all gotten bigger and better, but it really started with that idea. Randy: I think that's the right question. Did you think about it from the beginning? Yes, or else we wouldn't have been able to do it and maybe somewhere along the road, we would have compromised, but it's been a big part of how we've talked about the business and the brand and a big part of the success of the company, and having a great product on the side for the consumer allows us to afford the development costs of the donation product, which is an important thing to make sure we're making a product for people who are experiencing homelessness or living on the street. All of these things have been really thought out from the start. Stephanie: It's amazing. I think I saw that you reached profitability by year three. What does your revenue look like now, annually? Randy: Well, we don't typically share exact revenues like numbers, but it's a multiple hundred million dollar a year company at this point and profitable. Stephanie: Very cool. Yeah, I think that's what I saw, but I wanted it to come from you instead of me saying what I think that I read. Randy: Yeah. You read correctly. Yeah, so profitability, I think you're seeing a lot of direct to consumer companies and Ecommerce companies now really starting to think about profitability in this moment. The way that people are raising money and what companies who are handing out money have been looking for, it's forcing a lot of companies who've raised a lot of money and had profitability as a down the road kind of goal, shift how they're operating and shift how they're thinking. I see that, and I've talked to founders who were dealing with this and it seems really painful. I think for us, it was a goal from the beginning. We wanted to have a really solid conservative financial outlook, get to profitability quickly, build a business for the long-term, for the long haul. Randy: We want our grandkids to be wearing Bombas. That's one of our core values. I think that plays into the way that we built the business from the unit economics and financial side of things as well, and the way that we approach marketing, which obviously as you know, as a direct to consumer company, is the hot topic, of course. Stephanie: Yep. Were there any issues that you ran into along the way? Because scaling to over a hundred million revenue is probably pretty tough. Is there any lessons you learned along the way or things that you're like, ooh, we did this great, or we maybe should have done this a bit different? Randy: I think the number one lesson is about focus. Know what you do really well, know why your company exists, why your product deserves to exist in the world, and then focus on doing that well, focus on telling the same story over and over and over again. Whenever we've been able to really focus on that product on the donation, on the sort of foundational elements of the business, that's when we've done the best, and that's when the company has grown really well. When we've gotten distracted by, hey, let's try this pop-up retail idea, or let's advertise in this new place that is unproven, but seems good for this one specific reason, and it's taken our focus away from the things that we do best, that's where we've had the most trouble. I think that's been the big theme for us in the early years, is just focus has really led to growth, and it's where we've had the most success as a company. Stephanie: Very cool. When thinking about the first conversion or a brand new customer, do you think the social good aspect of the business sells the product initially? Because it's pretty hard to convey how good the socks are on the website. Randy: Yeah, it is. It's hard until you, I guess, you try them on, and we just want to get as many socks on feet as possible. But yeah, there has been a constant debate at Bombas since day one about what comes first and the way we talk about the company. The quality of the product comfort or the mission, our commitment to give back to the community. Some people come for the product and stay for the mission, and some people will come for the mission and stay for the product. I don't think we've solved that debate. We poll our customers and we're surveying people and we're thinking about this a lot, but I think the thing that works the most in marketing for prospects, people who haven't heard about our company, is talking about comfort, is talking about the quality of the product. Randy: The mission definitely helps complete a sale, helps with the follow on sales, and our customers, people who've already made purchases, expect us to close the loop, report back on how we're doing with the donations that we promise we would do on their behalf. That storytelling element helps us with both sides of it. It's just about where we show up with the mission and where we show up with the product marketing, at what time in the life cycle. It's an ongoing debate and we stay nimble around it, but those are still the two elements, and they have been since the beginning that show up the most in our communication. Stephanie: Cool. The other thing I saw that you all had was the happiness guarantee, which I was like, how do they remain profitable? Because one of the things I think I saw in there was, if your kid outgrows a sock in a year, which I have three kids, so I'm like, that could happen quick, or if your dog chews up a sock, which our dog, [Tossy 00:11:14], does that every day, how do you make sure that people aren't abusing those rules? How did you come up with that happiness guarantee? Randy: I think for us, we think about the great companies that we all like to work with, or shop at, or interact with. A common theme is that they have great customer service and they stand by their products. We wanted to make that a hallmark of Bombas. In the early days, Dave would take all of the calls that would come in to our phone number on his cell phone. So we would be out talking about the business or in a bar, back when there were bars. He would get a phone call and go outside, and an hour later, he'd come back and he'd just talk to a customer. I think that idea of just making sure that we're taking care of the people who are spending money with us, that led to the idea of the happiness guarantee. Randy: We have our internal customer service team, they're called the customer happiness team, and we've also, just sort of connecting it back to the business, to get back to your question, people who interact with our customer service team have two times the lifetime value of customers who don't. We're trying to turn issues that people have into positive experiences, and that turns people into bigger longterm customers, because then they trust us, they trust that we take care of them. Sure, there are people who try and abuse the policy, but that's far outweighed by the number of people who are just trying to solve a problem, or get to the bottom of something and want things to be right and don't want to have to jump through a lot of hoops to get there. Randy: For us, the good of having that really strong internal team to deal with our customers and to respond to problems, and yes, to make sure that if your kid outgrows the sock that's expensive or that ... We'll be there to grow along with you. All those things are ... we just want peace of mind as people go through the process and think about, should I be making this purchase right now? Stephanie: That's great. How do you train your customer happiness team? Because I feel like it takes a certain kind of person to be peppy and to, like you said, have a higher lifetime value with the people who interact with that team. What kind of training process do they go through? Randy: It's pretty rigorous. I think Dave passed on the mentality of our customer happiness team to the person who originally ran the program, and he's still running that team. I think, like almost everything at Bombas, when we have something that we want to do and we feel like we've reached the limit of how we can handle it ourselves, we try and bring in people who are way smarter than we are and have the right skillset, and really focused on hiring great people. It also helps that, people who come to work at Bombas, tend to want to give back to the community and are inclined to support and work for a company that cares about that as well. Then, we in turn, care tremendously about our company and the company culture, and all of those things lead us to find, I think, the people who are right for the roles and write for the company and speak to those core values, and that's how it works with the happiness team. Randy: They're trained, not only on what to say in the situations that come up most often, but how to deal with Bombas customers, how to put the extra spin on it. It's about, I guess, just that level of care. Our whole team really appreciates that customer service team, and we make sure that they know how appreciated and important they are as the first line of defense for our customers internally as a team. I think giving them the support and love that they need as the team that has to deal with a lot, and has to clean up mistakes when they happen and make sure that everybody's happy, and then understanding how we want them to communicate with the world as a brand. The way that we talk in an ad versus a video, versus on the phone with the customer, versus internally, none of that should really be different, right? We're trying to be really consistent as a brand. Stephanie: How do you create that consistency? Because I can see as a company grows, and I've seen this happen before, where you start developing silos and the teams are kind of off doing their own thing, maybe trying their own marketing campaigns, and it starts getting a little bit chaotic. How have you kept a consistent culture and feel at Bombas? Randy: Yeah. We're not immune to some of the issues that you just brought up. But just recognizing it, being honest about it, trying to get ahead of those things, and focusing on that core messaging and communicating well internally. We're also at the stage where we're really thinking about planning and processes as a company as we've grown to 150 employees and being remote, how we interact and how we work cross departmentally. Those types of things are at the front of mind right now. We're hearing it from our team, we listen to ideas, we bring in people to help us. I think we're laser focused on making sure that some of those breakdowns and that siloed work doesn't get the best of us. We have seen that and we're working on it. Randy: I think any company that starts off operating like that, when you have five or 10 people, that would be overbearing, and I don't think the type of people who end up coming to a company that small would appreciate that, but as you grow, you have to adjust and you have to get ahead of it so that people keep that same feeling of freedom in terms of thought, in terms of how they can innovate in their work and get things done, and expectations around their jobs, all that stuff becomes really important to be more documented, to have tighter processes so that people feel freer to do the things that they love to do. That's what we're trying to work on, but it's not an easy thing. Stephanie: Yeah. It's definitely a tough juggle. If someone were to join and they're employee number five, and then all of a sudden, there's 150 employees, it's like, okay, well, I used to be able to do everything at the company, and now you want me to shrink my role. A tough thing to work through with employees. Randy: Yeah. It's a challenge. You want to retain the people who made Bombas, Bombas, but you also want to make sure that people are growing in the right way, and there are opportunities, and the new people who come in at certain levels understand what they're supposed to do and what everybody else is supposed to do. You just start to get into these things that maybe you thought you would never have to deal with if you started a company, but as it grows, this is what it looks like. Stephanie: Yup. Were there any resources that you leveraged along the way when you were growing quickly, when you were like, I need to learn this or I need to figure this out, or companies that you were watching to learn from? Randy: Yeah. I think that's been our mindset since the beginning. Just from our early advisory board, just to fill in the gaps, to hires that we've made, the things that we tend to lean on are people. Dave and I are like, we don't know the first thing about performance marketing, when we started this business. We need to bring in somebody who's an expert in that, or at least, have somebody on our advisory board who can help answer questions for us as we grow that until we have that right person, or to help us find the right person. That's been a big part of how we've grown this business, is leaning on our network to reach out to people, to ask questions, to make good hires, and then watching other D2C companies and having a good dialogue with the other D2C companies who have grown to our size and larger. That's been really helpful as well. Randy: Then you also think about companies like Toms. They've been really helpful to us, in terms of watching out for certain mistakes that they've made along the way with their donation aspects of their business. They've been really open with us about those things and helping us avoid them. We try and do the same with other companies who reach out and want advice from us as well. Stephanie: Very cool. How did you think about building out the website? What kind of things did you want to have on there to make sure that you kept with the brand story, but also, sold enough to be able to be profitable to keep the model working? Randy: It's a great question. The idea of what a website looks like when it's your only store is so important. You want to have that right blend of storytelling, but you want people to be able to breeze through the checkout process the right way. That's been a journey for us. I don't think it's anywhere near where we want it to be, but I would think that you would ask any direct to consumer company and they have a lot they want to do, and their technology roadmap is pretty long, and that's part of it. You're always building, you're always tweaking, you're always improving. You're looking at the data and you're making changes to just make it better. Randy: In the beginning, at some point we have to replatform. But just the processes along the way to get us from where we started to where we are now, to where we're heading, it takes a lot of care and attention. Like I said, when it's your only store, I think it's your job and your duty to make sure that it works and operates really well. Stephanie: Yeah, I completely agree. How did you know it was time to replatform and what was that experience like? Randy: I knew it was time when we just had so many issues with managing traffic or the backend or uploading content. It was wrong. We launched the business and the website in 2013. Since 2013, there've been a lot of changes in technology and the way that Ecommerce works and looks. If you went back to a site from 2013, as a 2020 consumer, you wouldn't last a minute. You'd be out. Stephanie: You'd bounce right away. Randy: You'd bounce. There was a lot more tolerance then, but less people using Ecommerce because the experience just wasn't great. I think, if you go back even further, and I think about this a lot, if you were starting a direct to consumer company in 2009 and you didn't have a lot of money that you would raise, building the website itself would have been prohibitively expensive for most brands, for most companies. But if you managed to get it up, the marketing was basically free. There was no algorithm that was holding your content back. If you had a Facebook page, whatever you posted, everyone who followed you with anyone who shared it, and anyone who got added to your page, not some of these early companies, resources to build a site were able to build huge businesses. Randy: But then, as it shifted, now, if you want to launch a direct to consumer company, the technology is basically free, getting that website up, but the marketing is prohibitively expensive. It's totally flipped. We just happened to launch, I think, in a sweet spot where the technology had gotten more affordable and the marketing was still affordable, but it was not free like it had been in 2009, and it wasn't very hard or challenging environment like it is now. We sort of had time to figure out both pieces, and we had runway to figure out the marketing and we could afford the technology. Then that got a lot better, and just have to stay on top of and ahead of all those things. Stephanie: That makes sense. To focus on the website piece first, and then we can jump into the marketing aspect, so the website, was there any like big fundamental changes that you made where you're like, this made the biggest difference when it came to sales and conversions and even getting traffic in the first place? Anything that you remember that you change where you're like this had the biggest improvement for us or a couple of things? Randy: Site speed, I think is the number one thing. As a person who comes from the creative side of the business, a copywriter or strategist, there's nothing that I could do from my previous job or as a brand person that would make the improvement of one second of site speed in terms of how something loads or how it acts. Just sort of getting over some of the sort of shiny objects into saying, oh, if we change the copy here, or what if we put this video here, or had this type of look on our site? If you make your site faster, it will convert better. Things like that, just understanding the fundamental way things move and what people want from you, layering the other stuff on top then becomes just sauce and becomes fun. Then you can start to have incremental changes and things that work. But I think, just looking at site speed, if you want one good thing, that's where I would start, as dry as that might be. Stephanie: Yeah. No, that's a great one. Was there anything affecting the site speed that you were surprised by? Randy: I think the way that you manage and load images, obviously has a big effect on that. Your product architecture and understanding Randy: I think some of these things you don't realize when you're starting out, but the way things are organized, hosted, served, there's sort of best in class ways of doing that now. But if you want to have your variants of your products perform a certain way, or if you want to create bundles in a different way than most companies do it, then all of a sudden, you're creating ... you could be creating extra things that are weighing your site down, even though you think ... it helps you organize the things that you want to sell the way that you see them in your mind. It doesn't always benefit you because maybe you're slowing things down. If people are bouncing before they're even seeing it, then what's the point? Again, this isn't my area of expertise, but these are the things that you learn along the road when you're doing everything in a business when there's five people. Stephanie: Yeah, I think that backend infrastructure piece is hard to focus on in the beginning because you're so excited about the product and the marketing, and like you said, getting good copywriting and telling your friends that you don't really think about how to set up, maybe the data and the backend piece to actually create a good performing website. Randy: Totally. Listen, like I said, my background was in branding. I was a copywriter. I think we built this business around the brand because it's, in many ways, a commodity that you turn into a brand. You do that by being really consistent and having good storytelling and build a moat through brand. But none of that exists if you don't get the infrastructure piece right, and you can't get to that. I talked to founders who were starting companies, and they're so focused on hiring the right creative agency or branding agency, they'll put together the right logo, and it's just not the right place to start in my mind, even though I love that work and I love thinking about that for companies and thinking about how you communicate to the world and understanding why your product exists, but without that fundamental infrastructure piece, no one's going to care about that other piece. It's just maybe a little bit of a sad truth for creative side of business people. Stephanie: That's okay. Got to hear it sometimes. Randy: That's right. Stephanie: One thing I saw that you guys were doing was that you were investing in a data science team and embedding more data elements into the customer journey. Can you tell me a little bit more about that and how you knew it was the right time to bring on a team like that? Randy: How will you know it's the right time is that when you start to ask questions that you can't answer, and nobody internally can answer it. That's the truth, and when one person ... Randy: You also know when you're having a debate about something in the business and somebody is able to pull out data or a statistic related to what you're talking about, and the conversation ends because it's hard to argue with the data. When you see that and you've thought about it the other way, and you're not trying ... You can't convince data, right? I know [crosstalk] manipulated. Stephanie: There's no argument there. Randy: That's right. Then you sort of think, this is really valuable, and rather than trying to think about something from the perspective of, I think it should work this way, you want something to show you how it should work, and you want to be able to interpret data the right way and be able to use it to your advantage to build out a strategy, rather than just making assumptions and going off of somebody who has the most experience or who has the most seniority. I think companies get in trouble when they just rely on the loudest voice in the room or somebody who's the most persuasive at arguing rather than bring data as a voice into the room for decision making. Randy: I think it started to creep in when we would understand a little bit what we don't know, and then have debates that were a little bit out of our depth and we didn't have the right people. We didn't really have that skill in the beginning. We knew that it would be a big part of this business, even back in 2013. We just knew that it wasn't the first thing we were going to invest in. It just sort of came naturally to the time. We were always excited about the idea of what a data science team could bring to the table for a sock company. There was a point where you almost can't operate without it anymore. Stephanie: Yeah. That's awesome. What does it look like now having that team, and what kind of metrics are you guys paying most attention to? Randy: A lot of the metrics are the same. You'll see a lot of Ecommerce companies paying attention to, but what the team looks like, and what's interesting is, now that we have the team in place, getting other teams to work with that team the right way is the key, and getting our directors and decision makers accustom to partnering with the data team, to help surface solutions to problems and present them and work, it goes back to some of the work that we're doing, trying to figure out the processes and cross departmental work and to avoid some of the siloed behavior that you brought up earlier. A big part of that is the data team and how they can help support. There's support teams within an organization, there's execution teams, and that's very much a support team, and they love answering questions for teams, and some teams use the data and analytics team more than others. Randy: We just try and be really loud about it at our all hands meetings and present back case studies so that people understand how they could better use that team. It's a process and something that was getting better all the time, but you just sort of have to make it central to how you operate as a company. That doesn't happen overnight. It's a big change. We've been working on that for the last six months to a year in a major way. I think it's really paying off for us. Stephanie: Very cool. Yeah, I definitely have seen business intelligence teams in the past struggle with being able to create a partnership with the product team or the engineers. I like the idea of showing a case study. So instead of pushing it on a team member, it's like, well, here's what another team did. Look how great this turned out, and encourage them to want to partner with that team even more. Randy: Yeah. You're making decisions, how many times a year should we ... We're not a promotional company. But if you wanted to ask a question, like how often should we do a sale? There's logical times of the year when you think that should happen, and the merchandising team might have a different perspective than the marketing team, and using the data team to think about the effect on customers or prospects. There's so much information that could help steer a decision like that, that is major to the business. Those are the types of things where you start to see a lot of power in the team like that. Stephanie: Yeah. We're talking about data. I want to also shift into the aspect of transparency. I read that you and your co-founder both had subpar experiences with transparency at previous companies you were at. I wanted to hear, how do you think about being ... Well, first tell me the story. I want to know all the nitty gritty details, and also how did that influence your culture now? Randy: Sure. I don't know, the cliff notes is that was a major influence on our culture now, but we had the experience together. Like I mentioned, we worked together at a previous company, and at that company, the person who ran the company brought amazing people together, and there was a great team, and the work was fulfilling and we learned a lot, but it was really hard to have conversations around career growth or compensation, or how well is the company doing? Or data. One person tended to hold on to decisions for so long that it was counterproductive and it was demotivating for people. You felt nervous to even ask a question, and nobody understood their stock options. You would ask questions about it and you'd get them response months later. Randy: That sort of fogginess around the things that people really care about when they're going to work at a smaller company, it was really hard for us. We knew no matter what company we started together, building a culture of transparency, where people really understood the why behind the business, the core values, the financial performance, what their ownership meant, and a culture of being able to ask questions, that was hallmark from the beginning. We just wanted to create the company that we would have loved to have worked at and centering our employees in the business, and thinking about them just as much as we do our bottom line. Our theory was that it would make the bottom line better. People would be more inclined to give something beyond their capacity or to continue to learn or to grow if they felt safe and supported at the company. Stephanie: Cool. Yeah, that definitely is a good way to build a company from the ground up, and maybe not fun to have that experience, but hey, you learn from the best people you work for and the worst people you work for. Randy: Absolutely. I wouldn't trade that experience because that's what led to the culture that we've built at Bombas. I think, if you talk to our employees and the way they think about it, we're maybe more proud of that than anything else that we built in this company. Did I give you enough nitty gritty details? Is that good enough? Stephanie: Yeah, I was hoping for a little more drama, but I'll take it. That was good. Randy: There was plenty of drama. We can talk about that offline. Yeah. Stephanie: That sounds good. Earlier, I mentioned, I also wanted to hit on your marketing a little bit. What kind of channels do you focus on? What are you seeing success in right now in any new channels that you're excited about? Randy: Yeah, for us, listen, we're a direct to consumer company that started in 2013. Can you guess what our number one marketing channel is? Stephanie: Facebook? Randy: Bingo. Right. Okay. I think we still see a lot of success there, and while it might've been a way larger percentage of our marketing mix in the early days, and we've diversified away from that a fair amount, it's still an important driver for us. In the beginning, in the early days, we would create a video that we didn't even intend to be an ad, just a thank you to our customers, and then eventually it gets turned into an ad on Facebook that's seen a hundred million times. Leaning into the trends and trying to see around the corner at Facebook. now working closely with that team. has really helped grow our business. Randy: One of the things that we have had since the beginning is ROI positive or breakeven on first purchase. We're not over our skis on Facebook spend, while lot of companies are to just to try and build up their customer base. For us, it was important to really be disciplined. We knew that if we were going to grow our budget and grow our company, and we were a really marketing led company, we'd have to diversify away. So, Hello Podcasts, radio, direct mail, TV. Those are all big parts of the business now, and they're all growing probably at a faster rate as a percentage at least of the business than our online ads on Facebook. But search has grown for us tremendously in the last year and a half as our brand has grown and recognition has grown. Randy: Some of that comes from broader marketing, like on TV, and then people are searching Bombas by name, and we can lean into search advertising and that works better. Some of these things are just about timing. Yeah, we still have a tremendous success sort of trialing things out online. We've never used a creative agency. Everything is internal at Bombas, so all of our creative direction and the marketing team and the partnership between the creative team and the brand teams and the marketing team operates as an internal agency. We like places where we can test things, test creative, test lines, test different cuts of videos, see what works, preview it, and then build it out into bigger campaigns that could work across all those different places that we talked about earlier that I mentioned. Randy: I don't know, that's sort of more of an overview than what's working now. But if I think about the last few months, when everyone's at home with COVID, people who were still able to afford to be buying things right now online are looking for comfort, and socks have done well in this moment. On the other side of things, we talk a lot about our efforts in the community and how we've adopted and been able to help out in this moment above and beyond how we normally do. That's also something that people want to hear about. For us, it's the combination of the product and the storytelling and the marketing mix, and making sure that we're nimble enough in all three of those places to make adjustments as we build and grow. Stephanie: That's awesome. Do you find that you have a community also, because it seems like with your story and your brand, you would have this community of people who want to lift you up and talk about you and spread the word organically without you really having to push too hard? Randy: Yeah, absolutely. Community is a big word at Bombas. Something that has been since the beginning. I think about the community of giving partners that we have. In the beginning, when we wanted to donate the socks, you buy a pair and we donate a pair on your behalf. We didn't know how to do that. We started with one giving partner that would accept socks from us, and we learned a lot from them. Then we built a specific sock that we donate, that's more tailored to the needs of the homeless community. Since then, now we have 3,500 giving partners across all 50 States. These are the people who are working really hard on the front lines helping out that community and doing what they can to serve their communities, and our job is to support them. Randy: That is a big community. We get a lot of feedback from them. Then you have our customers who really care tremendously about the product and the donation aspect of it, and they're telling our story on their behalf. You mentioned earlier about one of the keys, I think for us is consistency. The more you're telling the same story in different nuanced ways, the easier you make it for other people to tell your story on your behalf, and that word of mouth marketing, or letting people explain to somebody else when they're having dinner that, hey, they just got these socks and they're really excited about them. Randy: They donate for every pair they sell, and they also just happen to change the way they feel about putting on a pair of socks in the morning, and they feel more supported and comfortable in their daily life. That's a pretty amazing thing that you can get somebody talking about socks at dinner. I think all of this stuff is related, making sure the messaging is tight, keeping that internal, having a marketing team that's nimble and always trying new to new and different areas, and then having that product that's really high quality to support all of that, to give you the confidence to go out and sell something. Stephanie: That's great. How do you keep things organized? Because I'm thinking about, you have all these community organizations that you're mentioning to do the one to one program, then you've got your own product that you need to focus on. How do you make sure that you're spending the right amount of time with each area? Randy: You don't want to be playing whack-a-mole, I guess. You want to be seeing ahead of things a little bit. There's a certain element of making sure ... You start to see when some friction comes into a certain side of the business and you need to spend a little bit more effort getting your go-to-market process ironed out, or on the technology side, if we don't install an ERP process in the next X amount of time, we could see a lot of trouble. I think that starts with a leadership team that communicates really effectively, often open, and is really humble, and then syncing up on our company roadmap, and making sure that when something does seem like it needs a little bit more attention, that people spend their time on it. Randy: That's the idea. I guess some of that is also thinking about, and talking to companies that are a year or two ahead of us, and have been through some of these sort of growing pains at the same times, and looking for the pitfalls that they went through and trying to get ahead of it rather than to have to be reactionary. Stephanie: The D2C community, it seems like they're very helpful with each other, and you just mentioned, looking to someone who's maybe two to three years ahead of you, how have you utilized that community and leaned into it to get advice or build friendships or mentorship? Randy: Yeah, it's a great community. For us, we're a pretty open group. We talked about transparency and communication as pillars of Bombas from the beginning. We want to help out other companies who are coming up behind us, and then we've looked to other direct to consumer companies, and other, generally, just good companies to try and help us out. You ask the question and you find that people are generally willing to say like, yeah, this is how we did this, or connect with this person on our team. They know that at some point they'll have a question for you. We've always been just asking questions outside of the organization. It's the same approach with hiring. We want to bring in people who are smarter than we are. Randy: We want to ask the questions to the companies who are ahead of us. You don't get the answer if you don't ask the question. It's just an important thing, and I'm not sure why this group of companies especially is more open or collaborative, seeming than other groups that you've been in, but maybe it's this generation of founders and the way that we grew up and the interest in community, and the expectation from customers that our company just can't look the way it used to look or act the way it used to act, and it has to have more of a purpose. Maybe that just drives us all to be a little bit more open and a little bit more flexible and a little bit less guarded about some of the things that we're doing. Stephanie: Yeah, I agree. It also just seems like there's so many opportunities. It's not like you're going to be talking to someone who's doing exactly what you're doing. There's just so many opportunities and so many things to start and try that I'm sure that also helps with people wanting to share and show how they did things. Randy: Yeah. I don't really feel competitive with anyone in that space. In some ways, those companies, you could see them as more of our competition than another sock company, because we're competing for the attention of people online. It doesn't matter what you're selling. If somebody else is taking away time that somebody might spend thinking about Bombas, then I guess that's competition, but approaching it, from a lens of collaboration and like, if they can help us know we can help somebody else, it's just the way we've done it. I'm not sure it's right, or it does feel like it's helped us. It is nice to feel like there is a community around this. I like to think about these companies, I like the community of the businesses. Randy: I'd rather be lumped in with these companies, as a community of people that can help each other with the business side of things, than on the brand side of things. I'm wary of being one of the direct to consumer brands out there, because I don't feel like that set of companies always looks the best or the type of press that is out there is always positive. For me, it's just about the people running it and the people at these companies, and making sure that people in our teams are connecting to people who've done something that they maybe don't know how to do perfectly. Stephanie: All right. Before we jump into a few higher level Ecommerce themes, I wanted to hear what is the best day in the office look like for you? Randy: Oh, the office. Stephanie: How do you walk home when you're like snapped in and you're like, that was a good day. Randy: Remind me of what an office is. Stephanie: Okay. What's the best day from your bedroom look like? Randy: Well, okay. It is interesting to think about at home versus at the office. The office is a big part of who we were as a company and getting everybody together and that spirit of community that comes into it, and being able to sit down with someone face to face. We do miss that. Although the teams are really productive and risen to the challenge of working remotely. The best day feels like when something goes well beyond what you expected and teams are celebrating each other and recognizing each other. Also, when we have a speaker from one of our giving partners to give us perspective on what's happening in our work life and why maybe it's not the most important thing in our life and in our world. Randy: When all of those things are kind of clicking together, I think people remember why they work at this company, what's truly important, how they can impact it, and then the collaboration and the spirit that comes along with it. Those are the best days for me, when you're reminded of what's important and how that impacts the company. Stephanie: I think it's good to document those days too. I really like, there's a coffee shop, Philz, right up the street, and they have all these pictures of their employees and just having fun and team meetings they have. It's on the way when you're headed to the bathroom, but it's really fun. I would think as an employee, but also as a customer to see and remember like what it felt like that day and how excited this person looks when they're receiving this award. Because it seems like it could be easy to forget when something's moving so quick. Randy: Totally. I love that idea. I also think about the times when we all got to volunteer together. Now we tend to volunteer in smaller groups which is obviously still great. We have sign up sheets for all of our volunteer opportunities and you have to pounce on them to get the spots that you want. I think that speaks a lot about the culture of the company, but some of the photos you look back on from those moments, or those days when the team feels really connected, those are really exciting days. Stephanie: Yep. All right. A higher level Ecommerce question. What do you think the future of online shopping looks like, like in 2025? Randy: Ah, like when we're all driving around in flying cars, what does Ecommerce look like? Stephanie: Yup. I'm on Mars. Where are you? Randy: I might be on Mars too. Do you want to have a rival colony? I'm down or maybe we have a collaborative colony. Stephanie: Okay. Oh, I'm down. Maybe, we'll see. Randy: We'll see. Okay. All right. We'll see. We'll figure it out then. Stephanie: It depends if you accept my LinkedIn request, I guess, then I'll know. I'll be like, is it any cooler now? Randy: Wait, that's how we judge if you're cool, is if you accept our LinkedIn request? Stephanie: I just made it up, but we'll see. I might have higher criteria afterwards. Randy: Okay. All right. We'll put a pin in that. I don't know what the future of Ecommerce looks like, I got to tell you, I know the percentage of people who get comfortable shopping online, that's only going to go up. I know that companies are going to invent new ways to make it easier for people to buy their product, to review their product, to look at it. I think ease is the name of the game. In a world that's going to be more and more competitive, the way to stand out is going to change. All I know is it's not going to look like it looks right now, and having the attitude that, even if you're doing something right, that the way to succeed in a few years, it's going to be a different version of right, then you'll be okay. Stephanie: Yep. I love that. All right. Before I move into the lightning round, anything that you wanted to share that we missed, where you're like, I really wish you asked this, Stephanie, and you just didn't? Randy: No, like I said, I'm here for you guys. You want to talk about Mars and infrastructure, then great. Whatever you want to talk about. Stephanie: Mars and the moon, that'll be the next podcast. Anyone who wants to sponsor it, hit us up. I don't know what we're going to talk about, but we're going to need help to figure it out. All right. Lightning round brought to you by Salesforce Commerce Cloud. This is where I ask you a question and you have a minute or less to answer, Randy. Are you ready? Randy: I'm ready. Stephanie: All right. What's up next on your reading list? Randy: Can we just start that over? Sorry. Stephanie: Yep. What's next on your reading list? Randy: Up next on my reading list is the Mike Nichols book. I'm not sure what it's called, but I'm excited to read it. Stephanie: What's it about? Randy: Its about the director, Mike Nichols, and his life. Stephanie: Cool. We'll have our producer, Hillary, will find the link to that and everyone can go explore it there. Randy: I don't tend to read business books. I know that they could be helpful, but I'm more interested in people, humanity, fiction, novels. Stephanie: Yep. Cool. Any podcasts you listen to? Randy: Yeah. There's a great podcast I listened to about words called The Allusionist, Allusionist with an A. Love that podcast. I have a whole list, but let's just do one. Stephanie: Yeah. We'll check that out. Any hobbies that you're really getting into these days? Randy: Hobbies that I'm really getting into. I really like this sport called paddle tennis. It's not pickleball, it's not ping pong. It's called paddle tennis. If you look it up, it's like a fast version of tennis. You play with a paddle and a tennis ball, but you poke a hole in it. There's like a really small, but passionate community around the sport. It's really fun. Stephanie: Do you play on a tennis court? Randy: You play on a small tennis court. It's basically the service boxes and two-ish foot baseline, and a net. You serve under hand, and you can't serve [inaudible 00:52:55], and you poke a hole on the tennis ball so it doesn't fly everywhere, but it still bounces. It acts and feels like tennis, but like a faster version. It's really cool. You can play in New York. There's courts in New York in StuyTown and Peter Cooper Village, and there's courts in Venice Beach in California. Those are kind of the two centers in the US. It's not a very big popular sport. Stephanie: We will have to bring it up to Palo Alto. I will be the one do that. That would be my initiative over the next year. Randy: Do it. Stephanie: All right. If you were to have a podcast, what would it be about, and who would your first guest be? Randy: Oh man. If I was going to have a podcast, wow, I don't know. Do we need another podcast? Do we need a podcast from me? Stephanie: Yes, we do. Randy: Maybe it would just be rants. Just do like a short rant every week. I don't know. Stephanie: I like that. Hey, that seem to do well sometimes. Stephanie: That's okay. All right, this one's slightly harder so you might have to think. What one thing will have the biggest impact on Ecommerce in the next year? Randy: I think the thing that will have the biggest impact on Ecommerce in the next year is the timing on reopening the economy and stores and retail. If people can't go to stores or don't feel comfortable going to stores, they're going to, inevitably, accelerate their comfort level with shopping online. We already see that happening. I think it's just going to push that trend line even further forward. I'm for one, excited about it. I think the biggest, biggest test for this will be this Q4 and the holiday season, and to see what percentage of shoppers are shopping on Ecommerce and what they're demanding of Ecommerce retailers that they weren't a year ago when the percentages were smaller. Stephanie: Yeah, I completely agree. Great answer. Randy, it's been a blast having you on the show. Where can people find out about you and Bombas? Randy: You can find out about Bombas at bombas.com, and everywhere else you would expect, B-O-M-B-A-S. That's it. Thank you for listening and thanks for having me. Stephanie: Yeah. Thanks so much. It's been fun. See you next time. Randy: All right. See you next time.  

You may only know Kellogg’s as the company that makes your favorite cereal. But there is so much more to the company than just delicious treats. Robert Birse is the Head of Global B2B Ecommerce at Kellogg’s, and he has been leading the charge to position Kellogg’s as one of the leaders in creating scalable B2B Ecommerce strategies. On this episode of Up Next in Commerce, Robert explains all the ways that Kellogg’s is upending traditional Ecommerce strategies in order to help customers find greater success. Using technology like A.I. and machine learning, and by developing a platform that all of their customers and partners can use, Kellogg’s has been pushing the ball forward on bringing small and large businesses into the world of Ecommerce and helping them get the most out of their Ecommerce strategies.  3 Takeaways: A brand like Kellogg’s has the power to up-end the typical Ecommerce strategy. Instead of asking how to get customers to buy more, they ask how they can help their customers sell more. In doing so, their customers and partners become more successful, and it’s a win-win for all parties Change management is important because many of the small businesses Kellogg’s works with have to fundamentally change the way they think about doing business.hey have to rely much more on technology than ever before. But the appetite is there because A.I. and predictive analytics are proving to be critical tools in helping businesses determine what to stock and how to look at consumer behavior B2B Ecommerce is still in its infancy, but there is an appetite for innovation across the board from brands to retailers to distributors. They’re eager to test, iterate and experiment with new technologies in order to create better one-to-one engagement at scale For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Stephanie: Welcome to Up Next in Commerce. This is Stephanie Postles, your host from Mission.org. Today I'm very excited, we have Robert Birse on the show, the head of Global B2B & B2B2C E-commerce at Kellogg. Rob, how's it going? Robert: It's going great. Thank you very much, from captivity. Stephanie: Yes, yes. How is life in captivity? Robert: Well, I'm thinking about calling Amnesty International, see if they can get me out of here. Stephanie: Well, we were just talking about what life looks like right now, just us eating lots of Cheese-Its on our bed at home, calling into Zoom calls, or maybe that's just me. Maybe that's not you. Robert: No, I think that's a typical picture across the world right now. Stephanie: Yeah, which is okay. Temporarily, it's okay. So, I saw you have a very long history in E-commerce. I think I saw dating back to even early 2000s, right? Robert: I'm afraid it was in the '90s. Stephanie: Oh nice, okay perfect. Well, I would love to hear a bit about your background and what led you into E-commerce. Robert: Sure. Well, I was working for a catalog distributor, so not a distributor of catalog. We use the catalog as our medium to communicate with our customers who were predominantly engineers in factories across Europe. The business that I was responsible for at the time was a small specialist distributor, and we were struggling a little bit to find our position as E-commerce was starting to take more of a role in the consumer engagement or the customer engagement in our case. So we were on the tube and this was the late '90s, and we took a digital transformation, even though digital still wasn't really a bonafide strategy because it was only emerging. The first task we undertook was to create a digital asset library from all the bromides and things that we'd cumulated to support the catalog production. Robert: So we partnered with a startup in London, a bunch of basically college graduates who were trying to create the first digital content management system. And that was more than 20 years ago. So we did that and we started to work to create a digital presence online, starting with static content and then moving into transactional capabilities. It helped transform that little business into something that had a much greater future. So that was my first introduction to digital and then never looked back since to be honest. Stephanie: Oh, that's great. What kind of transformations has your career seen since the starting point in the '90s to now? And what does your role look like now at Kellogg? Robert: Yeah, I mean, I've used digital disruption and innovation in all the roles I've had since that position in the UK to varying degrees of impact. When I joined Allied, and I moved to Texas, we transformed that business collectively from a couple of hundred million to 600 million in a very short period of time. Just really ensuring that we unified the sales channels with the digital channel. In the early '90s, or early 2000s was very popular to Ring-fence E-com as a separate channel, and I felt that was wrong. So when we moved to the US I tried to ensure that the unification happens, so it was the best one to punch we could possibly give our customers, we're always on capability with the human interaction. I have used that principle throughout my career to build success. Robert: Ultimately all the way to Kelloggs where now, I'm using technology to create value for our customers, changing the paradigm that was always traditional in sales engagement of how do I get my customers to buy more? Now the principle behind our E-commerce strategy from a B2B perspective, is how do we enable our customers to sell more? And then we will be the recipients of the downstream benefit in due course, and that's a big change in the approach. Stephanie: So what did your first, maybe like 90 days look like? When you came to Kellogg's and you saw the lay of the land, what were some of the initial things that you were like, we have to do this, or have to shift this? What did you do? Robert: Well, the train was leaving the station when I joined Kellogg and I decided to embark on a pilot, a B2B pilot, in Brazil of all markets, one of the hardest B2B markets in the world. So it was an interesting challenge to ramp up very quickly. Now, thankfully that we're using Salesforce Commerce Cloud as the technology platform, which I was very familiar with. So that was okay, but getting familiar with our business model in Brazil, which was a direct store delivery model was a different beast for me. And then obviously with Portuguese language challenges, it was an interesting 90 days, but it was certainly a massive. You know the saying, jump in the deep end and [inaudible] and that's where I found myself. Stephanie: Thankfully you're still swimming today, which we all are glad about. So what does your day to day look like now? And how would I think about B2B when it comes to Kellogg's? Because from a consumer perspective, I don't really think about what goes on behind the scenes. I just go to my local whole foods. I find my cereals and my RXbars, and I don't think about how it gets there or how maybe it gets to a smaller Mom-and-pop stops. So how do I think about Kellogg's B2B experience and B2B2C experience? Robert: Well, I hope the consumer will start to see how B2B is impacting the shopper experience, not directly but indirectly. So as part of our mission, we're trying to use technology B2B platforms to create a conduit where we can influence, educate, and inform and enable our retail, especially our independent small retailers. Not a frequency store or space in particular, to be better store owners and to create a better in store experience. As well as use some of the modern engagement tactics, such as social media engagement to bring more food traffic to their store from within their community. Therefore, strengthen their business and providing a jumping off point for them to become more successful in the future. Robert: So the consumer should recognize that when they go to the store, the store has always got the product they're expecting to find in the store, and if that product is displayed in a fashion that's compelling and it's positioned next to other products, they well, that would be the perfect combination. Then B2B commerce, modern B2B commerce is starting to have an impact on the buying experience. So that's what goes on behind the scenes, and that's what our vision is built around. Stephanie: Yeah. That is something I never think about, is this product positioned next to another one to make a better, maybe make me buy more. How do you figure out what products should be next to each other? And how do you work with the store owners to ensure that they abide by those rules? To make sure that, maybe not rules, but it'll also help them sell more as well. So how do you work with the store owners to creating a partnership? Robert: Well, in the past, it was always through traditional sales engagement. The Lucas success has always been a principle behind how we've engaged our retailers in using planograms and driving compliance around these planograms and the science behind them has been well understood, and the discipline has been in place for a long time. However, the cost of serving and maintain that relationship at a cadence that we need to continue has become ever more challenging. So digital is helping to change that paradigm and allowing us to go back to the long tail and really start to help our smaller retailers to really become stronger and more effective in their day to day life. So we see things like AI driving the intelligence around product recommendations for a store type, for instance. Robert: So if you are an independent store owner and you are in a rural environment where you are a 1,000 square feet and two the cash registers, that we would like to be able to cluster you with other retailers just like you, do the analysis and determine what you must stock, what you could stock and what you shouldn't stock. And then ensure that we're talking to the owner operator on a cadence that would allow us to then do more of that and offer and recommend as consumers trends change. So we're always ahead of demand, not buying demand in the long tail. Stephanie: How do you stay ahead of demand? What kind of tools and technologies are you using to ensure that you're able to quickly react to consumer buying behaviors or inventory levels for the store owner? How do you stay ahead of those things? Robert: Well, you're giving me way too much credit to say that we're actually ahead of those things, we're aiming to be ahead of these things. So let's make sure that's completely clear and we're being transparent, there's a lot of work to do here. So what we see is the ability to take all that historic purchasing information, and then combine it with social listening to see what consumers are talking about, then plugging in triggers like weather and other influences on buying patterns and then continue to feed machine learning and AI logic to build a picture that is constantly dynamic and changing so that we can then say to the customer, the retailer, "Hey, this product is starting to decline its popularity so we're recommending you start to reduce the inventory you carry. And by the way, this product is gaining popularity and we're going to drive a marketing campaign in your market to promote it. So now it'll become a hot commodity, please accept this recommendation and capitalize on that demand and it will happen in the coming weeks." That's what we're aiming for. Stephanie: Do you see the partners being ready to accept that and wanting to stock the products that you're recommending? Are they trusting your guidance or has it been an uphill battle when it comes to those recommendations? Robert: Well, first of all, the primary segment we're focused on is that high frequency store, independent retailer, a C-store, a convenience store that kind of customer segment, and they've been incredibly underserved for many years now. So any insight that we've given them so far, and the questions we've asked them about would it just be of interest, they've all unanimously said, this is what we've been asking for years, please help me grow my business. So I think the appetite is definitely there. Stephanie: Yeah, that's amazing. How do you set up platforms and systems for these different businesses? Because I could see each one needing something a little bit different. So how do you scale that model to provide the data to each company in a different way, or each, like you said, store in a different way? Robert: Right. It has to be done without human intervention to start with, we cannot be responsible for building an army to support such endeavor. So at Kellogg we're really focused on a single global platform, one ecosystem of applications that will scale globally across markets and channels and the customer segments within these channels, with a lower cost of ownership as we scale it out. So that's the first guiding principle. The second end is, if a machine can do it, we probably shouldn't do it. So everything is going to be machine driven. And then by rewarding the owner operators to complete their profiles, that allows us to capture information like, is your store rural, suburban, or urban, gives us another great data point to then create more effective costuming. Robert: And then in these clusters, the analytics can be very powerful and the machine can then start to communicate through marketing automation on a cadence that we could never possibly imagine before, and then touch them with relevant content that is absolutely pertinent to their business. So I would make a recommendation to you and your store that you're missing these two products, you should this and if you do stock these, we predict that you will make X number of dollars incrementally every year thereafter. And that's very powerful for comparison. Stephanie: Yeah, no, that's great. Are there any pitfalls or learnings when going about this partnership model and helping the retail stores that you saw along the way that you would find maybe other companies or brands will need to do this, where you're like, "Hey, we ran into this problem along the way, or this was a big hiccup that other people could probably avoid if you listen to this podcast." Any advice around that? Robert: Well, I think it's going to be the same answer that everybody gives, and that's really focused on education, change management. You're asking people to change their habits. So in emerging markets like Brazil, for us high growth markets, there's a full service that the reps provide to date. And so the store owners are accustomed to doing a particular style of business with us, we're asking them to change that and be more responsive from a digital perspective. Now corporate, for all the bad and sadness that's come with corporate, it has been the catalyst for changing the perspective of many retailers to how they should interact with their brands. So that's been that the silver lining of corporate is it's elevated the position of why B2B could be a very important tool in their growth strategy going forward. And that's changed the perspective of consumers considerably. Stephanie: Yeah, that's a good silver lining. So I saw that you also created a mobile app to reach some of the smaller retail clients. Can you tell me a bit about what problem you were facing and why you thought mobile was the best way to solve that problem? Robert: Well, that's a really easy one is the business tool of choice for small business owners. The internet and the mobile device and companies like Kellogg's are now developing solutions, online solutions that years ago would have been financially out of reach. Now they have all these tools that they can run their business, and that's why mobile is so important to us. Stephanie: Got it. Do you ever feel like you're encumbered by trying to meet your partner obligations or that the experiences maybe can't be what you want them to be because of certain obligations you have with partners? Robert: No, I feel more enabled to be honest, because it's a difficult market. The times are always challenging. So anything that might add value to a relationship, I think it goes a long way to creating a winning business scenario. So don't feel there's any barriers, maybe some adoption challenges that those would have been there regardless. So I feel that there's such a large opportunity to use Ecommerce to change our engagement model, that there're enough partners that have put their hand up and will put their hand up to say, "Yeah, I would love to be part of that because I can see that could create competitive advantage for me and alone I can't do it but in partnership with you, I feel that you could guide us and help us aspire to our own digital endeavors going forward." Stephanie: Yeah, completely agree. How do these retail partners keep track of all their other brands? So I'm thinking, if Kellogg's has their website that you would log into and you would look at the recommendations and get your orders and your inventory and all that kind of stuff. How would a retailer keep track of everything else they have in their store too? Is there like a single source that they can rely on or how do they think about that? Robert: So that's a great question, and it's greatly misunderstood. There is no real lifespan for a single application to serve a single brand in a retail environment. Who in their right mind would manage 50 different applications from different brands? So for two different models, I foresee. So in a mature, disciplined distribution based market, such as North America where most of our distribution wholesale partners have a web presence to date with E-commerce capabilities, we will be looking to integrate into that, to improve the experience in that environment. So think about a store within a store concept, and that would be where I would see brands like Kellogg's and others prospering and allowing the retailer to buy across a broad selection of products available from the distributor, but also to technically punch out to reach my Kellogg experience, where they can see their performance plus with their peer group to get the recommendations that we're offering, being informed about trends and product demand and so forth. Robert: And then if they're inclined to confer upon a recommendation we've given them that product order will go back into the distributor environment to be processed in a normal fashion, thereby allowing them to continue to go about buying other products for the store. Now in markets where distribution isn't as well evolved from a digital perspective, then marketplaces become the answer to ensuring that a retailer can go to a marketplace designed for their customer segment, with brands that represent at least 40% of their shelf. So that there's enough for them to do in one execution to not create administration, but to reduce administration in the procurement of product. Stephanie: I got it, that makes sense. How do you think about working with different platforms? You just mentioned marketplaces and I saw when you go on Kellogg's website, you direct people to go on platforms like Amazon and then also CVS and Target. How do you balance working with bigger stores and retail partners, and then also platforms like Amazon within your Kellogg strategy for E-commerce? Robert: Well, there's a lot of room for improvement on both ends, so in the end you're referring to where the large platforms are in play, there's a ton of up side to improve content, to improved recommendations, to really get deeper integration, that we can take all that learning and insight and present it as a more refined offer list dynamic. Obviously the price part architecture element of ensuring that what we're presenting is something that's scalable and profitable for us, as well is a key factor in these relationships at both ends, of course. I would say that they're not mutually exclusive in the sense that, we can operate in two spectrums here. So in the large platform, but also taking that technology and applying it to enable the long tail to prosper. Robert: Monetizing the long tail is actually, a very worthy prize worth unlocking for every CPG company in the world. And I think that's where the glue on your food is to be honest, we do a great job in most cases with our Walmart's, and our Target's and our Amazon's. We don't do a tremendous job today with a smaller, high-frequency stores as an example. Stephanie: Yeah. That long tail does seem really important. How would you advise other CPG brands to engage with those? Like you said, the long tail? Robert: Do you know, I think partnerships are key. The synergistic product from more than one brand that you could curate into a collective offer, there is a lot of power in that. So strengthen in numbers has always been the case. So I think we could really team up better in the industry to make a more powerful proposition to our retailers, that creates greater value, greater economies of scale, and it's easier to adopt. And I think that's what's missing today because everybody is a little nervous about working together, trade secrets and what if the competition find out. But honestly in my entire career, I've always had a hard time just getting our innovation execution done, nevermind, stealing somebody else's in time. So in reality, it will never happen, but there's an insecurity, that's common to human nature, I guess. Stephanie: Yeah, I see the same thing in startup world where people don't want to share their ideas and you're like, "Trust me, I've got my own stuff to work on, I'm not trying to steal your idea and build a whole nother startup on top of the stuff that I'm working on. Don't worry." Robert: So true. Stephanie: Have you seen any successes when it comes to those partnerships that you would advise others to think about it this way, when it comes to letting people lower down their guards and allowing them to see this could have benefit for everyone, any successful case studies there? Robert: No, nothing is mature as a case study yet. We're still very much in the embryonic stage of developing this strategy. You can see it though in play from time to time when we do joint ventures with other brands targeting the consumer, to be honest. We did last year, we did a very exciting campaign with cheeses and house wine, that was the box wine company. Stephanie: Oh, tell me more about that? Robert: Well, this one is very interesting and very simple, it was a box wine. The box had to be extended to contain cheeses. Cheese and wine, as you know, is a perfect combination. I personally was just eager to get my hands on a box and, yeah, that morning it went live at nine o'clock and we sold everything in about 40 seconds, I believe. So none of us got any, so the power- Stephanie: You're still on the wait list. Robert: It's never coming back, I don't think. Stephanie: Oh, no. Robert: We have to recover from the demand. Yeah, cheeses doesn't need much help [inaudible] as I said, we can't make enough to meet consumer demand. That's a great example of when you can join forces and just make the proposition more compelling. So I see that playing out in the B2B space as well, as I said before, together we're stronger. Stephanie: Yeah. How do you think about what partnerships are advantageous to have? It seems like it'd be hard, and I could see a lot of brands maybe partnering randomly, and you're like, "Ah, that's not really even helpful to the consumer." So how would you think about striking up new partnerships in a way that's mutually beneficial to both brands and is good for a longer term strategy? Robert: Well, it depends what your ambition is, of course. So there'll be different solutions for different approaches. I mean, obviously, we wouldn't partner with a Benjamin Moore Paint brand, there's no correlation. So within the food industry taking snacks as an example, the beverage industry is the perfect partner, beer, wine, alcohol, Cheez-It and Pringles, it's a perfect combination. So the same as for cereal, milk and yogurt, it's a perfect combination. So there's definitely groupings of product where you can see which brands aspire to the same vision, it would be critically important as well. So just because the product has synergy doesn't mean that the strategy is there, you can't force a round peg into a square hole. Robert: So my first checkbox criteria would be, is the digital ambition the same? Do both companies, or do three or four companies aspire to own breakfast across all hospitality in the world? Well, if we do, then we've got a common objective. Now, how do we go about it together is the next step. Stephanie: That's great. It seems like the larger brands too, might have to give a little bit more, or provide a little bit more help to the smaller brands, if they're picking someone like ... If you were partnering with a smaller wine company or something, it seems like you might have to be ready to do maybe the 80% of the heavy lifting, because maybe they don't have the resources or the budget. Is that kind of how you're seeing things play out when you pick partners, that sometimes Kellogg's has to do the heavier lifting to create a partnership? Robert: Yeah. Even with partners with some of the bigger brands we're actually willing to do the heavy lifting. We made a decision with our leadership to own our destiny in this space. So it's from top to bottom, and I do see that small startups in an incubator fashion, we would be a great big brother to get products launched. And we have our own startup business within Kellogg's where we're giving grants to products like Leaf Jerky and so forth, which is a different plant-based product that challenges the status quo of what we felt like Jerky was in the past. So yeah, I could see that there could be a market verticals that we would go after, there might be health club awaited before we joined the Kohler, we were talking about RXbars and examples. Robert: So predominantly through health clubs and so forth, why not probiotic yogurts? Why not non-alcohol based beer? So why not the combination? All plays well to the health industry, so there might be some small companies in there that are pioneering excellent alternatives that we would be, I think, more than delighted to partner with them. Stephanie: Yeah. No, that's great. So Kellogg's is over, they've been around for over a 100 years, right? Since 1906, is that correct? Robert: Yeah, it's correct. Stephanie: Okay. Oh, good memory, Stephanie. So with a company that's been around for that long, how do you think about making sure that the company continues to innovate? Like you said, you have a startup within Kellogg's, what do you see within that startup? What kind of products do you see coming out of that? And would you advise a lot of other large companies to also put on their startup hat to compete with these B2C companies that are all popping up everywhere? Robert: Well, change has become the new norm. I mean, taking COVID aside, people want to taste new things, that is my impression, anyway. I think, there's an appetite for new and more challenging flavors and so forth. So in the food industry, I can see that the innovation around our product offers is actually critical for success. But the innovation doesn't stop there though, we have to be more innovative in how we present these products, how we ensure these products create value other than just in flavor, but in health and wellbeing as well. So Kellogg has always been a very health driven business right from its inception, that continues to be an underpinning philosophy of our company. I see a great deal of passion in our business and investment for innovation. It's not just digital, it's all down to food, not innovation kitchens and the chefs we have, they're inspired to really go find new products. Robert: We do a great job of creating an incubator within our business by constantly searching for ideas within our employee base around what we could do with Kellogg products. So I think you look inwards and outwards there's no stone not worth turning over to find out an idea about a new product. Stephanie: Yeah, that makes sense. When you mentioned marketing earlier, it seems like you would have to market to two different audiences. You have to market to your retail partners and then also to the consumers, how do you go about, maybe within your platform where you're selling to retailers, do you market differently than how you do to consumers? Or how do you think about that? Robert: Well, so now you bring up an interesting subject in the sense that direct to consumer, which could in sense be side by side be B2B, does provide you with an awesome channel to test the appeal of new product, and affordable cost if you engineered it appropriately so that you've got something you can stand up and tear it down quite quickly without major investment. So I don't know if you would really want to continually be knocking on the door of your retailers with new products without having some good market data behind it, to say that this will sell. And so testing that product in market that becomes a critical part of the evolution of the go to market strategy. So I see traffic consumer testing being interesting proposition for companies like Kellogg's going forward. Stephanie: Got it. So you test the product with a market first, and then you go to your partners and say, "Hey, a lot of people like this, you should also put this in your store?" Robert: Absolutely, because that's where we get the scale, and then we can then turn on all of our abilities to cross sale and use some of the capabilities we talked to earlier about in the B2B platform, ensuring that our retailers know how to create success with new product. There's another interesting aspect of that too, so if you'd go back to the conversation around the long tail of retail, these companies, these business owners don't have sophisticated inventory management tool. So one of the biggest challenges we're solving for is ensuring that new products, our products we've recommended for that retail when they're placed that they stay. Because we see a lot of occasions where a new product is being placed or our product from the portfolio that they should be adopting, has been taken. Robert: And then a week later has been sold and never replaced because somebody in the evening has just redistributed product on the shelf to complete the look and that position be lost. And so making sure that these products are reordered and reordered again, until they become habitual, their presence is habitual on the shelf is a massive opportunity so it's not about just new product and innovation, it's also about ensuring the stickiness of product they are placing on a shelf. Stephanie: What ways do you engage with your partners to make sure that they, like you say, keep reordering, have you seen any best practices to stay top of mind with these people even if they do excellent and lose a spot in the shelf. They're like, "Oh, hey, this product actually belongs there." How do you go about building those patterns? Robert: Well, there's also technology becoming available from scanning to just constant recognition. So there are solutions coming, they're not particularly affordable today for the segment we've been addressing, which is the high frequency stores segment. So the challenge has been resolved by manpower up until now, and of course, that's not very affordable. It's interesting when you go to markets like India, if you don't show up something else will steal your space. Stephanie: [inaudible 00:32:09]. Robert: I know, so there's a whole bunch of, I must run ... Making sure that you hold onto the shelf space that you've worked so hard to attain. So we're looking at tools like, asking our retailers to take shelfies using the robot cameras and uploading- Stephanie: Shelfie? Tell me more about a shelfie. Robert: So a shelfie is just, the shelf equivalent of your selfie, in the sense that, we're to set challenges for our retailers and say, "Listen, take a shelf of your cereal display." And then we'll match that image to the planet ground that the AI has in its memory, and then give them a score, and that score will then be translated into points, Kellogg points that they can use for purchasing everything from a discount to cleaning services, say for instance, in the future. So one thing happens in this process, is we ask them to do a challenge, before the actually did their pictures there is a pretty good chance they're going to address any gaps on their shelf. So we see it being a little self serving and helping us get a better position in the store, but also then just educating the retail around best practice and reinforcing that practice. So the look of success is getting closer and closer in the package stores within their reach. So that's just one example, I guess. Stephanie: Yeah, no, that's awesome. That's a really fun example. Have you seen the rewards program that you have actually really incentivize these retailers to, like you said, take these shelfies and engage with your brand more? Robert: No, again, you gave far too much justice. I talk with authority, but we're still very much in the theory and the testing, the technology is still catching up, but we see rewards and we have a rewards engine built into our platform to date. We haven't really turned it on to its full force yet, but it will be a cornerstone of our strategy. We're looking at gamification rewards and recognition as being a key driver of behavior going forward, and creating the path to best practice. So it will be a constant in our engagement strategy, so at eight o'clock, nine o'clock at night, we'll be connecting with an owner operator of a store through WhatsApp or email or text to say, listen, we have a challenge for you, and this challenge is worth a 1,000 Kellogg points. If you go and take that shelfie or if you can tell us, answer this question about the new product you recently stocked, did it sell out, did customers come back and repurchase? Did you get any feedback in any shape or fashion about the flavor? What did they think, and reward them for that first party data insight. Robert: Now, all of a sudden you've got this incredible ability to harvest information that could be invaluable to your R and D teams. At the same time, you've got the opportunity to influence best practice and take the customer on a journey, the customer being the retail owner operator on a journey to become better at their craft, which is super exciting to us. Stephanie: No, that's really awesome. It seems like there'd be room to build a community among these store owners, to all do the challenges together and to talk about best practices. Have you all explored that? Robert: We're exploring it. We're definitely exploring it. So it came from, when we looked at one of our customer's segments being a K through 12 schools starting here in North America, there's a lot of schools that are rural. They're isolated, they don't have large school communities to support them, and there's so many challenges that they face from allergies and health and nutrition, taking food and making education subject matter. All of these things we're looking into to say, okay, so our community together would be again stronger. So connect schools that are similar together and then connect schools that are not similar and let them use our product as a teaching aid. So we aspire, this is long away from happening. Robert: So please don't take this as something that's been executed today, but we can see that sometime in the future, we'll create a syllabus around corn and our cornflakes and how it changes the flavor of patterns in Japan compared to Idaho, and then to schools when their kids are having their breakfast, they can share the differences in the sweetness and so forth because the [inaudible 00:36:46], the climate is different so that the plant takes on a different flavor. So that's a subject that you could turn into a syllabus and education and bring kids together. Yeah, it is a very exciting proposition for us and different from anything we've ever done before. Stephanie: Yeah, that's awesome. And I did not know that flavors around the world would be different. So you definitely taught me something brand new here. Robert: Yeah. We've done a few things at Kellogg's in the office in Chicago where they've taken five or six or seven different sources of cornflakes and put them all in independent bowls unmarked, and then tasted them and people were convinced that sugar had been applied and so forth. And it actually hadn't, it was just that the different produce, produce different flavors and it was quite an epiphany for many of the folks tasting them. Stephanie: Yeah, no, that's really interesting. So when it comes to your B2B platform, what are some of the best capabilities that you're using today that maybe you weren't using a year or two ago? Robert: Again, cornerstone of what I'm trying to do with the B2B platform is create efficiency, and so to create efficiency, the first thing I'm trying to tackle is preventing any waste of time as it pertains to identifying a product. So we are integrating scan into the mobile device, using the mobile device camera, quickly scan that barcode it will take you straight to the product in our platform. So no need to key in, no need to type in the barcode or any keywords that are associated, just quick scan within less than a second you're on the product detail page, and you got a path to purchase with one click. You've got a path to understand your performance versus your peer group with one click. And you've got a path to understand how to sell more by accessing the tools that give you the toolkits that will help you do that. So that's, that's one aspect. Robert: The second aspect is to create value around ensuring that big data is conferred into some form of exportable logic that says that, hey, you are not creating the optimal product assortment. Companies, businesses, stores, like you sell these products successfully, and you're missing revenue as a result of not taking them. So here's a recommendation for these products. Here's the stocking quantity that we believe you should take. And here's a revenue projection based on MSRP from the class that you belong to that. That to me is transformational in so many ways. Stephanie: So are you using AI behind the scenes to create a lot of these recommendations? And do you think a lot of brands are also doing this or is there a lot of room for them to adopt to this technology? Robert: Yeah. AI is the key to success. So we've talked about AI for several years now, and it has really not delivered what it says in the box as of yet, but I am a 100% confident we're getting closer and closer all the time. Anybody that's been getting with AI knows that a lot of teaching into the logic that supports the output, but we're definitely getting closer to being able to use it at scale. What I see in the next year to 24 months will be the ability to then turn on that dynamic, self-sustaining logic that continues to morph as it reads more data and continue to present very tailored recommendations to all of our retailers worldwide, simultaneously because the computing power, obviously, continues to scale at an exponential rate. So it doesn't do necessarily what it needs to do today, but the path is now clear, and I think it's just around the corner, to be honest. Stephanie: Yeah, no, I completely agree. Are you all training your own models for AI? Are you relying on a platform to help you with that? How would you recommend another brand or a larger or smaller brands to start adopting this technology or start experimenting with it? Robert: Well, there's a lot of data scientists that they're all better actor than I am for sure. Stephanie: Sure? Robert: Yeah, I'm absolutely positive. So we've been looking outward to smaller businesses, as well as some of our larger partners to use their experience. Because clearly they see the opportunity too, so I would continue to just make sure that you're using a blend of traditional partnerships and innovative new businesses that come up with some left-field idea about how to resolve one of the challenges. Constantly looking for new ideas from the marketplace, from the periphery where there's new startups starting and looking for an agent, they might have a great concept that we can use. I often equate it to something you might see in a Paris fashion show where coming in the the runway is a presentation that could be quite outrageous, but some form of it we'll get to the high street that will be very popular with the consumer. So a really wild idea can really translate and be boiled down to something that can be a game changer in reality. So never assume that it has to be something that's already in place, but to be open to suggestion and I try and work on a daily basis to be that way. Stephanie: Yeah. I think that's a really good lesson too, to look at tangental markets and industries that could also help influence not only new products, but also E-commerce strategies and just like keeping tabs on what other people are doing, especially startups who are moving quickly and experimenting quickly. How do you keep tabs on companies like that stay up to date with what other people are trying? Robert: Well in prior lives, working for brands that were less recognized, it was on me to continue to search and find, and encourage my team to continue to look for these innovations. Working for a brand like Kellogg's, there's a lot of people come calling. So I'm obviously in a fortunate position to be exposed to a lot of these ideas on a day by day basis from various entrepreneurs. I feel that Kellogg's could prosper from taking on the idea so that role has changed. So I'm very fortunate in that regard to be exposed to great ideas across the industry and not just from within the food and beverage industry as an example but from sending an upturn to, you name it aerospace, there's a lot of innovation going on. Stephanie: What is definition of success for E-commerce? What kind of metrics do you look at? What do you think is successful? Robert: Yes. Okay, so none of the traditional metrics are really going to be of any interest. So for me, the success has moved upstream. So when I think about what does success look like from a digital perspective in B2B, it's very much around ensuring that the retailer is selling more products more effectively and more efficiently, and putting more money in their pocket. So if I can look back and say that all the retailers that we supply our products are prospering as a result of our E-commerce engagement, because we're delivering not just the fundamentals of E-commerce, which is about auto management and everything else that comes with it. That's just table stakes, whatever else comes with it, where we create the value through AI recommendations, access to toolkits, marketing campaigns, guidance on how to create the perfect store. If that's translating into more dollars at the point of sale, then that's what success looks like to B2B commerce going forward, in my opinion. Stephanie: Yeah. It seems like that partnership and education is really important in B2B, have you guys seen success with doing that? Robert: Well, again, I wish I had something much more tangible to give you in terms of the successful metrics. This is still ground zero, we're still very much in day one of our B2B engagement. I think you will find that modern B2B is still in day one globally across both industries. So there's still a lot of learning, a lot of testing, a lot of refinement to do, but the appetite is there. When I talk to other brands, they feel the same way about how we can harness technology to create value. The retailers I've talked to they are hungry, and so is our distributor and wholesaler partners too, to participate in this new era of one-on-one engagement at a scale that's affordable and on a cadence that has never been achievable before. Just that combination of menu items is really driving the hunger to get to that point quicker. Robert: I wish I had to go quicker, we're definitely trying to get there quicker, but it just takes time to build. And so ask me again in six or 12 months, and I'll be in a far stronger position to give you a better answer. Stephanie: Oh, you've just invited yourself around two. So with things changing so quickly, are there any new or emerging digital channels that you all are focused on or trying out? Robert: Again, comes back to just watching and keeping an eye on how things are changing, an example would be, for instance, say WhatsApp for instance. So WhatsApp starts life as a messaging tool, becomes incredibly popular worldwide, supplanting email, phone, texting everything. Now WhatsApp is developing your online ordering capability that will potentially change the trajectory of B2B commerce. So we're watching it very, very carefully, but there's a caveat, there's so much low hanging fruit in just doing what we already know, we can do better in B2B commerce. The WhatsApp example would be a very shiny object while we still need to continue to look to shop opportunities, we need to temper our enthusiasm to be distracted, it can be a distraction. We know that there's enough revenue potential just executing our primary mission without chasing rabbits down holes. Robert: I don't want to be the anti-innovator, but there's got to be a balance. So I use three words to caution myself, stop, better and clever. Stop doing things that create no value. Identify what you do well, but do it better. And say Friday afternoon is for the clever things. So Friday afternoons are dedicated to it, but don't let it become all consuming and that's how I approach this. Stephanie: That's great. That's a really good lesson, Friday afternoons with a beer maybe then you're even more creative, right? Robert: Why not? Yeah, certainly, my wine consumption during COVID is gone up tremendously. Stephanie: I think everyone else. So are there any B2B commerce trends that you're excited about that are coming down over the next couple, well, maybe even in the next year? Robert: Well, I just think the fact that the chatter around B2B has climbed exponentially in the last three or four months, is exciting. I'm super excited about what machine learning can do for scale in just enabling us to do the value added services that we've aspire to do, but couldn't execute because of the cost. So these two elements that B2B is becoming a cornerstone of business strategy, and it's not seeming to be as a poor cousin of B2C, B2B can be sexy. We're taking all of the goodness from the user experience and applying it, but then with this logic, that's data driven it's hard to turn down when we recommend products to a particular owner operator that I've got a revenue projection associated with them, that's a hard proposition. Plus we're giving them an award for accepting the recommendation. If that recommendation comes and was close to our prediction, then I think conversion could be a 100% going forward. Robert: Now in digital, we usually have 2% conversion and an action was great, a 100% conversion, wow, that's perfect execution. What does that do to the industry? Truly transformational. Stephanie: Yeah, I completely agree. So when it comes to implementing technology and stuff, because I think, like you said, a lot of people and a lot of platforms are focusing on B2B now, it is a new player to look at where B2C was maybe the sexier area before. How would you advise other companies to think about onboarding new tech technologies and tools in a way that sets them up for longterm success? Robert: Well, first of all, think scrappy. You can't innovate with the mindset of perfection. Large companies, I think suffer more than small companies, of course, there's a procedure and there's an ROI calculation, and there's a certain set of expectations. Especially when you're dealing with technology that can't quite deliver on the initial promise, but you have a fairly competent perspective on it, we'll get there. So you have to be a little ashamed of what you take into market, because quite frankly, in my experience, you see the flaws, whereas the target audience does not. They see something different, something value added, they know it's a work in progress, and they can see it resolves a pain point. It removes all of the inadequacies of what you didn't do as a result of getting to market quicker and testing a reaction. So that would be my recommendation. Feel a little ashamed, to be a little ashamed about what you go to market with initially. Stephanie: So is there anything that we didn't cover that you want to cover before we move on to the lightning round? Robert: Oh, no, I didn't know there was going to be a lightning round. Stephanie: Yes. There's a lightening round. Robert: That's a little scary. Stephanie: Yeah, anything high level, E-commerce trends, the industry that you're like, "Man, I really wish Stephanie asked this question and she just didn't." Robert: No, I don't think so. I think we've covered off the fact that, I think the biggest thing that's missing in the industry is that more collaboration. I think collaboration is going to be a game changer in terms of driving success. So that's what I'm seeking to build through networking and working with other brands to try and find some common ground we can explore in. So if anybody is interested, please reach out to me and I'll be happy to partner. Stephanie: Yeah. I completely agree. That's great. All right. So the lightning round brought to you by Salesforce Commerce Cloud is where I ask a question and you have one minute or less to answer. Are you ready, Rob? Robert: No. Okay, I am. Stephanie: All right. You're ready. What's up next in your cereal bowl? Robert: Oh my God. No, Scott's, it should be porridge, but it isn't. I like porridge, I'm a diehard Frosties guy. I don't know, there's not a bad time in a day to consume Frosties, so that's what's always in my cereal bowl. Stephanie: I agree. It's a delicious choice. What's up next on your Netflix queue? Robert: Netflix, I just finished watching Altered Carbon and it was a book that I'd read, three books I'd read many, many years ago. And it was actually a really good rendition of the novel. So I thought it's Sci-fi is very forward looking, it's probably what you'd expect me to watch, but I thought I enjoyed that series. Stephanie: Yeah, that sounds great. What's up next on your podcast list or audible? Robert: Yeah, so podcast, during COVID, I mean, I listen to a lot of podcasts, especially at nighttime and I've started to rediscover Vinyl. So I've become a bit of a pseudo audio file or want to be, at least I fought the big stuff, but I'm working my way into. So I started to listen to Vinyl's audio file podcasts, which have been fantastically interesting, but suddenly they're talking about technology I can't afford or justify. My wife keeps a very close eye on me, so sorry- Stephanie: Oh, man, so rude of her. Robert: I know terrible, isn't? But logical, she saves me from myself. Stephanie: That's good. Yeah, that's really fun. Well, if you were to have a guest on a podcast of your own, so if you were to have The Robert's podcast and you want to bring on your first guest, who would you bring and why? Robert: Oh, that's easy. That's easy. I am a big soccer fan from the UK. And one of my idols is Alex Ferguson. I would love him to be my first case on a podcast. He has such great insight into leadership, management, the stories he has. He would be, there's an entire encyclopedia of subjects we could discuss, and he's an idol of mine. Stephanie: That'd be a fun one. I would listen to your podcast. All right. The last hard question. What one thing will have the biggest impact on E-commerce in the next year? Robert: One thing, I think, changing the culture within companies to really embrace innovation, not to necessarily wipe the investment and make a net positive operating gain in the short term but to be more risk orientated. I see a lot of challenges around investment strategies and payback periods and so forth, and it really does slow down our ability to go to market. So if we can get to a point where there's an acceptable investment tolerance, and that will obviously vary by company size and profitability, then I'd like to see more about an entrepreneurial approach to taking that startup fund internally, and going to market with it, improving success or a failure. In Kellogg's we've done a tremendous job recently of celebrating failures. Robert: We've even have an award, for the peace of the award for failure. So it's a transformation that's underway, but we still have to get more comfortable with capital investment that can be used to experiment rather than the business case that supports it longterm, which will come, that will come when we determine what the metrics are or what the levers that work that can be expanded upon and so forth. So that's what I'm looking for. Stephanie: I love it. You are a lightning round expert, so nice job. Well, it's been a blast having you on the show, where can people learn more about you and Kellogg's? Robert: Well, they can see my profile on LinkedIn, obviously, I'm not a big social media user today. So reach out to me through LinkedIn and I'll be happy to engage. Stephanie: Awesome. Thanks for coming on the show, Rob, it's been a blast and we will have to bring you back since we have an invitation now for round two, we'll have to bring you back in the future. Robert: That was a mistake, wasn't it? Stephanie: No mistake, we'll have even more fun then. Robert: I look forward to it. Thank you very much for having me on. It's a great pleasure. Stephanie: Thanks.

