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You never know when inspiration will strike. For Jordan Nathan, the idea for his company came after an unfortunate incident. Jordan got Teflon poisoning after burning one of his pans while cooking. After researching the dangers of Teflon, which is one of the most prevalent materials in all of cookware, Jordan knew there was a chance to carve a niche for himself in the market with a non-toxic and eco-friendly product. Thus, Caraway Home was born and it launched with a waiting list of more than 150,000 customers. Jordan has been building on that initial buzz by focusing on his Ecommerce platform and selling a vision of a company that can go far beyond just non-toxic pots and pans. On this episode of Up Next in Commerce, Jordan explains how he builds a pipeline to drive customer reviews, which he uses to organically grow the business. Plus, he reveals the growth strategy for Caraway Home and why he believes that if you want to truly take on the big brands in an industry, you need to use an omnichannel approach to take market share and shelf space away from them in all areas. 3 Takeaways: Reviews are key to showing the value of a product when you are selling online. Building and maintaining a review pipeline is critical and means following up and offering products to everyone from influencers, to editors to ordinary people Taking a data-driven approach to product development allows you to lean into introducing products that have a strong chance of flourishing online In order to achieve true saturation of the market, you need to have an omnichannel approach. It’s smart to build up your Ecommerce platform and product offerings at the start, but to compete with the bigger brands, you need to eventually replace them on the shelves of brick and mortar stores 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 everyone to Up Next in Commerce. This is your host, Stephanie Postles from Mission.org, and today, we have Jordan Nathan on the show, the founder and CEO at Caraway Home. Jordan, thanks for coming on. Jordan: Yeah, thanks for having me. Stephanie: I feel like we have to start with the story of you poisoning yourself which brought you to your company. Can you please tell me about that because I read that in the notes and I'm like, I didn't know you could poison yourself from pans, like pots and pans, so I wanted to start the episode that way if that's okay. A great way to start, on a high note. Jordan: Definitely. Yeah, back in, I think it was late 2017, I was cooking just like any other night and unfortunately left a fry pan on my burner for about 45 minutes. I think I ended up getting a call right when I was starting to cook and forgot the pan was there. Call ended, ended up feeling kind of nauseous and light headed and the apartment was feeling super fumy and soon realized that I had forgot the fry pan on the burner. Yeah, ended up getting sick. I was nervous based on having inhaled a bunch of fumes, live in a really small couple hundred square feet apartment in New York City and ended up calling poison control. They basically had told me that I was likely exposed to Teflon poisoning which occurs either from overheating a fry pan with Teflon in it or scratching it and it getting into your food, and really just was really surprised that something that I was cooking off of and touching my food could potentially get you sick. Also, further research showed that there were definitely some longer-term consequences that have been proven through a number of studies related to Teflon and felt there was a big opportunity to build a brand in the kitchen space around launching non-toxic products and eco-friendly products in the category. Stephanie: That is a very good reason to launch non-toxic products. Before deciding that you wanted to start Caraway Home and build non-toxic pots and pans and things like that, let's hear a little bit about your background and what brought you to moving to the world of Ecommerce. Jordan: Sure. Well, grew up in New Jersey, went to school at Colby College, up in Maine. Studied consumer psychology there. I tried launching my first startup out of school, which was a Ecommerce marketplace built for direct to consumer brands. This was back in 2015. Really got it as far as I could, but unfortunately, really struggled with that fundraising process and coming right out of school, didn't have much experience, but it was really a great kind of launchpad to testing and learning and trying to do my own thing. Jordan: I then joined a company in New York in early 2016 called Mohawk Group. They're a consumer product holding company owning about four brands and I joined them to lead Vremi, which was their kitchen brand and ended up basically working there for about two and a half years. Launched close to 200 different kitchen products. The brand itself was really focused on a post-college consumer. Average price point was $10 to $20, so definitely someone looking for something that was lower cost, colorful, and was my kind of first really great experience at obviously working in the kitchen category launching a number of products and really fortunate to have done more or less the exact same thing prior to Caraway. Stephanie: That's awesome. What were some of the lessons you learned, especially at Vremi when you were launching all of these products that you brought into Caraway? Jordan: Yeah, I think biggest lesson was don't launch 200 products in 18 months. Stephanie: Sounds intense, but why? Why not? Jordan: Yeah. Well, it's definitely a lot of fun and learned about a lot of different materials and categories, but definitely caused a lot of issues with inventory forecasting and quality. I think through that experience really got to see the power of selling through digital mediums. At Vremi, we really did focus on Amazon, which is quite different than what we're doing at Caraway, but a lot of the same kind of growth principles that carry over that we now implement at Caraway. It's really a good opportunity to leverage data, use that to inform product decisions and the beauty of online, obviously, is the ability to test. Really taking a lot of those same principles into what we're building at Caraway. Stephanie: That's great. Were you any bit nervous when you were moving from a large company that had resources and infrastructure and more funding and all that, to then start your own company where you had to do everything on your own? Jordan: Definitely. I think when you take that first leap, it's super scary and you leave a comfortable job. You end up initially pitching investors and getting rejected a lot, you're not getting paid anything, and really, you are the only person in the world who actually believes in what you're building. It's definitely scary, but I had enough conviction in Caraway and having sold all these products before and had experience, felt really there was no better person to go do this. The supply chain and the manufacturing were really easy for me just because I had done a lot of this. It was more of the fundraising that was kind of a challenging and new process for me. Stephanie: You had some recent success around fundraising. Right? Jordan: Yes, that's correct. Stephanie: It was a seed round? Jordan: Yes. We just closed and announced a $5.3 million seed round. Stephanie: That is awesome. How did that feel closing that when I think earlier on you said it was a bit of struggle trying to attract the investors. How did you find the right investors and get them to believe in your vision? Jordan: Yeah. Well, we're really excited. It's a big step in our journey and I think validation for what we're building. We took a little bit of a different route than most brands and I think something that's maybe becoming a little bit more common in consumer, but we raised from over a hundred investors in the round, a lot of founders and execs a number of funds and a lot of consumer-focused investors and really took the approach to building a large network, which we felt would be much more valuable in the long-term. As you can imagine, getting a hundred investors means I probably pitched a thousand investors and it took a long time, but I think in the long run it will net out much better because we're more or less one introduction away from any company, given the large pool of investors we have. Stephanie: Were some of the key differentiators that either excited the investors or that they saw about your company? Jordan: I think there have been a lot of news and some companies out there over the past number of years who've really focused on growth at all costs and really prioritizing top-line growth and thinking about things like profitability at a much later stage. Coming out of my prior experience, I had a really great grasp on economics and how to manage cashflow. I think since day one, our pitch has always been really growing a sustainable business in a category that's super-exciting and stale and hasn't seen much innovation. As a brand, we call ourselves Caraway Home for a reason in that cookware is our hero product, it's where we've launched and felt there was the biggest opportunity, but we really see taking those same product principles and applying it across the whole home. I think what's really exciting, that investors have really been attracted to is basically the breadth of how big the home is and how many products there are within the general category. Really, an opportunity to build a lot of products and a pretty large brand across a variety of categories. Stephanie: Got it. Yeah, that's great. When it comes to organic and non-toxic cookware and things like that, how do you convey those type of unique differences on your website because when I was looking at it, it's like, I wouldn't automatically maybe know that Teflon can poison you. I mean, I kind of have heard it before, but it's not something I think about every day, maybe when I grab out my pans. Especially if I'm on a Ecommerce site where I'm looking and shopping, how do you show people this is why we're better than all the other brands out there? Jordan: Yeah. I think for us, storytelling's a really big piece of DNA. Most places where people are coming to from the site, whether it's press or a Facebook ad or Google, we do our best to tell that non-toxic story through those mediums, so they're coming into the site with an idea. We're not here to use any scare tactics; we're here to educate consumers. We try not to push it too hard on our site. We've got sections on materials that you can go deeper, we have a lot of blog posts, so we really provide those educational resources in case you're interested to read more and educate yourself on the subject, but the site's really meant to emphasize all the points of differentiation, whether it's design or color or the storage components that come with our sets. We really want people to get the full picture there, but in those kind of advertising mediums and press, the nontoxic is really who we are and what we stand for. Hopefully, before coming to the site, you get some type of idea of that product feature. Stephanie: Got it. The one thing that I liked when I was browsing through your site was it had this very risk-free feeling to it because it has that free returns and 30-day trial and it had a ton of reviews. I mean, all over the page and it had a whole tab, like a tab for just reviews. Was this something you did from the start or is this a more recent implementation? Jordan: Reviews have been a really big piece of the brand since we first launched and this was a big learning from my prior experience, especially on Amazon, which is so driven by reviews. It's one thing to just show a product on a website, but you can't touch and feel it and reviews are really the only way to create validation for the quality. Really, since day one, we've been focused on our review funnels, we also want to get feedback to improve our products. Yeah, we continue to improve that pipeline, but we're excited to really continue building that out. As a brand, again, with no brick and mortar presence at the moment, it's really the best place customers can go, especially for a brand that's six, seven months old and they've never heard it before. Stephanie: Mm-hmm (affirmative). How did you go about getting those reviews because that, to me, seems like one of the hardest things to do, especially with a new product or podcast? For anyone that hasn't reviewed this podcast yet, please help us and share the word and review it. How did you go about getting those reviews because some of the places that you were getting them from where pretty big media brands? What was the strategy there to bring people in to actually review the product? Jordan: Yeah. I mean, on the site, we've run post-purchase email funnels, SMS funnels, we hit each customer with it a number of times to get their feedback and then, when it comes to press, we did a lot of gifting at the early stages and really tried to create a culture amongst editors of getting the products into their homes and actually using them at home. Not really pushing them to write stories on us, but getting them to experience the product and if they love it, have them come back and write their honest opinion. Stephanie: Mm-hmm (affirmative). That's great, yeah. I think if you get something in someone's house, even if they didn't originally maybe even ask for it, you kind of feel obligated to give a review. I know on Amazon, I left a two-star review on something for a baby product, and they sent me a new and different product just saying like, "Hey, we're sorry that the first product didn't work out, but if you could please reconsider your review because here's three new things we're sending you to try out." Even though I didn't ask for it, and I didn't expect it, I kind of felt obligated to get on there and test out the product and re-review it if I did end up liking it. I think that's good to get it in their house to get people to start thinking about it. Jordan: Definitely. We see the same things with influencers as well. We want to be working with people who organically love the brand and product. We're very confident in the product that we've created and the quality. We've seen just a lot of success of once we can get it into people's hands and they cook with it a few times, it's really a great bridge to starting a bigger partnership conversation. Stephanie: Yeah, that's great. The one thing that I saw that was interesting was, it was on a blog post where you mentioned that when you were launching, you had a wait list of I think it said 150,000 people who joined pre-launch to get the product when it was ready to go. Is that the right number and, if so, how did you garner that excitement for people to get on a wait list? Jordan: Yeah. That is the right number and that wait list was a really incredible kind of launch platform for us. I think early days, it really started with me pitching just a lot of investors and talking to as many people as possible. Created a lot of word of mouth, which drove to our landing page and then, prelaunch, one of…
Full show notes at the publisherChad Ledford likes to say that his Ecommerce journey started with a van and a fax machine. And it’s true. Chad has gone from selling socks out of a van to building one of the first and only online sock-sellers in the early 2000s, to his gig now, as the co-founder of AddShoppers, a company that was named one of the fastest-growing startups in Charlotte for two consecutive years, and an application installed on thousands of eCommerce websites There were obviously many twists and turns on his journey, and he explains them all on this episode of Up Next in Commerce. But the main idea that drove Chad throughout his winding road was the idea of diversification. Long-lasting success only comes through diversifying marketing platforms, acquisition tactics, and communication channels where you can build those coveted one-to-one relationships with customers. He explains it all here. 3 Takeaways: Anything that allows you to build a one-to-one relationship should be valued above others. Be willing to experiment here to maintain customer relationships Be open to new and emerging channels and be ready to quickly experiment with those platforms so that you can be a first-mover and gain market share More and more publishers will soon invest in creating their own platforms, thus lessening the reliance of major consumer channels like Facebook and Google For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone, welcome back to Up Next in Commerce. This is Stephanie Postles, your host, and today we have Chad Ledford, co-founder of AddShoppers. Chad, welcome to the show. Chad: Thanks for having me. Stephanie: I would love to dive into your background a bit, because it seems like you've had a really interesting background, and getting into ecommerce, I want to hear all the stories around that, and how you got to where you are today, if possible? Chad: Yeah, you got it. I like to say that it started with a van and a fax machine. So, to give you a little background, my grandfather who raised me has been in the hosiery industry for the past 25 years, so he kind of introduced me to just entrepreneurship in general, but whenever I turned 16 I took one of his vans and loaded it up with socks and went door-to-door to small businesses to sell the socks. So, I did that pretty much throughout high school, saved up enough for college, and then whenever I went to college, my freshman year I didn't do a whole lot, played probably too many video games, but it really introduced me to the internet. Chad: So, my sophomore year I started to get the itch around trying to make money again, and that's when I basically took the socks that my grandfather had, and then put up my first ecommerce store. It was built on Microsoft's ecommerce platform, I don't even remember what it's called today, but it was back in the early 2000s. We just put up a couple SKU's, I gave my grandfather a fax machine, put a fax machine in my dorm room, and then as I would get orders I would fax it over to him, and it would print the labels off for it. Stephanie: Oh, my gosh, that's amazing. So, what kind of socks were they to be selling like hotcakes like that? Chad: Yeah, it was pretty much every type of sock. So, I think Bombas has probably made it cool, but at the time we didn't really have a brand, it was just socks. It was like ankle socks, or crew socks, but nobody else was selling them online at the time, so we got really good at the search marketing side of it. If you bought socks in the early 2000s, you probably bought them from us, because we were number one on Google for the keyword socks, and- Stephanie: Wow. Chad: Yeah, it was kind of a fun adventure at the time. Stephanie: So, was your grandfather any bit hesitant to go online, or work with his grandson? What was that like working together? That sounds, yeah, just really fun. Chad: Yeah, he was really supportive early on until it got to be too many orders that he didn't want to do it anymore. So, he basically said, "We have to find someone else.", and then that's when we got introduced to the idea of dropshipping. We basically just needed to find somebody that wanted to handle the capacity, and then that's when we learned about dropshipping, and how that fits in ecommerce. Stephanie: Wow, so you've definitely seen it all from the very start. What are some of the biggest shifts that you remember where you're like, "Man, dropshipping used to be like this.", or building up a website I remember silly things that would be super hard. What were some of the things that you remember from back in the day that just kind of look silly now looking back on the processes that you were doing, or the things that you were undertaking? Chad: Yeah, I think whenever we started doing it we were just thinking about it more from like a tactical execution standpoint. But what I mean by that is we could basically put up a site, put some products on it, and then we could rank for it pretty quickly. We weren't really focused on creating a brand, we weren't really focused on lifetime value, or how do we kind of cross-pollinate between multiple brands and things like that, it was really just how do we rank number one for this thing, and then push as many orders through it as we can? So, I think part of that is just being young and figuring out what business actually means, and how to maximize lifetime value. Chad: But at the same time, just the shifts that we saw, search was starting to gain more momentum, and more people were going online to start to look for things, and that's when we started to see the shift from retail dollars going a little bit more online, obviously that's accelerated a lot recently. But yeah, it's just kind of interesting, at the time we just saw it as a way to make money, but now kind of in hindsight it was a bigger shift that was happening with people, and people wanting to get more convenience, and better deals, and things like that. Stephanie: So then what brought you to co-founding AddShoppers? At what point were you like, "This is something I want to do."