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What do underwear models, Frank Sinatra impersonators, and a partnership with Anheuser-Busch have to do with selling alcohol? For Saucey, it was about changing consumer behavior in an industry that hasn’t truly been disrupted since the 1930s. Chris Vaughn is the founder and CEO of Saucey, an alcohol delivery service. Since launching in LA in 2014, Saucey has broken into 20 metro areas and has continued to grow. Getting off the ground wasn’t easy, though, and on this episode of Up Next in Commerce, Chris takes us through the trials and tribulations of bringing Saucey into the market — from regulatory issues to investor and customer skepticism. Plus he explains how they pushed through the hardships and used edgy creativity to break into a market that was set on shutting them out. Key Takeaways: Bring On The Crazy Ideas: When working with smaller budgets, it’s critical to think outside the box with your marketing efforts. The money might not be there to do customer acquisition in traditional ways, so shifting to a scrappy mindset may be key. What partnerships can you form? What unique campaign can you launch that is outside of the traditional ones in your industry? Tune in to hear how Saucey generates new and noteworthy campaign and partnership ideas that generate results. Disrupting An Undisrupted Industry: The alcohol industry has remained relatively the same since prohibition ended in 1933, mostly because of harsh regulatory guidelines and big brands owning most of the market. But, as buying behavior has moved online, enterprising companies like Saucey have capitalized on new opportunities. Why your first customer matters: Landing your first “name brand” client can make every future sale that much easier. Many companies got their start by being able to point to a well known first client, and seeming larger than they actually were. 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. And today on the show we have Chris Vaughn, the CEO and Founder at Saucey. Chris, welcome. Chris: Thank you for having me. Stephanie: Yeah, I'm excited to have you. It might be 9:00 AM here, but I'm trying to get into the beverage mindset right now. Thinking about my 5:00 PM drink. Chris: Yeah. Nice, good. I like that. Stephanie: Yeah, I know. So Saucey, tell me a little bit about what it is and how you started it, the whole backstory. I want to know it all. Chris: Sure. So we started Saucey in late 2013. We really had this hypothesis that... I guess even before it was a hypothesis, we have this idea that you could have basically anything you wanted delivered, but for some reason you couldn't have alcohol delivered. In some major cities like New York, The Bodegas would run it over to you and whatnot, but for the most part in a city like LA, where we're based, that really wasn't an option. Found that to be really interesting, particularly given that the buying behavior around alcohol seems to be such an impulse driven buy. I know I'm going to have dinner tonight. I know I'm going to buy groceries at some point this week or next week, and delivery for those categories, mirror that behavior. Chris: Grocery delivery is more about saving me the time of shopping the whole store. Food delivery is this convenience driven thing. I know I'm going to have dinner, but it's kind of, "What do I feel like having?" And alcohol is this heavily impulse driven by where maybe I have dinner and it gets to be eight, nine o'clock at night, I'm watching a show or Netflix or whatever it may be. And I feel like having, some wine or I feel like having a cocktail, or beer, or whatever it is, or some friends are going to come over and they text me, "Hey, you want to get together?" And then and then you need to buy something. And so given that the buying behavior was so again, I think a non-planned purchase occasion we found that delivery would be the perfect fit for that type of purchase. Chris: So we started to look into the industry a little bit, and I think that the things that really opened my eyes was there clearly have been very, very little innovation in the alcohol industry really since [prohibition 00:02:32]. Most of the innovation had taken place on the brand side, creating new brands, new brand categories, but very little to do with how alcohol gets distributed or purchased. It was also fascinating to see that the brick and mortar landscape had effectively been built out to mirror that type of impulse driven buying. There's more liquor stores in the United States than grocery stores or gas stations. And that mirrors this behavior of, "Oh, I feel like having something." Run out to the corner and go get it. Chris: Then lastly, I think we clearly identified that there was a huge brand loyalty when it came to the products. I'm a Bulleit Bourbon drinker, I'm a Tito's vodka drinker. I'm a Coors Light drinker, whatever it may be, but almost no loyalty when it came to retail. Yeah, I'm on my way home. We'll stop here. I'm on my way to my friend's house I'll stop there. With the exception of some major holidays. Major holidays, go to Costco, stock-up or some of that type of buying. We found that delivery would be the ideal use case where we could not only capture more of a customer's purchases than any of the traditional brick and mortar players, but obviously service and provide a solution to this need of this impulse driven buying, or this last minute buying. Chris: We actually came up with the idea where... or how we came up about Saucey was I had floated it by a very close friend of mine at the time we were working at another company, and my girlfriend at the time, now wife with three kids we were camping up in Yosemite and we went up on this big hike, and I just couldn't get it out of my head. And I was talking through it with her and she was like, "I think you should do this." I came back and shared it with my close friend, and another close friend of this company called Text Plus where we were all working. Daniel Leeb, and Andrew Zeck. Andrew Zeck was one of their head mobile engineers, and ran their whole iOS team. Daniel Leeb was effectively leading their product of those teams. Chris: I said, "Listen, I think there's a big opportunity in alcohol delivery. And I think that the margins are there to support the business. It's a little brutal in food and some of these other categories, I think we can do it and alcohol, and here's what I think it could look like." Immediately we started working together. Nights and weekends spending a lot of time on the weekends and late into the night, trying to put this thing together. Dan did all these initial mocks of what it would look like. We didn't have the name Saucey at the time. We were trying to think of different names. Andrew was starting to program what the prototype would be, and we were working on doing all the specs. Chris: And then I was out trying to find who our first liquor store partner was going to be working with legal counsel and then subsequently talking to the ABC and some of the regulatory committees, or the regulatory bodies on, "We would like to do this. How do we do it, not only in compliance, but what are some of the issues you guys have in this industry, and how, as we're thinking about it, how can we maybe solve some of that stuff?" Like underage drinking, and be more proactive about ID verification, or there's cash under the table transactions, have everything go through credit cards. It was a fascinating time, we started working on that, I want to say October, November 2013, we really got our heads down and we launched in May 2014. Chris: Our first ever delivery. So remember Andrew dispatched it, Dan and I drove it. Was a bottle of Johnny Walker black label, to a guy named Vincent Rella who we actually ended up hiring, not that long after. Stephanie: Oh, that's great. Go Vincent. Chris: Yeah, it was interesting times. Stephanie: How did Vincent find you? First customer, did he actually find your app, or how did he even stumble upon you guys? Chris: I think Vinnie had loosely known Andrew. We all posted on Facebook, and we did all these things, and he saw the post and just said, "Oh, I'll try that." And then we ran the order to him and he goes, "Yeah, I know that guy." And then it was exciting. And of course those early days, we got one order, two orders in a day. And we did all the deliveries ourselves, taking turns on a schedule throughout the week, having to rotate who is going to be dispatching, who was going to be out delivering. An internal irony to the story was we wanted the service. We wanted to be able to order a bottle of wine, or a case of beer or something to your house, and so we built it. But what we actually ended up doing is just all of our time, seven days a week was out delivering to everybody else, and then we could never use it ourselves. So it was interesting. Stephanie: How it works. When you guys were doing that, any funny stories that you remember from when you were personally delivering, or doing the pickups and drop offs? Chris: Yeah, I mean, there was a lot of interesting stuff. I think- Stephanie: Here we go. Chris: ... we did probably a thousand orders between us before we started really hiring any outside couriers. At the time alcohol delivery was also very new, which I think is interesting. When you think about delivery as a category, food delivery has