Up Next In Commerce

What do underwear models, Frank Sinatra impersonators, and a partnership with Anheuser-Busch have to do with selling alcohol? For Saucey, it was about changing consumer behavior in an industry that hasn’t truly been disrupted since the 1930s.  Chris Vaughn is the founder and CEO of Saucey, an alcohol delivery service. Since launching in LA in 2014, Saucey has broken into 20 metro areas and has continued to grow.  Getting off the ground wasn’t easy, though, and on this episode of Up Next in Commerce, Chris takes us through the trials and tribulations of bringing Saucey into the market — from regulatory issues to investor and customer skepticism. Plus he explains how they pushed through the hardships and used edgy creativity to break into a market that was set on shutting them out.  Key Takeaways:   Bring On The Crazy Ideas: When working with smaller budgets, it’s critical to think outside the box with your marketing efforts. The money might not be there to do customer acquisition in traditional ways, so shifting to a scrappy mindset may be key. What partnerships can you form? What unique campaign can you launch that is outside of the traditional ones in your industry? Tune in to hear how Saucey generates new and noteworthy campaign and partnership ideas that generate results.  Disrupting An Undisrupted Industry: The alcohol industry has remained relatively the same since prohibition ended in 1933, mostly because of harsh regulatory guidelines and big brands owning most of the market. But, as buying behavior has moved online, enterprising companies like Saucey have capitalized on new opportunities. Why your first customer matters: Landing your first “name brand” client can make every future sale that much easier. Many companies got their start by being able to point to a well known first client, and seeming larger than they actually were. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome to Up Next in Commerce. This is your host, Stephanie Postles. And today on the show we have Chris Vaughn, the CEO and Founder at Saucey. Chris, welcome. Chris: Thank you for having me. Stephanie: Yeah, I'm excited to have you. It might be 9:00 AM here, but I'm trying to get into the beverage mindset right now. Thinking about my 5:00 PM drink. Chris: Yeah. Nice, good. I like that. Stephanie: Yeah, I know. So Saucey, tell me a little bit about what it is and how you started it, the whole backstory. I want to know it all. Chris: Sure. So we started Saucey in late 2013. We really had this hypothesis that... I guess even before it was a hypothesis, we have this idea that you could have basically anything you wanted delivered, but for some reason you couldn't have alcohol delivered. In some major cities like New York, The Bodegas would run it over to you and whatnot, but for the most part in a city like LA, where we're based, that really wasn't an option. Found that to be really interesting, particularly given that the buying behavior around alcohol seems to be such an impulse driven buy. I know I'm going to have dinner tonight. I know I'm going to buy groceries at some point this week or next week, and delivery for those categories, mirror that behavior. Chris: Grocery delivery is more about saving me the time of shopping the whole store. Food delivery is this convenience driven thing. I know I'm going to have dinner, but it's kind of, "What do I feel like having?" And alcohol is this heavily impulse driven by where maybe I have dinner and it gets to be eight, nine o'clock at night, I'm watching a show or Netflix or whatever it may be. And I feel like having, some wine or I feel like having a cocktail, or beer, or whatever it is, or some friends are going to come over and they text me, "Hey, you want to get together?" And then and then you need to buy something. And so given that the buying behavior was so again, I think a non-planned purchase occasion we found that delivery would be the perfect fit for that type of purchase. Chris: So we started to look into the industry a little bit, and I think that the things that really opened my eyes was there clearly have been very, very little innovation in the alcohol industry really since [prohibition 00:02:32]. Most of the innovation had taken place on the brand side, creating new brands, new brand categories, but very little to do with how alcohol gets distributed or purchased. It was also fascinating to see that the brick and mortar landscape had effectively been built out to mirror that type of impulse driven buying. There's more liquor stores in the United States than grocery stores or gas stations. And that mirrors this behavior of, "Oh, I feel like having something." Run out to the corner and go get it. Chris: Then lastly, I think we clearly identified that there was a huge brand loyalty when it came to the products. I'm a Bulleit Bourbon drinker, I'm a Tito's vodka drinker. I'm a Coors Light drinker, whatever it may be, but almost no loyalty when it came to retail. Yeah, I'm on my way home. We'll stop here. I'm on my way to my friend's house I'll stop there. With the exception of some major holidays. Major holidays, go to Costco, stock-up or some of that type of buying. We found that delivery would be the ideal use case where we could not only capture more of a customer's purchases than any of the traditional brick and mortar players, but obviously service and provide a solution to this need of this impulse driven buying, or this last minute buying. Chris: We actually came up with the idea where... or how we came up about Saucey was I had floated it by a very close friend of mine at the time we were working at another company, and my girlfriend at the time, now wife with three kids we were camping up in Yosemite and we went up on this big hike, and I just couldn't get it out of my head. And I was talking through it with her and she was like, "I think you should do this." I came back and shared it with my close friend, and another close friend of this company called Text Plus where we were all working. Daniel Leeb, and Andrew Zeck. Andrew Zeck was one of their head mobile engineers, and ran their whole iOS team. Daniel Leeb was effectively leading their product of those teams. Chris: I said, "Listen, I think there's a big opportunity in alcohol delivery. And I think that the margins are there to support the business. It's a little brutal in food and some of these other categories, I think we can do it and alcohol, and here's what I think it could look like." Immediately we started working together. Nights and weekends spending a lot of time on the weekends and late into the night, trying to put this thing together. Dan did all these initial mocks of what it would look like. We didn't have the name Saucey at the time. We were trying to think of different names. Andrew was starting to program what the prototype would be, and we were working on doing all the specs. Chris: And then I was out trying to find who our first liquor store partner was going to be working with legal counsel and then subsequently talking to the ABC and some of the regulatory committees, or the regulatory bodies on, "We would like to do this. How do we do it, not only in compliance, but what are some of the issues you guys have in this industry, and how, as we're thinking about it, how can we maybe solve some of that stuff?" Like underage drinking, and be more proactive about ID verification, or there's cash under the table transactions, have everything go through credit cards. It was a fascinating time, we started working on that, I want to say October, November 2013, we really got our heads down and we launched in May 2014. Chris: Our first ever delivery. So remember Andrew dispatched it, Dan and I drove it. Was a bottle of Johnny Walker black label, to a guy named Vincent Rella who we actually ended up hiring, not that long after. Stephanie: Oh, that's great. Go Vincent. Chris: Yeah, it was interesting times. Stephanie: How did Vincent find you? First customer, did he actually find your app, or how did he even stumble upon you guys? Chris: I think Vinnie had loosely known Andrew. We all posted on Facebook, and we did all these things, and he saw the post and just said, "Oh, I'll try that." And then we ran the order to him and he goes, "Yeah, I know that guy." And then it was exciting. And of course those early days, we got one order, two orders in a day. And we did all the deliveries ourselves, taking turns on a schedule throughout the week, having to rotate who is going to be dispatching, who was going to be out delivering. An internal irony to the story was we wanted the service. We wanted to be able to order a bottle of wine, or a case of beer or something to your house, and so we built it. But what we actually ended up doing is just