You may not know exactly what Soft-Tex is, but chances are you’ve seen or even own a Soft-Tex product. That’s because Soft-Tex is a B2B2C company that provides products to retailers like Walmart, Amazon, Bed Bath & Beyond, Macy’s, and many more. The company specializes in sleep products, like pillows, mattress toppers, mattresses, mattress pads, or anything else you might need in your bedroom to help you get a good night’s sleep. But Soft-Tex doesn’t only ship to their retail partners. In recent years the company has upped its Ecommerce and drop-shipping capabilities in an effort to get even more in the lives of consumers. On this episode of Up Next in Commerce, Taylor Jones, the Vice President of Marketing for Soft-Tex explains how the company is creating a collaborative partnership with retailers while also exploring and consulting in the world of Ecommerce. He explains the ways in which Soft-Tex goes about ensuring successful product launches — including the exact number of reviews he thinks is the sweet spot — why SEO and product-usage videos are the ultimate keys to success, and the need for an Amazon strategy and what that looks like.   3 Takeaways: There is a delicate balance you have to strike when working with retail partners and also selling products D2C. You have to work collaboratively and across multiple channels to ensure that you have the products selling where you want them and not competing against themselves  Amazon is a price-leader, and in order to get any market share, you need to have an Amazon strategy that allows you to live there, while also ensuring that other partners have exclusive access to other products Product reviews and product-usage videos are absolutely essential to achieving a high conversion rate. Generating about 15 reviews and placing a usage video front and center are two strategies to implement to help grow conversions For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone. And welcome back to your number one show on all things eCommerce, I'm your host, Stephanie Postles. And today we have Taylor Jones on the show, the VP of marketing and eCommerce at Soft-Tex International. Taylor. Welcome. Taylor: Hey Stephanie, thanks so much for having me. Stephanie: I'm excited to have you here. I'm feeling a little bit sleepy now, thinking about all the nice products you guys have, that are centered around sleep. I'd love for you to dive a bit into what is Soft-Tex International and how did you come to the company? Taylor: We'd love to hook you up first off. Stephanie: Yes, please. Taylor: So at Soft-Tex, we're really serious about sleep and home comfort products. I think for a long time, the company has been a leader in memory foam and cooling technologies and just everything to help you get a better night's sleep and live a comfortable and better life. I came to the company about three years ago. I have deep digital experience, worked for a company called Red Ventures here in Charlotte. Maybe you've heard of them. Then for another company in the call center space, Arise Virtual Solutions, and from some mutual connections found this role at Soft-Tex and started, really owning the eCommerce business for them. And it's blossomed into a larger marketing role, including e-commerce still. Stephanie: That's great. So how do I think about Soft-Tex? Because maybe a normal consumer, maybe hasn't heard of them. So how do I think about, how big the company is, who their partners are, how you guys sell? Tell me a bit about that. Taylor: Soft-Tex is really a B2B, to C company, and Soft-Tex is the entity that would be known to our retail partners. So think about Macy's, Bed Bath & Beyond, J.C. Penney, Walmart, Amazon, the whole gamut of retail, we supply with bedding, pillows, toppers, mattresses, mattress pads, protection, anything that is in the bedroom that you'd sleep on, it would probably make it. Taylor: We have a direct to consumer presence that we work with, bedpillows.com. We also have a robust, drop ship capability. So it's not just, we sell in bulk to a retailer. We do that absolutely, but we do, as a core capability, have drop ship to over 50 partners. Stephanie: Wow. So it seems like there's an interesting mix where, you're trying to market for yourself, you're doing direct to consumer, you have your retail partners. How do you think about managing these relationships and also not cannibalizing yourself at the same time? Taylor: Right. So I would say, our partnership with bedpillows.com, is emerging. It's a delicate balance for folks in our position, because we supply, our retail partners, we absolutely don't want to compete with them. Ultimately those relationships are very important to us and we build custom products. It's a very collaborative process with our brick and mortar retail partners and the branding that that goes into all of our different channels. Soft-Tex we have about five or six national or licensed brands that we supply product under or, or we'll develop product under a private label, to mitigate some of the brand conflicts or sales channel conflicts that may arise with selling our products. Stephanie: Very cool. And are you helping your partners when it comes to digitally marketing, the mattresses, pillows, are you helping improve their eCommerce strategy? Because I could see you having a lot of insights into different brands and their strategies and what they're doing to maybe share that knowledge and help each other out. Taylor: Absolutely. So the role we play on with the eCommerce team is a consultative role in that aspect, in that, we're able to see over the wall, we supply our products to the 50 different partners that I mentioned. So we can see some really interesting things that, maybe somebody over here is doing, in merchandising, assortment, with features, attributes, something cool on the product description page. And we can make that suggestion to someone else who maybe has not done that yet. Stephanie: That's great. So what are some learnings or key things that you see happening on these eCommerce sites where your like, here's some good best practices that anyone could implement or I see this working really well right now, or maybe it wasn't working six months ago. What lessons are you seeing through all these brands that you work with? Taylor: I think the concept of reviews syndication and review seeding is very important. Obviously, authenticity is critical and you don't want to see fake reviews, but when you have a new product, accelerating the process through which consumers can experience the product and write a review and leave a review, such that it exists is social proof, for other customers who see that product, is so important to getting a product off on the good foot. We've seen, in the home comfort space, 10 to 15 reviews, seems to be a sweet spot for a new product introduction to really help accelerate its growth. Stephanie: Completely agree on there. How do you encourage reviews? Taylor: There are review seeding partners out there, those companies that you can do seeding programs with, Bazaarvoice is a big one in our space. They have a really interesting service where you can collect reviews if you have a direct to consumer presence and syndicate those reviews. And they also have a network of folks that exists to, you can nominate your products and folks order it to sample your product. And those reviews can get syndicated out to retailers that, on the flip side are members of the Bazaarvoice syndication network. So we've seen retailers who participate in that, really scale up quickly on our products. Stephanie: Very cool. So they're not really having to do as much of the heavy lifting because essentially a consumer would review a product and that review can be used multiple times. Is that how to think about it? Taylor: Through a seeded review, say we did 10 reviews, those same 10 reviews would appear on Macy's, on J.C. Penney, on Kohl's, all at the same time, versus, if someone visited Macy's and bought the product and reviewed it, obviously that review would be owned by Macy's, and it will show there. So, as much as we can do to help reviews go as many places as possible, that's been very helpful. Stephanie: That makes sense. So when it comes to, I'm thinking about mattresses and buying mattresses, for a while, everyone wanted to lay on them and sit on them and see how they feel. And now with the market evolving, especially with the pandemic and everyone being a little bit more comfortable with ordering online, what shifts have you seen? Do you see consumer expectations increasing, consumer demands increasing on the sellers? What are you seeing happening behind the scenes right now? Taylor: For our products, from basic bedding, so everything non-mattress and the mattress, it's been through the roof. I think, folks want a fresh and clean sleeping environment, especially cleanliness is top of mind. With COVID in fact, Soft-Tex, my company announced a deeper partnership with Thomson Research Associates. They make an anti-microbial technology called Ultra-Fresh, the market is hot right now for all bedding products. And I think, from the customer experience point that you're hitting at, do you need to touch and feel the product in order to feel confident in purchasing it? Certainly bedding is a very tactile and personal experience and the same pillow or mattress that's great for me may not, may not work for you. Right. Taylor: I think we've seen folks through warranties and trial periods that the industry has, particularly on the mattresses, pretty much a hundred nights sleep trial guarantee, in some form or the other is a standard now. But from a pillow or top or other product standpoint, maybe there's not that trial period, but being as descriptive as possible, the images, the copy, using enhanced content and the importance of video is so important. Batched attributes, iconography, to really recreate that story and experience, doing everything you can without the consumer touching the product, and that way, I joke with folks at my company that I have the hardest job, right. I have to convince people to buy something that's highly personal and tactile, that they have never touched prior to receiving it. Stephanie: That's pretty tough. What best practices have you seen around creating videos? Because that's something that a lot of companies are leaning into right now, but especially for, a mattress or something, what are you seeing work when it comes to videos for the products? Taylor: I think the concept of video can take a number of forms. YouTube is the second largest search engine. So, you can do a ton of explainer videos or keyword optimized videos, to try and drum up search traffic to your products. But you can also leverage video, in particular the 30-second to a minute product video, to help drive conversion. And I think, that's been a huge thing that we've seen. The addition of video to product pages has scaled our conversion rate by an incremental 10 or 20%. It's hard to fathom, because typically most retailers merchandise video is the last piece in an image carousel, right? People don't like to read, they want to be told, and be surprised and delighted. Taylor: And so, leveraging that video format in a short, condensing it to 30 seconds, has been really big for us. And I think, stylistically, it's very on brand for us, the videos that we've done. As I mentioned at the top of the podcast, Soft-Tex is a very innovative company with emphasizing technology, cooling, I mentioned antimicrobial. So our videos come off as very techie, with graphics, lower thirds that pop up. So I think, making sure your videos are on brand and authentic to your brand voice, clearly and concisely conveying the product value proposition. In our space, it's really, how are we different than everybody else selling a mattress or a pillow? There's thousands of options. Stephanie: Yep. Are you making the videos for your brand partners, or are they all are using the same one, or are you customizing them where you're like Bed Bath & Beyond, this video works better versus Macy's they have a different clientele and we're going to make a different video for them or are they making their own? Taylor: Absolutely great question, Stephanie. For private label products, or we have some national brands that we offer exclusively to certain retailers, obviously those are customized, and we work with retail partners like Bed Bath & Beyond, and Macy's, on art direction, model considerations, we work with them on developing a storyboard and get it approved by them before we film it. Stephanie: Got it. That makes sense. So the one thing I was thinking about when we were mentioning direct to consumer, how you guys were going about that route right now. I was thinking about a very large mattress brand who I think recently IPOed and a lot of people are talking about their negative unit costs. And I was wondering, how are you guys thinking about that with your direct to consumer strategy? Are you willing to have negative margins to add a new customer, or how do you think about the digital growth around them? Taylor: I think the way we've thought about it in a lot of ways, is in the concept of, getting reviews on Amazon is so critical to helping ramp up. If you're giving a discount or something, that you may be selling your product at a loss initially to help gain those reviews, gain some initial sales traction initially. I think it has to be for a finite period of time, right? That you turn the corner and have a clear path to profitability. You can't just do it indefinitely. Right. But I think that there are definitely values to doing it, in that, you get your brand out there, you get some exposure, user generated content is so powerful right now. I think if the world is telling us anything, the power of social media and viral media, the same can be true for user generated content and reviews. If you get a really good review or a really bad one, people can upload them, they're always going to be there. Right. It's so important. Stephanie: That makes sense. Is there any model that you developed around we're going to, we're okay with going in the negative for this amount of time with this campaign, or is there any models that you build to influences these decisions, around adding new customers? Taylor: In terms of the review thing, it's still an algorithm that we're working out, what's the right quantity of review that moves the needle towards a product being successful. That's mostly in our space, right? When you're syndicating in a retail environment, so products sold across many retailers, because really the review is a key way to optimize, each retailer has its own search engine, right? Now, if you're your own brand, right? Selling direct to the consumer. I think it's a different calculus, you have your own tolerance with whoever's providing your investment. Taylor: If you're going to go negative for a time. What is the strategy? How do you become cashflow positive? In the industry, a lot of these, just e-commerce mattress in a box guys, is really, they're marketing companies if you think about it. There's a lot of articles, a lot of them are made by the same folks in terms of manufacturers and who pours the foam, et cetera. So it's interesting. Stephanie: That's really interesting to think about. I think I have three different brands of mattresses in our house, but I'm pretty sure they're probably all the same or made from the same people. Taylor: Or from the same cloth. Stephanie: I think so. They all feel pretty similar. How do you think about returns, for something as large as a mattress or, I'm thinking about furniture companies and stuff, how have you seen some brands lower their return rates? What are some best practices around them? Taylor: I think for the industry, for the mattress in a box, we've seen return rates average out between 10 and 15%. I would include basically everything in that, including the comfort trials and everything. Right. So, when you're a direct to consumer mattress in a box guy, that has to be factored into your pricing. Some other things that we've seen creative ways to save the sale, a lot of, one of the big complaints with sleep products is, maybe the bed is too firm. Maybe you'd send a topper or something to make the mattress more plush, as a method to save recouping, returning the mattress. Because ultimately, right, wrong or indifferent, in the mattress industry once somebody slept on a bed, you can't resell it. It's just one of those things. People don't don't buy used mattress. Stephanie: Good. All the things I'd never really thought about. So you were just mentioning how... I'm glad that you have to deal with that and not me. So we were talking about how a lot of the brands that maybe we think are unique, maybe are utilizing the same types of underlying materials and things like that. So they're kind similar. I saw that you guys sell on Amazon. Are you ever worried that Amazon could just knock you off and just make a mattress that's so similar, that it's maybe not beneficial to be on there, or what's your reason for selling products on there? Taylor: Well, I think, so many things nowadays, if you're searching for a product, folks don't just begin on Google anymore. There's a large contingent of the population that are Prime subscribers and really begin the product search phase on Amazon. I think you pretty much have to be there to have the share of voice, whether you like it or not. I think, for us, Amazon's a growing partner. Certainly it's hard, we have a lot of rebates and allowances with them, from a margin standpoint and I'm sure you've heard this from many folks. It's hard to find products that, you can be profitable. But, I think brands have to make a decision to have an Amazon strategy. Taylor: It is delicate. Obviously, retailers are very sensitive to being comped on Amazon. So it's a very nuanced delicate road that we walk. We have an assortment that we have on Amazon, but we also offer exclusive products to other channels, that we don't offer to Amazon. Stephanie: Got it. Is there any other advice that you would give when it comes to selling on Amazon, but making sure that it's beneficial, like you said, one idea is keeping exclusive content to where not everything you offer is all on Amazon, but is there anything else that you all do, where you're like, this works well? Taylor: I think, really it's ensuring that you're being thoughtful about your assortment, if you're selling on multiple outlets. We've learned in our experience that Amazon is a price follower. Well, we're a first party vendor. Obviously many of your listeners, maybe third party sellers were there. They set the retail price, but as a first party vendor, we have a wholesale price that we give to Amazon and there are, like I mentioned, rebates and allowances. But ultimately, they then retail it to make a profit or not, in some cases. Taylor: They're pretty aggressive in price scraping and seeing what others are doing and commanding the market share to come to them, if they see a lower price out in the market, they will likely try and beat it. So I think, you just have to be prepared, before you open that flood gate, if that's your strategy, making sure that you're ready to enforce, map or, D inventory Amazon as needed. I think, certainly if you're a third party seller on Amazon, you're in much more control of your destiny in that respect, as you can, you set the retail yourself. Stephanie: That completely make sense. In terms of SEO, I'm thinking it's pretty tricky for you guys to, you want your brands to be seen as leaders, but then you also want yourself to be seen as leaders. What SEO tactics do you all use for yourself and your brands? Taylor: Great question. I totally think, in our space in particular, features and attributes are more important than the brand overall, in terms of the search volume. Obviously, if you build a brand, which obviously we all are in the business of doing, you can build search volume that way, but, most of our SEO strategy exists around, trying to optimize and rank for generic keywords, based on the features and benefits of each product. For us, the brand story and value proposition is more of a conversion factor rather than a volume driver, if you will. We as a company have invested more in building a robust e-commerce interface, to target that non-branded search term versus building, paying money for our brands to be the most searched today. Taylor: That's not to say that, our brands don't have an impressive story and value proposition, but I think, part of that comes into cost, right. A brand that spends a lot in marketing, a direct to consumer mattress that may retail for $1000, queen size, roughly, you have a very similar product that we offer under one of our brands, through Macy's or J.C. Penney, or Walmart, Amazon, that retails for 350 to $400. Is there much difference in the product? I would say they're very similar in terms of features and attributes, but it comes down to advertising and price point, right? Stephanie: So what have you seen works? How do you win? Taylor: I think, again, each retailer is its own search engine and each retailer's algorithm for the sort that they show, when somebody types in a pillow, I'm searching for memory foam pillows or pillows or mattresses, is a little different. They take into effect or into account different factors, all of them leverage the trailing sales history, review quality. So, is your product good? Four stars or better? Are you getting reviews recently? So review count and frequency and recency. And then how does it relate to the query that was searched? Taylor: So, for example, there's a lot of backend keywords that we look to put with our products and we've really gone through and looked to optimize those to make sure that we're calling out things like, if a product is antimicrobial, it is tagged appropriately, or if it's got some certifications or whatever it is, such that, when you're searching on a retailer, if you're typing in the keyword or leveraging a checkbox menu, faceted navigation, that we're optimized to show as much as we can. Stephanie: Got it. So how are you finding new brands who would be willing to work with you on selling your product? Are you marketing to them? Are you approaching them directly, cold email? How do you find new partners in your space? Taylor: It's a great question. A lot of our business is, if you put it into two buckets, hunting and farming, it is farming. You bring new ideas and new product and new concepts to the same folks you've been dealing with. But we absolutely have hunting strategies as well. Honestly, I think Soft-Tex has taken a position as an industry leader of research. We've undertaken bedding industry research initiative, both of bedding buyer trends. We work with, many, many retail partners, and especially during COVID times, we've been able to survey our partners on what they're seeing and aggregate the results and provide that as a free service, that I think has been really valuable to folks in the industry. And then also not just industry or retailer, B2C information, but what the consumer is looking for in bedding today. We've actually just completed a large scale research initiative for bedding consumer tastes and preferences in 2020. Stephanie: Very cool. And are you plugging in some of your products, because consumers are very interested in cleanliness going forward and what do you know? We have an antimicrobial, I'm saying that wrong, but you know what I mean, product? Taylor: It's absolutely the type of a feedback loop that fuels our product development cycle. So in our bedding buyer survey, we just got the results back on that. As you might imagine, anything with fresh and clean attributes has been on a positive sales trend and we've for a long time had anti-microbial infusions and treatments in our products, but obviously we're ramping that up now, given the favorable sales trend that it's seeing. We're looking forward to, seeing the full landscape of what consumers are shopping for, how they shop, as that's in constant flux, especially with COVID and beyond. I think, consumers are more comfortable shopping online, increasingly daily, more and more orders, for all of eCommerce, not just bedding are taking place digitally. Stephanie: Do you think this is a longer term trend? And if so, how have you guys shifted your strategy? What things are you planning on doing differently or changing going forward? Taylor: I think, like I mentioned, we've done a great job at Soft-Tex in optimizing our product pages and the end retailer optimization. We are making the investment now, in that top of funnel or off of retailers sites discoverability. So we want people to have our brands, enter the consideration phase earlier in the process versus, just see them on a retailer site and click on them. So we're definitely investing there, because we do see the shift towards e-commerce, increasingly as a longterm trend, just rough numbers that I had looked at before this podcast. When I started at Soft-Tex, e-commerce was, just under 10% of the total business. Stephanie: That's four years ago, right? Taylor: That was in 2017. And I think, ultimately even then we were under-indexed as a company. This year, I think, just given how the trends are going and how we're pacing, it's looking, 35 to 40%. And that's not to say that the brick and mortar piece or other channels of business have shrunk terribly either. It's just grown that much, just organically as well. Stephanie: The pie has increased. Taylor: Exactly. Stephanie: With that much growth, I'm thinking about your tech stack now. And I saw a quote on some article, where you said, our approach is working, and we believe that the tech stack we've built is well positioned for continued growth. So what does your tech stack look like? What are you guys investing in? What platform are you using? What does it look behind the scenes? Taylor: I think, product information management and taxonomy, and really taking control of your data as the expert of whatever product you make, is so critical. Before I started, all of our product data was in, 50 million Excel sheets, right. Now it's much more systematized. And also, not to mention, different retail partners require different fields and everybody's set up processes a little different, whereas, before that, was institutional knowledge and it lived with a person, now that lives with platform. So that's a huge process improvement that we've made. Taylor: Digital asset management is so critical, particularly from being able to rapidly get new images out to different syndication platforms, but also tests. We've done a lot in push the envelope on image standards. We talked about how we can play a consultative role with retail partners. We'd seen some really nice boosts when we added some batches to images, as trust symbols, like if something was featured on, Better Homes & Gardens, sticking that, in the bottom right hand corner. Sometimes that's been a little tough, because certainly main images get picked up in Google shopping and there's some rules against how much text can be in the image. Taylor: That worked well for a time, when we were able to get it approved. From a text tech standpoint, email marketing, that's super important, leveraging, and also of course social, being able to leverage all of our digital assets and brand voice and value, getting it out there consistently to the customer as well, has been really important. Stephanie: What metrics do you look at for success around, whether it's your B2B type of backend or your eCommerce platform, what metrics are you reviewing to see if things are going well? Taylor: An early indication, skew count. So how many skews do we have in our assortment and how many places are they set up? Obviously if we have a thousand skews, they should all be 50 places, ideally, right? For full skew syndication. Certainly not every retailer is going to take every skew that we have. A lot of retailers still have more of a curated assortment versus an endless aisle. Certainly I think, we see a value in an endless aisle, because of how we differentiate our products. Literally we try to create every product to be a little different, to have a little bit of unique feature and value proposition. So that concept that, there's something for everyone, right. Taylor: So skew count, a very important metric, ultimately total sales obviously, unit sales and how are retailers trending, particularly ramping up impression volume, how many people are getting to a product page and certainly for folks listening, they're probably like, well, how do you get that? Not every retailer provides that information. But you certainly can leverage tools out there, on Amazon, there's intelligence tools to look at, how many views your products are getting and other things of that nature. I think that, being able to just check that and see the demand for your product over time is very important. Taylor: Other metrics that we really look at, sale, when we give discounts, how things perform, because ultimately a lot of things come back to the law of supply and demand, right. We might have a price in our mind where we think something should be, but that's not the price that the consumer wants to pay for a product. Finding that right price that moves the volume, through discounts, just finding that equilibrium is interesting. And then obviously we talked about reviews a lot, review count and quality. The quality is a big feedback loop that we take very seriously, in terms of work with our quality assurance and customer service teams, to make sure that, we don't have an issue. And we're very proud, that our products have about a 4.7, 4.8 aggregate rating. Stephanie: That's great. Taylor: It's huge. I said at the top of the call, what works for one person doesn't for another. So you might think that a pillow, if left long enough to its own devices might net out around a three. So the fact that, we're at a 4.8 overall, is really encouraging. Stephanie: That's awesome. Do any of your partners right now, not having an eCommerce platform? I'm thinking there must be some people who don't, how do you work differently with them if they only have a retail location versus your eCommerce partners? Taylor: There are, sometimes e-commerce is challenging to jump into. It can seem daunting for folks that aren't doing it, because you're talking about things at the each level versus, big old fat POS, the way you retail used to run, right. You order a bunch to a warehouse and it gets distributed. There's a lot of implications to that, especially when you're talking about commitments for product, with e-commerce and drop ship the risk is inherently on the supplier or the vendor. There's no risk for the retailer, right. The retailers is like, Oh, sure, I'll put it up on my website, but you're inventorying it. Right. You're going to ship it for me, just when I sell it. Taylor: A lot of companies, that's their biggest objection, I think, is, without a hard commitment or a retailer to commit to bulk units upfront, if they don't have that, they won't offer it for e-commerce. They won't bring it in, because they don't have that driver to pull them into it. Because it's very easy, if a retailer's ordering 10,000 units of something, pepper and a few thousand more free commerce while we're at it. But if e-commerce is the first channel you're thinking about, it can be a riskier equation. Stephanie: Do you see that changing going forward? Do you see a lot of these brands thinking about now going online? Taylor: Yeah. I mean, even within Soft-Tex it's changing, right. We have now for, within the past couple of years, now digital first product, whereas, not saying that my e-commerce department was a recycling bin before, but pulling off of the success of things in brick and mortar initially, was really what drove eCommerce previously, which is not necessarily a bad strategy. But I think today, for innovation and new product, more and more stuff, if you're confident in it, you have to commit and leverage on e-commerce. Stephanie: I completely agree. So I saw you guys had some showrooms, I think, for your product. How are you all thinking about that? Taylor: We have permanent showrooms in New York and Las Vegas, and participate in market events where we host, the buyers from many different retail partners, so much of that. The importance of an in person event, has been blown up now through COVID. We went through a virtual market in March, which, obviously is hard to convey everything through a video, but, we had fun doing it and a lot of people really enjoyed it. That whole concept has been a challenge. Right? Being able to find that dedicated time to get in front of your customers and have them, if anything, particularly for stores, it's all about creating an experience to surprise and delight. Taylor: Those buyers really want to feel the product and experience it, to ensure that it's worth, that it will monetize that floor space, that it will take up. With the first touch point being a virtual video, that can be a challenge sometimes, but, we're adapting through virtual markets, mailing samples for, Zoom calls to review them. But it certainly has been different, it looks like, the Las Vegas market furniture show was pushed back.It's likely that, at least for us, it's virtual still, just given everything that's going on. And many of our customers are, you've seen probably the announcements, a lot of travel moratoriums. Some through the end of the year, they've already come out and said so. It's been interesting from that standpoint. I guess from that point- Stephanie: I can imagine. Taylor: I think home products, more folks will spend money, through e-commerce on home and other products, that they're not spending on travel. So, positives for us and for many others. Stephanie: That could be a good opportunity. I'm thinking of, these virtual events right now to sell to buyers. I think, I would just run and jump on the mattress and then just go to sleep and then people would just be interested to see if I'd wake up, that might pull people in. That's how I would sell it. Taylor: That's a very attention grabbing headline, for sure. Stephanie: It'd be like, is she asleep or is she dead, what happened or is she frozen? I don't know. Taylor: That's all right. Maybe we'll use that in our next market video. Stephanie: Great. I can be the star of it, I'm pretty good at sleeping and internet freezing, all of the above I'm good at. Are you thinking about incorporating these virtual strategies going forward? Is it something even when the pandemics over, that you're like, this is working well, we might try this out in the future and use it for, our initial targeting effort to then retarget them to an in person event afterwards. Or how are you thinking about that marketing strategy going forward? Taylor: I think it's something that, we're definitely going to do. It's something that we had been doing, I guess, even before. We would do video walk throughs of our showroom and our virtual experience with an industry publication called, Home Textiles Today. But for the most recent market, we produced the virtual market video ourselves. So, leveraging, either internal or partner capabilities, we still think it's very important to address that. There's always going to be people that can't come to an event, even forget COVID times. So it's always good to have that digital touch point to be able to send to them. And also, to your point, it absolutely can sit on our website and exist as a lead generation tool as well, for people to sign up, to see our latest innovation and then fill out a lead form and then go watch the video. Stephanie: There is definitely a lot of opportunity there, for content that is being created now that maybe wouldn't have been thought of before everything that was going on. Taylor: Right. It's a delicate situation, because a lot of what we produce for a trade show like that, and our competitors, is very future looking and conceptual. There is a level of security. Most of what we sell at a trade show is not yet fully commercialized. Sometimes it is, but in many cases it's like, this is new brand new technology and we're introducing it here. So, there's also a dimension of, yes, we want people to see it, but no, we don't want everyone to see it. Stephanie: That's got to be a little bit, get a little FOMO there and make it a secret. Taylor: That's right. Stephanie: So you have an interesting intersection between B2B and B2C. Is there anything that you wish existed right now in the eCommerce space or technology wise, or you're like, we're struggling with this right now, that you could see getting better in the future or that you hope to get better? Taylor: We have some partners now that help us provide really high quality CGI imagery. Obviously that's been around, but, making that process easier, it takes a lot of work to stage a live photo and video shoot, especially for our product class. That's something that we're looking to get better at, such that we can, as we commercialize new products, we don't have to have crazy processes to stage a photo and video shoot. Certainly there's value to that, and we will continue to use it. We have to use live folks for a lot of things, and models and videos, but for the static, just e-commerce imagery, getting those images up front can really increase our speed to market. Taylor: I would think the other thing, that perhaps we're missing today, is really seeing an aggregation of reviews across platforms. So obviously we see reviews that are syndicated. But we don't always see every review out there. So getting notified when there's a negative review in particular, such that we can see, is it just a one off? Somebody just didn't like it, or, is it the start of a trend of some sort. That happens very seldom with us fortunately, but it's always good to be on the forefront. Taylor: If you think about it, I'm sure we're not alone. A company like Kraft, they have millions of skews probably, having that feedback loop automated is so important. You can't have a person, tracking every review manually, right? So the more automation that's out there, the better. And we've done a really good job, I think, building out partners with the scraping capability to monitor our product pages and also, with advertising as well. Stephanie: Very cool. That's two very useful things. I'm sure a lot of people will be looking for, going forward as well. So we have a couple of minutes left and I do not want to let you get out of the lightning round. So let me know if you're ready and we can start that, Taylor. Taylor: Let's do it. Stephanie: All right. The lightning round is brought to you by Salesforce Commerce Cloud. It's where I'm going to ask you a question and you have a minute or less to answer. Are you ready? Taylor: Yes. Stephanie: All right. First one. What's the next sleep product that you're excited about buying or what are you most excited about right now? Taylor: CBD pillows. Stephanie: Tell me more about that. Taylor: Our CBD, we're really proud of the chemistry. It's microencapsulated into the cover. So with body pressure and as you toss and turn, as you sleep, the capsules break open and release the CBD up through the fabric and it's absorbed in the CBD receptors in the skin. Stephanie: Oh my gosh. That sounds very interesting. I have to check that out. Taylor: Coming, next quarter. Stephanie: Cool. I'll be on the lookout for that. What's up next on your reading list or audible? Taylor: That's a really great question. I don't read as much as I should. Mostly, I'm reader of the news. I would love a good mystery. I don't read enough fiction, sometimes it's good for diversion, especially during COVID times, right? Stephanie: Yep. We'll have to find one for you then. I'll source one and let you know. Taylor: Yes, please. Stephanie: What's up next on your Netflix queue? Taylor: Ozark. We just started, it's been really intense. So my wife as a mental health counselor, and I have some stressful days at work, so we both agreed, it's pretty much a weekend thing, because it's so intense, we can't watch it. Stephanie: Yes. I agree. You got to balance that out, put on a Disney movie or something. Taylor: Exactly. Stephanie: And the last one, what one thing, will have the biggest impact on e-commerce in the next year? Taylor: I am going to say, voice search, I think more and more people will leverage, Siri or Alexa or the Google voice piece, for searching on stuff. I think, particularly, so much of our population is aging. For whatever reason, when I see somebody have a question, I see them using the voice search the most, like my grandparents, that demographic. As it gets better, we'll see it used more and more. Stephanie: I completely agree [inaudible 00:57:15]. To take anymore, too much work. Taylor: I know. That's all right. Stephanie: I like that. Well, Taylor, it's been a blast having you on. Thanks so much for coming on the show. Where can people find out more about you and Soft-Tex International? Taylor: You can check us out on the web at, soft-tex.com. We're also on Facebook and Instagram. You can also check out any of our brands, like SensorPedic, SensorGel or BioPEDIC. For me personally, I'm on LinkedIn and Twitter, Taylor Jones. There's a lot of Taylor Jones's, but I'm out there. Stephanie: We'll link you up. We will find you, don't worry. All right. Thanks so much, Taylor. And we will talk to you soon. Taylor: Okay. Thanks so much, Stephanie. This is great.  