? And could you give us a little background on what AddShoppers is? Chad: Yeah so, that first business, 3tailer, was really built around Facebook. Whenever Facebook made a change to their algorithm we had to react as fast as we could to try to keep up. So, whenever we started AddShoppers ... we tried to be a little bit ahead of the market when it came to social media. Again, this was before everybody had a Facebook profile, and Pinterest was just sort of coming online, but we saw that a lot of people were spending time there, and a lot of people were engaging there. Chad: So, the first version of AddShoppers was to try to figure out what was happening inside of social, and is it driving sales for people? So, it was mostly an analytics product that a brand could plug in and it would tell them if a social channel was driving sales, and if so kind of break that down and tell you how and why that was happening. But the thing that we were trying to solve is diversification of revenue. We had the 3tailer business, which was really built on SEO, but we saw social kind of up and coming, so we wanted to figure out how to monetize that and drive sales for our own business. Stephanie: Wow, that's great. It seems like you guys were definitely very ahead when it came to spotting these trends, and seeing something that could get big, and starting to offer solutions around it to give deeper data insights for that. How did you realize that was a problem for companies back then, when I doubt a lot of companies were like, "We need access to the data, we need to do more with it."? I mean, now it seems obvious, but back then were you getting customers who were looking for help around that? Chad: Not really, it's just what we felt through our business, we had felt the revenue impact. We didn't have a wholesale channel set up or a physical in-store, so whenever something changed online we had to be on top of it to figure out what was going to happen next, and as social was kind of coming online we saw it as an opportunity. So, it wasn't a stroke of genius, it was we had to to survive, and that was the main reason that we focused so intently on it. Stephanie: Very cool. So, what does AddShoppers look like today? How has it evolved? Chad: Yeah so, similar to the early days of search marketing, Google kind of won the market, and then same thing happened with Facebook, Facebook won the market. At the time when we started it there were probably about 20 different social networks that we were kind of tracking, and figuring out how to drive influence on, but once Facebook became the clear winner it was obvious that the same things were going to start happening, Facebook was going to make changes, that was going to impact people the same way that search did for our business. So, we decided to look into other channels, and more specifically we wanted to looking into channels that don't change often. Chad: The ones that don't change often are usually kind of the baseline architecture of the internet, it's the open protocols, basically email, or SNTP, being able to send a message to someone has been around since the internet started, and as much as people have tried to kill it, it's still one of the top channels, and it's one of the few things that a brand can really own and be able to have that direct communication with a client without having to ... or with a customer without having to pay some sort of an ad tax, or CPM to really get in front of those people. So, today our solutions are really focused on creating ways for brands to tap into those open protocols a little more of like email, and being able to message a customer directly without having to go through the big guys. Stephanie: Got it. So, how do you get those emails? Is it something that a brand could already access, or what does that look like? What problems or pain points do the brands have when they come to you? Chad: Yeah so, most digital commerce brands realize the value of email today, especially whenever it comes to retention and lifetime value. So, the conversations are a little bit easier now because they understand that it is a really strong channel, and it's one that they have to defend, but most brands can only tap into what's considered first party data. So, first party data is data that the brand captured themselves. So, a lot of people build up emails from popups, or they capture it during the checkout process or things like that, but that usually ends up being anywhere from like three to 5% of their traffic that they've spent a lot of money to get to their site that they're actually able to capture, and be able to continue creating that relationship with them. So, the problem that we help solve today is tapping into that other 95% of people that are on the website, people that haven't given them their email address yet, but they're still showing a lot of engagement, and they probably still want to try to get those people to be their customers. Stephanie: Got it, so the people who are just casually browsing, or maybe added something to the cart and then left, the people like that who didn't directly give the brand their email, but maybe seemed kind of interested. Chad: Yep, exactly. Stephanie: Very cool. So, one thing I've read a bit about is that you said brands have been over-reliant on Facebook and Google when it comes to customer acquisition. How do you envision sellers getting around those two giants? If that's a main channel like you mentioned, like they're dominating the market, how should a brand find customers if they're not going to rely on those two areas? Chad: Yeah, I don't think they should neglect those. I think they need to figure out how they can push as much volume on those as possible profitably, but as a lot of D-to-C companies have seen more recently, as everyone starts to do that, it gets more expensive for everyone, because it's an option. So, it's more about creating diversity in the revenue streams, and it's more about just creating a closer relationship to the customer, and the ways to do that is through one-to-one channels, or really any kind of open protocol. So, if email is an example, another example is SMS, push notifications, direct mail, really anything that can kind of get you one-to-one with that customer and really build the relationship. Those are the things that should be valued a little bit more. There's ways to do it where it's not scary, and you can track the revenue quite easily. So yeah, I would say that diversification of the revenue is really the big thing, it's not just about avoiding working with the big guys, but only using them as much as you need to. Stephanie: Got it, that makes sense. So, what are some maybe, not a case study, but an example of a brand who came to you and diversified their channels to start maybe using ... texting is one thing that a lot of people have come on here saying they're thinking about or they are experimenting with sending texts to customers or potential customers, but they're not always really sure how to check that or how to measure the results. What are some maybe examples where you've seen that work well, or other channels that have worked well that maybe a brand normally wouldn't have explored? Chad: Yeah, I think the one that comes to mind it's a pretty big omnichannel retailer, they have about 50 locations and they sell sporting goods. I don't know if I can share the name, but basically- Stephanie: That's all right. Chad: ... they did a lot with the traditional advertising, so they ran local TV commercials, they ran local radio ads, and then they did a bit on Facebook and Google mostly around retargeting. They didn't really see those things as kind of top of the funnel activities, and because of that they basically relied on it for retargeting for the most part. So, they were basically spending on these offline channels, and then they were using digital as a way to retarget and try to convert those people, because it was the only way they could tie together the conversion of, "Hey, this person is on the website, and they just bought something.", and they could pretty much always get like a 10 to one return on ad spend. Chad: So, for them, they were kind of stuck in this omnichannel box where they couldn't do additional things for branding or impressions, because they didn't have a great way to track it, so whenever they started working with us, we helped them expand out into these other channels where they were still able to get a guaranteed 10 to one return on ad spend, because we were using things where we didn't have to buy media, like email and some onsite personalization things that we did for them. Today we don't have an SMS product, it is on the roadmap, along with push and a few other products, but really the email is still one of the biggest revenue drivers that we found for clients. Stephanie: Very cool, and do you help with looking into the data after you start these campaigns for the different brands and whatnot, because I know before we were recording you mentioned that you're really big into data and you…
Full show notes at the publisherMaking the switch to online shopping has been easier in some cases than others. Buying laundry detergent online, sight unseen doesn’t feel quite as high-risk as a larger purchase like say a car or a house. It makes sense, then, that certain industries have been slower to fully embrace the Ecommerce experience. Bridal is one of those industries, but Leslie Voorhees Means thinks that it’s time to shake things up. Leslie is the co-founder and CEO of Anomalie, an online-only custom wedding dress company, and on this episode of Up Next in Commerce, Leslie explains why she thinks her model is going to be the one to disrupt the market. Thanks to a blend of tech and human stylists all focused on customization and personalization as well as taking control of the supply chain, Leslie says that Anomalie has found a way to solve many of the pain points brides run into during a traditional wedding dress shopping experience. Thousands of customers agree so far, and as growth continues, Leslie has her eyes set on new technologies that she believes will lead to a sea of change in the entire Ecommerce world. 3 Takeaways: Understanding and owning your supply chain is becoming more of a focus for D2C brands and it will be a differentiator moving forward. Building a strong supply chain presence allows you to have more flexibility, agility, and ability to scale Transparency and communication is a business advantage when competing against bigger brands When tailoring custom unique experiences, tech can’t completely replace a human element For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone, welcome back to Up Next In Commerce. This is Stephanie Postles, your host. And today we have Leslie Vorhees on the show, co-founder and CEO at Anomalie. Leslie, thanks for coming on. Leslie: Thanks for having me. Happy to be here. Stephanie: Yeah, we're really excited. So, where are you located at right now? What are you up to? Leslie: We are in San Francisco. So, the company was founded and is headquartered here, but we have a couple offices around the U.S and the world. We've got our customer service stylist operations in Scottsdale, Arizona. And then we've got a team that manages our supply chain operations in Hong Kong. Stephanie: Oh, very cool. Hong Kong sounds awesome. So, I'd love to hear a little bit about Anomalie then. We're jumping into it quick, but yeah, talking about offices in Hong Kong, it sounds like it's expanded quickly and grown from where you started. So, I'd love to hear a little bit of the background there and what brought you to Anomalie. Leslie: Yeah, for sure. So, I never actually expected to be founding a company and was not expecting to be in bridal. This idea for the company came about through my own frustration when I got engaged and shopped around for my perfect wedding dress and had a really, really hard time finding, I had this picture of a dress that I really wanted and couldn't find it in boutiques and was pretty horrified by the prices. Leslie: My background is in mechanical engineering and manufacturing. I've always worked for big companies. Started my career at Nike and fell in love with the factory environment and product development and being able to create real physical products. And was working at Apple at the time that I got engaged and was working on the launch of the Apple Watch and was in China quite a bit. Did a little bit of research because I knew co-workers of mine had custom clothing made, mostly men's shirts and suits and things. Leslie: And ended up finding Suzhou, China, which is outside of Shanghai, which makes most of the world's wedding dresses. 80% of the world's wedding dresses are made in and around this amazing supply chain hub of expertise and craft. And worked directly with one of the workshops there when I was out in China for work and was just absolutely floored by the price but also the quality and the levels of customization. Leslie: I could pick out everything from the lace to have it be custom-tailored to my body. And mentioned it to a couple of friends and almost immediately started getting requests for orders before this was even really a company and realized pretty quickly that other women felt the same frustrations that I was feeling around not quite finding what they want for, arguably, the most important garment that you're ever going to wear. Leslie: And then another interesting insight besides just the virality of those original orders was the first couple dozen requests were coming from women that said they wanted something really special, and really different, and really unique. And in reality, the dresses looked very, very similar. People were like almost ordering the same dress because wedding dresses are uniquely low variable. It's white, it's ivory, has lace or no lace, there's limited silhouettes, there's limited styles, has a longer product life cycle than a lot of garments and fashion. Leslie: And so, there were the seeds of this idea for mass customization that was really exciting to me as an engineer to think about how we could scale this to give tons and tons of options to brides, but on the operations side be really efficient and be able to have the benefits of scale by thinking about these modules that can be customized. So, the skirt, or the neckline, or the straps, or the sleeves, et cetera. Leslie: So, we've thought about that a lot as we've grown in the past. So, that was about three years ago, a little over three years ago that we started and since then have grown to serve thousands and thousands of brides. And are building, from the technology side, a way to be able to visualize the dress in an easy and fun way, given that we don't have brick and mortar shops. Stephanie: That's amazing. Yeah. It's very interesting hearing the story of your background of being like, "I need a wedding dress," and actually going to the district in China where they're made. I can't think of many people who would solve their own problem like that. Was there any surprises when you were going and meeting these companies there and just thinking through, "Hey, this could actually be a business," or any findings when you went there that you weren't expecting? Leslie: Yeah. I think one thing that was really stark that I noticed right away was I was the only foreigner in this area. It was very apparent that Chinese women knew that this is where you can get really high quality, almost like haute couture type of like custom garments. But I was the only foreigner, the only white person walking around getting a lot of stares. Leslie: I think that was really representative that there was a secret that was being uncovered. That was how I was thinking of it was, this is something that can be untapped. And just given my conversations with friends, and then friends of friends, and then friends of friends of friends, as the idea started growing was, women really want to be able to tap into that but need a trusted source. Leslie: There's a lot of direct from China websites and horror stories about women ordering a dress and then when it actually shows up it's low quality or not what they were expecting at all. And given, again, this is a very emotional important purchase. Having someone that you know and trust on the ground, I thought was something that was going to be really