all of our time, seven days a week was out delivering to everybody else, and then we could never use it ourselves. So it was interesting. Stephanie: How it works. When you guys were doing that, any funny stories that you remember from when you were personally delivering, or doing the pickups and drop offs? Chris: Yeah, I mean, there was a lot of interesting stuff. I think- Stephanie: Here we go. Chris: ... we did probably a thousand orders between us before we started really hiring any outside couriers. At the time alcohol delivery was also very new, which I think is interesting. When you think about delivery as a category, food delivery has been around for decades, grocery delivery has been around for decades in one form or another, used to be able to call it the corner grocery store or place a fax order, and have things brought to you from your local market. Alcohol delivery in most major metros started six or seven years ago with us and a few others. And so it was a very new behavior. I think all the customers in the early days, the first additional hurdle, everyone was just asking, "Is this legal?" Everybody. Investors, customers, et cetera. Chris: We had to do a lot of work, both in our email content, as well as in our investor materials to walk through conversations we had had with the regulatory bodies, what the law says, how we think about these different things. So those early were just like, "Is this legal? I don't know, I'll try it sounds cool." Stephanie: Like sneaking out behind their bush, like, "Okay, drop off the goods." Chris: Exactly. And we'd show up in 25, 30 minutes and they were blown away, but we definitely had a couple of customers open their door, just totally nude, and totally unfazed. And you had to do a double take, and then, "Can I see your ID?" They'd walk back, come back, still totally naked, hand you their ID, you'd scan it and then turn over their order. That definitely happened more than once. Stephanie: Odd. Chris: People with unusual animals or pets. There was one customer that had like a snake wrapped around her arm. I remember one of those delivered, and was trying to hand it to her, and the snake's on her arm. And we were like, "Wow, this is some interesting stuff." But also lots of just, fairly standard and normal deliveries for the most part, people just super excited to use the service, and check out what it was all about. Stephanie: Yeah. That's really fun. So what kind of challenges did you run into when you were starting this, and working with these agencies and whatnot? Chris: Yeah. Licensing and working with licensed retailers is a challenge. The regulatory environment of alcohol being different on the state by state basis. So you're effectively dealing with 50 countries in the US, as opposed to having the rules all be the same. You can't ship alcohol across state lines, spirits and other things. So there's just a lot of barriers and a lot of reasons as to why Ecommerce has not taken place historically in alcohol, while fashion, and consumer electronics, and even cars and all these other things have picked up. Big followings in the Ecommerce world, set up at East Coast warehouse, a West Coast distribution center, take online orders, ship them out to everybody, and then optimize more distribution centers, see a faster delivery times. Chris: In alcohol, there is a whole series of barriers. One, that you mentioned is regulatory. You have to work with a licensed retailer, or get a license yourself. You're going to get a license yourself, and you don't previously have one that can be a very long and arduous process as to proving you are who you say you are, there's something in alcohol called the three tier system, which means you can only effectively be a manufacturer, a brand like Anheuser-Busch, a distributor like Southern & Wine Spirits, or Southern Glazer's, or a retailer. And if you're one, you can't be the other. So alcohol flows through about three to your system. There's some exceptions in wine, obviously, but it divides up the industry in many ways. Chris: There's many reasons why, I think even in like the private equity world there's been roll-ups of laundromats, there's been roll-ups of car washes. There's been roll-ups of grocery chains. There's been roll-ups basically any category you can think of. When it comes to alcohol, it can get pretty difficult because when you're trying to roll-up a bunch of liquor stores or roll-up a bunch of these licensed entities, these different regulatory bodies want to know every single person that has even a fractional amount of ownership. So you could have a PE firm, or a venture firm, all of a sudden being in a situation where they're having to go back to their LPs to get identification cards for people to list them on licenses. And so it's just a very challenging environment as to how people have been able to operate in this space. Chris: I think also because of the shipping regulations you had a lot of categories that were it's not as simple as setting it up and shipping. And then take that a step further when you think about fundraising, or capital, a lot of endowment funds, pension funds have carve-outs for things, like don't touch anything to do with alcohol, tobacco, firearms, pornography. So there's entire institutions, or very large venture funds, or funds of funds that have invested in all these different VCs that in those early days just wouldn't touch alcohol as a category. So when you think about building a service in an Ecommerce space where you can't ship all over the place, that's a challenge. Everywhere you go you have to deal with licenses and/or different regulatory guidelines on a state by state basis. That's a challenge. Chris: When you're looking to raise capital, large sums of capital to go and attack this big problem. And there's a whole swarms of buckets of capital that literally can't touch the category. That's an uphill battle. And so most, I think the capital injections into the industry have usually been families that have come in, or you've seen someone's creating a brand. They usually do these friends and family rounds. But again, very little going into like a big marketplace, or very little venture or private equity money pouring into the space over the years. Some of the big challenges that we had was in all of those buckets. We launched in LA, but then dealing with even expanding into other cities, looking at the regulatory environment as you go into other markets, thinking about licenses and protecting our partners' licenses, and ensuring ID verification, the way that payments worked, worked properly. Chris: You just have to be very careful on the regulatory side and on the capital raising side, you have to be very resourceful in thinking about who your partners are going to be, and who you'd be able to raise capital from. I think some of that's changed now, particularly during COVID and the acceleration of a lot of things online, you're seeing all sorts of barriers, and regulatory guidelines be changed or altered in some ways to adapt to this new normal, and that includes capital as well. But back then, it was very much a little bit of a taboo service, and taboo marketplace that we had to raise money for. Stephanie: Yeah. I was just going to say, with all of those things you have to think about, and then you also have to think about building local marketplaces to find the drivers, and find the retailers, and the customers, how did you figure out which steps needed to come first without getting overwhelmed? Because that whole list that you just gave me, I'm like, "Oh, I would have given up, that's like very intense and I don't even know where to start." So how did you unravel that, and figure out, "Here's things that we want to focus on first?" Like, did you focus on the product, or the regulatory aspect, or did you like divide and conquer? Chris: We divided and conquered I think the way as founders, we've been extremely fortunate that we just work really well together. We still hang out together. We're still very close friends today. That's not always the case with people who have been working together for over six years this closely. But we couldn't find a better group of people to work with and just have inherent trust in each other as we're building this thing. A lot of my role in those early days was the regulatory, and compliance and working with the different regulatory bodies, legal councils and whatnot, and that really was gating factor one. You don't do that correctly, as we saw with other services, you could be shut down tomorrow, or your ops could be turned off, and then you could also have that stigma against your business. So you got turned off, you were a little blahzay about how you were thinking about the rules in a