Making the switch to online shopping has been easier in some cases than others. Buying laundry detergent online, sight unseen doesn’t feel quite as high-risk as a larger purchase like say a car or a house. It makes sense, then, that certain industries have been slower to fully embrace the Ecommerce experience. Bridal is one of those industries, but Leslie Voorhees Means thinks that it’s time to shake things up. Leslie is the co-founder and CEO of Anomalie, an online-only custom wedding dress company, and on this episode of Up Next in Commerce, Leslie explains why she thinks her model is going to be the one to disrupt the market. Thanks to a blend of tech and human stylists all focused on customization and personalization as well as taking control of the supply chain, Leslie says that Anomalie has found a way to solve many of the pain points brides run into during a traditional wedding dress shopping experience. Thousands of customers agree so far, and as growth continues, Leslie has her eyes set on new technologies that she believes will lead to a sea of change in the entire Ecommerce world. 3 Takeaways: Understanding and owning your supply chain is becoming more of a focus for D2C brands and it will be a differentiator moving forward. Building a strong supply chain presence allows you to have more flexibility, agility, and ability to scale Transparency and communication is a business advantage when competing against bigger brands When tailoring custom unique experiences, tech can’t completely replace a human element For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone, welcome back to Up Next In Commerce. This is Stephanie Postles, your host. And today we have Leslie Vorhees on the show, co-founder and CEO at Anomalie. Leslie, thanks for coming on. Leslie: Thanks for having me. Happy to be here. Stephanie: Yeah, we're really excited. So, where are you located at right now? What are you up to? Leslie: We are in San Francisco. So, the company was founded and is headquartered here, but we have a couple offices around the U.S and the world. We've got our customer service stylist operations in Scottsdale, Arizona. And then we've got a team that manages our supply chain operations in Hong Kong. Stephanie: Oh, very cool. Hong Kong sounds awesome. So, I'd love to hear a little bit about Anomalie then. We're jumping into it quick, but yeah, talking about offices in Hong Kong, it sounds like it's expanded quickly and grown from where you started. So, I'd love to hear a little bit of the background there and what brought you to Anomalie. Leslie: Yeah, for sure. So, I never actually expected to be founding a company and was not expecting to be in bridal. This idea for the company came about through my own frustration when I got engaged and shopped around for my perfect wedding dress and had a really, really hard time finding, I had this picture of a dress that I really wanted and couldn't find it in boutiques and was pretty horrified by the prices. Leslie: My background is in mechanical engineering and manufacturing. I've always worked for big companies. Started my career at Nike and fell in love with the factory environment and product development and being able to create real physical products. And was working at Apple at the time that I got engaged and was working on the launch of the Apple Watch and was in China quite a bit. Did a little bit of research because I knew co-workers of mine had custom clothing made, mostly men's shirts and suits and things. Leslie: And ended up finding Suzhou, China, which is outside of Shanghai, which makes most of the world's wedding dresses. 80% of the world's wedding dresses are made in and around this amazing supply chain hub of expertise and craft. And worked directly with one of the workshops there when I was out in China for work and was just absolutely floored by the price but also the quality and the levels of customization. Leslie: I could pick out everything from the lace to have it be custom-tailored to my body. And mentioned it to a couple of friends and almost immediately started getting requests for orders before this was even really a company and realized pretty quickly that other women felt the same frustrations that I was feeling around not quite finding what they want for, arguably, the most important garment that you're ever going to wear. Leslie: And then another interesting insight besides just the virality of those original orders was the first couple dozen requests were coming from women that said they wanted something really special, and really different, and really unique. And in reality, the dresses looked very, very similar. People were like almost ordering the same dress because wedding dresses are uniquely low variable. It's white, it's ivory, has lace or no lace, there's limited silhouettes, there's limited styles, has a longer product life cycle than a lot of garments and fashion. Leslie: And so, there were the seeds of this idea for mass customization that was really exciting to me as an engineer to think about how we could scale this to give tons and tons of options to brides, but on the operations side be really efficient and be able to have the benefits of scale by thinking about these modules that can be customized. So, the skirt, or the neckline, or the straps, or the sleeves, et cetera. Leslie: So, we've thought about that a lot as we've grown in the past. So, that was about three years ago, a little over three years ago that we started and since then have grown to serve thousands and thousands of brides. And are building, from the technology side, a way to be able to visualize the dress in an easy and fun way, given that we don't have brick and mortar shops. Stephanie: That's amazing. Yeah. It's very interesting hearing the story of your background of being like, "I need a wedding dress," and actually going to the district in China where they're made. I can't think of many people who would solve their own problem like that. Was there any surprises when you were going and meeting these companies there and just thinking through, "Hey, this could actually be a business," or any findings when you went there that you weren't expecting? Leslie: Yeah. I think one thing that was really stark that I noticed right away was I was the only foreigner in this area. It was very apparent that Chinese women knew that this is where you can get really high quality, almost like haute couture type of like custom garments. But I was the only foreigner, the only white person walking around getting a lot of stares. Leslie: I think that was really representative that there was a secret that was being uncovered. That was how I was thinking of it was, this is something that can be untapped. And just given my conversations with friends, and then friends of friends, and then friends of friends of friends, as the idea started growing was, women really want to be able to tap into that but need a trusted source. Leslie: There's a lot of direct from China websites and horror stories about women ordering a dress and then when it actually shows up it's low quality or not what they were expecting at all. And given, again, this is a very emotional important purchase. Having someone that you know and trust on the ground, I thought was something that was going to be really important and that has remained important the entire history of the company. Leslie: And then I think the other thing that was surprising was just the breadth of quality in Suzhou. It was, you could get everything from a very, very, very inexpensive cheap wedding dress for a couple of bucks all the way up to dresses that were almost as much as it would cost in America and wide ranges of quality. Leslie: I remember I vetted probably a hundred or so factories when we were first starting up and it was pretty apparent the ones that didn't take quality as seriously. There was one factory that I remember where everyone in the factory was smoking cigarettes- Stephanie: Oh my God. Leslie: ... which is not something that you would want in a high quality [crosstalk 00:07:03]. Stephanie: What's their reviews on Amazon? People are like, "Hey, it smells smoky. I wonder why. Now we know." Leslie: Yeah, exactly. So, that one was an easy one to cross off the list. But then on the flip side, there were a lot of really, really sophisticated entrepreneurial factories that we met with that I think could feel the shift that's happening in bridal, which is that it's one of the, I think, last verticals that hasn't really been disrupted by an online presence. Wedding dresses are still 95% brick and mortar in the U.S. Leslie: And a couple of years ago, it would have been crazy to say that you're buying your eyeglasses, or mattresses, or TVs, or books, or whatever on online. And it's still a little bit crazy to say that with wedding dresses, but I think that's exactly why I was so interested in it because it felt new and different. I think that that's the making of a really good startup, a good, crazy idea. Stephanie: Yep. Yeah. I completely agree. It seems like there could be a lot of D2C opportunities that go directly to the source like you did. Because a lot of them, people are coming online. They want not go through someone else to sell right now. Is there any other areas that you can see going direct to actually help with the business model, or maybe friends, or mentors in the industry where they realize, hey, there's a lot of opportunity if you go directly to the factories and see how they make it and develop your own relationship, instead of always relying on a wholesaler, or drop-shipping, or whatever it may be? Leslie: Yeah. I have to credit my internship when I was in business school. I was really, really lucky enough to be a part of the core founding team of M.Gemi, which is direct to consumer high, high quality Italian footwear. And I was able to go with the founder over to Italy that summer- Stephanie: Wow. Leslie: ... which was the coolest internship ever. Much more glamorous than some of the factories in China. Stephanie: Wow. I want that internship now. Leslie: Yeah, exactly. Stephanie: Can I sign up for that? Leslie: It might be the coolest job I've ever had. But it was really, really interesting because they had set up relationships with these Italian craftsmen that make shoes for, I mean, the factories we saw were for Yves Saint Laurent, and Prada, and Valentino. And the same hands that were making those shoes had extra capacity to make high quality shoes that didn't have the designer label and then designer price tag. Leslie: And tapping into that direct to the workshop and direct to the craft idea was something that I got to see that M.Gemi was doing and is apparent all over e-commerce with, I know Away luggage, I think, started with making partnerships directly with the workshops and, I'm trying to think of another. Oh, the mattress, a lot of the mattress companies are... There are these pockets of expertise and by being able to sell direct to consumer, it cuts out the middlemen and obviously cuts out a lot of the costs. Leslie: And then also for us, especially being able to centralize stylist operations, and tech, and our finances, and all of that allows us to scale nationwide without having those costly retail footprints. And then also we can scale the experience from a customer experience side. Stephanie: Very cool. So, if you're looking back now on picking factories and workshops to work with directly, what were some of the lessons that you took away from it where you were like, "I would do this over again," or, "I did it this way and it worked out really well," if someone were to try and start this process from scratch? Leslie: Yeah. Well, I'd say definitely no cigarettes present in the factory. Stephanie: Step one. Leslie: Yep, step one. Stephanie: All right everyone, that's all you need to know. Leslie: That's the secret. No, I think also the appetite for international partnerships. And we were lucky because we started really small with just a few orders. And a lot of partners, especially in China, require minimum order quantities to be able to produce with them. And we found partners that were aligned with our vision of entrepreneurship and scale, but we really had to sell the vision probably similar to fundraising and selling the ideas to venture capitalists to get funding. Leslie: We had to sell the idea to the workshop managers as well to buy into this idea because we did not have massive amounts of orders at beginning. And so, definitely alignment on a strategy of customization and a strategy around scaling through tech and having technology-enabled operations to be able to get bigger and better. That helped a lot to be able to find some partners that were really, really aligned with that vision. Stephanie: Yeah. That definitely makes sense. It's like when you're looking for a contracting job or something like that, the people who apply maybe aren't the ones you always want versus going out and actually sourcing the exact person that you want to work on your project, or employee, or whatever it may be. Leslie: Exactly. Stephanie: Always seems to work a little bit better. Leslie: Yeah. Stephanie: So, for Anomalie, when I was thinking about, I've had a wedding before, I've bought dresses, and I was thinking, "Oh man, that seems like it could be pretty hard to do direct to consumer online because of the measurements, and making sure it fits, and wanting to feel the fabric and all that. How can technology replace that kind of experience that makes the consumer more comfortable with buying something so important online? Leslie: Yeah, it's a great question and a great call out. It is hard. It is a hard hurdle. We have a really, really high bar of trust. This is a really, really important garment. I think what's really exciting to us is that a digital experience solves a lot of the pain points for brides' shopping experience in brick and mortar boutiques by offering, one, a much better price. Leslie: So, high quality brick and mortar boutiques you wouldn't balk at a price tag from, the average is in the two to $5,000 ranges where the bulk of the dollars are in the market. And designer dresses can cost $10,000 or more. And by being able to cut out the cost of the shop and then also having a stylist we're able to offer a much better price. So, our average dress right now is right around 1700, which is- Stephanie: That's really good for custom. Leslie: ... [crosstalk] in industry standard. Yeah, we think so too. And then another pain point that we hear over and over from brides is around inclusive sizing. So, the average American bridal boutique doesn't carry the average American woman's size, which is a bridal size 14, normal size 12. Leslie: And the inventory is expensive and boutiques have a limited set of gowns. And that gets even smaller when you think about sizes that can include plus size women. And so, by making our dresses made to order, made to measure, we're able to make the pattern to fit the woman's body, regardless of whether you're a sample size or up to a size, I think it was made up for a size 32 before. Leslie: So, that I think addressing the inclusive sizing has been a big unlock for us. And then I think the biggest advantage we have is we can offer dramatic advantages with customization of the design because we can bring together any element that a woman wants. So, more often than not, we hear a bride say, "I tried on dresses, I have a Pinterest board with all my dream wedding dresses, and I love this element of this dress and this element of this dress. I love this skirt and I love this top and I wish I could make it long sleeves." Leslie: Or, "I wish I could swap out the lace." And so, from a supply chain perspective, that's exactly how we're thinking about building every single dress is with those modular components to be customized. And because we don't have to hold inventory, we can offer literally billions of permutations of designs to bring together all of the parts of different dresses that brides want. Leslie: And so, we're really empowering brides to discover and then also create the exact product that they want. And then that tech is supplemented by a human component, which is still really important to have a stylist on the other side of the phone to bounce ideas off of, talk about pros and cons of different design elements, and really reaffirm the decisions. Yeah, because it is hard, because she's not trying it on in a store. Leslie: But the question is always the same, which is, I want this dress to fit, I want this dress to look beautiful and flattering on me. And that is a problem that we can solve with tech and with data. We're collecting hundreds of thousands of custom measurements right now, and developing IP around pattern making, and fit, and have a fit guarantee that you're not going to have any more than $499 of alterations. And if so, we'll cover the costs. That's something that we just launched last month. Leslie: And so, we feel confident that we can tackle the challenges with not having an in store experience, but actually offer much, much more value through better price and sizing and fit. And then also that customization element. Stephanie: Very cool. So, when it comes to entering in data for sizing, do you have the user do that? Do you have the stylist work with them? Because that seems like it could be a process where it could be painful if you're measuring your wrist, measure your shoulder area. I mean, it seems like there's a lot of spots that you'd have to measure to know how to get an exact fit. So how do you work with customers on that to where they don't bail? Like 50% of the way in they're like, "Ooh, there's a lot of work. I'm out." Leslie: Yeah. We benefit because women are really committed to getting this garment right. Stephanie: Got it. Leslie: So, it's shows up in lots of different areas. For example, we have a really long, intense survey and we have a crazy, crazy high completion rate. If it ever drops below 95% completion, we're thinking something's wrong with the website, because this isn't just purchasing a pair of pants or a pair of earrings or something online, this is your wedding dress. So, women are really, really okay with sharing a lot of data. Leslie: So, that shows up with measurements too. So, process-wise, we send a little fit box, which includes physical swatches of our fabric, because that's something that we've found is really hard to digitize, the color, and then also being able to touch and feel the quality and what the fabric feels like. Leslie: And that includes measuring tape. And then we've got pretty in-depth instructions on how to have someone take your measurements, whether that's your fiance or a friend. We also have a connection with local tailors. So, if women want to go in and get measured by an expert, we cover the cost of that. But what we've seen over time now is actually, we have hundreds and hundreds of thousands of these points of measurement. And so, our system can algorithmically flag if something looks off too. Leslie: So, oftentimes, we'll come back to a bride and say, "Hey, this measurement doesn't quite look right and it's a typo that we were able to catch." And so, by just having that back and forth, and then also this foundation of data to ensure that the measurements are accurate helps a lot. And then, in the future, I mean, we've seen a lot of technology pop up around digital measurements. I'm hoping someone else can solve that problem. And then we can fold in the technology through our process because it is for sure a challenge. Leslie: What we're thinking more about is once we have measurements that we feel really, really good about, how does that translate to the pattern making and being able to create a 3D physical garment that will fit a 3D object, which is a woman's body? Which is hard, but that's something that I think, in particular, our investors are really excited about. Because once we figure out that part of the problem, that can be applied to other things besides wedding dresses. That can be applied to garments just overall for women. So, thinking a little bit longer term about how we can build some really cool IP around women's fit. Stephanie: Yeah, that's awesome. I was just thinking about how nice it would be to have someone take a quick video of you doing a spin, where then it has all your measurements there, so then you can actually virtually try on the dresses and see how they look, because that seems like it'd be hard to know how something would look on your body without actually seeing it on the computer screen or something like that. Stephanie: At what point did you realize, like, "Hey, we're getting a bunch of data." We probably should incorporate machine learning or build an algorithm that helps with either recommending styles or like you said, checking the fits or the measurements that the potential bride was putting into the tool? At what point were you like, "This is a lot of data, we need to actually implement some type of technology," and how did you go about that? Leslie: Yeah. It's funny. I would say it's probably the way we figure out anything else with the company and probably other startups will empathize with this as well. It's like, once things start breaking, that's where you're like, "Oh, okay, we got to fix this." It's like the leaky faucet or the balancing plate's analogy. It's once things really start to wobble, it's like that's where time and attention and resources need to be applied. Leslie: But another part of this is that I've always really, really admired startups and D2C startups in particular that have this differentiation with tech, or data, or supply chain, or operations. So in particular, I really, really admire Stitch Fix and Rent the Runway, which Stitch Fix famously has said they employ more data scientists and engineers than they do merchandisers, and they're a fashion company. Leslie: I think they recognized really early how much leaning into that data strategy can help them scale and get really, really good at what their core value proposition is, which is similar to ours in terms of personalization. And so, we've always tried to follow after their ways because they've been so successful. And so, that's been on my mind since day one as like, this is going to be an important part of how we can scale successfully. Stephanie: Yeah. Stitch Fix is definitely a good example. It's amazing how much data they use and how they are working to perfect every single fit of clothing and using all the feedback they get every single second to make it better and better. Leslie: Yeah. What I love is it's not data just for data's sake or tech just for tech's sake. It's like really core to how they're delivering personalization to their customers. And they see it as a big competitive advantage, which I think is why they've been one of the few successful e-commerce exits. You haven't seen that many in B2C, I think, because it is really hard, but that seems to be a really, really smart way to differentiate your company and your brand. Stephanie: Yeah. I completely agree. Do you have a model that you're looking at right now where you're like, "We're going to spend this amount of time thinking through the tech and the future of where our industry is headed to get ahead of it, and then this percent is spent on the product right now?" Or how do you think about balancing those two initiatives? Leslie: Yeah, I wish it was that organized. We're probably not quite there strategically yet, but it's always been these three core pillars of our business, which is the tech and the visualization really around solving these frustrations around visualization, and measurements, and fit, and developing a really amazing digital experience through our tech. And then second is our human part of the customer experience. So, our stylists team that is just really smart, and empathetic, and helpful and, I think, necessary to make this big decision, this big purchase online. Leslie: And then third is our supply chain operations and being really on the cusp of vertical integration and being super, super involved in our workshops on the ground to make sure that we're maintaining a really high level of quality and that we're covering all the areas of ambiguity that comes from making custom garments. Stephanie: Yeah. Awesome. So, right now when I think of the wedding industry, I think of the big brands, the major players. How do you think about building a bigger share of the market or getting a bigger piece of the pie when you're competing with companies like that? Leslie: Yeah, it's something that we've thought about since day one. And because bridal is so unique, I think we're really uniquely suited to disrupt the market. So, as I said earlier, bridal is still 95 plus percent in brick and mortar. And then the other funny thing is that it's really fragmented. So, the biggest player in the market is David's Bridal, which is a third of the market. And then the rest, there's no one with more than a 1% market share. Leslie: So, it's just super fragmented, independent, usually mom-and-pop boutiques. And the crazy thing about David's Bridal is they're failing, they filed for chapter 11 in November of 2018 and have been repackaged and sold off to a number of different private equity firms and just continues to be- Stephanie: That's not good. Leslie: Yeah, really I think struggling because of the costs of their retail. They have over 300 stores in the U.S, and salespeople, and I think it's a model that's not going to work long-term. And so, we have our sights set on taking that big of a share of the market similar to David's Bridal. And we think we're really well set up to do that because we're doing it in a direct to consumer way. We're not burdened by the cost of having a retail presence. Stephanie: Yeah. Yeah. I read a really interesting report about the David Bridal's of the world, where once retail locations are bought by PE firms, that there's a very high correlation of them going bankrupt because of just how- Leslie: It's not a good sign. Stephanie: Yeah. Yeah. I think Toys "R" Us was the same way and there was a whole list of them. Leslie: That was actually the, I think it was Oak Tree or Oak Hill that took Toys "R" Us into liquidation. And they were the same ones that just purchased David's Bridal in [inaudible 00:27:54]. Yeah, it's not looking great for them, but it's wild that there's still one in every three wedding dresses in America and no one else is really stepping in to take them on. Leslie: And we're going big here. The answer I think is not to just open up another boutique or another online boutique, I think the answer to unlocking a big portion of the bridal market is around price, and customization, and fit, which is why we're spending a lot of time and a lot of dollars on building tech to support that. Which is hard and our investors understand that, but I think it's also why we're a great venture opportunity is because there's a lot yet to be discovered, which is what we're working really hard to build right now. Stephanie: Yeah. I completely agree. When it comes to your marketing efforts and getting that market share and growing bigger, what kind of tactics do you use right now to either convince the buyer who's maybe very skeptical of buying online to come and try you guys out and making it a easy process for them just to get involved versus the people who you can tell are like, they're in it, they're ready, they've already paid the stylist fee, they're here? How do you think about advertising those two different types of audiences to make sure they convert to hopefully customers? Leslie: Yeah. For us, it comes down to transparency, which is very authentically Anomalie, especially in the early days when we were first starting out. It's not trying to make us bigger than what we were, it's acknowledging, "Hey, we're a young upstart, but we're going to work really hard to make your wedding dress perfect." And being really upfront about the challenges and being upfront about the questions that are in bride's minds. Leslie: It doesn't help to gloss over the fact that you're not going to be trying on the dress until it arrives, but having an honest conversation with our customers around that has always helped. And what also helps is that we've got a lot going for us in terms of, again, the price and being able to bring together all these design elements that you could never find in a store. Leslie: So, yeah, it's addressing concerns around what customers might be thinking of, and then also just education around this new experience. And what's cool is I think our authenticity really shines through our social. So, we have really, really great word-of-mouth viral growth, but more and more finding new customers through Instagram and Facebook. Which we have a pretty cool way of reaching our customers because oftentimes if women become engaged, they change their relationship status on Facebook, and so they're easy to find. Leslie: Also, especially newly engaged women love content. They want to read all of the wedding blogs and browse Pinterest for hours. And so, we're working a lot on how we can make our digital experience really fun and easy to browse tons and tons of potential dresses and then also real dresses. Leslie: So, our Instagram account is just chock-full of women, real women, not models on the happiest day of their life with our product being the centerpiece on the bride. It's a really cool evergreen content machine too, because every day we get dozens of new wedding photos from women who have professional hair, and professional makeup, and professional photography on this very happy day. And it's just really easy to- Stephanie: Perfect. Leslie: ... feed that back to potential customers to show the breadth and depth of our customers and customer types and body types, and also design. And I think it's a really cool way to communicate our value proposition to potential brides. Stephanie: Yeah. That definitely makes it much easier. How do you think about encouraging the brides to share that, not only with you, but also in their socials? Because I could see some people being hesitant to show where they got their dress from, because then everyone knows about it and it's not as special and fancy. I've just seen this hesitancy in brides to tell you like, "Hey, I got this bracelet from here and this dress from here. And here's where I got my veil from." It seems like it's an industry or, at least, a group of people that sometimes don't always want to share that. Have you experienced that? Leslie: Yeah, it's funny. And this is another funny thing with bridal. I mean, we've never developed an influencer strategy. We've never had to work hard or twist a bride's arm to post pictures because it's almost always a really, really happy customer experience. Brides are shouting it from the rooftops, especially brides that had frustrations finding a dress that they wanted and then discovered us. They want to tell their friends about it. They want to help future brides know about us, which is just super cool. Leslie: And I think it's something that we've worked really hard to develop because, again, this idea of having a lot of trust, but we've earned that by going above and beyond to make sure our original customers were advocates for our brand by delivering a really, really amazing experience and a really, really beautiful, perfect dress. Leslie: And so, it still amazes me how much brides love to share about their experience. It's funny also because oftentimes the wedding dress is a secret, especially to the fiance. So, women will go as far as posting on their Instagram stories their sketch for their custom dress, but then we'll scribble out so you can't quite see what the dress looks like, but they still want to post the fact that they are so excited about getting their sketch, even though you can't even see it. It's pretty amazing. Stephanie: That's great. Yeah, that's really awesome. I'm sure also having that relationship with them, I mean, by the time they get to the very end, I'm sure they feel very connected with you, and the stylist, and your team, so it probably makes that better. Leslie: Oh, we've had stylists invited to so many weddings. It definitely is a relationship that is, I think, pretty unique. I think other companies would kill for this type of loyalty we have. Our stylists, we joke, get presents all the time, cupcakes and flowers and things delivered to the office because the bride was just so delighted with our experience, which is so cool. Leslie: It's really empowering, I think, to know that you've had a difference in what should be the most fun, enjoyable time in a woman's life and unfortunately oftentimes it's super stressful. So, I think just having an ally through that and then really wowing her with the delivery of the dress is the experience that we want to deliver every time. Stephanie: Yeah. I think a lot of brands would kill for that kind of relationship. And it's just a really good reminder of how important it is as a lot of companies are either coming online or moving more to direct to consumer that keeping those relationships, even if they're virtual, is super important to get that trust and to make sure it's, even after the sale, you have champions who are talking about your brand and wanting to send more people your way. Because, like you said, word of mouth is key. Leslie: Absolutely. And that becomes something very defensible as well, more so than a cool brand or, potentially even those tech and operational differentiators. Having customers that are singing your praises and having that community of advocates is something that we really, really want to keep building. Stephanie: Are there any digital e-commerce trends or patterns that you're really excited about or that you see coming down the pike? Leslie: Yeah, and I'm biased, of course, but I think the idea of personalization and customization is so, so key. And I love other brands that are tackling that as well, like Stitch Fix. I also think the idea of vertical integration and being really involved in your supply chain has popped up. And I'm a supply chain nerd, so I always appreciate other companies taking action there as well. Leslie: So some of the razor companies, [inaudible] of them purchased an actual razor factory in Germany. And I was just talking with the founder of Haus, which is a new liquor brand direct to consumer [crosstalk 00:37:29]. Stephanie: We just had them on the show. Leslie: Oh, amazing. Stephanie: Yeah, Helena. Yeah, she came on. Leslie: Helena is awesome. And I think there is a lot of innovation happening right now in terms of the front end, which the customer's experience, how you're interacting with brands in a digital way versus in a physical store. But I think the innovation from a supply chain side will also be really, really important for brands to differentiate, especially if they're making things in a new way. So, I'm feeling good about our investment in time and resources with developing a really strong supply chain presence. And I'm hoping it'll benefit us long-term. Stephanie: That's great. Are there any channels, like digital channels that you guys are looking into to expand to? Whether it's, I know a couple of brands we've talked to have talked about TikTok, which people laugh when I say that. But I mean, they've said that they've had great success on there. Is there any areas where you're seeing success that maybe others aren't trying out right now? Leslie: Yeah. It's funny you bring up TikTok, because months ago I would not have even really known what that was. TikTok is going to be very important for brands. We had a woman post just a quick little video around like, "Hey guys, if you are bored in quarantine, check out this website, you can visualize your own dress. I'm not even engaged, but it's pretty cool." It was something literally that simple. Her post went viral. We had over 200,000 people sign up in one day last week. Stephanie: Oh my gosh. Leslie: Or about a week and a half ago, crashed our website, our engineers were working until four in the morning trying to get our capacity back to where we could actually serve our customers, just bombarded with TikTok traffic. So, it was half the team trying to fix the website issues, and then half the team just trying to figure out what tikTok was. And quickly getting up [crosstalk 00:39:36]. Stephanie: What is the source? Leslie: Yeah. So, it's, I just saw a stat this week that they were the fastest social media company to get to a billion users. It's just amazing what they've built and the speed at which they've built it. And I think it's something for sure that leaders of brands will need to keep an eye on just given how viral it is. Stephanie: Yeah. Yeah. I mean, I know people are still questioning how many of the users are real versus not, but I brought this up in a team meeting with my team. I'm like, "We should try out TikTok. One, it looks fun. And two, I've actually heard of quite a few brands saying that it's working well." And my entire team laughed at me and said, "No," so. Leslie: Well, they will be eating their words now, I think you were ahead [crosstalk 00:40:23]. Stephanie: I agree. I agree. So, 200,000 signups, crashed your website, that's a great segue into building platforms for e-commerce. How are you thinking now about, I mean, it sounds like you could be at a place where you're maybe outgrowing the platform or you're experiencing some friction because you guys are growing and you're going to have large spikes in volume coming your way. How are you thinking about developing a platform that fits you where you are now and where you're headed? Leslie: Yeah, I mean, it's a balance of building a robust tech foundation and serving up an experience that customers really want. It has to be a balance of both of those for us... Leslie: (Silence). Leslie: About six months ago. And being able to tie any possible design element and having logic built into it to not show a sketch to a customer of a dress that can't be created. We worked really, really hard to do that. That being said, it's a big load on our tech. And so, we're thinking about ways to, from a technology perspective, how do we continue to have a really cool mind reading type of experience, but also be able to potentially surge to have sketches available for hundreds of thousands of people in one day? Leslie: And one thing that we're building right now is, you mentioned earlier, there are a number of different types of brides that come. So, some brides come in and are like me, and they have an idea of exactly what they want and having a very mind reading survey experience works really well for that type of customer. But where we're moving to right now, and the team's building a brand new browsing experience that should be online just hopefully within the next couple of weeks is this idea of being able to filter down based on a couple of different elements and being able to view lots and lots of designs side by side. Stephanie: That's great. Leslie: Other Ecommerce companies have the same type of experience in terms of filtering down based on different price ranges, or colors, or sizes. And we're thinking a lot about that. And then also building that in a way now with the TikTok viral event fresh in our minds with a way that we can access our amazing data and logic that we've worked really hard to build, but also be able to have an easy load on our servers to be able to show this to hundreds of thousands of people at the same time. Stephanie: Yeah, that's great. I was actually just thinking when thinking through your business model of like, I'm probably the consumer that wants to... I don't know what I want until I see it. So, I would probably instead want to come in and be able to see different designs maybe on models that look like me so then I can choose it that way. Yeah, if someone were to say, "Hey Stephanie, design your own wedding dress." I'd be like, "Ah, it's white. It's all I got." Leslie: Such a big task. Yeah, for sure. We just created this algorithm within the last couple of months called... it's called a similar dresses algorithm, which takes all of these, I think we have millions of photos now at this point of real women, real weddings, real dresses, real Anomalie dresses. And based on the sketch that you get served up, you can see what that dress would look like on women that look similar to you. Leslie: If you've used Rent the Runway, which I'm a big consumer of Rent the Runway, you can see what does this look like on a woman that looks like me, which I think is really helpful in terms of addressing that question around the visualization and like, what is this actually going to look like? Stephanie: Yeah. Yeah. That's great. I'm excited to hear how that goes. How are you thinking about measuring performance when you have these two different types of models now? How do you think through, is our website working? Is it converting well? Yeah, what's your process around that? Leslie: Yeah. Well, our conversion tank, as you can imagine, just within the last couple of days, it was really exciting to see the site traffic and just the number of sketches being generated and just, I think overall excitement. Which isn't quantitative, but just the qualitative excitement and virality around the promise of what we're building was really, really exciting. Leslie: As far as like our KPIs, it's really just around growth. It's like we have a lot of interests. We need to make sure we're converting that interest into real purchases and real dresses being made with Anomalie. So, that takes a little bit more time than that initial visit to our site to get a sketch. And what we really look is the conversion of interactions with stylists. Our process right now is that you pay a small design deposit, so $29 to be able to connect with a stylist, and talk through the design, and talk about pros and cons, and iterate the sketch to be absolutely perfect. Leslie: And then the decision to move forward with Anomalie is after that call. And so, that's what we're really, really focused on is just making sure that we're converting the interest from our cool tech and our cool website experience to actual dresses. And that's where we're growing a lot right now, too, which is exciting. The conversion is not looking good right now- Stephanie: Temporary. Leslie: ... in terms of all the TikTokers, but that's where the rubber hits the road in terms of dresses actually going to the factory. Stephanie: That's awesome. Have you seen any hesitancy with paying that $29 fee? Have you seen traffic come there and hover a bit and be like, "I'm not so sure." And then people bounce because they don't want to pay something right upfront? And have you thought about maybe a quick freemium model where maybe they have a stylist for a couple minutes or would that ruin the business model of making it super personal and the relationship? Leslie: Yeah. We've thought about this a lot. And this actually is something that we're talking about as a team quite a bit right now is, is $29 too high? Is it too low? I think having a posture of confidence in our process that this is a good value is really important and we've adjusted the price and also if it's refundable or not, and then also having the calls be completely free or not it's something that we're looking at really closely and just continue to listen to what our customers like. Leslie: And we've got enough of a growth team set up now where we can measure that quantitatively rather than just viewing it qualitatively. So, yeah, it's a great question and something that we're thinking about a lot. What we want to communicate is, speaking with a stylist is important and absolutely necessary before you purchase the dress. This is not a typical e-commerce experience where you drop something into your cart and purchase it. This is your wedding dress. And so, making sure that we're delivering a really positive high quality customer experience and making sure brides are feeling good before they make that final decision is important. Leslie: And the exact makeup has changed a little bit over time and probably will continue to change over time, especially as we add more and more features to our website. But yeah, it's an exciting challenge that we're working on every day. Stephanie: Yeah. Yeah. I liked the idea too of sticking with your guns to keep that quality high. I know when I was looking through your website and you were mentioning transparency earlier, but you have a whole section where it says, can I get my wedding dress in six months and I still want a custom? And at one point you're like, "No, you can't do this, this, and this. If it's seven months, yes, we can do it for you. Eight months, here's what we can do for you." Stephanie: And I thought that was really smart to just show like, "Here's our boundaries and here's what we can and can't do." So, let's just set expectations up front and same with that stylist fee. It's like, "Here's how we work." If you go, "Well, this is the process where we see works best right now." Leslie: Yeah. And what's great is we've got a couple years under our belt now and have made thousands and thousands of dresses, so we know what's best. Which in the early days, I think we're a little apologetic and wanted to be super flexible, but now we have a lot of confidence in our process as it stands right now. Another place that shows up is the pricing of the actual dress. Leslie: A lot of brides come to us with a tight budget for their wedding, rightfully so. Weddings are really expensive. And so, being able to talk through with the stylist, what are the big price drivers of a dress? So, for us it's, there's hand beading. That takes a really long time and it's really expensive and adds a lot of costs to the dress. And so, being able to talk to a stylist about how to bring in elements of sparkle with less expensive elements is, I think, something that really appeals to brides. Stephanie: Yeah, that's great. So, we have a couple minutes left. And I want to jump into the lightning round, brought to you by Salesforce Commerce Cloud. It's where I ask you a quick question and you have a minute or less to answer. Are you ready, Leslie? Leslie: I am. Stephanie: All right. What is up next for your travel destinations? Any factories you're visiting? Where are you headed? Leslie: Yeah. Well, right now everything is still locked down for quarantine, so it is really hard to think too far in the future. I mean, in 2017, when we were starting this company, I was in China pretty much half the year. I think it was like every month I was out there. So, thankfully we've got an amazing team on the ground, so I'm not having to travel out there as much. And it'll be more traveling to our Scottsdale, Arizona office to chat with our stylists and customer experience. So, that's taking much more of my time now versus to China in the old days. Stephanie: Yeah, very cool. What kind of hobbies do you have or ones that you have on the map that you want to try out? Leslie: Almost none, I would say, which I don't know if- Stephanie: Work. Work. Work. Leslie: ... this is the most healthy answer, but starting a company and building a company is all consuming, which I love. That was exactly what I wanted. And that's what I'm dedicating my life to right now. My husband also is my co-founder, which is crazy. Stephanie: Sounds similar. Leslie: So, we don't have a personal life, but that's what we want right now. And we love what we're building and it still remains exciting, and cool, and our biggest hobby for sure. Stephanie: Yep. Completely agree on this side too. What's up next on your reading list or podcast list? Leslie: Oh, I'm just finishing a book called The Upside of Stress, which is super fascinating. It's a Stanford PhD researcher. She had done a ton of research on how stress can impact people's health in a negative way. But what she started uncovering is that it was believing that stress is bad for your health is what was making people unhealthy. Leslie: And so, the book is all around how you can... stress isn't going to go away, especially in meaningful lives or meaningful parts of your life that stress represents that you care about something and something is important. So, she has really practical tips for how to hone and manage stress in a way that helps. Which is focus, and energy, and care in what you're stressed about, which I'm really, really enjoying reading that and would highly recommend it. Stephanie: That sounds like a good one. I'd love to check that out too. All right. And the last, a little bit harder of a question, what's one thing that will have the biggest impact on e-commerce in the next year? Leslie: Oh, I mean, I have to say right now COVID is going to really, really append retail. With retail essentially being completely shut down in the U.S right now, I wonder about if there are decisions being made at both startup companies and large companies about what value they're getting out of their stores. And they are a lot of really expensive components of having a physical presence and we're benefiting from the value of having a digital experience in terms of the data, and the personalization, and delivering value to our customers. Leslie: And I wonder if we're just going to see a lot fewer stores. It's probably a pendulum and we'll swing another way in the future. But yeah, I just have to imagine that a lot of stores are going to be closed once the economy opens up and once quarantine is over. That's what I'm thinking about. Stephanie: Yeah. That's a great answer. Well Leslie, it's been a blast having you on the show. Yeah. Good luck with everything and we'll see you next time. Leslie: Thank you so much for having me.

There is an evolutionary process for every business, and Beardbrand is no different. When Eric Bandholz co-founded Beardbrand back in 2012, all he had was a Tumblr blog with a modest amount of followers and an Ecommerce shop selling other people’s beard products. Today, Beardbrand is a seven-figure business with multiple high selling products of its own and an entire catalog of content that customers gobble up with each new release. On this episode of Up Next in Commerce, Eric tells us how he fortified his brand, and how success in the digital world is all about going beyond offering just a product in a box — it’s about delivering value and the best possible experience to your customers Key Takeaways: Move away from the strict focus on simply selling as much as you can and instead aim to find the ways you can add value to your customers’ lives. That will lead to more loyalty and, in turn, more lifetime sales When you're cash-strapped, you must think of creative ways to grow the business without capital. One way to do that is word-of-mouth — you can't incentivize word-of-mouth. You have to just focus on creating an amazing experience that your customers want to talk about Site speed is more important than other features. Achieving that  means cutting out pop-up ads and other third-party plugins, which data shows often do not provide consistent or meaningful ROI For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone. Welcome back to Up Next in Commerce. I'm your host, Stephanie Postles. Today, we have Eric Bandholz on the show, founder of Beardbrand. Eric, welcome. Eric: What is going on, Stephanie? Stephanie: Hey, hey. Thanks for hopping on here. Eric: Yeah. I'm excited for our conversation. It's going to be a lot of fun. Stephanie: Me, too. You are a true brand. You're rocking an awesome beard. Just what I expected when I was hoping to see you on video. I'm like, "He better have an epic beard, or this conversation won't go well." Eric: Well, it was funny because, actually, I shaved it all off in December, the beginning of December, of last year. That was kind of a big deal for us. That was the first time I shaved my beard completely off. Stephanie: Oh, man. Eric: She's like, "[crosstalk 00:00:44] your beard," or something like that. Stephanie: How many customers did you lose when you did that? Eric: Well, I'd like to think that we actually added a lot of customers, because Beardbrand is not about the beard. It's about the man behind the beard. We kind of support a guy's right to grow his beard as much as his right to shave it off. I really wanted to make that point, especially today, with a lot of our competitors challenging people's masculinity by not having facial hair. We want to kind of say facial hair doesn't matter at all. It's just a style. Stephanie: Cool. Eric: We did some YouTube ads on it as well, which was a lot of fun to do. Stephanie: Awesome. I'd love to dive into the background of how you started Beard Brand and the story behind that. Eric: We're in business, I think it's got to be, eight years now we launched. Stephanie: Wow, congrats. Eric: We launched in 2012 after I had grown a beard out for about a year. What happened is, at that time, I was trying to do this graphic design business or design business, and I would go to networking events and everyone would call me Duck Dynasty or ZZ Top or Grizzly Adams. Those are super cool dudes. They've got epic stories as well. As an individual, I don't identify as those kind of guys. I've got the softest hands you could ever imagine. I never touched an axe. I ended up attending this event where I met other dudes like me who are other entrepreneurs and designers and doctors and lawyers and dads. I realized there's this whole community of guys that do not fit the traditional stereotype of a bearded guy. That was the inspiration to kind of call myself an urban beardsman. Stephanie: I like it. Eric: Beardbrand was going to be the community to unite urban beardsmen and give them the tools they needed to feel confident about rocking a beard. To us, the tools don't mean just the grooming products. They mean, videos. They mean blog posts. They mean style inspiration. They mean community. Over the past eight years, we've been rolling all that out. We've gotten an epic blog and a YouTube channel with over a million and a half subscribers. We've got a private community where we connect with people. We've put on conferences for our customers to be able to connect in person. We've really worked hard to support our audiences, support our customers. I've got two business partners. We're completely bootstrapped. We have no debt. We have no outside funding. We've been able to grow to a nice size seven-figure business. Stephanie: That's amazing. Congrats on all those YouTube followers. How do you think about utilizing your content to sell your products? Was that an idea and a strategy from the beginning, or was it more organic, where you started on YouTube, and then you're like, "Well, now, we have all these followers, we should launch a product as well?" Eric: Yeah, if we'll hop in our time machine a little bit more. We launched 2012 as a blog, a Tumblr page, which I don't think anyone's ever heard the word, "Tumblr," five years [crosstalk 00:03:53]. Stephanie: Long time. Eric: We had a Tumblr page. Then, we also had our YouTube channel. This time, it was just me, as kind of a side project. I'll make a couple of posts on the blog. Then, I would just re-blog some things on Tumblr to make it look active. I think I did six videos on YouTube. It's not like, in that first year, we really built this thriving community. I think we had 300 subscribers on YouTube and just a couple of thousand visitors to our blog. It was enough that a reporter from the New York Times saw the blog and kind of quoted me as an expert. Stephanie: That's awesome. Eric: We utilized that opportunity. I convinced two of my friends to go into business with me, and said, "Hey, why don't we turn this blog into an e-commerce store?" We found a product. We started reselling it. We literally launched the website a day before the New York Times article went live- Stephanie: Wow, perfect timing. Eric: [crosstalk] a couple of days. That was kind of the spark to the business to really give us the energy to continue. Then, I had the vision that Beardbrand, the Urban Beardsman, is going to be like how Lululemon is to people for yoga or Vans shoes is to skaters. Beardbrand and the Urban Beardsman was we're going to serve these urban beardsmen. I always visualize that as apparel or accessories or clothes. I really didn't have the industry knowledge to be able to do that, and the margins are so tight on there, and some seasonality that we found grooming products was going to be that product that united the community. Eric: After, I guess, a year or two of failure after failure after failure of trying to get apparel up and accessories up, we finally admitted that we're a grooming company. For us, the content that we've created was more of not to drive sales. The products we have allow us to share our word more. We sell products as a way to kind of expand our voice and to grow our content, not as a way to create content to sell products. I think we're one of the companies that kind of view it a little bit differently. Stephanie: Got it. How do you utilize newsletters and reaching your subscribers once you have them or engaging with buyers or prospective buyers? I think I've read about some newsletter strategy that you have from day one, everyone kind of starts out in the same place to go on the journey with you. Is that still accurate? Eric: Yeah. We utilize Klaviyo to, I think they call it flows, where you have these series of emails that you send out when people join your email list. We've launched that, I think, in 2015. That's been really good. When you think about building a business, as much as you can automate and build systems and processes, then the more you're going to be able to scale your business and the more traction you're going to be able to gain. Eric: This series that we opened up with is really like an education series. I think it's a 5 or 10-part series where we teach them how to care for their beards, teach them how to care for their hair. A lot of guys still don't know how to shampoo and condition your hair. Basics like that where, honestly, they've been doing it wrong, but there's opportunity for them to improve their techniques and, ultimately, get better outcome through their journey. That's been big for us. Then, at the end of the flow, we give them a little thank you product, or free shipping, or something like that for taking the time to invest in themselves. Stephanie: Got it? Are there any best practices you would recommend other e-commerce sites when it comes to utilizing that newsletter or where you're like, "Conversions were high when we did this," or, "They were lower when we did this," or, "That thank you product really does help drive future sales," any insights around that? Eric: Yeah. A couple of things that we've found that work over the years is we have a product that is not available on our navigation. It's kind of a hidden kit that is only available to people who join our newsletter. Stephanie: Interesting. Eric: The retail value of that kit is $50. We give them a pretty aggressive price point to be able to get on board. It's kind of like a tester kit, sample kit, so they get exposure to a lot of our products. We found that that works really well because we can say, "Hey, get this tester kit, try all of our products, use these products as you're learning about the things that we're telling you, then, in two weeks or a month or whenever, when you go through the products and look to re-up them." We found that that works really well at getting people into the ecosystem and trying our products. Stephanie: Very cool. Eric: What other best practices do I have? For us, it's so much about content. I think a lot of people really err towards sales and discounts and buy from us and chest thumping. That's really not our style. I would challenge people out there to think about how you can bring value to your audience's lives. Then, if you bring enough value to their lives, then, kind of the whole Buddhism karma thing, it will come back to you. People will end up buying from you. We kind of have that outlook on the world, that if you do good things, good things will come back to you. Stephanie: Love that. How do you think about your buyer experience and making that personalized and unique to all your customers as they come in? Eric: We've invested a fair amount into our packaging to our products. The unboxing experience is nice. We use nicer primary packaging, which is going to be your bottles and your labels and your caps and all that. Then, we use nicer secondary packaging as well. When they actually get the boxes and they open it, it's pretty nice. In addition to that, we're working with our own 3PL or a third-party logistics, our own fulfillment center. We make sure that we work really closely with them that they wrap it kind of to our specifications. There's a nice little unboxing experience, a little bit of tissue paper, and a Beardbrand sticker. Then, we have what's called a thank you kit. Within this thank you kit, we have a little booklet. The booklet usually changes every quarter. For instance, one quarter, it was a book of reminders, which are kind of my nine reminders that I tell myself in life as I face adversity. Stephanie: That's great. Eric: Daily planning. It's all tied around our core message or our tagline, which is keep on growing. We're trying to, again, bring more value. You buy from us and, not only did you get great products, but we brought you a little more value outside of what the products can do. Hopefully, by delivering this experience, we can grow through word-of-mouth and loyalty and customers who want to stick around, rather than kind of going on to the next hot thing. Stephanie: I was just going to say I could see that adding to that viral experience by giving people those little presents that are really fun to share, then, just engaging with more customers because of that. It's really interesting to hear about. Eric: I'll tell you this. If you're trying to build a bootstrap company, the reality is you've got more time than money. When you're cash-strapped, you've got to think of creative ways to be able to grow the business without capital. One way to do that is word-of-mouth. You can't incentivize word-of-mouth. You have to really just truly focus on such an amazing experience that your customers want to talk about it. When you have that mentality, not only is it healthy for your business, but it's going to be healthy for your growth. It's just kind of a win-win, and the world's a better place because you're bringing that much value to the customers. Stephanie: I completely agree. Are there any success stories or big failures that you've had come from trying to generate that word-of-mouth and getting people to spread the word? Any advice around that? Eric: It's actually not a metric that we really track or keep an eye on. It's just more of a philosophy internally of just being customer first. I think, to a certain degree, you do have to integrate data. We used to include a little sample of products for people. We found that those samples weren't driving any additional sales of those products in a significant way. When you look at that, you're like, "Well, are you actually bringing value to customers if you're giving them something for free that, maybe, they didn't want or they didn't want need? Stephanie: How do you track that, or how did you know that people weren't really using it or that wasn't helping drive sales? Eric: We would send a beard wash, a little sample, a one-ounce container. Then, we would look at if there's any increase in sales of beard wash. Your data is always going to be muddy, especially when you're a company that's our size and really small. We fundamentally can't get the data. You do have to go off of a certain gap. You have to also look at, "Well, every sample is costing us," let's say, it's $1. Every order is going out, five orders is $5,000 a month. Then, if we're not seeing a boost of really $10,000 in sales to justify the cost of that, then the margin and the future order, then, you're not building a sustainable practice. Again, as a bootstrap company, you do have to think about your marketing efforts being sustainable and being able to exist on their own for a long time. Stephanie: How do you think about creating these marketing campaigns, whether it's YouTube videos? How much do you guys put out per day or per week? To me, that feels like it could be not sustainable if you don't have the right team in place, the right video crew. Especially right now, I'm thinking everything with COVID-19. Has it been hard to keep that content going out and recording the videos and launching them on YouTube and everything? Is it still pretty good, because it's a remote team doing that? Eric: It's been a really long, hard journey. To the listeners out there who are hearing our story now, eight years in is like we've had eight years to build these processes and systems and relationships. You're not going to be able to do all the things that we've done on day one. We're still cranking out about six videos a week. We've been able to do that by leveraging multiple personalities, just like you guys have multiple shows. We're kind of the same thing. It's not all on my shoulders, and worrying about me getting burnt out. Eric: We have four different regulars on our smaller channel called the Beardbrand Alliance. Then, we have, probably, maybe 4 to 10 barbers who will hit on to do these kind of barbershops style videos. We've been able to really spread the burden of the YouTube channel. Then, we have an in-house video editor who is constantly video editing. He's a machine. Then, in addition to creating these YouTube videos, we do a fair amount of advertising in the video form as well. We do have video editing handled by our ad person as well, our advertising coordinator. She'll be cranking out content that way as well. Video is great, man. I would highly suggest anyone listening that if you invest in video, you could have a pretty good competitive advantage in the marketplace. Stephanie: I completely agree. Video is where it's at. How do you make sure that your videos and your content is found? A lot of people create some really awesome stuff and then be like, "Now what? I've only had one view on it," or, "I don't know how to get people to view this video, and then take the action that I want afterwards, which is, probably, buying one of the products that I'm highlighting?" Eric: There's two answers to that. One answer is you pay for it. Really expensive, but if the content is truly remarkable, for instance, when I shaved my beard off, we filmed it. We created a 45-second ad on YouTube. To get exposure on YouTube through their advertising system, if the video is engaging, it's extremely cheap. I think we're paying a third of a penny per view. Stephanie: Yeah, that's cheap. Eric: A million impressions was, I don't have the calculator in front of me, what does that look like? Stephanie: Something great. Eric: Yeah. It's astronomically inexpensive. At the same time, you may not be targeting the right people. Now, organically, I think YouTube is going to be the platform to go, because of how they recommend videos. It's a little more evergreen than Facebook. There's certainly opportunity on Facebook and Instagram, but I'm not as strong on how to perform there. It comes down to, in the early days, the reality is no one's going to watch your content. You think that sucks, but the reality is it's awesome. Maybe, you'll have one person or two people or 10 people watch it. Then, you'll get a couple of comments. Well, you'll use those comments to get your content better and better and better. Then, by the time you've built a larger audience, you've kind of figured a lot of these things out, so you're not really damaging your audience. You think what you create is great, but the reality is it's not. Stephanie: I agree. Eric: [crosstalk] will be shared. By creating and by doing, you get the hang of it, you get more natural in front of the camera, or you get more natural on the editing process and telling the story. As you learn, it compounds on itself. If you're thinking about getting into organic video on YouTube, then plan on having, really, 20 or 50 videos that you want to produce before you really even see any kind of traction. I think it took us three years before we got 10,000 subscribers. Then, again, it compounds and you learn and create more content. You create more content faster that's more in line with what people want. Then, all of a sudden, we're able to grow to daily content and getting 10,000 subscribers a month. It takes time and it takes learning. There's a lot of insights in YouTube that you'll need to learn as well. Stephanie: I think it's really good as a reminder to kind of detach yourself from the content, because when you put something out there, it's like, "It's my baby. That was my best one yet." I remember when we were starting our company, the first couple of episodes we did on Mission Daily, Chad and myself, it didn't get any downloads. It's a brand new podcast. No one had heard about it. We didn't know how to grow the podcast at that point. I remember thinking, "That was my best episode yet. I'll never be able to do something that good again." Now, I look back on it. I'm like, "I'm very glad no one was listening to those episodes because they were not good and the audio wasn't great." It's just a really good reminder to put stuff out there more in the learning phase. Then, eventually, you can move into the really trying to find those subscribers and followers, once you get to the point where you're a bit more experienced and you've tried a bunch of things out. I love that. Eric: Yeah. So much of it is just the process, for a podcast, making sure you can line up those guests and you can post it early. That's hard work. It's easy to get the first one done, or maybe, the first couple and queue it up, but to also record and organize and plan is a very big challenge. Those are the things that you'll be solving when your audience is small. Then, as you solve those, that allows you to grow your audience. Stephanie: I agree. When it comes to solving problems when you're small, when you got the visibility from, I think, you said New York Times, and I think I read Shark Tank, when you got that visibility, were you ready? Was your website ready, your product ready, your fulfillment strategy ready? How did that go when you got those bumps in visitors? Eric: New York Times drove about $900 of sales. Stephanie: That's huge, just kidding. Eric: It actually is. I think we had $100 worth of product. It was nine times our inventory. Fortunately, we were able to solve all that. You have a lot of growing pains, I think. This is my first successful business. I had no relationships. We didn't know where to get our wooden boxes made. We always dealt with supply chain issues. Really, the first two years, as we were growing rapidly, it was just always like a fire was being put out. Then, eventually, we moved to quarterly planning, which has helped significantly in managing our inventory. Stephanie: What was the Shark Tank experience like? I haven't talked to anyone who's been on there yet. Eric: Oh, no. I'm your first breaking your show. Stephanie: Yeah, you're my first. Eric: That's virginity. This was 2014, I believe. Yeah, it's got to be 2014. Halloween 2014 is when the episode aired. A lot of things may have changed since that time. I know Shark Tank was really popular at that time. A lot of people were watching it. It's a very stressful process, because during the whole campaign, not only 80% of the people who go through the whole process are going to end up on the show. You could end up investing a lot of energy, a lot of time. You could pay a lot of money to build out this fancy display case. You could fly out there, step away from the operational needs of your business in a time where your business really needs this stuff. Then, do all that and not make it there. Eric: We always knew there is a good chance that we didn't make it there. Subsequently, we didn't put too many resources into Shark Tank. We kept our display stand, I think, we paid $300 to rent some furniture. Then, we put out some products there. It's just me going on show. It wasn't my business partners, so they could kind of focus on building the business and I just kind of focused on the Shark Tank pitch and stuff like that. Then, you get up there and it's stressful, not just because of pitching to the Sharks, which is how they make the show seem, but also knowing that whatever you do is recorded in front of seven million people. If you make a mistake, you're like, "Seven million people want to know about that." Stephanie: It's replayed over and over again, and reruns. Eric: Yeah. And, fortunately for us, I feel like Shark Tank, they did a pretty accurate representation of how I felt the conversation was. They're cutting down 45 minutes to seven minutes. They're trying to craft a story in seven minutes. Then, the hard part is all five of those sharks, they talk to you all at once and you don't know that on the show coming in. They all ask you a question right at the same time. When you see the people pitching and they're looking all over the place, it's just because five people are talking at once and they're just trying to figure out who to talk to. Stephanie: Wow. Sounds very intimidating. I do love Shark Tank, though. I hope to try and find your episode and see if I can watch it. Eric: Yeah, do it. It was a fun experience. It was like how your heart can race and go on through a roller coaster. It was really that. The whole time, it's just like the adrenaline is pumping. I'm not very good with words. I'm kind of dyslexic. I'm just hoping I'm not saying anything too stupid. I think it was a great experience all over. I think what they're doing for entrepreneurs is great, too. Stephanie: I completely agree. In early days, were you completely selling on your website? How much of it was selling direct to consumer versus wholesale, versus, maybe, utilizing Amazon would your sales strategy look with your brand? Eric: We've done a little bit of everything. We started off direct to consumer. We actually started off, as I said, as a simply an e-commerce retailer. Another people's products in the early days, until we're able to develop our own products. As we were able to get traction, we had passively, companies like barber shops and salons and pharmacists who would want to sell our products. We would kind of sell to these smaller retailers. It was never a core focus of us to bring on wholesale retailers. Eric: Then, we would get on the Amazon. This was the early days of Amazon. Hindsight is 2020. We probably missed a fair amount of opportunity on there. We really always focused on selling on Beardbrand.com. Amazon was never more than 10% of our sales. After a couple of years, we ended up pulling off of Amazon completely. You can't get our products on Amazon now. That's been a great decision for us. Then, we also brought in Target as one of our wholesalers. That happened 2018. Today, we're about half the retail and half direct on Amazon, and on any other market. Stephanie: Very cool. How do you think about separating yourself from your competitors? Not that I watched the beard space often. I don't have a beard that I know of, but I have seen a lot of beard oils coming on the market and just things focused around that. How do you separate yourself from the competitors, especially since you're an e-commerce site and you don't have a bunch of retail locations or not in a ton of places? How do you show that value on how it's different from other products? Eric: The reality is, you're always going to have a competition. If you have no competitors, then your competition is ignorance. We've kind of always embraced competitors and knowing that we're going to have competition in the sense that it's going to force us to elevate our game and provide such an amazing experience to our customers, that they'll have no option other than to go with us because we are the best. With that mentality, we've also come to terms with certain things, like we're not going to be the low price product on the marketplace. If that's the game you want, then we're not going to be a good fit for you. Eric: We try to be really clear about the value that we bring and the things that, maybe, we're not great at. There's always going to be trade off. To us, I think we do a great job because we bring all that value to our customers. Like we talked about earlier in the show, the content marketing, the education, the blog articles, the email flows, the YouTube videos, the customer service experience, the unboxing experience, I think, all of those things are what makes Beardbrand a different company and why someone would want to buy from us. If they're just some dude who doesn't really care and they just want whatever's cheap, then Beardbrand probably isn't going to be the best product for them. Stephanie: I like that idea of being upfront with, "Here's what we sell. If you don't want quality, then, maybe, go somewhere else to find something different." Do you market differently based on that? Eric: To be fair, there's other quality products out there as well. I don't think there's quality products out there that also do the education, that also do the packaging, that also do the customer experience. There's so much more to a business than what's in the package or what's in the box? I think a lot of companies get so focused on their product. Anyone can rip off your product. They can exactly copy your product. They can come down to an exact tee. Then, if that's all you're standing on, what do you have there? Then, it becomes a race to the bottom for the price. Eric: When you build a business, you have to think beyond your product. You have to think about, "How can I really bring value to my customers that is beyond the product?" The product alone is not going to do it. Stephanie: Got it. I love that. How do you think about building better business models for other e-commerce companies? I was looking at, I think, on Twitter, you had an experience with West Elm. I guess they had marked down a table. You kind of went through how e-commerce companies need to figure out how to develop better business models. What is your advice around that? Maybe, you can highlight that experience a bit, because I didn't read the whole thread. Eric: Yeah. A little background story. I bought that table, that table I'm actually using for my podcast studio. 25 days later, they put on a sale where I could get the exact same table, but it cost me 75 days, or excuse me, $75 less. As a consumer, that's kind of frustrating, because you kind of feel like an idiot for not waiting out. I would have waited 25 days to save 75 bucks. Personally, I don't think that's a good experience. I recognize they're doing sales, they're doing weekly sales, and some sales are better than others. To me, I feel like, have some kind of policy in place where, within a certain time frame, whatever you feel is appropriate: two weeks, a month, two months, whatever, that you can guarantee the offer that you're giving to them. Eric: It doesn't even have to be a money back guarantee. It could be a store credit guarantee. Then, I think that's going to encourage a lot more confidence in the consumers. Also, consumers will be more likely to buy from them again, because if you have the alternative where you're just like, "I know you screwed; you missed out on this one; you already bought it," then, it's like, "Well, next time, I'm just really going to wait. I'm just going to wait until I know there's an incredible deal," or, "I'm just not going to buy at all because I don't want to feel like I want to be made a fool again." Eric: You run the risk if you're running sales all the time and they're not the exact same sale. Not everyone will feel this, but some people will subconsciously be feeling this. There's quick and easy ways to really just guarantee the experience about it. I don't want to tell people how to run their business and their policy. I'm not mad at them. I'm just kind of calling them out that I think they could do better. Then, to be fair, West Elm reached out to me on Twitter and they offered me store credit. Stephanie: That's nice. Eric: You don't want to have to really fight and argue for that. You just want them to make it right. Stephanie: I think that's a good point, though. Also, that big brands are looking to smaller companies and the individual consumer to kind of learn from. That's a really good point of making the consumer feel good after a purchase and not having buyer's remorse. I've definitely had that experience before of buying something and then seeing a discount afterwards, and then waiting the next time, and then there's no more inventory. Then, I just never go back again. Those little moments definitely matter. Eric: Well, then you think about, the whole West Elm experience for me is, I couldn't do a live chat or email them about it. I had to call them. Then, I called them and I was on hold for 25 minutes. Then, after 25 minutes, they pretty much told me I could ship the thing back and then buy a new one, but shipping would not be reimbursed. Financially, it wasn't going to make sense. It's like, "Okay, this is how you're going to do it." Then, as a small company, you think that these large companies have all the advantages because they can buy in bulk and get better prices. Well, a lot of people don't buy based on products. They buy because they want to be able to reach out to you and talk with real person, not be on hold for 25 minutes. Those are the things that I want you to think about as you build your business, how you can compete with Amazon and how you can compete with West Elm and Walmart and these giant companies out there. Stephanie: I love that. What's one thing that you wish online sellers would start and stop doing? I'm asking you this question because I see you're big in the e-commerce community, always talking and highlighting different e-commerce stores. You've probably seen a lot of best practices that sellers do, and some things are like, "You should just stop. That's not good." Eric: Going back, I don't want to tell anyone how to run their business. There's a lot of ways to build a business. It kind of comes down to who your audience is and what they're okay with. A couple of things that we've always avoided is we don't want to do pop-ups. There's no pop-ups. There's no tricks. There's no immediate discounts. One of the things that is a pet peeve of mine is, "Here's a pop-up. Do you want to save 10% on your next order?" Then, they click x or, "Close out of this if you don't want to save money," something kind of condescending like that; or, with the little spin wheel. I think a lot of these has become a little hokey. Eric: The people selling those software as a service thing always claim that they work. We've actually cut a significant amount of our third party plugins, just because it made our websites so bloated. Stephanie: I was reading about that, how quick were you able to get your website down? I think I saw four seconds. Eric: Oh, my god. We were doing a speed test on our old website. The homepage on the desktop, I think it would have been in the 40 range score. Then, I think the mobile side would have been in the 20 to 25 range, the score [crosstalk 00:34:34]. Then, we essentially rolled out a new website template, a new website theme, killed all the third-party plugins. The new speed is now around 77 for the desktop and around 40 or 45 for the mobile. Stephanie: That's great. Eric: I don't know what that is in actual load times, but in terms of data, according to Google, it's a significant increase. Some of our blog posts would take 10 seconds to load. We really just went and found the stuff. It wasn't just the theme, too. We had some images that we uploaded, which were two megabytes in size, something ridiculous like that. It's just kind of like eight years into having a business and a lot of people putting their hands into the business, it gets a little you lose sight of things. It's always good to circle back every once in a while. Stephanie: I think doing that audit is really important, because like you said, after many years, people are implementing their own things without thinking about the long-term strategy of it and how it might impact things. I think, web chat is one thing where a lot of websites have the digital chat, but that increases the website's load time by a ton. Maybe, people don't even fully utilize it. They would rather call or send an email. It's good to just do that audit, I'd say, at least yearly. Eric: We had one of those live chats. I think it presented some issues because, sometimes, a little pop-up would block information or block the "Add to Cart" button. Stephanie: Oh, man. They're like, "I'm just trying to buy and you're not letting me." Eric: Exactly. It's just like as templates get uploaded or themes get updated, things get reverted. We killed it. We no longer have that JavaScript burden of loading. Those chat bots are fundamentally the things that slow down your page load speed the most, I've seen. We haven't seen any drop in conversion rates or sales. Then, in addition to that, the alternative, what we did is we just moved to a phone number that people can text. I think what we're getting is people who are more serious about needing advice rather than just kind of casual looky-loos who see a little pop-up and they're like, "Oh, yeah, da-da-da-da-da." Stephanie: I that, looky-loos. Eric: That's what my mom calls them. Stephanie: That's good. What metrics are you paying attention to most? You've mentioned conversion rates. Now, we've talked about website speed. Are there a certain set of metrics that you pay the most attention to? Eric: Yeah. I'm like your typical A.D.D. entrepreneur. Being in the details on a daily basis is really hard for me. Everything I do is kind of on an ad hoc basis. When it comes to YouTube, the things that we really look at are our watch time and our click through rate. They're going to be the big indications if a video is going to be successful or not. Then, on our website, really, I'm the top level kind of guy, so I'm looking at revenue. I'm looking at orders. Then, on the ad hoc level, I look at how our blog is converting, then, how our traffic outside of our blog, two of our stores is converting. Then, our page speed has been something that's been a pretty big metric for me, lately. Then, there's so many other more metrics that I should be looking into that I'm fortunate that we have team members who are looking for [crosstalk 00:38:09]- Stephanie: Do that for you. Eric: ... email performance and how those are doing. Stephanie: Is there any themes around either video content that you put out or blog content that you've seen, certain types of videos? Maybe, funny ones convert better or more how-to blog content converts better. Any best practices around releasing content in a strategic way that will actually create a future buyer? Eric: Our strategy is to leverage YouTube's organic growth. To do that, you need to have the viewers want to watch more of your content and stay on YouTube. The strategy isn't really so much of, "Hey, buy this," or, "Be aware of this." It's more of get awareness of the brand. We try to integrate a lot of branding on our videos. We put our taglines on every video, to keep on growing and change the way society views beardsmen. All those call outs in the lower thirds. Then, we try to integrate product placements in our videos as well. It's just bringing awareness to it and not driving people off the YouTube. Eric: Subsequently, when you do that, you're less concerned with any kind of direct sales that you're getting from videos. One great plugin tool that we've used on our Shopify store is called Grapevine. Grapevine allows you to have a simple one-question survey that you put at the end of after they've purchased. We use that to say, "Hey, how did you first hear about us?" We have about 20 different options, from Shark Tank to our YouTube channel to various YouTube personalities. We found that 40% of our customers have first found out about us from YouTube. Eric: Being able to attribute that any particular video, we can kind of segment it a little bit. 18% of it is from our barbershop videos, which was a fair amount. Beyond that, you just kind of have to trust the process. Stephanie: Got it? Do you find influencers in the space? When you're talking about having these barbers do these videos, do you find someone who already has a following? Do you kind of create that following organically through under your brand? Maybe, it's someone that no one would have ever known about, but you just know that they're a great personality to do the video? Eric: A little of both, I would say. One of our most or one of our longest tenured relations, well, we've got a couple of long tenured relationships with influencers, Carlos Costa. We reached out to him back in 2013. He's been with us kind of since then as an influencer for the brand. Then, he's grown to make videos for us. Then, he reached out to Greg Berzinsky, who at that time, I think he had, maybe, 20,000 or 30,000 followers on Instagram. He's a big believer in the brand. Eric: We try to find people who really love your brand, who love the products, who love what we're doing. It's just easier for them to be excited about it. We also try to work with smaller influencers, those who are, maybe, still getting established, or who have a following because they're not influencers. Tobias van Schneider is another one. He's another business owner. He's got other businesses. He's not making money from promoting products. He's more likely to talk about our products and not ask for compensation, which is something that you need as a bootstrap company, to be able to make your dollars go far. Eric: It's been a little bit of that. Then, we have had employees at Beardbrand who are like, "Hey, man. Get on camera. Talk about this. You've got a great beard." They've done that. We've done a little both and have had success and challenges and both processes as well. Stephanie: That's very cool to experiment with all those different types of models. I like the idea of having the employees be the influencer. I know that a lot of companies in Asia are doing this. I haven't seen a lot of companies in the US fully utilizing that model of creating micro-influencers within the company, and then developing their own followings. That's just a nice organic way to do it. Having someone who is an actual expert on the product without being too salesy, because they're not a salesperson. Eric: We try it, too. If you look at our Instagram account, the Beardbrand account is replying to comments, you'll always see Sylvester. He's replying to him. He'll sign his name, or whoever's replying to a comment. On YouTube, they'll sign their name. We're totally in favor of get to know our people, get to know our copywriter, Mike, and get to know our growth marketer, James. Eric: Again, we talked about how you compete with Amazon. Amazon doesn't have a James. They don't have a Mike. They don't have a Lindsey. They don't have a Jordan. They don't have Chandler. But, we have those people. The more we can help them get to know the team. Then, the risk is if you just work with one person within your company, then, that person could hold you hostage or quit or leave or getting a DUI or do something like that. If you have 10 or 20 different people on the regular who you integrate into your content, then, in the natural course of business, as people move on and things change, then, you'll still be able to move forward. Stephanie: In a world where everything is becoming automated and you always know you're talking to bots, I think it's actually nice how certain business models are kind of flipping that. You're mentioning about developing a relationship with the person at the company where you are used to seeing the same name and you kind of are developing an Internet relationship with someone at the company that you trust and grow to love. I like how that model is kind of reversing a bit over the past year. Eric: Sylvester, who I mentioned, that's his full time job, is he runs a community. His responsibility is to build those relationships. He's heading up our private forums. He's putting on these events. He's interacting with people on Twitter and Instagram. As they chat on Twitter, and as they chat on YouTube, and they see the same name over and over again. They start to learn about him. Eric: In our emails, we'll have a photograph of him. We'll talk about him. We'll talk about the style. People will start to trust his input because, obviously, me as the founder, a lot of videos or a lot of views to those videos, a lot of people want to come and talk to me, but I can't interact with 40 people a day and still run the company and have sanity, really. Well, to scale up what I bring, and not only that, Sylvester's got way more incredible style than me. He's a lot more empathetic than me. He's able to really provide these people great advice in a way that I cannot. It brings a lot of joy to me to be able to offer that to our audience, and also, that Sylvester is able to do what he loves. Stephanie: That's really fun. To zoom out a bit, go a little bit higher level, what kind of digital commerce trends are you most excited about that are coming down the pike right now? Eric: Probably, the thing I don't follow too much is the trends. I feel like we just kind of fall into them. SMS is something that a lot of people are talking about, and something that we've actually been doing for a good half a year now. We do it in a way that, I think, most people aren't doing it. Most people see SMS as just another channel to market and throw sales and discounts. That drives consumers crazy. If I see someone marketing to me on SMS, I'm just like, "You're dead to me." How we're using it is as style consulting. You text us, send us a photo. Stephanie: That's good. Eric: SMS is perfect for that because you got your phone there, take a selfie, send it to us, we can tell you where you're trimming your beard, how your neckline is coming in, what your hairline looks like, and what kind of hairstyle will work for you. I think that's an excellent way to use SMS. It's funny. Once we started using SMS that way, the company we work with, Emotive, they actually changed their whole marketing position to be more about style consultants and beauty consultants, and things like that. Stephanie: That's funny. Eric: I want to take full credit for that, but I would like to say we had a little bit of influence in the way that they're selling us on this. I think that's better for the consumer as well to be able to connect with them on a one-to-one kind of consultant basis, rather. Stephanie: How do you make sure they stick with your brand? I can see them, maybe, not having the expertise, like you're talking about, how you're trimming your beard wrong, or what kind of product you need, because of whatever they see in the photo, how do you make sure that they stick with your brand guidelines and make sure they're speaking in the way that you want and they're recommending things correctly and not giving bad advice? Eric: This goes back to our core values, which are freedom, honor, and trust. Part of the hiring process is making sure that we hire people who align with these core values. Then, it's not blind faith with trust, but through experience and interactions. I know Sylvester. I know his style. I see him show up every day in the office and what he's wearing and how he's behaving and how he communicates. It's like, "Dude, man. Go at it. Be yourself." Our brand standard is communicate to our customers in a way that you communicate to your friends. Those no corporate speak, nothing. Eric: If you're a goofy guy, talk goofy. If you're a serious guy, talk serious. Be yourself. You are going to have different experiences. Interacting with Sylvester is going to be different than interacting with Matt. They're two different people. That's totally okay. Stephanie: That's great. Are there any other channels that you're utilizing or looking to utilize over the next couple of years? Eric: For us, our goal has been, again, going back to me being an A.D.D. entrepreneur, you try a little bit of everything. The past two years has been fixing all of my A.D.D. new channels that we've been in. We killed Amazon. We killed selling in the Europe. We've cut marketing channels. It's really how do we get better at the channels we're in? How do we get better at Facebook marketing? How do we get better at Instagram marketing? How do we get better YouTube content? Eric: Like I said, we have a newer, smaller YouTube channel that we're trying to grow and build that awareness. In terms of just completely introducing anything that we've never done before, like TV advertising or radio advertising or podcast advertising, we're going to be staying away from that until we feel like we've completely capitalized on the opportunities of the channels we're currently in. Stephanie: That makes sense. I think killing projects and platforms is a good first step to making sure that you can focus on what's actually working to, then, move into a new channel around the tryout. It sounds like a good strategy to me. Eric: I'll tell you, it sucks, though, when you kill something and then you don't get better at the thing you're supposed to get better at. Stephanie: Yeah, that's a big bummer. Eric: We've done that. Stephanie: That happened a few times? Eric: Yeah. When we pulled out of Europe, Europe was about 20% of our business. We did this March 31st of last year. It was about 20% of our business. The intent was with the new focus of not having to deal with multiple fulfillment centers and different time zones and multiple stores and things like that, that we could get really good at serving our customers. Subsequently, 2019 was a terrible year for us. We weren't able to capture the lost sales that I thought we'd be able to by having more focus. We've had to really analyze. It wasn't so much selling into Europe. That was the thing. I think it was more of the internal structure of our team and kind of red tape that got put in place after seven years of business and systems and processes that kind of built up on itself. We should have taken an axe to all of that, rather than, maybe, potentially taking an axe to the UK channel. Stephanie: Got it. Is there any big initiatives that you undertook that you were like, you talked about internal processes and structures, is there any one thing that led to kind of riding the business back to where you wanted to go after the whole shutting down Europe? Eric: Yeah. Transparently, we had the worst fourth quarter we've ever had. It was a bloodbath. We were just losing a significant amount of cash and just burning through cash. We just had to make hard decisions about the business. When you're hemorrhaging money, you're not profitable, we had to scale back to 15. A leaner team means, "Hey, we're no longer going to have people proofing your work anymore. You're going to have to be responsible for your own work-end. You're no longer going to have someone who's kind of being the quarterback of the marketing team. You have to kind of interact directly with your audience, or your coworkers." By scaling back the team, you were almost, by necessity, forced to cut a lot of that red tape and focus on getting stuff done. Stephanie: Super important. All right. At the end of the interview, we'd like to do a lightning round, which is where I ask you a question and you have under a minute to quickly answer whatever comes to mind. Are you ready, Eric? Eric: I am electrified. Stephanie: Woo-hoo. All right. What's up next on new product launches coming to Beardbrand, if any? Eric: Our big thing is killing scent confusion or ending scent confusion. We want to provide head to toe fragrance and matching products. We don't have anything in your midsection. That's a little hint of a product that will be coming. Stephanie: Fun. I'll have to stay tuned for that. What's up next content or video-wise that you're excited about producing or creating next? Eric: We want to systematize our barbershop and winding in five different barbers and record over the course of a week, which would be a new way for us to perform. I can't wait to do that, but, this whole quarantine has got to end first. Stephanie: That sounds really fun. What's up next on your reading list? Eric: I hate reading. Stephanie: Podcasts, audible, anything? Eric: I hate reading. I'll tell you I just finished the book called Rocket Fuel which talks about integrators and visionaries. It was the one book that I've read over the past year. I'm just going to piggyback off of that one. Stephanie: I don't like it. What's up next on your Netflix queue? Eric: Again, man, I just had a baby five weeks ago. Stephanie: Congrats. Me, too. Eric: Oh, no way. Stephanie: Yeah. I had twins eight weeks ago. Eric: Oh, poor you. Stephanie: Poor us. Eric: It's got to be crazy, right? We're in the quarantine. Stephanie: Yeah. No Netflix for us then, huh? I don't know. I watch Tiger Kings in my off time when they're sleeping. Eric: My answer is a lot of primitive survival type of videos on YouTube. That's my go-to content that I consume. Stephanie: That's great. All right. A little harder one, what's up next for e-commerce pros? Eric: I think there's going to be a move away from Amazon from both a consumer perspective and a seller perspective. I think Amazon is really kind of twisting the screw in a lot of people. There's going to be a little bit of blowback from that. Stephanie: Completely agree, especially with everything going on right now where Amazon's picking what products are essential. I think they just said that they are going to be optimizing for its margins. Instead of showing people, maybe, what they want to find, they're going to be showing people products that have higher margins. I can see that also happening. Eric: They're also neutering a lot of people in the affiliate space where they just literally cut their commissions in half. Stephanie: That's not good. Eric: [crosstalk 00:54:51]. Stephanie: Well, it sounds a good prediction, then. Eric: Yeah. Less people will be pointing links to Amazon, I think. Stephanie: All right. Any final words of advice or wisdom, Eric, that you want to share before we hop off? Eric: The big thing I always like to tell people is, in life you always have doubts and questions about what you need to do. The reality is you need to just go out there, execute, and do it. Action, a lot of times, is better than no action. Just go out there. You know what you need to do. Go and get it done. Stephanie: Yes, do it. All right. Thanks so much for coming on the show, Eric. It was a blast. See you soon. Eric: My pleasure.  