been around for decades, grocery delivery has been around for decades in one form or another, used to be able to call it the corner grocery store or place a fax order, and have things brought to you from your local market. Alcohol delivery in most major metros started six or seven years ago with us and a few others. And so it was a very new behavior. I think all the customers in the early days, the first additional hurdle, everyone was just asking, "Is this legal?" Everybody. Investors, customers, et cetera. Chris: We had to do a lot of work, both in our email content, as well as in our investor materials to walk through conversations we had had with the regulatory bodies, what the law says, how we think about these different things. So those early were just like, "Is this legal? I don't know, I'll try it sounds cool." Stephanie: Like sneaking out behind their bush, like, "Okay, drop off the goods." Chris: Exactly. And we'd show up in 25, 30 minutes and they were blown away, but we definitely had a couple of customers open their door, just totally nude, and totally unfazed. And you had to do a double take, and then, "Can I see your ID?" They'd walk back, come back, still totally naked, hand you their ID, you'd scan it and then turn over their order. That definitely happened more than once. Stephanie: Odd. Chris: People with unusual animals or pets. There was one customer that had like a snake wrapped around her arm. I remember one of those delivered, and was trying to hand it to her, and the snake's on her arm. And we were like, "Wow, this is some interesting stuff." But also lots of just, fairly standard and normal deliveries for the most part, people just super excited to use the service, and check out what it was all about. Stephanie: Yeah. That's really fun. So what kind of challenges did you run into when you were starting this, and working with these agencies and whatnot? Chris: Yeah. Licensing and working with licensed retailers is a challenge. The regulatory environment of alcohol being different on the state by state basis. So you're effectively dealing with 50 countries in the US, as opposed to having the rules all be the same. You can't ship alcohol across state lines, spirits and other things. So there's just a lot of barriers and a lot of reasons as to why Ecommerce has not taken place historically in alcohol, while fashion, and consumer electronics, and even cars and all these other things have picked up. Big followings in the Ecommerce world, set up at East Coast warehouse, a West Coast distribution center, take online orders, ship them out to everybody, and then optimize more distribution centers, see a faster delivery times. Chris: In alcohol, there is a whole series of barriers. One, that you mentioned is regulatory. You have to work with a licensed retailer, or get a license yourself. You're going to get a license yourself, and you don't previously have one that can be a very long and arduous process as to proving you are who you say you are, there's something in alcohol called the three tier system, which means you can only effectively be a manufacturer, a brand like Anheuser-Busch, a distributor like Southern & Wine Spirits, or Southern Glazer's, or a retailer. And if you're one, you can't be the other. So alcohol flows through about three to your system. There's some exceptions in wine, obviously, but it divides up the industry in many ways. Chris: There's many reasons why, I think even in like the private equity world there's been roll-ups of laundromats, there's been roll-ups of car washes. There's been roll-ups of grocery chains. There's been roll-ups basically any category you can think of. When it comes to alcohol, it can get pretty difficult because when you're trying to roll-up a bunch of liquor stores or roll-up a bunch of these licensed entities, these different regulatory bodies want to know every single person that has even a fractional amount of ownership. So you could have a PE firm, or a venture firm, all of a sudden being in a situation where they're having to go back to their LPs to get identification cards for people to list them on licenses. And so it's just a very challenging environment as to how people have been able to operate in this space. Chris: I think also because of the shipping regulations you had a lot of categories that were it's not as simple as setting it up and shipping. And then take that a step further when you think about fundraising, or capital, a lot of endowment funds, pension funds have carve-outs for things, like don't touch anything to do with alcohol, tobacco, firearms, pornography. So there's entire institutions, or very large venture funds, or funds of funds that have invested in all these different VCs that in those early days just wouldn't touch alcohol as a category. So when you think about building a service in an Ecommerce space where you can't ship all over the place, that's a challenge. Everywhere you go you have to deal with licenses and/or different regulatory guidelines on a state by state basis. That's a challenge. Chris: When you're looking to raise capital, large sums of capital to go and attack this big problem. And there's a whole swarms of buckets of capital that literally can't touch the category. That's an uphill battle. And so most, I think the capital injections into the industry have usually been families that have come in, or you've seen someone's creating a brand. They usually do these friends and family rounds. But again, very little going into like a big marketplace, or very little venture or private equity…
Full show notes at the publisherWhat 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 be…
Full show notes at the publisherIn 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…
Full show notes at the publisherWhen 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…
Full show notes at the publisherHow 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 f…
Full show notes at the publisherBelieve it or not, in the pre-internet days, a good deal of swimsuit purchasing was done via direct mail, not in store. So why, even in today’s digital-first age, are big brands still focusing on in-store experiences when it comes to selling swimsuits? Lori Coulter saw an opportunity in this disconnect. Using data and a methodology she had already perfected in the made-to-order space, she co-founded St. Louis-based Summersalt, a direct-to-consumer women's lifestyle brand. And you could say Lori found the perfect wave to ride to success — in the very first summer of the company’s existence, the waitlist for its bathing suits surpassed 10,000 people. On this episode of Up Next in Commerce, Lori explains what trends she was looking at in the market that compelled her to take the leap to start Summersalt, and which ultimately led to its massive success. Lori also shares her tips for inventory management and marketing advice for D2C brands. Plus she goes into detail about the challenges female founders face when fundraising, and how to turn those challenges into wins and buy-in from skeptical investors. 3 Takeaways: Utilizing multiple channels: Reliance on a single channel or message will not sustain a business. Summersalt was able to build a waiting list of more than 10,000 people by meeting the customers where they were — regardless of channel — and adjusting the message for different audiences. Inventory management: Working with multiple inventory partners and having short-term plans is necessary for D2C brands. It is critical to know your sell-through rate and, especially when offering limited-time items, plan to meet the demand and have enough inventory of other products to offer if/when your special items sell out. Promotion vs. Prevention Questions: When fundraising, women founders typically get asked more prevention questions than their male counterparts (i.e. how they will avoid failure vs how they will find success.) Tune in to hear how to spin those questions into talking points centered around a promotion angle. 