regulated environment. We had to be just above reproach when it came to that. Chris: Two, Dan, and Andrew were really focused on the product and engineering. And then when we put those things together, it was a definitely collective effort, but that also fell heavily on my plate as it related to capital raising. So Dan and Andrew in many ways we're running and setting up a lot of the operations and business product, the design, the roadmap, and I was out there bringing in the dollars, and making sure that we don't all get arrested. It was very good in the early days to be able to work that closely together. And obviously that's permeated throughout our, our journey over the years. I think yeah, we knew early on that it's a big opportunity in the space and that you'd have to be willing to take on a certain amount of brain damage if you were going to build something great here, and that's a bit of a moat. Chris: We've seen a lot of people dip their toe in alcohol, realize there's all these compliance things or whatnot, and just give up. We've I think over the years have developed a little bit of a specialty or become known as entrepreneurs as the guys that are willing to go through just crazy amounts of complexities and brain damage when other entrepreneurs maybe wouldn't take on those challenges, and love it or hate it, that's become our specialty to some degree. Stephanie: That's great. Tell me a little bit about some of your early marketing efforts. They looked pretty unique, and I was hoping you could touch on that and talk about how you acquired some of your early customers? Chris: Sure. The early days you had very small budgets. When we first launched, we were effectively bootstrapped and very shortly after launching had raised a small amount of money from an angel who was a terrific early believer in the company and maintained support throughout the years. But I mean, how do you make as much noise as possible with very small budgets? And we just had this approach of we're in the alcohol space. I think, our first thing we looked at was retail alcohol does marketing very poorly, or in a very boring way. If you look at how customers are adopting any type of brand or brand category or marketplace, usually there's a little bit of brand identity, or something you're trying to communicate to them. Chris: Retail alcohol's literally just, "Hey, we have Smirnoff, it's on sale. Come to me. Hey, I have SKYY vodka, it's on sale. Come to me." There's almost nothing... even if you look at the brand names and logos of most of the major alcohol retailers throughout the country, they're just like gimmicky whatever. We knew that we wanted to take more of the marketing style that takes place in the on-premise world — bars, restaurants, hospitality, leisure, et cetera — that I think translate some of these alcohol brands' vision to the customer very well, which is not, "Hey, come to our bar restaurant, hotel, whatever, because we have alcohol here." It's come here because it's a good time. And you'll be here with friends, and all these things that alcohol subtly sits in the background. Chris: We wanted to mere that type of approach over to the off premise world where it wasn't, "Hey, come here cause we have alcohol." Or, "Hey, we're alcohol delivery." Or, "Hey, get beer delivered." Or whatever maybe. It was trying to communicate fun and interesting messages, plans for people, different things they could do in their city. Wild and crazy activations that just got them excited, and just falling in love with the brand. And then subtly, by the way we deliver beer, wine, spirits, mixers, snacks, ice cream, all this type of stuff. So our activations really mirrored that philosophy of saying, "How are we going to deliver plans to people, or excitement to people?" Chris: One of our first big stunty activations, we partnered with a terrific company, LA company called MeUndies, which is the world's most comfortable underwear, and we just said, how do get a bunch of attention together, and do something that customers would love? And we came up with MeUndies underwear models, delivering sleepover packs that were pajamas and underwear, and a bottle of tequila, a bottle of wine or whatever it may be. It was male and female underwear pairs. Underwear models going out, and delivering. So anybody who ordered- Stephanie: Were they just in their underwear? Chris: They were just in their underwear, so you have anybody who ordered to have this female and male underwear model would come and show up at their house and deliver their sleepover pack. And we structured a great partnership together, rolled it out and we got just shy of a hundred million press impressions inside of a week, basically for free. Chris: We also did on Frank Sinatra's birthday in December, we partnered with the Sinatra family, Jack Daniels, and I believe it was Universal Music and anybody who ordered Jack Daniels, it would be delivered by a Sinatra impersonator. And they'd give you an LP and sing songs to you and do all this type of stuff. We did a handful of other really stunty activations. We took a page out of Uber's book. We delivered cuddly puppies, and donated proceeds to different animal charities and all sorts of stuff like that. Then we backed those types of campaigns with other things that we could afford at the time, which was we did a lot of door hanger campaigns. We did a lot of early stage for direct mail to 21 plus mailing lists. Chris: We did a lot of Facebook ads, Facebook native ads at the time. In the early days of any marketplace, you can acquire tons of customers on Facebook, relatively cheaply, and then your CAC start going up. So it's always a challenge to figure out as you saturate a channel, or saturate a market, how to change either how you're running the ads, or new ways to acquire customers or not be so dependent on one channel. But in the early days it was bracketed as deliver wild and crazy activations that get people talking about us. And then let's backfill that with a little bit more direct response media that maybe they heard about us from a friend because we did this crazy thing, and then they saw some Facebook, and then they saw us on their door. The combination of those things hitting people multiple times really drove a lot of that early adoption. Stephanie: Yeah. That's really, really fun. I love that story, is such a good idea and a good reminder to be creative in the early days and get the most bang for your buck. So what does your customer acquisition look like today, and how are you measuring that? Chris: It's a little different today running across a lot more channels, but I would say that a core tenent of our marketing has always been our referral program. We think that that's the best way that anybody's going to adopt a new service or product is hearing about it from a friend. And so we always push our referral program. It's always been our highest performing and fastest conversion customer acquisition channel that we do run ads across tons of different paid media channels. Obviously, the social, podcasts, radio, out-of-home, less so out of home right now for obvious reasons, and then we do a lot of partnerships with the big alcohol brands to drive awareness through some of their channels. We work with different influencers and then have started exploring some things like streaming, and whatnot. Chris: I think the most fascinating things that have happened on all these channels during COVID is obviously about 50% of somebody's alcohol purchases. It's usually fairly split between on premise and off premise. Bars, restaurants, stadiums, hotels, et cetera, over here. Grocery stores, alcohol delivery services, Ecommerce whatever over there, and half of those purchased venues effectively got turned off. So you had this influx of 50% of somebody's buying jump over to the other side, the off-premise buying behavior. And then you had people not wanting to go wait in lines and all this type of stuff. And so the search traffic went through the roof, time to first conversion shortened at rates that we had never seen before. We had higher intent, customers coming in, and just looking for alcohol delivery, "Is this even possible? Is it possible in my city?" Chris: We've been fortunate enough to have a great ops team that we've expanded dramatically, our footprint. We've launched dozens and dozens of new markets and cities over the past few months, been acquiring customers in all those new markets and cities. Partnering with terrific brands to help drive awareness and let people know that they can use the service. Then acquiring people at very different numbers than we've seen historically, an example would be when COVID really started to kick off, our Facebook customer acquisition costs dropped to