The alcohol industry is worth more than $250 billion in the United States, but the bulk of that money is being raked in by the biggest corporations and distributors with very little room for independents to break in. But Haus has found a way to be a disruptor. On this episode of Up Next in Commerce, Haus founder Helena Price Hambrecht hopped into her recording studio (AKA her car outside the Haus warehouse) to explain how her small aperitif company has taken advantage of deep industry knowledge, organic growth, and the complete ownership of the supply chain to build an Ecommerce-based alcohol experience that the younger generation is embracing.  3 Takeaways: Adding educational elements to every touchpoint is key to helping customers get the most out of products  Now is the time to invest heavily in the product because it is only with a good product that you can have truly excellent organic growth There are risks involved with being a fully vertical company, but the reward is the ability to be nimble, have a laser-focus on product development, and allow the ability to adjust to supply chain curveballs with ease For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Stephanie: Welcome everyone to another episode of Up Next in Commerce. This is Stephanie Postles. And today we're joined by Helena Price Hambrecht founder at Haus. Helena, should we call this a happy hour episode even though it's only 11:00 AM. Helena: Every hour it can be a happy hour. Stephanie: I think so too. So tell us a little bit about Haus. I was looking into it and it looks like a really fun brand and it already was getting me excited with some of the new products you were launching. I think one of them was called Lemon Lavender that, like I said, I was ready to order at 11:00 AM. So I'd love for you to detail a bit about your company, and your background, and how you started it. Helena: Yeah, so Haus is an alcohol company. We launched with me and my husband. We co-founded it together. His name's Woody. We live on a farm in Sonoma County and we joke that it's very much the product of a techie marrying a wine maker. And our goal is to create the next portfolio of alcohol products that reflect how our generation drinks and what they care about in food and beverage. Stephanie: Very cool. And how is Haus different from other spirits brands or liquor brands or wine? Helena: Oh God, where do I begin? I think it's interesting because most people don't realize that alcohol can be better than it is. Right? I think alcohol has gotten a pass for a long time because it's a vice. And I think people can just assume, "Well, it's bad for me. So doesn't ultimately matter what's in it because it's just bad." And corporate alcohol has kind of run with that for a long time. So a lot of the products that you're drinking are worse than you think. You're feeling bad, you're feeling hung over when you drink and you think it's just because it's alcohol, but alcohol is only a tiny piece of that puzzle. Helena: In reality, corporate alcohol is made with things that you just wouldn't believe, take wine for instance. You can intervene in your wine production with milk, and eggs, and clay, and fish bladders, and artificial flavors, and tubs of processed sugar. You can engineer it to taste good, but it's going to make you feel horrible. It can be made with grapes that are full of pesticides. Your favorite whiskey might be full of petroleum-based, caramel coloring. It's kind of a racket. And we're a generation that's cared about where our food comes from, where our beauty products come from, is it organic? Is it locally processed? Is it responsibly made? For some reason, alcohol has gotten a pass and we wanted to raise the bar. So we approach things very, very differently. Stephanie: Very cool. So it seems it'd be very difficult getting into the alcohol industry. I was reading a little bit about the three tier system where distributors and bartenders are the gatekeepers and they tell you what to drink. How did you have the courage to get into that industry? And then how were you actually able to become the only direct consumer spirits brand? Helena: Yeah, so I mean, it's really Woody, right? I used to work in alcohol industry, but as a bartender. I wasn't really deep in the production side of it until I met Woody. And Woody is a great farmer. He's been running the family's grape farm for the last decade and he also makes wine, and was making aperitifs when I met him before Haus. And he was doing everything right as a independent wine and spirits guy. His products were in the best bars and restaurants in America. They were in the best cocktails in America. Helena: But because of the three tier system, which is pretty much controlled by corporations, you don't have a lot of leverage as an independent brand. So you don't really have control over how your product is used and Woody would just find that he was a little sprinkle in a fancy 10 ingredient cocktail. So while he could name drop his full accounts, he wasn't moving any product, the drinker had no idea who he was. I was observing this and thinking, "Man, this is not a great way to build an independent brand." And the more and more I got to know the industry, the more I got to know the three tier system, which it's a hundred year old prohibition era laws. Helena: For those who don't know the tiers, which I would assume you don't, it's just distributors, producers, and retailers. So if you're a producer, you have to go through a distributor to get your product into bars and restaurants. And then bars, and restaurants, and retailers then sell to the drinker. Unfortunately, the way the laws have been designed, it's actually allowed corporations to just be in cahoots with distributors. So corporations ultimately decide what you're drinking and it's why you're still drinking Jack Daniels, and Gregger's, and Absolut and you've not really heard of any other brands that are playing in the liquor space. Helena: So for us, we didn't know that there was a way to go around the system. And I started doing research because I was curious about just how our generation was drinking, what were we looking for out of alcohol? Because I was certainly looking for a better alcohol experience. And I saw a huge opportunity. Like I said earlier, millennials are looking for better made products. They care about their health, and their image, and authenticity, and transparency, and convenience. And when you looked at what alcohol was doing, it was almost nothing. So I was really complaining to Woody about this, saying, "Gosh, what a shame that you can't build independent brand, like a Glossier or an Everlane of alcohol because of the three tier system and you have to go through the distributors." And that's when I said, "Actually, there's a loophole that I never thought about until this moment." Stephanie: Dun, dun, dnn. Helena: Yeah. If you're an aperitif, you're typically in the liquor category. You're federally regulated like a liquor. You can't sell direct to consumer. You can't go online, but if you're under 24% alcohol and you're made mostly of grapes, which is a loophole you would only know about if you're a great farmer who makes great base aperitifs, you can go around the loss, you can go direct to consumer, you can sell online. And it just had never occurred to anyone to use that loophole to build a direct to consumer alcohol company. Stephanie: So no one else in the industry found that out until you guys did and you're the first ones to actually be able to sell to consumers directly because you leveraged that loophole? Helena: Yeah. And you know what? We thought that we'd stumbled upon a treasure and that, "Oh my gosh, when other people find out about this loophole, we're going to have competition, which would be fine." But when we were pitching it to folks in the alcohol industry, they thought it was a stupid idea. They could not understand why we would want to go direct and why we would sell online. People are so used to doing things the way that they've been done forever and they just couldn't process that we thought that we could just go on the internet and create a brand and sell something to the drinker because it had never been done before. Over and over and over again people were just like, "Why would you do that? That's stupid." Stephanie: Yeah. That's awesome. And this loophole also lets you guys have a brick and mortar store, right? Whereas you would never see a Jack Daniels store on the streets of New York. But you all could open one if you wanted it to, correct? Helena: Exactly. Yeah. We could open two different brick and mortars in California today. It's state by state. Every state has different laws and it's still kind of a nightmare to navigate. But yeah, we can do so many things that other brands and liquor space can't do. We can be sold without a liquor license. We can sell online, we can do a wine club style subscription service. There's just this whole world that opens up to us. And we were the only people that decided to try it. Stephanie: That's amazing. So what was the first steps looking like when you started Haus and you were thinking about building the website and the experience, like the buyer experience? How do you think through designing that process for consumers who have never done that before? Helena: Yeah, and that was the challenge, right? It's like as a brand, one thing we had going for us was we weren't just two people in class who had an idea and had to create a backstory. The backstory was there, right? We were people trying to solve our own problem and a problem that everyone we knew was having and that was great. And we live on the farm and we make it ourselves, and all of that's hopeful as a brand. But the real challenge that we had was how do we take this type of liquor aperitifs, which has been in Europe for over a century ... it's a style of drinking that's very common in other parts of the world, but is relatively unknown in America. How do we take this type of liquor and make it mainstream? Without having to pitch people in person just through the internet, how do we very quickly educate people on what this is, the problem it's solving, convince them to buy it, get them to get their friends together and drink it together? So that was a challenge. Helena: But for us, our goal was to just approach it as education, right? And bake education into as many touch points as possible, not just through copy on the website, but through photography, through editorial, through different touch points post-purchase, in the packaging. It was really about how can we make the most of every single touch point that this customer has with our product so that by the time that they receive it, they deeply understand it and where it lives in their life. Stephanie: Yeah. I could definitely see the difference from your photography versus a lot of other e-commerce companies. I could see that you were teaching the buyer how to enjoy Haus. I think one thing I saw was as you went from page to page, you had a couple images flash showing how it's being enjoyed at the table, sitting on the table with a bunch of friends. It was very different than the typical product images with the white background and no one really having a good time with it. How did you know to utilize that imagery to encourage that buyer behavior to then hopefully spread the word about Haus? Helena: Yeah, that was a very conscious decision. So my background's in brand. Before Haus, I had a production company that did everything from visual brand strategy to producing commercial campaigns including photography. So when we thought about photography for Haus, first things first, I didn't want to do what every other direct to consumer company at the time was doing, which was product on a plain colored backdrop, very simple, very polished, very digital looking. It didn't feel right for us because there was no context, right? Haus isn't supposed to live on a seamless backdrop in a photo studio, Haus is supposed to live at your dinner table. And it just felt like a missed opportunity to show the customer where Haus belongs. Helena: And that type of photography of the product on a plain backdrop, that exists for a reason, right? It performs well in paid. It's very straightforward. People can physically see what they're buying. And, in an era prior to now where paid drove most direct to consumer growth, it makes sense that people use what performs well. But for us wanting to grow organically as much as possible, we didn't care so much about that sort of metric and for us the priority was way more about how can we use this opportunity to just show people exactly what they should be doing with the product. And that's really how we approached it. Stephanie: That's awesome. And are there certain metrics or data and analytics that you look at to see what's performing well and what's not or how do you think about success when it comes to utilizing a different kind of buyer experience? Helena: Yeah, I mean, in the beginning up until December we were 100% growth. And that's hard to measure, right? There's no real way to examine where those customers are coming from. There's not a whole lot you can do with that data, which makes it very daunting for most companies to pursue. Right? Stephanie: And you said a 100% organic growth, right? You cut out there for a second. Helena: Yes. Stephanie: Okay. Got it. Helena: And now we're experimenting with paid and now about 20% of our customers come from paid. But for us, we're still a primarily organic company. So I think for us it was more of a philosophy and some hypothesis around our product and how it could spread, right? Our product is something that is inherently shared, right? If you're having a drink, you're very likely having it with another person, you may be having it with a group of people and that's certainly the customer that we were going before. So for us, we wanted to make sure that the product and the customer experience was so stellar, which sounds common sense, but it's not necessarily, especially when you have limited resources that you have to put into certain buckets. We put everything into product and everything in the customer experience so that when people received that product, they gathered their friends together, they shared it with their friends, they all had an amazing experience together, and then all of those friends went to buy a Haus. So that was this organic flywheel that started taking off. And our growth was through word of mouth. Helena: We also prioritized press quite a bit. My first career was in PR, running comms for startups. So I'm a big fan of working with press to tell your story because, you can tell people what to do all day, but people are going to really listen when someone else tells them to go buy your product and that it's great. And press is also hard to quantify, right? A lot of press doesn't actually tie to purchases. It's more of a long game of having this validation and the customer being able to come to your website and see that the New York Times, or GQ, or Vogue said that you were good. So it's one of those things where a lot of what we pursued in the beginning birthwise was really hard to quantify and it was also kind of long game. So I think it rests outside of the comfort zone of a lot of founders and a lot of growth managers because of that. But it worked so well for us and it continues to work well for us. Stephanie: Yeah, it definitely sounds like it. How do you think about leveraging press? Because when I think about that, it seems like there's a lot of agencies and companies who are ready to do a PR release and tell you that they're going to get you press. But then afterwards you're like, "Oh, what did it really get me?" And a lot of people maybe can't get on the Vogues and the bigger name brand sites like that. How did you pick out strategic places to be seen and found? And how did you even get those relationships to get that press? Helena: Yeah, I mean, it takes time, right? There's plenty of people that I wish were writing about us and they still haven't. But for us, my philosophy since my early '20s when I was doing comms is like you can't expect anything from anybody immediately, right? Because even if the person writes about your beat, even if it's obvious that they would find your product interesting. You just don't know what they're going to be writing about for the next year. And maybe they're not going to be writing about anything where you're particularly relevant and maybe they don't break news, maybe they're writing trend pieces. A lot of the media relationship building that I've done over the last decade and that we continue to do with Haus is about just getting on people's radar and not wanting anything upfront, not being so transactional about it, and just saying hello, sending them some information about Haus or your company, sending them samples of it, any new products as you release them. Helena: There's a lot of parallels I think between media relations, and fundraising for those who have fundraised where building relationships with investors is similar, where a lot of times it's just reaching out over and over, being like, "Hey, hope you're well, remember that thing that we said we were going to do, we did it. Check it out. It's pretty cool." And not expecting anyone to immediately do something about it, whether it's write you a check or write a piece about you. If you have news to share, you can always pitch it and formally ask if they're interested in writing about it. Helena: But I think approaching it more casually and again, really thinking about the long game, helps forge a more authentic relationship as well, where they are people and if they're interested in your space, you probably actually have a lot in common, you could probably be friends. And if you just treat them as a person who's interested in a space that's similar to you, then it's just going to be a much healthier relationship versus only reaching out last minute when you want them to write about you right now. It's just not going to happen. Stephanie: Yeah, that's such great advice. Be persistent, but don't be annoying. So how do you think about selling something on a website that a lot of people want to experience? I know you just mentioned samples. Do you see samples working well to get people to come back and buy? Because I've heard mixed experiences with that from a few of the guests we've had on the show. Some people completely took samples away because it wasn't working. Other people said it worked well. What's your experience with having the buyer be able to try before they go too deep into the buying experience? Helena: Yeah, well, we don't actually do samples for our customers. We have a starter kit that are two smaller bottles of two of our flavors that people can buy. And that's definitely a popular first purchase. I think for us there was a risk to selling smaller form factors direct to consumer, right? Like the margin is lower, it's just not a productive purchase from a business standpoint. But we released those smaller sizes because we saw a behavior where when people would buy even one larger bottle of Haus, they would come back and they'd buy more. Their next purchase would be two bottles or six bottles. So for us, there was that confidence because we had the data that showed that people that bought that first smaller size, they would come back and they would buy something bigger. So that's worked for us. I think if we were losing money on it, we wouldn't do it. But we still make a decent margin on our small sizes. So for us, really the challenge was how can we give people the best idea of what they're going to experience? Helena: And part of that was us being really thorough on the site, just explaining the kind of flavor components, what they can expect, showing the ingredient list, showing the nutrition facts. And then reviews have also been really useful for us where we work with Yoko. And for that it's been great for someone who's on the fence to go and read from 50 people who tried the product and liked it and talk a little bit about their experience. But ultimately, it's still a challenge for us. We're exclusively an online company. This is kind of a great problem to have. It's a problem that most companies want. But when we last looked at our newsletter, 70% of our newsletter subscribers who open our emails, and read our emails, and love the brand, they haven't bought yet a Haus yet. So it's an interesting phenomenon where people like the brand, and they're interested in it, and they're thinking about trying it one day, but they just haven't pulled the trigger. Though what we've seen with COVID, a lot of those people are starting to pull the trigger. Stephanie: Got it. And what are you including in your newsletter because that's unheard of to have a newsletter for a brand where people love the newsletter, but maybe haven't tried it yet. What kind of content are you putting out there that's pulling people in so much and how are you thinking about converting them in the future? Helena: Yeah, I mean, it's nothing crazy, right? It's not like we've built some robust editorial platform. But we share recipes, we share behind the scenes, we share occasionally elaborations that we do with other brands or people in the food and beverage space. It's nothing that's too robust. We haven't put a ton of resources into the editorial side of our business yet, but we are very careful to not be too promotional or too self serving and really make it something that people are going to enjoy looking at and enjoy reading even if they aren't actually drinking Haus right now. Stephanie: Got it. That's awesome. Are there other brands in the e-commerce space that you look to, to either learn from? I know I read that you've described Haus like the Warby Parker of booze, so are there people that you are inspired by, that you test out maybe different website models or AB tests or what are your content that you're releasing that helps iterate that? Helena: Yeah. Oh my gosh, it's so many, right? Like the Warby Parker analogy came from Luxottica outright who Warby ultimately disrupted and Luxottica feels very similar structurally to what you see in the alcohol industry. I mean, Away is one of the kind of OG brand branded did such an incredible job of building a movement and building a community around something that wasn't considered very sexy prior to Away. And they did such a great job with curating content and working with their community on photography and they did such an incredible job. Glossier does an incredible job. I love that they started editorial first and they really focused on building a community that was very, very different than what you saw in the beauty community. And they utilize channels in a very different way than other beauty brands did. And that really came to help them. I think the bottom line is really focusing on creating content that serves the customer and makes them really excited to participate with your brand. And for every brand, that's different. But it's finding that thing that gets your customers really, really energized and engaged. Stephanie: Yeah, I completely agree. Are you focused on a certain demographic or are you trying to pull maybe a demographic who's always been used to going after the name brands, are you trying to also pull them away and try something new? Helena: Yeah, I mean, our initial demographic was a hunch based on us, on our own personal use case and how we came up with Haus. We made it for people who drink quite a bit, and they're out and about, and they're building their careers, and they're networking, and they're at events, and they're catching up with friends, and they're going on dates, and they're around alcohol a lot. Right? Like we're not going for the kiddo person. We're not going for the super, super health nut, we're not going for sugar-free people, we're not going for people who are trying to get sober. We're going for people who love to drink, but they have certain values that they apply to other industries like food, and beauty, and their clothes and they just didn't know that they could have those same standards for alcohol. Right? Helena: And those people, our hunch was that they lived in urban areas, large and midsize cities, they were career focused, they were probably millennial though the age range extends beyond that. Gen Z also exhibits the same kind of behavioral demographics and they're starting to turn 21, definitely early adopter types have some sort of aesthetic sensibility. And we had a hunch that there would be overlaps between us and other direct to consumer brands. And so far that seems to be correct. Stephanie: Yeah, completely agree. So something else that's really interesting about your company is that you guys are a fully vertical company, so you own everything from the production to the distribution. Can you speak a little bit towards how that gives you an advantage when it comes to launching new products and how you even came about thinking like, "I'm going to do everything." Instead of going with a more traditional model of sourcing things. And I mean, you said stuff came from your farm, like the ingredients and whatnot. That's insane from thinking about how other alcohol companies do things. So I'd love to hear a little bit about that. Helena: Yeah. It's not normal for alcohol and it's not normal for direct to consumer, right? Take Warby Parker for instance, who's like the OG in the direct to consumer space. I mean, take most direct to consumer companies. The advantage to being direct to consumer in the beginning was not owning your supply chain and being able to go and work with vendors that you own the brand experience and the purchasing experience and you're able to take a brand and make it a thing. And, and so for us, we wanted to take a very different approach for the most part because we knew how to do it, right? Like we're good at it. We make aperitifs already, we have the warehouse, we have the farm, we have the infrastructure. So we didn't want to outsource that to anybody else. Helena: But we also had a hunch that being fully vertical would give us a huge advantage from a product development standpoint. We could super nimble, we could iterate every day if we wanted to based on customer feedback. We could launch new products quickly, we can kill them quickly. We had a lot of abilities that other companies wouldn't have. And then we would also be prepared for any sort of supply chain curveball that comes our way. Right? The only thing that we don't personally own is making physical bottles. So we always have to make sure that we're prepared and have inventory for an inflection point. But everything else we do ourselves, right? We make it, we bottle it, we ship it. Helena: And so for us, we of course never expected a pandemic sized curve ball, but it was the ultimate test, right? And we're one of the few companies that haven't been impacted at all by the pandemic and we were even able to release a ton of new products during the pandemic. So it's one of these moments where we made some philosophical bets early and we didn't know how exactly it would benefit us, but we had a feeling that it would longterm and it's benefited us in a massive way now. Stephanie: Yeah, that's great. It seems like it's very opposite from what a lot of brands and companies and e-commerce companies are doing right now where everything's about outsource that and only take care of the front end part of it. So it's really nice hearing about someone jumping in and doing the whole process. Are there any learnings, or best practices, or failures you've experienced when setting that up? Helena: Yeah, for sure. I mean we've definitely made some mistakes on the production side, but the beauty of it is if you accidentally leave a hose open and the product pours out all over the floor, you just start over and you make it again. I think for us, the biggest learning curve was the one part of our supply chain that we didn't own, which was bottles. And again, this industry has its own politics. It's pay-to-play, it helps to be owned by a corporation. And so it took us some effort to be taken seriously by a bottle vendor because we were a new brand. We didn't have the backing of Diageo or Pernod. What were they to expect us to do? Right? Even if we were like, "We're going to be big." How are they supposed to believe us? Helena: So we were sold out for most of the first two months of our existence because we just couldn't get bottles. They just wouldn't take us that seriously. And it got to a point where we had to say, "How big of a check do we have to write for you to believe us?" So the downside of that is you have to buy more bottles upfront than you may have wanted to. But again, in a time like this, during a pandemic, we're really happy to have made that. Stephanie: That's great. So when it comes to the pandemic, I saw that you were able to quickly shift where I think your profits were going. Do you want to speak a bit about the initiative that you have going on and how you were able to quickly pivot because you own the entire process and supply chain? Helena: Yeah, the pandemic has been a roller coaster for everybody, us included. In February, we saw that it was calming and potentially already here, which it was. So we had to do worst case scenario planning, right? Like, "Okay, what if the economy bottoms out? What if nobody's buying anything? What if like every direct to consumer company burns to the ground?" So we did a deep dive in our P&L and we cut a lot of costs that kind of felt more like nice to have versus must haves. We luckily didn't have to fire anybody, but we wanted to just make our business very core, very nimble and that ended up being a good decision regardless. Helena: But pretty soon after, our business started growing and that's due in a large part to e-commerce growing, it's due in a large part to alcohol growing. We happened to be the one alcohol company that directly delivers to your door and the press started writing about us because of that. So there were a lot of domino effects from being in this space. And we were also starting to see a lot of efficiencies around paid, so we were putting more money into that. There are a lot of things factoring in, but long story short, we were growing, like our business right now it's up more than 500% than it was in January. Stephanie: Congratulations. It's amazing. Helena: It's crazy. And so for us, obviously that was a huge relief knowing that we didn't have to let anybody go. We could continue building the business. But there was definitely a question of this pandemic is way bigger than us, right? It's something that we're all going through as a society and it feels a little strange to be wholly focused on yourself, especially if you're doing well. And so for us it was really thinking about the rest of our industry, right? We're in food and beverage and not everybody is faring as well. Restaurants in particular, they are in huge trouble. They're a very low margin business. They're a labor of love. They are a beautiful industry, but largely they're traditional, right? And they don't have alternative revenue streams. They're serving only local walk-in patrons, so they're in huge trouble. Helena: And we took a step back to really think about like, "Okay, we could just launch a campaign or something like that." But that didn't feel right. There was too many of those already out in the world and it just felt overwhelming. So we thought like, "We have infrastructure, we have a warehouse, we have a production facility, we have resources, physical resources. How could we use the tools that we have to help others in our industry?" And pretty quickly we realized if we ... obviously we had to test it with them and see if they were into it, but if we made a product for restaurants, like if we made booze with these restaurants, use the chef's vision, the chef could direct it because that's very important to a restaurant. They don't want to promote someone else's group product. Helena: We could make and ship booze for them that's their recipe and we could donate the profits to the restaurant, which is a healthy margin. We could make a significant impact on their business. So we tried it and we got signed on from a bunch of the best chefs in the country, partially because of our connections and connections of our investors and our friends. And now we're making 13 new products this month. And we're sending a lot of money to restaurants. I think at this point, we've probably sent like $80,000 to restaurants and we're still in the preorder phase. So it feels good. Stephanie: That's great. Is this the first time that you've had someone help influence the ingredients to create a new product? Like you're mentioning how the chefs are creating their own. Is this the first time you're trying out this model or have you always had help from the industry when it comes to new products? Helena: No, Woody's done everything himself. So what is this magical man who is such an artist and he has a vision and he's really, really good at making wine and aperitifs. So all the products were his vision and then this is still very much a collaboration, right? It's like these chefs don't have experience making alcohol, so they talk to Woody, they share their vision, right? Like what they would love for it to taste like and ingredients that they would like to feature. It's a very similar collaboration between a chef and their kitchen, right? They give the vision, the kitchen executes it, and it's similar here where Woody can take that vision and then he can play around with the recipe and different combinations of ingredients to get somewhere that he thinks is up to par. Then he sends those samples to the chefs, the chefs give some feedback, whether that's like, "Oh, it could use some more acid." Or, "Maybe a little sweeter." Or, "I'd like to taste more of this particular fruit." And then and then it's done. Stephanie: That's great. Do you see that kind of partnership continuing even after the pandemics done? Because it seems like a really nice way to have like UGC content or alcohol created for you and then creating those partnerships could only help scale all the different products that you have with the help of other people who have a specific idea in mind. And then you have a buyer from the start. Helena: Oh yeah. It's a win-win for everybody, right? It's like these restaurants have a new form of revenue, which is great. It allows them to monetize their audience, which is for the most part national or international. They're just collect revenue from a much, much bigger group than they could four. And we've made these products, they're so good. These are incredible aperitifs. It feels like a new frontier for alcohol in America. It's really exciting. And so for us it's great that we can collaborate with these chefs to make these really unique recipes. So I wouldn't be surprised if we added most of them to our permanent store after the project is over because they're just awesome and this makes sense. It's a win-win. Stephanie: That's really fun. So to zoom out a little bit, go a little higher level, what kind of trends do you see coming to the e-commerce industry or what are you most excited about right now? Helena: Yeah, I mean, I have a feeling that there's going to be a new level of scrutiny applied to direct to consumer, right? This is a real moment of reckoning for a lot of companies where if you can't do business for a month, you have to shut down or you have to lay off a majority of your workforce. It's probably not great that supply chain is so fragmented right now. And I think there's also at the same time a bit of brand fatigue that was already happening prior to the pandemic where there's so many direct to consumer companies being made right now where the founders don't actually have much expertise in the space. Right? They just had the idea, they were able to get venture capital because they're connected in that world, and they were able to launch a company. And they can put all that money into pay it, and they can acquire a bunch of customers. Helena: But the problem with not knowing your space is that you're not able to iterate quickly. And it seems like we're about to enter a world where we just don't know what curve balls we're going to see. Right? Like international trade is a bit testy right now. We may see people become a little bit more nationalistic in terms of supply chain. We don't know. So I think at the very least we're going to see more money going to founder teams that have at least one founder with deep, deep industry experience, whether that's a generational family heritage or whether it's a decade plus of experience in the industry because you at the very least need the connections on that side of things to have leverage, right? You may not have to own it all yourself, but if you don't have any real leverage in that world, then you're toast. So I think that's going to impact a lot of what brands, not just survive right now, but what brands get funded in the future. Stephanie: Yeah, completely agree. It definitely feels like we have been in an environment where it's like just try and create a quick MVP and see if it works and if not, go on to the next one and keep trying until you find one that maybe works. And I think that's a really great point of you should probably have some kind of deep expertise in whatever you're going into. Because one, you have to love it for a long time if you're going to actually follow through with it and being good at something probably means you're going to have a good business as well. Helena: Totally. Yeah. I mean, it's like, of course it goes good when it's good, right? But at the end of the day, it's not just about product market fit. If you don't have real control over your life business and how your product is made, then as soon as a curve ball hits, you realize you're just as fragile as any other business. Stephanie: Got it. Yeah, completely agree. When it comes to someone either launching a new product or building a whole new business, what's one thing that you would suggest for them to try out based on the success that you've had from your store? Helena: I mean, again, it sounds like obvious, but it's not, I would put so much more effort into product than you may feel comfortable with. It's riskier. It takes more resources. But in consumer, I just don't think that MVP is going to cut it anymore. So in a time where paid right now is performing well, but ultimately we're in a postpaid world. We're in a post soft bank high growth venture capital world. People have to start taking organic growth more seriously. And the easiest way to do that is to have a product that's good, and tastes good, and feels good, and looks good. It's one of those things where it feels easy to cut corners up front, but you really only have one chance to make a first impression. And those first impressions, they carry the weight of viral growth. So I would really put more resources into that than you're comfortable with and it'll pay off. Stephanie: Yeah, completely agree. And I saw you all doing that in your unboxing experience. Do you want to talk a little bit about that buying experience and how you thought about creating something that would ... you would make something that would be socially shared potentially, like a pretty box, a pretty bottle? I think you were putting different pamphlets and stuff inside that people actually wanted to share. How did you think about creating an experience that would go viral like that? Helena: Yeah, I mean, it's pretty amazing to watch how much the bottle and the box is shared because we haven't asked anyone to share it ever, and it just keeps getting shared. But again, I think for us it was about like, "Okay, all of these touch points are important to the person." Right? Like they're not just buying an aperitif, they're buying an experience. They're buying even a good website experience. They're buying a good post purchase flow. They're buying a good unboxing experience. They're buying a good bottle. All of those things are just as important in direct to consumer as the actual liquid in the bottle. So for us, we put a lot of effort into the glass bottle. We wanted it to look beautiful in your home. We wanted it to feel good. We wanted it to look really tight. Helena: And we wanted the same with the box, right? Woody has a great relationship with a box maker from his many years in the industry. And we were able to do custom boxes really easily with him. And we just wanted to make something that was very simple that fit into as many homes as possible. And just the point where it was looking beautiful, right? The point wasn't to sell the product because they already bought the product, [inaudible] doesn't need to do that. It really was about looking good and making the customer feel good. Helena: And then with every package there's an editorial that comes in and that's more of that educational component that I was talking about where that's another opportunity. Yes, it costs money to make an editorial pamphlet, but in that pamphlet, the customer can learn about me and Woody, they can learn about the farm, they can learn about what appetites are, the history of them, where they belong in the world, why they exist, they can learn a few ways to make a cocktail with Haus. It's this kind of deep wham bam education right in their face. They didn't have to pursue it. It's just there for them. And by the time that they're done reading it, they have a deep understanding of how to use the product and they feel like they know me and Woody, they feel like they deeply understand where it comes from, and we didn't have to do anything. Right? We just did all the work upfront. Stephanie: Yep. Do you personalize that experience after the first time they buy they might get one type of editorial and then when they come back, do you send a different one and do you keep track of how they're doing like how each editorial or unboxing is performing? Helena: Well, we've started only sending editorials with the first order that people make. But we've found that actually people like, "Oh wait, no, I was going to give this as a gift. I want the editorial." So we're still trying to figure that out. Because there's so many people that gift Haus to other people that we've realized that the first order or the second word doesn't necessarily mean that it's that person's second bottle. It might be someone else's first bottle. Stephanie: Yeah. That's a really good point not to make assumptions like that and also just really great developing that relationship. I mean, if I were to see a picture of you and Woody, and the whole background and history, I would feel like I have a personal connection with you where I would want to come back and buy from you all instead of going to a liquor store to buy something from someone that I don't know. So yeah, that all sounds really smart. Helena: Yeah. I mean, it's me and Woody like Haus is me and Woody and it's a competitive advantage, right? There's very few companies where the founders are physically making the product. So we want you to know us because this is our life's work and we're really proud of what we made. And we want you to know where it comes from because that's important to us, so it works out. Stephanie: Completely agree. All right, and these last few minutes, we do something called a lightning round where you answer the question in a minute or less. Let me know if you're ready and I will start firing them off. Helena: Ready. All right. Stephanie: What's up next for the next product that you're going to be enjoying from Haus? Helena: A summer flavor that was around last year and it's coming back for this year. Stephanie: Ooh. Any hints to the ingredients or what that could be? Helena: It's Rose Rosé. People know. Stephanie: Yeah. I didn't know that sounds delicious. Helena: It's amazing. Stephanie: All right. What's up next on your Netflix queue? Helena: Ooh, probably more cooking documentaries. I can't watch a lot of TV. It stresses me out, but I love cooking shows. Stephanie: Yeah, those are very relaxing. What's up next on your Workday? We heard Woody outside your recording studio, AKA your car that's outside the warehouse. So what's he doing today? Why was he trying to get you to move your car? Helena: Woody is trying to move a bunch of pallets of product. They're making a new batch of Ginger Yuzu right now and they're finishing up some prototypes for the restaurant project. I am going to get off this podcast, answer like a hundred more emails and write a bunch of gift cards for people gifting Haus, and then I'm going to do another interview this afternoon. Stephanie: Very cool. All right. In a slightly harder one, what's up next for e-commerce pros? Helena: Ooh. I think it's taking a big step back and reflecting. That is the most important thing you can do right now. Stephanie: Completely agree. All right, Helena this has been a blast. I can't wait to try Haus. Where can we find you and buy some of your amazing beverages? Helena: You can buy them online at drink.haus. And you can follow along with us on the internet @drinkhaus on Twitter and Instagram. And yeah, we hope to send you some booze soon. It's great for breastfeeding, by the way. Stephanie: Yum, I will have to indulge in that. It sounds perfect for me right now. Helena: Yep. Stephanie: All right. Thanks so much for coming on the show. It's been a blast. Helena: Thank you again. Talk soon.