important and that has remained important the entire history of the company. Leslie: And then I think the other thing that was surprising was just the breadth of quality in Suzhou. It was, you could get everything from a very, very, very inexpensive cheap wedding dress for a couple of bucks all the way up to dresses that were almost as much as it would cost in America and wide ranges of quality. Leslie: I remember I vetted probably a hundred or so factories when we were first starting up and it was pretty apparent the ones that didn't take quality as seriously. There was one factory that I remember where everyone in the factory was smoking cigarettes- Stephanie: Oh my God. Leslie: ... which is not something that you would want in a high quality [crosstalk 00:07:03]. Stephanie: What's their reviews on Amazon? People are like, "Hey, it smells smoky. I wonder why. Now we know." Leslie: Yeah, exactly. So, that one was an easy one to cross off the list. But then on the flip side, there were a lot of really, really sophisticated entrepreneurial factories that we met with that I think could feel the shift that's happening in bridal, which is that it's one of the, I think, last verticals that hasn't really been disrupted by an online presence. Wedding dresses are still 95% brick and mortar in the U.S. Leslie: And a couple of years ago, it would have been crazy to say that you're buying your eyeglasses, or mattresses, or TVs, or books, or whatever on online. And it's still a little bit crazy to say that with wedding dresses, but I think that's exactly why I was so interested in it because it felt new and different. I think that that's the making of a really good startup, a good, crazy idea. Stephanie: Yep. Yeah. I completely agree. It seems like there could be a lot of D2C opportunities that go directly to the source like you did. Because a lot of them, people are coming online. They want not go through someone else to sell right now. Is there any other areas that you can see going direct to actually help with the business model, or maybe friends, or mentors in the industry where they realize, hey, there's a lot of opportunity if you go directly to the factories and see how they make it and develop your own relationship, instead of always relying on a wholesaler, or drop-shipping, or whatever it may be? Leslie: Yeah. I have to credit my internship when I was in business school. I was really, really lucky enough to be a part of the core founding team of M.Gemi, which is direct to consumer high, high quality Italian footwear. And I was able to go with the founder over to Italy that summer- Stephanie: Wow. Leslie: ... which was the coolest internship ever. Much more glamorous than some of the factories in China. Stephanie: Wow. I want that internship now. Leslie: Yeah, exactly. Stephanie: Can I sign up for that? Leslie: It might be the coolest job I've ever had. But it was really, really interesting because they had set up relationships with these Italian craftsmen that make shoes for, I mean, the factories we saw were for Yves Saint Laurent, and Prada, and Valentino. And the same hands that were making those shoes had extra capacity to make high quality shoes that didn't have the designer label and then designer price tag. Leslie: And tapping into that direct to the workshop and direct to the craft idea was something that I got to see that M.Gemi was doing and is apparent all over e-commerce with, I know Away luggage, I think, started with making partnerships directly with the workshops and, I'm trying to think of another. Oh, the mattress, a lot of the mattress companies are... There are these pockets of expertise and by being able to sell direct to consumer, it cuts out the middlemen and obviously cuts out a lot of the costs. Leslie: And then also for us, especially being able to centralize stylist operations, and tech, and our finances, and all of that allows us to scale nationwide without having those costly retail footprints. And then also we can scale the experience from a customer experience side. Stephanie: Very cool. So, if you're looking back now on picking factories and workshops to work with directly, what were some of the lessons that you took away from it where you were like, "I would do this over again," or, "I did it this way and it worked out really well," if someone were to try and start this process from scratch? Leslie: Yeah. Well, I'd say definitely no cigarettes present in the factory. Stephanie: Step one. Leslie: Yep, step one. Stephanie: All right everyone, that's all you need to know. Leslie: That's the secret. No, I think also the appetite for international partnerships. And we were lucky because we started really small with just a few orders. And a lot of partners, especially in China, require minimum order quantities to be able to produce with them. And we found partners that were aligned with our vision of entrepreneurship and scale, but we really had to sell the vision probably similar to fundraising and selling the ideas to venture capitalists to get funding. Leslie: We had to sell the idea to the workshop managers as well to buy into this idea because we did not have massive amounts of orders at beginning. And so, definitely alignment on a strategy of customization and a strategy around scaling through tech and having technology-enabled operations to be able to get bigger and better. That helped a lot to be able to find some partners that were really, really aligned with that vision. Stephanie: Yeah. That definitely makes sense. It's like when you're looking for a contracting job or something like that, the people who apply maybe aren't the ones you always want versus going out and actually sourcing the exact person that you want to work on your project, or employee, or whatever it may be. Leslie: Exactly. Stephanie: Always seems to work a little bit better. Leslie: Yeah. Stephanie: So, for Anomalie, when I was thinking about, I've had a wedding before, I've bought dresses, and I was thinking, "Oh man, that seems like it could be pretty hard to do direct to consumer online because of the measurements, and making sure it fits, and wanting to feel the fabric and all that. How can technology replace that kind of experience that makes the consumer more comfortable with buying something so important online? Leslie: Yeah, it's a great question and a great call out. It is hard. It is a hard hurdle. We have a really, really high bar of trust. This is a really, really important garment. I think what's really exciting to us is that a digital experience solves a lot of the pain points for brides' shopping experience in brick and mortar boutiques by offering, one, a much better price. Leslie: So, high quality brick and mortar boutiques you wouldn't balk at a price tag from, the average is in the two to $5,000 ranges where the bulk of the dollars are in the market. And designer dresses can cost $10,000 or more. And by being able to cut out the cost of the shop and then also having a stylist we're able to offer a much better price. So, our average dress right now is right around 1700, which is- Stephanie: That's really good for custom. Leslie: ... [crosstalk] in industry standard. Yeah, we think so too. And then another pain point that we hear over and over from brides is around inclusive sizing. So, the average American bridal boutique doesn't carry the average American woman's size, which is a bridal size 14, normal size 12. Leslie: And the inventory is expensive and boutiques have a limited set of gowns. And that gets even smaller when you think about sizes that can include plus size women. And so, by making our dresses made to order, made to measure, we're able to make the pattern to fit the woman's body, regardless of whether you're a sample size or up to a size, I think it wa…
Full show notes at the publisherSometimes an opportunity comes along that’s too good to pass up. For Matt Hulett, that happened when a friend approached him about a job at Rosetta Stone. The famous language-learning company was stuck in the analog world and they wanted Matt to be the guy to bring them into the digital future. It was no small feat, but Rosetta Stone has made progress on the digital transformation and Ecommerce journey, including introducing a subscription model and overhauling its tech stack and app. On this episode of Up Next in Commerce, Matt discusses the challenges of transforming a world-famous brand, including how he chose a free-trial subscription model over going freemium, what it was like to achieve buy-in from investors, and the future of Ecommerce and why he thinks social selling still hasn’t reached its full potential. 3 Takeaways: Even the most well-known brands need to earn their stripes when entering a new space. When a previously offline product starts playing in the digital world, it has to prove to customers that their investment in this new space is worth it AR and VR are tools that Ecommerce platforms will be exploring more in the coming years. If you can provide a more immersive experience, you differentiate yourself from the competition and create more value to your customers Stay true to the brand and don’t try to compete on business models that don’t fit 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're going on a digital transformation journey. Matt, how's it going? Matt: Oh, really good. A little cooped up here like we all are, but I'm hanging in there. How are you doing? Stephanie: I'm doing well. Yeah, same hot, very hot. It's 92 here and the places in Silicon Valley usually don't have air conditioning so just a little sweaty in the studio. Stephanie: So I must admit, I have not checked in on Rosetta Stone in a while and when I started browsing through you guys' website, I was like, "Whoa, you all have come a long way from CD-ROMs and everything that I was used to when I was growing up and thought of Rosetta Stone." So I'd love to hear a little bit about what brought you to Rosetta Stone and your background before you joined. Matt: Yeah. It's interesting, just before I dive in, it's rare to join a company where everyone knows your brand and your product like just about everyone in the United States does Rosetta Stone. Matt: And so actually, it's an interesting story because there's not many ed tech companies that are a public companies, you could count them on your hand and the company has been a public company for over 10 years. Matt: It's been around for 27 years and it's a really interesting backstory on how the company was founded and so some of that came into play with what got me attracted to the business. Matt: So a friend of mine who's a recruiter talked to me about this opportunity and I typically do restarts, pivots as they are [crosstalk] for startups. Matt: And even the startups that I join are typically pivots. So there's kind of this pivot transformation story that typically is a draw for me for whatever weird reason why I attracted to these things and when he said, "Oh, it's Rosetta Stone." Matt: I was like, "Oh, the CD-ROM company, the yellow box." I was like, "Yeah, but they're trying to be digital." I'm like, "They're not digital yet?" Matt: And so the draw for me was typically, I take on jobs and assignments that are very difficult where I have to either completely change the strategy or get new financing on a new idea. Matt: There's generally something really, really wrong and Rosetta Stone was so intriguing to me on the surface for the intellectual reasons why they brand the product, people love it. Matt: It's not one of those iconic brands that people are afraid of. It's not like saying, "Matt, do you want to restart Myspace? I was like, "Oh my God, it's Rosetta Stone, of course." Stephanie: That's your next project. Myspace. Matt: Yeah. Stephanie: Just bring it back. Matt: Making it great again. Too soon. But what personally drew me, that's kind of the intellectual business level, what personally drew me into the company was and is the fact that I'm dyslexic, and a third of the revenue for Rosetta Stone is actually one of the fastest growing. Matt: We sell software into K-12 schools primarily in United States that help kids learn how to read, better learn how to read which is a problem. I've seen my own youngest son struggle with his dyslexia as well. Matt: And so on a personal level, it's very emotional when you can kind of tie that emotional tie to a company to its mission and vision. It's really intriguing. So it's been one of the best career decisions I've ever made. Stephanie: Yeah, that's great. Were there any universal truth that you discovered as you are kind of pivoting from different companies and trying out different roles and turning them around? Was there anything like yeah, universal truths that you saw while doing that? Matt: Well, that's a great question. Yeah, a couple things. One is it's so crazy to me, when I step into a company how basically from week one, maybe day one, no one really understands how the business works, like truly understands it. Matt: The key insight, what makes the business special, what can you do to apply capital or a time or attention to improve your strategy or your outcomes? It's just so, it's so weird when you go to a business that's operating, and maybe these are the only businesses I look at where it's not quite tight inside around the strategy and what makes the kind of the economic engine run. I think that's the biggest one that I see off the top of my head. Stephanie: Yeah, that's interesting. I can definitely see a lot of companies struggling there especially as they grow bigger and they have many business units and everyone's kind of chasing a different path, I can see people losing sight of what's important and what's actually driving this business like you're talking about and making it profitable or maybe it's not, but it's the lost leader, something that we still need. So yeah, that's really interesting. Stephanie: So when you joined Rosetta Stone, it hadn't been digital. I mean, only a few years, right? I think it stopped, maybe it didn't stop doing CDs, but it went online. Wasn't it in 2013? Matt: Yeah, I would say it was like half digital. What that means is we were selling one of the most expensive products in the App Store at the time and we didn't really have the concept of really effective sales funnels, a well thought out pricing and packaging strategy based on the type of customers that we're going after. Matt: We didn't have a lot of mobile native features and capability. So I would say it was kind of a port of the CD product in the mobile environment and that was kind of the approach. Matt: And also the approach was really not to focus on the consumer business. So not only did we make this kind of business model and digital transformation move, but also when I came into the business, the big focus was for the language side of the business was to focus on enterprise customers. Stephanie: Mm-hmm (affirmative). Matt: I thought that was actually the wrong move because enterprise is difficult, it's a smaller market, yet consumers where everyone knows Rosetta Stone, everyone likes the product. They actually remember the CD products in many cases and want to use them again, but they want to use them on your phone. Matt: So I thought, "Well heck, everyone knows who I am from a brand awareness perspective, I'll have an easier time deploying less capital against the consumer space and enterprise space." So there was not only just a business model shift, but also a strategy shift. Stephanie: Did you end up sticking with that business model shift to focus on enterprises or did you kind of make it a mix of 50/50? Matt: Oh, good question. So it is about 50/50 today, although consumers now are growing fast. I mean, we're a public company so I can only speak to our public company numbers, but in Q4 of last year, we grew the consumer business about 20% year over year and this is from a business step was growing at single digit. Matt: And then our last reporting earnings quarter, we grew the consumer business around 40% year to year and the enterprise business has struggled more primarily because of the C-19 impacts this year because obviously, we're in a never before seen macro economic headwind, but generally, it's the right decision to make and I view the enterprise business as more of an extension of what we want to do for all adult learners versus creating as a separate entity. Matt: That's a long answer to say consumer turned out to be the right move. It was not clear when I joined the company that even joining Rosetta Stone was a smart move. Matt: I had a lot of folks that I know, acquaintances more so than friends say, "Good luck. There's a lot of error in this company." And I just think it's just a really exciting problem and it's a ... Sorry to keep going because I've had maybe 80 cups of coffee today and just, I don't know. Stephanie: No, keep it up. Matt: It's like the two big verticals that are the most expensive that increased their prices to consumers over the last 50 years are healthcare and education and they have the lowest penetration of digital, and like, "Well, those are hard problems to solve. Why wouldn't you want to be involved?" So anyways, I think it's really fun. Stephanie: Yeah, that's fascinating. So when you came in, what were expectations for your role? What did people want you to do? Did you have a 90-day plan? How did that look? Matt: Oh yeah, if anyone thinks these are scripted questions, these are not scripted questions. These are very good questions. So during the interview process and I'm sure you've had this experience before, when you meet with somebody in a company, you're like, "I'm going to do whatever it takes to get this job." Stephanie: Yup. Matt: And I had one of those experiences with Rosetta Stone. I knew I wanted this job and so I came into maybe the first or second interview with a 90-day plan before I even started, this is the first or second interview. Matt: And the 90-day plan did change slightly because then I knew a little something, but I've done enough of these transformation projects, these pivots where I knew there's these basic building blocks in a format, I have a toolbox of things that I do that really didn't change. Matt: The inevitable strategy didn't know before I started, I didn't know the team members, were they the right fit or not, I didn't know any of that, but the basic building blocks I definitely put together. Stephanie: Got it. So what was on your roadmap, did you have to think about how to re-platform to support your commerce journey and shifting into enterprise and then consumer? What was on that plan that you laid out? Matt: Yeah, and I kind of learned some of this years ago when I was ... Sometimes I think my best work, I can't speak for you or anybody else, but