about a 10th of what it's been for roughly six years. Time to first conversion, which share is usually around 14 days, someone downloads the app and they're waiting for that first use case. Chris: "Oh I feel like having that bottle of wine. Oh, I'm watching a show, I'll try ordering six pack of beer." Or whatever it is, dropped down to effectively a day. People were just searching for the service, found it, used it. And then second purchase happened before that 14 day mark as well. So you went from having time to first conversion be 14 to 20 days, and then it's all about getting to that second and third purchase. You had purchase one, purchase two, basically happening inside of that first purchase period of time. The customer acquisition costs on a lot of major channels dropped to a 10th of what they normally have been. Then we saw other people willing to spend a lot more media dollars. And then obviously when you think about marketing as well, so much of it is just how you cut through the noise. Chris: If you go back there's a lot of terrific documentaries on Netflix about history ad agencies and all this stuff, but there wasn't tons of marketing being thrown at people the way it is today, back in the fifties and sixties. And so a creative ad, like the Volkswagen think small, or something like that could just cut through everything and take over a nation. Today, it's very difficult. How do you come up with campaigns that cut through the noise that feel genuine that people respond well to? But when you had entire industries been negatively impacted by this pandemic and pull back, a lot of their marketing spend, a lot of that "marketing noise" had died down. And so if you were a service that was still operating the ability to just make sure the customers knew about you was in a heightened state than it had been in. Chris: So there's been a lot of changes over the past couple of months, both in terms of how we do marketing operations, and work with our customers. But yeah, we've obviously been very blessed by sheer dumb luck in this sense on being in a category that has been positively impacted as opposed to negatively impacted. Stephanie: Yeah. That's amazing. Very cool to hear about the time to first conversion and all that. How would you guide someone to create a marketing campaign that does stand out among the noise? Like even outside of a pandemic, and how to make sure it's authentic, but also unique. How do you guys even think about that when building your campaigns? Chris: Yeah, I mean, it sounds cliche. It's just put yourself in the customer's shoes. Be a customer for a day, go on to social media, take a drive around, look at the billboards, look at the signs. Look at the ads that are being served up to you. What's attractive? What do you like? What stands out? What feels cool? Having a barometer for just what I think really impacts somebody is important. And then translating that into your own campaigns is key. We've done most all of our stuff over the years in house. In terms of ad copy, and ad creative, and CRM, creative and copy, and all that type of stuff. But it's just putting yourself in the customer's shoes, what feels genuine, find brands that you really like what they're doing, and they feel honest and interesting and original, and they create interesting templates and guidelines. Chris: There is a creative agency called Gin Lane, which has since pivoted into creating their own products that built these templates for a whole bunch of companies, one being Hims & Hers, and a handful of other very well known brands today. But yeah, I mean, it's just what feels honest, what stands out, and do things that get people talking. It's fairly simple, but I think our barometer's just always been if you do what gets people talking, and is cool and genuine, then people will talk about it, and they will share with their friends. If you do something boring, or off-putting, who cares? Stephanie: Yeah. You'll be like everyone else. I love that. So with all the changes that have been happening, what updates did you have to make to your website, if any? Is there anything that you completely changed to try and... website or app either one, or like, this is a new user that's coming in, or now we have this new group that we need to focus on retaining who has never been here before. Any strategic updates or changes that you've made to your mobile or desktop presence that have really positively impacted like conversions and revenue and whatnot? Chris: Yeah. I mean, some of the initial stuff was very simple. It was just categories. So obviously coming into the app in those early days, people were looking for anything from wine, but also PPE equipment, and masks, and gloves, and hand sanitizer, and things like that. A lot of our stores and markets carried those things, toilet paper, paper towels, et cetera. Canned soup, frozen pizzas. So we've had that stuff for years, though a lot of people don't necessarily know it, but it was just making sure that that was very prominent in both our content marketing, as well as in the app and the website. So when people showed up they knew that that was available and they could use it. Then operationally, it was obviously it was getting out in front of a lot more people, so rapid expansion of our delivery footprint and neighborhood coverage throughout the country, so that more and more people could use us. Chris: Then obviously all the communication and work that went into little things operationally, like in certain States that require signature capture at the time of delivery, not just ID capture, but signature capture as well. Working with different people to get those signature capture requires lifted. So you could have more of a contactless delivery, it's not the same as delivering a sandwich where it can just be left at your door. You do have to see the person. You do have to visually identify them and scan their ID. But that can still happen in a contactless manner, where they just hold out their ID, you scan with the phone, and nobody's swapping goods or anything like that. So yeah, there's little things around COVID protection, primarily around contactless delivery, and ensuring a signature capture was waived in certain States. Chris: Showing more prominently categories of products that people were looking for, but particularly around stocking up or staying safe at home, or staying safe with PPE gear, putting up protocols to all of our retail partners on how they need to be picking and packing products and operating at retail. In some cases helping them source their own protective gear. Then yeah, on the site and in the communication email... I was recently speaking to somebody else about this, but we just had to basically torch all of our content marketing that was planned, where March was all March madness. We had tons of ad campaigns and things lined up for that going into different sports seasons, sports openers. All of that media and content pretty much could be very tone deaf if you just went as is. Chris: So all of our planned content marketing and even some of our campaigns and video shoots or photography, all those things, were basically just nixed it all and had to start from scratch on the marketing side. But the team there did a fantastic job. Stephanie: Yeah. It seems like there's so many things that were changing and you guys were able to act really quickly to pivot, and showcase the products that were already there and personalize it in a different way. Yeah, that's really awesome. What metrics are you looking at to measure success for your business? Chris: For us, alcohol's a little bit different than food. Food you eat every day, or dog walking was a big category. People that I remember early days, some of these venture guys, I don't think quite understood the category, not speaking about our investors, speaking about other people that we would pitch, and they ask things like, "Well, we saw this dog walking app and the retention is... they get used like nine times a month." Are people going to use your service nine times a month?" And it was like, well, I'd say, "Well, that dog is alive every day of the week, no? So if the dog is alive, it needs to be walked every day. Right? And if people are working then yeah, they need a service to walk the talk every day of the week that they're at work." Stephanie: Why are you comparing us? Chris: Yeah. Or even food you need to have food, and am I going to cook? Am I going to buy something at the store? Am I going to have it delivered? But when it came to alcohol, it's a little bit, I'd say roughly 15 to 20% of your customer base and in alcohol is really the people that drink a little bit more frequently, or several times a month. It's not as exaggerated as like sports