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, I'm your host, Stephanie Postles, co-founder of mission.org, and today on the show we have Lori Coulter, the co-founder and the CEO of Summersalt. Lori, welcome. Lori: Thank you. I'm really thrilled to be here. Stephanie: Yeah. I'm so excited to have you. I'd love to hear a bit about your background before we get into Summersalt which seems like a crazy story, awesome things that I want to dive into, but I want to hear a little bit about you before Summersalt. What was your background, work experience, all of that? Lori: So, what's interesting I think I'm probably... I don't know if I want to say a born entrepreneur, if I believe that or not, but even in college I would tell my friends that I just had a good idea, I would do it. I went straight through from undergrad to a business school at Washington University here in St. Louis. Again, had that entrepreneurial mindset from the beginning, and when I went to business school I wrote several business plans. Had an entrepreneurial focus, although that wasn't as in vogue at that time as it is now, and I left business school, I went to work for an economic consulting firm primarily understanding at a macro level, economics. Lori: We did a lot of selling to major banks, investment banks, but I always had an interest in fashion and apparel, and had turned down several jobs coming out of business school in the industry that I loved. Lori: At that point in time, I was focused on a concept around fashion and technology, and digital body scanning, so working at the intersection of technology and fashion at an early date. Did a ton of research and eventually launched a start up in partnership with Macy's in store as their vendor, doing digital body scanning in made to order apparel, initially swimwear and eventually, we were supplying other mid size brands, early eCommerce brands like ModCloth and some large scale resorts. So, that was my story pre-Summersalt. We really parlayed that intellectual property that's a foundation. We still use it at Summersalt to this day in regards to our fit, quick turnaround manufacturing, and prototyping. Stephanie: Very cool. How did you get big brands like Macy's to partner with you and your company early on like that? Those are some good names to get in front of. Lori: So, what's interesting about being a founder is ... Half of it is just sticking to it. And so, raising your hand, asking the question, asking for the meeting and just telling your story, it truly is a sales process and I managed to get in front of the right person at Macy's and got the deal done. So, I didn't know anyone in particular, it was just, "Hey, can I tell you my story?" And we're off to the races. Stephanie: That's great. So, you were mentioning IP earlier, and you were saying that right now you use some of that IP with Summersalt. What was a process like where you had one company you were partnering with, the Macy's of the world, and then now you're moving over to Summersalt which I'd love for you to detail a bit about what Summersalt is and how you brought that IP over. Lori: Yeah. So, we launched at Macy's over 10 years ago, and in June of 2016 I met my now co-founder, Reshma Chattaram Chamberlin, and she also is a serial entrepreneur and had owned an agency working with some of the larger direct-to-consumer brands on the east coast, particularly on the brand and digital marketing side. And I shared with her the intellectual property in regards to fit. We had scanned over 10,000 women and made a swimsuit for each of them so we really had optimized that process for the consumer and knew exactly what worked for a broad spectrum out of the US market. Lori: And then we had separately mastered quick turn around manufacturing and prototyping, which allows us to move at the speed of lightning that we're still moving at with Summersalt to this day. When I shared with her the IP I was sitting on, what I was seeing in the market with regards to consumer trends, and I didn't see a truth path to scale for brands that were pursuing that traditional wholesale model in apparel space, it has had headwinds for a long time and even more so now with COVID-19. Lori: But I shared my story with Reshma on what I was thinking she got really excited. We went away from that conversation. Ironically, that was a conversation at Chipotle. It wasn't intended to be any life defining moment, we were just two Midwestern founders sharing our ideas about eCommerce and the future of retail. But she really inspired me to look hard at that direct to consumer business model. So, I went away from that conversation we were at the initial business plan and strategy for what is now. I developed a collection, which I think separates the dreamers from the doers, the ability to actually manifest a concept and then go out and do it. Lori: And then, I went back to Reshma in December of 2016, a full six months later, to retain her agency. Ironically, she was in transition at that moment, wasn't taking on new clients. But serendipitously we ran into each other in New York, which is a bit ironic, because we're both based in St. Louis. Ran into each other in New York, at the Gramercy Park Hotel, Rose Bar. I'd been interviewing PR teams that week and had the deck and the line she left me and I literally cornered her on the spot, shared what I was working on, and her response was, I'm interested about what you consider a co-founder, and that's how we joined forces and the rest is really history. Stephanie: That's awesome. And how do you describe Summersalt today? Lori: Summersalt is a direct-to-consumer women's lifestyle brand, direct-to-consumer meaning we sell primarily on our own website and platforms and have an ongoing relationship with a consumer over time as opposed to working through a major retailer or another department store or something. Stephanie: Very cool. So, when my team was doing research on Summersalt, I saw some wild numbers that were a little bit hard to believe. I saw that, and you can be like, "Stephanie these aren't wrong numbers." But I saw that you had a waitlist for one of your bathing suits of over 10,000 people. Lori: That is absolutely a 100% true and what is really, really interesting about that is that was our first summer we had a waitlist that high. Stephanie: That's wild. Lori: Right. We had raised a very small Angel around to launch. We were everywhere that first summer from our Refinery29, to the Today Show, to Elle Magazine. I think Forbes covered us and it became clear. One, that we didn't have enough inventory that first summer, and two, when we saw that waitlist continue to build, we knew there was an incredible amount of pent up demand and I think it's twofold. Lori: One, the brand itself is resonating with the modern consumer and so much swimwear had been done and it's over sexualized, tired, outdated way and Summersalt's fresh and new and fun, and our whole mission is to inspire joy, the childlike joy we all felt at the beach as children and I think it's just so encouraging to see that message resonating with the consumer and then separately we translate that message in our products as well. Lori: And clearly the fits, the aesthetic, this idea that you can be fashionable and cheap but so comfortable, is important to the core of the brand. And then separately, I think that the macro dynamics in retail are in our favor. They have been from the start and even more now that we're facing COVID-19 as a nation. Stephanie: Yeah, I completely agree. So, what were some of the main drivers behind getting that consumer demand? I mean, I know you were mentioning PR and a couple well known outlets to probably spread the word but what would you say were the key drivers to getting in front of people and then also encouraging them to join a waitlist, because when I think about buying something, sometimes I'm very much like I want it right now. Like, if I need a bathing suit, it's because I need it probably for tomorrow. So, how did you get people to agree to get on the waitlist and wait until you have the inventory back and even get in front of them in the first place? Lori: So, when we were launching and even to this day ... Summersalt just celebrated our third anniversary on May 23. So, that gives you an idea of how far along we are in the cycle of business, and from the very beginning it was about a 360 degree approach. It wasn't about just one platform, as far as how we speak to our consumers, so that includes press, that includes email, that includes social media, working with influencers, working with other brand collaborations, it's about bubbling up to the top and speaking to our consumer in multiple ways at multiple times, but always when, where, and how she wants to be spoken to is how we talk it about it [inaudible 00:09:21]. Lori: And obviously, the scale is quite a bit different now. But at the same time, those principles hold true. And I always tell brands, if you're focused on one platform, only one message without that brand storytelling. It's such a risk to the business model over time, and what's wonderful about Summersalt we truly are a brand that is digital first. Stephanie: Yeah, I completely agree about relying too heavily on one outlet. What metrics do you look into? I mean, it sounds like you're doing a lot whereas a lot of PVC companies we've had on here so far, they only have enough bandwidth to maybe focus on one or two platforms, and they're going deep instead of going wide. So, how do you start thinking about metrics that holistically look at all of your marketing efforts? Are there any certain things that you rely on? Lori: Yeah, I think a couple of things are important when you're a digital first brand. First and foremost is sessions on the site, and any activation we do, we want to see the consumer coming to the website, and then of course, conversion rate is very important, but it's really that traffic that you have to have on your storefront, that is important. Lori: And then separately, we look at organic search metrics and anytime we have a brand activation, whether that is something on social media or we did an out of home campaign in New York, as well as even direct mail. You want to see search lifting, and then eventually traffic to the site. And then, as you continue to see conversion lift as well, you can understand, you can measure the difference and understand, "Hey, this consumer is highly likely to purchase. She has high intent." So, we measure that as well. Stephanie: Got it. So, selling swimwear online seems difficult, at least when I think about making sure the measurements are right, and it looks good. How do you showcase the fact that your swimsuits are comfortable, and I know that they