my best work is when I'm completely ignorant of the challenges in front of me and so when I was younger, I worked for ... Well, actually, we sold our company to Macromedia and they had a division called Shockwave. Matt: And Macromedia at that point was not bought by Adobe, and this is Web 1.0 bubble, so I'm dating myself which is not legal in Washington State and these jokes have all jail time. Stephanie: [crosstalk] get us in trouble. Matt: I know. And so we step back through that experience and I learned a lot from the Macromedia Adobe kind of M&A folks about how to approach a problem. And that plus some other work experience over time really got me to the point of thinking through things from I call it the insight, the math in the heart. Matt: And no one framed it that way to me, but that's kind of how I framed it and so when I think about the insight, I think about the addressable market, the position that we are in the marketplace, so supplier's demand competitors. Matt: Then I think about what value we're driving to consumers, what value are you driving to your suppliers if you have them. And then what are the decisions you're going to make based on the strategy that you're laying out for the best outcome? Matt: So you want to grow market share, you want to grow revenue share. Do you not have enough capital? Do you actually need to raise capital and buy companies in order to get size and scale that's the outcome? Matt: So it's kind of a process that I've done over time and I want you to figure all that out, and it takes a while, maybe 90 days, maybe a little bit more, then it's really like how do you put a process together and dashboard is a little trite, but how do you actually run the business so you understand what things are working, the unit economics, what key layers of the business are you looking at, and then figure out an organization to support that and then you find the right team. Matt: And it sounds kind of exhaustive in terms of an answer, but I think too many people come in situations and they say, "Okay, I started this job, I got to restart it. What's my team look like?" Matt: And it's always I think the tail wagging the proverbial pivot dog and I typically, you can find startup people that are good at startups and sometimes, you find startup people that are good at later stage. Matt: You can find every dynamic possible, but until you do the work on, "I need this type of person for this type of growth stage, it's the right person the right time." Matt: If you don't do the work upfront, then you end up having a team that isn't the right team for the outcome that you want. Stephanie: Yup. Yeah, I've heard ... I forgot who said that startup advice where a lot of startups especially around here, are looking to hire that VIP level person, you have to pay a bunch of money to and someone was making the point of like, "Well, will they help you right now where you're at?" Stephanie: And it's okay to kind of grow out of people, but it's not okay to hire someone who's way above that actually can't get their hands dirty and do the work of what needs to be done right now. Matt: That's right. There's lots of people that have different approaches. I actually like to be pretty data driven in terms of how I think about people so I use like employee satisfaction studies and I use different personality profile tests. Matt: Obviously, you're not trying to like ... Hopefully, no one is like applying an AI filter looking at my reactions on this live video, but you can go overboard with data, but I do feel like you need to get the right alchemy talent for your team. Matt: And I've made mistakes where you have that senior person that doesn't want t…
Full show notes at the publisherIf you think back to just a few years ago, when someone asked you to name a company that delivered food, you’d probably only be able to name a few pizza joints or the local Chinese food place. But today, the world has shifted and online food delivery is a booming business. Last year alone, Grubhub sold $6 billion worth of food, and the company delivers more than 500,000 meals per day. So how did Grubhub enable this massive shift to digital meal purchasing? On this episode of Up Next in Commerce, we welcomed Alex Weinstein, the SVP of Growth at Grubhub, and he explained to us exactly how the company has been able to become a market mover. From the initial education process to then focusing on customer retention, Alex and his team have been deep in the weeds of it all, and they have built a culture of experimentation, data analytics and a focus on ROI to stay ahead of the curve. Alex explains it all here. 3 Takeaways: Measurement and incrementality are important. You have to understand whether or not where you’re putting your dollars is making a difference, and sometimes the answer will surprise you True experimentation is necessary to create new methods of measurement, marketing strategies and growth opportunities. So the question you have to ask as a leader is how can you create incentives to allow people to take risks and learn? The time is now to learn about the newly-online customers that have trickled into your business due to COVID-19. In understanding their needs, you will be able to ensure retention and set yourself up for the new reality we live in For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome to Up Next in Commerce. I'm your host, Stephanie Postles, co-founder of mission.org. Today, my stomach is rumbling, because we're talking all things Grubhub. Alex, welcome. Alex: Thank you for having me. Stephanie: Yeah, thanks so much for coming on the show. I just pulled up the app earlier to be like, "What should I have for lunch today?" Because it's 12:00, and it's time to order something. Alex: What did you end up ordering? Stephanie: I'm looking at pad Thai right now, we have a really good Thai place down the street. That's usually my go-to, but I started to get influenced by sushi, so if you have any advice, let me know. Alex: I don't know the restaurants in the area, but look for those that are well-rated, and look for deals. We have a ton of deals going on right now. Stephanie: Ooh, nice, that's perfect. You are the SVP of Growth at Grubhub, correct? Alex: That's right. Stephanie: I'd love to hear a little bit about your role there, and what brought you to Grubhub. Alex: Sure, sure, thank you. I've been at Grubhub for a little bit over three years. My responsibility is for the consumer business. That is, how do we get more new customers to try us out for the first time, and how do we get existing ones to order with us a little more often? And hopefully they'll return. Alex: This spans all aspects of marketing. We do a whole bunch of stuff in-house. I'd love to explore that a little bit later. But it also involves a lot of work cross-functionally, across the product. When I say product, I don't just mean our apps, but the totality of the experience that the customer has, from our apps to the delivery, to customer care, if that's ever necessary. Stephanie: Very cool. Previously, were you at, I think I saw Microsoft and eBay, or what did your past life before Grubhub look like? Alex: That's right, that's right. I actually am a very strange Head of Marketing. I'm a software engineer by training. Stephanie: Oh, interesting. Alex: I've written a bunch of code. I switched over to product management, and then darkness had me, and I somehow ended up in marketing. I indeed was at eBay before this, also for around about three years. Similar role, maybe a slightly more narrow role, focused on customer retention, marketing technologies. Stephanie: Very cool. I'm sure that was great help working at a marketplace, albeit not maybe a three-sided one, but still maybe a really helpful to transition to Grubhub with as your background? Alex: It very much was. I have to admit, I thought I knew marketplaces after eBay, then when I started Grubhub, I discovered so much complexity. Our business, exactly as you said, is a three side marketplace. Restaurants, food delivery drivers, and consumers. It is a hyper local business. People who live in Palo Alto whole heartedly don't care how many restaurants we have in San Jose, and how good our delivery network is in San Francisco, right? Alex: It has to be block by block, and we have to make sure that we have good restaurant selection there, good demand, and good supply of drivers. Otherwise, if the three sides aren't in alignment, bad things happen. Stephanie: Yeah, that seems like it would be really tricky to keep all that balanced. How have you found success keeping everything balanced? Like you said, it's so hyper local, I'm thinking there could be a driver over in Sunnyvale, and they're definitely not going to go to my local Thai place to pick up the order that I'm looking at. Alex: Yeah, this is where a lot of fun in this business comes from, and a lot of complexity in this business comes from. We have to be really good at predicting things, and predicting demand. And we have to be really good at engaging all sides of our marketplace so that drivers actually want to be online at the time when we want them to be online. Alex: Consumers end up placing additional orders if perhaps we have a little bit too much supply. Restaurateurs want to create deals. Basically, being able to influence three sides of the marketplace in a automated, personalized, hyper local way, is really the only way we can survive, right? This, to me, is super joyful, and super complicated, and where a lot of learning, personally, for me, has come from. Stephanie: Yeah, I'm sure every day it's adjusting a little bit more, and you keep have to kind of changing things up and experimenting a bit. How do I think about where Grubhub is at right now? To me, it seems like it's the market leader. How many meals are being delivered? How much is that in dollar-wise of food that's being sold? How do I think about that? Alex: We're a public company, all of those numbers are public. Quick summary for you. We deliver more than half a million meals a day. Last year, we delivered more than six billion dollars worth of food. Of course, with the arrival of the pandemic, the demand for food delivery has also increased. The expectation of all of our constituents, and of our community, all of us, have risen tremendously. Because, from something that restaurateurs really on for a portion of their revenue, they now rely on delivery as the majority of it. Alex: For consumers, where they would perhaps order delivery occasionally, now is the only way for them to order restaurant food. A lot of expectations on us have increased throughout these past couple of months, even though we already started from being quite a large company with high expectations. Stephanie: Yeah, have you had to adjust quickly with everything going on with COVID-19? What have you seen, other than increasing orders, and how have you had to pivot to meet the customers and meet the drivers in where they're at today? Alex: Yeah, absolutely. Well, most definitely, yes. First and foremost, we began by focusing on safety of all the participants of our marketplace, right? This began with our work on personal protective equipment for our drivers. We distributed hundreds of thousands of PPE sets for free for our drivers. We invested a bunch of work into enabling contactless delivery within our apps. Which, of course, is something that makes the entirety of the marketplace safer. Alex: We basically have to take our product roadmap, and, in many ways, revisit it fully, and focus on things our community demanded of us in that moment. Similarly, we had to do something like that with marketing, as well, because we had a certain strategy. You of course know that a lot of our effort is in making sure that consumers can get the best value on Grubhub. If you spend money on food delivery, your dollars will go the furthest on Grubhub. This really is our brand positioning. Alex: When COVID came, we had to take a pause, because this rewards positioning, or this value positioning, really had to take a step back, because consumer's interest... Sure, they were looking for deals, but they were looking to be safe, first and foremost. Secondly, they were looking to support their community. So we had to reposition a lot of our marketing work to make it so. Stephanie: Yeah, that makes sense. I'm thinking that could be a trend that stays around, even after everything's over, keeping that contactless delivery at least as an option, and thinking about how to actually prove you have the safety measures implemented, and you're tracking that every month. Are you all thinking about how to scale that and keep that for the long term, or is it more just a short term play until the pandemic's over? Alex: Couple thoughts for you. One is, I don't think that we're going to be looking at a pandemic being over and everything coming back to normal. I think we need to get used to the new normal, at least until the vaccine is here. Which means that people's lifestyles, their habits, will be fully adjusted by then. Alex: As such, it's not like we were developing a set of patches for three months, and then after that, we just turned those patches off. But also, there's meaningful, positives coming from this change, right? Like any crisis, it is both a danger and an opportunity. What we've discovered is this contactless delivery, for example, besides making everyone safe, it is actually making our network a tiny bit more efficient. The delivery driver does not need to engage with the consumer in-person. They can just drop it off, take a photo, and keep going, and keep working. Which shaves off a small amount, but in the grand scheme of more than half a million deliveries a day, this starts adding up. It helps our drivers earn more, and it helps our overall network be more efficient, which means food comes to consumers faster. Stephanie: Yep, yeah, that's definitely a good change. There's a lot of food delivery players in the market right now. How do you create an experience that's completely unique to Grubhub? Where people, they're like, "That's where I want to order through." Alex: All of this, in our minds, has to do with differentiation. And you're exactly right, maybe two or three years ago, where consumers didn't really know much about the food delivery category. A lot of what we had to do was to educate them about our existence, which is why a lot of our marketing, a lot of our product, was geared towards a first-time experience of someone who's never gotten anything delivered other than a pizza. Because really, that was the state of the world, right? You would ask an average consumer on the street, "Name a couple companies that deliver food," and they would name pizza brands. Stephanie: That would've been me a couple years ago, too. Alex: Totally. Stephanie: I'd be like, "Domino's." Alex: Yeah, yeah, absolutely. Maybe Chinese food, if you've ever tried it. An average consumer didn't know that there's hundreds of restaurants that deliver to them, and that they can find them on Grubhub. So that was the focus of our messaging. Alex: Three months ago, even before COVID, if you asked an average consumer to name food delivery brands, they would name us, and maybe a handful of our competitors. In that environment, I'm prompted, right? This is unaided awareness. Not, "Have you ever heard of Grubhub?" But, "Name a food delivery brand." Alex: Our work switched from creating awareness to driving consideration. Helping consumers understand, what is it that they get if they buy from us versus perhaps one of our competitors? Last year, a lot of our focus has been on stating this extremely clearly and delivering on that experience quite precisely. As I mentioned a little bit earlier, it is all about value for us. Alex: Now that we're entering a bit of a new normal with COVID-19, we're beginning to come back to some of this foundational brand positioning. Talking about rewards and value. We have a TV spot that's actually launching today and tomorrow on national TV. We're one of the biggest spenders on TV in both the category. Stephanie: Oh, interesting. Alex: Generally we're one of top 200 brands advertising on U.S. television that talks about rewards and value. You might be scratching your head and wondering, "Why in the hell is a digital first brand spending so much money on TV?" Stephanie: Yes, I was wondering. Tell me. Alex: It actually is kind of counterintuitive. We, maybe about three years back, we started scratching our heads and thinking, "Okay, if an average consumer doesn't really know what food delivery options are out there, how do we create that awareness? And how do we do that in a way that can confidently map the efficacy of our spend?" Because creation of awareness, let's face it, is the most expensive thing a company can do. Stephanie: Yep. Everyone wants it, but then actually implementing it, tracking it, and seeing how it did, seems a little tricky. Alex: It is so very tricky. Most mechanisms for doing this are actually kind of arcane, right? You do media consumption patterns, which, frankly is a large-scale survey that perhaps an agency would run and say, "Okay, New Yorkers, they absolutely do not watch any TV. They spend a bunch of time in the subway, true. And then they're all very much on digital." Alex: So, a brand that's trying to advertise in New York then would say, "Okay, television in New York, totally worthless. And our consumers are probably just like the average consumer in New York." That's kind of how the line of thinking typically goes. We, despite having a general applicability product, right? Everybody wants food delivery, right? Everybody from 18 to my mom, most definitely could benefit from food delivery. Alex: And yet, what we discover, is that the media consumption patterns of an average New Yorker are not the average media consumption patterns of our consumer. Moreover, what we discovered three years back was even though our intuition was that someone who orders food delivery online is most likely an early adopter of technology, and most likely a cord cutter, right? I mean, if you're about to order food online, you of course are ordering your socks from Amazon. You of course are watching shows on Hulu Plus without any commercials, as opposed to on cable TV, right? Stephanie: Yeah. Alex: Of course that intuitively made sense, which is why we've been spending a lot of money through digital video channels. That intuitively made sense. We stumbled upon a set of techniques that allowed us to, with confidence, compare the efficacy of our awareness spent between digital video and the digital awareness darlings of Hulu and YouTube and Facebook for some of the dimensi…