betting or gambling where some instances we've seen platforms where 0.3% of the customer base is driving 70% of the revenue. And it's all about maintaining that 0.3%. In alcohol it's finding the people that enjoy the category, maybe have a wine in the evenings, or a couple of times a month or whatever it may be, and nailing that customer use case. Chris: Then we have other customer use cases where people just use for gifting, or people use us as their office for gifting all their employees, or having office happy hours, or having business orders. So it's really segmenting and cohorting all the different types of use cases, and customers that relate to this product. It's obviously a big space over a hundred... these are pre COVID numbers, but alcohol is roughly a little over $200 billion a year in sales, in the US. Roughly 55% off premise, 45% on premise. It's a big space, and it's all about finding obviously the people that use your category. I think as we think about just our marketing may change, or customer acquisition may change, or who the customer is, it's always just identifying those use cases. And some of those use cases have obviously changed right now. Where we're supporting more of that on-premise behavior. Zoom happy hours, people socially drink it with their friends, but from home. It's been interesting. Stephanie: Yeah. I really liked the idea of putting the users into cohorts based on why they're using the product. That's a really good point. The other big topic I wanted to talk about that could be probably a whole entire episode is all around partnerships. I want to hear what it's like partnering with these companies, like the industry that maybe hasn't really been online, the alcohol industry previously, what does that look like behind the scenes? How are you going about partnering with these companies right now? Chris: Yeah. Partnerships is a huge part of our business, both on the marketing side, as well as just how we operate as a company. We're a marketplace for the most part. We partner with existing retail locations where we'll partner with a store in a geographic area and then funnel all the volume and requests effectually to that store or a handful of stores in that area. So partnering with liquor stores and retail stores all throughout the country. And then we partner obviously with the Diageos, and Bacardis, and AB InBevs, and those guys of the world. When we first got started, the first ever brand partnership that we did was with Anheuser-Busch, and they actually reached out to us. It was this is this $200 billion market cap company. And I think they had just started their first digital team, which was less than half a dozen people up in a garage in Palo Alto. They called the beer garage. Chris: A guy by the name of Mike Raspatello reached out to me on LinkedIn and said, "Hey, I'm from Anheuser-Busch. We saw..." I think probably because of the MeUndie's campaign, "We saw what you guys are doing, and we want to have a conversation about how do we work together? We're trying to take on digital for the first time, and we're part of this beer garage." It get morphed into what later became ZX Ventures, which became like a venture team of theirs. And then is this big team now of hundreds of people over at Anheuser-Busch, back then it was mostly, I think Mike and a handful of people up in Palo Alto. He reached out, and he's like, "Yeah, we're talking to Instacart, we're talking to you guys, talking to one or two others." And we did a campaign where we promoted certain products in the category. [inaudible 00:39:47], and Stella Artois, and a handful of their portfolio products, and saw could you increase by featuring different brands? Could you increase their share of category? Chris: For them it was, "Our historical share of beer category is X at retail, in this new online world, how do we make sure that it is more than X?" And every brand has approached it that way. We are X percent of our categories in retail, how do we make sure in online we are more than X? We ran the campaign and did extremely well. Mike was absolutely instrumental in that, and terrific at Anheuser-Busch. He'd probably hate me for saying that, he's a hilarious guy who's in Chicago now and catch up with him. He's one of my favorite people, but yeah, we ran this campaign and they came back to us afterwards and they were like, "Man, you guys just worked so seamlessly with us. It went so smoothly it didn't go as smoothly with some other people. How big is your company? You guys got like four or 500 people?" And I think it was just Dan, Andrew and I at the time. I was like, yeah, totally. Totally we have 500 people. Stephanie: Huge backend helping us here. Chris: Exactly. I was hesitant to let them know, but I was like, "No, it's three of us right now, and a handful of couriers." And they were like, "What?" It was interesting in those early days, it was a little bit of fake it till you make it, in making us feel much bigger than we were in year one. That helped us get some of those very early partnerships. And then obviously as we started doing more and more creative stuff a lot of brands came knocking at our door. In many ways, outside of just promoting people in categories, or integrating them into our content, we did some big activations and made a lot of noise with different people. Like you saw with the Jack Daniels, and Sinatra impersonators and stuff like that. Chris: In many ways I think people started to treat us a little bit like a creative agency, they'd come to us to say, of course, we're going to do paid placement, but what else do crazy people come up with? We'd come up with all sorts of cool stuff for these brands. And in many ways we became like an outsourced agency that would help them with that stuff, or even help them with some of their Facebook spending. "Hey, we're currently with agency X running Facebook ads, they're telling me a customer acquisition cost of 137 bucks is fantastic. Is it fantastic?" We don't know, it sounds great to me. They have all these slides and whatnot, and we're like, "No, that's atrocious. That was absolutely terrible." Stephanie: Yeah. Oh man. Chris: "Let us help you figure this stuff out." So in the early days it was again, just being extremely helpful, but then sometimes that's not always scalable being very handholding and helpful with each brand. You can't translate that at our team size to every brand. And so it was coming up with a lot of templates and guidelines. Finding out what's effective. How do we translate what's effective to each brand? Today, our team on that front does a terrific job of still being able to come up with really creative and interesting campaigns with companies and execute on them. I think the biggest change that I've seen is in those early days, a lot of these... they're like institutions. These brands, or portfolio holdings are just huge, had very rigid brand guidelines. Chris: I remember working with a big very famous champagne brand, and effectively the model was they have a brand authenticity team that is just protecting everything related to that brand. And they spend months specking out what a campaign looks like for billboards, TV, all this stuff. And we were effectively just another channel to put that campaign into. And that just didn't work. We speak to our customers in a very unique way, and you take this billboard and then just put it in Saucey, and it looked very foreign. People recognize it as a foreign object, and don't respond well. And so the brands that earlier were able to say, "You guys know your customers better than we do. So we're going to give you relatively all the creative freedom to speak to them, with some approvals." Those were the people that performed the best, and those are the people that have continued to perform the best. Chris: I think the biggest change that I've seen is you've had a lot of these huge alcohol companies go from having zero person digital teams to having fully built out futures in digital teams. Then the biggest next step was those teams doing a fantastic job of working with senior leadership at those organizations to get them out of the more rigid guidelines around brand identity and being much more flexible in how they both think about campaigns, creative talking to people, et cetera. And that's been a huge shift for them. Stephanie: Yeah. I love that story, especially about Anheuser-Busch. And it's just a good story that highlights the importance of finding that first partner and really giving them, like you said, like a frictionless experience where they walk away like, "Wow, that was easy. I didn't really have to do anything. And the team just took care of it for me." Even if it semi kills you to begin with, like that doesn't have to be a for