protect you from the sun, and they'll also fit right. How do you display that messaging to the consumer to where they know that this will be a good fit and I'm not worried about getting something that would be weird on me? Lori: Yeah. So, what's interesting about that is from the very beginning, again, it was about inspiring that sense of childlike joy. We always show the consumer a diverse set of women both from age, race, background, size perspective, and that's really core to who we are at Summersalt. And so again, I think she trusts us as the best friend she brings in the dressing room because of how open we are ... Still showing, I think aspirational and joyful women, but still some reality there that's quite different than the approach that traditional retailers and really particularly swimwear brands have taken in the past. Stephanie: Yep. I definitely got that feel when I was looking through your website. I'm like, "Uh, these people actually feel like me." Where oftentimes, especially on Instagram, and you're looking at swimwear companies, it's always the skinny models and very tall and you're like, "Okay, well that's not exactly me, and I'm not in off the coast of Italy or whatever they're doing it feels so detached from reality." And I liked how when I was browsing your website it's like you could see people from all walks of life and all different body types and it made you instantly feel a little bit more secure with browsing through the swimsuits knowing that there will be a good fit for you there. Lori: And I think the other thing that's interesting swimwear, pre-internet was purchased in great quantities via direct mail. So, it really is a category that's conducive to try at home or buy at home, and we knew that before launching Summersalt, and so many other brands of yesterday and particularly post-COVID-19 are not in the space, so it gave us a ton of whitespace to go after and scale very quickly. Lori: And also, from the very beginning, it was never just about swimwear. It was always about building those concentric circles out from swim that fill her wardrobe and closet with all things Summersalt and starting with things that are comfortable, cozy, and then meeting her where she i…
Full show notes at the publisherIf you want to keep up with what’s going on in the eCommerce industry, the best thing to do is to go straight to the source and ask. But where can you find a group of eCommerce business owners openly talking about their pain points, sharing tips about how they grow their businesses, and combining their knowledge to solve problems together? Does such a mecca exist? Andrew Youderian is here to tell you that it does. Andrew is the founder of eCommerce Fuel, and on this episode of Up Next in Commerce, he discusses how he built a community of more than 1,000 seven-figure eCommerce business owners, plus he shares all of the insights he’s gathered along the way. From questions about Amazon, to a crash course in community-building, to the single metric he says should guide eCommerce businesses today… Andrew divulges some of the industry’s best-kept secrets and more in today’s interview. Key Takeaways: The Value of Selective Community Building: A community is only as strong as the people in it. Together, a community can deliver ideas, content, and capital to other members who would not be able to find those things on their own. But to ensure that all members are receiving value, it is important to be selective about the acceptance process. Finding Your Way Through The Amazon: “If I'm selling to wholesalers, should I let them sell on Amazon?” “How do I control my brand identity on Amazon?” These questions and more are plaguing the industry and at eCommerce Fuel, the community is gathering to come up with answers, including how to capitalize on the recent delays in shipping Amazon has seen. Meaty Metrics: While most owners will point to revenue as the main metric to judge success, it is widely believed that revenue is one of the least important metrics when judging the health and long-term viability of a business. There are other metrics that are more telling, including repeat purchase rate, and one other that gets very little fanfare but could change the course of your business: price per visitor. 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 and today we're joined by Andrew Youderian, the founder of eCommerceFuel. Andrew, welcome. Andrew: Hey, thanks Stephanie. I appreciate you having me on. Stephanie: So, is a weird feeling a podcaster being interviewed by a podcaster? What are your thoughts right now? Andrew: I think it's great. You have to do all the work and I can just sit back and relax. Well, unless you send some really pointed questions my way, so maybe I shouldn't be relaxed, so we'll see. Stephanie: Oh, yeah. I don't know. Andrew: But, yeah- Stephanie: You might have to sit up straight and get ready, this might be intense. Andrew: This may be, I need to stop slouching here. But no, it's good. Good to be on, it's fun to be on the other side of the mic for a change. Stephanie: So, I want to dive into your company eCommerce Fuel. I looked at it and it seems awesome. It seems like you have gathered so many insights from this company that you've built all around eCommerce, but I want to hear in your words what is eCommerce Fuel? Andrew: At eCommerce Fuel we provide community content and capital to seven figure plus store owners, and so we do that through an online form which is really the heartbeat of our community. We've got over 1,000 vetted store owners, and the idea was really just get a lot of people together that are doing this day in and day out, that we're running seven... our average store owner is probably doing three or four million dollars a year with their business, so that's community aspect. We also do a big event every year for our community through content, like you said I'm a podcaster. I've been doing the eCommerce Fuel podcast for I think it's about seven years now, which is crazy. Stephanie: Wow. Andrew: And then we have a capital arm as well where we invest in promising eCommerce businesses. We have 20 investors that have a lot of similar experience or world class experts, everything from Facebook marketing to email marketing to product design and so we invest in companies that we think are interesting, so that's what we do at eCommerceFuel. Stephanie: That's such a cool model. So, for you podcast I think I saw you had over 300 episodes. Andrew: Yeah. I think, actually I think we're... yes, we do. I've been, like I said, been doing it since July 2013. Yeah, been going at it for awhile. It's been fun. Stephanie: Yeah, that was really cool to look at your backlog and the guests that you've had on. So, your business models' really interesting how you have a capital arm and community, I mean two things that I would say are very hot right now. Everyone is always thinking about of course being investors, I mean at least here in Silicon Valley that's everyone's dream it seems like. And then building up a community is something that we've heard a lot of guests mention on the show, like how to properly build a community. What was your idea behind starting this business and having those different arms of the business? Andrew: They came in stages, so in a nutshell, left the corporate world and got my teeth in eCommerce for starting in 2008 on a couple different eCommerce businesses and built those up. So, I had a sense of this space and nobody was talking about eCommerce unless it was like from a Home Depot or like a Lowe's, like a, you know, Fortune 500 style? Stephanie: Mm-hmm (affirmative). Andrew: And so I started writing about what it's like to grow an eCommerce business for a small team or a single founder and developed a little bit of a following on the blog, started podcasting, and then from there that kind of just naturally led to me meeting all these great people and I thought what if we got a bunch of people in a community together that had some kind of vetting thresholds and just made sure everyone had some level of experience? And that launched the community and built that up over time and then the capital arm is fairly recent, really recent in fact, it's about five or six months old. That just came as a natural extension of seeing all these interesting entrepreneurs that hopefully we'd built some trust and report with, or that people knew about us from the time running the business. And then also just a really great group of investors who also had not just money, but a lot of in the trenches experience and advice to lend, so it kind of came in stages. Stephanie: Yeah, that's really cool. To start with the community aspect, what are the vetting procedures that people have to go through? How do you know who to bring in to keep it a high quality community? Because I think that's biggest problem when you're getting in all these Facebook groups or communities, you're like, "Oh my gosh, just everyone's in here and I'm actually not learning anything." So, what does it look like to get into your community? Andrew: Yeah, you're right. I mean, if I could only do one thing well in a community it would be bring the right people into it. So, our guidelines are a little nuanced but you need to be operating a seven figure business. If you have a very proprietary product that you've made from scratch or that is a little harder to