Full show notes at the publisherWhen Christiane Lemieux was looking to sell her first company, she knew she wanted to find a buyer that understood that the future revolved around Ecommerce. She found that buyer in Wayfair and for the next few years, she worked with the company to cultivate as much knowledge about the eComm space as possible before venturing out on her own once more. Today. Christiane is the founder of The Inside and the author of numerous books, including her newest called Frictionless. The idea of her new company and the book revolves around the concept that in order to have success in the world of Ecommerce, you need to give your customers an experience that is so easy and efficient, that they never have a reason not to buy. On this episode of Up Next in Commerce, Christiane explains why that frictionless experience is so important, and how to make it a reality. Key Takeaways: Thanks to innovators like Bezos and Jobs, the world shops in a different need-it-now way. As a result, the biggest challenge Ecommerce platforms face is creating a frictionless experience By leveraging the design community to be consultants, The Inside is targeting customers who can buy with more frequency and create predictable, repeatable conversions Getting online quickly and the businesses who have a digital-first strategy are successful 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: Christiane, welcome to the show. How's it going? Christiane: Hey. It's going really well, Stephanie. How are you doing? Stephanie: Doing great. So, for all of our listeners, I want you to pronounce your own name since I did not do it this time. Christiane: My name is Christiane Lemieux. It's very French and a huge mouthful, so I completely give you a pass on that. Stephanie: Thank you for doing that, so I did not have to. So, you are the founder and CEO of The Inside, a direct-to-consumer home furnishing brand. I love to hear a little bit about that and how you started it? Christiane: Well, this is my second foray into the world of home furnishings. I started my first company, it was called DwellStudio, out of college. I went to university at Parsons School of Design here in New York. And I started a home furnishings brand from my New York apartment. 13 years later, I sold it to Wayfair. And speaking of what's up next in commerce and the digital landscape, part of the reason that I did that was that... Oh, you know what, I should cut my nail Hold on. Sorry. Let me just cut this so it doesn't ding on you. Stephanie: Okay. Christiane: Sorry, I'll go back to Wayfair. So, I sold my first company to Wayfair, and part of the reason that I did that was that I got to be entrepreneurial fork in the road where I had never really raised money before. And I realized that if I was going to continue down, the growth trajectory that I was on, it would involve me opening more than the one store I had in New York. It would involve me raising money for the first time, substantial amounts of money for the first time, to roll out stores. Christiane: And at the end of the day, I sat and thought for a very long time about the business model that I was on, that was growing, that I had started, and I realized that it didn't feel right to me. I really believed that all businesses were going to, at some point, in the near term or distant future, transition to eCommerce. And what I wanted to figure out was, who could I either partner with or sell to that would understand that idea and philosophy? Christiane: And so, I hired an investment bank in New York and they actually had me meet with a whole bunch of home furnishings companies, most of them, you would probably know. But when I walked into Wayfair's office in Boston with 1,800 people and 800 engineers, I realized that we were really aligned from a conceptual point of view in terms of what the future of DTC look like, direct-to-consumer look like. And so, it wasn't the best offer financially but, to me, it was the best offer intellectually and philosophically. So, I sold my business to Wayfair in 2013. Christiane: And then, I went on their executive committee. I mean to say that it was a learning would be doing a disservice. It was like a full immersion into eCommerce with one of the best teams in the country, and by far, the best team in my particular category. And so, I learned so much from them. Christiane: And as I was sitting there, I was like, "What would make me start another business? What in the world after building one from the ground up and selling it, what would I do?" And so, I realized that if I could take my first business, which is really design-first and brand-first, and then merge that into what I had learned at Wayfair from a digital commerce-first perspective, that I might be crazy enough to do it again. And that's what I did. Stephanie: Yeah, that's amazing. So, what were the key learnings that you took away from Wayfair, and maybe the pitfalls that you saw where you're like, "Oh, I should avoid that."? Because when I was looking into Wayfair, I think they're still very unprofitable. And so, did you see things like that and you're like, "Oh, if you just adjusted this part of the model or this part of logistics, I wouldn't have to worry about that."? Or what kind of things do you take away from that experience? Christiane: So, I would say there's almost nothing wrong with Wayfair. And I'm saying that, I mean that honestly. First of all, Niraj, their CEO is one of the smartest digital executives in the country, if not the world. I think that he's very much following the taking market share approach pioneered by Bezos, of course. And so, I think we're just very much on the same path. He will own the furniture category online and he will very quickly, if not even now. I mean, the last quarter was insane for them because now we're all sheltering at home and [inaudible] in a very different way than we did maybe nine weeks ago. But he'll take market share and he will be very profitable, and he'll own furnishings online. Christiane: There are other companies that have pursued that line of growth that weren't necessarily as equipped as he is. And he's equipped to do that. So, as relevant as that is in the post-WeWork discussion, I think in his particular case, he's already got the groundwork done to be able to do that and do it fairly flawlessly. I think for me- Stephanie: I mean, definitely still... The first company that comes to mind when I do think about buying furniture or looking for anything, even above Amazon and Walmart... I mean, they're the first ones I would go to so I agree. Christiane: Also, because they've got the best selection and they've also got the back-end figured out. And so, they taught me things like overpack centers. I was like, "What is an overpack center?" And so, they take- Christiane: They have overpack centers where they take in the goods from the manufacturers and they overpack them, so they don't break. And by diminishing the chance of something being damaged, not only do they make the customer experience better, which is really necessary in this day and age, but they also ensure that their margins don't get completely depleted by goods that arrive damaged. And so, it's not a crazy thing to do, but at the end of the day, it's totally crucial. Christiane: So, I mean, they taught me so much about, first of all, UX, customer experience, and then the logistics and the profound necessity to really think about delivery in a way that is beyond just parcel delivery or white glove delivery. They really think about it from a 360 perspective all the way from margin protection to a really flawless customer experience. Some of the things that you don't necessarily learn when you're building a design brand, I learned at Wayfair, so I'm forever thankful. Christiane: The difference is that they're like Amazon, they're a marketplace. And so largely, they don't design and produce their own SKUs or their own products. And they don't need to because their value prop is that in COVID-19 when every single person in the country, all of a sudden, needed some kind of a home office and/or home school. I mean, you went right to Wayfair and you ordered a desk and they came to you perfectly, right? Christiane: I wanted to take the ideas of brand and design but apply the Wayfair rigor of digital thought around how I executed this next brand, some of the things like having no inventory, having exclusive product, having a 3D studio to do the photography, dropship, largely dropship the product. So, instead of sending it through a more expensive white glove delivery, have it lightly assembled so that UPS or FedEx could do the delivery. And so, all of these things add up to really beautiful customer service, exclusive custom product to the customer, and then margin improvements around delivery, around no inventory, around a decreased cost in photo assets. Christiane: So, what I wanted to do is I challenged myself to think of all of the substantial problems with a home furnishings business, solve them first, and then start the business. And so, that's how I did it this time. Stephanie: That's super smart. So, how long has The Inside been operating and how's it doing today with everything going on? Christiane: So, I left Wayfair in 2016 and I called up my favorite supplier. She went into business with me on a B2B beta way. And so, we did that for close to two years. And then, I met the extraordinary, Kirsten Green of Forerunner, and she said to me, "This is really interesting, Christiane. Why don't I write you a pre-seat check and you go figure it out." Christiane: And so, we came out of beta in July of 18th. We're a year and a half in, and it's going very well. It's going very well. In this pandemic, I did not have the category breath that Wayfair has which made this a very interesting business time for them, but enough of a product breath that I think that we're helping people improve their homes on a daily basis right now, which is what we set out to do. Christiane: And listen, I feel extraordinarily lucky that it's a digital-first company. I don't have stores, I have a very lean staff. We were working from a work kosher, which we closed down at the end of April. So, we are going to be dispersed until, at least, the beginning of 2021, so we won't have an office. We can do all of this virtually. We hold no inventory, so we have no warehouses. Essentially, we had to let go two people just to preserve the business. But we've come through this, I think, as well as you can. My whole MO right now is making sure that nobody loses a job, really, because that's the scariest part of all of this is the unemployment numbers. I mean, that just keeps me up at night. Stephanie: I know. Yeah, seeing how high they're trending is definitely that's scary. Was there any big digital pivots you had to make or that you made quickly when COVID-19 started, or right now? Christiane: Well, I think that what we did... Apparently, from my digital marketing, either cohort or people that we work with, there are three DTC areas that have done very well in this particular pandemic, I mean, the Starling pandemic, so this pandemic, but it's athleisure, home, and alcohol. So, those three things had extraordinary growth. We happen to be in one of those categories. Christiane: I think one of the things that we did, which I think, anybody in a growth category in this particular time, we stayed the course with marketing. So, a lot of people caught their marketing. And what we're seeing is customer acquisition costs have come down, the cost for all of these paid marketing initiatives across all the platforms have come down. And so, we really leaned into that. Christiane: The other interesting thing that's sort of trend that's come out of this is not the digital marketing, I don't know if you've noticed this, but a lot of people are doing direct mail. Direct mail a huge resurgence obviously, depending on the category you're in, but people are home, and they're reading their direct mail. Stephanie: You shifted into that space of it? Christiane: We're looking into it now. Stephanie: Cool. Yeah, that's great. When you were first building The Inside, were there certain key technologies that you leaned on to build up the website, or are there any favorites that you utilize? I mean, I saw you have quizzes on the website, which seemed amazing. Is there anything specific where you're like, "This is my favorite piece of tech we use or a plug-in how we build our website." Any details around that? Christiane: Well, it's funny, this is our third iteration of our website. Christiane: So, we actually had to build our site from the ground up, which has its challenges. Christiane: One of the things that happened to us is we were on a really new version of Java, and Google couldn't index our site in the beginning so we had to do all kinds of back-end hacks to fix that. But for like three weeks, we're like, "Why is our traffic so bad?" And then, we realized that we weren't showing up at all. Stephanie: That's not great. Christiane: No, it's so horrible. So, just all these learnings along the way have been really interesting. So, because of the customizable aspect of our business, we had to build our own site from the bottom up, and that's given us the ability to keep growing our SKU count and keep allowing people to customize each and every one of the pieces. Christiane: I think that there's plug-ins. Everybody loves the Affirm or any kind of extended payment plan. There are things that are so unbelievable like Apple Pay and Amazon Wallet and all these things. If you don't have them, I mean, you're putting yourself at a huge disadvantage. I mean, they're not necessarily plug-ins, they're more payment tools. Christiane: I think the name of the game now is, it goes right to the core of my book, is making the experience frictionless. I mean, this is philosophical, but I think if frictionless extends even beyond that digital aspect of our lives, people are used to getting what they want, when they want, at the price they want, with the look they want, because of... Christiane: And I would say that Bezos might be the grandfather or the father of the frictionless experience. I mean, he changed the way we consume, and buying, shopping, whatever, fundamentally, in the same way that Steve Jobs changed the way we think about media. I mean, Bezos changed the way we shop, and he made it frictionless for us, and he keeps going beyond. Because if you think about Amazon Prime, he made everything accessible to us in two days. I mean, not necessarily right now, but generally speaking, and that just removes the friction from everything. Christiane: And philosophically, it's given us time back in our lives, right? Especially, let's think about others, me as a mom, I never have to take two hours of my day to go to the toy store to get the Lego for my son, William's friend, Gray's birthday party ever. It gets delivered to my house and it takes me no time. And that time t…
Full show notes at the publisherThere is an evolutionary process for every business, and Beardbrand is no different. When Eric Bandholz co-founded Beardbrand back in 2012, all he had was a Tumblr blog with a modest amount of followers and an Ecommerce shop selling other people’s beard products. Today, Beardbrand is a seven-figure business with multiple high selling products of its own and an entire catalog of content that customers gobble up with each new release. On this episode of Up Next in Commerce, Eric tells us how he fortified his brand, and how success in the digital world is all about going beyond offering just a product in a box — it’s about delivering value and the best possible experience to your customers Key Takeaways: Move away from the strict focus on simply selling as much as you can and instead aim to find the ways you can add value to your customers’ lives. That will lead to more loyalty and, in turn, more lifetime sales When you're cash-strapped, you must think of creative ways to grow the business without capital. One way to do that is word-of-mouth — you can't incentivize word-of-mouth. You have to just focus on creating an amazing experience that your customers want to talk about Site speed is more important than other features. Achieving that means cutting out pop-up ads and other third-party plugins, which data shows often do not provide consistent or meaningful ROI For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey, everyone. Welcome back to Up Next in Commerce. I'm your host, Stephanie Postles. Today, we have Eric Bandholz on the show, founder of Beardbrand. Eric, welcome. Eric: What is going on, Stephanie? Stephanie: Hey, hey. Thanks for hopping on here. Eric: Yeah. I'm excited for our conversation. It's going to be a lot of fun. Stephanie: Me, too. You are a true brand. You're rocking an awesome beard. Just what I expected when I was hoping to see you on video. I'm like, "He better have an epic beard, or this conversation won't go well." Eric: Well, it was funny because, actually, I shaved it all off in December, the beginning of December, of last year. That was kind of a big deal for us. That was the first time I shaved my beard completely off. Stephanie: Oh, man. Eric: She's like, "[crosstalk 00:00:44] your beard," or something like that. Stephanie: How many customers did you lose when you did that? Eric: Well, I'd like to think that we actually added a lot of customers, because Beardbrand is not about the beard. It's about the man behind the beard. We kind of support a guy's right to grow his beard as much as his right to shave it off. I really wanted to make that point, especially today, with a lot of our competitors challenging people's masculinity by not having facial hair. We want to kind of say facial hair doesn't matter at all. It's just a style. Stephanie: Cool. Eric: We did some YouTube ads on it as well, which was a lot of fun to do. Stephanie: Awesome. I'd love to dive into the background of how you started Beard Brand and the story behind that. Eric: We're in business, I think it's got to be, eight years now we launched. Stephanie: Wow, congrats. Eric: We launched in 2012 after I had grown a beard out for about a year. What happened is, at that time, I was trying to do this graphic design business or design business, and I would go to networking events and everyone would call me Duck Dynasty or ZZ Top or Grizzly Adams. Those are super cool dudes. They've got epic stories as well. As an individual, I don't identify as those kind of guys. I've got the softest hands you could ever imagine. I never touched an axe. I ended up attending this event where I met other dudes like me who are other entrepreneurs and designers and doctors and lawyers and dads. I realized there's this whole community of guys that do not fit the traditional stereotype of a bearded