There are more than eight million dynamic pages that run on Lenovo.com, where the majority of shoppers go to buy their products. It is a massive Ecommerce platform that has to work for more than one billion website visitors per year. Ajit Sivadasan is the Vice President and General Manager of Lenovo, and even though managing those pages is part of his job, what he’s more interested in is making sure that those pages are offering relevant content and an efficient experience to a new generation driving Ecommerce growth. On this episode of Up Next in Commerce, Ajit explains why figuring out what content is relevant to Gen Z will be the driving factor in how successful your Ecommerce platform will be. 3 Takeaways: There is a massive demographic shift happening in the consumer market, so rather than focusing on producing more and more content, companies need to focus on producing content that is relevant to this new audience of digitally-native consumers Customer irritants are data points that matter and constantly change. Constantly addressing those irritants – from delivery time to language on the credit card processing screen – has an impact on consumer satisfaction and your NPS Behavioral economics states that humans are predictable and predictably irrational. Therefore, you have to take this behavior into account in everything from website design to offering comparisons of products as a counterbalance for the fact that humans will deviate to the path of least resistance more often than not For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Stephanie: Hey everyone. This is Stephanie Postles, your host of Up Next In Commerce. Ajit, how's it going? Ajit: Good. Thank you for getting me on the show, Stephanie. Stephanie: Yeah, I'm excited to have you on. So I'd love to hear a little bit about your background at Lenovo. You've been there 15 years, right? Ajit: Close to, yeah. This is my 15th year. Stephanie: So I'm sure a lot has changed since you joined the company back then. Ajit: Yeah. I joined Lenovo in 2006, and came to Lenovo to build a consumer brand online. And obviously, when I joined, we didn't have much of a infrastructure or even sales. We were in a very limited set of countries. We were actually in four countries and we probably had a very small amount of revenue. Since then, obviously, we have scaled the business about 10X on revenues, and profits have grown about 10X. And we have scaled from four countries to 35 countries. And in the process, we have seen several acquisitions. We acquired the Motorola brand. We acquired the System X brand. So we have had to integrate all of those businesses. So Lenovo has gone from a company that's sold PCs, to being a company that basically is trying to drive intelligent transformation for its enterprise customers, and for its consumers around the world. Obviously, we have a footprint in more than 165 countries. So it's exciting. Ajit: When I joined the company, we were number six in the world. Obviously, we've been number one for a number of years now, and have a significant market share in the PC space, and we continue to make progress in the data center space, which we acquired from IBM. And the Motorola phones, you might have seen some of the latest phones that we introduced. We were the first ones with the foldable phone, that was a take on the Razr phone, the iconic Razr phone. So, yeah, it's been very exciting. We have obviously enjoyed our ride. I'm very excited because we get to interact with a number of customers on Lenovo.com and really bring the technology to life, and the brand to life, using the platform we have. So yeah, it's been a good ride. Stephanie: That's awesome. And what does your day-to-day look like at Lenovo? Ajit: I manage the platform for Lenovo, which is basically Lenovo.com. And since it serves all of our stakeholders, we have the Lenovo.com footprint in more than 90 countries. So I have to manage both the sales side, which is primarily a combination of B2C and SMB. And then I have to manage the enterprise side of the customer. So mostly B2B customers that buy from us using a procurement type of strategy, where we actually service them one-on-one. So I have the sales part, which is basically running the whole end-to-end business, all the way from marketing, CRM, UX/UI design, sales and marketing, phone sales, to really even trying to help with the supply chain piece, working closely with our supply chain organization. Ajit: But then the other side is really trying to figure out how to position Lenovo.com to become a brand voice, and figure out how we bring to life all of the innovation, and the products, and the enterprise strategy we have, for the stakeholders that come to Lenovo.com around the world. We get over a billion people coming to the website any given year. So it is a pretty substantial property. And so we have a ton of work that we need to do to manage all of those aspects that take care of basically all of the customer needs we have. Stephanie: Wow. What are some of the key learnings when it comes to moving globally? So it started out, I think in 1985, and it was just a reseller in China, right? And then, now it's a global company. What has that transition been like, and what have you learned in the process as you open up new countries and start selling there? Ajit: When I joined, obviously, my journey beyond Lenovo, was at Gateway. I was at Gateway for five years. So I've been in the PC space for about 20 years. And what you have to really understand is, all the transitions that have happened in the business model. When I started, internet was relatively new, and people used it as a very siloed organization that was doing just the phone and the web. So it was very limited. But today, as you know, 70% of the traffic that comes to the website is mobile traffic. The patterns have shifted quite a bit. So the business model transformation that has happened over the last 15 years has been interesting. Ajit: And what you see is, initially when we started, a lot of our colleagues around the world were maybe a little apprehensive. They were worried about things like conflict. They were worried about issues like pricing and things like that. And what you notice as things have evolved is, what you find is that, that is a very complimentary system. A number of our customers that are very sophisticated, technology-focused, innovation-focused, want to buy online. They want to be able to customize their products, they want a full breadth of products. And then there is a bunch of customers who would like to go to retail stores, look at our products, touch, understand it a little bit better before they actually make a purchase. So what we have found out is, thought we had a lot of skepticism, maybe even like six, seven years ago, that has changed into, people now trying to figure out how to leverage the business models, including connecting retail and the offline presence we have. How do we get our enterprise customers the best experience possible? How do we make sure the supply chain is responsive? How do we get them more capabilities that love them to buy products on credit, allow them to buy using a subscription type of service, give customized services that add them for SMB customers. Ajit: So, if you really think about it, the evolution has been quite interesting. And look, day-to-day, there's tons of things that you need to do because it's a fast-pace, technology-driven, very innovation-focused space. And people like Amazon and others, they're really driving the paradigm as far as online commerce is concerned. So it's not sufficient for us to just look at our traditional competitors. We also have to understand that the customers are getting sophisticated, and their expectations are much, much higher than what they used to be. So in many ways, the decision to go into a country now, is much more driven by the customers, than it is even proven by our direct stakeholders. And when I say stakeholders, internal folks, because customers really demand that you actually have an online presence. And they really want to transact with you online. So the transition has been interesting, but I think it's accelerating and the business models getting very complex. And our ability to actually react to them fast is going to be critical, as we move to the future. Stephanie: Yeah. I completely agree. So I heard that you have eight million dynamic and other pages, on lenovo.com. Maybe it's more at this point, compared to when I heard that stat'. How do you keep up with all the pages that you have, behind the scenes, being custom, depending on who's coming, depending on what country they're coming from? How do you make sure that it doesn't turn into a black box? like an algorithm when it starts getting too much stuff in it, you're like, "I don't even know what's happening behind the scenes anymore." How do you keep up with the pace? Ajit: A lot of this is automated. If you really think of our bulk of the products... I'll give you an example. So we sell thousands and thousands of third party products, accessories. Whether it is hard drives, whether it is even headphones and monitors and lots of things that are serviced and provided by other companies. And those are all managed automatically. So it's in a database. It's a data-driven process. So you don't have to worry about it. But if you multiply those into the number of countries, suddenly the numbers look staggeringly big. Now, having said that, it still is a pretty big number of pages. And clearly, there is a process for us to manage level one, level two, level three type of page, home page, right? If we look at the efficacy that is periodic checks on usage of the pages, there's teams basically managing content across the site, across the countries. Obviously, there is a strategy for how many layers of product pages we want to have. We look at data to understand who is using it, how often are they using it, and things that are not being used. Obviously they get [inaudible] as time goes by. Ajit: But more and more, it is clear to us that we need a very cohesive data strategy for formality content. So the formats customers prefer for content is changing. A lot more focused on videos, a lot more focused on how to do things, through a short-form video. Even content that you provide in terms of words are very succinct, and to the point. So you let customers pull the data, pull the content, as opposed to publishing everything and letting the customer go through stuff. Clearly it takes a lot of time and effort. And the key is to make sure that your systems, from the product management, all the way to what the customer actually sees on the glass, all managed in a way that makes sense. And that clearly is a challenge, because you've got a lot of legacy systems. And what somebody puts in as they're designing a product, may be marketed different from the marketing content that somebody needs to see in order to make a decision on a sale. Ajit: So you really have to figure out the process, streamline it. You need to make sure, periodically, you look for paradigm shifts. You need to understand demographics. 70% of the population that's going to be in the workforce is going to be millennials. And I can tell you that they are not really interested in reading a lot of stuff. They prefer much short-form formats, and they like videos and things like that. So if you're not connecting with them, and your engagement is not right, I think you're going to have a problem in the long run. So, I think the page count is less of a problem, than relevance. And I think that what we really are trying to do is to figure out how to be relevant, and drive content that truly drives engagement with our audiences. Stephanie: That completely makes sense. Are there certain trends that you see coming that Lenovo is preparing for, when it comes to, like you said, videos, preparing for millennials? What things are on your radar right now that you're preparing for the future? Ajit: So I'd say a couple of things on that. We are definitely seeing a pretty significant shift in demographics. Though we see a bimodal distribution. And by that, we see a lot more older people, and we see a lot more younger people. And the number of people in between actually is very low. So you would see very young people. 60%-70% of the population will be in the 20-30 age group, going forward. Which means that, these are native millennials. These are generation Z, Gen Zs, who basically are native digitally. And therefore, their expectations and how they consume data, and how they consume information is very, very different. So we have to really worry. I think everybody needs to worry, if you're online, as to how they are going to be part of your community, how you're going to get engaged with them, how are you going to keep their interest in the products that you have? Ajit: Part of the challenge is that they are so sophisticated, and are pretty much, in my mind, no nonsense, in terms of technology, that it's highly unlikely that they are going to support anything that is cumbersome, or verbose, or anything that basically takes away from efficiency, in terms of how they deal with online content. And so, I think the big challenge is for companies to truly make that shift of saying, "Look, this was the audience in the past. They had a very different predisposition to how they looked at data, and how they analyzed things. And then there's this new generation that truly is looking at content differently." Ajit: Now, the key points will be when they start truly having money in their pockets, and they're going to be in positions where they're going to be making decisions for companies, in terms of purchasing, technology decisions. And many of them already are making those decisions. And then if you are not able to engage with them appropriately, I think that you have a challenge. So truly trying to figure out how to build that relationship with the gen Z, millennial audience, I think is key. We are definitely looking at a couple of segments where we believe that that's an area that we need to really get good at, which is, gamers who are basically a big part of the online ecosystem. They are very sophisticated. They know exactly what they want. They are very community-driven. They're very content-driven. Ajit: And so, the proxy for us, at least in my mind is, "Look, you now have to figure it out how to engage these people online." Because you will learn from that set of experiences, that if you are, as a brand, not able to work that in your favor, it becomes increasingly challenging, I think, for the brand to have relevance in the future. And so, we are really focused on gamers. We believe that we have to cater to them end-to-end. From content, from products, online experiences, capabilities, giving them access to a broader set of products and portfolio, game titles, being able to give them subscription services and other things. Ajit: And the second audience that's really, really important are students. So a big part of students are going to be online, and quite frankly, this Covid crisis brings out the issue much more readily, where you see high schoolers, pretty much all schoolers, including colleges, basically offering courses online. And everybody's online study. I can tell you that it looked like a big deal when it happened, but we have been thinking about this thing for several years now. And this crisis obviously has accelerated that thinking even more. But the reality is that this is going to be the new norm. And, what is interesting is that a lot of people that aren't online students, because of the fact that for 1,000 years we have always told students that they need to go to a school, and be an apprentice, and study and learn because they can find a job. Ajit: And now, companies have come out and said, "Look, you don't really need a college degree to get a job. All you need is knowledge. And if you're good at something, then we'll figure out a way to test you, and you'll be fine. You don't need a formal degree." And we think that that trend will accelerate in the coming years. And I think that universities and colleges and institutions will figure out how to deal with it. And then at the same time, people like us, brands, we'll have to figure out how to engage this audience. Because, they're looking for information, they're looking for technology, they're looking for solutions. And the question is, "Can we provide them solutions and technologies that make learning online easier for students?" So that is the audience. Obviously, we make PCs, and we make phones, and we made monitors and all these things that really are part of the technology solution that enables people to learn online. And therefore, we believe that we should figure out how to engage with this audience who are basically online, and in a direct way, so that we understand their needs much more concretely. So those are two segments that are key. Stephanie, you had a question? Stephanie: Yeah, that makes sense. When it comes to thinking about this new generation, and they're, like you said, no nonsense. They want things quick. The website better be super quick. They better be able to buy fast. They have, I'd say, a higher risk tolerance when it comes to ordering online, as long as there's a good return policy. They're probably okay with just buying right away and hoping for the best. How are you thinking about your retail strategy? Because like you said, a lot of people in the past have been used to going into stores, and trying things out. Do you see that being something in the future? Especially with Covid, it seems like a good forcing function, where it's pushing more people online, and to just try it instead of having to experience it in person. Are you all shifting your thoughts around that area? Ajit: Well, I think Covid clearly will be an outlier. It will accelerate the digital transformation. But I still think that retail will have a pretty important place and role to play in the long run, but it will get redefined. And for our part, we are doing a couple of things. We are trying to figure out how to help our resellers, how to help our retail partners, and quite frankly trying to connect offline and online in a meaningful way. So where we own stores like in China and India and other places, we are trying to figure out how to connect the online experience with the offline experience, so that people can buy products online. They can go to the shop and order it online there. So really trying to figure out how to manage the customer experience a little bit more readily. Ajit: Now, having said that, I think the interesting transformation that's happening is really trying to connect the social, the retail, and online together. And if we can, at some point, get the mobile piece to work, then it becomes a very, very interesting value proposition for the customer because you truly have the customer for the whole cycle. So if they are outside, we know where they are, and therefore we can give them recommendations if they're interested in looking at our product. If they're online, obviously they can do things online. But if they do stuff on their phone, we can actually translate some of those things meaningfully to their desktop, and therefore we make it very, very easy, experientially for them to experience a good a brand experience. So we don't have to act surprised when the same person is in two different places, or as two different ways they connect to the brand. We just need to figure out how we connect those pieces. Ajit: And I think that these are the types of business model shifts that we will see accelerated as we go through this crisis and beyond. I think that people are finally trying to figure it out, "How are we going to connect this?" Look, Amazon has already done some of this with what they have done with Whole Foods and the Prime. So they've figured out how to connect the store to Prime users, and the online stuff. So the blueprint is there, and I think that most companies are doing some stuff. But I think that you're right. It's going to get accelerated as this crisis progresses. Stephanie: Yeah. I think connecting those platforms is key to making sure you understand the customers and can deliver value to them wherever they're at. Are there any technologies that you guys are experimenting with, to try and connect that online, to offline, to social, and mobile? Ajit: Yeah. It depends from place to place, and it depends on the companies footprint, right? In China, obviously, I think we are the most progressed in terms of the technology piece. We have a substantial online, merged with offline footprint, which connects WeChat, and online cloud, and our application layers, which allows our customers to actually be connected fully with the brand. And it actually connects all the retailers also to the brand in a very, very meaningful way. So that is, I think, the aspirational model for everybody. We have a very different model in Japan, as an example, where we are connected in kiosks, in the retail store, that's connected to the online world. In Taiwan as an example, we have an offline store that we are connected to. In India, it's the same thing. It's an offline-online model. Ajit: So yeah, the business model is different from different country to country. But it also depends on who is innovating more, and what's the landscape look like in the country? So it's not one size fits all. And I would be remiss if I didn't mention that privacy, as an example, is a key consideration in some countries, and some countries they're more relaxed. So it just depends, also, on some of the privacy laws that enable customers to share information more freely versus some others where you can't. Ajit: But my sense is that depending on the country, and depending on the business, you will see hybrid models emerge. They already are emerging. And some will have much more traction than others. But I would see a lot of partnerships being formed between online companies and offline retailers, to really manage the customer experience to be much smoother, and much more productive, going forward. Stephanie: Got it. And I saw that Lenovo is leaning more into focusing on the consumer and their needs, and becoming a more consumer-first company. Is there certain data points that you all are using to meet your consumer better than you were before? Or were in that end-to-end consumer journey do you see the most room for growth or improvement? Ajit: Yeah. Lenovo's history and its heritage has always been a product company. We have some of the best brands in the world, whether it's Thinkpad, Yoga, Moto, System x, these are all brands that are at the top of their game when it comes to their specific categories. Stephanie: I used a ThinkPad at Google. I love my ThinkPad. Ajit: There you go. And nine out of 10 people that I speak to in the business will tell me the same thing. I used to use a ThinkPad before I worked for Lenovo long, long time ago, as well as a consultant for Deloitte. And there's plenty of people who actually use ThinkPad because it's an iconic brand. So we always have been a company of engineers, historically. But as we move into the internet era, and as digital becomes more mainstay, it is absolutely critical for us to really understand what our end users look like, what they are doing with our products, how do we collect feedback that's more direct? And truly, really understand and have a pulse on what the customer sentiment is for our brands. Ajit: It becomes extremely difficult for us to get feedback more directly, as from an indirect channel, because of the fact that we don't really talk to the customer directly. We have to remain and collect information in an indirect fashion. And depending on the privacy laws and other things, it becomes very, very complicated for us to collect information. Having said that, three or four years ago, as a company, we decided that it was such an existential reason for us to really start thinking customers first, and truly trying to figure out how to connect with them, and drive digital transformation, that we decided to start measuring all of our customer segments, whether it's direct or indirect, in either use proxies or direct measures. But mostly, the entire company has been on a Net Promoter Score basis, and trying to understand how customers value our products and our services, and what they actually think about the brand. Ajit: So our employees and our executives get paid based on a customer satisfaction metric. At one point, it was actually imperative, in terms of how they got paid. So we take this very, very seriously. And the transformation is clearly much more evolved than what it was three years ago. And now, pretty much every group in the company has a customer-focused metric. Whether it's product development and supply chain, eCommerce, or our global accounts customers. So everybody is measured on a customer-centric metric, which allows us to then drive the focus that's stated. And it's one of the top priorities for our COO, our CEO, my boss who basically runs all of the PC plus the IDC group. It's a key focus for him. So clearly, it's something that we take very, very seriously, and we are all trying to evolve with this one metric that we can look at and say, "Are we making absolute progress as a company, or not?" Stephanie: Got it. So a lot of times, metrics can actually have unintended consequences where maybe someone's trying to meet that metric and they're not doing the best thing to meet that. Did you see that when you guys were thinking about creating that customer metric? Did you see anything go wrong where you're like, "Oh, that's actually not a good one to rely on?" Any learnings throughout that process? Ajit: Yeah, look, e-commerce, we have been measuring customer satisfaction for the last, I don't know, 13 years or so. So as soon as I joined the company, two years into it, I figured out that, "Look, we need some form of getting feedback from our customers." So we have a very robust and mature process for eCommerce that we've been collecting roughly 20,000 customer feedback from a survey that we do online. So we have had a model for a long time, that uses the feedback. The biggest challenge, always, I think, is trying to figure out correlation of what factors will drive it. I think that's been the big controversy. So is it delivery metrics? Is it quality metrics? Is it product design? Is it the call center experience? So, I think there is a ton of data, and we have requested data to find out the top factors. And those factors keep changing. So- Stephanie: What are the top factors right now, that you see? Ajit: So what we see is product quality is undeniably the number one thing that the customers actually value. Hybrid customers truly value delivery. So delivery times and making sure that you're keeping your commitment in terms of products. They definitely value help in the call center as a metric. So there's probably a list of about 20, that we track. And the big ones really are product quality, delivery, out-of-the-box experience, those kinds of things. Service, as an example, right? We do surveys of customers on their service. That's a pretty important part of their feedback. But the purchase survey that we do is more around the purchasing experience. And customers are not shy, and they give you exactly you know what is important to them. And the one thing that we find is that some of the metrics that are difficult to move. Like product quality, as an example, Lenovo's product quality is very high. So it's always in the 90% range. And for us to move a percentage point on product quality is very, very difficult. Ajit: But there are several others where, like delivery and other metrics that float a lot more in this, there's ability for us to go change that, if you are focused on trying to drive certain changes. So the key for us is to say, "Which are the metrics that we can influence, that the team can actually take actions? Whether it's on the website, whether it's on trying to do training, or whether it's really trying to figure out how we message things to the customer differently, do proactive phone calls." One of the things that we do. But the key is to really identify those things that truly can be moved meaningfully, and we can put energy behind it, and then keep going. Ajit: Last year, we moved our CSAT score, or our NPS score by almost 35%. So that's a pretty substantially good jump, in terms of effectiveness. And that's because we identified a few things that we thought compelling. We had a business management system around it, we made IT changes. So all those things configured into us focusing and moving things in a certain direction. So I think that's the key. When it comes to customer-centricity, the challenge is that the customers are not standing still. Their expectations are going up every single day. So you have to do a lot more, to make meaningful progress. So you can't just stop. You have to continually change and continually improve the processes. Ajit: And that's always tricky because you have to really be at it, and you've got to use data to really understand what's changed, what's moving, what's the new irritant? You have to do social listening, you have to really start scanning your data that you get from your customers to figure out what's the new irritant, and how are you going to manage them. So it is certainly not an easy process. It's a very challenging process. But it is also something, I think, that is very, very important, if you, as a brand, need to keep your customers happy. Stephanie: Yeah, I completely agree. If you were to point to, the larger theme of being able to improve your customer satisfaction score, what was the largest thing that you changed, or adjusted, that made it so you could improve that score, by, I think you said 35%? Ajit: Yeah. So the one big thing that we changed was, we always had a very high amount of customization on the website. So ThinkPads, as you know, can be customized. And obviously, a customized product takes a longer time than if you had something in stare. So we have traditionally had a lot of our ThinkPads customized. And we made a conscious choice to really figure out how to keep stock of some of our high-flying products, or the fast-selling products. And so, that is a pretty significant shift, because when you have to ship something centrally from one warehouse, versus, you have to ship products from a warehouse or a manufacturing facility to a distribution center, and manage inventory, it obviously is not as efficient as trying to run something directly from the factory. Ajit: But we made the choice to move some other products to local distribution, to speed up delivery of our products. And that definitely helped. And we had some issues with supply. We're having some industry-wide constraints on some of the supply. And therefore, this whole process of managing inventory locally really helped us manage customer expectations a little bit better than what we're used to. So that is one example of what we did, that really helped. Ajit: Now, we also made a number of changes on the website, from messaging, whether it's a credit card processing screen, or whether it's a product page, or whether it's a configurator design. Any number of things that we feel are irritating customers, we have it list of maybe 500 items that we work through at any given time. And everybody is going through those things and fixing it. And then that incrementally adds a little bit of help. But the big ticket items are always around supply, product quality, call center management, pricing, promotion challenges. Some customers see discounts that are different, and I.e. managing those correctly... So it really is those big buckets that we want to make sure that we are focused on, we're fixing. And ultimately, the customer feels like we are being responsive to their needs. Stephanie: That's really fun, haring how you're able to drill in on a few of those things, and shift customer perception and happiness so much. Are there certain metrics that you use when it comes to, like you said, looking at what's irritating the customers, or where the website is maybe failing in certain areas? Is there a set of metrics that you look at, maybe bi-weekly or weekly with your team, to see how things are doing? And if so, what are those metrics? Ajit: Yeah. So when you talk about metrics, we have a website, a technical side of looking at metrics for the website, which is the IT organization that basically looks at all the technology stuff. It is, "What does the response time look like? What is your mobile performance? What's the page performance? 404 errors, page not found, the timeout errors on your checkout page, blah, blah, blah, blah. So there's probably like 100 things that somebody looks at every single day and then we manage those by exception. So we know what the numbers are. There's somebody constantly looking at those. Ajit: Then that is the website feedback mechanism, which is, when a customer comes online, something like our opinion lab, or a survey mechanism that basically allows customers to give you a feedback. So we randomly select customers that are on the website. We actually give them the opportunity to respond to the experience. We collect experience on their research process, their buying process, the website complexity, blah, blah, blah. So we get a ton of feedback from our customers on that particular thing. And then like I mentioned to you, we have this thing called the online ordering experience, and the purchase experience. So we get 20,000 or so responses every two weeks from all these countries, which we analyze. Ajit: Then, we obviously have social listening, where we actually listen to what the customers say. And then that is a common section where customers give us comments, and we use some form of AI stuff, to actually binge through all that stuff, to really get the sentiment analysis, and big ticket items that are coming back. And we take all of these things into a composite score that then allows us to go look at and say, "Where are we falling short? What are the benchmarks? What's the threshold? What's the competitive benchmark that we should be looking at for each of these categories? Best in class." And then we benchmark ourselves and figure out what actions we need to take, based on why this mentions the regression analysis to say, "Okay, these things actually have a meaningful impact through the customer experience. And therefore, we got to go figure out how to remove people who are giving us ones twos and threes. How do we increase our nines and tens? And then everybody in between, how do we move them up," to basically minimize the customer irritations that we have in the system. Ajit: So it's a very systematic process. There is a team that basically looks at it. There's a supply chain element that's very real. There is a services element. There is a phone sales element. There is a chat sales element. So it's a very complex set of metrics that basically transcends all of the functional groups that have a small stake in that experience, as the customer goes from the website research, to buying the product, getting it serviced, talking to a customer rep'. So we take the end-to-end customer with journey and figure out all the points, if they touch something, and figure out how to measure them, so that we have an accurate understanding of where the irritant is, and what we need to do to make it better. Stephanie: Got it. So I know when it comes to getting feedback, I go on websites all the time and it's asking me to do a survey, give feedback, and at least for me, I don't normally do it. I just X-off, and I try and find what I want. How are you incentivizing these potential buyers or buyers to give you the feedback, and take these surveys, and get them to do what you want? Ajit: It's tricky. You have to do it in a way that doesn't bias the sample. And that's what I'm most worried about, is that I don't want to incite people to do the wrong thing. So what we do is, we have a... What I've noticed is that the core customers, they are actually always very vocal, especially if they are a brand loyalist. So we get a steady stream of feedback on brands loyals, which is great because I think they are finicky, and they are brand zealots, and they really take pride in making sure that they're providing feedback on things that they like and things that don't like. And quite frankly, it shapes perception and product strategy in many ways because it's a big group of customers. Ajit: The tricky part is the random customer, or the customer that truly hasn't built a relationship with us but just bought something. Those folks, we have to figure out how to drive the subscription into the process a little bit more meaningfully. We periodically a 5% off coupon. We periodically send out emails to people who have bought product. We always send out emails to people buy products for us, saying, "Give us feedback. Tell us what is it that we have done well, and what are the things that we haven't done well." On the phone, obviously, we have more success because we get a chance to talk to people. But it's a combination of things. In the past, I remember like five, six years ago we would run contest that basically gave prizes for people to actually participate. And then we reduce that a little bit, because it may tend to bias the sample a little bit. Ajit: Look, online reviews is the other one. We have a very robust online review process that we have on the website. So we get a ton of online reviews of our particular products also. So we use that, sometimes, to also incent people to give us more feedback. So there isn't a one size fits all answer for others. It just depends. Again, in some countries we get local feedback, and some others... And so, countries where we don't get as much feedback, we try to figure out what's the right way? Can we leverage our community? Can we leverage our brand? And other things. Can we gamify it? So there's lots of strategies depending on which country and which part of the world you're in, to incentivize the customer to actually engage more readily. In some countries it's a challenge. Just because it is challenging in countries like Europe, where trying to get around some of the privacy laws can be tricky. So it's a balance. But we have tried discounts, newsletters, contests, reviews, and rating, promoting them. Ajit: Having said all that, I do believe that building a community and trying to nurture that community is probably the easiest way for us to get more and more feedback, which is what we are trying to do, is to try and figure out how to engage these customers more meaningfully over a longer period of time, beyond the purchasing. But we're connecting them with the brand. And then, I think that that solves some of the feedback issues, because I think we can get a much higher response rate when that happens. Stephanie: Yeah. I've heard a lot of brands leaning towards that community aspect, at least from the people that we've had on the show. What are some of the initiatives that you guys are doing, to create that community? Ajit: Well, I won't give away all the secrets, but- Stephanie: Just give us a couple. Come on. Ajit: So the big communities that we are focused on, obviously one is SMB. SMB, we fundamentally believe are underserved. And I think that there's going to be a lot more SMBs in the workplace, going forward. Because I think a lot of them are millennials and Gen-Zs are very entrepreneurial. With the advent of technology progressing the way it's progressing, and digital technologies becoming more ubiquitous, but with the online space, I do believe that we will see a lot of internet businesses springing up. It's no longer really difficult for somebody to actually open a business or start a business if they have a good idea. So you will see a significant number of people actually coming online in the SMB space. And we are obviously very aware that we need to provide them an experience, a community, and a set of resources that make them productive and useful. Useful in the sense that, we give them something that is useful for them to be more productive. Ajit: So part of our challenge is to try figure out what is really important for them. So we definitely think community is important. But the work, I think, is very, very important. And the question is, "How do we drive relevance? What is really important for the SMB customer as they are online, beyond the products that they buy from us? How do we get them more out of technology? How do we get the more out of their work, their productivity, and how do we make sure that they are ultimately successful as they are part of our ecosystem?" Ajit: So I'll give you an example. Maybe they can hear from other SMB customers who are probably struggling with similar challenges. Maybe the ability to belong to a community that has other people doing similar things, or at least dealing with broad themes that they're dealing with, money, resources, training, those things become important. So the question is, "Can we provide some of those things to our SMB customers that make their lives a little bit easier, and therefore their affinity for our brand a little bit higher?" So that's one thing that we are definitely doing for SMBs. A lot of work to be done. We are just at the very, very early stages. But we do believe that a well thought out, longterm strategy will definitely help our ecosystem and our customers. Likewise, we will be thinking about students and gamers, and trying to figure out what we can do meaningfully to nurture the relationship we have with them. Stephanie: Got it. Have you shifted your strategy around online learning, students, gamers, since Covid started? Did you guys have to go into a quick pivot mode to start doing something different or planning for a different future than what you were maybe planning for six months ago? Ajit: Well, we started this strategy two years ago. Haven't changed much. So therefore, we do have a leg up because we have been thinking this for a little while. Covid just made it a little bit more easier to sell, and get traction. But the strategy we are on has basically been in place for a while, because we have been building IT capabilities and some of those things that we need to service our customers. This is not something you can just spin up in a day. These take much, much more longer-term. And there's plenty of partnerships and relationships that are [inaudible 00:42:24]. So it's not, certainly, something that you can just copy, or you can just do. It is capital-intensive. You need to put money into it. You need to do a lot of development. Do you need to really start thinking about the strategy much more clearly? So it's certainly not something that's the thought about yesterday. But I think that there's a lot more that we need to do to be relevant and to drive this to a scale. Stephanie: Cool. So I've heard that you like behavioral economics. I was wondering- Ajit: Yes. Stephanie: Yeah. I watched a few videos. I'm like, "Oh, me too." What principles have been useful, or how have they shaped the digital experiences that you build at Lenovo? Ajit: Yeah. Look, pretty much everything that you do on a website, or you do on business lends itself to some of the principles from behavioral economics. And some of them that are really interesting... I became a fan of behavioral economics with Dan Ariely, who basically is local here at Duke. And we had Dan come to campus and speak to our people a couple of times. This was like maybe seven, eight years ago. So I've been a big follower of it. And clearly, what I understand from it is that people are predictable, and they can be predictably irrational in how they make decisions. So sometimes, common sense is probably overrated, believe it or not, when it comes to some of the design principles and some of the things that we do from a merchandising and marketing standpoint. Ajit: So big couple of things for me is, look, people want to compare things, right? And they freeze when they're not able to compare things that are similar. If you give them these similar things and ask them to compare it, they always rationalize it to something that is a common denominator. So as an example, you don't have to bet an apple to an orange. Obviously, they are very different fruits. And to ask them to really say which one you like more becomes a preference issue, more than a rational exercise. And so, if you're truly asked them to assign value to it, more likely, they are going to say an apple cost $1 and an orange costs 50 cents. So maybe the apple is 2X better than the orange. That would be the natural way of thinking. Ajit: Now, when you tell them to compare a PC of one kind to a PC of a completely different kind, they are likely to be completely lost because they just are not able to understand the fundamental differences between them. Or, it would take them an inordinate amount of time for them to actually compare the products, disparate products. And so what they do is they start thinking about price. And price is not necessarily the best way to make a decision on something that basically is going to be your technology partner for a few years, and going to make you productive in the kinds of things that you need to do. Ajit: So I've realized that look, you have to really enable a comparison of products in a much more meaningful way. So make sure that the customers don't have to really go out of their way to think about how to compare products. And obviously, it's challenging when we have so many products coming out at this breakneck speed, that some of the technology cannot keep up. But to me, comparing things is an important paradigm, in my opinion. Stephanie: It brings back the memories when I used to open up a bunch of tabs to compare products before the company started shifting to that comparison model. But I do still think there's a long way to go when it comes to, especially comparing tech. Because when I'm looking at a computer and it's saying, "Here's all the specs of this computer." A lot of those things, I don't even know, why would I want to upgrade? Whereas if it said, "Well this means that you'll be able to store this many pictures versus this." Or, "You'll have a much faster internet speed," or, "Remember how your computer's working really slowly when you try and open up Photoshop? It won't do that anymore." It would be nice to start seeing a more consumer perspective of, "What does this do for me?" Instead of just being like, "It's this many terabytes," and all the technical specs to it. Are you all thinking about that kind of shift, or how are you incorporating them? Ajit: Definitely, comparison of products is a big thing. Search, how you do search comparison is a big thing. So we are absolutely focused on it. And to make things worse, the mobile form factor doesn't facilitate very readily, comparison of complex things. So we have to figure out more elegant and meaningful ways in which we can have people compare products on a small form factor like a phone. So yeah, clearly very, very important, on top of our list. Always challenging, always evolving. So yeah, we have to go figure out how to do that. Ajit: One other thing that I would tell you when it comes to behavioral economics and behavioral science is, bias, the role of bias. And I think that this is a big one because I think people will generally, when they're making decisions, executives like me included, we make decisions based on anecdotal evidence, based on what we have done. And we take that size, and of one, and we try to generalize, hypothesize our theory based on a bad experience or a good experience. And we extrapolate that to the population and end up driving everybody crazy and not looking at numbers the right way, and ignoring numbers, and making decisions that are suboptimal. Ajit: So, the work by Kahneman and some of the work that the Israelis have done, especially because it seems like that's where all of the cool stuff is coming from on behavioral economics, from the Hebrew University, the work is really, really telling us not to be biased, and to suspend judgment, and to really focus on what the data tells us, and to pay attention to not fall into the trap of the bias. So, it takes a while, and it takes a lot of effort, but I think it's a good reminder for us to really focus on managing and minimizing our biases, so that we can make optimal decisions that affect our customers in a very positive way. Stephanie: Completely agree. Do you all do trainings at Lenovo? Whether it's for the executives, or the employees, when it comes to how to create surveys and look at the data in a non-biased way, and collect data from certain people, where it's not biased. Do you do anything around that to teach those principles? Ajit: I also teach, sometimes. So I have been pushing this very heavy and hard with my teams. And obviously, a lot of the executives read these books, so it's not lost on them. But look, because we have such a huge direct customer-facing interface, the focus on the online space has to be much inordinately higher, because I think the impact is much, much higher on the direct interface. So we are definitely driving this. A lot of our people are classically trained. They all go to classic UX/UI trading. But more and more, I also have started relying on quantitative data at scale, for making decisions, rather than opinion. So I am not, and my team hates me for this. But I'm not a big fan of qualitative information. I would much rather not ask people anything and just look at the data and interpret the data and start making decisions. Ajit: Because people say one thing, and they do another. And it's not a new notion. I think a lot of people know this. And at scale, when you're talking about tens of millions of records, I think the data doesn't lie. In fact, if the data says that, then that's what we should do because it services a majority of our customers positively. So that's the other principle that I use is, "Don't ask, just look at the data and try and make decisions based on the data. Try to understand the data, and then design your tests and your experiments based on what you see, rather than asking a bunch of people in a panel, and they'll tell you some stuff." And I'm sure it goes in some places, but I am always skeptical when that happens because I'm worried about bias. Stephanie: Do you think, from your experience, a lot of companies are still focusing on that qualitative data and it's actually leading them down the wrong path, or they're creating either new products or new website experiences that are probably going to fail because they're using that qualitative data? Ajit: I am sure people are. But I think people also... They all read these same things. But I think there is probably enough anecdotal evidence that suggests that there's lot of people who still use those principles. So I don't know the exact number, and any guess that I would venture would be wrong, so I would not venture it. But my sense is that yeah, it requires activism, like for some of the people and the executives, to actually read the books, get interested, get excited, and then drive everybody to get to follow it and understand it. It's a field that's still evolving. So it takes effort. Right? And then the infrastructure that's needed to do at-scale testing, and A/B testing, they're not cheap. It's expensive. Ajit: So, I think the question is, how many people are driving digital transformation? How many people are digitally savvy? How many companies are? And my sense is that that's a very small number. I think everybody's talking about digital transformation now, because of all the issues that are around them. But I can tell you that the number of companies that are digitally savvy after you take out some of the tech companies and the internet companies, is very small companies. There are a few who companies have a pretty big gap. So my sense is that they're not, probably, using it as much. Stephanie: Yeah. I completely agree. So, zoom out a bit for the last couple of minutes. In the world of e-commerce, are there any big disruptions you see coming or what do you see in the future, that you guys are planning for? Ajit: Well, I think this whole transformation, this whole crisis actually points to the fact that the digital transition will be much faster. I think that people have realized a couple of things. One, travel, may be overrated. People have realized that education, going to school, sitting in classrooms, may be overrated. People are going to realize that working from home is not such a big deal. And so, I think the workforce productivity, the online education, travel as a paradigm, and how companies operate, all of that will, I think, become ripe for disruption. So you will see, increasingly, technology solutions practices that's going to upend a lot of the work practices, and the educational practices. So that's happening. That's going to happen, and it's going to accelerate. Ajit: Clearly, I think that this will also boost some of the technology things like AR, VR, IOT, both from home and from work. I think it'll accelerate some of those things because it'll be a natural extension of some of the things that people are doing. I think the move to cloud is going to get accelerated, because I think everybody wants access to everything. As 5G comes, I think a lot of these things that are laborious today might experience a complete revival, and complete transformation when it comes to speed, and feel, and what's possible. So I think that the time is right for us to get much more digitally-connected. Ajit: The last one is mobile, in terms of what's going on with mobile and how mobile is going to get a face, or as 5G comes on. So it'll be interesting to see how retail, how millennials and gen-Zs, how SMBs, all of these groups of people that make up a pretty significant part of the population... I think students, gamers and SMB is probably at about 40% of the world's population. So you'll see that there's going to be a significant shift, quite rapidly, in the next three to five years. And there's going to be a considerable amount of disruption that'll happen as a result of this. Ajit: You will see winners and losers. This will be probably a long list of people we're going to go out of business if they're not able to adapt quickly to some of the changes that are happening. The companies that get it naturally will have much bigger gains, which will make them much more competitive, and difficult to beat. So you will see a lot of winners and losers emerging out of this whole crisis, and as the digital evolution continues in a significant way. Stephanie: Yeah. I love that answer. So before we move on to the lightning round, which is where we ask a question and you have one minute or less to answer, are there any other high-level thoughts or words of wisdom that you want to drop in the podcast? Ajit: No. Well, I just tell the people who are in this space, the eCommerce space, that their time has come, finally. So they should just buckle up and help their companies and see where the ride goes. Stephanie: I love that. All right. So the lightning round, like I said, brought to you by Salesforce Commerce Cloud, is where I will ask a question and you have one minute or less to answer it. Are you ready Ajit? Ajit: Okay. Stephanie: All right. What's up next in your travel destinations, after we're allowed to travel? Ajit: I would like to go to Cuba because I'm running very low on my cigars. Stephanie: Wow, that sounds cool. All right. What's up next on your Netflix queue? Ajit: I just finished Ozark. And I'm trying to figure it out how to watch The Last Dance. But it's not on Netflix, unfortunately. Stephanie: Maybe Hulu? Ajit: I've been watching Heist. So maybe I'll keep watching that. Stephanie: Cool. What's up next for... Is it lunchtime there? I guess a little bit past lunch. What's that next for dinner? Ajit: Dinner, I had cooked on the weekend, some lamb curry and some roti. So I'm going to just reheat that and eat it. Stephanie: Yum. What's up next on your podcast list or your reading list? Ajit: Ah, reading. I'm reading The Billion Dollar Whale. Stephanie: What's that one about? Ajit: It's about this dude, Wall Streeter, who basically flees a billion dollars right under the nose of Wall Street and big finance people and everybody else in the world. So it's like DiCaprio movie. Stephanie: Oh, which one is that? The Wolf of Wall Street? Ajit: The Wolf of Wall Street. So it's loosely a character like that. So I'm just a quarter into it. It's unbelievably engaging and interesting. Stephanie: I have to look into that. Ajit: Yeah, you should. It's pretty cool. Stephanie: You have a few, you said? A few more books that you're working on? Ajit: I still haven't finished Homo Sapiens, and some of the books that he had written. So I'm still trying to figure it out when I can finish those, with things slow. Stephanie: All right. What's your favorite tool or technology that you're either learning right now or you're thinking about implementing in the future? Or it could be a skill? Ajit: I don't know about skill. I don't know very many skills. Technology. We are constantly thinking about technology. And the big technology that we are thinking about is how to drive the subscriptions business. So it really is trying to figure out how to give customers the convenience of buying something as they pay-for-use concept. Because I think it's becoming very, very clear that the reason why people like Netflix and Adobe and some of our other customers and clients are successful, is because people are able to pay. And in [inaudible 00:58:45], I think that business model is very appropriate. People don't want to spend a lot of money upfront. So trying to figure out how to make their lives a little easier. Stephanie: Awesome. Yeah, I definitely- Ajit: Hello. Stephanie: Subscription business. All right, the last big one. So it sounds like you guys are doing a great job of staying ahead of expectation, and your competition. So in your opinion, what's up next for e-commerce professionals? Ajit: Well, I think it will become a key priority for most organizations. I think the digital transformation plus e-commerce, if they are in a business that does e-commerce, will become a major priority. The key will be to try and figure out how to build out that strategy in a meaningful way. If they are global, I think they have to figure out how to make it more global. If they are not global, they have to figure out how to get more local. Either way, you really have to figure out what that business model will look like. And it's not going to be easy because you have to deal with legacy systems, and you have to deal with legacy operating processes, and you have to deal with the legacy sales force and the legacy set of go-to-market strategies. So trying to figure out how to meaningfully make sense of it. There's a bunch of companies that are doing well. But there's going to be a bunch of companies that will have to figure this thing out. So they will be busy, and they will be in demand. Stephanie: Awesome. Love it. Any final plugs before we hop off the podcast? Ajit: No. I just want to say that if you have good people that work for you, you should try and figure out how to hold on to them, because it's going to get a mad rush to get to good people. Stephanie: Oh yeah. I completely agree with that one. All right. Ajit, it's been a blast. Thanks so much for coming on the show. Ajit: Thank you so much, Stephanie. I enjoyed our conversation.  

They say that a goldfish grows to the size of its tank. But what if that small fish is ready to launch into a bigger pond? That is the situation Sea Bags has found itself in recently. With a rabid following and millions in revenue, the Portland, Maine-based retail store has outgrown its initial eCommerce setup and is ready to grow into a major totes and accessories brand thanks to growth fueled by personalization, storytelling and an incredible social media presence. On this episode of Up Next in Commerce, Laura Hnatow, the Vice President, Marketing & Ecommerce at Sea Bags, explains how she is helping to expand the eCommerce platform using a cross-platform social media strategy, and she digs into the re-platforming experience she is leading to help Sea Bags utilize tools like A.I. and M.L. to grow their business both online and as they expand to brick and mortar locations. Key Takeaways: Content, social media and UGC utilization are critical in building and maintaining an active and engaged customer base Re-platforming offers an opportunity to utilize new tools such as A.I. and machine learning to introduce new forms of personalization in product offerings as well as marketing strategies The power of storytelling is the most important tool in your toolkit to differentiate yourself from the competition For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome to the show. Laura: Hi, thanks for having me. Stephanie: I'm really excited about you joining me today. I just was browsing through your website, Sea Bags, and I wanted to buy like about five things. Laura: Oh, that's flattering. Stephanie: Yeah. It's awesome. An awesome product. I'd love to hear a little bit about what Sea Bags, in your own words, and why you joined it. Laura: Yeah. Sea Bags is a company based in Portland, Maine, that manufacturers bags, totes and accessories from recycled sails from sailboats. We gather those sails one at time from the boating community all around the country, and bring them back to Portland, where we cut them down one-by-one. Each sail is a little bit different, therefore each bag is a little bit different from the next. People come to visit us in Portland, where they can actually see the bags being made on the waterfront, at our building that actually overhangs the water, with the hum of lobster boats outside, along with the sewing machines and the seagulls. It's really a great experience in quintessential Maine. Laura: The reason why I joined Sea Bags... It was almost seven years ago at this point. The opportunity was presented to be by the current CEO. It was the story effectively. The whole story about the brand. It was so compelling. I've worked for a number of brand manufacturers before, L.L. Bean and Cuddledown. They all had great manufacturing stories to tell, but this story was so much more authentic and rich. It was that authenticity that made the story so easy to tell. They also had built the brand up on these three core tenets, that drive the business every day. It was this very defined mission behind the company, of being made in the U.S.A., sustainable in product and practice, and also committed to giving back to the community generously. Those three things guide all of our decision-making in everything that we do. With such a clear mission and mandate, in terms of how we were going to grow the business forward, to me it seemed like a no-brainer to join that team. Stephanie: Yeah. That's very cool. What is the story behind Sea Bags? I think it started with the Founder's dad. Right? Laura: Yeah. Many years ago, the original founder, Hannah, her dad, he was in the sail bag-making industry, for the actual bags that hold sails in between seasons. He made a recommendation to his daughter, "You should try to figure out what to do with these old sails. They're just going to landfills." She crafted the first ones. It's our current COO, Beth, who actually grew the business from there. She partnered with her and then grew the business to where we're at now, with the help of our current leadership and CEO. Yeah. It started as a hobby business, and now has really ground to be a lifestyle brand. Stephanie: That's amazing.The one thing I really liked, which I didn't know before, was I didn't realize that sailboat sails actually can't break down. So when you guys say you're focused on sustainability, you really mean it. Nothing would happen with those sails, if you didn't transform them and give them a second life. Is that correct? Laura: You're absolute right. Yeah. Predominantly sailboat sails are made out a material called Dacron. Dacron has an element of plastic fiber in it. It's that resilience that lets the sail hold up to the strength of the wind and actually propel a sailboat forward. But it is that strength in the fiber and how it's made that makes our bags so durable as well. Because of that inability to break down in the landfill, we knew that that material, itself, would be perfect for a bag. They wear like steel. People have gone into our store to show off, "Here's my bag. I brought it 15 years ago." They wash it regularly in the washing machine. They look great. Yeah. They do wear really well. Stephanie: That's so cool. How do you convey that uniqueness to your customers, especially through an online experience? I saw some really great videos that you all had on your website, which I thought were amazing. Is that part of the way that you convey that? Laura: Yeah, absolutely. Storytelling is one of the things that we do best. Like I said, that's why I joined the brand, is this rich story. We do a lot of content creation on our team. It's easy to do content creation when you have a lot to work with. Building really great video content... We have a new line of products all the time. We have new partners that we're collaborating with regularly. So being able to stitch together different videos, content pages on the website. We integrate a lot of user-generated content into the website and our marketing. Laura: So things like customer testimonials, but also customer images. We have a very rich user-generated content campaign, called our Sea Bag Citing campaign. It's a hashtag. And customers in that campaign will tag us and show us all the places they take their Sea Bag. It's really a great opportunity for us, because when we see a great picture, instead of us having to go out and stage a photo shoot, we've got a really authentic image of somebody vacationing using their bag in the environment that it was intended for. Stephanie: Yeah. I was very impressed when I saw your social media following and how engaged people were and the really great photos they were tagging you all in. I definitely see the world of online sales seems to be moving to social media and building a community. How do you think about building that up, and creating relevant content, and keeping those followers engaged? Laura: Yeah. I'd say it's one of the things we're really good at, but it's also probably one of the things that's the most challenging in what we do. Because people spend a lot of time on social media, but everybody's competing for their attention. I have a social media team with multiple partners on it. I've tasked them with making sure, across all the platforms, that, number one, we're showing different content, to keep different types of people engaged. And the other thing is that we're hitting the breadth of content that I'd like us to do. Laura: They have a filter that they put all of our content through, to make sure that we're showing the right variety of, and frequency of, things like behind the scenes images, testimonials, new product launches, PR news that we're doing. We're trying to make sure that we hit the breadth. And also, we're tailoring it to the specific types of platforms. Obviously Facebook and LinkedIn are not a synonymous platform so we make sure that some of the content goes on one location and we speak to those audiences a little bit differently. Laura: I think customers want to be invited to participate and we do a lot of that with either surprise and delight opportunities, where we ask people to come and bid on something for a chance a win to a wristlet. A wristlet is a small item. It's not like a vacation getaway. But that alone... people love the gesture. They love to participate. It's really interesting. When somebody does win a prize, it's funny how authentically and genuinely thrilled for the winner the other customers are. It does become very communal. They're like, "Oh, my God. I'm so happy for you. Great job. You're going to love it." Laura: Then we also find that customers... Getting back to this idea of engagement. This is delightful for us. Customers sometimes answer on our behalf. We'll get comments that say, "Do you have this bag in this color? Are you ever going to offer this again?" Before we can even comment, we'll have other customers saying, "Yes, they have it. You can go to this page." It's almost like we've got these brand ambassadors stalking us right within our social media. That is so flattering. It really does speak to a highly-engaged social media following. Stephanie: Yeah. That's amazing. Having people who are working for you and your brand without even asking. Laura: Yeah. Yeah. Stephanie: It's a key strategy, if you can figure it out. Laura: It is. It's great. Stephanie: Are there any new emerging digital channels that you are excited about or focused on right now? Laura: I think in terms of new channels, I don't think there is one. Social media really is where we're spending a lot of our time as a channel, in terms of trying to grow audience and engagement. We are playing around with some things like influencer marketing, which is important. I think some people might not call it new and emerging either. We're doing quite a bit in just dabbling in lots of different spaces. There is a lot of overlap. I think video is probably where we found the most success, in terms of developing content and distributing. Video specifically for Facebook has been fantastic for us. We're repurposing a lot of that video content again. We like to recycle. We put it in a lot of places. We're trying to incorporate it into the site. We use it for things like Instagram Stories. It's been really fruitful, so that's been really fun. Stephanie: Very cool. Any key strategy that you have when it comes to guiding a customer through that buying journey while utilizing social? Laura: It's interesting. We have a really defined and fine-tuned digital marketing strategy. We work with a great partner that helps us distribute all of our paid advertising. That would include paid social. One of the things about paid social that I think is challenging for people... I do chat with folks who say, "Facebook doesn't really work for us." I am always surprised to hear that. I think part of it is, it's the type of content that you're putting out in terms of advertising on Facebook advertising. Making sure you have the right mix of video, and static ads and then dynamic remarketing ads are really important. Laura: I think the other thing, too, is how you measure it. Of course, there's different attribution models. Last click attribution and first click attribution. Of course, Facebook measures the performance differently than some other folks might measure it. We base it on Facebook's measurement. When you base it that way, you'll see that the programs themselves actually perform much better than if you base it on the other attrition models out there using Google Analytics. Stephanie: That's interesting. I definitely see Facebook stepping their game up with the launch of I think it's Facebook Shops just yesterday or the day before. Laura: Yeah. It's so interesting. The landscape is changing quite a bit. I was actually talking about this recently with the CEO, because we see organic shifting quite a bit. We're doing a lot, in terms of SEO on the website and building organic content. We have a blog that we try to regularly publish. It's made a big impact on our SEO, but then all of a sudden when you have the search results pages changing to favor, again, more ad space? You do immediately see a falloff in your organic search results. Paid search all of a sudden is also doing much better, but you're also spending a lot more money perhaps than you had intended to. Stephanie: Are you guys doing any quick pivots to try and bring back the organic searches? How do you think about that when things change so quickly? Laura: Yeah. I don't think there is a quick pivot with organic. Organic is a long game, as always. The pivot that we're doing right now, and I wouldn't even call it that. We are looking at our digital strategy on a daily basis and really refining things. So if we see something taking off, we are chasing it. A great example is shopping at one point was doing very poorly. We didn't know why and watched it for about a week or two. It was right when things were headed down to a flat line period at the end of March. Everybody was in kind of a lull. Then all of sudden things turned around and a lot of e-commerce folks were seeing a spike. As soon as we saw that spike, we chased it. I think that's the thing. You really have to be on top of it and know when to chase it and keep increasing your budget. Laura: We've increased our budgets in area like shopping more than we've typically been comfortable. I would say the same goes for Facebook Prospecting. We found that Facebook Prospecting is performing incredibly well for us. We do a lot of prospecting with video ads for Facebook as well, and those are very productive too. Stephanie: Very cool. Did you have to adjust any messaging when it came to acting fast on that? With everything going on with the pandemic, did you kind of change how you target people and market to them? How do you think about that? Laura: We changed the messaging. Yeah. We definitely wanted to make sure we weren't being tone deaf to what was going on. We definitely pulled down any ads that had anything to do with travel-related products. We have a great travel collection. We pulled down all of those because nobody was going to be traveling. I think the thing that we did more so than the actual ad strategy was our product strategy changed a little bit. We wanted to look at our product from the viewpoint of how we could add more value to it, to help solve problems for people who were now stuck at home and still had life to conduct. Laura: The example I'll give is Easter came around and people were kind of caUght off guard by the idea that, "Oh, our Easter family celebration is not going to happen. The Easter egg hunt is not going to happen. I have a grandchild. How are we going to commemorate this holiday that is very important to a good portion of the population?" We quickly partnered with a local chocolate company that had just laid off most of its workforce. They were able to bring back five of their employees to help produce chocolate to put in our Easter buckets. Stephanie: That's great. Laura: Within a very short period of time... We thought, "We might sell 50 of these over the next three or four days." We sold over 700. It was one of those things that every day, we said, "How many more do we need?" It was really a matter of how much chocolate could the chocolate maker make in that short period of time? It was a real success story, in being able to reach out, help a fellow business in the community, but also solve some problems for customers. The comments we got from customers were unbelievable. Just saying how appreciative they were because they weren't going to be able to see their family and bring them something. This is how they were able to do that. Laura: So that was really rewarding. That afforded us a lot of opportunity in our digital advertising to reach new customers, to convert customers who were prospects and who were already looking into the brand. It was more about just being relevant with a message that solved a problem for customers. So then we took that same product strategy and same digital strategy and expanded it onto Mother's Day, and Father's Day, and Graduation. Even though a lot of the stay-at-home orders have been loosened a bit? I think a lot of people are still looking for some convenience to eliminate any unnecessary visits to stores that they don't want to make. Stephanie: Yeah. I completely agree. That's such a good strategy, to find partnerships like that. I could see that lasting into the future, where a lot of brands start thinking about who they can partner with. That seems like it would help future-proof both brands, if they figure out ways to work together and send business to each other. I think we'll see more of that over the coming years. Laura: Yeah. I hope so. I know for our brand, we're not going to stop doing it. It was a pilot that was a success. Now we've realized there is an opportunity here and the customers see the value in it. We've always been very collaborative as a brand. We typically do reach out and collaborate with a handful of companies that are like-minded in their business practices and approach. What we often bring to the table is that we're a sustainable product and they might not have that same messaging in their product that they can offer. Or the fact that we're a Made in the U.S.A. product, which again is really valuable to a lot of brands to partner with us. So we have similar mindsets and very much focused the Coastal lifestyles perhaps. Laura: A more recent relevant example, we're partnering right now with Life Is Good. If you're not familiar with that brand, they are an apparel and accessory company that basically delivers the message of optimism in all of their designs. Really quirky designs that we are now able to add to a Sea Bag, and then with these really important optimistic messages during this time that we're all going through. It resonates really broadly with customers. That's another example of ways that we reach out and collaborate. It's given Life Is Good an opportunity to have a Bag story that they sell to their audience, and it gives us a different story in terms of different designs and messaging for our audience as well. Stephanie: That's great. When it comes to messaging, does the consumer know the background of the flag, where it came from and the journeys that sailboat went on? Do they have any insights into that, so they can find of feel connected to their bag even more? Laura: Yeah. It's interesting. We would love to be able to pedigree every bag, but when you start talking about 700 tons of sails that we've saved from landfills, it's really, really challenging to figure out how we could actually catalog that many sails. On a one-to-one basis, no. But what we do is when we take a sail in, our customers are so great about wanting to share the stories. So we've had many cases where a Sail Trade, is what we call it. The customer will bring a sail into our store, for example. Just show up and unfold the sail right in the middle of the retail store and start talking about, "Oh, this is the sail that was on my grandfather's boat. As a kid, we sailed." They just go into this long elaborate story. What we try to do is get somebody from the marketing team downstairs to take notes, and talk to them about it and basically interview them a little bit about what the story behind the sail is. Because that stuff is so meaningful. Laura: We have a really great one on our website called The Santana Sail Trade Story. The gentlemen, Ben, tells the story about how this boat meant everything to him. He had this boat since he was 15. At this point, he was in his late 40s, maybe early 50s. He still has the boat but was retiring the sails. He talked about the different moments that that boat was present for his life and every smudge and stain on that sail means something. He hoped that everybody who buys a bag really understands how meaningful the heart of the sails are. Stephanie: That's great. Feeling like you're connected to a community like that, and another person, without even knowing them, I think it's super important. What people are going to want after all this. Now we're all getting in the state where we're connecting with people that we don't even know online. Laura: Right. Stephanie: We're getting used to that now. I think moving in that direction is really smart and also just fun. Knowing that you have something that has experienced things that you could never even think of. Laura: Yeah. Yeah. We like to say that carrying a Sea Bag is like carrying a story on your shoulder. Stephanie: Yeah. That's great. Have you ever had a sail come through where you're like, "This is from a pirate ship?" Laura: I don't know about that. There is a type of sail called tanbark. It's like a dyed tan-colored sail. The lure of tanbark, it's not often used in sail manufacturing today. It's definitely not as common. The lure is that the pirates, they used to use tanbark sails so that they wouldn't be seen on the horizon with the sunset. It was the way that they were able to sneak about in the ocean and not be spotted in the distance with a bright white sail. Stephanie: That's cool. So if you see one of those come through, you'll know. You'll know where it came from. Laura: Yeah, exactly. I do think we have some tanbark on the site right now. It is definitely a little bit more rare and we tend not to offer it all the time. But I think we have a handful of tanbark designs right now. They're just so cool because they are really uncommon and we don't always offer it. Stephanie: I'd also be giving the side eye to whoever brought that in, like, "What did you do to get this sail?" Laura: Exactly! I could be looking for their medallion. "Are you actually a pirate?" Stephanie: Yeah. I know. "Tell me." Obviously retail is on hold right now, but I saw you guys were expanding. Expanding actually one place that is close to my heart, Rehoboth Beach, in Delaware. Laura: Yeah. Yeah. Stephanie: We used to go there every single summer. I'm from Maryland. Such a cute beach town. How are you thinking about utilizing brick and mortar stores? How are they lifting each other up and accelerating your e-commerce as well? Laura: That's a great question. By the end of this year, we'll have 33 stores, spanning 12 states. That's really exciting for us because when I joined the company, we had two stores. That's a lot of growth. We open four to six stores a year. We're opening eight this year, alone, which is really, really exciting. I think that one of the important things with meshing the retail business and the online business is just a general omnichannel approach. Right? Laura: Our CEO likes to say that the e-commerce site is our biggest retail store. It carries all the products for the brand and you can see them all there at any time. And you go to our stores, and the stores may have most of those products but some different selections that might be regionally appropriate. For example, you mentioned Rehoboth Beach. There might be some coastal nautical chart bags down in the Rehoboth Beach store relevant to that regional area. So there's some things like that. But we try to do... Stephanie: Crabs all over the bags and whatnot? Laura: Right. Yeah. To customize and be relevant to that local region. If you were to go to a store and they didn't have a product, the great thing is that you can log onto the iPad at the store. They can get the bag for you that you were looking for and ship for free. We're using an endless aisle concept that leverages the flexibility that we have as a just-in-time manufacturer. We make our bags on demand for customers. It's great to have that flexibility, where we don't have lead times to worry about. We're sourcing everything locally here in the United States. Most everything we source is within New England. That's really criticaL, in terms of being able to take an order and turn it around in a matter of days. Stephanie: Yeah. That's huge. With all this expansion that you guys are experiencing, how have you had to adjust your technology, your platforms you're using. What does that process look like with such a large amount of change that you guys have been experiencing? Laura: Yeah. It's great. I'm actually really excited about this. It's very timely. We decided right in the beginning of this year to move forward with replatforming our website. It's a huge endeavor. We realize that over the last six years, we've been on this very exciting ride of growth and expansion. Quite simply, we've outgrown the website platform that we're using. I do find it really rewarding to think that we have squeezed every ounce that we could get out of the current platform we're on. There's nothing that we have left unturned. Laura: Embarking onto this new platform, we're working with Salesforce Commerce Cloud. There are so many new opportunities for us to improve the customer experience and to refine our practices, in terms of how we approach selling to customers. Using new technology like artificial intelligence and machine learning, personalization, I think we're going to be as a team much more efficient and much more sophisticated in how we are able to speak to our customers and give them what they want. It's going to take us a lot less time to manage that. I'm really excited about being able to grow the business utilizing those types of tools specifically for the e-commerce website. But the great thing is that it really does trickle into the other channels as well that we sell in retail, for example, too. Stephanie: Yeah. That's very cool. Tell me a little bit more details around how you plan on using AI. When you think of using that with Commerce Cloud, what are your ideas around how that's going to improve the consumer experience? What does that look like? Laura: Yeah. We have some personalization currently on the site that we do. Not too much. It's mostly personalized recommendations. I'm really looking forward to using that, in terms of... One of the most exciting things for me is the merchandising of the site and making sure that the predictive sort of the categories. When a customer lands on a page with 150 different wristlets, that the ones that are most relevant to them are actually rising to the top. It's not based on a static presentation of what we think is the most important things to put at the top. Laura: I think that's really important. One of the things on our roadmap after the site is launched, is to actually take a look at the marketing opportunities in terms of email marketing and how we can pull some of the artificial intelligence into the journey map of the customer and how we message to the customer in their lifecycle. I think a lot of those components as well will be really exciting to start to create not just a series. I think in the past, people have created a welcome series, or a trigger series after they buy X product. Laura: I think instead what I want this to be is a more dynamic opportunity to generate emails to customers that are, again, pulling in predictive content. So the customers have performed certain activities, and then the machine learning decides, "Okay, great. Because they did these five things, the most relevant thing to put here is this item and a message about this." That's what I'm excited about. And then being able to look at that data. I think the data is so exciting too, and knowing what works and what's not working. And being able to do site tweaks and adjustments to it will be really helpful. Stephanie: Yeah. I completely agree. I was just going to ask, were there any metrics that you paid attention to in the past that you think it will be way easier to get to? Or that you weren't able to access easily because it was too hard to maybe compile all the data and see it easily. What are some of those metrics if so, that are now going to be accessible to you that'll really help? Laura: I'm not sure if this definitely going to make it easier. But what I'm really more excited about is seeing... The measurements are customer lifetime value and customer acquisition costs. Starting to really understand the customer lifecycle better. So that once we see customers logging onto the website. Also, we just launched a Customer Loyalty program. Getting customers more engaged and in the habit of, "To get your reward points, logging in and making sure." We're keeping track of what customers are doing and delivering them relevant content, as opposed to just sending them too many emails. Laura: I think I was telling you, I'm in the process right now of cleaning out my email and unsubscribing from everything possible. I don't want people to have that experience with our brand. Saying, "You guys just email me too much." I want the contact that we're sending them to be interesting. The one thing I will tell you, and again this goes back to how we engaged our audience is. The open rates on our emails are really high. The click through rates are high. Our customers, like when we do these auctions periodically on the website. Laura: After the auction is complete, we usually take a look at who won the auction. We'll just see who the customer is. What's their lifecycle like? Almost every time when we do this, the customers email open rate is over 80%. They're highly-engaged people. Of course, they're participating in an auction. You would assume that. But it is so interesting to see somebody opening that emails from us. That to me, is a real testament to the strength of the brand and how engaged people are. Stephanie: That means you're definitely doing something right. For sure. How are you assembling the team for this digital transformation that you guys are about to undergo? How are you thinking about aligning your organization and your team members so everyone can help make this transition quick and easy? Laura: Yeah. That is critical. So what we did, it's probably not so different than what a lot of other folks might do. I assembled a core team. A Project Manager whose in charge of managing the project with our Systems Integrator. Then I have a Lead Developer in-house. His job is really to get into the technical details behind the development and transition. Because he has been primarily responsible for all of the development on our current website. I'm on the team, more from a strategic guidance standpoint and decision-making. Then our CEO has been really involved as well, which I really appreciate. Laura: This is the biggest project that our company has undertaken in the last six years, to do this type of major replatforming. It's a totally new platform. We've done some previous site launches and relaunches, but this one's pretty huge. I still have a number of other people on my marketing team who will participate and we'll start pulling them in one-by-one. We'll also embarking on a training curriculum, that we're developing in-house for our team. That's going to be going on while we're doing the developing, so that we're ready to go when the site's ready to launch. Laura: We're also looking at peripheral technology that is impacted by this transition. So an example I might give you is, our shipping platform and how we ship products. That was impacted. We needed to make a decision to shift to another provider. We assembled pilot team to get together and review the technology available and the vendor. We got all our decision-makers in one room and everybody agreed said, "Yes, let's do it." We've been making these decisions quickly. Kind of in that agile methodology of those sprints. Laura: Part of that is a function of how the Systems Integrator has outlined and structured the project. We have a very tight timeline, too. We're looking to have the website launched by October 1st. We started it in mid-March. We're definitely on an accelerated scheduled and we don't want to miss any milestones. Knock on wood, we are currently on target. So I'm excited about that. Stephanie: That's so fun. I can't wait to see the new site and try it out. Are there any digital commerce trends that you guys are preparing for, as you're launching this new platform and putting out a V2 of the brand? Are you preparing anything in the e-commerce space that you think is coming down the pike, that you're thinking, "We better get ready for this, or this trend?" Laura: No. I can't say that we're focused on anything like that right now. We're definitely mostly looking at the capabilities of the new platform. Like I said, the AI and machine learning component is so rich, that we see that as foundation to changing how we approach, how we do our marketing strategies and communicate with customers. So I think that's really the biggest opportunity for us. Stephanie: Very cool. One side question I had was, when you have your customers tagging all these photos and they're flowing into your website, are people able to buy from those photos right now? Laura: Yeah. On a limited basis right now. When we launch the new site, it'll much more prolific. You'll be able to buy from almost all of them. Stephanie: Yeah. That's great. Laura: I think that's really critical and it's important. Stephanie: Yeah. I know. When I was looking at all the different photos that you guys were getting tagged in, I'm like, "Oh, I want this Bag." There was this one alignment. It was like a tan orangeish bag but it had a duffle bag, and a bigger bag and there was like three of them together. I'm like, "If I could just click in and get this set, it would be so much easier than going into the website and trying to find out what this is called, or trying to figure out which one it was." Laura: Yeah. It's really interesting. The thing about user-generated content is that the customers put the product in context that we wouldn't necessarily be able to in our marketing because it wouldn't make sense. I'll give you an example. Just this week, we received a review from a customer, that was a picture of what they were calling a COVID Survival Pack that they were sending out their friends. It was a Sea Bag's beverage bucket bag. A beverage bucket is kind of a like a tall 14-inch high bucket that has handles, and the interior has six pockets for six beers. Then in the very middle is like a cavity that you can put ice and it has a grommet in the bottom, so that the ice can melt and escape out of the bottom of the bag. So it's a collapsible cooler. Laura: While they were filling the buckets with six Corona beers, and then put a roll of toilet paper in the center. They were mailing these out to their friends as COVID Survival Packs. It got such a laugh for us. It also is great, in terms of giving other customers ideas on ways to use our product in a way that is memorable and fun. Yeah. There's a lot of that. But like I said, that whole idea of content creation... While a lot of stuff can come from us and we can push it out, when it comes our audience, it's even more relevant. Stephanie: Yeah. That's such a fun idea. I want one of those Survival Packs right now. Person whoever made that, please send one my way. I want lime as well. Laura: Yeah. The lime would be great. Stephanie: Yeah. That's a necessity. That's a good point, too, for larger brands. We work with a lot of larger brands developing podcasts for them and whatnot. When you have your customers, where they can actually interact how they want. They don't have to go through the brand policy team and all these approvals and things like this, where maybe 80% of it would never get past the company's PR team. But when the customers are able to engage the way that they want to, it seems like it allows for more organic conversations to start and just things that maybe wouldn't normally get past the actual internal policies. It makes it more fun to have those customers who can do that stuff. Laura: Yeah. Absolutely. I agree. Stephanie: So to shift a little bit. Are you the founder of Women in Retail Leadership Circle? Laura: No, not the founder. Stephanie: Tell me about that. Laura: I'm very flattered. No. Women in Retail Leadership Circle is a national organization that basically connects senior women in leadership, C level and director level, in retail organizations. They were started about seven years ago. They're backed by NATCO Media. I was a founding advisory board member, on the team there. So I've been involved over the last almost seven years. They've grown significantly in size over that time. It's one of the most energized and engaged leadership groups I've ever participated in. They have an Annual Conference that I can say is nothing short of transformational. It has been rescheduled this year for October. I'm hoping that I'll be traveling, to be able to go to it. Laura: Even so, during COVID. The conference is usually in April. They were very quick to figure out how they could be of service to their audience. They set up peer groups that leaders could participate in on a biweekly basis with opportunities to share advice and experience with other senior female leadership. During more normal times, they do regular what they call On The Road Events, where you can connect in a major city, like Boston or New York, over an evening of cocktails or something like that with leaders like Rebecca Minkoff talking about her leadership struggles perhaps. It's a great way to collaborate with other companies. Laura: I've been able to uncover new tactics and strategies for growth. I also use it as a tool to refine my leadership style, because there's a lot of inspirational leadership that we share in those, like I said, events that they sponsor. They're doing a lot of stuff virtually right now. The thing I like the most about it, is it's noncompetitive. It's just great personal development at the senior leadership level, which I think there doesn't happen to be a lot of that typically. A lot of the personal development that happens in organizations usually is more at a junior level. Stephanie: That's really cool. Is there anyone in the industry that you look to for not only leadership, but maybe different tactics or strategies that they're trying out or doing? Do you keep an eye on anyone to incorporate at Sea Bags? Like incorporate what they're doing? Laura: Yeah. I look at a lot of brands, which is the reason why I need to pair down my emails so much. I do. I track a lot of folks. I also follow a lot of people on LinkedIn, because I feel like it's just a great opportunity to see what everyone's doing. As a brand, we try to spend time benchmarking and keeping our eye on brands, again, that are very, very correlated with our DNA. Coastal lifestyle brands, like Sperry Top-Sider, Life is Good, a very inspirational brand. We have a lot of partnerships like that. We also try to keep an eye towards some more local name brands too that we partner with, and just benchmarking what they're doing. Laura: And we also share a lot of information too. An example of that would be Stonewall Kitchen, which is a gourmet food brand. They also are on Sales Commerce Cloud. While we were going through this whole replatforming project, being able to reach out to people within our network and benchmark around what their experiences were on their websites platforms and technologies that they're using is really important. Stephanie: That's great. Having that little network that you can tap into and be like, "Hey, how did you guys do this?" Or, "Does this work better, or this strategy?" That's really fun. And all about, once again, tying it back to having that community that you can tap into to get answers from and learn from people who've already gone through that. Laura: Yeah, absolutely. Over the years, that's one thing that I learned very early in my career. Some of my leaders, actually one that I'm still working with today, who is on our Board at Sea Bags, taught me how important that skill of networking was and that networking is a two-way street. It's really important to make sure that you're not only asking things of people and keeping in touch with them, but you're also being a value to them as well, in terms of that networking relationship. Stephanie: Yeah. That's such a great point. Coming up next we have the Lightning Round, which I can tell you a little bit more about in a second. But do you have thoughts or ideas that you want to share before we move onto that? Laura: Geez, thoughts that I want to share. Stephanie: Anything that we missed? Laura: I'm sure there's something we missed. But I think we covered a lot, too. I'm excited to hear what the Lightning Round is all about. Stephanie: All right. Cool. So the Lightning Round, bought to you by our friends at Salesforce Commerce Cloud. It's where I ask a question and you have one minute or less to answer. Are you ready? Laura: I guess so. Stephanie: All right. What's up next on your reading list? Laura: Oh, on my reading list. I am about to start... I'm like one chapter in. A book by the founder of IDEO. I think his name is Dave Kelly, if remember correctly. It's a book all about innovation and idea generation and how to approach innovation a little bit differently. I'm really excited about that. I'm definitely one of those people that reads multiple books at once, too. Stephanie: Yeah. Me, too. I think they did have a space here in Palo Alto, right down the street from us. Laura: Yeah. I think you're right. I think you're right. The name of the book is The Art of Innovation. Stephanie: Okay. Cool. Laura: It's Tom Kelly. I got his name wrong. Stephanie: Tom Kelly. Got it. For everyone, Tom Kelly. Yeah. That's really funny. We went and we were touring office spaces. We toured through their building. It was very forward-thinking and innovative. I mean, just like what you were talking about. It was all about R&D and trying new things. It was cool to see the inner workings of their space. Laura: Very cool. Stephanie: What's up next on your Netflix or Hulu Video? Laura: Oh, I am watching Ozark. I know I'm a little painfully behind. Yeah. I'm trying to make my way through into, I think, season three of Ozark. I am really enjoying that and it's a problem I will sometimes stay up way to late trying to fit in just one more episode. Stephanie: Yeah. Me, too. I love that show. What's the next conference you're excited about attending? Laura: I am really excited about the Women in Retail Leadership Conference. Like I said, I hope it's happening in October. This is, as I mentioned, it's a transformational opportunity for me to go talk with other senior female leaders about their challenges and opportunities and where they're seeing growth within their companies. I've walked away from this conference before getting lots of new ideas, new business opportunities and third-party partners to work with and collaboration opportunities. So that to me is what I'm most looking forward to and I hope that it still happens, especially because it's in Miami in October, which will be a really nice time of year to be there. Stephanie: That's very cool. I'll have to check that out. What are you doing for fun these days? Any passions that you have? Laura: I am actually, after this podcast, going to jump on my boat with my husband and two kids for the first time this season. That is actually our big passion. This is the kickoff to boating season in Maine, Memorial Day weekend. Usually while I'm on the boat, the things that I do is knit. I've been knitting a sweater for four years now, that I am committed to finishing this year. That's my goal. Stephanie: You have to post a picture when it's done, so we can all see it. Laura: I will. I hope it actually fits. I'm kind of laughing at it going, "I don't even know if this is going to fit." I end up probably giving it as a gift. Stephanie: Yeah. My mom got into sewing and knitting and all that. She was trying to make us outfits, just for fun. Sweaters and things like that. She ended making one that ended up having to go towards our Shih Tzu dog because it... She was like, "Oh, this went really wrong." Laura: Yeah. It can go wrong quickly. That's what I'm worried about. I've ripped out a few rows of this a few times and I'm not sure I recounted correctly. So we'll see. I post a picture regardless of what it looks like. Stephanie: Great. It's a journey. Laura: Yeah. Stephanie: The next hard question. You guys at Sea Bags are moving quick. You're having to transition platforms. It's your job to stay ahead on the expectations and your competition and all that. What do you think is up next for e-commerce pros? Laura: Up next for e-commerce pros. I think that we really are going to have to focus on is how to take omnichannel retailing to the next level. I think that that term, omnichannel, is really broadly thrown around. I think that people don't really understand what it is. I think that we need to be able to deliver a seamless customer experience regardless of where they're shopping and figure out, also, how to do it without inconveniencing customers with asking for their information repeatedly. Laura: I think that's one of the challenges in retail, is being able to know when somebody places an order in one of your retail stores, and being able to translate that into their customer profile so that you have, again, that really full 360-degree picture of that journey of that customer and really knowing what their full lifetime value is. Again, so that you can come back and customize and personalize their shopping experience and make it more rich. They feel valued because they know that you're speaking to them in a way that is informed and caring about what value they play for your brand. Stephanie: That's a great answer. Laura, it's been blast. Thank you for coming on the show. For all our listeners, go check out Sea Bags and don't forget to subscribe, rate and review this podcast. Let's help spread the word and spread stories like the one Laura shared today. Laura, thanks. I hope to have you back. Laura: Thank you so much for having me. It was an absolute joy. Stephanie: It really was. Yeah.  