make sometimes we'll take people in kind of the mid to high six figure range. If you're selling just on Amazon usually we require a little bit more than that, so that's on the revenue threshold sides. Andrew: So, we keep it no major SaaS vendors, and then for service providers we're really careful. I'd probably say only 10% of our applicants that we accept are service providers and they need to be recommended by an existing member because you can... An amazing email marketing expert that knows the space, that is respectful of people and isn't going to come in at a hard pitch and is going to build relationships the right way through adding value, is a huge asset. But we want to make sure those are the type of people we have and not people who are just trying to sign somebody up on the first day, so. Stephanie: Yeah, that's really important. How many people are in your community now? Andrew: We have about 1,100 members in the community. Stephanie: Okay. How did you go about building that up? What is your method of bringing new people into the community? How do you get in front of people and even tell them about eCommerceFuel? Andrew: Community building's interesting. You've got this chicken and an egg problem, right? Stephanie: Mm-hmm (affirmative). Andrew: And the way that I did it was when I was blogging and podcasting early on about eCommerce, just over that probably 12 month period really focus on not trying to monetize the business or anything, just trying to build authority, get a little bit of a reputation, and connect with people. Over the course of a year, just naturally, organically, met about 100 to 150 really interesting people. And any time I did, I'd just put a little tag on them in gmail and say, "Community seed member." Stephanie: Oh. Andrew: So, a year in a had this list of 150 people and I reached out to them and said, "Here's what I'm doing. I'm starting a community, are you interested?" And then over the course of about 30 to 45 days I dripped in, I added, about four or five people a day. I'd bring them in, I'd introduce them, I'd introduce them to other people, I'd ask them questions, kickstart discussions, and so it gradually grew. I didn't just drop everyone in at once, and it took about like 45 days but we had a bit of a community at that point. And then from there I had over the last year built up some traffic to the website, was able to put up a page that said, "Hey, here's the community. You can join," and that gave us kind of... because you need both things, right? Stephanie: Mm-hmm (affirmative). Andrew: Like in community you have to have new people come in because you always have a drop off even in the most healthy. So, from it was able to kind of, with a lot of work, get to self sustaining within probably 18 to 24 months, so. Stephanie: Wow. Yeah, that's great. And it is a paid community? Andrew: It is, yes. It's a paid community, so it's... yeah, it is. It's $99 a month. Stephanie: That also helps... Okay, yeah. I'm sure that also helps with quality and bringing in people who are serious and really want to learn and contribute to get their monies worth. Andrew: Oh, it helps so much. I mean, for a couple reasons why. We have, just like you said, on the vetting side, yeah, it shows that people are actually serious about this. The other nice thing is it gives us the resources to do things like hire a real community manager. We have someone full time that their whole job is just to vet people to make sure that if people have questions that don't get answered they can move them to the right people. It let's us invest in technology, we've probably poured six figures plus into the custom tech for the community, so yeah, it makes it a lot easier. Stephanie: Yeah, that's really cool. When it comes to keeping the community engaged, because to me that's one of the biggest things to make sure people keep renewing their membership and they want to check in everyday and see what's new and see who's talking, how do you go about keeping them engaged? And maybe what have you seen works and what didn't work? Like any tests that you've done where you're like, "We've tried this and this failed," or, "We tried this and this really increased engagement a lot and helped keep it going?" Andrew: I think the best thing you can do, two things, the first thing is to actually have discussion and content that are highly relevant to what people are doing day in and day out. So, again, kind of going back, if you get the right people in the same room that's 80-90% of the battle. From that point, setting up custom notifications is really important. So, some of the custom tech that we've talked about, when people sign up we don't just blast them with every single discussion that pops up, that's crazy, right? They'd just drowned in a fire house because we have like 5,000 comments every months in there. But we do try to figure out like, hey, what are you an expert in and what are interested in learning about? And then when they join we tailor their notifications to try to create the highest level of a signal to noise ratio possible, and so that's another thing. The third thing is just maintaining a really respectful environment, like we have a pretty strict no jerks rule. I probably shouldn't say this, but I get a lot of pleasure out of throwing people who are just downright disrespectful and just, you know, kind of just generally unpleasant out of our community because they're horrible. Stephanie: Yeah, good. Boot them. Andrew: And also non-solicitation. We kind of have a one strike, one warning, and then if you do it again you're out. So, we don't put up with pitches, you know, if people are hard pitching stuff they're out. So, I think those are the big things that help with maintaining an active community where people keep coming back to. Stephanie: Yeah, those are such good points and it's not only applicable to your business but even thinking about any eCommerce business of how to build up... I mean, everyone talks about building these communities but how do you actually make it helpful and personalize it to people in a way that people want to engage on your social media post or they want to engage on your blog or tag themselves wherever they're in your clothing or with your mug or whatever. So, I think these lessons actually can apply across industries as well and not just upon building a community like you're doing. Andrew: Yeah. Community building, it's interesting, it's kind of like a brand. It is a brand. It's insanely hard to get up and running, like the amount of time and energy and love and relational just work that you need to put in, I don't say it in a bad way, but just building relationships takes a tremendous amount of work. It takes a ton of time, just like building a brand. But it's insanely defensible, I mean, if you're willing to put in that, you know, if you have a multi year approach. You can't steal people's friends, right? Stephanie: Yeah. Andrew: And that's what happens, whether you're building a community for your brand or kind of a micro niche community like this for eCommerceFuel, is people come in and they stay because they get value and they stick around for a couple months but then they come to an event, they connect with people via PM, and then build genuine friends. I don't know, you'd be hard pressed to tear me away from my good friends and it's really defensible in that department, so. Stephanie: Yeah, I agree. I love that. So, you probably get a lot of really good insights into the world of eCommerce and where things are headed just by some of the questions that some of the members in your community are asking each other, and I wanted to know what kind of top…
Full show notes at the publisherIn today’s digital age, even the most traditional enterprises are moving processes online. Unfortunately, though, the shift to online is not as simple as turning on a faucet. Wolseley Canada is a leading wholesale distributor of plumbing, HVAC/R, and waterworks products and earns more than $1 billion in revenue each year. Today, the company has one of the industry-leading B2B eCommerce sites, but getting to that point in their digital transformation hasn’t been easy. Gail Kaufman, the Vice-President of Marketing & eBusiness at Wolseley Canada, dropped by Up Next in Commerce to walk us through how she has helped lead that movement online, and the speed bumps they encountered along the way. Gail touched on everything from building the initial backend infrastructure to the replatforming experience that happened as they learned more about their customers and what they needed from an online experience. But what did they need? And how did those needs affect the training of internal employees and the shift toward implementing A.I.? Everything is connected, and you’ll find out how. Main Takeaways: Bundle Things Up: In the past, customers were often forced to go to one website to buy a certain plumbing part and then another to get their HVAC supplies. In recent years, Wolseley has brought together the many entities of the company in order to start delivering a unified message and a singular experience on the eCommerce site, eliminating a pain point and saving time for customers. How A.I. Can Be Deployed: When deployed strategically, A.I. has the potential to have a huge impact on the bottom line. Wolseley is already seeing promising results from this through a partnership with a leading A.I. research department at University of Toronto. The Importance of Training: The journey from analog to digital is not exclusive to the customer. Employees also need to be trained not only in how to use the eCommerce systems, but how to sell this new digital buying experience to the customers. Customer Engagement Leads The Way: When determining the success of your eCommerce site, the only true indicator is engagement. 