guy. That was the inspiration to kind of call myself an urban beardsman. Stephanie: I like it. Eric: Beardbrand was going to be the community to unite urban beardsmen and give them the tools they needed to feel confident about rocking a beard. To us, the tools don't mean just the grooming products. They mean, videos. They mean blog posts. They mean style inspiration. They mean community. Over the past eight years, we've been rolling all that out. We've gotten an epic blog and a YouTube channel with over a million and a half subscribers. We've got a private community where we connect with people. We've put on conferences for our customers to be able to connect in person. We've really worked hard to support our audiences, support our customers. I've got two business partners. We're completely bootstrapped. We have no debt. We have no outside funding. We've been able to grow to a nice size seven-figure business. Stephanie: That's amazing. Congrats on all those YouTube followers. How do you think about utilizing your content to sell your products? Was that an idea and a strategy from the beginning, or was it more organic, where you started on YouTube, and then you're like, "Well, now, we have all these followers, we should launch a product as well?" Eric: Yeah, if we'll hop in our time machine a little bit more. We launched 2012 as a blog, a Tumblr page, which I don't think anyone's ever heard the word, "Tumblr," five years [crosstalk 00:03:53]. Stephanie: Long time. Eric: We had a Tumblr page. Then, we also had our YouTube channel. This time, it was just me, as kind of a side project. I'll make a couple of posts on the blog. Then, I would just re-blog some things on Tumblr to make it look active. I think I did six videos on YouTube. It's not like, in that first year, we really built this thriving community. I think we had 300 subscribers on YouTube and just a couple of thousand visitors to our blog. It was enough that a reporter from the New York Times saw the blog and kind of quoted me as an expert. Stephanie: That's awesome. Eric: We utilized that opportunity. I convinced two of my friends to go into business with me, and said, "Hey, why don't we turn this blog into an e-commerce store?" We found a product. We started reselling it. We literally launched the website a day before the New York Times article went live- Stephanie: Wow, perfect timing. Eric: [crosstalk] a couple of days. That was kind of the spark to the business to really give us the energy to continue. Then, I had the vision that Beardbrand, the Urban Beardsman, is going to be like how Lululemon is to people for yoga or Vans shoes is to skaters. Beardbrand and the Urban Beardsman was we're going to serve these urban beardsmen. I always visualize that as apparel or accessories or clothes. I really didn't have the industry knowledge to be able to do that, and the margins are so tight on there, and some seasonality that we found grooming products was going to be that product that united the community. Eric: After, I guess, a year or two of failure after failure after failure of trying to get apparel up and accessories up, we finally admitted that we're a grooming company. For us, the content that we've created was more of not to drive sales. The products we have allow us to share our word more. We sell products as a way to kind of expand our voice and to grow our content, not as a way to create content to sell products. I think we're one of the companies that kind of view it a little bit differently. Stephanie: Got it. How do you utilize newsletters and reaching your subscribers once you have them or engaging with buyers or prospective buyers? I think I've read about some newsletter strategy that you have from day one, everyone kind of starts out in the same place to go on the journey with you. Is that still accurate? Eric: Yeah. We utilize Klaviyo to, I think they call it flows, where you have these series of emails that you send out when people join your email list. We've launched that, I think, in 2015. That's been really good. When you think about building a business, as much as you can automate and build systems and processes, then the more you're going to be able to scale your business and the more traction you're going to be able to gain. Eric: This series that we opened up with is really like an education series. I think it's a 5 or 10-part series where we teach them how to care for their beards, teach them how to care for their hair. A lot of guys still don't know how to shampoo and condition your hair. Basics like that where, honestly, they've been doing it wrong, but there's opportunity for them to improve their techniques and, ultimately, get better outcome through their journey. That's been big for us. Then, at the end of the flow, we give them a little thank you product, or free shipping, or something like that for taking the time to invest in themselves. Stephanie: Got it? Are there any best practices you would recommend other e-commerce sites when it comes to utilizing that newsletter or where you're like, "Conversions were high when we did this," or, "They were lower when we did this," or, "That thank you product really does help drive future sales," any insights around that? Eric: Yeah. A couple of things that we've found that work over the years is we have a product that is not available on our navigation. It's kind of a hidden kit that is only available to people who join our newsletter. Stephanie: Interesting. Eric: The retail value of that kit is $50. We give them a pretty aggressive price point to be able to get on board. It's kind of like a tester kit, sample kit, so they get exposure to a lot of our products. We found that that works really well because we can say, "Hey, get this tester kit, try all of our products, use these products as you're learning about the things that we're telling you, then, in two weeks or a month or whenever, when you go through the products and look to re-up them." We found that that works really well at getting people into the ecosystem and trying our products. Stephanie: Very cool. Eric: What other best practices do I have? For us, it's so much about content. I think a lot of people really err towards sales and discounts and buy from us and chest thumping. That's really not our style. I would challenge people out there to think about how you can bring value to your audience's lives. Then, if you bring enough value to their lives, then, kind of the whole Buddhism karma thing, it will come back to you. People will end up buying from you. We kind of have that outlook on the world, that if you do good things, good things will come back to you. Stephanie: Love that. How do you think about your buyer experience and making that personalized and unique to all your customers as they come in? Eric: We've invested a fair amount into our packaging to our products. The unboxing experience is nice. We use nicer primary packaging, which is going to be your bottles and your labels and your caps and all that. Then, we use nicer secondary packaging as well. When they actually get the boxes and they open it, it's pretty nice. In addition to that, we're working with our own 3PL or a third-party logistics, our own fulfillment center. We make sure that we work really closely with them that they wrap it kind of to our specifications. There's a nice little unboxing experience, a little bit of tissue paper, and a Beardbrand sticker. Then, we have what's called a thank you kit. Within this thank you kit, we have a little booklet. The booklet usually changes every quarter. For instance, one quarter, it was a book of reminders, which are kind of my nine reminders that I tell myself in life as I face adversity. Stephanie: That's great. Eric: Daily planning. It's all tied around our core message or our tagline, which is keep on growing. We're trying to, again, bring more value. You buy from us and, not only did you get great products, but we brought you a little more value outside of what the products can do. Hopefully, by delivering this experience, we can grow through word-of-mouth and loyalty and customers who want to stick around, rather than kind of going on to the next hot thing. Stephanie: I was just going to say I could see that adding to that viral experience by giving people those little presents that are really fun to share, then, just engaging with more customers because of that. It's really interesting to hear about. Eric: I'll tell you this. If you're trying to build a bootstrap company, the reality is you've got more time than money. When you're cash-strapped, you've got to think of creative ways to be able to grow the business without capital. One way to do that is word-of-mouth. You can't incentivize word-of-mouth. You have to really just truly focus on such an amazing experience that your customers want to talk about it. When you have that mentality, not only is it healthy for your business, but it's going to be healthy for your growth. It's just kind of a win-win, and the world's a better place because you're bringing that much value to the customers. Stephanie: I completely agree. Are there any success stories or big failures that you've had come from trying to generate that word-of-mouth and getting people to spread the word? Any advice around that? Eric: It's actually not a metric that we really track or keep an eye on. It's just more of a philosophy internally of just being customer first. I think, to a certain degree, you do have to integrate data. We used to include a little sample of products for people. We found that those samples weren't driving any additional sales of those products in a significant way. When you look at that, you're like, "Well, are you actually bringing value to customers if you're giving them something for free that, maybe, they didn't want or they didn't want need? Stephanie: How do you track that, or how did you know that people weren't really using it or that wasn't helping drive sales? Eric: We would send a beard wash, a little sample, a one-ounce container. Then, we would look at if there's any increase in sales of beard wash. Your data is always going to be muddy, especially when you're a company that's our size and really small. We fundamentally can't get the data. You do have to go off of a certain gap. You have to also look at, "Well, every sample is costing us," let's say, it's $1. Every order is going out, five orders is $5,000 a month. Then, if we're not seeing a boost of really $10,000 in sales to justify the cost of that, then the margin and the future order, then, you're not building a sustainable practice. Again, as a bootstrap company, you do have to think about your marketing efforts being sustainable and being able to exist on their own for a long time. Stephanie: How do you think about creating these marketing campaigns, whether it's YouTube videos? How much do you guys put out per day or per week? To me, that feels like it could be not sustainable if you don't have the right team in place, the right video crew. Especiall…
Full show notes at the publisherThe alcohol industry is worth more than $250 billion in the United States, but the bulk of that money is being raked in by the biggest corporations and distributors with very little room for independents to break in. But Haus has found a way to be a disruptor. On this episode of Up Next in Commerce, Haus founder Helena Price Hambrecht hopped into her recording studio (AKA her car outside the Haus warehouse) to explain how her small aperitif company has taken advantage of deep industry knowledge, organic growth, and the complete ownership of the supply chain to build an Ecommerce-based alcohol experience that the younger generation is embracing. 3 Takeaways: Adding educational elements to every touchpoint is key to helping customers get the most out of products Now is the time to invest heavily in the product because it is only with a good product that you can have truly excellent organic growth There are risks involved with being a fully vertical company, but the reward is the ability to be nimble, have a laser-focus on product development, and allow the ability to adjust to supply chain curveballs with ease For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Stephanie: Welcome everyone to another episode of Up Next in Commerce. This is Stephanie Postles. And today we're joined by Helena Price Hambrecht founder at Haus. Helena, should we call this a happy hour episode even though it's only 11:00 AM. Helena: Every hour it can be a happy hour. Stephanie: I think so too. So tell us a little bit about Haus. I was looking into it and it looks like a really fun brand and it already was getting me excited with some of the new products you were launching. I think one of them was called Lemon Lavender that, like I said, I was ready to order at 11:00 AM. So I'd love for you to detail a bit about your company, and your background, and how you started it. Helena: Yeah, so Haus is an alcohol company. We launched with me and my husband. We co-founded it together. His name's Woody. We live on a farm in Sonoma County and we joke that it's very much the product of a techie marrying a wine maker. And our goal is to create the next portfolio of alcohol products that reflect how our generation drinks and what they care about in food and beverage. Stephanie: Very cool. And how is Haus different from other spirits brands or liquor brands or wine? Helena: Oh God, where do I begin? I think it's interesting because most people don't realize that alcohol can be better than it is. Right? I think alcohol has gotten a pass for a long time because it's a vice. And I think people can just assume, "Well, it's bad for me. So doesn't ultimately matter what's in it because it's just bad." And corporate alcohol has kind of run with that for a long time. So a lot of the products that you're drinking are worse than you think. You're feeling bad, you're feeling hung over when you drink and you think it's just because it's alcohol, but alcohol is only a tiny piece of that puzzle. Helena: In reality, corporate alcohol is made with things that you just wouldn't believe, take wine for instance. You can intervene in your wine production with milk, and eggs, and clay, and fish bladders, and artificial flavors, and tubs of processed sugar. You can engineer it to taste good, but it's going to make you feel horrible. It can be made with grapes that are full of pesticides. Your favorite whiskey might be full of petroleum-based, caramel coloring. It's kind of a racket. And we're a generation that's cared about where our food comes from, where our beauty products come from, is it organic? Is it locally processed? Is it responsibly made? For some reason, alcohol has gotten a pass and we wanted to raise the bar. So we approach things very, very differently. Stephanie: Very cool. So it seems it'd be very difficult getting into the alcohol industry. I was reading a little bit about the three tier system where distributors and bartenders are the gatekeepers and they tell you what to drink. How did you have the courage to get into that industry? And then how were you actually able to become the only direct consumer spirits brand? Helena: Yeah, so I mean, it's really Woody, right? I used to work in alcohol industry, but as a bartender. I wasn't really deep in the production side of it until I met Woody. And Woody is a great farmer. He's been running the family's grape farm for the last decade and he also makes wine, and was making aperitifs when I met him before Haus. And he was doing everything right as a independent wine and spirits guy. His products were in the best bars and restaurants in America. They were in the best cocktails in America. Helena: But because of the three tier system, which is pretty much controlled by corporations, you don't have a lot of leverage as an independent brand. So you don't really have control over how your product is used and Woody would just find that he was a little sprinkle in a fancy 10 ingredient cocktail. So while he could name drop his full accounts, he wasn't moving any product, the drinker had no idea who he was. I was observing this and thinking, "Man, this is not a great way to build an independent brand." And the more and more I got to know the industry, the more I got to know the three tier system, which it's a hundred year old prohibition era laws. Helena: For those who don't know the tiers, which I would assume you don't, it's just distributors, producers, and retailers. So if you're a producer, you have to go through a distributor to get your product into bars and restaurants. And then bars, and restaurants, and retailers then sell to the drinker. Unfortunately, the way the laws have been designed, it's actually allowed corporations to just be in cahoots with distributors. So corporations ultimately decide what you're drinking and it's why you're still drinking Jack Daniels, and Gregger's, and Absolut and you've not really heard of any other brands that are playing in the liquor space. Helena: So for us, we didn't know that there was a way to go around the system. And I started doing research because I was curious about just how our generation was drinking, what were we looking for out of alcohol? Because I was certainly looking for a better alcohol experience. And I saw a huge opportunity. Like I said earlier, millennials are looking for better made products. They care about their health, and their image, and authenticity, and transparency, and convenience. And when you looked at what alcohol was doing, it was almost nothing. So I was really complaining to Woody about this, saying, "Gosh, what a shame that you can't build independent brand, like a Glossier or an Everlane of alcohol because of the three tier system and you have to go through the distributors." And that's when I said, "Actually, there's a loophole that I never thought about until this moment." Stephanie: Dun, dun, dnn. Helena: Yeah. If you're an aperitif, you're typically in the liquor category. You're federally regulated like a liquor. You can't sell direct to consumer. You can't go online, but if you're under 24% alcohol and you're made mostly of grapes, which is a loophole you would only know about if you're a great farmer who makes great base aperitifs, you can go around the loss, you can go direct to consumer, you can sell online. And it just had never occurred to anyone to use that loophole to build a direct to consumer alcohol company. Stephanie: So no one else in the industry found that out until you guys did and you're the first ones to actually be able to sell to consumers directly because you leveraged that loophole? Helena: Yeah. And you know what? We thought that we'd stumbled upon a treasure and that, "Oh my gosh, when other people find out about this loophole, we're