“What will my customers like and buy?” The timeless retail question today is answered with enterprise-grade purchasing, inventory, and sell-through analytics for big box sellers, but not SMBs. SMBs have long made these decisions with their guts and intuition. But what if a marketplace powered with those same analytics could enable small shops to purchase with the same information? Faire has discovered this opportunity is worth $1 million in sales per day, and growing.  Faire is a wholesale marketplace that helps retailers find and buy wholesale, while also connecting makers with physical stores or businesses. and it was built using a data-first model that evens the playing field for those small shops. On this episode of Up Next in Commerce, Marcelo Cortes, the Co-founder and CTO of Faire, joined us to explain how the company got started and the steps it took to reach the billion-dollar valuation it boasts today. Much of the success is thanks to Faire’s ability to analyze data and iterate based on what that data tells them, but it is also built on a sense of community between makers and buyers, who have been able to find each other in a world filled with outside noise. Key Takeaways: Implementing personalization throughout the buyer & seller journey is key when setting up a two-sided marketplace You need to have a message people understand quickly that really resonates with them Being able to iterate quickly and build on the go allows you to be more nimble and capitalize on data you are collecting to create a better business and experience For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone, and welcome to Up Next in Commerce. This is your host, Stephanie Postles. Today, we have Marcelo Cortes joining the show, the co-founder and CTO of Faire. Marcelo, how's it going? Marcelo: It's great. It's great to be here, thanks for inviting me. Stephanie: Yeah, thanks. It's fun having someone, you said you were in Toronto, or a little bit north, right? Marcelo: Yeah, that's right. Our office in Canada is in Kitchener-Waterloo, which is about an hour from Toronto. Stephanie: Cool. Do you ever make it out to the San Francisco area? Marcelo: I do in normal times, I go very often. I usually go there once a month. Stephanie: Next time you're around, you'll have to stop by our studio and we can do an in person interview. Marcelo: Yeah, that would be great. I hope that can happen soon. Stephanie: Yeah, I hope so too. Fingers crossed. I would love to hear a little bit about Faire, and your background and role at Faire. Marcelo: Yes, of course. Faire was founded in 2017. Me, Max and Daniele are the co-founders, the original co-founders. Jeff also started the company with us, but he left and came back after a few years. Faire is a wholesale marketplace. We help retailers, basically mostly physical stores, brick and mortar, find products to buy wholesale. Then on the other side of our marketplace, we have all the brands or makers on our platform that are selling products, and we help connect those makers with the physical stores. Stephanie: Very cool. The makers reminded me, in a way, of the Etsy makers that normally would never be able to have their products in a large retailer, like a Nordstrom. Is that accurate? Marcelo: Yeah. We are somewhere in between Etsy ... I would like to say there is a little bit of intersection with Etsy, but a little bit a level above as well, where we do have smaller manufacturers or makers that have a small operation, but we also have some more sophisticated ones that have warehouses and things like that. Stephanie: Cool. How did you think about creating Faire? How did that idea come about? Marcelo: Yeah, it's an interesting story. Max, who is our CEO, back in the day after he graduated from school, he was working on bank consulting. He was always an entrepreneur by heart, so he was always trying to do businesses on the side. A friend of his asked him if he was willing to try to build a business of selling a product or distributing a product in the United States. The product was actually a physical umbrella, a rain umbrella that was manufactured in New Zealand, called Blunt Umbrellas. It's a very cool umbrella. It has cool shapes, cool colors, doesn't break with wind. He was like, "Yes, let's do this on the side." Marcelo: That's when he learned how the wholesale industry works, especially in North America. He searched on Google, how do I start selling products, or how do I distribute products wholesale like everybody else does? Basically, there were a few ways. You can go find sales reps or hire sales agencies to have all the sales reps trying to sell your products. You have to go to trade shows. He did all of those things. Eventually, he got this company to be successful distributing the product in North America. But at the same time, throughout all this process, he couldn't stop thinking that there's a lot of areas here that could be improved with technology. This whole market is really in the dark of technology. Marcelo: Years later, we met at Square. We all worked at Square together for four or five years each. Combining the expertise we had there with dealing with small businesses with this idea of, how can we really add technology to wholesale distribution, make it better? We finally came to the conclusion that ... we found the data that's available online as well on products, and on makers and on retailers, we could put it all together and build this idea that could add a lot of value to everybody in the industry. Stephanie: That's awesome. Were there any technologies or insights that you gained while you guys were at Square that you took into the business when creating Faire? Marcelo: Basically, there isn't anything .... technology that's advanced. There were combinations of many smaller things. For example, the fact that if you think of a small store, a brick and mortar store that might have one to five locations, which is usually our target audience, they're trying to compete with much larger brick and mortar stores, big buck stores, or with eCommerce. They have no data. If you think of Walmart, they have data on all their products. They know what sells well where, what time of the year. The little store, they're buying products basically all by intuition. They see a few products, they look at it and they have to make a decision whether they're customers are going to like it or not. Marcelo: We realized that we can actually build something that will give them the ability of having the same type of tools that much larger businesses, or big buck stores, or eCommerce platforms have, to make much more well informed decisions on what products are going to work well in their stores. On top of that, another thing that we learned a lot of course at Square is how to deal with underwriting the small businesses. We helped Square do Square Capital, which is the landing program that they have at Square. Part of that process, we learned a lot about how do you decide how much credit to give to a store like this? That's also part of what we do. Marcelo: As a store comes into our platform, we give them the ability to buy products that they can pay 60 days in the future. We give them credit to buy products, and we allow them to return any of those products if it doesn't work. So, basically- Stephanie: Yeah, that's huge. When I saw that you all did that, I'm like, wow, I don't know how you make that work. But not only giving store owners credit and saying you don't have to pay me right away, and you can return products? I haven't heard of anyone else doing that. Marcelo: Yeah, that's how we are combining and adding technology to this ecosystem to make those things possible. We have to do our job well to be able to offer these value propositions. We have to make sure that we are recommending the right products to the stores, and guiding them into buying the right amounts as well. We can't just let them buy way more than they would be able to sell. We should be steering them away from products that we don't think are going to perform well in their store. If we do that part of the job well, the other part is also making sure that the makers or brands that we're onboarding on the platform are also very high quality and good, so that, again, the products that we are selling have a much higher chance of performing well in stores. Stephanie: How did you build that platform to cater to different types of clients? I can see the one person in Arizona making bracelets versus the larger person who's used to fulfilling large quantities, because maybe they've sold on other platforms before, and then different sized retailers. How did you build a platform that caters to all of them? Marcelo: Yeah, it's a very hard problem. That's another place where technology is used to our own advantage. We need to be very good at serving customers differently, and providing a completely customized experience to different types of stores. That's what we do. That's why data science is so important for us, and we have a very strong data science team tackling this problem of ranking and personalization. The reality is, we really treat each customer differently. Every different store that comes to our platform, they have a completely different experience. If you are a store that sells gifts, you're going to see a lot of gifts. The more we learn about you, the things that you like to see, the search that you make, the products that you sell and you buy from us, the more accurate we get at serving you products that will connect well with your store. Marcelo: But what we can't have, for example, in our platform is that you are a store that sells apparel mostly. You come to our website and all you see is candles, or back products or things that are completely disconnected from your business. From day zero, we have spent a lot of time and effort making sure that we have data, and we are very data driven, and we are building a very custom experience for every different person that comes to our website. Stephanie: Yeah, that seems super important because it can be really easy to get lost when there's tons of products, and you're automatically seeing the wrong one to start with. How do you gather that data on, especially a new customer who's never bought from you before and they're coming on for the first time, how do you have any data to even know what to show them? Marcelo: Yeah. Sometimes it's hard. Sometimes we can't do it and we have to start with products in different categories, and then start to learn as they navigate the website. But there are things you can do in advance as well. Even a brand new customer ... they usually have a reason why they came to your website. A lot of those reasons are they were recommended by somebody, they clicked on a link somewhere. If they come from an ad, it's very easy to know what's the ad that they clicked on, and we at least have some idea of what caught their interest. Obviously we have too this mark into serving things or products that are related to what are where they came from. If they clicked on an ad for a candle, we're going to show them similar types of candles, or of course that same candle that they clicked on. But we are also trying to show, oh, here's some apparel categories as well, or here's some best sellers in a different category. Marcelo: Again, we have to show relevant data, and then show enough of other types of data that we can give them a chance to tell us more about who they are and what they are interested in. Stephanie: Got it. Then most likely, I'm guessing you encourage that sign up process, so then you can learn more and more about them. Then you can recommend products even further after that? Marcelo: Exactly. As they sign up, we have some quizzes. We ask them for more information. We keep adding and changing how we do that, of course. But we will try to do a Netflix style, like, what are the types of products that you're interested in, or categories? How big is your store? Things like that. The reality is, we are in 2020. Every little store, brick and mortar store, they have a presence. Once we learn who they are, what store they are, we will find if they have a website, and we will learn more about them by looking at data that we can see online. Publicly available data that's on the internet as well. Stephanie: Got it. Yeah, that's so cool. I saw that you leveraged machine learning and AI to recommend and show these retailers what's going to do well in their store. How do you know what would do well in San Francisco versus Washington DC? What do you utilize to help teach the retailers what they should and shouldn't buy? Marcelo: Yeah. That's obviously part of our secret sauce. There isn't- Stephanie: You don't want to share that with me? Come on, Marcelo. Marcelo: No, I can share it for sure. It's just ... there isn't a very easy answer. It's not like, oh, if you're in San Francisco it's for sure that you're going to sell candles very well. But there is a lot of input and a lot of signals that we gather. I can give you some examples that make a lot of sense and they're very obvious. For example, we have so many stores on our platform today. There's a lot of correlation. Remember I told you Max was selling those umbrellas, Blunt Umbrellas? Stephanie: Mm-hmm (affirmative), yup. Marcelo: Even from his time selling those umbrellas, he realized and he learned very quickly that there are correlations between products as well. If there is a store that sells well the umbrella, there are some products that will also sell well in that store. They could be completely different categories of products. It could be a watch. It could be a sunglass. But the customers that are usually interested in this Blunt Umbrella, which is a high end umbrella, are also going to like and very likely buy products that are in a similar style, or similar type of high level upper cost product. Marcelo: Imagine now instead of one umbrella, we have millions of products that we sell, and we get data back from these stores. We know what's selling in each one of these cuts because they're buying it again from us. So we start to be able to correlate things. You can have a gift shop in New York, and you're selling three products that are very similar to a store in San Francisco. Now you add the fourth product, and that product performs very well in your store in New York as well. It's very likely that that store in San Francisco will also have that fourth product performing well. Stephanie: Got it. That's really cool. Have you ever thought about running on the side a point of sale system that you can put in the store, so then you don't only have access to the stuff that's sold from Faire, but then you have access to their entire inventory and catalog? Then you really have full insights into what's happening in that store, what sells together. Then you can even recommend things at, I guess, a better pace? Marcelo: Yeah, 100%, we have thought about that. Stephanie: Are you doing it? Did I already uncover more secret sauce? Marcelo: Maybe. What we do today, of course we don't have our own point of sale system today. But what we do is, we integrate with their point of sale systems. Stephanie: Got it. Marcelo: We add value to them if they connect their point of sales with us as well. For example, imagine that you are a small store and you just placed an order for 20 products. Then next week, you're going to receive all those products in your store. You need to start selling them right away, but you restore all of them in your point of sale. So it takes time and effort. You need to type in the prices, the descriptions. You need to upload photos to the point of sale system. If you were a store that gave us access to your point of sale system, we do that completely automated for you. As you place an order, as soon as the order arrives in your store, all the products automatically show up in your point of sale system. Stephanie: Got it. Yeah, that's definitely- Marcelo: Of course with that, we get some more data from the point of sale that we can help with recommendations as well, and learning more about what performs well in your store. Stephanie: Cool. Yeah, that's awesome. When you started out, did you build your eCommerce platform from scratch? Or did you buy and eventually move everything over to custom? What did that transition look like? Marcelo: Yeah, that's a good question. We actually built everything from scratch, and we built it on the go. On the early days, we started ... and we went to Y Combinator in San Francisco. When we were accepted at Y Combinator, it was end of 2016, I was still working at Square. Max had left already. Daniele was still working at Square. We basically quit our jobs at Square, and we started Faire in January, 2017 at Y Combinator. We had nothing built. We had this pressure that three months later, we would need to do a Y Combinator demo day presentation to thousands of investors, and we needed something to show. Usually the companies that join Y Combinator, they have been doing something already for a year or two, and they get there to try to scale their business. We started from scratch. Stephanie: I was going to say, that's ... well, maybe it's not unheard of now because I think they do accept a lot more people now. But back in 2016, if you didn't have an actual product, you probably weren't going to get accepted if they couldn't see something. So that's awesome. Marcelo: Yeah. But then what we had to do is build it on the go. That's also a lot of how ... it dictates a lot of how we operate today and through the history of the company. We have always been very data driven. When we started, of course we knew this idea of let's let people try the products before they buy. We told Max, we're like, "We really believe in your idea, but let's prove that people really want this." Marcelo: Again, without any technology or any website, we went into stores that Max had contacts with because he used to sell the umbrella. We told them, "Listen, we are going to give you products that we think are going to do well in your store. You don't need to pay us. If you sell the products, you pay us. If you don't sell them, we will come back and pick the products up." The stores were like, "You just want to give me free products to try to sell? We're going to do it, for sure." Stephanie: Yeah, no brainer. Marcelo: That's how we validated the idea. We also got lucky because we had no idea what we were doing when it came to picking products, so we just bought random products. Turns out that one of the products we bought, it's called Pyropets. It's this candle in the shape of animals. When they burn, the skeleton of the animal shows up. Stephanie: Oh, that's awesome. Marcelo: Yeah, it's pretty cool. Stephanie: I need to look that up. Marcelo: It's very cool. They have many different animals. That was one of the products that we gave to the store in San Francisco. The feedback we got from the store right after was that, "Listen, I would never have bought this candle to sell in my store. But since you gave it to me for free and I could try it, I put it on the shelves," and the candle happened to become one of their best sellers. Stephanie: Wow. Marcelo: That's when we saw, okay, there is definitely something here, especially if we can use data to find actual good products, not just random products that we picked on the internet. From that point on, we started to build the experience on the go. Very quickly, we built a website where people could place orders. They would see products and place orders. Everything in the background happened manually. An order would be placed on the website. Basically, people would be able to add products to cart and check out. We didn't even collect payment information. We weren't even charging people. We would deal with payments later over the phone. Stephanie: Oh man, that's great. Marcelo: Yeah. We would get an order. We had one contractor that we hired in the early days, he would be in charge of calling the manufacturer and placing the order over the phone. He would call the maker and be like, "Hey, just got an order. Five Pyropets to be shipped to this store in San Francisco. Here are the details. Here's our company credit card, we're going to pay for this order." There was no automation, nothing else built behind the scenes. Again, we kept building it on the go behind the scenes very quickly. Marcelo: Fortunately, there are a few good things that happened with our company. Very quickly, we found product market fit in the summer of 2017. We started to grow a lot. But by that time, we had automated all of this process. We financial managed to build all the technology so that all this order placement with the makers, and the fulfillment and everything, was fully automated. But it was really like building the train as the train's going forward. Stephanie: Yeah. But a lot of people ... some of the best advice is do things that don't scale in the beginning. That's how you learn what you actually need to build on the backend, instead of doing it all upfront and realizing, oh, that's actually not even how the seller or buyer interact with our platform and now we need to redo it. Now you guys are valued at over a billion, right? A billion dollar valuation, or higher, probably. Marcelo: That's right. Stephanie: That's insane. Congrats, that's awesome. Marcelo: Thank you. Yeah. Stephanie: When you were setting up your website in the beginning, is their any best practices, either setting up the buyer side or the seller side where you're like, we've seen this work really well on the buyer side of the platform? Or these types of ... setting up the eCommerce like this, or having certain pop ups or anything? Anything that you would recommend to someone who's looking at starting a marketplace, or improving the marketplace that they're already running? Marcelo: it's very hard to learn without doing it. We didn't have any facts. We never built a marketplace or an eCommerce platform before. What we did do is, we moved very fast and we built very simple things. We spent a lot of time scoping things down. We thought we had very good intuition that something is going to work. Of course, eCommerce is a problem that's figured out today. There is many very successful eCommerce platforms that you can see how they do things. We always looked at the successful examples when we built our things, and then we tried to build our own version of it. We built the simplest thing possible. We all talk about building the simplest possible thing, but we really tried to do it. We spend time removing anything that would be essential, but we managed to build things that would add value. Marcelo: We built things very fast. We launched things very fast. We gathered information on how people are using it very fast. Then we integrated a lot, improving the experience with our learnings. Many times, our intuition was wrong, and things that we built were not the right things, and we shut it down. But at least we didn't spend a lot of time doing those things. Stephanie: Was there anything that you shut down that you see a lot of other store owners using right now where you're like, oh, we saw that didn't work well, you might want to look into that on your store? Marcelo: Well, it's hard to know what is not working for other people. It might not have worked for us. There is one very interesting thing. It's not really, I think, we'd do it. But when we were in the early days trying to finding product market fit, our very first idea for Faire, as I told you, we walked into these stores and we told them, "Just keep this product. If you sell them, you pay us. If you don't, we are going to take them back." This is pretty much a consignment system. That's what we wanted to build. That was our very first big mistake, I think. We were very sure that we could build a successful consignment eCommerce platform where we would connect to the point of sale systems in the stores, and we would know when they sell something, and they would pay us when they sell. They would keep things, I don't know, until they don't want them anymore. Marcelo: Turns out that the word consignment, the term consignment is really ... people really dislike it in our market. They think of consignment as products that nobody can sell, and they are willing to give it to you for free to try to sell it for them. Stephanie: Yeah. That's what first comes to mind when I hear that word. It's like when you go and you can sell your clothes to a company, and they're like, "Well, we can either do consignment or we'll just give you money upfront." You're like, oh, I'd rather just have money because I don't want to take that risk of you not being able to sell it because you bury it down in a bin somewhere. Marcelo: Exactly. It turned out that whenever we told people consignment, they ran away from us. We couldn't understand it. We're like, it's a good thing, we're giving you very good products. We've built this machine that finds good products, and we'll let you carry them for free. Then we changed our message. We started to call it try before you buy. We're like, listen ... we completely erased the word consignment from our vocabulary. We were like, "This is try before you buy." Stephanie: That's great. Marcelo: You get the products, you have 60 days to pay. Within those 60 days, you can return anything. If you sell, great. Basically, we didn't change much of the consignment idea, but it completely changed how customers understood our business. Stephanie: Yeah, that's great. Such a good lesson too of how little things like that can go a long way, and how just doing those simple tests could really help your business completely transform into a way bigger one if you stop using certain words that maybe are throwing someone off, that you're so deep in the weeds you didn't even realize it. Marcelo: 100%. There is this, of course, concept that people talk a lot of, product market fit. But in this case, there's this other concept that people don't talk much about, which is the message product fit. You need to have a message that people really understand quickly what you're trying to do, and it resonates with them. Stephanie: Yeah. You guys would have to have two different messages, one for the buyer, one for the seller, and not try and make them both be the same, I'm guessing. Marcelo: 100%. The way of selling Faire to a maker or a seller is much different than the way we sell to the stores or buyers. Stephanie: Do you have different teams focused on that messaging? Because it seems like it'd be hard to where different hats where it's like, one second I'm trying to think how the buyer things, and then I'm going to shift over and think how the seller thinks. Is it different teams, or the same one working on all of that? Marcelo: Yeah. Today, it's completely separate teams. Sales teams, ops teams, everything is completely separate. The market team is the same. The messaging is one team that creates both. But how we deal with them internally in operations and sales is completely separate teams, and also product. There is teams building products for the makers, and there is teams building products for the retailers. Stephanie: Cool. That's awesome. I saw you guys had a podcast that you just launched, and it made me want to ask a little bit about your content strategy. What was the thought behind launching that podcast and the goals behind it? And what kind of ROI you're looking at for that project, if any? If you want to talk a little bit about that, that'd be great. Marcelo: Yes. The podcast was also part of a thing that we wanted to do for a while. But our customers, even though we are online, our customers are not online. We are dealing with offline local retailers, and they love community. That's one of the initiatives that we're trying to build, to help them with community, to listen to each other's stories, to learn from each other's mistakes and connect them more. It was especially important to launch it now with this whole COVID-19 era. People need more information- Stephanie: Yes. Yeah, perfect timing. Marcelo: We rushed it out at this point to really get more data and get more information. And really, to support more of the retailers and makers in this time that they really need it. Stephanie: That's great. Marcelo: Yes, thank you. For me, I love listening to it. It's so ... I am motivated to listen to our customers stories, and how they are struggling or how they are being creative to deal with these issues. The feedback I have seen so far has been amazing as well. People really love listening to each other's stories and hints. Again, they see that other people are also struggling, they're not alone in this. They feel more connected. So far, the feedback has been amazing. I personally love to listen to these stories. Stephanie: Yeah. No, that's really fun. I love anything like that that shows I'm not the only one in the struggle right now, and then that you can bypass any future struggles that maybe you don't have to go through if you hear someone else detailing it. You can skip right over it, if possible. Marcelo: It's called Brick and Order. Stephanie: Brick and Order? Marcelo: Yes. Stephanie: Is it on Apple, Google, everywhere? Marcelo: Yes, it is. Stephanie: Cool. Yeah, we will also link that up in our show notes so people can find it. Marcelo: Thank you. Stephanie: Because it sounds like it's a good one. With the pandemic right now, and putting out different types of content and all that, how have you had to shift, if at all, your business model? Because I'm assuming what people were coming to buy before COVID-19 is very different than what they're coming to your site to buy now. How did you have to think about shifting not only what you were maybe recommending, but also what you were suggesting to stores who are probably, a lot of them closing down right now? How did you make that transition or shift? Marcelo: Yeah. COVID has been very big for our company. It hit our customers really hard. Our customers, of course, are small stores. Most of them are still shut down at this point. It was a big transition for us as a company, as well as for our customers. We are this high growth startup that has been adding more customers on both sides of our marketplace very quickly, and a lot of our focus is on growth and adding value to these stores. Suddenly this happened, and we had to shift focus very quickly. Marcelo: The first thing we did when this whole thing started to happen is, of course, to take care of the employees and making sure that everybody's safe. We started working from home very quickly, I think seven weeks ago. Then very quickly, we shifted focus to, okay, now how about the business? Very fast, we had to change from this high growth mindset, sell, sell, sell, to how do we help our customers get through this pandemic? For us, we are a well funded company. We have a lot of money in the bank. It's easier to, again, slow down and survive for whatever it takes, a few years, a few months. But we were really worried about our customers. We're like, what's going to happen with these small brick and mortar stores or the small makers around? Marcelo: We started collecting data. That was the first thing we did. We ran surveys with thousands of makers and retailers on our platform to understand their financial situation. We were asking things like, do you have money in the bank to be shut down for two, three months? How is it going to affect your business? We collected all of this data. We of course shared the aggregate of the data with the community, with everybody on our marketplace. Then we changed focus very quickly to try to help makers and retailers do the right things for them to survive. There was so much confusion on what's going to happen, so much information all over the place that they had a hard time, and they were all overwhelmed with it. Marcelo: We tried to inform them. We tried to guide them on what are the right things to do right now. We changed our focus from growth to helping our customers survive this pandemic. We built tools to help them apply for the government relief funds. Stephanie: That's great, much needed. Applying for that was crazy. Marcelo: Yeah. We tried to help guide them through it and help them understand all these programs. It's a lot of legislation, a lot of language. We tried to spend hours ourselves learning about everything, and writing it in a very simple way that they will understand it, and they know what applies to them and what don't apply to them. We built financial calculators so that they can understand what are the things they need to do? Do they need to renegotiate rent? How can they reduce expenses so that they can basically survive longer with the funds that they have? Marcelo: Then the next thing that we did is really, okay, now another way of helping stores survive this is helping them adapt to this new world. First thing we did is help stores and makers, makers that could sell essentials, they could make different things, or they were already making those different things that were essentials. We started to help them focus on that. For stores, the same. We're like, listen, you might not be selling gifts right now, but you could be selling masks, you could be selling hand sanitizers. You could be selling other categories, like food, that's still in high demand. We definitely changed recommendations. We guided people into adapting their business into this new world. Stephanie: Wow, that's great. Did you see the makers be be able to shift and adapt quickly, or what did that look like when you were recommending maybe tangential things, but also maybe something that hey hadn't focused on before that. Marcelo: Honestly, it really impressed us at how resilient our community is, our customers are. Most stores, especially small business owners, they have survived for so long against brick and mortar stores. They survived Amazon, giant online eCommerce, to keep their business operating. So they are also surviving. They're being super creative on how they change their business to survive this pandemic. Stores, of course, struggled more than makers because, again, they were completely shut down, and some of them didn't even have access to go to their store. Makers adapted much faster. Some of them already had wide presences, and they just had to switch more of their traffic to online. But the stores also were very resourceful. They are really trying very hard to survive. They are doing a lot of the things and following a lot of our recommendations as well. Stephanie: That's awesome. Yeah, that's so great hearing how you shifted everything you were doing to focus on how to help them, give them the tools that they needed that didn't exist in the marketplace, because who knew that this was coming down the pike? What were some of the top learnings from the survey that you sent out that you heard? Because something that comes to mind I just heard about was that apparel retailers, smaller ones don't have more than two month often times of cash on hand to keep them going. What were maybe some overall themes that you got from your survey that maybe you were surprised by? Marcelo: Yes. At the time, and remember that the survey was done over a month ago now when this whole pandemic really stared, but I'll tell you some of the numbers and the things that we learned here. Stephanie: Yeah, I would love that. Marcelo: 76% of the retailers only had enough capital available for up to three months of operating expenses. Stephanie: Wow. Yeah, that's crazy. Marcelo: At the time, and I'm pretty sure this has shifted a lot since then, but at the time only 30% of the retailers had anything with regards to selling online. Stephanie: Some of that seems hard to believe. It makes you realize the importance of surveying someone and not just going forward with assumptions that you have about them, because I would've never thought the numbers were that high. Marcelo: Yes. We keep trying to survey them more often as well to see how it's changing. Other things that we learned was that 45% of retailers, they were already connecting with other businesses. Again, trying to build more community, learning more from each other and sharing information. 41% of the makers at that time had already started changing or reprioritizing their product assortment. Stephanie: That's good, being scrappy entrepreneurs. Marcelo: Yeah. Of course, we adapted. We started launching and selling a lot more face masks. Today, we have already over 200 brands that are selling face masks on our platform. The masks that we sell, they are produced in the United States by local makers. Most of the products that we sell are actually today still made or partially made in the United States. With the results of the survey, we tried to also create a lot of educational content to help everybody else learn about what's happening and how people are shifting their focus to try to help more of our customers to do it as well. Stephanie: How are you getting the word out about that educational content? How do you bring traffic to the content you're making? Marcelo: Yeah, there is a few ways to do it. Of course, we very often email all this information directly to the customers on our platform. We have two blogs. We have a blog for makers, we have a blog for retailers. We have community forums for retailers and we have a community forum for makers as well, both on Facebook at this time. We also have hosted a few webinars that had almost thousands of people attending at the same time. Stephanie: Oh, very cool. How do you see the webinars paying off? Do you see people enjoying that? Do you think that's a good use of time? What have you seen perform the best? Marcelo: We got amazing feedback from the webinar. People oversubscribed. We actually had a hard time dealing with all the subscriptions because ... the platform we were using was not ready for the amount of people that showed up. Stephanie: That's a good problem to have. Marcelo: Yes, always a good problem to have. But me, being the CTO and having to deal with the technology makes my life harder. Stephanie: What did you do to have to try and quickly ... Marcelo: We used to platforms at the same time, and that accommodated all the traffic. But yeah, people came back and they watched again and re-watched it. They shared it a lot. Webinar is not a thing that we have done a lot, but we are definitely going to be doing more of it. Stephanie: Yeah, that's very interesting. With everything that's happening now, what kind of digital commerce trends or patterns do you see coming down the road? Especially because you're so close to retailers and makers, it seems like you guys would have a good idea on what the future could look like if you had a crystal ball. How are you maybe thinking about what the future looks like, and how to adjust Faire based on where you think it's headed? Marcelo: I really wish I could ... Stephanie: Come on, Marcelo. Just tell me the future. Marcelo: I had a crystal ball. Of course, we can't tell the future, but we can pay attention to how fast and what direction things are going. It's obvious that everybody's trying to do things differently online and remote. How that's going to affect makers and retailers too, yet to be seen. I think honestly, from my own personal experience and from the platform, there will be a lot of behaviors that will change, that we do expect to change, but they are for the better. For example, curbside pickup is a thing. I don't think it was nearly as popular as it has become. I think it is going to be a thing that will stick with us. People do enjoy the ability of buying something, and whenever they have a chance, they go and grab it. Marcelo: I think for our platform specifically, that's going to become a very powerful thing. Because now, as I said, we launched this shop neighborhood. We can get consumers to find cool products online that they would never have found otherwise. They will find all these stores around them where they can go and find those products, they can buy it online and go pick it up. Not only go pick up the product that they bought, but they can also see all the other products in the stores, and actually meet the people that are selling this in person. That's one thing that people already loved in local shopping. They like the experience of walking into a shop, and talking to the owner and listening to the stories of the makers or the products. Stephanie: Yeah, that's how eCommerce started. I think back to, I don't know if you watched this, Marcelo, but Little House on the Prairie, huh? Any fans of that? They would basically, the shoppers would go into the store, and they would talk to the store owner and say their problem. He would go in the back and figure out exactly what they needed, and then would check back in with them to make sure it solved the problem. It's getting back to the roots of Little House on the Prairie days. Marcelo: Yeah. My prediction if I had a crystal ball here, if I were to make a prediction for the future is that, what this is going to change is that it's going to make the relationship between online and offline stronger. There will be more intersections. There is a world in which you are both online and offline at the same time, and that's the wold we're living in. We have been getting to this world slowly by having only online interactions and only offline interactions. I think what this is really accelerating is the merge of the two where you have both online and offline experiences with the same companies at the same time. Stephanie: Yeah, I definitely can see that happening. Are there any digital transformations or tech transformations you see necessary to make that happen? Marcelo: I think the technology, a lot of the technology already exists. Of course we have all this video technology, video chatting, video broadcasting. They have been available for a while now. But the applications of these technologies are going to change a lot. Again, another thing that we are working on, I feel like I'm here just marketing the things that we have been doing, but- Stephanie: Hey, that's all right. I'm sure people can learn from it. Marcelo: Another thing that we are working on is a product that will allow people to connect virtually, the same way that they have been doing offline. Think about it as the experience of a local market where makers are going to just be able to show videos, or have a live experience where they connect directly with many or very few of their customers at once, in a private or public type of meeting set up. Stephanie: Got it. To deepen the relationship that maybe all was virtual, or through just emails or just ordering, and you never know who's on the other side. You're trying to enable that relationship more kind of in person, but virtually? Is that how to think about it? Marcelo: Exactly. It's hard to give you more details yet, but we are going to be launching it this summer. Stephanie: That's great. When it comes to thinking about digital transformation, I know earlier you said that you would look to successful examples of other companies, of how they set up their eCommerce stores or strategies they were utilizing. That was the early days. Is there anyone now that you look towards as a leader when it comes to digital eCommerce, or someone that you're following closely where they have best practices that you guys like to keep tabs on? Marcelo: I don't think there is one company. I think, of course, coming from Square, we look a lot at Square and what they have been doing. But I think our platform is special in the way that we combine these local stores, these local relationships into an online global marketplace. I think of our platform as being or having some intersection with Pinterest, for example, which creates a very nice experience for people to navigate through things that they are interested in. We as a platform, I want our customers to enjoy this experience of finding products. Our customers, if you think about it, they start at a small store because they love to find products to show people, to sell, to show their friends. To be able to get these type of people to shop online, we need to create an enjoyable experience for them as well. They need to come to a website where they enjoy navigating, they enjoy looking at products. We're going to show products that are always relevant. They can keep diving deeper into a category and finding new, cool products that they like. Marcelo: Again, it's not just looking at eCommerce, but looking at what are the platforms that are offering the best possible experience that really get people to be hooked onto them? And trying to merge it all into our own platform. Stephanie: Yeah, I love that. I think that's such a good reminder that just because maybe you sell clothing, you shouldn't just look at other clothing companies. You should maybe look at how food companies are doing it, or like you said, looking at Pinterest and how they display images. Trying to just tap into completely different verticals to then pull those best practices up into your company, I think is super smart. All right. We have a couple minutes left. We always do a lightening round at the end where you answer a question in a minute or less. I was thinking about starting with the harder one first, and then doing the fun ones afterwards. How does that sound? Marcelo: Sounds good. Let's try. Stephanie: All right. All right, Marcelo. It's your job to stay ahead of tech and expectations and competition in the industry. In your expert opinion, what's up next for eCommerce pros? Marcelo: Oh, I need to think. This is a hard one. Stephanie: Yeah, got to start with the hard one first. Then we get to the fun ones. Marcelo: Yeah. Answering from experience, of course, that's very important. That's Faire. eCommerce is not just about showing products anymore, or letting people navigate through categories of products. The future of eCommerce is really a very customized, personalized experience. Data science is mandatory for successful eCommerce today. Stephanie: Yup, completely agree on that. All right. What's up next on your reading list or podcast list? It can be your own podcast, if you want, the Brick and Order. Marcelo: It's definitely our own podcast, talking about podcasts. I have enjoyed it so much. It inspires me to keep doing my work. The next book that I'm reading, I have just started, is Finding Genius, which is VC related. It's not really eCommerce, but it's pretty interesting. Stephanie: That's great. Yeah, exploring different industries and verticals. That's what it's all about. What's up next on your Netflix or Hulu cue? Marcelo: I have just been watching random things. I haven't had much time to watch TV lately with all the things we have been doing. I finished watching The Vikings on Netflix. That was the last series I watched. Stephanie: Very cool. Marcelo: After that, only random movies that I just find. They might even be old movies. There's nothing exciting. Usually I fall asleep if I start watching it. Stephanie: Hey, that can be a good way to slowly drift off to sleep. Marcelo: Yes. Stephanie: Once you can leave your cottage in Toronto, what's up next for travel destinations for you? Marcelo: Oh, that's an easy one. I was just about to grow on a cruise. Stephanie: Oh, where to? Marcelo: Actually, I was considering going on the cruise when this whole thing started. Max and Daniele were telling me, "There is no way you're getting to a cruise ship right now." We were going from New York all the way to the Caribbean and back. Stephanie: Oh, fun. Well, hopefully- Marcelo: I'm hoping to do that at some point in the future. I was really excited about it. Stephanie: Yeah, I hope so too. All right. Then the last one, what's up next on your shopping list? It can be tech stuff, it can be something you saw on Faire that you're like, I want to try and order that. Groceries, anything. Marcelo: On Faire, I have been ordering a lot of things. The next thing that I want to buy is a drone. Stephanie: A drone? Okay. What kind of drone are you thinking? Marcelo: As I am at the cottage, that's why I want to buy a drone. As I have stayed at the cottage since this social distance has started, I would love to have a drone that I could use to explore the forest around us here, and maybe find some of the animals that are around. Deer, and rabbits and things like that. That's next on my shopping list. Stephanie: That's fun. Well, maybe all the COVID stuff has a little plus that is making you explore different hobbies that you didn't have before. Marcelo: Exactly. Stephanie: All right. Well, this has been a really fun interview. Everyone go check out Brick and Order after this. I know I'm going to do that. Marcelo, thank you for coming on the show. Marcelo: It's my pleasure. Thank you very much for having me.  