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 of Mission.org. And today, I have Gail Kaufman on the show, the vice president of marketing and eBusiness at Wolseley Canada. Gail, welcome. Gail: Hi, Stephanie. Thank you so much. Glad to be here. Stephanie: Yeah, I'm really excited to have you. It feels like you're so far away, where are you calling in from? Gail: I am calling you from Burlington, Ontario, which is just about a half an hour Southwest of Toronto. Stephanie: I think you're our first guest on the show it's calling in from that area, what's the weather like? Gail: Perfect, it's beautiful out. We had a little rain last night. It's cooled down a little bit, but we've definitely been experiencing some very what I would call South Florida weather recently. Stephanie: Rain, something I miss here in California. My two-year-old always asks like, "When will it rain?" And he always brings out his umbrella and I'm like, "I don't know. Don't ask me." So Wolseley, I saw that you've worked there for over 14 years and I was really intrigued and I really wanted to kind of hear about what that journey's been like. What is Wolseley to start and then tell me a bit about your role and how it's transformed over the years? Gail: Well, Wolseley Canada is a leading wholesale distributor of plumbing, HVAC/R, and waterworks products. We have about 200 or so locations coast to coast, 2,500 employees. And we are part of Ferguson PLC, which is the world's largest trade distributor, plumbing and heating products. So very large organization in North America, and we are listed on the London stock exchange and on the FTSE 100 Index. So that's a little bit of overview of the company. Yeah, very large company. So yes, I have been with Wolseley for a number of years. And the role has really evolved since then. I started as director of marketing. And since that time, I've taken on a variety of different responsibilities under, still within marketing obviously, but the scope has then flowed and expanded over the years. Gail: In 2009 was when I got involved with the Ecommerce piece at Wolseley. The platform previously sat in business development and then it was moved over to marketing. And at that time, we had had a very long standing relationship with a digital agency who really pretty much drove the development and the day-to-day management. And so when we really started to get serious about eBusiness, it really made sense to transition that over into marketing where we could really sort of wrap it into our value proposition for our customers and give it the right focus. And so obviously that was a really great opportunity for me too. So that was really where my engagement with eBusiness started. Stephanie: Very cool. And was this something that you were starting to get interested in before they were making that switch or was it kind of like you were thrown into it like, "Here you go, you're going to take this whole business and it's coming into marketing, it's all yours"? Gail: I would say it was interesting because the world had started to change. Certainly in our channel, Ecommerce was not prevalent. But certainly sitting in marketing, it was like we need to do something here. So when I was given the opportunity to take that, it was good. It was a nice development for me, and I felt like we could really do something important with it. It was a direction that we needed to move in, and I thought I was in a good position to do something with it. Stephanie: Yeah, that's great. So just to make sure I fully understand, how were customers buying from you all before 2009 and then what did it look like afterwards? Because I haven't bought a HVAC unit recently, so I'm trying to think about how that worked for you guys. Gail: So in a very traditional fashion, our customers would interact with us through an outside sales rep or in a branch, pretty much that was it. I would say before 2009, we did have a presence online, but it wasn't fully transactional. So there was a website, someone could place an order. But in fact, they weren't really placing an order because it wasn't fully transactional on the backend. So 2009 is when we really got serious about having a fully integrated platform. So before then, it was really coming into a branch, calling a sales rep. And that's still very much how many wholesalers continue to operate. Stephanie: Yeah, I was going to say for this industry, I can imagine the people who are in this business getting used to doing things the way they always have like I always buy from this one company, I go into the store and they place a big order for me. How much education was involved when you start introducing online ordering? What did it take behind the scenes to change that consumer behavior to say like, "Hey, we have a platform now, go here instead"? Gail: Well, that's a great question and certainly one that comes up a lot. I can tell you it's been a journey. But invariably when this comes up, talking about engagement of our customers, I always have to say, first and foremost, this is really about engaging our own associates. It's making sure that they really understand the value proposition, that they are comfortable, that they are proactive in talking about Wolseley Express, really understanding how it impacts the customer from a convenience and efficiency standpoint. That is a very large piece of work unto itself. We recently did a survey with our customers and they indicated that the number one reason they tried the platform was because their salesperson recommended it. So that's a very influential relationship. Gail: So it's really important not just for our outside sales reps, but also for our branch associates. They have really strong relationships with our customers, so it's really about how do we start making Ecommerce and promoting Wolseley Express, just part of what we do? We're really great about talking about products, we're really comfortable with talking about pricing and competitive pricing. But it's like, how do we start to expand the conversation around value in other ways? Stephanie: That makes sense. What was the process like trying to retrain your employees who have maybe been used to something a certain way to then start being like, "Hey, make sure you also mentioned this, and this is the way we do business now"? What was that training process like? Gail: It's an ongoing training process, and it's really about giving them a level of comfort with the platform. They certainly don't need to be experts, but they really need to understand the why. So we have to look at different types of customers, there's different features that may resonate with some customers over other customers. There's training, there's coaching on how to have conversations. I think we have a pretty good approach to it actually because it's very holistic. So we're providing you the training, we're providing you the why, we've got a number of different tools that we provide. And we also really dig into our data and help them really understand the different types of customers who we would consider high potential customers, why we consider them high potential customers. And ultimately, it's about, A, identifying the customers and helping them have those conversations. So that's working down through our sales management network and our branch network. So it's a very multifaceted process, it's very hands-on. Gail: The other thing I didn't mention is we've talked about sort of the onsite experience and sort of why Wolseley Express is so helpful to a customer from a convenience standpoint and efficiency standpoint. But there's also, which I should mention is the whole training around the fulfillment piece. So if they have a great experience onsite, that's good. But if something falls down and the fulfillment part of the program where I didn't get the material or I didn't get the material when I was expecting to get it, that's a whole other area that we've spent a lot of time with our operations people to really make sure that we're closing the loop on that. So that's another piece. Stephanie: Yeah, makes sense. What parts of fulfillment did you invest in heavily that you saw the largest improvements from? Gail: It's really about system training, when a web order comes in, this is what it looks like. This is where you look on a sales order to make sure that every step of the way that people were picking up the orders because when an order prints out, it's sort of in with all the other orders. That's the way it works. So we need to make sure that we prioritize these, that someone's looking for them. Because we're not keying in the orders, we want to make sure that they don't get lost along the way. So the fulfillment is not much different other than the order comes in the same way. But in the early days, it was kind of strange because all these orders print out, so the people that are responsible for the customer they'll pick off their