going to have competition, which would be fine." But when we were pitching it to folks in the alcohol industry, they thought it was a stupid idea. They could not understand why we would want to go direct and why we would sell online. People are so used to doing things the way that they've been done forever and they just couldn't process that we thought that we could just go on the internet and create a brand and sell something to the drinker because it had never been done before. Over and over and over again people were just like, "Why would you do that? That's stupid." Stephanie: Yeah. That's awesome. And this loophole also lets you guys have a brick and mortar store, right? Whereas you would never see a Jack Daniels store on the streets of New York. But you all could open one if you wanted it to, correct? Helena: Exactly. Yeah. We could open two different brick and mortars in California today. It's state by state. Every state has different laws and it's still kind of a nightmare to navigate. But yeah, we can do so many things that other brands and liquor space can't do. We can be sold without a liquor license. We can sell online, we can do a wine club style subscription service. There's just this whole world that opens up to us. And we were the only people that decided to try it. Stephanie: That's amazing. So what was the first steps looking like when you started Haus and you were thinking about building the website and the experience, like the buyer experience? How do you think through designing that process for consumers who have never done that before? Helena: Yeah, and that was the challenge, right? It's like as a brand, one thing we had going for us was we weren't just two people in class who had an idea and had to create a backstory. The backstory was there, right? We were people trying to solve our own problem and a problem that everyone we knew was having and that was great. And we live on the farm and we make it ourselves, and all of that's hopeful as a brand. But the real challenge that we had was how do we take this type of liquor aperitifs, which has been in Europe for over a century ... it's a style of drinking that's very common in other parts of the world, but is relatively unknown in America. How do we take this type of liquor and make it mainstream? Without having to pitch people in person just through the internet, how do we very quickly educate people on what this is, the problem it's solving, convince them to buy it, get them to get their friends together and drink it together? So that was a challenge. Helena: But for us, our goal was to just approach it as education, right? And bake education into as many touch points as possible, not just through copy on the website, but through photography, through editorial, through different touch points post-purchase, in the packaging. It was really about how can we make the most of every single touch point that this customer has with our product so that by the time that they receive it, they deeply understand it and where it lives in their life. Stephanie: Yeah. I could definitely see the difference from your photography versus a lot of other e-commerce companies. I could see that you were teaching the buyer how to enjoy Haus. I think one thing I saw was as you went from page to page, you had a couple images flash showing how it's being enjoyed at the table, sitting on the table with a bunch of friends. It was very different than the typical product images with the white background and no one really having a good time with it. How did you know to utilize that imagery to encourage that buyer behavior to then hopefully spread the word about Haus? Helena: Yeah, that was a very conscious decision. So my background's in brand. Before Haus, I had a production company that did everything from visual brand strategy to producing commercial campaigns including photography. So when we thought about photography for Haus, first things first, I didn't want to do what every other direct to consumer company at the time was doing, which was product on a plain colored backdrop, very simple, very polished, very digital looking. It didn't feel right for us because there was no context, right? Haus isn't supposed to live on a seamless backdrop in a photo studio, Haus is supposed to live at your dinner table. And it just felt like a missed opportunity to show the customer where Haus belongs. Helena: And that type of photography of the product on a plain backdrop, that exists for a reason, right? It performs well in paid. It's very straightforward. People can physically see what they're buying. And, in an era prior to now where paid drove most direct to consumer growth, it makes sense that people use what performs well. But for us wanting to grow organically as much as possible, we didn't care so much about that sort of metric and for us the priority was way more about how can we use this opportunity to just show people exactly what they should be doing with the product. And that's really how we approached it. Stephanie: That's awesome. And are there certain metrics or data and analytics that you look at to see what's performing well and what's not or how do you think about success when it comes to utilizing a different kind of buyer experience? Helena: Yeah, I mean, in the beginning up until December we were 100% growth. And that's hard to measure, right? There's no real way to examine where those customers are coming from. There's not a whole lot you can do with that data, which makes it very daunting for most companies to pursue. Right? Stephanie: And you said a 100% organic growth, right? You cut out there for a second. Helena: Yes. Stephanie: Okay. Got it. Helena: And now we're experimenting with paid and now about 20% of our customers come from paid. But for us, we're still a primarily organic company. So I think for us it was more of a philosophy and some hypothesis around our product and how it could spread, right? Our product is something that is inherently shared, right? If you're having a drink, you're very likely having it with another person, you may be having it with a group of people and that's certainly the customer that we were going before. So for us, we wanted to make sure that the product and the customer experience was so stellar, which sounds common sense, but it's not necessarily, especially when you have limited resources that you have to put into certain buckets. We put everything into product and everything in the customer experience so that when people received that product, they gathered their friends together, they shared it with their friends, they all had an amazing experience together, and then all of those friends went to buy a Haus. So that was this organic flywheel that started taking off. And our growth was through word of mouth. Helena: We also prioritized press quite a bit. My first career was in PR, running comms for startups. So I'm a big fan of working with press to tell your story because, you can tell people what to do all day, but people are going to really listen when someone else tells them to go buy your product and that it's great. And press is also hard to quantify, right? A lot of press doesn't actually tie to purch…
Full show notes at the publisherThere are more than eight million dynamic pages that run on Lenovo.com, where the majority of shoppers go to buy their products. It is a massive Ecommerce platform that has to work for more than one billion website visitors per year. Ajit Sivadasan is the Vice President and General Manager of Lenovo, and even though managing those pages is part of his job, what he’s more interested in is making sure that those pages are offering relevant content and an efficient experience to a new generation driving Ecommerce growth. On this episode of Up Next in Commerce, Ajit explains why figuring out what content is relevant to Gen Z will be the driving factor in how successful your Ecommerce platform will be. 3 Takeaways: There is a massive demographic shift happening in the consumer market, so rather than focusing on producing more and more content, companies need to focus on producing content that is relevant to this new audience of digitally-native consumers Customer irritants are data points that matter and constantly change. Constantly addressing those irritants – from delivery time to language on the credit card processing screen – has an impact on consumer satisfaction and your NPS Behavioral economics states that humans are predictable and predictably irrational. Therefore, you have to take this behavior into account in everything from website design to offering comparisons of products as a counterbalance for the fact that humans will deviate to the path of least resistance more often than not For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Stephanie: Hey everyone. This is Stephanie Postles, your host of Up Next In Commerce. Ajit, how's it going? Ajit: Good. Thank you for getting me on the show, Stephanie. Stephanie: Yeah, I'm excited to have you on. So I'd love to hear a little bit about your background at Lenovo. You've been there 15 years, right? Ajit: Close to, yeah. This is my 15th year. Stephanie: So I'm sure a lot has changed since you joined the company back then. Ajit: Yeah. I joined Lenovo in 2006, and came to Lenovo to build a consumer brand online. And obviously, when I joined, we didn't have much of a infrastructure or even sales. We were in a very limited set of countries. We were actually in four countries and we probably had a very small amount of revenue. Since then, obviously, we have scaled the business about 10X on revenues, and profits have grown about 10X. And we have scaled from four countries to 35 countries. And in the process, we have seen several acquisitions. We acquired the Motorola brand. We acquired the System X brand. So we have had to integrate all of those businesses. So Lenovo has gone from a company that's sold PCs, to being a company that basically is trying to drive intelligent transformation for its enterprise customers, and for its consumers around the world. Obviously, we have a footprint in more than 165 countries. So it's exciting. Ajit: When I joined the company, we were number six in the world. Obviously, we've been number one for a number of years now, and have a significant market share in the PC space, and we continue to make progress in the data center space, which we acquired from IBM. And the Motorola phones, you might have seen some of the latest phones that we introduced. We were the first ones with the foldable phone, that was a take on the Razr phone, the iconic Razr phone. So, yeah, it's been very exciting. We have obviously enjoyed our ride. I'm very excited because we get to interact with a number of customers on Lenovo.com and really bring the technology to life, and the brand to life, using the platform we have. So yeah, it's been a good ride. Stephanie: That's awesome. And what does your day-to-day look like at Lenovo? Ajit: I manage the platform for Lenovo, which is basically Lenovo.com. And since it serves all of our stakeholders, we have the Lenovo.com footprint in more than 90 countries. So I have to manage both the sales side, which is primarily a combination of B2C and SMB. And then I have to manage the enterprise side of the customer. So mostly B2B customers that buy from us using a procurement type of strategy, where we actually service them one-on-one. So I have the sales part, which is basically running the whole end-to-end business, all the way from marketing, CRM, UX/UI design, sales and marketing, phone sales, to really even trying to help with the supply chain piece, working closely with our supply chain organization. Ajit: But then the other side is really trying to figure out how to position Lenovo.com to become a brand voice, and figure out how we bring to life all of the innovation, and the products, and the enterprise strategy we have, for the stakeholders that come to Lenovo.com around the world. We get over a billion people coming to the website any given year. So it is a pretty substantial property. And so we have a ton of work that we need to do to manage all of those aspects that take care of basically all of the customer needs we have. Stephanie: Wow. What are some of the key learnings when it comes to moving globally? So it started out, I think in 1985, and it was just a reseller in China, right? And then, now it's a global company. What has that transition been like, and what have you learned in the process as you open up new countries and start selling there? Ajit: When I joined, obviously, my journey beyond Lenovo, was at Gateway. I was at Gateway for five years. So I've been in the PC space for about 20 years. And what you have to really understand is, all the transitions that have happened in the business model. When I started, internet was relatively new, and people used it as a very siloed organization that was doing just the phone and the web. So it was very limited. But today, as you know, 70% of the traffic that comes to the website is mobile traffic. The patterns have shifted quite a bit. So the business model transformation that has happened over the last 15 years has been interesting. Ajit: And what you see is, initially when we started, a lot of our colleagues around the world were maybe a little apprehensive. They were worried about things like conflict. They were worried about issues like pricing and things like that. And what you notice as things have evolved is, what you find is that, that is a very complimentary system. A number of our customers that are very sophisticated, technology-focused, innovation-focused, want to buy online. They want to be able to customize their products, they want a full breadth of products. And then there is a bunch of customers who would like to go to retail stores, look at our products, touch, understand it a little bit better before they actually make a purchase. So what we have found out is, thought we had a lot of skepticism, maybe even like six, seven years ago, that has changed into, people now trying to figure out how to leverage the business models, including connecting retail and the offline presence we have. How do we get our enterprise customers the best experience possible? How do we make sure the supply chain is responsive? How do we get them more capabilities that love them to buy products on credit, allow them to buy using a subscription type of service, give customized services that add them for SMB customers. Ajit: So, if you really think about it, the evolution has been quite interesting. And look, day-to-day, there's tons of things that you need to do because it's a fast-pace, technology-driven, very innovation-focused space. And people like Amazon and others, they're really driving the paradigm as far as online commerce is concerned. So it's not sufficient for us to just look at our traditional competitors. We also have to understand that the customers are getting sophisticated, and their expectations are much, much higher than what they used to be. So in many ways, the decision to go into a country now, is much more driven by the customers, than it is even proven by our direct stakeholders. And when I say stakeholders, internal folks, because customers really demand that you actually have an online presence. And they really want to transact with you online. So the transition has been interesting, but I think it's accelerating and the business models getting very complex. And our ability to actually react to them fast is going to be critical, as we move to the future. Stephanie: Yeah. I completely agree. So I heard that you have eight million dynamic and other pages, on lenovo.com. Maybe it's more at this point, compared to when I heard that stat'. How do you keep up with all the pages that you have, behind the scenes, being custom, depending on who's coming, depending on what country they're coming from? How do you make sure that it doesn't turn into a black box? like an algorithm when it starts getting too much stuff in it, you're like, "I don't even know what's happening behind the scenes anymore." How do you keep up with the pace? Ajit: A lot of this is automated. If you really think of our bulk of the products... I'll give you an example. So we sell thousands and thousands of third party products, accessories. Whether it is hard drives, whether it is even headphones and monitors and lots of things that are serviced and provided by other companies. And those are all managed automatically. So it's in a database. It's a data-driven process. So you don't have to worry about it. But if you multiply those into the number of countries, suddenly the numbers look staggeringly big. Now, having said that, it still is a pretty big number of pages. And clearly, there is a process for us to manage level one, level two, level three type of page, home page, right? If we look at the efficacy that is periodic checks on usage of the pages, there's teams basically managing content across the site, across the countries. Obviously, there is a strategy for how many layers of product pages we want to have. We look at data to understand who is using it, how often are they using it, and things that are not being used. Obviously they get [inaudible] as time goes by. Ajit: But more and more, it is clear to us that we need a very cohesive data strategy for formality content. So the formats customers prefer for content is changing. A lot more focused on videos, a lot more focused on how to do things, through a short-form video. Even content that you provide in terms of words are very succinct, and to the point. So you let customers pull the data, pull the content, as opposed to publishing everything and letting the customer go through stuff. Clearly it takes a lot of time and effort. And the key is to make sure that your systems, from the product management, all the way to what the customer actually sees on the glass, all managed in a way that makes sense. And that clearly is a challenge, because you've got a lot of legacy systems. And what somebody puts in as they're designing a product, may be marketed different from the marketing content that somebody needs to see in order to make a decision on a sale. Ajit: So you really have to figure out the process, streamline it. You need to make sure, periodically, you look for paradigm shifts. You need to understand demographics. 