For those not in the know, The Mars Agency is an independent agency that combines the best of technology with the best human intelligence to provide solutions to businesses throughout the world of retail and eCommerce. And one of the Martians who leads the charge at Mars is Amy Andrews, the SVP Business Development & eCommerce. On this episode of Up Next in Commerce, Amy walked us through all the trends she’s been seeing in the eCommerce industry, including the changing consumer behavior, the rise of omnichannel experiences, and why companies that can crack the code of using voice plus video technology could see a huge payoff. Key Takeaways: There is an opportunity to merge eCommerce and influencer content in order to make a more relevant and personalized shopping experience The amount of data in the eCommerce world is overwhelming and can lead to losing the humanity of the work, which Mars tries to avoid by having a blend of the best technology and the smartest humanity Voice shopping still hasn’t reached its tipping point, but there is data that shows that voice technology is growing in the world of eCommerce For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next in Commerce, this is Stephanie Postles, co-founder of Mission.org and your host of this lovely podcast. Today we're joined by Amy Andrews, SEP of business development and eCommerce at the Mars Agency. Amy, how are you? Amy: I'm doing well Stephanie, how are you doing? Stephanie: Doing great, yeah as great as can be. So, when I heard of the Mars Agency, I saw that you called your, was it your customers or your employees Martians? Amy: We call our employees Martians, very lovingly. Stephanie: Oh man, I love that. I was trying to think of a name I wanted to give our employees, but nothing comes close to that. Tell me a little bit about the Mars Agency and how all that came about. Amy: Sure. So the Mars Agency has been around for over 45 years, started by an amazing woman, Marilyn Barnett, and really our focus has been on marketing to shoppers over that last, almost half a century. And Marilyn was really a pioneer in this space, she used to be when she started kind of the grocery model who would hold the box of laundry detergent as people walked by. And really just, yeah, and talk about women in business. She was just such an interesting leader and saw that as a marketing opportunity for brands at retail, and started the Mars Agency. And we have a long history in shopper marketing, and shopper marketing is really just marketing to shoppers so, as that has evolved and how people shop has evolved, we followed them and led them to all those different places. Stephanie: Got it. So are you working with large brands to kind of teach them the trends in the industry and how to market to, like you said, the shoppers, is that how to think about the Mars Agency? Amy: Yep. We work with a lot of large consumer package good clients so, like Campbell Soup, Nestle Waters, several others across top retailers. So Walmart, Target, and for me in the eCommerce space, Amazon is definitely a huge player. Stephanie: Okay, cool. And what is your day to day look like there, what is your role look like? Amy: So I lead our eCommerce team, which I mentioned some of the retailers but we really work across all eCommerce retailers and digital platforms. If you think about things that some of you probably use more recently than others like Instacart and other delivery services. We help brands market to their shoppers in those spaces, and really anywhere that you can buy a product online. Which used to be physical stores would convert it online, or your kind of Amazon, Pure Play retailers, and now as I'm sure you've experienced definitely, there's a lot of different options to buy online as you're scrolling through. Instagram you can shop now and kind of always be almost we're moving towards one click away from a purchase in any environment so, that's really what my team focuses on, for our clients, how do we help them market and ultimately sell more online? Stephanie: Got it. Has everything with COVID-19 kind of adjusted your strategy of what you're advising your clients to do? Or what kind of shifts have you made when it comes to that advisory role? Amy: Yeah that's a great question. I think we have seen a lot of data as this, sadly continues for us. But it has definitely had a huge impact on the eCommerce space, particularly for grocery, since a lot of our clients are the CPG packaged clients. We've seen online grocery projections in the last couple of weeks reach what we thought they would be in 2025. So there's been, yeah huge growth in this space, and a lot of new users to this space so, we know that's out of necessity, but again as this kind of continues, we think that a lot of these people, like 60% of people tried a delivery service for the first time in the last six weeks. That's a ton of new people who are buying new groceries online and, yeah there's been a lot of experience as I'm sure you've heard with, not being able to find what you want, or having slow delivery time- Stephanie: Yeah. Being out of stock of my favorite matcha tea, very disappointing. Amy: Out of stock, yes. Which is a little bit easier to deal with than toilet paper but- Stephanie: Yeah, I guess. Amy: I guess it depends on where you are on both with your supply but, no we've had ... Yeah, a lot of people are having to make different choices and having to try things but as this continues, I think people are forming new habits, and even new preferences, so it's definitely influencing how we're advising our clients and where they should invest. I think what's also interesting is because of a lot of those issues, a lot of our clients and a lot of retailers have just put their marketing on pause, to make sure that they can get things in stock, and for retailers to make sure that they're not price scourging or kind of promoting things in the wrong way that would send the wrong message. Amy: So I think what will be interesting long term is, some retailers and brands kind of catch that, and once they have products in stock, once, even Amazon this week has fixed some of their Amazon Fresh delivery issues. As those things start getting worked out, I think they'll be a lot more interesting marketing opportunities, especially as you think about all those new users, either to a retailer or to a brand. I don't know if you bought a different tea brand when you couldn't find yours. Stephanie: I did, I did. Amy: Yeah, a lot of people are having that experience right, so then it's like how does that new brand try and keep you and then how does your old brand try and get you back? So we're definitely working with our clients on all those types of questions. Stephanie: Got it. Do you think clients should be turning off their marketing budgets? As you mentioned, a lot of them are doing that right now, do you think that's a good strategy, or should they till be maybe thinking of ways to experiment because this is a whole new world, it might be actually a good opportunity to kind of experiment a bit without offending people if possible? Amy: Yeah, no, I think ... Yeah, I think it is a bit of both. I think initially, not just marketing but a lot of businesses and industries, just kind of paused to figure out and make sense of what was going on and determine what they should do next. And I think that was, probably a smart move at the time, just to not make any rash decisions. But we're definitely partnering with our clients now on, what is the right way to market. I think one of the trends that we'll see is probably a lot more regional and geographic differences. Like we in the Bay Area are still sheltering in place for another month. So, online shopping here will be very different than other states that are opening up. Amy: And, marketing to those people might be very appropriate now, and I would definitely recommend testing and trying things in that space. Stephanie: Got it. Amy: So I think it's going to have to be a combination. Stephanie: Yeah, completely agree. Do you see the companies you work with coming to you with similar struggles? Like other themes that you're hearing and any advice around some of those struggles that they're experiencing? Amy: Yeah. I think a lot of the marketing struggles, or just some of the struggles on a more macro level of just the unknown, especially in terms of timing and how long it will continue. And then we kind of have some of the same issues in terms of data, you know there's so much out there, like when you turn on the news, you see so many different stories and different points, sometimes it's kind of hard to determine what are the right guidelines, or what's the right data that you should follow. So, we're really treating this as an ongoing conversation with our clients. And it does differ by geography, it does differ by category or industry. So, I think taking a really custom approach and being able to adapt now, and have a strategy where you're also able to easily adapt moving forward, is going to be really important. Amy: We typically do annual planning with our brands, and we've already been talking, you know we're already in the stages of re-planning but, I think re-planning will be something we do all year now, I don't think it's kind of the pre COVID plan and the post COVID plan, I think it's going to be continuing to adapt. And the brands and retailers that are able to evolve in that way are probably going to be the most successful. Stephanie: Yeah, completely agree. It seems like a good time to kind of pivot in certain areas, cut projects that aren't, maybe as necessary, and thinking in a completely new light based on everything that's happening. What kind of things do you see being cut or changes be made in these re-planning sessions at these companies? Amy: I mean, the big question now, which the Mars Agency is tackling with our clients is, what might come back in-store and what might not, in terms of marketing and planning around that? There's the kind of legal or even not legal, but kind of the official guidelines or restrictions side of things, in terms of how people shop and how many people can enter the store at what time. But then I think there's also a very real consumer behavior piece of it. So, one thing that has happened in stores and that a lot of our brands being food brands, we've done is, things around sampling and trying new products. And whether that's a cooked piece of food outside of a wrapper, or a sealed up new product, I think in both of those cases, I don't know if for myself, and if I think about other shoppers, I don't know how eager we're going to be to take either one of those samples now. Amy: So, we're trying to rethink things like that that have been really traditional vehicles to encourage trial, how do we think about that in a new way? Either if that's a re-plan in terms of, what do we do with those dollars and invest them in something else? Or what I think is maybe more creative and exciting is, how do we think about sampling in a new way? Or how do we think about demos in a new way? And that's where we really see the in-store and the eComm world kind of colliding, and really creating some of these omnichannel is the word that we use a lot. Stephanie: Yeah. Amy: Omnichannel experiences, so that we're moving towards that anyway, and I think COVID has been an interesting tipping point to, as you said, kind of pivot and think about these things, and push ourselves to think about them even more differently now, to deliver the best shopper experience. Stephanie: Yeah, it seems like it could be with everything bad that happened, maybe a good forcing function to kind of push some brands into the eCommerce world who maybe weren't fully utilizing it before, or not at all. Do you see them being able to adapt to some of these changes that you're recommending them or being able to shift something that they've always been focused on selling in-store, always focused on someone having that in-person experience, like you said, whether it's a sample, a demo, have you seen them be able to pivot on to eCommerce, or being open to that, or even having the technology to do it? Amy: Yeah. I mean I'm pretty optimistic, so I think yes, I think all brands can do this and adapt and pivot and do so relatively easily. I think that was a big question before all of this, and the crisis was just how quickly should each, brand based on their category, be moving into this space? And a lot of brands were over-invested in eCommerce because they felt that that was going to be the future so they're a bit of a step ahead. And that doesn't mean that other brands can't catch up but, I think COVID has just been a kind of internal tipping point for a lot of organizations to think about how they're treating eCommerce and maybe prioritizing it a little bit differently. Amy: So, yeah for brands or companies who weren't thinking about it before, I would definitely say, now's the time. And, because the whole industry and the whole world is really shaken up, it's a great time to think about how you're treating eCommerce differently, and then within the eCommerce space, what we can be doing differently there as well. Stephanie: Got it. Is there anyone that you ever looked to in the industry, where you maybe point your clients in that direction of being like, hey, here's an industry leader when it comes to the checkout experience, or the shopping experience, or the unboxing, or anything like that? Anyone that you guys kind of look to as like a leader in the space? Amy: Yeah, that's a great question. I think there are a lot of examples of brands or retailers doing, I would say pieces of the puzzle really well. The one that comes to mind for me as someone who is creating a really holistic, best in class experience, is actually a retailer. I think IKEA does a phenomenal job in this space, in terms of just digital experiences. They have different digital technologies, and apps and platforms, and AI, and all of that, that is really just helping recreate the experience of going to an enormous, huge physical retail destination, I mean, I can't think of a more traditional shopping experience than kind of browsing through those huge displays in IKEA. Stephanie: So many levels, at least here in Palo Alto. Amy: Yes, definitely. I think of like a huge retail footprint that they've had to translate into a digital experience. There's one now where instead of IKEA saying, what's the best .com site or digital catalog? They are thinking what's the best shopping experience? And now you can as a shopper, walk through an IKEA store, through virtual reality, and pick different products, and then also using AI to see them in your own bedroom. So I think they've just done a great- Stephanie: Oh wow, that's awesome. Amy: ... Job. Yeah, I think I've just done a great job of thinking about it a little bit differently, and kind of doing it in a fun way that that's the biggest piece for myself as a shopper as well, that's sometimes missing from the online shopping experience. It's so convenient, and there are so many wonderful, wonderful benefits that come along with that. But you do lose kind of the fun of shopping, and browsing around, and I think IKEA has done a nice job of bringing some of that physical experience in a fun, very branded IKEA way, to their shoppers digitally. Stephanie: Yeah, completely agree. I think sometimes people forget that it's not just shopping and trying to buy the thing, but really, like when I go to IKEA, it's my day. It's a whole experience, I'm ready, I'm prepared, I've had my snack, and I'm ready to go through every single setup area to like look at their bedroom, and see how they set it up, and look at this living room setup and incorporating VR into that shows that they know exactly why their customers, at least customers like me come there, is to be able to experience it like I'm actually there. So yeah, that's great. Are you advising other companies to kind of, not only think that way but maybe moving into technologies like that, that they weren't utilizing before? Whether it's VR, or AR, or any of that kind of stuff? Amy: Yes. And I would say just even more broadly, we're advising our clients, and working with a lot of our clients right now on, how do we create the best digital content that's going to be relevant for an eCommerce shopping experience? So, yes that could be an amazing VR IKEA type experience, or that could be a six-second video on a product page, that tells you exactly what you need to know about the benefits of this new water that you're drinking. So I think it's about, what's right for those different brands and, then having that content strategy that then dictates what technology you might need to use to deliver it. Stephanie: Got it. Yeah, I definitely see that shift of a lot of companies, brands, turning into kind of their own media companies when it comes to producing their content, and focusing heavier on that, and not just on a paid strategy where maybe that's been, how it's been for a couple of years. Amy: Yeah, I think I've also seen brands, hopefully, using technology to deliver experience instead of just kind of using or testing, technology for technology's sake, or to have something new. So, it used to be QR codes, and then maybe some AR that just, is just kind of there for the fun, cool factor, that's interesting. In some cases, it's kind of fun, but I think if you're just doing it for the tech's sake, and it doesn't deliver a consumer, or a shopper benefit, it's really a fad and kind of dies quickly. So, we're always trying to think about, what's the need first, and then what can we use to deliver against that? Stephanie: Yeah, it's good to flip that mindset when it comes to that, because yeah I can think of, especially QR code, that's a good example. I've seen random places it's on there, like a cereal box or something that delivers no value, and I don't actually want to even see what's behind that QR code, it seems like it was just placed there because everyone was doing it. So- Amy: Right someone told that- Stephanie: ... You definitely- Amy: ... Told that marketer, "You need a QR code." And they checked that box. Stephanie: They did it. Amy: Yeah. Stephanie: Have you, when it comes to content, I know a lot of brands right now like you said, are focused on that and trying to make sure they get, of course, new customers in that vertical, and also make sure they put out great content. Have you seen any best practices with their clients around like you said, short product videos seem to really increase conversions where you know, like something on YouTube, if you've never been on YouTube maybe isn't the best way to go? Is there any themes around that? Amy: Yeah. I would say generally we always start with what's going to be the right message for the type of media, or for the type of tactics. So, you mentioned YouTube, that's obviously a very different format than say Pinterest, who's also having quite a moment with everyone at home looking for inspiration and recipes, and all of that. Obviously, that type of content you would develop for that would be very relevant to our brands, but also relevant to that platform and what we know people are looking for there. Yeah, I think we're definitely moving towards kind of more bite-size, or smaller content formats, in general. So definitely short format, we always give the example of, you don't want to have your 30 second or 67, 60 second, excuse me, TV spot and just use that everywhere, on your eCommerce sites or on your digital media more broadly, we want to be tailoring it for the environment. Amy: I think another thing that we're trying to do a lot more of now, in terms of a trend, is how are we leveraging influencer and user-generated content in a new way? So, if we talk about relevancy, especially in the eComm world where reviews are so important, and the new mom, you might go on and you're testing the reviews of a stroller, or a really important product for your baby more than you trust advice from your own parent, or from your mom peer group even right? So, people play a ton of influence on that, especially in the eComm space. So, thinking about how we merge eCommerce and influencers, has been really interesting and we've been working with our clients on taking influencer content from a particular shopper since we're in that space. Amy: So, how do you leverage Walmart influencer content on walmart.com, and Amazon influencer content on their site? And in doing so, you create an even more relevant experience for the shopper, because not only do they have those product details and reviews, but you've kind of put all that influencer content in one place, so they can have more ideas on how to use your products, or just more relevant images and messages based on people like them. Stephanie: Yeah, that completely makes sense. I wonder if right now, with how the market is, if it'll kind of give the wrong signals to companies. Like maybe, you have all these people at home so, if you see content is very easy to get right now, you have people maybe at home who actually want the longer podcast and the longer clips. Whereas after all this starts to calm down, I wonder if it'll be hard for brands to kind of pivot again, if all that reverses. And, all of a sudden there's not many consumers who want to create content for free anymore, and long reviews and, people want those shorter clips, like you talked about. Do you see any problems coming up by brands acting too quickly right now, to kind of pivot to what the environment is now? To then it reversing maybe again in a month or six months. Amy: Yeah, I think that's a good question, and that's why I think, as I kind of mentioned earlier, we're taking a proactive but kind of cautious approach. So, one thing we did for one of our brands was, we just went out immediately and pulled out content that, I don't want to say offensive, because that's almost too strong of a word, but pulled out content that wasn't culturally sensitive. For example, a group of people in a home that was more than 10 people. Stephanie: Got it. Amy: We went in and took all of that content down, you know, just to make sure we were being sensitive, and we were also being relevant. Even if someone wasn't particularly upset about it, and maybe they had no thought on it, but we want to make sure we're giving them the most relevant message of how our brand can be used in their lives. So I think that it is going to be an evolution, it's going to be really interesting to see kind of what behaviors stick. I think bread makers was one of the top terms searched on Amazon, the last several weeks. So, I wonder if we're going to get burnt out on making bread anytime soon. Stephanie: That does sound delightful but I'm like, yeah, I don't know how long that trend will last because, my mother-in-law makes bread, and man is it a process. Amy: Well, maybe she needs a bread maker. Stephanie: I know, she does. Amy: But yeah, I think it'll be interesting to see how much of those are kind of the COVID trends that then people get sick of it, or people want to, I'm not sure, maybe people will want to race back to the stores like you said, it'll be maybe really exciting when an IKEA opens, and you can go back in, and browse around and get your meatballs and all that. And I'm thinking people are going to do that in a different way. And I think that we're going to have to continue to evolve. So, that's what I mentioned about the kind of planning, I think annual planning is dead. I think we're going to be planning over and over again, if that's monthly if we can get kind of more on a routine, or maybe that's just continuous as things change, and as the news changes. Stephanie: Yep, completely agree. So, the Mars Agency has been around for almost 50 years I think, how does the company and the Martians of the company, recognize trends and then act on it quick enough to help your clients? Amy: Yeah, I think, I honestly think that's why we have been able to be around so long. In the marketing and advertising world, we're one of the few independents who's left, we're still family-run, the company is now run by Marilyn's son and Ken Barnett. And I think that having that independence, and having really just a lot of still that entrepreneurial spirit, has allowed us to really adapt as the industry has adapted and, in most cases kind of stay one step ahead. We talk a lot about our Martians, as you said, and really think that there's a balance between, our people and our technology. So, over the years we've, of course, as most industries have invested more in technology and data, and all of that, we've also really balanced that with our Martians and having, what we say is the latest technology and the smartest humanity. Amy: I think some companies, especially in the eCommerce space, because there's so much data there, and so many different tech platforms, I think if you go too far in that direction, well one, there can just be kind of data overload, and you're not able to find the insights and all the data. But two, I think you just lose a lot of that humanity, and kind of that person who we like to be who's saying, "Well, why is that the case? And, what does that data point mean?" And kind of taking it that step deeper, so that we can really understand what the human behavior is because I think that's where you have the best marketing ideas that really resonate with people, instead of just kind of trying to attack a data point. Stephanie: Yeah, completely agree. Are there certain metrics or data points that you've seen many brands use that you're like, you guys are all using this, but it actually doesn't really tell you much. Instead, maybe you should look at this instead. Amy: Well, because we're focused on shopper marketing and conversion, I mean, our ultimate data point is always sales. So we're always looking at, how many products were we able to sell as a result. Along with that though, you obviously want to understand what other impact you might have had on engagement. Or, in some cases, there are other circumstances that are affecting sales that are out of our control. We, of course, want to measure all the other media metrics as well. I think to answer your question on, are there certain metrics that brands are looking at that they shouldn't? I don't know if I would say you shouldn't look at this, but I think a lot of brands are placing a disproportionate kind of weight in the eCommerce based on their ROAS or their return on ad spend. Amy: And there's just some interesting ... There are some ways that you can get a very high ROAS, and that a lot of media companies or retailers will say, you had a very high ROAS and it's typically because you are reaching people who would have purchased anyway. So I think that's one where, it does beg the question of sometimes having a person or maybe a smarter data set that's kind of suggesting, why is that the case? And digging a little bit deeper to understand the why behind that metric. Stephanie: Yeah, that seems like an easy way for someone to be like, hey, look how great those ads doing when you're like, all those people were already previous customers so. Amy: Right if you're ... Yes, if you're targeting past purchasers, you can typically get a pretty high ROAS so. Stephanie: Yeah, that's pretty funny. Are there any new emerging technologies that you're advising marketers to look at or other like eCommerce platforms that you're telling people to check out? Amy: I don't know if I would say this is an emerging technology, but just in light of all of the changes around COVID, I would say looking more at new delivery platforms or channels. And this is something that, we're just having early conversations with our clients on now. But, there are a lot of what used to be in the world of retail, relatively niche players You see a lot of those platforms having really explosive growth now, kind of during this COVID period. So it'll be interesting to see how that behavior might change over time. Amy: I think we're also seeing some really interesting partnerships, so you can have your 7-Eleven order delivered by DoorDash. Or you can make a reservation to shop at a local store on OpenTable. Again, those aren't new technologies, but I think it's kind of new platforms and new channels that will be really interesting to test and learn as we go, as you're suggesting, and then also as things, hopefully at some point, kind of start to normalize. Stephanie: Yeah, cool. And then how do you think about, I saw on your website that you were talking about getting the most out of voice technology and how to conquer Amazon? Do you think, I know voice technology, it feels like it's been trying to ... It's been like that up and up for a while and no one's really cracked it. Even when I was at Google, it still felt like they couldn't crack it. How do you think about incorporating that into what your clients are doing? And same with Amazon as well? Amy: Yeah, that's a great question and you nailed it. I think it has been growing, we have on my eCommerce team, a dedicated voice specialist has a background in user experience. And, similarly, I think we've had tons of great conversations around voice, we've seen tons of great data in terms of how it's growing, but I don't think we've reached the tipping point yet of voice shopping. I think it's still, some of the data and it'll be interesting again, to see kind of how this being at home more might change that. But, there are definitely different behaviors that have grown with voice more than shopping has. We're still actively pursuing and exploring that with our clients. Mars is the preferred Alexa developer, we also work with Google Voice as you mentioned. Amy: But I think it just comes back to, really the foundation of what we do which is, how can we create better shopper experiences, and voice definitely has the technology to do that. I think it's just about the adoption, especially in the shopping space. So to date, we've worked with our clients on, creating skills that can be useful to shoppers based on their different categories. But I think it'll be interesting to maybe see how COVID changes the voice space as well. Stephanie: Yeah, I could see that becoming useful, especially as the catalogs get bigger of what the brands are putting on their eCommerce sites. It'll be easier if you're able just to tell the website like, I want to find this, instead of having to go through the whole catalog and try and find exactly what you want, and it probably growing by 50% from the time you were there maybe two months ago if they can crack, getting the voice technology to actually work and be seamless, and not an extra step. Amy: Yeah. And then I think another thing that'll be interesting now is just, I even have to remind myself as we're talking because typically we think voice and we think, speaking into the speaker, but with the combination of voice and video. Plus people being at home and maybe wanting more, we know there's been a huge surge in recipe searches for example. I think having the voice plus visual is a different way that brands should be thinking about voice now, and something that we're working with some of our clients on. Stephanie: Yeah, completely agree. And what about the conquering Amazon piece? I'm only thinking about how that maybe has shifted a lot, especially lately because of everything Amazon is doing of like, only surfacing maybe essential things, and changing shipping times, and maybe kind of burying certain retailers if they didn't view them as essential. I could see a lot of people kind of getting scared about relying on Amazon as their platform to sell from, and maybe moving away from that and trying to build their own eCommerce store on their own, and just do their own thing. Do you see that kind of happening? Or what are your thoughts around Amazon? Amy: Yeah I mean, Amazon could probably be a whole nother topic or hour. Stephanie: A whole podcast one. Amy: Exactly, I'm sure there are millions. But, I think in terms of, we've been really digging into what has this last six or so weeks meant? And where have we seen new growth? Walmart.com in March was the number one downloaded app in the grocery space and surpassed Amazon for the first time. So, it's interesting to kind of see all these stats and you think, oh, maybe Amazon isn't as important. Amazon just still dominates the eCommerce space. Which is why you mentioned, we have it on our website. I would say even as of two months ago, people were using Amazon and eComm interchangeably, almost. Amy: So, it's great and it's exciting to see that, and as we have always advised our clients, we should think about this holistically across this space and across all different retailer dot-coms and delivery platforms like your eCommerce strategy should be comprehensive. But I don't see Amazon ever not being a component of that, at least not in the near future. There are a lot of issues now from a user experience, from a shopping experience, also as you mentioned with brands and maybe being deprioritized for essentials or not being able to market in the way that they have been able to before. But it still really is the lion's share, it's still seeing the most growth during this time period. Amy: So it's not, I don't think it's a place that brands can afford not to be, with the exception of maybe a couple of the really big ones. But I think the idea of trying to tackle eCommerce without Amazon, or without having a strategy around Amazon, and there's by the way, a bunch of different ways that you can do that, it definitely doesn't have to be every brand's number one eCommerce retailer. But I think it probably has to be part of the strategy, just because of the number of shoppers that are using that as their primary eCommerce destination. Stephanie: Yeah, agree. So earlier we were talking about brands creating content, how do you think about the intersection, or what do you advise your clients when it comes to the intersection of content management system, their commerce platform, and their CRM? How do you see that working in their space are any best practices around that or advice? Amy: Yeah, I think, I mean one is to be thinking about the total experiences we've been talking about, and making sure that, no matter what agencies or, in our case, we're oftentimes working with a lot of other agencies either at different parts of the funnel or that the brand is working with for different pieces of their advertising. A lot of our clients are large enough that they're hiring multiple agencies. So I think it's, having IT as planning processes that are very integrated, and making sure you're connecting all the different partners so that you can leverage all of the different content and all of the different wonderful assets. Amy: In terms of, what should the content strategy be, I think it comes back to, what's going to be best and what's going to be needed and relevant for the shopper in that environment. So, we're really working with our brands in the eCommerce space on, how are you creating eComm content that typically doesn't always exist in other brand channels? So, how are you creating content for your product pages with information that people need to know when they're at that point of buying you versus buying a competitor. If you don't have that right content, let's create it, we help our clients map that out on what's needed in terms of assets, and videos, and enhanced content, and all of that. Amy: And then really track that over time to make sure that we're constantly optimizing it. We have a new technology, an eShelf maximizer tool that uses data to look across different websites, and identify across thousands of skews for a lot of our brands, what product pages might have some issues or some areas of opportunity, and then we can fix those right away. And with the retailer's constantly changing their algorithms and limitations, and all of that. This is kind of a huge pain point for our brands so, even though we'll optimize content as brands change their packaging, or new products launch, there's kind of continual issues and continued opportunities to optimize. So we're using technology to make sure that we can stay ahead of that and be really proactive for our brands. Stephanie: Got it. Do you see them being able to kind of manage that in a way that stays organized? Because, I kind of view a lot of brands having their content management as one silo, and their CRMs another one, and their commerce platforms another one, it doesn't seem like they've been able to integrate like, well, here's how our content is affecting our customers and actual conversions. Do you see that kind of shifting now? Or are a lot of your brands already ahead and they're already kind of all intertwined, and they got it? Amy: Oh, I wish that was the case. No, I think, I mean, I think we have silos within the Mars Agency, I think most companies have silos, I think most of our clients would say that they have silos within their companies as well. Unfortunately, I think that is a reality so I don't want to gloss over that picture too much. I think it's about, how do you look for ways to work and collaborate across those silos, for more of a common goal? So, I think eComm has been a silo for a lot of brands today. We've kind of siloed it off and said, let's deal with that separately because we don't quite know what to do with it, or maybe it's still a little bit too new for our brand or company. Amy: And this is really a moment when I think we can be integrating it in, we certainly have done that at Mars. Our team is now integrated with our customer development team. So when we're working on a Walmart plan, it's not the Walmart in-store plan and the walmart.com plan, we're all one team. So I think hopefully, that would be an outcome of this time period is kind of breaking down some of the eCommerce silos. But I think as you pointed out, there's definitely still an opportunity for, I would say most brands, to kind of better connect. I think content and eComm are coming together much more naturally. I think CRM is still a piece that we could, as an industry, probably better connect to some of the other pieces. Stephanie: Yep, completely agree. Have you seen, like what do you think the first step is to that digital transformation? Or have you seen a company really do it well? Is it like start from scratch, throw everything away and start over? Or, how have you seen that work? Amy: I think that actually, most companies have kind of, that we've worked with, have kind of taken eComm out and brought it back in, or taking the digital team out and brought it back in. And I think that's actually an okay approach in terms of, especially where you are with your company's growth in this space, some kind of half joking that eComm has been a silo. But, in a way that's been necessary for some companies because, as eCommerce has grown, it typically starts off as an add on within a current team, and then as it grows, it kind of gets its own silo, or its own little team on the side, and then as they get big enough, they come back into the integrated team, typically the marketing team, or in some cases, the sales team. Amy: And I think that that makes sense because, as the space grows for different clients, it needs different resources. I think a lot of companies are going to be fast tracking that now, so they might skip that step of having the separate eCommerce team and just automatically integrate it. I don't think that's a bad thing, I think that could be beneficial to, instead of kind of separating it or starting from scratch, just integrating in from the team from the beginning. Stephanie: Yeah, that makes sense. That sounds like good advice. So, do you see any disruptions coming to eCommerce? Like one thing I've been paying close attention to, or reading up a bit is about these pop up retail stores. And I think maybe that could be a trend that a lot of retail stores are closing down right now, and people might be scared to actually set up locations for 10 year leases, after all this dies down. So I'm wondering how maybe that could influence the future of retail and eCommerce. Do you see any disruptions like that that is on the horizon that you guys are looking into when it comes to eCommerce? Amy: Yeah. I mean I think there's going to continue to be a lot of disruptions, and probably a fast tracking of what would have happened anyway. So, some, as we've seen in the last several years, some really established big box retailers have closed down, or shut several of their locations, because that huge size of space didn't make sense anymore, and to your point that frees up space for other types of retailer formats. I think coming out of this that, one of the disruptions will be, what we go to a physical store for, versus what we continue to buy online. So I think there's going to be a lot of differences in those categories, and even in in subcategories within that. I think what's going to be interesting about the physical stores is just, how do we deliver an experience in those stores that is worth kind of leaving your house for? Amy: And I think some of the best retailers, and some of the best brands have been talking about that for years, right? How do we create a physical experience of our brand? If you think of like the flagship stores, that's meant to be bringing the brand to life and delivering on that experience, and then you think of retailers who have been improving their in store experience, to get people to browse other categories, or browse other sections. I think a lot of that was a trend that will now really be pushed and challenged, and fast tracked as we rethink about what that physical space means to a shopper. So, pop ups, as you mentioned, were great because they were delivering a different experience and that was a reason to go, see something new, or maybe see something that you could only buy there. Amy: I think exclusives will probably continue and be played around with in a new way in terms of what's exclusive online versus in store. But I think it's a little early to tell what disruptions are going to continue, and how people are going to use those physical spaces. I mentioned it earlier, but I could also see there being a big difference in geographies. The coasts have always been a little different anyway, but I could see the the retail experience on the coasts being a little bit slower to change at first, and then probably having more disruptions in the end. Stephanie: Yeah, completely agree. I can see also when they start streamlining the return process, I've already started see that at least with Amazon, where it's like, you don't even have to bring a box now or anything, just bring the good back there. Once that starts feeling easier, it seems like a lot of things could shift because, to me that's been the biggest hang up of ordering things online and, not knowing how to really return it, and not knowing if I'm going to feel like doing it, and keeping the box, and printing out the label and all that stuff. It seems like that could be a big shift too, and it's kind of already been forced that way over the past couple months. Amy: Yeah, no, that's a great example of now people are having to get creative in how they do things, both retailers and shoppers. And also, just as you try things and get used to it, you might realize that the return process wasn't as bad as you thought. Or the delivery window that your groceries came was actually more convenient than what you'd wanted before. So, I think some of those habits are going to change, which is always interesting to see, because now we're still in kind of the survey phase of, what do you predict that you're going to do? Or will you use this service again? And it's always interesting of course, to see what people say versus what they actually do. Stephanie: Yeah. Amy: And I think just over time as we all keep doing this, we could say, we hate it and it's a pain. But some of that we're going to be adopting those new habits that will stick with us in the longer term. Stephanie: Yeah that'll be really interesting to see what actually comes from that. So before we move into our lightning round, is there any other thoughts you have for eCommerce leaders or trends or anything else you want to highlight? Amy: No, I think you've covered it. I mean, I think this is just such an interesting time for the eCommerce space that, if you talk to someone else next week, they might say something different, and that's what's kind of exciting about it is watching how quickly it's changing, and just really being able to adapt quickly to stay relevant. Stephanie: Yeah, that's why this podcast is so fun. All right. So the lightning round brought to you by Salesforce Commerce Cloud. This is where you answer each question in a minute or less. So you have a minute, you don't have to rush too much, but it's kind of whatever comes top of mind. Sound good? Amy: Great. Stephanie: All right, I'll start with the easier ones first, and then move to the harder one towards the end. What's Up next on your Netflix queue? Amy: Oh, this is the lightning round. Let's see. Stephanie: When your eight month old and three year old aren't hanging on you. Amy: Exactly. I have to move into my adult entertainment mode which also doesn't sound like the right phrase to use, so that shows that I've been watching a lot of cartoons lately. Stephanie: No more Daniel Tiger for you. Amy: I know I'm just glad that I can get off Disney Plus and over to Netflix. We are big fans of Nailed It, and with the at home baking, I know I'm a season behind on nailed it, so I need to get caught up on that. Stephanie: Cool. What's up next in your travel destinations after the pandemic is over? Amy: Oh, we were supposed to go to Vienna for my husband's 40th, so hopefully we can get that back on the agenda. But, next week I'm going to be driving from the Bay Area to Aspen to see my new niece so- Stephanie: Oh fun. Amy: It will be a road trip. Stephanie: Sounds awesome. What is the best shopping experience that comes to mind that you've had lately? Other than being in a store? Amy: Yes, I have not been in a store lately, nor had a good experience in a store lately. Well, just this week was the first time that I could get an Amazon Fresh order, and I am a pretty heavy user. So they had a lot of issues, so I was really excited this morning at 7:00 AM when my Amazon Fresh order arrived. Stephanie: Yeah, that's game changing. I love seeing them come up and deliver it. I'm like, this is nice. Not having to do it. Amy: Yes. Stephanie: What was the last thing you bought from an ad? If you remember? Amy: The last thing I bought from an ad. That wasn't one of my clients products? Stephanie: Yes, yep, that wasn't one of your clients [inaudible 00:51:31]. Amy: Yes, that I was actually buying as a consumer, let's see. I bought some Hannah Andersen Star Wars pajamas recently for my three year old. They're very cute and available now and actually they did arrive quite quickly so. Stephanie: Awesome- Amy: I'd recommend that for the- Stephanie: ... For PJ's. Amy: Yes for the toddler PJ's, they are great. Stephanie: Yep, I know all about that. All right, and the hard one, what's up next for eCommerce pros? Amy: Oh, that's a big switch from PJ. Stephanie: I know, that's why I saved it for last. Amy: Yeah, I think eCommerce pros are going to be ... Have much higher regard in their own industries, and have a lot more influence. So, hopefully what's next for them is being able to kind of take a greater role in that brand and marketing experience across retailers. I know we've talked a lot about Amazon, but I think it's, how do we integrate eCommerce and into everything that we're doing, and that should be really exciting for the eComm pros. Stephanie: Cool. Love it. All right thanks so much for coming on the show Amy, this has been fun. Amy: Thank you so much. Appreciate you having me.

How do you build a successful eCommerce business that has attracted nearly 5 million visitors in a month? For Jerry Hum, it took a few failures and a couple of stumbles out of the gate with his cofounders before finding the winning combination of users, demand, and products all in one. Jerry is a co-founder and the Executive Chairman of Touch of Modern, a members-only e-commerce website and app focused on selling lifestyle products, fashion, and accessories to men. On this episode of Up Next in Commerce, Jerry takes us through his early struggles and how he found the secret sauce to making his eCommerce platform one of the most popular among male shoppers. Plus he explains what metrics other eCommerce pros should be looking at, and gives some advice to other entrepreneurs. Key Takeaways: For a multi-brand company, customer retention and lifetime value is the critical metric to look at Build the primary platform where your primary customer prefers to buy Combine marketing engagement and transactional data to prevent high engagement high cost marketing yielding low sales volume --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone. This is Stephanie, your host of Up Next In Commerce. Today we have Jerry Hum. The co-founder and executive chairman of Touch Of Modern. Jerry, how's it going? Jerry: Pretty good. How are you? Thanks for- Stephanie: [crosstalk] good. Yeah, how's it going? So you're in a loft right now, right? In SF, living the quarantine life. Jerry: Yeah, in San Francisco. Stephanie: Yeah. Jerry: Yep. Stephanie: How- Jerry: [crosstalk] for a little longer than most other folks. Stephanie: Yeah. So what's your day look like with being sheltered in place and... I think San Francisco is even stricter than Palo Alto where you guys [inaudible] allowed to do even more than we are. Jerry: Yeah. Well, we actually started preparing for it a little bit earlier actually, just as it was making news headlines and most companies were still up and running. We were planning kind of contingencies and all that planning and seeing how work from home would be like if we had to do it. Luckily we came up with a plan just in time. We actually went into it before even California started making statements about it. So I think we are kind of in a pretty decent groove in terms of keeping the business running smoothly and all that. In terms of a day to day, I'm actually surprised as to maybe how engaged people have remained. Stephanie: Mm-hmm (affirmative). Jerry: Being that we have to do it all through technology. I actually started thinking about it, why is it that work from home is almost a little bit easier now than it was in the past. And I think it's because when it's the only option then you just do it. Right? Stephanie: You have to make it work. Jerry: Yeah. It's not like if half the office is doing one thing and then... Or not like half the office. If most of the office is at work and a few people are work from home then it's actually more difficult because the people in the office are like, "Oh, I'll just wait for that person to get in or something." But if this is the only way that every one is communicating then it's actually fairly smooth. Obviously everything takes a little bit more time and all that. Stephanie: Yeah. Jerry: [inaudible] day is actually longer than usual. Stephanie: Yeah. Jerry: All things considered, I think it's working pretty well. Stephanie: Good. Yeah. Hopefully it will all come to a close soon. How have you all handled... I mean has there been any struggles, I'm imagining taking photos of your products and things like that? That's probably a very in-person type of thing that [inaudible] people have perspectives on and all want to help. How are you handling things like that with your business that seem pretty hard to do virtually? Jerry: Yeah. So luckily, some of our folks have set-ups at home. Stephanie: Good. Jerry: Yeah. Because usually, photographers, this is not just a job. It's also a passion and a hobby. Right. Stephanie: Yeah. Jerry: So we've been able to make due... Obviously at a reduced capacity. Yeah. Stephanie: Yeah. Well, good. So maybe that's a good point to dive into what is Touch of Modern. If you were to explain it to the listeners and give us some background. Jerry: Touch of Modern is the only shopping destination that men visit daily. And we offer a [inaudible] mix of remarkable products across all categories and that you can use everyday.This could be anything from a flame thrower you can strap to your wrist, or the newest exercise gadget, or anything in between. Stephanie: Are women allowed? Because I was on there and I was like, "I want to buy some of this stuff." I would buy... Maybe not a flame thrower but there was some good stuff on there that I'm like, "I want this." Jerry: Of course, women are allowed. It's just kind of more... A little bit more of our differentiator. Because most E-commerce sights out there are catered toward women. Stephanie: Yeah. Jerry: [inaudible] we're not the only one but one of a few that really cater to men. Stephanie: Got it. Yeah. It looks awesome. A lot of the products. I was afraid to hit buys right away. How did you come to create the idea of Touch of Modern? And I think I read it was the third... The third times a charm. That you had done three other things, or two other things before that until you got to Touch of Modern. What was that like? What was that journey like? Jerry: Yeah. I'll give you the long story here, maybe. Stephanie: Good. Jerry: [Four] founders, guys from New York. The business actually was a peer-to-peer experienced market place. And this is kind of similar to what Airbnb has now. Obviously they built that on top of their existing business but we were trying to start from scratch at the time. That was extremely difficult because you're telling folks to change their lifestyle. Right? If you need to suddenly offer a cooking class, that's not a easy thing to do if you don't have the customers for it. Right? Stephanie: Mm-hmm (affirmative). Jerry: Or the time for it. And then we're telling customers to come on this platform and book stuff. But if you don't have the activities, what is there to book? Stephanie: Yeah. Jerry: So it becomes this chicken and egg problem. Stephanie: Yeah. Jerry: It came out of our own need because we were guys from New York, you're kind of looking for interesting things to do all the time, just in the city. Right? The second business was called Raven. Well, the first one was called [Scarra 00:05:24]. I don't know if I mentioned that. Second one was called Raven. That was a slight variation on the first. And that was we took out half of the equation because we realized, double sided marketplace, super hard. Right? Stephanie: Yep. Jerry: We started offering activities that already existed. This could be like hang gliding. This could be sky diving. This could also be day at the spa. Right. Stephanie: Mm-hmm (affirmative). Jerry: We also layered on a recommendation algorithm where you could like stuff. And based on your activity, we would offer you a daily feed of different activities and things that were new to discover in your area. We got a lot of engagement out of that. People found really cool things. If you look at my feed versus somebody else's, it would be really different based on what we like. When we looked at it, it was like, oh this is a pretty accurate description of things I'm interested in and my hobbies and such. Right? Jerry: And that was difficult because people would then discover stuff but they wouldn't actually book it with us. They would just call directly [crosstalk 00:06:29]. Stephanie: Wow. Jerry: What we learned from that was, well, we need reason for people to transact. Right? And we need maybe something to make us relevant for right now. So the second generation of that business was actually arranging events where we built a mobile app as the early days of... Not the iPhone but when apps started getting the more complicated... Better than just the kind of beer pouring app. Stephanie: Yep. Jerry: Those simple things. Right? So we used Geofencing to create this thing where if you went within a certain perimeter of something going on, we would tell you about it. We'll alert you and be like, "Hey, like... Street fair over here or something over there." And that was really cool because there wasn't another app like that. At least that we know of... That we knew of at the time that was doing that. Also at the time, a lot of folks were moving to San Francisco. Stephanie: Yep. Jerry: Probably even more so than they are today. A ton of messages from people saying, "Wow, you're really helping me discover the city. Every weekend we pull this out and, you know, see what's going on." Especially because San Francisco is the type of city that always has something going on. Stephanie: Yeah. Like on the side streets, you're like, "There's a whole festival going on right now." Jerry: Yeah. So that was really cool but again, a lot of these things were free. So it wasn't there wasn't a real business model there. There's just a ton of engagement. Stephanie: Mm-hmm (affirmative). It seems like you guys are kind of ahead of your time with that. Because even when I'm hearing about that now, I'm like, oh, if you would have kept going with that one, Airbnb probably would have acquired you. Jerry: Yeah. Right. Stephanie: Oh, if you kept going with the Geofencing thing, Google would acquired you because I worked for Google Maps before this. Jerry: Oh, yeah. Stephanie: They're still trying to figure out how to show you where the festivals are, where the farmers markets are based on your location. So maybe you guys are just ahead of your time with everything. Jerry: Maybe. That would be the positive view of it. So I think the lesson we learned from that was... Incredibly hard to scale location based things. because you could sell out all the tickets to this one show or a certain percentage of it but there's unlimited margin and you're constricted by the location and therefore we couldn't justify the kind of business mechanics that were necessary to actually make that sustainable. I mean, it raised a ton of money. Right? And so this isn't going to get like... Where it wasn't like, hey, we're going to get to a billion people and then it's going to work. It's not like that. Stephanie: Yeah. Jerry: So we were like, what were we good at and what were we not good at? We were really good at getting people engaged. Really good at discovery aspect of things. We just needed something more scalable to be the thing that we featured. And realized that, hey, products... You get scale with products. Right? Mass distribution and all that. There's real margin there because that's kind of built into the modal that [inaudible] already exists. Jerry: We had always kind of liked products, just as the people that we were. But we didn't want to touch it because we didn't want to deal with real world problems of moving things around, shipping, [crosstalk 00:09:46]- Stephanie: Yeah. Logistics. Jerry: Yeah. Logistics. Right? After going through the struggles of the first two business, we realized that things are not really... It's not rocket science. Right? This has been done. We started thinking about what kind of unique angle we could take at it. I remember we were in the living room and we're talking about speakers for some reason and who made the best speakers. Dennis had his idea. Jon had his idea. And then Steven, who's real audio files, was like, no, these are the best speakers. He knew all these brands that we didn't even know about. We knew the mass market brands but not the kind of stuff that he was into. Stephanie: Mm-hmm (affirmative). Jerry: He had all this knowledge. Okay, you win that debate. Right? And we realized that we have this thing that we geek out on. Right? Jon was really into cooking and he had these really expensive knives that he would keep in this [inaudible] that he would have to take out and show us. Dennis was really into outdoor activities and all the gear that's associated with that. I use to be an architect when I was in New York so I spent way too much money on furniture. So that was my thing. Right? And so everyone had our own thing. No one out there was catering to this desire or whatever it was that ties all these things together. Right? Jerry: So we just started sourcing things that we thought were cool. Hey, if we think it's cool, other people are going to think it's cool too. Right? It wasn't like a men thing. It wasn't even necessarily a discovery thing. It was just these were the things that we thought were cool. Stephanie: Mm-hmm (affirmative). Jerry: Through that process, right away it kind of hit in a way that the other two businesses did not hit at all in two years. Right? Where day one we started getting real transactions and kind of buying activity. Right? Stephanie: How? How did you get buying on day one? How did people even find your website or know where to go? Jerry: We did not even have a website on the very first day. We actually... What happened was Dennis, who ran marketing, would just start running ads and would go to a landing- Stephanie: Okay. Facebook? Jerry: Yeah. Stephanie: Or what kind of ads? Okay. Jerry: Facebook. Earlier in the days of Facebook too. I think a lot of what we did, now, can't be exactly replicated but there's probably some learnings to take from it. Stephanie: Mm-hmm (affirmative). Jerry: So we basically just collected emails and say, "Hey, there's this thing that's coming soon." Right? I think [inaudible] probably remember years ago there was tons of these types of things that are just coming soon and you're like wow [crosstalk 00:12:39]. Stephanie: Yeah. That was the strategy back then of just like just put up a landing page and see if people want that fake product that you could create. I remember books where they would suggest that and I'm like, that's a good idea. Jerry: [crosstalk] that is more less of a pit. I mean, we were creating it. Stephanie: Yeah. Jerry: I'm not talking about like, let's just run ads and see if people like it. We were just building it at the time, that same time we were running ads against it. And basically we had an idea of what that metrics needed to look like in order for a business to work. Right? We just made assumptions down the whole funnel. Right? If we acquire an email for this much, and if this percent of folks convert, and assume a certain order value, and certain repeat rate then this is what our business would look like. Right? Stephanie: Mm-hmm (affirmative). Jerry: And no data for anything outside of what it would cost to acquire an email. Basically, we knew the cost of that. Then we started sourcing products and building the website behind it. Then we just went down the funnel and firmed our assumptions. Sometimes they were better and sometimes they were just different. We kind of just proved it out from the top down. Stephanie: Got it. That's really cool. Has it always been a member's only platform? Has there ever been a time where people could just go to the website, the app, and just see the products without inputting their email? Jerry: Yeah. So, we require folks to input the email for the upfront reason that we are talking to... And this is also maybe one of our differentiators, is that we are not a clearance channel per se. We talk to vendors who have products that are new to market. Right? So they may have endeavors to go to traditional retail or something else, and they may not want their prices shown necessarily to everybody. Stephanie: Mm-hmm (affirmative). Jerry: So that's one [inaudible] been the case. Stephanie: Got it. Okay. Cool. So when I was looking at your catalog and just seeing everything that you have, how do you go about curating something like that? I mean, it sounds easy in the early days of, oh, so and so likes knives so he pulled in his favorite knives. But I saw how many products you have on that page. Maybe it's like... How many a day do you release? Jerry: It's about 300 a day. It's quite a bit. Stephanie: How do you find 300, even a month, cool products that are so unique like that and keep up the level of quality that's on there? Jerry: We have a team of about 30 or so folks on the sources and buying team and they're out just looking for what's cool and unique. And obviously we have our standards and things that we look for and they just go out and try to find things that meet those standards. And they also try to find things that are... that we've just never seen or heard of before. Right? Then we bring it back, it goes through an approval process, and then we put it up and run it. It's fairly simple. Stephanie: Does it still go through you to approve of every single product? Jerry: Not every single product. Stephanie: No. Jerry: In the early days it was and now we have a team of folks that can do it. Stephanie: Got it. And you also have an app that people can buy from. Is it the same functionality? Does the website mimic the app or how did you think about expanding to mobile? Jerry: It's mostly the same functionality. We expanded to mobile fairly early on. Like I said, our previous companies were... We were already experimenting with mobile back then. I don't think we had one on Scarra but Raven, we definitely did. Stephanie: Mm-hmm (affirmative). Jerry: That was a core part of it. So we went to mobile pretty early on and I don't think we knew this per se, but it was interesting because men tend to be more comfortable buying on mobile too. Stephanie: Mm-hmm (affirmative). Jerry: And maybe that influenced part of our strategy or vice versa. It seems to actually be the more popular platform for us. Both in terms of actual use engagement and revenue as well. Stephanie: Okay. And do you see different customer profiles when it comes to the mobile user versus the website users? And do you cater to them differently based on that? Or personalize things different? Jerry: No. The experiences are pretty congruent on both sides. The mobile users tend to have a little bit of a higher value. But that could also be because you kind of have to self select into mobile. Stephanie: Mm-hmm (affirmative). Jerry: You go on to the website and then you're all, hey, we're really into it. And then you go on the app. Right? Stephanie: Yep. Jerry: It's kind of hard to say what's [inaudible 00:17:21]. Stephanie: Go it. Very cool. So in the early days you were doing Facebook ads. And I think I read that you were doing TV ads as well at a certain point. How has your marketing strategy evolved over... since you started? Jerry: Yeah. So in the early days of Facebook it was like a wild, wild west. Right. Big brands weren't really on it. So it was a great time for companies like us. And this is why I say a lot of it can't really be replicated today exactly the same way we did it back then. So when a lot of competition started moving in, in order to compete, we kept broadening our category just... I mean, just becoming a stronger business. Right? Stephanie: Mm-hmm (affirmative). Jerry: So it would be a lot harder to start with just a handful of products the same way we did. When we started, I think we launched with 12 products and that was it. It was like 12 individual products, not twelve vendors, just 12 [inaudible] things you could buy. Right? Stephanie: Yep. Jerry: That was enough to make it work. Probably impossible now to do that. As the business grew we could support more channels. We went into Google and then eventually got to the size where we can actually start experimenting with TV. I think also, TV has evolved over time as well because of visual advertising. Because so many brands see the benefits of digital advertising. You can track things and kind of go after a more specific audiences. That TV now kind of has changed to have some of those properties as well. So we use them both kind of together and they enhance each other. You can tell when, if you're spending too much on TV and not enough on digital, then TV starts to suffer. If you spend too much on digital and not enough on TV then the opposite happens. Stephanie: Got it. How do you find that ROI of the campaigns? Then decide, okay let's scale back on TV and increase mobile ads or something. What metrics are you looking for? Jerry: We actually have the exact same metrics on TV as we do on digital. Right? And this is just... cost acquired customer and lifetime value and all that. The way we track it is now you can know exactly when your spot airs and basically we have a baseline of traffic that we know that, hey, if nothing is airing, this is what are organic traffic looks like. Right. So when we air a spot, we can see that spike. We do a [inaudible] analysis to say this much of the traffic following that airing is probably through the TV. Stephanie: Got it. Okay. Very cool. So when it comes to metrics, when you think about E-commerce, what metrics do you think are most important to keep track of? Or how do you define success when it comes to E-commerce? Jerry: Yeah. There's a ton of stuff. I mean, it really depends... It depends a lot on what kind of product you're selling. Right? I'll give you two extremes. One extreme is like us, and for us we are a multi-brand retailer. Right? You can buy a number of things and also we change our selection everyday. So you can keep coming back to keep buying different things. Right? Jerry: So what's important to us is lifetime value and retention. Right? How fast do you break even on the cost to acquire a customer? At the end of the day, that's kind of like the most basic thing for any kind of company in our space. But the products that you're selling may influence how you look at it. Right? If you're selling cars or mattresses or something that you just don't buy very often, then you may think about it very differently because it's just not feasible to thing that the retention rate is going to be nearly what ours is. Right. Or at least not be frequent enough for you to be able to plan your marketing spin around. Stephanie: Mm-hmm (affirmative). Go it. How do you keep your customers... How do you retain them and keep them coming back? Versus acquiring new customers. How do you think about that mix? Jerry: I mean, you always have to acquire new customers. Stephanie: Yeah. Jerry: I think [inaudible] is just like a natural part of business. You can't deny that it's there. Stephanie: Yep. Jerry: [inaudible] you can be great but there's going to be some folks that it's not for. Right? It's not like 100 percent of your folks are going to stay with you forever. Even the folks that do eventually they may change taste or things like that may happen. So in terms of splits, I think that also varies on performance for us. For us we care about kind of a payback on the spend that we're doing and pending on where we see better performances kind of where we'll weight it. And also kind of seasonally because I would say for retail there's holiday season and all that, you may want to do one thing versus another. But that's going to be really specific to the kind of company that you're running. Stephanie: Yeah. So when it comes to changes in spending pattern, what have you seen with everything from COVID-19 going on? Like what kind of differences? I saw you have a... I think a stay-at-home section or something similar like that. Shelter in place, on your website. How have you seen things change since that started? Jerry: People's priorities definitely change very quickly. Luckily for us because we can change our assortment everyday, we were actually able to adapt really quickly. We got that store up from... From when we said we were going to do it to when it was up was a matter of... Like the morning to that afternoon. Stephanie: That's impressive. How did you line up all the vendors? I mean, to me that's like a long process of picking the vendors and picking out the product and making sure they can ship enough, depending on demand. How did you get all that lined up so quickly? Jerry: The thing is... I mean, when this first started happening especially. And we need to agree now still, it seemed as if time had just sped up suddenly. Stephanie: Yeah. Jerry: Things that would take an entire quarter could happen now in like a day. Right? Stephanie: Yeah. It has to. Jerry: Everyone was wondering what would be different? All of our vendors, suddenly their retail channels dried up. Right? And they had to move things around. So we just called them up and said, "Hey, this is what we're doing." Obviously most of the folks that were on there, day one, were folks we've worked with already in the past. Stephanie: Mm-hmm (affirmative). Jerry: Or coincidentally we were talking to and hey, this fits, kind of thing. Right? It was tapping existing relationships. And parallel, the design and engineering teams were building up the store. We were using some existing infrastructure that we could repurpose and re-skin for the store. It was an amazing feeling. I didn't think we were going to do it in a day but it happened. Stephanie: Yeah. And are you changing that catalog? Like each day or week or... Jerry: [crosstalk] as well. Mm-hmm (affirmative). Stephanie: Got it. Does it... How do you think now your company is going to change based on now you know how quick things can move if it has to? Jerry: Yeah. Stephanie: Do you think that your internal policies and all that stuff could change going forward based on how quickly you can see thing go through? And maybe seeing things aren't a priority or approval for certain things might not be as high priority as you thought they were or... What's your view on that? Jerry: Yeah. I mean, in terms of policies first... I think in more so than anything it was like validation of a lot of policies that we had in place. Stephanie: Mm-hmm (affirmative). Jerry: It was confirmation that we could move quickly. Because we always thought we could. I think that's always been our thing. One of the questions people always ask is how does a company that sells premium products, how does that respond in a recession? Right? This isn't a recession but it's a time when people's priorities are going to shift maybe away from things that were... seems more frivolous to things that are now more essential. Right? For us, we always said, well you know, we can respond quickly but it's never been proven. And now it's been proven to an extent that we can respond quickly. And we can move to things that are more essential. It's still essential with a twist. Right? Stephanie: Yeah. Jerry: It's still within our brand. And it's going to bring a bit of uniqueness and delight into people's lives that are staying at home. Stephanie: Mm-hmm (affirmative). Jerry: I think it's validation that the modal can move quickly. The way we thought. And that our brand can extend to the different categories. And address people's needs as they change. Stephanie: Mm-hmm (affirmative). Do you think these buying behaviors are going to last for a while? And if so, are you shifting maybe your thoughts on what Touch of Modern looks like in 2025, 2030? Is it kind of having you re-think things a bit? Jerry: I think that people's buying behaviors will change because I don't think it's going to go back to exactly the way it was. You know. Stephanie: Mm-hmm (affirmative). I agree. Jerry: Yeah. People are going to be much more... And I hope they're going to be much more health conscience. I hope that this introduces some good habits. Right? I think people take a bit of time to reflect and think about things like self improvement. Maybe they didn't have the time to do before because I think some people staying home are going to realize like, "Hey, there's this new hobby that I've always been wanting to do that I can do now." Or, "Maybe I should drink less." Whatever it is that they discover when they change their lifestyle, that there's actually parts of this that are good, that they can take away and keep with them. Stephanie: Mm-hmm (affirmative). Except for the drinking lessening. I think that one's going the wrong way. Jerry: Wait. I don't know. I don't know how some people are- Stephanie: Happy hour time keeps getting earlier and earlier. I'm like, I need to set up rules around this house. Oh my gosh. It's only like two o'clock, what am I doing? Jerry: Well, I mean, another silver lining here is that I think people now have actually seen how quickly the environment can actually improve just with... And in a short period of time. Right? Because in the past I think it always seemed like this insurmountable thing to certain folks where it's like, "Yeah, you know, we can recycle and do this, but we've been doing that for a long time and nothing has really changed. It's actually been getting worse." Right? Jerry: And then suddenly you take a step back and it's like, hey, things change quickly. Right? Stephanie: Yeah. Jerry: So maybe it's not as impossible as we thought. We just have to be deliberate about habits that we have and maybe where we spend our energy. Stephanie: Yeah. Yeah, I think sometimes a little shake up like that can be good for people and the economy. And good things could come from it. Even though there's a lot of bad going on as well. I think, yeah, it depends where you're looking, I guess. So when... Oh, go ahead. Jerry: Yeah, I mean, [inaudible] other wise it's just all bad. Right? Stephanie: Yeah. No, everything can't be all bad. There has to be something good out there. That's what I'm hoping for anyways. So when it comes to outside of Touch of Modern, and more of the E-commerce industry as a whole, what destructions do you see are coming? Especially with COVID-19 now. We're seeing some of that already happening. But what are you betting on in the future... Yeah, coming? Jerry: Well, I'm going to bet probably more on E-commerce. Right? I think people are going to build habits from shopping at home that are not going to go away. Right? I think certain things that maybe people use to only buy in person are like, hey, I can buy this at home. It's actually a pretty decent experience, probably going to keep that habit even after this. And I think people are going to maybe focus a little more on preparedness for things than they have in the past. I think human nature is that you never think that these kind of outlier type of situations can happen, but they do. Be that once... Once in a century, I'd never think about it. But a person lives a long time. Right? Jerry: You may see a once in a century thing in your life. That's probably going to happen for a lot of people. Right? And this is that thing for us. Stephanie: Yeah. Agree. It seems like there's going to be a lot of new people coming online who never were online before. And it brings me to a point I saw on your website that I liked a lot is kind of meeting a consumer where they're at. There's two things I saw on your website that I thought would be perfect for a new consumer who doesn't normally buy online. The first one was you have a toggle button on your homepage that says, "View as." And you're about to actually change how you view products on the page, depending on what you prefer. Stephanie: So I thought that was genius. Any insight behind that? Or any thoughts when you were creating that? Because I haven't seen many websites allow you to toggle that view to what you prefer. Jerry: Yeah. It's just like a preference thing. Right? Our experience on the landing page is we just drop you right into our offering. Right? It's not like a landing page where you then click in and search and do all this other stuff. Mostly E-commerce is catered to search. Right? You just go on the page and automatically thing is you type in what you're looking for. Right? That's not really our experience. It's there but it's kind of secondary. It's mostly a browse and kind of meander your way through our offering. Stephanie: Mm-hmm (affirmative). Jerry: We let people maybe pick the way they want to meander. Right? Stephanie: Mm-hmm (affirmative). How do people meander through 300 hundred things? Because I was going through and I wanted to look at all of them but after a little I'm like, oh, this is too many. And I kind of wished maybe like... What did I see? There was this screen that extended your screen. So you have your MacBook or something and you plug in a little cord and you have an extension of your screen, which is awesome. Jerry: Yeah. Stephanie: I'm like, that should have been shown to me first because I want to buy that right now. Whereas, what was the second thing? It was showing maybe like an expensive bottle of wine, which I'm like, oh, push that down some because I'm not fancy like that. How do you think about helping people get through these products each day? Jerry: Well, I think your first time experience is going to ne a little bit different than your second and your third time. About almost half of our users, and I'm not talking about customers but just people that visit, will actually come back at least once a week. And so- Stephanie: Wow. Jerry: Yeah. And so if you're doing that and then our most frequent visitors are coming back every single day, then it's not as hard to browse through everything. Because then you can browse through it and then you'll hit a point where, okay, now I'm looking at yesterday's stuff. Right? And so, if you keep up with it everyday then it's not actually a ton of stuff. Stephanie: Mm-hmm (affirmative). Jerry: But for your first time, you're looking at all the days that have accumulated in the past five days. And certain events will also extend beyond that. I think the first time experience is like, wow, this is a ton of stuff. And also because you probably want to click through every single thing. Right? Stephanie: Yep. Jerry: But after awhile you're probably just looking for the things that catch your eyes. Or you're just going to scan and be like, okay, that's really cool. That's really cool. But you're not necessarily going to check out every single thing. Right? Stephanie: Yeah. [inaudible] Jerry: Also, on the mobile app, the scrolling screen is just much slicker and smoother too. Stephanie: Mm-hmm (affirmative). Jerry: I think you might just browse there. A lot of folks also will tell us that it's just something that they peruse through when they're waiting for something or commercial break or something like that. Stephanie: Mm-hmm (affirmative). The second thing I saw that I really liked, which I also haven't seen... Maybe I'm just not on enough websites. I don't know. But I was looking through... It was an about shipping section. And it showed a visual of what does your shipping status mean. Jerry: Yeah. Yeah. Stephanie: And it just... It showed everything from like, we place our PO, and than it goes to the supplier, and here's what it means if you see... I don't know the whole... I can't remember the whole layout. But I thought that was genius showing it in a visual format. And I'm sure that probably brings down a lot of customer support emails. But tell me how you all are thinking about giving that transparency to the customer. Jerry: Yeah. Stephanie: And hopefully prevent a million a emails of, hey, where's my product. Jerry: This is another product of our business modal. Or kind of what differentiates us a bit. We sell across all categories. Right? Meaning that we have to be able to accommodate all the categories. So it's not like, a company that just sells furniture ships one way. A company that just sells clothing ships another way. Right? And so their customers go there expecting a certain experience. A company that sells everything needs to ship all the different ways. Right? So a customer might not know exactly what this shipping process is going to look like when you buy something because they may not realize... I mean it's obvious now when I talk about it but if your company goes on a site, you're going to expect shipping experience to be generally consistent. But for us it's like, we're going to ship furniture differently, then we're going to ship clothing differently, and then we're going to ship, you know, this cup, right? Stephanie: Yep. Jerry: And so for us it's just more like informing the customer, this is what's going to happen. This is what it's going to look like. And this is what the different steps mean. For us, we found that more so than anything, they just want to know what's going on. That it's moving and... like internal. Yeah.   Stephanie: How about when it comes to relaying the value of the product? How do you convince someone that something is really good? Because I don't think I saw reviews on the website. Unless I missed them.   How do you... That's usually the first thing I look for. Is it five stars? You know, I want to see if someone has the same kind of experience that I'm looking for. How do you tell someone something's valuable without that? Jerry: Yeah. I mean, a lot of what we do is educating the customer. Right? Because a lot of these things they never heard of, they didn't know it exist. I wish we could say we do an awesome job at it and we provide all these reviewed stuff but... And we vet the product. We'll go and look at the reviews and we'll test the product and all that. But it does take a leap of faith in the first purchase and maybe you get a learned trust after some time, that like we've done the research. Jerry: Because if you go and research these products you're going to find that they're pretty highly regarded. Stephanie: Yep. Which I think actually might be the modal that it's headed is just show me one or two people at your company that I trust to review product, and I trust them. Because a lot of reviews, I mean, at least on other places... Marketplaces and things like that. They're paid reviews. And so you go through and you're like, well, I can't trust 90 percent of these anyways. So I think it is kind of shifting towards just give me the one person that I can trust. Or the one company that I can trust to curate something for me. And I know if it's coming from them, it's going to be quality and good. Stephanie: Are there any big transformations that are going to be on your plate after the environment kind calms down? Or any big projects that you plan on starting or changing within your strategy? Jerry: Yeah. We're working on shipping things a lot quicker. The reason being that a lot of our products do take a little bit longer because we have these various modals that we work with. And we found that when we can ship things more quickly people are generally way more happy and more likely to come back and purchase. Stephanie: Got it. How can you speed up the shipping for... when it's a bunch of different, I'm guessing, retailers who all their own different practices? How can you kind of know that you can speed that up and make it all pretty uniform? Jerry: Consign the product. Right? So they will house it in our warehouse and we essentially act as their distribution center. Stephanie: Oh. Okay, cool. Tell me a little bit about that. Do you have to buy warehouses in different parts of California? Or how is that modal set up? Jerry: Right now our warehouse actually has a good amount of space. And we've actually developed our distribution system to fit with our model, right, which is that we run things in these short spurts. Right? And what's cool about that is that things come in and they go out really quickly so we're not sitting on mountains of inventory. I mean, we're nearly inventory-less. We're very inventory light. We don't actually require that much space to run a lot of products. Stephanie: Mm-hmm (affirmative). Jerry: So right now, for the foreseeable future, it's to keep it within our distribution center. It's a long winded way of saying... Stephanie: Okay. Got it. How did you learn to do that? When I even think about shipping products to a warehouse and making sure everything goes well, how did you learn best practices around... Yeah, around all that? Jerry: Yeah. This is interesting because when we first started we were shipping our own products from day one. And so- Stephanie: From your house? Or from where? Jerry: From the house. [inaudible 00:41:45]. Stephanie: That's awesome. Jerry: ... of just tons of boxes in the living room. And then when the FedEx guy came we would... The first day we just piled it in the lobby and our neighbors got really pissed at us for doing that. Stephanie: I can imagine. Jerry: So the second day, we knew when the person was coming and we just did like bucket brigade style where we just passed packages from our living room down to the... Basically we had our four founders there. And we would just pass it down, bucket brigade style, down the stairs as quickly as the guy could load it into the truck. Stephanie: Oh my gosh. Jerry: And then the first day we finally opened the office, we set aside half of it for fulfillment. And the reason why we did that was because we realized our model is just very different than a traditional pick and pack modal, which is what most 3PLs... What's called a third party logistics provider. At least back then, they were mostly doing pick and pack type operations. And it didn't really fit our modal and we realized that at a certain scale we'd have to bring it in house. It's better to learn it now than to try to take it in when it's already at scale and have huge disruptions in customer experience. So basically, we just started doing it at a really small scale and built our operations all custom to that. So our, kind of, back office technology is all custom. Right? So everything ties together and it suits us in a way that... If you went with a just a third party provider, it probably wouldn't work as well. Stephanie: Very cool. Well, definitely have to get that picture from you so you can post it somewhere to show people because that's... Yeah, a really fun story of starting out. Jerry: Yeah. Stephanie: What do you see for new people starting out, building their stores and all that? What is some advise that you give them? Or best practices or things that you did that you're like, don't do that, that actually worked out really bad. Jerry: So this probably goes back to your first question about the two businesses that we had before. We made some classic mistakes. Right? Which is, I think the big one is you build the whole thing and you spend like a year building it and then you think that one day you're going to open and people are just going to come in. Right? Stephanie: Yep. Jerry: Then you start thinking, hey, maybe we just keep tweaking the product and eventually people will come. Right? Really all you're doing is staying busy. Stephanie: Mm-hmm (affirmative). Jerry: Because if the demand is not there, it's not going to suddenly show up, almost like the world changes, right? And you would be at the right place at the right time. So it's prove out the demand first. And then when the demand is there, you can take your time with the product. Right? It's like, you don't want to be in a place where you're convincing yourself that the reason you're not succeeding is because the product is not quite right. Stephanie: Mm-hmm (affirmative). Jerry: If there's a real need for it you can come out with something that's pretty minimal and just addresses the core need. And it doesn't even have to run perfectly and be totally ironed out. And that will give you enough signal that there's something there that people want. And then you can find it down the road and keep expanding your market to... [inaudible] but this is now more mass market. And so on and so forth. Right? Because the early folks, they want your service, whatever it is, so much that they're going to put up a little bit with you in the early days of like not having it all totally together. Stephanie: Mm-hmm (affirmative). [crosstalk] Jerry: And so... Yeah. Yeah. You got to prove out the demand first before you totally refine the product. Stephanie: Cool. And what about when it comes to technology? How do you think about... It sounds like you guys did a lot of just in-house... everything. In-house logistics. In-house website stuff. What would you tell someone right now? Should they try and build things in-house? Or... Yeah, what are your thoughts on that? Jerry: It's easier now to build anything in-house than it use to be. Right? Back then it was actually a little more difficult because a lot of the frameworks that are being used today were really fresh back then. Right? So people weren't learning it in school. They had to teach themselves. There weren't the coding bootcamps back then either. So engineers were still a little bit hard to come by. Now, resources are there and everything. Jerry: We were lucky because we did our own coding in the first versions of the site. It was me and Steven, our CTO. More him than me but we built the early versions of that and didn't hire engineers for a long time. Maybe longer than... we probably should have hired engineers a little bit earlier than we did. But we got by with just two folks building stuff. Right? But you also learn a lot. You are kind of like more intimate with the product, even today, just because we have that history with it. Stephanie: Yep. Jerry: And I think one of the things that's really important to us early on was the data ownership. Right? We don't want to have all these different things talking to each other and not have a clear picture of what's going on. Right? Stephanie: Mm-hmm (affirmative). Jerry: We don't want any black boxes. There's things that if we don't have access to all the data then we're just going to cut that service and we're going to build it ourselves. Stephanie: Got it. Very cool. Yeah. Great advice. So with a couple minutes left, we're going to move on to... it's called the lightning round. Brought to you by [Sales Force Commerce Cloud 00:47:37]. Sales Force Commerce Cloud. This is when I shoot a question over your way and you have a minute or less to say the first answer that comes to mind. Jerry: Mm-hmm (affirmative). Stephanie: Are you ready? Jerry: Okay. Stephanie: Dun, dun, dun, dun. We'll start with the easy ones first and then we'll end with the harder one. Sound good? Jerry: Yeah. Stephanie: All right. What's up next for dinner? Jerry: Left-over Chinese food. Some more. Stephanie: Yep. What's up next that you're buying from Touch of Modern? Jerry: What am I buying next? Well, I'll have to see what comes up next. It changes everyday so I don't know yet. Stephanie: All right. Well, what did you just buy recently? Or what's your most recent purchase? Jerry: My most recent purchase was, funny enough, it is a cast-iron rice pot from [Le Creuset 00:48:22]. Stephanie: Okay. Have you tried it out yet? Jerry: No, it hasn't gotten here yet. It was very recent. This was probably... couple days ago. Stephanie: Cool. What's up next on Netflix or Hulu queue? Jerry: I actually don't have either. I don't even own [inaudible] TV. I don't watch a whole lot of stuff, actually. Stephanie: Okay. Hey, that's an answer. What's up next in your travel destinations after the environment calms down a bit? Jerry: I think an easy one from California would be Hawaii. I like to go there to relax and it's a relatively short trip. So I like to go there [inaudible 00:49:05]. Yeah. Stephanie: What's your favorite island there? Have you been? Jerry: Yeah. I go to Oahu fairly frequently. I really like Kauai, I've been there once to do a hike. Stephanie: Yeah. That's my favorite island with all the waterfalls there and the crazy hikes that- Jerry: [crosstalk] been to the weeping walls? Stephanie: Yeah. Yeah. Jerry: Yeah. Stephanie: Yep. Oh, yeah. I want to go back though. We were only there for a couple days and I feel like there's so many different hikes and waterfalls and just things to see there. I mean, it's... Yeah, like a jungle. It's awesome. On to the hard question. What's up next for E-commerce pros? Jerry: E-commerce pros. Hmm. Man. What's next for the pros? I think, I mean, it's going to be adapting to the changes in customer behavior that are coming out of this. Whatever that is. I don't have a crystal ball for that one. Stephanie: Got it. Hey, that's an answer. All right, Jerry. Well, this has been a fun interview. For everyone who hasn't gone and checked out Touch of Modern, you should. It has really fun products on there. And yeah, thanks for coming on the show. Jerry: Thanks for having me.    