own orders. Stephanie: Like someone goes fist, thanks you very much. Gail: Because they're talking to that person either on the phone, maybe talking to them across, so there's this human interaction that's happening. But when you all of a sudden get this order that shows up, it's like these orders were being sort of just left. Well, that's not mine. Well, yeah, it is yours, it's everybody's. That's sort of the foundational stuff that we had to address at that level to make sure that all of these orders were getting processed with excellence. Stephanie: So when I think about wholesalers and industrial wholesalers, I don't really think about typical companies investing a lot in the user experience and making sure ... I mean, you were mentioning like convenience and having a good user experience on the site. Do you think there's an opportunity for disruption in this field, and how are you guys going about that to make sure that your customers are getting the best experience on the site that's also maybe translating to a higher AOV each time? Gail: Well, I think it's about knowing your customers. And so what we've been doing I would say over the past three to four years, we have invested a significant time and effort into our customer experience program. So that gives us a real time pulse on our customers. We use Net Promoter score, that's a very common way for companies to measure customer experience. So we are always constantly looking at NPS, reporting on it. We have a wealth of insights that we derive from that. And then we take all of that feedback, of course some of it's relating to online, some of it's not. But it's really about taking that feedback, closing the loop on it, and then really being aware of sort of those overarching themes that are emerging and then how do we address some of those through operational improvements? Stephanie: Did you see any similar themes that people were giving you feedback on that maybe you weren't expecting or it was kind of like an aha moment where you were like, "Oh, 20% of our customers just said the same feedback, we need to implement this instantly"? Any surprises there when doing this? Gail: I would say not a lot of surprises. But one thing that comes up from time to time, which shouldn't come up from time to time is pricing. We may get customers that will say, "Well, I checked out Wolseley Express, and I can always get a better deal when I go to your branch." That should never happen. And the reason that should never happen is because Wolseley Express, it's fed from the same system. So the price is the price, is the price. So that is an opportunity for us to go back and identify where we be having people doing overrides where they shouldn't be. So that's definitely a coaching opportunity that does come up sometime. And that is a great example of when you're really paying attention to that customer feedback and doing something with it. And so you can really address those issues because if someone's always thinking, well, I'm not going to use it anymore because the pricing is always wrong or it's always higher, that should never happen. Stephanie: Yeah, because it kind of creates a waiting game where the customer's like, well, I see a discount maybe in the app or in the branch or something like that, I might as well wait until that better price when really there shouldn't be any discrepancy to begin with. So it kind of creates a different mindset. Gail: And it erodes trust. And I think that's a key tenant of shopping online. And certainly in the early days when we were talking about how do you get your customers to engage with it? When they engage with it, you better deliver. So your pricing has gotta be right. They have to have the confidence that when I look online and I see t…
Full show notes at the publisherNot 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 th…
Full show notes at the publisherIf you’re looking for insights into the trends of the eCommerce industry, look no further than Adam Rose, the Chief Talent Officer, of eCommerce Placement. Adam has had a long career as a recruiter, including the last decade at eCommerce Placement, the company he founded to focus on the industry he believed was the future. That bet has paid off, and as the eCommerce industry has grown and changed, Adam has been in the middle of it all. What are the skills eCommerce based businesses are looking for? Where are eCommerce leaders focusing their attention and investing in growth? How is consumer behavior leading the shifts we’re seeing in the industry and how can those working in the industry be successful using analysis of that behavior? Which industries and companies are emerging as big-time players in the eCommerce landscape? Adam has the answers to all of those questions, and he shared them with us on this episode of Up Next in Commerce. 3 Takeaways: Ecommerce offers positions of the future, and right now very few colleges are offering programs that prepare students for them. Those who want to get into the industry need to be lifelong learners and seek out new knowledge Consumer behavior has completely changed, and industries are seeing a shift that they thought they would have years to prepare for, happen in just a few months. That has led to a movement to build Ecommerce teams quicker than ever before CPG companies are starting to heavily invest in Ecommerce, which presents an opportunity for people who want to work in Ecommerce the ability to work in a newly-entrepreneurial environment but with more resources 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. And today I have Adam Rose on the show. How's it going? Adam: It's going great. Thank you. Really happy to be here. Stephanie: Yeah, I'm really excited to have you here too. Tell me how did you first get involved in the world of e-commerce? What led you to create this company? Adam: Yeah. So eCommerce Placement, we are a leading e-commerce recruitment firm and what we do is we work with online retailers, e-commerce technology companies, really anyone that touches upon e-commerce. And we're recruiting across the full spectrum of e-commerce functional areas. So that's leadership roles, strategy and management, digital marketing across the whole channels, site merchandising, operations, analytics, logistics and fulfillment, creative technology, the entire gamut. And we've been doing this for 10 years and e-commerce as you know has been growing year after year. So we're just very fortunate to be in this space and one that's really interesting. Adam: Yeah. So, well I've actually been in recruitment my entire career. It is all I know and all I can do. But I went to school and I have a bachelor's degree from Rutgers in psychology and realized I didn't really want to be a psychologist, but I minored in labor and employment relations, which is essentially HR. And that got me into thinking about recruitment or HR as a career. And I ended up getting my masters in HR manager at Rutgers as well. And when I got out of school, I started in more of a generalist HR role at a financial services company doing benefits and compensation and recruitment. And the recruitment piece is what I really liked and decided that's what I wanted to stick with. So I was doing recruitment for several different financial services companies and then a little bit of pharmaceutical as well. And it wasn't until I landed a corporate recruiting position at Borderfree that I got into e-commerce. And Borderfree was a startup e-commerce software as a service company. Adam: And what they did was they allowed US-based online retailers to sell their products overseas to international customers seamlessly. Just like if they were here within the US, yes. And we had about 50 employees at the time when I joined and I grew that company to about 350 before it was sold to Pitney Bowes, much larger organization. Yes, but it was there that I saw that e-commerce was a really hot industry, that folks were still figuring it out. It was a really cool industry if you're an entrepreneur, if you like startup environments, which I did, very different from financial services and pharmaceutical. And I saw that there was a huge need for e-commerce specific recruiting agencies out there. We were working with some of the larger recruitment firms that were just very generalists. They didn't focus in e-commerce, but they were trying to help us regardless. Adam: And I saw that they just didn't have a good understanding of what we did, the types of candidates that we needed, where they'd be coming from, what they'll be doing. And after a while I said to myself that I could do that. I see what these agency recruiters are doing on their end and honestly it seems better than what I'm doing on the corporate side because they're not having to deal with a lot of the paperwork that I have to do, a lot of the internal struggles that I have. And they were doing the best part of recruiting, in my opinion, which is just proactively going out there and sourcing top talent. And that's what got me into recruiting in the first place and got me excited about it. I think it's one of the most strategic parts of business is bringing in the right talent, without that talent that your business may not be so successful. So that's really what got me thinking about making the switch and 10 years later I'm really glad that I did. Adam: And what we're really