70% of the population that's going to be in the workforce is going to be millennials. And I can tell you that they are not really interested in reading a lot of stuff. They prefer much short-form formats, and they like videos and things like that. So if you're not connecting with them, and your engagement is not right, I think you're going to have a problem in the long run. So, I think the page count is less of a problem, than relevance. And I think that what we really are trying to do is to figure out how to be relevant, and drive content that truly drives engagement with our audiences. Stephanie: That completely makes sense. Are there certain trends that you see coming that Lenovo is preparing for, when it comes to, like you said, videos, preparing for millennials? What things are on your radar right now that you're preparing for the future? Ajit: So I'd say a couple of things on that. We are definitely seeing a pretty significant shift in demographics. Though we see a bimodal distribution. And by that, we see a lot more older people, and we see a lot more younger people. And the number of people in between actually is very low. So you would see very young people. 60%-70% of the population will be in the 20-30 age group, going forward. Which means that, these are native millennials. These are generation Z, Gen Zs, who basically are native digitally. And therefore, their expectations and how they consume data, and how they consume information is very, very different. So we have to really worry. I think everybody needs to worry, if you're online, as to how they are going to be part of your community, how you're going to get engaged with them, how are you going to keep their interest in the products that you have? Ajit: Part of the challenge is that they are so sophisticated, and are pretty much, in my mind, no nonsense, in terms of technology, that it's highly unlikely that they are going to support anything that is cumbersome, or verbose, or anything that basically takes away from efficiency, in terms of how they deal with online content. And so, I think the big challenge is for companies to truly make that shift of saying, "Look, this was the audience in the past. They had a very different predisposition to how they looked at data, and how they analyzed things. And then there's this new generation that truly is looking at content differently." Ajit: Now, the key points will be when they start truly having money in their pockets, and they're going to be in positions where they're going to be making decisions for companies, in terms of purchasing, technology decisions. And many of them already are making those decisions. And then if you are not able to engage with them appropriately, I think that you have a challenge. So truly trying to figure out how to build that relationship with the gen Z, millennial audience, I think is key. We are definitely looking at a couple of segments where we believe that that's an area that we need to really get good at, which is, gamers who are basically a big part of the online ecosystem. They are very sophisticated. They know exactly what they want. They are very community-driven. They're very content-driven. Ajit: And so, the proxy for us, at least in my mind is, "Look, you now have to figure it out how to engage these people online." Because you will learn from that set of experiences, that if you are, as a brand, not able to work that in your favor, it becomes increasingly challenging, I think, for the brand to have relevance in the future. And so, we are really focused on gamers. We believe that we have to cater to them end-to-end. From content, from products, online experiences, capabilities, giving them access to a broader set of products and portfolio, game titles, being able to give them subscription services and other things. Ajit: And the second audience that's really, really important are students. So a big part of students are going to be online, and quite frankly, this Covid crisis brings out the issue much more readily, where you see high schoolers, p…
Full show notes at the publisherAfter working for some of the biggest tech companies in the world, Nate Bucholz was ready to leave his Google and Facebook roots behind for something smaller and an opportunity to experiment and move fast. He found that opportunity at Cardlytics, where he serves as the Vice President, eCommerce Partnerships. In this role, Nate and his team are working in new and exciting ways on a platform for an industry that isn’t typically considered new or exciting. Cardlytics works exclusively with banks to build their digital and eCommerce platforms, connect with customers and create rewards programs that lead to mutually beneficial relationships between customer and company. And to do all this, Nate and his team are analyzing troves of data and using technology in unique ways to truly perfect the digital experience for all involved. On this episode of Up Next in Commerce, Nate explains it all, including what data is the most telling and how to utilize said data in the best ways possible while also building and maintaining trust among all parties involved. Key Takeaways: Forget metrics about who and how many people are on your platform and really hone in on where they are laying out their money. Then use that data to decide where your marketing dollars should be spent Using anonymized data, you should isolate data sets and analyze specific behaviors to predict who might leave your platform or service, then create an action that will make them stick around The ROI from purchase behavior insights comes when you change your targeting practices based on the data you collect For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible eCommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to another episode of Up Next In Commerce. This is your host Stephanie Postles, and today I'm joined by Nate Bucholz. Nate, thanks for coming on the show. Nate: I'm happy to be here. Thanks for having me. Stephanie: Yeah, and where are you in the world today? Nate: I am sitting in my office/guest bedroom in Alameda, California. Stephanie: Yeah, keeping all the kids out as best you can. Right? Nate: The door knob rattles, but it is locked so we should be safe, I hope. Stephanie: We'll see. Yeah, once all this is over, it'll be nice to be able to bring people back to our studio and not have to do bedroom meetings anymore, but for now we'll make it work. Nate: Sounds very scandalous, but yes. Stephanie: It is a little scandalous. So I'd love to hear a little bit about, actually, I want to go back, back background on you. I want to start in the early days because I saw where it led up to, of working at Google, and Facebook, and where you're at now at Cardlytics, and I actually was wondering, I'm like, what is Nate's first job he had because everything else looks amazing. Was he working out on a firm when he was little? What was your first job? Nate: I was a dishwasher at a local restaurant in Lake Oswego, Oregon where I grew up. Stephanie: Oh, that's awesome. Nate: Worked my way up to busboy and waiter at some point. Stephanie: Very cool. Yeah, I think a lot of us started out in those kind of, I was a silverware roller, and so I would just roll silverware for eight hours a day. And I asked to be a hostess and they were like, "No, you can't be a hostess yet. I mean, you're not that senior." Nate: You've got to earn that. Stephanie: Yeah. It was good times. So you went to University of Oregon, right? Nate: I did, yeah. I did my undergrad there and then went on to work in public relations for a little bit. I had the, not so enviable job of getting good press coverage about Windows in Millennium Edition which is quite old now, but it was pretty the bad operating system and that was my first time- Stephanie: Oh, man. Nate: ... post college job. Stephanie: I'm sure you learned how to be pretty scrappy in that job though, don't you think? Nate: Yeah. I mean, there's always something good I think that you can find or an audience for a product if you can find the right one. After that I was in the Peace Corps for a couple of years in Ukraine doing business development and volunteer work. And then I came back for graduate school here in the Bay Area at the hospice and school at UC Berkeley. Stephanie: That's Cool. And then did you head right to Google after that or was there something between? Nate: I did, yeah, there was a brief internship, but after getting my MBA I went on to Google, in a travel vertical, or their travel vertical, I should say, up in the Seattle office. Nate: I was going to say that I was with Google for quite a long time, almost 11 years, and got to move around in a good way quite a bit. So I started out in Seattle and travel, then moved over to our London office for four years where I led a sales team there and so I oversaw the advertising sales for airlines and car rental. And then my wife and I had a son while we were in London and it kind of changed the lifestyle a little bit. We decided to get back to the US, moved back to the Bay Area, in retail-focused industry, mostly e-commerce, for about a year and a half, and then, actually, the last intake Google was in Malaysia where I was in the office in Kuala Lumpur looking after the branding and YouTube partnerships. Stephanie: Oh, wow. Very cool. What was that experience like? Nate: It was great overall, personally, it was amazing. We had this amazing expat lifestyle where our son was in this wonderful private school, we had lots of travel and so forth. Professionally, it was a real challenge, there were some of my, I'd say professional strengths that kind of turned into weaknesses in a different environment. Being quite loud and outspoken, and non deferential, didn't apply necessarily so well in some of the situations over there. But I mean, it was great. It was a good learning. Nate: At the same time my whole career had been and is now, once again, focused on more direct response marketing. And I had jumped not only into a new geography but also into the more brand forward environment working with Johnson & Johnson and Procter & Gamble and kind of the sort of traditional marketing that would have been on TV before, and online now is more about reach and frequency rather than getting people to buy things immediately. So that was also a new world. Stephanie: Got it. So then you quickly decided to head back to your e-commerce marketing type roots and go to Facebook afterwards? Nate: I did. So it was a finite assignment over in Malaysia and when I came back with Google I kind of felt like I was coming back to the same thing that I had left and I wanted to do something different. Facebook offered me a role, very similar but leading the team that that worked with one of their very largest advertisers. And that was more of a product heavy role in terms of working with the product teams to build things that would allow the largest, most sophisticated advertisers to grow their spend more. Nate: It was interesting, there were a couple of things that prompted me to leave. Which one was, it was very similar to Google, which is a wonderful thing, but you're part of a giant machine and it's hard to feel like you have a real big impact. And at the time, though they've changed this and allowed people to work from their San Francisco offices as well. I was commuting down to Silicon Valley from Alameda, which is about an hour and a half each way. So- Stephanie: Yeah. No, thank you. Nate: ... it's kind of brutal. And actually a colleague at Facebook connected me to someone they knew at this company I had never heard of, Cardlytics. It's a ad platform, much like Google and Facebook, except it operates entirely on banking channels. So if you log into Bank of America or Chase, Wells Fargo, one of many, many banks, you'll see offers from different companies for some sort of incentive to purchase like a cashback rewards or something like this. And that's where we operate. Nate: And it's a much smaller company for one so I enjoy feeling like I have a bigger impact, but the common thread through these three companies that they all sit on an amazing trove of data. So Cardlytics can analyze the purchase behavior of about half of the credit and debit card swipes in the US and we're in the UK as well. Stephanie: Wow. That's a lot. Nate: It is. It's amazing. And so I've learned from Facebook and Google that when you've got an amazing first-party data set, then you can kind of get a seat at the big kind of table and so it's a lot of fun to analyze that and see how it can apply to marketing. Stephanie: That's cool. Were there any learnings that you had from Google and Facebook that you kind of brought with you or best practices when working with large brands or a large e-commerce like store owners that you saw where you're like, Oh, a lot of people were doing this and we noticed that was actually the wrong move, or here's some best practices we learned from the top brands that smaller brands could apply, that you maybe brought with you to Cardlytics? Nate: Yeah, I mean, the first thing that I tried to do with my team when I came into Cardlytics was change the mindset about what is big and the impact that we could have. So we'd gone from this really small company to now, there's about 400 employees, and we've been public for about a year and a half, but it's still pretty early, pretty young. And I think a lot of the Cardlytics employees had viewed the going public as, Hey, we've reached the big time and we've made it. And I kind of tried to share this viewpoint of the ad budgets, the marketing budgets that are out there, the potential for growth that I saw at Facebook and Google to really kind of pay them big I would say. Nate: And I also saw that because Cardlytics is a different sort of advertising platform, but a lot of the language was language that we spoke internally and we have kind of impressed that upon the marketing teams and so there was a lot lost in translation. So I think one thing, Facebook and Google have almost been able to use their own language because they're so large, but it's become industry standard and we need to conform to that to make it easy for marketers to make apples to apples comparisons when they're thinking about their budgets and how they spend it. But there's been an evolution. So I started Google in 2007 and at that time it was all about search and it was all about clicks and- Stephanie: And still is. Nate: Well, it is, it got more sophisticated though, you know what I mean? Stephanie: No, no. I mean, I just left, let's see, two years ago from Google and I still feel like they're so heavy on search. Nate: This is true but it was the greatest sales job in the world. I'd go in, I'd say, well, you got a hundred clicks, but your competitive group got 200 clicks so let's go ahead and double your clicks. Here's the budget that'll do that for you. But it evolved, it went to measuring the money that was spent off of each click for example, looking at your conversion rates and getting into the mobile experience, trying to get marketers to catch up to consumers in terms of the fact that everybody was shopping on their phones or a good enough amount of people to warrant some serious attention. Nate: And then moving on over to Facebook, because Google had that first mover advantage of everything being based off of what you see from the click, it was trying to open up people's eyes that there's more than just last click when you look at an attribution model, that there's a lot of influence that happens prior to that. And Facebook always, we always said internally they figured they were undervalued by like 30% because of all this view through attribution that they're losing. Nate: And then ironically getting people to stop targeting so granularly, even though it's possible to let the machine do its work and start doing machine learning, based targeting so that Facebook could open up its inventory more. And I think that the evolution, and I'm definitely biased obviously, these are the moves that I've made in my career, but part of the reason I've made these moves is I see the next stage of marketing getting more and more rigorous about what is actually bringing an impact. This is why it was so hard when I was doing branding work in Malaysia. It was not so much a return that was required, but a reach and frequency, and it didn't really matter how that was gained. Nate: It was just, let's hit a lot of eyeballs a lot of times, and Cardlytics is on a totally other end of the spectrum where it's not even about your interests online. It's just, where do you lay down the money, on what sort of categories, what have you done in the past, what's the basket size and the frequency, and these sorts of things. I think that's a natural evolution of marketing as you get better data, you're able to cut out the waste more and more and get more efficient. At least that's the idea. Stephanie: Yeah. How do you see marketing spend evolving over the next couple of years when it comes to measurement and ROI? Do you think it'll change how people think about things? Like you said, they used to just think about clicks and maybe impressions and then they started niching down a bit and wanting to actually target maybe who their customer is, and where do you see that heading over the next five years? Nate: Five years is a long time to make- Stephanie: I was going to say 10. Nate: Oh, my gosh but yeah. It'll be implanted in my retina somehow in my screen. I think, obviously I'm talking to you now from my guest bedroom and there's this whole pandemic going on. These kinds of catalyst events are what I think make large vector changes in things that would happen slowly over time anyway, right? There's a shift to digital over time. If all of a sudden everyone's TVs had exploded, there would have been a faster shift. And I think that the fact that a lot of marketers have either pulled back their spend or just paused all spend entirely, means that there's going to be a whole new shift when they go back to whatever the new normal is because you're going to look at every channel from a totally fresh perspective. Nate: And obviously things have shifted online more and I have some interesting stats that I can share about that as well. There's been this online shift of people who maybe had never purchased groceries online or maybe they were happy just with their broadband cable and now they're doing all sorts of streaming services, whatever it may be. So I think online is going to benefit a lot as people see that they didn't have such a huge downswing or maybe they didn't notice a big change when they canceled some channels and not others. Nate: But I also think over time, and we were really good selling with data at Facebook and Google to explain why more and more money should be shifted through those channels. And they weren't bad decisions but there are a lot of other marketing channels out there. Obviously, Cardlytics is one on my mind but there are several that have the scale and have the data to challenge some parts of the marketing budgets that have just almost, not mindlessly, but I don…
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