In the world of eCommerce, one of the biggest challenges the pros come across is selling something to a customer who physically cannot experience the product at the time of purchase. For Dmitri Siegel, that was one of the hurdles he has had to overcome as the Vice President of Global Brand at Sonos. Dmitri cut his teeth in the world of eCommerce at Urban Outfitters and then moved on to work for Patagonia. And while the number of products he was selling was reduced with each move, the challenge of building a platform that could connect with target buyers remained. On this episode of Up Next in Commerce, Dmitri explains all of the lessons he’s learned in facing those challenges, including the importance of culture, what a successful brand and website redesign looks like, and what some of the most important metrics are when you’re judging the success of your eCommerce platforms. 3 Takeaways: On any project, culture and collaboration is important — you have to be able to personalize and succinctly summarize your goal on paper so everyone knows what they are working toward Optimizing for margins per session can guide you on what to focus on when adding to your site In times of crisis, brands are given a clean slate to reinvent themselves, accelerate projects, and scrap things that haven’t been working For a more in-depth look at this episode, check out the full transcript below. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Dmitri, how's it going? Dmitri: It's going as well as it can. I'm enduring. How about yourself? Stephanie: It's going well. It's bright and sunny, and even though we can't go anywhere, at least we get to hang out here, right? Dmitri: Yeah. Stephanie: So I'd love to hear a little bit, Dmitri, about your role at Sonos. What is your title, and if you can give me a little bit of background on what you do at Sonos. Dmitri: Sure. I'm the vice president of global brand for Sonos. It means I oversee all of our brand creative and marketing, product marketing. I oversee all of our digital experience and physical retail experience, so our web site and our physical store displays as well, and marketing operations. So kind of all the touch points that you have with our brand except for the product itself. Stephanie: Got it. And how did you get into that role, because it seems very wide ranging whereas a lot of people are like, I only control the web site or I just have this one vertical. It seems like you have a lot under your purview. How did you move into that role? Dmitri: I had kind of a crazy pivot in my career early on. I was at Urban Outfitters and I was the digital creative director, and this was about 15 years ago. It was very early days for e-commerce. And my boss left, and we were interviewing people to run DTC, and there just was nobody really that had much more experience than I did. And so I kind of made the dumb youthful move of being like, hey, I think I could do this job. And my boss at the time, Ted Marlow, was like, all right, well, we'll give it a shot. And so I went from really running creative and the web site product to running the whole business, and they were so good at operations and merchandising and finance and all these things that they felt like they could teach that to me. And so I just had this opportunity to run a P&L and run operations, and that gave me the sort of balanced background between those two things. Dmitri: And everywhere I've been, I've sort of since then, I've just sort of had that balance of the e-commerce business and creative side, and it just came out of basically someone taking a risk on me early on in my career. So yeah, it's been an interesting, interesting journey. Stephanie: That's awesome, really fun to hear about someone betting big on you like that. Was there anything where when you jumped into that role, you're like, I actually don't know anything about this- Dmitri: Oh yeah, so much. Stephanie: And what did you do in those moments if so? Dmitri: So much. Stephanie: And what are some examples of that? Dmitri: I mean, at that time, merchandising, I looked at everything as what would be beautiful, and so understanding this one might be beautiful, but it's low margin and nobody's buying it. That was an important thing to learn. And I also, I remember really early on in sight merchandising saying, oh look, we should put this in the upper left hand corner because it will sell more, or I think we should put this in the upper left hand corner, it's my favorite product or whatever. And I remember the merchandiser at the time going, you know what? I could sell a lot of old flip flops if we put them in the upper left hand corner too. You're not some merchandising genius. So understanding that, just learning the way that shopping actually happens in that medium and the mechanics of it, very humbling from that point of view. Dmitri: But I think having a learner's mentality is important at any stage in your career, I still have that feeling. There's so much that I don't understand, there's so much to learn, and most often honestly from the people who report to you or who are in your own organization. I think being promoted young into that role, I had to very quickly get comfortable with the fact that people who worked in my team knew more than I did and just being humble about that and learning from them, so that's part of what makes it fun to go to work, so. Stephanie: That's great. Have you seen your role at Sonos change since when you started because of the environment or consumer buying behaviors to where it is now? And if so, what are the biggest changes that you've seen? Dmitri: I think that I came in early on to really get the digital side of the business going faster, and we did a lot of the sort of fundamental blocking and tackling of re-platforming, redesigning the web site, but I think quickly realized that this is really a holistic business and a multi-channel business, and what's happening in the product marketing, for example, has just a huge impact on all the channels, including e-commerce. And I think some of the stuff in this field is very optimization oriented, and it's actually not as impactful sometimes as what your naming a product or defining the core benefits of that product that would actually help it in every channel. So my role has definitely gravitated more to the general brand and product messaging overall, and how that comes to life in e-comm is the harshest test of it, the best place to test that. But it's not the sole focus any more. Stephanie: Got it. Yeah, how do you think about bringing a product that's ... You really need experience. Nice speakers or great food or something like that, how do you bring that experience to life on a web site? Dmitri: It is challenging. I mean, the core benefit of Sonos, sound, is invisible, so you can't see it. And if you're listening on a laptop or on a phone, you're not going to experience the quality of sound that we go for and that we create. But really, I think every product has that challenge. I mean, I like to think that Sonos is more complicated and more difficult, but I think you always have to just be really, really rigorous and relentless about what the value is for the customer and then illustrate that in words and pictures in a very slavish way. And I think it has to be like a pop song. There's no guitar solo, there's no 15 part middle part. It's got to be really to the point and verse chorus, verse chorus. And I think that rigor is really, it's true for us probably more so because it is an invisible, ethereal, emotional kind of thing. But I think it applies to just about any product. Stephanie: Yep. Yeah, I agree. One thing I saw on your web site that, I don't know if it just hit home with me, but I thought it really made me think about the experience was when I was scrolling, I saw the speaker on the page and it had little sound bars bounce off the speaker, and it made me be like, oh, cool. And it gets you kind of in that music mode and just thinking about, I wonder how that sounds now. I'm assuming that was intentional, and if so, was that your project? Dmitri: Yeah, so we actually have an entire style guide of how to show sound and how to talk about sound. What are the words that you use? What are the circles that emanate from the speaker, and is this stereo sound or are we showing the tuning of the speaker? And our brand design team, I think in some of the ways that ... Oh, God, this is a random story, but I remember going to a creative summit for McDonald's, and they had an entire session on the Coke and how to make the Coke look delicious and thirst-quenching. And then there was the burger session, and that sound is that for us. We have to be really consistent and relentless again about how do you make this thing look like it sounds great? Dmitri: And there's actually different ways we do that. So in above the line media, for example, we use this very bold waves of sound coming out of the speaker that really grab your attention. When we're doing an education piece like what you saw on the web site, we want to me more articulated about what the sound's actually doing in that moment, so ... And then we have to package that up as a tool kit so that marketers all over the world and partners can show it in the same consistent way. And it's true that repetition and that consistency that I think you actually build a sound brand. Stephanie: Yeah, very cool. And how did you come up with that style guide? Was it a huge project that took a lot of buy-in and everyone had a different idea, and then did you have to train your retail partners or other people of how to interpret it? Dmitri: I think everything always starts with listening and listening to your partners and understanding what they're actually going to use basically and what they really need. And so the style guide was sort of a culmination of a lot of projects where we would have conversations about, God, I can't see the speaker in this shot. I wish there was some way to call attention to it, or the sound of the speaker is so ... You have five speakers in the sound bar, but I can't really tell that from what you're showing me. So hearing a lot of that, and then trying different things and saying, well, this really worked, or this didn't work, and then compiling it ultimately into a style guide. But we didn't set out with a white sheet of paper. It's more listening to the needs and solving the problems of the marketing organization and the go to market organization overall. Stephanie: Got it. Very cool. And I think I saw y'all just did a whole brand redesign with the colors and all that. Do you want to talk a little bit about that, because I don't see many brands doing that. It's usually like, I pick my corporate palette, and it's blue, and it has to be blue for the next 100 years. How did you think about changing that? Dmitri: Yeah, this redesign, it was the coolest one I've ever been a part of because we were able to do the site and the brand redesign at the same time. So often those are two separate projects and maybe even two separate teams where you have the brand design team that goes and comes up with this really cool, hip, exciting brand identity, and then you have this web design team that's like, I can't use any of that. I don't know how I'm supposed to get that to work on the web site. Because we're all one team, we were able to really work on it simultaneously. So we would do some brand exploration, and then we'd be like, okay, maybe the product detail page with that, okay, settle on some core messaging, does that work on the home page, and go back and forth between web design and brand design simultaneously. Dmitri: And we just have a really good team that is really collaborative, and we all had that mission in the end, we want you to see an advertisement, go to the web site, and have it be totally consistent. We don't want these disconnects where the ad sells you something and then you get to the web site and you're like, what kind of ... I thought this was that kind of company, but it's this kind of company. And so that process was really digitally driven. But a lot of times, if you just approach a ... Like we just redesigned the web site, you don't get that sort of high-level brand thinking and strategy to it and communication hierarchy and stuff. And also, you just don't get the sizzle of brand to it. You sort of can get a very functional thing, and we're a premium brand and we command a premium price point. Dmitri: And I think if people show up at your site and it looks like an out of the box thing, then they're like, I don't know if they're really going to deliver on the experience side, so ... It was really cool to balance all of those. And then as far as the question related to color and our brand identity, our product is really black and white. That's the design philosophy of the product itself is that it's really bold, high contrast black and white. And our brand identity was the same way. It was very bold black and white. And what ended up happening with that is you couldn't really see the product because everything was black and white. Dmitri: And then also our category, all of a sudden everybody was just really severe black and white. And so we just, we didn't have a great context to show the product. We weren't standing out in the market. And so our brand is more about the lifestyle of the experience of your home, having high-quality experiences with music and content. And so once we started bring the color in, it just, the product could really pop out, and also just our brand looked really different in the category, so ... We didn't choose a brand color. These colors will keep changing over time, and they're more in a digital, kind of almost a seasonal fashion kind of usage. But this definitely feels right for our company and our product. Stephanie: Yeah, no, that's a great way of thinking. Are there any best practices you learned when trying to work with multiple teams to update the brand and update the web site? Any dos and do nots or places where you're like, oh, this went wrong, but this went really well, and ... Yeah, any guidance for other companies who are listening right now, like maybe that's a good idea to do both? Dmitri: I mean, you really have to build trust in your team, and it's about culture I think first. We couldn't have done that kind of project four years ago. I think our culture is at a place where we trust each other, we're collaborative, we have a shared goal in mind. We're willing to be honest with each other about what's working and what's not working. So I think you have to have the right culture to do that. I think also, when I very first got out of college, I taught school, public school. I was- Stephanie: How cool. Dmitri: An art teacher for a couple of years, and- Stephanie: What grade? Dmitri: It was junior high and high school, so- Stephanie: Okay, that's kind of a hard age to teach. Dmitri: It's very- Stephanie: They can little meanies. I was, anyways. I was a meanie. Dmitri: I mean, when you have 30 kids in a New York City public school, and you have no carrots and no sticks, I think what I learned from that experience is just like, you have to externalize the goal. It can't be personal, and it has to actually be written down and be agreed to as, this is what we're going to do, what's on this piece of paper. It's not about me and it's not about you. It's about what's on this piece of paper. And I think that was helpful with this redesign. We just had a really shared sense of purpose that wasn't the brand team's agenda or the product marketing team's agenda. It was like an external third thing that everybody was working towards- Stephanie: I like that. Dmitri: And I think that's really important. Stephanie: Yeah, no, that's great, because then if not, you've definitely got teams kind of battling it out and competing and trying to push agendas, and it's nice to ... It's kind of like putting it on a higher authority of, well, this is what we all agreed to, and this is where we're headed, not towards either one way. That's great. Dmitri: Yeah. Stephanie: Were there any tools or technologies that you utilized or implemented that really helped with updating the web site and updating the brand? Dmitri: I don't think that technology played a huge role in it. I mean, Google Slides. We use Google Slides a lot. Stephanie: Tried and true, yep. Dmitri: But I think that the tools of the trade are pretty consistent. I think that the ... I mean, when you ask it that way broadly speaking, Zoom, Google Slides, and Slack have really enabled us to collaborate with different agencies and with different teams, often in different locations. And because we were already working that way, this current disruption is pretty seamless for us in terms of how we work. It definitely posed a challenge in terms of our typography. That's a huge thing obviously that drives design and it drives my point of view on design, and when you're working in a digital medium, it's just, it's really different. That's actually one of the places that I think brand design and digital design kind of get crisscrossed is brand design is generally this print-driven medium where you can be pixel perfect on every single bit of typography, and digital is just, it's just much more dynamic and you have less control over every application. So I think that's one where we had to carve out enough time for the digital team to solve those problems. Dmitri: Often you throw over this PDF and you're like, this is how I want it to look. I want it to look exactly like this. And they're like, well, that's going to take some custom work, because type doesn't really set up like that in a browser. So we were I think good about leaving enough time to actually do that work. Stephanie: Very cool. Yeah, that's great, and how did you think about measuring success of the redesign, or what's the impact been since you launched it? Dmitri: Our business is doing great. I think in my experience with redesigns or re-platforms, there's usually a dip when you first launch, and then it normalizes. I actually see that a lot in product reviews and app updates, and it's something I wish someone had told me when I was younger, because I used to freak out in the first couple weeks when you launch something new. But what we've seen is a lot of people understand the product better. That was our big goal is, people still were saying they didn't understand how the system worked or how the products worked. And so the customer understanding was a big goal of ours. And there were things where design choices really helped that, and then there were things where design choices didn't help that. So for example, one of the ways we did image galleries when we first launched didn't make it really super-duper clear how to click to the next image. And so we found that ... We did user testing all through before launch and after launch, and that single change, for example, had a huge impact on customers' understanding- Dmitri: The product, clicking through the whole gallery of images or finding the support link on the site for example. We kind of buried that in the original design and then found, no, that's really important, because if someone needs support, they really want to find it and they don't want to have a hard time finding it. It's been a while obviously since we launched it, but all the product launches have gone really well. The cognition and understanding of how the products work together is way up, so it's going well. Stephanie: That's cool. How do you find out what the customers are struggling with? When you're saying the support link was too low, how did you know that was a problem? Dmitri: I mean, it's a mix of quantitative and qualitative. So you're looking at behaviors, and wow, people are stuck on this page or they're clicking on this part of the page more. And then qualitative of just asking them what their experience is as they go through. So saying all right, we want you to go to the site and buy Sonos One, and then kind of narrate your experience as you're going through it. And that's where you kind of get some of the specific things that you wouldn't see in behavioral, which is why someone is doing what they're doing. It's just as important as what's happening. Stephanie: Got it. Very cool. And have you updated the technology behind your web site in the past couple years, or have you stuck with one thing? If someone was coming in and building a big e-commerce store now, is there anything you would recommend to keep up with customer demand and inventory and, yeah, everything that it takes to run an e-commerce store? Dmitri: I mean, I think that is one of the things that's changed so much in my time in e-commerce. I think 15 years ago, 12 years ago, it was really a life or death decision about what's your e-comm platform? You're going to be stuck with this. It's going to take millions of dollars and years to implement, so a lot of your success or failure was based on decisions about technology. I think that the tech has gotten a lot better. It's gotten a lot more accessible from a price point perspective. Implementation's gone a ton easier. It's still painful to switch, so switching costs are real. Dmitri: But I would say you're so much better off starting today than even two years ago. The platforms are super accessible, and in a way, I mean, I think a lot of the skillset has actually become automated and commoditized too. Search optimization or even a lot of the sort of marketing tactics that drive e-commerce, that used to be a real differentiator. If you were an analytically driven marketer, you could get an edge. But a lot of times now, you're better off just going with the platform automation on these things. So I think my advice would be, the thing that always you forget is the content management piece. You can launch with a great web site, but every day, you're going to want to update it and launch new products and launch new features, so really understanding how you're going to make new templates and how you're going to add new content is the thing that generally people overlook. Stephanie: Got it. Yeah, how do you think about that intersection of your content management system, your CRM, your underlying commerce platform? How do you think about those three together? Do they work together in sync, or are they kind of separate entities? Dmitri: I'm going to be very unpopular probably for this opinion, but I mean- Stephanie: Good. Dmitri: I think you can spend so much time and money trying to create this temple to technology, everything seamlessly integrated on the platform side. But what I've learned is that, or I feel like this has changed since I got into this business, but is that if your message is consistent, then you can actually let the tools do what they do, and your customer journey will be consistent. And the more that you focus on consistency of your message and your customer journey basically, your customer communications, you can allow the different technologies to do what they do best and be less obsessive about connecting every single point of customer data. Now I mean, that's also relevant to our business. We have 10 products. If you're Amazon or Wayfair and you have just infinite complexity in your assortment ... That was more the Urban Outfitters experience. We had 20,000 styles and we launched 7,000 styles a week, and so there was this huge how do I connect the right product to the right person challenge. Dmitri: But for a lot of businesses, you're dealing with a finite product set, and as long as you're consistent in how you're showing those products and what you're saying about them, you can let your re-targeting vendor go crazy. You can let your CRM program go crazy, because it's all going to add up to the same story in the end. So I think that I often feel like people spend more money trying to back of house stuff than they do on the customer, and I always try to look at that split of, are we spending money on the things that the customer can see, or are we spending money on ourselves to make ourselves feel cool about the systems that we have, and just balancing those things. Stephanie: Got it. Is it very different with a platform that has, like you said, a huge catalog versus only 10 products, and is there a different way you would handle an Urban Outfitters model when you were there versus at Sonos? Dmitri: Yeah, I mean, it is really different. The three big brands I worked with are Urban Outfitters, Patagonia, and Sonos, and each time I've gone to a smaller and smaller assortment because it's such a pain in the ass to have a big assortment that I was like, I just want to get to a smaller assortment. But- Stephanie: You're going to be down to just one product soon, just that's all Dmitri sells- Dmitri: That's my dream. Stephanie: Just one thing. Dmitri: Live the dream. No, it's really different because all the tricks of merchandising ... I think of like, people have been shopping since the Roman forum, right? It's a very human experience to wander around and find the thing that reflects your sense of self and choose it over the other thing and buy the middle price point because it's not too expensive. All that stuff is super innate to people. And so I think when you have a big assortment, you have a lot of products to play those games with, like this is something new, so you should look over here because it's new, or this is going fast, so you should look over here. With Sonos, it's very much about getting people to understand the experience, and get it that it's like, you can mix and match all these speakers. You can buy one or you can buy three, and you can move them around the house. And they need to understand that gestalt much more than ... That's more important than them picking one speaker and having a box shipped to their house. Do you know what I mean? Stephanie: Yeah. Dmitri: They might get that idea, and they might buy something at Amazon or at Best Buy, but if they get that concept, they're a super high-value customer, for us that's more margin to better business for us to be in. So a lot of what high product count sites are about getting you to a decision and to put something in your basket and check out, and for us I think, and for a lot of businesses and a lot of DTC businesses that have these narrow assortments, it's much more about communicating the gestalt and the value of the product. Stephanie: Mm-hmm (affirmative), yeah, because I'm sure once someone buys one, two, three, then it's like you've got ... That lifetime value of that customer is bigger because they're going to come back. And now I'm looking right now, we have our Sonos speaker, hey, right next- Dmitri: All right. Stephanie: To me, but I don't know ... I mean, we have a couple in our house and all around the studio, but I don't know if I'm getting the full value of it because the only songs that seem to play on our speaker are Old MacDonald and Happy and You Know It, for my two-year-old, all day long. So I think there's a bug. I need to send it back and get that updated hopefully soon. I'm sure you have the same problem. Dmitri: It is fun, though, singing to your kids though isn't it? Stephanie: Yeah. Dmitri: I love that aspect of it, just sharing music with them and dance parties and ... We're so often with our headphones on in our little phone world, but having it be something that you can share with the kids is really fun. Stephanie: Yeah, but I also enjoy that you can ... I'll turn off the kitchen, just leave the living room running and be like, you go have your dance party out there. I can't listen to that song another time. Dmitri: Totally. Stephanie: So if you're thinking about defining success for an e-commerce platform, what do you consider successful? What metrics do you look at? Yeah, how do you think about that? Dmitri: Well, if I have to pick one- Stephanie: Yep, only one. Or you can pick two, but stack rank them. Dmitri: Oh man. I mean, the ultimate one to me is margin per session. Stephanie: Okay. Dmitri: It's not the easiest one to get at, but I think traffic is really a tough one because it's driven often by an e-mail or it can be driven by bad things or you can have a bunch of crappy traffic that's unqualified. So like, great, you've done this marketing campaign that's not converting. I think conversion, you can have people again, like you could be converting on a sale product that doesn't generate a lot of revenue profit for the company. And so I like per session because it just, it corrects for traffic basically. And then I like margin because it's like, it motivates you to sell the high margin stuff and sell the high-quality stuff, and those are generally your best products and the things that bring people back and make them more high-value customers, so that one's really, when you're really in the weeds of it, that's something that I look at. Dmitri: And then usually, you're designing a specific part of the site and so step conversion is really helpful to look at, did I get them to go from here to here? Because if I didn't, then I know they're not going to get to the final steps of the process, but ... I think that, in my role, one of the things that's important is just a very high-level business understanding of margins are basically what you can charge for the product. It's based on people's perceptions and perceptions of your brand, and you have to dedicate a certain amount of time to just faith in that. And that's a pretty high-level thing. I don't expect someone at a junior level or somebody who's responsible for the day-to-day revenue of a particular category to get, but if you don't invest some of your development time and reinforcing premium, then you just, you're not going to be able to charge the margins. And so that's one that's a little more high level, but ... I think of the brand comes through in the margin. Stephanie: Got it. I think I just heard that Amazon's switching their algorithm to showcase higher-margin items, where before it was always based off of what they thought the customer would want to see first. How do you strike that balance between maybe showcasing higher-margin products higher up ... I mean, I know there's not many, but how do you think about that versus making sure the customer experience is what they want? Dmitri: Yeah, so it is less of a challenge with Sonos because our product philosophy is to make the fewest number of products possible for the most number of applications. So we only have a couple home theater products. We only have a couple of music products. And it's really about the size of the room, but I think it's like, that's all merchandising stuff. We sell 80% black, but you always show the color because it's going to excite someone and make them feel like the experience of wearing a great new jacket. And I think with sound, it's the same thing. I kind of want to get people emotionally invested in the experience of music, which is awesome, and just remind them, listening to music is great. Dmitri: And so that's kind of the first thing that we try to lead with is just what a great experience this is and reminding people that they have ears and it's one of the only five senses they have and it can be really transporting. And so that generally is going to be more of our premium products that do that, but then they're going to ... Most people will buy the middle price point. That's just the rules. Stephanie: Yeah, got it. Very cool. So to shift a little bit to the present day, the current environment, everything with COVID-19. Do you guys see a lot of changes in your business right now with what's happening? Dmitri: Our business obviously is ... We do a lot of business in physical retail, and physical retail is closed. And so that has really been disruptive to a lot of our partners and the people that we work with. And so on a personal level, it's just, it's hugely impactful. And obviously, we are really invested in our partners and the people that we work with. And so we're doing everything we can to work with them. A lot of that volume has shifted to online channels, so most of our partners have a web site and they're seeing that too, so their business is shifting online. Our direct to consumer business is way up. Dmitri: And so I mean, I think that is a circumstantial behavior. People can't go to the stores. Stores are closed. That's a behavior, and I think what people expect ... I feel like everybody is re-evaluating everything 100%, and you have a complete clean slate as a brand, which kind of sucks if you have a great brand like ours. You're like, wait, remember yesterday you thought we were awesome. I think every brand has to kind of start over, and every action you take as a brand is going to be evaluated in this new reality, like do I need Sonos now? Do I need to travel now? What do I actually care about now? And I think that's an incredible, almost once-in-a-lifetime experience. Dmitri: And anybody who's, especially young marketers and brand people going through this right now, this is going to be the proving ground for the future. The greatest brands of the last century were defined in the world wars, and the brands that figured out how to endure the Great Depression and those disruptions, and they didn't do it by disappearing. They weren't created by going off radar. They figured out how to stay in the public consciousness and to be relevant, even when people felt so horrible. So that's what I'm thinking about a lot right now and observing in the marketplace. Stephanie: Yeah, no, I agree, definitely the clean slate idea of everything can change from this point forward is, yeah, good to remember. Is there anything that you're, like any big strategic projects or things that you're shifting either off your plate or a new thing that you're starting to work towards based off of consumer buying behavior over the past couple months? Dmitri: Yeah, we really had to take a look at how our brand shows up, as all companies and brands do. And we really, we tend to be a very aspirational brand, and I think in this moment, it's really important to be personal and to be helpful and to just kind of tone it down a little bit and be real with people. And that's a big effort when you have a global marketing offense that spans channels and geographies, and the team just did an incredible job of realizing, accepting, and taking action and is continuing to learn and adjust as we go through it. But I think we couldn't just show up the way we did two months ago. Everything you do has to in some way be relevant to what's happening right now. And so it's touching everything. Dmitri: We're fortunate in that our product roadmap hasn't changed. We haven't had to take major programs off the board in terms of not being able to fund them or whatever. And we're at an incredible busy time right now. We have these two major launches coming up. So we were in the final mile of that work, and so we've just been proceeding, but then also, yeah, got to look at it through the lens of what's happening today. Is this going to seem off, or is this going to seem weird to be doing this right now? And you have to pull the plug on it if it's going to not look good for the brand. Stephanie: Yep, yeah, completely agree. It seems like it's also a good forcing function to make larger brands be more agile and make decisions quicker and be able to adjust to the market, whereas before this, I don't think there was that forcing function. Dmitri: It's true, and I think it accelerates changes that were already happening. So I think that's a situation like this, anything you were thinking of doing, you're going to probably, you're going to have the opportunity to do. It's also just a giant dumpster fire that you can throw almost anything on. If you want to get rid of something, some old behavior or if you wanted to ... I mean, I see brands that were really struggling with their perceptions, again, they have this fresh moment. They can throw their old identity on the fire and re-introduce themselves, and it's almost like a once-in-a-lifetime opportunity to do that. So definitely looking to take advantage of that as well, like what do we want to shed? What do we want to get rid of? Because that's also part of the opportunity right now. Stephanie: Yep, yeah, I think the brands that'll experiment a bit with that as well and try something new like you said are going to be the ones that come out on top, because I've seen quite a few come through my inbox that just have the same messaging. And I'm like, did you all just hire the same PR company to just be like, title, addressing COVID-19 challenges. It's like, here's what we're doing, and it's so cookie-cutter. I'm like, I don't connect with that. But the brands who send unique messaging and you can tell they care, like you're talking about Sonos really showing that you want to be there for them and the retail partners and the customers, that's very different. And yeah, you can start from scratch and have a whole different journey from here on out depending on how you choose to handle it right now. Dmitri: Yeah, and I mean, some of that is luck of the draw. When we went into that process of self-examination, we're like, okay, our mission is to give people a really deep, immersive experience of music and content in their home. It's like, that's still pretty relevant. Our goal is to connect people to music and as a way of making their lives richer and escape. That's still pretty relevant. I mean, it's not luck, but we're very lucky that that's what our product and what we stand for as a brand is still really relevant, and then it's more about like, okay, how do we talk about this in a way that's relevant? But I mean, look at Zoom, look at Portal, products that you were sort of vaguely maybe aware of all of a sudden are completely relevant and useful in your day-to-day life. So you've got to kind of be grateful if you happen to fall into one of those categories. Stephanie: Yeah, and the fact that there's so many new customers who are sitting on the sideline that are now coming on board. I mean, I'm thinking about for Zoom, it's my grandmother sent a link and was like, family Zoom call? I'm like, Grandma, how did you know about Zoom? And then my mom's like, oh yeah, I've been using that for teaching. I'm like, you guys ... I mean, we just got on Zoom not too long ago. But it seems like a very good time to be able to bring people into your product that you never had access to before and you might never have had access to them, unless something like this happened maybe. Dmitri: I know, and I do think this is one of the things that you won't go back from. I think it'll go back to some extent, like you won't have every school in the world doing school through Zoom, but it works really well, and you can be more remote. I think about the follow-up doctor's appointment. You go to a doctor and then you're supposed to come back a month later for a check-up, and you drive an hour and you sit in the waiting room, and then you go in for five minutes for them to be like, yeah, you're fine. It's like, you're not going to do that any more. You're just going to get on Zoom and be like, I'm fine, and they'll be like, cool, you're fine. Everybody's going to save a couple hours. And so I think there will be lasting effects on our behaviors and we're not going to want to go back in every way to the way things were. Stephanie: Yeah, no, that's actually a good point about doctor's office visits. I have two twins, they're seven weeks old now. And we went to their doctor's appointment, and one of them had a little baby acne or something. And they're like, well, don't come back for a follow-up. Just snap a picture of it and upload it into a Google Doc, because we can't access pictures but we can upload Google Docs and just do that. And I'm like, oh, from now on, then I'd rather just always do that. I don't want to come in here and expose my kids to maybe get sick from coming here. I'll just send you pictures and let me know. Dmitri: Yeah. Stephanie: So, yeah. Dmitri: But I mean, we're in the orbit of Los Angeles, and we have our own traffic situations, and there's so many trips that are just a total waste. Stephanie: Yep. Dmitri: My wife's a therapist, and you couldn't really do psychotherapy or therapy via Zoom. It's not secure, but there's so much innovation happening in that space right now with HIPAA compliance. And so yeah, I think less time in transit isn't a bad thing. More time at home listening to Sonos. Sounds good. Stephanie: I know. Hey, I'm all about that. I'm definitely all about that. So when it comes to leadership, whether it's in times of change or just in general e-commerce leaders, who do you brands do you look for, what brands do you look to or people in the field that you kind of keep tabs on what they're doing? Dmitri: In terms of leadership, I mean, I think we have an amazing CEO. My boss is amazing, so I feel really fortunate that I don't have to look too far for leadership inspiration. Stephanie: Yeah, that's good. Dmitri: That would suck if you were like, I don't know, I can't find it in my company so I have to go read a book- Stephanie: No one here. Yep. Dmitri: But man, leadership is one of those topics that the longer I work, the less I really feel like I understand it, or ... It's such a human one-to-one thing, and I think that what I like about our company and our CEO's approach is that you really focus on the culture overall and not this meeting practice or this latest book or whatever. It's just this consistency of how we treat each other is really the focus. And every time you go back to that, it actually helps you through a management challenge. And I think right now, the thing is just to be really, really patient with people and really understand how hard it is to do this. You've got kids crying in the next room, you've got elderly parents that you can't go be with. It's emotionally really stressful and really hard, and the best thing you can do as a co-worker, forget being a leader but just as a co-worker and a human, is to just be patient with people and to understand that it's going to ... Their first reaction, they might be coming in hot to a meeting because of something else entirely. So I think that's really important, and then ... Yeah, I think as far as brands and companies that I look to, there isn't a single company. It's interesting, we have these sort of index fund companies, like Apple, Amazon, Google. They do everything. They do every single kind of marketing, they do every single kind of branding. Dmitri: So you can always find an example there of, well, if you had unlimited money, this is what you would do. So I feel like that's kind of an interesting resource that you can always ... Or if you have contacts there or whatever, asking them questions, and we do a lot of partnerships with them. So that's always a good test I think of whatever you're thinking about. I do tend to look at smaller brands as far as just what's happening and how you want to look as a brand. It's been really interesting, again, to see how fast everybody's adapted from a branding perspective. Every single ad right now is people on Zoom or healthcare workers. I think a month ago, I was like, I don't think people are going to be able to advertise. What will be in the ad? And then it's just so fast. Everything's moving so fast. You just have to- Stephanie: Oh yeah. Every ad's that's catered to me right now is sweatpants and work from home outfits, which are basically sweatpants that look like jeans. And I'm like, man, I mean, that's what I want to buy right now. This is great. Dmitri: This is one of the challenges I think for consumers and for brands is that because everything is so automated, algorithm-driven, you kind of get into these wormholes, and you get into this, I call it a coffin of your own preferences. You can't see a way out of sweatpants, like, how am I going to get these sweatpants off my Instagram feed? And brands, that's a challenge for us too, like how do we break through that just self-reinforcing? Yeah, you probably are interested in sweatpants right now, but getting you to see something else is challenging I think, so- Stephanie: Yeah, I agree. Dmitri: Have you pulled the trigger on sweatpants at all? Stephanie: Well, before ... I mean, I own many sweatpants. Thankfully, our company is work from here a lot, so I don't have to always wear nice jeans. But I did pull the trigger on one pair of jegging pants- Dmitri: Nice. Stephanie: That look like jeans, so at least when I go on a walk, people think I'm fancy. So, I did. Dmitri: I am in the sweatshirt business right now. I get in these shopping sort of really focused trapping things, but it's almost more as a way to work through some of what's happening in the market? What's the customer's mindset? But I do it through my own experimenting on myself kind of thing. Yeah, and it's pretty extreme what's happening, whole businesses that are 70% off. And at the same time, the options are totally unlimited and it's a really, it's a time when I think you have to stay incredibly alert in the moment, because it is moving so fast. You can't sort of ... People want there to be a new normal, like, oh, we did it, the new normal of marketing and e-commerce is this. But I don't think we're going to get there for a while. Dmitri: I think people, we're going to have to be on our toes adapting for months. And that's going to be a challenge for the teams, because the teams are like, we just did all this work and now we have to change it, or what do you mean we don't want to show Zoom in any of our coms any more or something. But I think the fall into the Great Depression took four years. This took like four weeks. This is just a hyper-accelerated world we're living in, and you've got to stay alert. Stephanie: Mm-hmm (affirmative), yeah, completely agree. So if we zoom out a little bit and have a conversation on higher level e-commerce trends, are there any e-commerce trends coming that you're most excited about or that you're looking forward to? Dmitri: I think the trends that I've noticed recently is really the commodification of digital marketing and that, again, there used to be able to be a differentiator. You could pretty much get a business going by raising some money and then using these platforms to grow, and the platforms were willing to kind of subsidize your growth because it was their own growth of market share. And then about a year or so ago, that really flipped, and the platforms are like, no, we're going to take the profits now. We're going to be profitable. And so you saw these DTC brands I think really struggling that their customer acquisition engine wasn't as profitable as it used to be. So I think what I'm really excited about is I do think that there's a rejuvenation of the social channels. I think the sort of toxicness of them, at least my experience over the last month, is that they've gotten way less toxic. Even Walt Mossberg is back on Facebook. Stephanie: All right. Dmitri: That's a big deal. Stephanie: Yep, that's a good sign. Dmitri: So I think that the potential of those channels never got fully realized of as far as really being able to connect with people and brands in an authentic way and have that follow through to your business, and I kind of feel like that might be what we're going to actually experience now, where the targeting is so good, the relevancy is so high, and the community aspect is getting less toxic because of just, people are not wanting to be assholes right now I think- Stephanie: Yeah, which is a plus- Dmitri: As much, yeah, as much, and I think the platforms, I hope they'll take a little more responsibility too in this moment and go, okay, this isn't just about an election. This is life or death now. We can't allow such misinformation and just toxic behavior, because it's costing lives. So anyway, I see this sort of perfect storm there of social actually becoming the commercial channel that it never really realized in the past. And so that's one that I'm pretty excited about. It's obviously the only way we can reach people right now. And the ability to pull it through to your actual business is getting really, really good. So that's probably one that I'm excited about. Dmitri: And then I think also for us, the integration with our app and just that part of the digital experience and connecting the online to the in-app. I just had a great experience buying a printer and using the app to set the printer up and having- Stephanie: Really? Which printer? Dmitri: Yeah. I mean, I don't want to shill for another company, but I bought an HP printer, and they forced me to set it up with the app, which I was super annoyed by at first. But then I was like, wait, this is actually really cool. It's just going to measure the ink and send me the new ink when I want it? Yes, please do that. I hate- Stephanie: Oh, that's great. Dmitri: Finding out that I need to order ink. So I think this integration of IOT devices and the app component with the commerce component, I'm super excited about that for us. I think we've taken a lot of steps in that direction, but I think people are going to get more and more comfortable with it because it's actually going to be a good experience. So those are two that I see. Stephanie: Completely agree. Yeah, and especially the first one. I've seen a slow shift to brands kind of turning into media companies and not relying as heavily on certain platforms, because yeah, I know a lot of brands that had been relying on Amazon so heavily. Well, now that Amazon's shifting to, okay, well, here's what we view as essential and here's what's going to get shipped out, and I think a lot of brands are going to rethink relying on those platforms and instead maybe think about how they can rely on themselves more and promote their content on their own a little bit more. So yeah, two really good points. All right, so let's ... I think we only have a couple minutes, so I don't want to ask you too many things. Let's see. And actually, maybe we should just shift right over to the lightning round, just to respect your time. So the lightning round is when I ask quick questions, and you have to just say whatever's top of mind, and you only get one minute or less to answer the question. Dmitri: Oh my God, I was not aware of the lightning round. Okay. Stephanie: Dun dun dun. Dmitri: I want to do a couple push ups. All right, I'm ready. Stephanie: Yeah, do some push ups, do some deep breaths, just shake it out a bit. It's just for fun. But yeah, whatever just first comes top of mind. Dmitri: Okay. Stephanie: So we'll do some easy ones first, and then we'll do a hard one last. All right, so, what's up next on your reading list? Dmitri: The Last Kid Left by Rosecrans Baldwin. Stephanie: Okay. What's up next on your podcast or Audible queue? Dmitri: Stay Free: The Story of the Clash and Music Exists. That's a podcast I'm listening to that's really, it's just ... It's Chuck Klosterman and one of the guys from The Ringer, and they don't talk about specific music. It's like music concepts in general. I like it. Stephanie: Oh, cool. And you have a art background, so does that ... Do you think everyone would like that podcast, or is that more Dmitri specific? Dmitri: If you like music, I think you'll like it, yeah. I mean, they talk about like why do bands change? Why do bands change their style? Stephanie: Got it. Dmitri: That will be a topic they'll talk about, and they'll be like, okay, ACDC never changes, but this band did ... So it's that kind of thing. It's just like hanging out with your friends talking about music, but your friends are really smart. Stephanie: That sounds cool. I like that. All right, what's up next on your Netflix or Hulu queue? Dmitri: Oh man. I started watching Black AF, which is the new show from the guy who created Black-ish, and it is- Stephanie: Me too, yeah. Dmitri: It is so funny, oh my God. Stephanie: Yep. Dmitri: I basically can't wait- Stephanie: I just saw it last night. Dmitri: To ... Yeah, I can't wait to just go binge that thing. Insecure just started again, which I love that show, and My Brilliant Friend, which is on HBO, which is the Elena Ferrante books. I just, every episode I'm dying when that comes out. So those are my picks. Stephanie: Cool, I'll have to check out that last one. I haven't heard of it. What's up next on your travel destinations after we're allowed to go out into the world again? Dmitri: I want to see my parents. That's definitely- Stephanie: Where are they? Dmitri: They're in D.C. Stephanie: Okay. Dmitri: That's mostly my friends. It's like it's less destinational for me, but ... I lived in New York for a long time. I want to go back to New York. I love that city, I love so many people there. It's been through such a hard time. I want to go there. We had dreamed of going to Japan before this, so that's definitely going to happen at some point. I love going there. Stephanie: Awesome. Dmitri: My kids have never been there, so those are a couple spots. Stephanie: Yeah, Japan's great. That's definitely one of my favorite places I've been. It's so fun. The people are so nice there. Yeah, just a good, very different environment. Did you do the hot spring baths? What are they called again? Dmitri: Onsen? Stephanie: Yeah- Dmitri: Yeah. Stephanie: Did you do those? Dmitri: Yeah, I would go. When I worked at Patagonia, I would go a bunch, and it was a cool way to go there because we actually didn't spend any time in Tokyo. We would go up to Hokkaido and go skiing and go down [inaudible] and go surfing. And so yeah, it was ... The culture, even outside of Tokyo, is just so cool. Just everything is so considered, and every experience is thought through, and yeah. Stephanie: And everything's so clean, and it just feels so safe. We were in I think Hakone area, and there's a bus system that goes around, and there was kids, and I swear they were only like five or four, getting on the bus by themselves, going to school. And I'm like, oh my gosh, in America, no parent would ever let you just walk all the way down the street, get on the bus by yourself. I mean, these kids are small. But then, there, it actually did feel right for some reason. Dmitri: Yeah. So I hope you get back there. Stephanie: Yeah, very cool. All right, the last one. So it's your job to stay ahead of expectations, your competition, all that. In your opinion, what's up next for e-commerce pros? Dmitri: I think that you can't just be shipping boxes to people. I think that your site experience and your commercial experience, you've got to break the mold of, pick a box on our web site and this box will show up at your doorstep. I just think that's not a competitive advantage, and it's just not a customer advantage. And you've got to figure out some other way of engaging your customers that isn't about shipping and getting a box delivered to their doorstep. So it'll be different for every business, but I mean, I think obviously subscriptions are interesting, but also just the way that you decide what you want, it's not navigating a bunch of little squares on a page, but really learning about me and understanding and what I need and offering me a solution versus a box that's going to get shipped to my house. Dmitri: So I think the site experience and how that connects to either if you have an app or your CRM programs, all that stuff, it's ... The paradigm is just dead right now, and I think if you're not disrupting that, then you're going to just be perceived as, why am I bothered? Why would I bother shopping here? I can get a box shipped to my house by a lot of other companies. Stephanie: Yeah, completely agree. Wow, you were very good at the lightning round. You really had answers right away, so yeah, nice job there. But yeah, it's been a blast, Dmitri. Thanks so much for coming on the show. I know after this, I'm going to go and play all my Sonos speakers and put on a little surround sound techno music going on to pump me up a bit for the rest of the day. So yeah, thanks for- Dmitri: Oh, that sounds good. Stephanie: Hopping on. Yeah, it'll be a good rest of the day. So thanks so much. Dmitri: All right, bye bye.  

Listen to Selena (2021) talk about her internship in graphic design at Pew Research Center this past summer. Stephanie: You're listening to Gear Up, the Duke Career Center's student produce a podcast showcasing real student summer internship experiences. My name's Stephanie. And today I'm talking to Selena, who worked in graphic design at Pew Research this summer. Selena: Hi, I'm Selena. I'm a junior currently at Duke and I'm doing a interdepartmental major in visual media studies and computer science. Stephanie: And where did you work this past summer? Selena: I worked at Pew Research Center. Stephanie: What were you doing specifically? What was your your role? Selena: Yeah, I was the official title was Digital Design Intern. So basically I was working on their graphic design team, making all kinds of data visualizations and other types of visuals to go along with their articles and reports and be published online. Stephanie: How did you find out about that position? Selena: I don't remember exactly, but I think I was either looking on LinkedIn or Google or something and looking for a variety of different design related jobs. And it popped up. And I knew about the center previously because I because I'm in journalism and I do do some work for the Chronicle here. And at my high school newspaper, we used Pew Research Center's statistics a lot. And so when I saw that they had internships, I was really excited about that. And so I applied. Stephanie: And you got it. That's cool. So what kind of stuff were you actually doing day to day? Were you working on projects mostly or... Selena: I basically was functioning like a full time staff member. And depending on what was being published that day, I was either working on social media graphics or I was working on graphics to accompany a report or they have blog posts that are called for their facthink blog. And so those all need those, all need data visualization graphics as well as everything that gets published gets a featured image. So I was also looking through stock photos, getting images and that kind of thing for photos to go along with the reports. I would say I had a few larger projects, I worked on. I worked on I was on a trusted science report and that report was over 60 pages long. Most of them were actually done by the researchers because they had they have like a template that they used to make some of the simpler graphics, but then for the more complicated ones, they go to the design team. And so I was working on some of those and working on another report about machine learning. That was pretty interesting. I got to learn a lot from the researchers about what they were working on and that was really cool. Stephanie: So do you kind of have to read the like the reports to know what graphics you need? Selena: Yeah, I definitely had to read through the reports for context. I think a lot of times the researchers already kind of knew we want to show this or we want to show this particular trend in a graphic. But sometimes there were times, especially when I was looking for featured images or trying to create featured images, that was a time where I needed to read through and figure out what's the gist of the report or the post. Stephanie: And so did you find it interesting? Was it cool getting to do that? Selena: Yeah, it's definitely really cool. I think it was especially interesting for me in learning more about how the whole process works, because you see that the center publishes so much information and so much content. And it was really cool to get to see how that happens. Stephanie: Was there anything that you kind of weren't expecting before you came to this position like. Did it kind of match the expectations of what you thought you would be doing day-to-day? Selena: As far as expectations. Well, I expected that I was going to be working on graphics and doing that kind of thing. I thought I didn't know that I would be looking for photos

Internship Funding Program – Leigh Ann: A special episode to tell you about the Career Center’s Internship Funding Program. Listen to the Career Center’s own Leigh Ann Waring to talk about the program. Stephanie: Hi there. You're listening to GEAR UP: the Duke Career Center's student-produced podcasts showcasing real student summer internship experiences. My name is Stephanie and today we have a special episode to tell you all about the Career Center's Internship Funding Program. Leigh Ann: My name's Leigh Ann Waring and I'm an assistant director in the Career Center. I work with employers who are seeking students as interns, but I also oversee the Internship Funding Program for the office. Stephanie: And what is the Internship Funding Program? Leigh Ann: Great question. It is a stipend-based program where students can apply for funding to help offset costs that they might have if they're doing an unpaid or low-paying internship over the summer. Stephanie: What does it include, really? Can just like students just get the money and can put it towards like, anything? Or logistically, how does it work? Leigh Ann: Yeah. So it's for any type of expense that might be a new expense that they have; any type of living costs they might have as a result of doing an unpaid or low-paying internship. So things like their rent, transportation costs - and that could be like a one time plane ticket to and from their location of their internship, or it could also be like day-to-day commute, like a subway car or something along those lines. They can ask for coverage for their food, utilities, any special type of expenses that they might have, like a visa or any type of vaccinations that they may have to get as a result of doing their internship. So really, it's those living expenses that we cover. Stephanie: And any student that's doing any sort of unpaid internship is eligible to apply? Leigh Ann: So the program is for first-year students through first-semester seniors. So unfortunately, graduating seniors are not eligible, just because they won't be a student over the summer. Stephanie: That's fair. Leigh Ann: But yeah. So the students do need to be in good academic standing and good conduct standing. The unpaid or low-paying internship does have to be two hundred and forty hours for the summer, and there's some other requirements too that go along with that in terms of the type of supervision that they'll and intern that they'll receive. The program covers what we call unpaid, which is zero compensation, or low paying internships, which is kind of a little more of a loose definition. Typically we say $1,500 for the semester or the summer. However, if a student's going to a high cost of living area like New York City or Washington, D.C., we obviously take that in consideration. So if they're receiving more than $1,500 for their internship, but they still have a financial need, we would definitely take in consideration of that, too. And it's also open to supervised research projects. Stephanie: Oh, okay. Oh, that's huge. Leigh Ann: Yeah. Stephanie: So what's the application process like, usually? Is it just fill out like one application and then receive a decision? Leigh Ann: Yeah. So it is a competitive application. So students have to do three different steps. The first step is they have to view an online virtual information session, which is available off of our website. Or they could have attended an in-person session. Unfortunately at this point, the in-person sessions are finished for the semester. But all the same information's covered on the virtual session. So they have to review that and then fill out a Qualtrics survey that just shows that they reviewed it. The second step would be they have two things that they have to fill out that's on our web site. They're both Qualtrics surveys. One is their application, and the other is a employer information form that they have to provide to their employer to fil

Listen to Zack (2020) talk about his experience as a Legislative Intern in New York City council member Helen Rosenthal’s office this summer. Stephanie: Hi You're listening to Gear Up the Duke Career Centers student produce podcasts showcasing real students summer internship experiences. My name is Stephanie Mayle and today we're talking, to Zack who worked, for New York City, City Council matter this summer. Zack: Hi there, my name's Zack Guffey, I’m a senior here. I am studying public policy. I have a minor in music. Stephanie: Oh that's cool. Zack: Yeah, I've played the trumpet since the third grade, but since getting here I've started pursuing public policy. Stephanie: And where did you work this past summer? Zack: So this past summer, I was an intern in New York City Council member Helen Rosenthal's legislative office. So I worked directly with the legislative director. My primary responsibilities were memo writing. I attended a lot of committee hearings and I did a lot of research for the council member when she was making decisions on votes and policy issues. And I even got the opportunity to write two opinion pieces that were since published on issues that were important to the council member. Stephanie: What issues were they? Zack: The first one was on the city's, in my opinion, broken procurement process. So basically New York City subcontracts a lot of its human centered work, which includes homeless shelters, food pantries, some of the most vital services for the the city and the city is very, very bad about paying those subcontractors, which are often nonprofits on time. Zack: And so what these nonprofits end up doing is they end up going to banks and getting loans to cover their costs that are growing and mounting. As New York City is late to pay its bills. And so it's a burden on organizations that are in New York City trying to do good. And so that was one opinion piece. And I think I remember the other one was, oh, well, it's big news now in New York City. The New York City Council just approved the borough-based jails program. And so that includes closing Rikers Island and opening up new modern community-based jails in each of the boroughs. And one very small subset of this issue is what to do with the women. As chair of the Committee on Women in Gender Equity, my council member was pushing for a women's only facility in one of the boroughs. So that was the other opinion piece that I wrote on. Stephanie: Also important, so how did you get connected to this council members specifically and kind of find he opportunity to work for her? Zack: So I actually was of the belief that I didn't want to run to DC as quickly as possible and work in some congressperson’s office. I really thought that it was my day to day would look like for them would be picking up phones and replying to emails and stuff like that. And so I was not that excited to pursue that for my summer internship. And so I for personal reasons. My family is from New York. I'm from New York, wanted to be in New York City during the summer. So there are only so many public policy options in New York City, and one of which included the mayor's office and the city council. And so I started poking around on the city council's Web site looking for council members that one have internship programs and two are sort of interesting. And so obviously not many people know about like the internal functioning of local New York City politics. But council member Rosenthal is running for city comptroller in 2021. This is her second term as a city council member, and she's fairly influential and chairs the Committee on Women and Gender Equity. So I reached out to her. I had a phone interview with her former legislative director, Ned Terrace, and we hit it off and here I am. Stephanie Yeah, I am one of those people that does not know the inner workings of New York City Council. So, I mean, how many people are also working very like what was the

Interview with Stephanie: What gift do you have for the audience today? “I created a capsule wardrobe guide- It’s all the must have basic items you need in your closet!” http://rebelhoneythreads.com/capsulewardrobe Helping people change their net worth is a holistic journey where all parts of our life affect it. How does your area of expertise help a person improve net worth or change how they think about net worth? “I teach women how to elevate their wardrobes because when you look good you feel good. And when you feel good it positively impacts every area of your life including your ability to attract abundance.” What were the pain points of why you chose entrepreneurship?  ”Time away from my family, stress, depression.” If you could start all over with your entrepreneur journey, what would you do differently? ”Focus on what I'm good at and hire out the rest!” What SPECIFIC NINJA skill did you need to learn or acquire to make money at what you are doing?  “How to build trust with my audience so they would buy what I have -- free advice and content, show that I'm a real person, imperfections, responding to every comment and DM, authenticity.” Where can people find your products? “Rebel Honey House of VIP Facebook group -- RebelHoneyThreads.com/VIP What was the number one mindset shift you had to make in order to believe you could do this? “Imposter syndrome -- that I have no business helping women dress because I've never been in the industry. I learned I only need to be 2 steps ahead of my customer"   About Stephanie: Stephanie has been an entrepreneur since 2010, with a background in brick and mortar, network marketing and online sales. She is a master at creative marketing and specializes in drop shipping women's clothing and does so via her Facebook group, Rebel Honey House of VIP. It is her mission to help women feel empowered to elevate their wardrobes, because she believes that when you look good, you feel good... And when you feel good, your entire life benefits.  Where can people find you?  RebelHoneyThreads.com/VIP

Listen to Imani (2020) talk about her summer internships at various nonprofit organizations. Stephanie: Hi there. You're listening to Gear Up the Duke Career Centers student produced podcasts showcasing real students summer internship experiences. My name's Stephanie Mayle. Stephanie: And today we're talking to Imani about her experience interning at nonprofits. Stephanie: OK. Can you introduce yourself? Imani: My name is Imani Hicks. I'm a senior I was going to say im a senior at Duke University. I'm a senior studying public policy, and then I'm getting two certificates, the first one human rights and the second one in Latin American studies. Stephanie: And so what have you done the past few summers? Imani: So my freshman summer, I worked in the public affairs department at like a development corporation. So they worked for a bunch of different companies, I did a lot of PR and I was just the intern there, and then the second is my sophomore summer, so I did Duke Engage in Seattle and that's nonprofit based. I worked with like a grassroots nonprofit in the city, and then last summer or this year, this past summer, I worked at a mental behavioral health nonprofit that specialized in working with urban natives. Stephanie: So you've done a lot of nonprofit? Stephanie: Yeah, that sounds like a thing. Imani: Yeah. Yeah. Stephanie: So what kind of drew you to that? Like, why did you continue doing the work? Imani: I came into Duke thinking I was gonna do econ and I realized after taking econ one to one, I didn't like that and so I started exploring my interest, and my mom's a social worker, like my grandma also worked in nonprofits pretty much all her life, did like a HR working with people and I was like, oh, that's what I really want to do, and at first I thought I'd like to do in the private sector. And so I worked with the Public Affairs Department, which is PR, and was a lot of like doing press releases and just interacting with the board, and I liked it , but then I was like, you know what? I rather just work directly, with people. I also picked up human rights as a certificate. I was like, I really want to work with helping people. That was my overall theme. Imani: So my sophomore year, I applied for Duke Engage. Got that. And then I was like deeply involved in nonprofit work and was like a grassroots organization that I want. You know, I don't really like the grassroots. It's a little bit. I'm not going to say unorganized, but it's just very on the go. On the fly and so then I worked last summer at sort of a traditional nonprofit. Stephanie: So let’s focus on last summer. Imani: So, yeah. Stephanie: What kind of role did you have specifically? Imani: So what the nonprofit is right now. So they just got a bunch of grant money and it's a bunch of clinical psychologist and they're right now working and doing research on the opioid epidemic and how it affects like urban native communities, specifically in L.A. and Minneapolis, but because we just got all this grant funding and they're sort of a newer nonprofit, they wanted to enter into kind of, it was closer to what a startup would be. It was a lot of like ground work ,and so even though technically I think my titles like Summer Intern with the focus and like mental behavioral health l, I did a little bit of everything. So it was a lot of just like creating a Facebook page to, organizing a lot of like the research, a little bit of everything I got to do stuff with like website development, which I had no idea that world existed. I knew I had too but I had, no idea about it, and just looking more like the clinical side of non-profits is really interesting. Working with all doctors because I feel like , they just approach the world differently. Stephanie: So how did you find this organization? Imani: So I'm public policy. So I need my internship and so I reached out to like people at home. It was really just putting out my feelings like even li

We're back with another weekend of Cabral House Calls answering our community's questions! Here are today's Q&A topics: Stephanie: What are your thoughts about "Gerson Therapy" for cancer patients? Marta: Could you talk about polycistic ovary syndrome (PCOS) and how to cure the symptoms such as facial hair, menstrual pain, hair loss... Marta: Is maca powder good for balancing hormones? Kristie: Hello, I believe two of my children are dealing with anxiety and/or depression. (I have a history of both.) The first is a 15 year old daughter and the second is a 13 year old son. Every time I read an article about mental heath and its relationship to the gut, I can't help but think of my son in particular. Ever since he was maybe five or six, his mood seemed very dependent on what he had or had not eaten, so much so that I have had him checked for diabetes, etc. Would you please tell me if there is a testing package or consulting package that you could recommend? Enjoy the Q&A and all the tips along the way! - - - Show Notes: http://StephenCabral.com/196 - - - Get Your Question Answered: http://StephenCabral.com/askcabral