good at right now is just the fact that over the past 10 years, we've built this huge e-commerce talent network. We have our proprietary database of candidates, we utilize LinkedIn where we have a huge network and following there. And that's a differentiator that a lot of other recruitment firms don't have. And we're also building very longterm relationships with prospective candidates, following them throughout their career. Just being there for them, regardless of whether or not we have opportunities for them in providing advice around their resume, around their career goals and that playing the longterm game is, in this business, I think very important. Stephanie: Cool. Yeah, that's exciting. So how do you vet talent? Because it seems like, at least when I was at Google Day's interview questions were kind of hard to rely on because people would get through and you'd be like, "How did you get here? You definitely don't belong here." So what are some good tips that you could give to other e-commerce brands who are looking to hire? What kind of interview questions or tactics or strategies do you do to vet candidates to make sure that they're the right fit for the company and actually have the knowledge that's needed? Adam: Yeah. So the first thing is that the company itself really has to have a good idea of what their needs are. And that's our job too, is working with them initially to make sure that we're all on the same page. And a lot of times our clients don't even have job descriptions created. And then we have to work with them directly to create that job description and make sure that everything's buttoned up so that when we are going out there and trying to identify the right candidate and speaking with them, we have really good sense of what they're looking for. And I'm talking to them about what their day to day job looks like, the responsibilities, where these people should be coming from and what their soft skills are needed for these positions, everything. And then we go out there and we take a look and do some research to what similar companies, what are some of the competitors out there that maybe we should be tapping into? Adam: Job titles may differ between organizations too. So we'll make a list of all the different job titles that could potentially match this position. And then we'll do an extensive search on that end. And then once we get them on the phone, it's really just conversational. We don't do very hard hitting questions. Our goal is just to make sure that A, the candidate is interested, that this would be something that they could potentially see themselves doing in the future and that they also have the right skillset for it. And that comes out during a conversation when you're just asking them, tell me a bit about your experience. Walk through your background with me. Do you have experience on this side of the business? And if not, is that something that you think you could tackle in your next role? So it's really just getting to know the person. Adam: And then what we do is we send a summary of their experience, their resume, their compensation expectations over to the client and they decide from there whether or not they think this person might be the right fit and they'll get them on the phone and usually to do an initial phone interview and go from there. But what we aim to do is really focus on quality over quantity. There are a lot of recruitment firms out there that kind of give us a bad rap by sending over 100 candidates for a position and- Stephanie: These people I Googled and they're looking for work on LinkedIn. Adam: Exactly, exactly. And hoping that one of them sticks and they're just throwing them at the wall. But we don't do that. We send over three, four, maybe five candidates and these are all people that we feel you would at least benefit from by getting on a call with them. And our resume to hire ratio is insanely high. Our interview to hire ratio's insanely high and we're really proud of that. Stephanie: That's awesome. So are there any skills that these e-commerce company companies specifically are looking for that are hard to kind of find right now? Like there was a shortage and people who knew... engineers always refer to engineers out here, is there a skill where all the companies want this right now and if you had the skill you would get scooped up but I can't find it. Adam: You're totally right about engineering. Any technology position is incredibly valuable right now for e-commerce organizations. And that's everything from engineering to product management, which is a really interesting field for a lot of people to get into that really makes this business strategy and technology that I try to steer people into because they're always needed. Stephanie: And that's not actually a career path that you're told about in the early days. I know I heard about product management, I'm like, "What does that actually mean?" And then, well you kind of should be a little bit technical and you should also have a strategic hat on when you're thinking, I'm like, "I've never heard of this when I came out of college. Why not?" Adam: That's right, that's right. These are roles that people really just fall into. And that's across all of e-commerce. There are very few colleges out there that offer any type of program in e-commerce. So when you get a degree in marketing, you may not be thinking about e-commerce marketing. It's a very vast field and that's just an example. So these are positions of the future that I try to steer new grads into or those that are looking to make a career change because this is an incredible field. But getting back to your question, our hottest positions right now are anything related to Amazon. Companies are really doubling down on their Amazon business, whether it be a marketing or sales, channel management, Amazon is huge. It's the elephant in the room, right? So- Stephanie: It seems obvious, but when I hear that I'm like, "Oh, I wouldn't think about hiring for a role specifically focused on Amazon," but it makes. Adam: Yeah, Amazon, other marketplaces, retailer.com channels. If you're a brand or manufacturer of products that are sold on Overstock, Wayfair, Zulily, you need to manage your online sales strategy and execution on those sites. So there are roles that are specifically focused on doing that as opposed to their direct to consumer channel off their own website. It's a very vast and complex e-commerce industry. Stephanie: Yeah. No, that's really interesting. How would someone develop skills for an Amazon specific role? It seems like you would have to maybe be a seller on Amazon and to know all the ins and outs. You would actually have to have been there, done that to be able to help another company? Adam: Yeah. So, yes. And part of what we get tasked to do is go out there and find individuals that have very relevant skill sets that can come in day one and hit the ground running. And that's what we're good at. But when I advise people on how to get that experience, you have to start small. You have to take on additional responsibilities. If you're in a direct to consumer role right now and you're specialist, start taking on more general generalist responsibilities, start dipping your feet into Amazon and just start asking questions and learn because this is the future and this is how you grow in your e-commerce career. E-commerce is really cross-functional. You need to work across all different departments. Across marketing and merchandising and promotions and fulfillment in no matter what role you're in. And you're going to have to deal with e-commerce metrics and web analytics in almost every role that you're in. Adam: So that's another question I get for individuals that are looking to get into e-commerce and they don't know how to do it and they don't know how to differentiate themselves. Maybe they've been working on the retail side, the retail brick and mortar side, and they're seeing everything that's going on now and they're like, "Oh, Adam, I really want to get into e-commerce. How do I differentiate myself? What do I do to get my foot in the door?" And one of the things I always recommend is get certified in Google Analytics. It's free. Google, they allow you to do this on their site. They have a program. And that's something that is incredibly important for you to know. Almost every company uses Google Analytics in some way even if they do have a more sophisticated web analytics software and it's free and you can put it on your resume and it's great to talk about during interviews. So things like that and I think are really important. Stephanie: Got it. Well, how do you see the industry changing? Seems like e-commerce, of course, is changing really quickly and when I think about having... I mean, I love Google, I work there. But I think having Google Analytics as a certification, what's next? Because I know at least on our side, when it comes to marketing campaigns and things like that, Google Analytics isn't somewhere that we utilize anyways even if we're not e-commerce. But I'm thinking about what's coming next after that? What are the next platforms or tools or technologies or focus areas maybe that would come after that that someone could dive deep into along with Google Analytics because they are a force used by everyone…
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