everything, but maybe first big fish, [inaudible] like, "Here's our partner." Is what can bring all the other partnerships your way. So yeah, such a great reminder. All right. I want to move into a lightning round, I know we don't have that much time left. So lightning round brought to you by our friends at Salesforce Commerce Cloud is where I will ask a question and you have a minute or less to answer. Chris, are you ready? Chris: I'm ready. Stephanie: All right. What is your drink of choice? Chris: I like Michter's Rye neat. Stephanie: On the rocks, or how do you make it? Chris: Just neat, Michter's Rye neat, is my favorite. Second favorite probably be Tito's Martini. After that probably jumping into beer or wine. Stephanie: All right. What's up next on your Netflix queue? Chris: I'm big into murder mysteries and prison documentaries and things like that. So probably something about international drug trade, or world's toughest prisons in Russia or something along those lines. Drives my wife absolutely crazy. Stephanie: Oh, man, that sounds very interesting. Also, our producer, Hilary said, "Neat means no ice, Steph." Got it. Thank you, Hilary. I apparently do not know alcohol, so that's on me. If you were to have a podcast, what would it be about, and who would your first guests be? Chris: I've thought about this a little bit. I think that I personally, when I was first starting working on businesses or trying to build a career, you see the end result of all these people, and you miss a lot of the details that got them to where they're at, or got them to how they think about the world and where they're at. Guy Raz, obviously, with How I Built This does a fantastic job of telling the idea of a company from start to finish. I'd love to even know the backstory before that of a lot of entrepreneurs. How did you get to the place where you wanted to jump off a cliff and start the company? You can have a little bit on the company, but really how did you shape what ultimately became this person that's willing to take risks, and do all these different things? Chris: I think to be totally honest, my first interview would probably be my co-founder, Dan Leeb. He has an unbelievably interesting story. I've that all sorts of twists and turns in life. He's one of the smartest people I've ever met. I would start a hundred businesses with that guy, and it would be an interesting one to listen to. Stephanie: Cool. That sounds good. I would definitely listen. And I love the story or founders stay together and stay friends because you always hear that not always being the case. So it's really fun hearing that. Yeah, you guys continue to be good friends to this day. That's awesome. The last one, what is your favorite piece of tech, or an app that's making you the most efficient right now with work? Chris: Just my phone. My phone, and these ear buds it's 90% of what's happening. Stephanie: All right. Chris: But yeah, I'm on the phone, most of the day, working with teams, video conferencing so these AirPods, or AirPod Pros with the noise canceling, that's a game changer. I got three little kids running around working from home, so we got a noisy household. So you got to be mobile and be able to communicate with everybody. Stephanie: Yup. I can relate with you there. And I almost forgot the hardest question that I need to ask you. What one thing will have the biggest impact on Ecommerce in the next year. How could I forget that one? Chris: I mean, outside of what's already happening with COVID, I think the biggest changes will be regulatory. We'll see what happens, but things like telehealth, or telemedicine, or even grocery, or even alcohol where you're seeing a lot of the legislation and regulations that have been sitting on the books for decades or 70, 80 years in many ways are all being revisited right now to adjust to this new normal. People have been trying to push for those legislative changes for years and years and years. And it's just been under the stack of papers, because, "Why is this so important?" Sort of, "Who cares, we'll get to it eventually." But you're seeing a lot of that accelerate right now. And I think a few big changes depending on what industry you're in, could really unlock an entirely new world for certain Ecommerce categories. Chris: So I think legislation driven by change of life, change of pandemic, I think will be very interesting to watch. And I think you'll see not only new categories come online, but the dramatic acceleration of some of the existing categories. Stephanie: Well, I love that. That's a great answer. I'm glad I remembered to ask that question. Well, Chris, this has been such a fun interview. Where can people learn more about you, and Saucey? Chris: You learn anything you need about Saucey at saucey.com. If you want to learn about me, I guess you'd listened to this podcast, go from there. I don't have a huge online presence, stay relatively private. But I think that, you want to learn more about Saucey, go saucey.com. Stephanie: Cool. Well, I like being exclusive source, so for all things, Chris Vaughn, you're welcome everyone. All right. Well, thanks so much for coming on the show. It's been great. Chris: Thank you so much. I appreciate it.  

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

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

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

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

Believe it or not, in the pre-internet days, a good deal of swimsuit purchasing was done via direct mail, not in store. So why, even in today’s digital-first age, are big brands still focusing on in-store experiences when it comes to selling swimsuits? Lori Coulter saw an opportunity in this disconnect. Using data and a methodology she had already perfected in the made-to-order space, she co-founded St. Louis-based Summersalt, a direct-to-consumer women's lifestyle brand. And you could say Lori found the perfect wave to ride to success — in the very first summer of the company’s existence, the waitlist for its bathing suits surpassed 10,000 people.  On this episode of Up Next in Commerce, Lori explains what trends she was looking at in the market that compelled her to take the leap to start Summersalt, and which ultimately led to its massive success. Lori also shares her tips for inventory management and marketing advice for D2C brands. Plus she goes into detail about the challenges female founders face when fundraising, and how to turn those challenges into wins and buy-in from skeptical investors.  3 Takeaways:   Utilizing multiple channels: Reliance on a single channel or message will not sustain a business. Summersalt was able to build a waiting list of more than 10,000 people by meeting the customers where they were — regardless of channel — and adjusting the message for different audiences.  Inventory management: Working with multiple inventory partners and having short-term plans is necessary for D2C brands. It is critical to know your sell-through rate and, especially when offering limited-time items, plan to meet the demand and have enough inventory of other products to offer if/when your special items sell out. Promotion vs. Prevention Questions:  When fundraising, women founders typically get asked more prevention questions than their male counterparts (i.e. how they will avoid failure vs how they will find success.) Tune in to hear how to spin those questions into talking points centered around a promotion angle. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome to another episode of Up Next in Commerce, I'm your host, Stephanie Postles, co-founder of mission.org, and today on the show we have Lori Coulter, the co-founder and the CEO of Summersalt. Lori, welcome. Lori: Thank you. I'm really thrilled to be here. Stephanie: Yeah. I'm so excited to have you. I'd love to hear a bit about your background before we get into Summersalt which seems like a crazy story, awesome things that I want to dive into, but I want to hear a little bit about you before Summersalt. What was your background, work experience, all of that? Lori: So, what's interesting I think I'm probably... I don't know if I want to say a born entrepreneur, if I believe that or not, but even in college I would tell my friends that I just had a good idea, I would do it. I went straight through from undergrad to a business school at Washington University here in St. Louis. Again, had that entrepreneurial mindset from the beginning, and when I went to business school I wrote several business plans. Had an entrepreneurial focus, although that wasn't as in vogue at that time as it is now, and I left business school, I went to work for an economic consulting firm primarily understanding at a macro level, economics. Lori: We did a lot of selling to major banks, investment banks, but I always had an interest in fashion and apparel, and had turned down several jobs coming out of business school in the industry that I loved. Lori: At that point in time, I was focused on a concept around fashion and technology, and digital body scanning, so working at the intersection of technology and fashion at an early date. Did a ton of research and eventually launched a start up in partnership with Macy's in store as their vendor, doing digital body scanning in made to order apparel, initially swimwear and eventually, we were supplying other mid size brands, early eCommerce brands like ModCloth and some large scale resorts. So, that was my story pre-Summersalt. We really parlayed that intellectual property that's a foundation. We still use it at Summersalt to this day in regards to our fit, quick turnaround manufacturing, and prototyping. Stephanie: Very cool. How did you get big brands like Macy's to partner with you and your company early on like that? Those are some good names to get in front of. Lori: So, what's interesting about being a founder is ... Half of it is just sticking to it. And so, raising your hand, asking the question, asking for the meeting and just telling your story, it truly is a sales process and I managed to get in front of the right person at Macy's and got the deal done. So, I didn't know anyone in particular, it was just, "Hey, can I tell you my story?" And we're off to the races. Stephanie: That's great. So, you were mentioning IP earlier, and you were saying that right now you use some of that IP with Summersalt. What was a process like where you had one company you were partnering with, the Macy's of the world, and then now you're moving over to Summersalt which I'd love for you to detail a bit about what Summersalt is and how you brought that IP over. Lori: Yeah. So, we launched at Macy's over 10 years ago, and in June of 2016 I met my now co-founder, Reshma Chattaram Chamberlin, and she also is a serial entrepreneur and had owned an agency working with some of the larger direct-to-consumer brands on the east coast, particularly on the brand and digital marketing side. And I shared with her the intellectual property in regards to fit. We had scanned over 10,000 women and made a swimsuit for each of them so we really had optimized that process for the consumer and knew exactly what worked for a broad spectrum out of the US market. Lori: And then we had separately mastered quick turn around manufacturing and prototyping, which allows us to move at the speed of lightning that we're still moving at with Summersalt to this day. When I shared with her the IP I was sitting on, what I was seeing in the market with regards to consumer trends, and I didn't see a truth path to scale for brands that were pursuing that traditional wholesale model in apparel space, it has had headwinds for a long time and even more so now with COVID-19. Lori: But I shared my story with Reshma on what I was thinking she got really excited. We went away from that conversation. Ironically, that was a conversation at Chipotle. It wasn't intended to be any life defining moment, we were just two Midwestern founders sharing our ideas about eCommerce and the future of retail. But she really inspired me to look hard at that direct to consumer business model. So, I went away from that conversation we were at the initial business plan and strategy for what is now. I developed a collection, which I think separates the dreamers from the doers, the ability to actually manifest a concept and then go out and do it. Lori: And then, I went back to Reshma in December of 2016, a full six months later, to retain her agency. Ironically, she was in transition at that moment, wasn't taking on new clients. But serendipitously we ran into each other in New York, which is a bit ironic, because we're both based in St. Louis. Ran into each other in New York, at the Gramercy Park Hotel, Rose Bar. I'd been interviewing PR teams that week and had the deck and the line she left me and I literally cornered her on the spot, shared what I was working on, and her response was, I'm interested about what you consider a co-founder, and that's how we joined forces and the rest is really history. Stephanie: That's awesome. And how do you describe Summersalt today? Lori: Summersalt is a direct-to-consumer women's lifestyle brand, direct-to-consumer meaning we sell primarily on our own website and platforms and have an ongoing relationship with a consumer over time as opposed to working through a major retailer or another department store or something. Stephanie: Very cool. So, when my team was doing research on Summersalt, I saw some wild numbers that were a little bit hard to believe. I saw that, and you can be like, "Stephanie these aren't wrong numbers." But I saw that you had a waitlist for one of your bathing suits of over 10,000 people. Lori: That is absolutely a 100% true and what is really, really interesting about that is that was our first summer we had a waitlist that high. Stephanie: That's wild. Lori: Right. We had raised a very small Angel around to launch. We were everywhere that first summer from our Refinery29, to the Today Show, to Elle Magazine. I think Forbes covered us and it became clear. One, that we didn't have enough inventory that first summer, and two, when we saw that waitlist continue to build, we knew there was an incredible amount of pent up demand and I think it's twofold. Lori: One, the brand itself is resonating with the modern consumer and so much swimwear had been done and it's over sexualized, tired, outdated way and Summersalt's fresh and new and fun, and our whole mission is to inspire joy, the childlike joy we all felt at the beach as children and I think it's just so encouraging to see that message resonating with the consumer and then separately we translate that message in our products as well. Lori: And clearly the fits, the aesthetic, this idea that you can be fashionable and cheap but so comfortable, is important to the core of the brand. And then separately, I think that the macro dynamics in retail are in our favor. They have been from the start and even more now that we're facing COVID-19 as a nation. Stephanie: Yeah, I completely agree. So, what were some of the main drivers behind getting that consumer demand? I mean, I know you were mentioning PR and a couple well known outlets to probably spread the word but what would you say were the key drivers to getting in front of people and then also encouraging them to join a waitlist, because when I think about buying something, sometimes I'm very much like I want it right now. Like, if I need a bathing suit, it's because I need it probably for tomorrow. So, how did you get people to agree to get on the waitlist and wait until you have the inventory back and even get in front of them in the first place? Lori: So, when we were launching and even to this day ... Summersalt just celebrated our third anniversary on May 23. So, that gives you an idea of how far along we are in the cycle of business, and from the very beginning it was about a 360 degree approach. It wasn't about just one platform, as far as how we speak to our consumers, so that includes press, that includes email, that includes social media, working with influencers, working with other brand collaborations, it's about bubbling up to the top and speaking to our consumer in multiple ways at multiple times, but always when, where, and how she wants to be spoken to is how we talk it about it [inaudible 00:09:21]. Lori: And obviously, the scale is quite a bit different now. But at the same time, those principles hold true. And I always tell brands, if you're focused on one platform, only one message without that brand storytelling. It's such a risk to the business model over time, and what's wonderful about Summersalt we truly are a brand that is digital first. Stephanie: Yeah, I completely agree about relying too heavily on one outlet. What metrics do you look into? I mean, it sounds like you're doing a lot whereas a lot of PVC companies we've had on here so far, they only have enough bandwidth to maybe focus on one or two platforms, and they're going deep instead of going wide. So, how do you start thinking about metrics that holistically look at all of your marketing efforts? Are there any certain things that you rely on? Lori: Yeah, I think a couple of things are important when you're a digital first brand. First and foremost is sessions on the site, and any activation we do, we want to see the consumer coming to the website, and then of course, conversion rate is very important, but it's really that traffic that you have to have on your storefront, that is important. Lori: And then separately, we look at organic search metrics and anytime we have a brand activation, whether that is something on social media or we did an out of home campaign in New York, as well as even direct mail. You want to see search lifting, and then eventually traffic to the site. And then, as you continue to see conversion lift as well, you can understand, you can measure the difference and understand, "Hey, this consumer is highly likely to purchase. She has high intent." So, we measure that as well. Stephanie: Got it. So, selling swimwear online seems difficult, at least when I think about making sure the measurements are right, and it looks good. How do you showcase the fact that your swimsuits are comfortable, and I know that they protect you from the sun, and they'll also fit right. How do you display that messaging to the consumer to where they know that this will be a good fit and I'm not worried about getting something that would be weird on me? Lori: Yeah. So, what's interesting about that is from the very beginning, again, it was about inspiring that sense of childlike joy. We always show the consumer a diverse set of women both from age, race, background, size perspective, and that's really core to who we are at Summersalt. And so again, I think she trusts us as the best friend she brings in the dressing room because of how open we are ... Still showing, I think aspirational and joyful women, but still some reality there that's quite different than the approach that traditional retailers and really particularly swimwear brands have taken in the past. Stephanie: Yep. I definitely got that feel when I was looking through your website. I'm like, "Uh, these people actually feel like me." Where oftentimes, especially on Instagram, and you're looking at swimwear companies, it's always the skinny models and very tall and you're like, "Okay, well that's not exactly me, and I'm not in off the coast of Italy or whatever they're doing it feels so detached from reality." And I liked how when I was browsing your website it's like you could see people from all walks of life and all different body types and it made you instantly feel a little bit more secure with browsing through the swimsuits knowing that there will be a good fit for you there. Lori: And I think the other thing that's interesting swimwear, pre-internet was purchased in great quantities via direct mail. So, it really is a category that's conducive to try at home or buy at home, and we knew that before launching Summersalt, and so many other brands of yesterday and particularly post-COVID-19 are not in the space, so it gave us a ton of whitespace to go after and scale very quickly. Lori: And also, from the very beginning, it was never just about swimwear. It was always about building those concentric circles out from swim that fill her wardrobe and closet with all things Summersalt and starting with things that are comfortable, cozy, and then meeting her where she is right now. But what's interesting is, we had already launched loungewear, pajamas and cozy comfy sweaters in Q4 of 2019, which has been wonderful for us. Stephanie: Yeah, that's definitely very good to have that now. I'd love to talk a little bit about how you go about designing your product, because I think I saw that you guys have about one and a half million measurements from people, and I'm wondering how you use those data points to create a new product, what does that process look like? Lori: So, what's interesting about the body scans is that we had developed a modular approach to allowing the consumer to mix and match the perfect building blocks of the swimsuit. So, whether that's changing the neckline, or the leg height, or the seat coverage, or the bra, or the lining, or the straps, or the back, it was a mix and match approach, which in reality is an unlimited license to continue to create on an ongoing basis. Systems still hold that basic fit, and so that's the approach we took 10 years ago and we've benefited from that at Summersalt, every new style that we're bringing out. It allows us to not have to move at a snail's pace, we can roll out new products at an exceptional speed and then have confidence that they're going to fit the consumer when we bring them to market. Stephanie: Yeah, that makes sense. Do you guys have a full on data science team who's working behind the scenes to make sense of the numbers and give suggestions and things like that? Lori: We do. And it's phenomenal, and just the level of detail because we're 100% sold ... Almost 100%, maybe not quite 100% sold on our own platforms. We have all levels of data by style, by skew, by size, any comments from the consumer, or any return rates, or return reasons? We can go and view that data and then make those incremental improvements that make such a difference over time. It's quite different than how most major brands work and certainly major retailers. Stephanie: Yep. Yeah, I completely agree. So, how are you organizing the data in a way that you can make quick decisions? Because it seems like with all those data points coming in, you would need some nice dashboard to be able to just look at each week to then be able to make adjustments like you are talking about. What's best practices on that? Lori: So, what's interesting is we have the query database that pulls in data from multiple different platforms. And so at least eight right now, I believe, and then we are able to take that and cross reference across platforms. So that for instance, from a return or reason perspective, we want to see the sales data on one platform, but we need the return data from another as well as the reviews from a third and we can cross reference and make sense of it all in a way that's clear on a particular dashboard and certainly ... Again, it's a type of situation where we have set dashboards that we work from, but then we're trying to answer maybe a new question, and we continue to build there on an ongoing basis as well. Stephanie: Yep, any adjustments that you've made to your site where you've seen increases in conversion or less returns or any big strategic plays you've made there that have helped with the consumer experience or a buying behavior? Lori: So, my co-founder is an amazing UX designer by training, and so we are constantly measuring conversion. The UX user experience is super important to us in Summersalt and we're making incremental improvements all the time on an ongoing basis. So, if you see us make a change, and it stays long term, it's probably because we've seen a lift in conversion or along the way. Stephanie: Yeah, that's great. So, you guys founded the company in Missouri, right? Lori: We're based in Missouri, St. Louis, Missouri. Stephanie: I'd love to hear a little bit about your experience, because I haven't talked to many people who founded a company there. So, I want to hear what your experience has been around building there. What advantages do you have for not being in high cost of living area like the SF Bay Area, like a lot of people are in New York, what is that experience like for you? Lori: So, what's interesting about building a startup and particularly a consumer tech startup in the Midwest, is that we have a unique view of the entire country that I think is a bit of a challenge for brands that are truly coastal, maybe they're an asset for New York. And if you think about the consumer brands of the last 50 years that have gotten to critical scale, and I'm talking the Nikes of the world, or even Spanx, a lot of times they're not coastal, or they're not in the major tech startup hubs. And we believe there's something to that, there's something about being the merry band of outsiders and I don't know if you've read the Nike bio, but they talk about that a lot there. It's their brand their way, we're doing it our way. Lori: Not that you don't borrow from the best practices of other startups, certainly. But at the same time, you're authentic to who you are as people, as founders, as well as authentic to the brand, and to the consumer. And that is working for us. And so we're grateful to be based in St. Louis, I do think fundraising outside of the coast can be very difficult, particularly at the earliest stages. And if you think about it, less than 3% of venture capital goes to women founders, less than 20% is what is outside the major hubs of New York, San Francisco, and Boston, so the odds were for us, and the earliest venture stages were tough, and we heard, No, many times, particularly at our seed round, but thankfully we persevered. Stephanie: Yep, yeah, I saw that you guys raised 26 and a half million or a little bit above that? Lori: Yes. Stephanie: Yeah, that's huge for this kind of company. I'm wondering what lessons did you learn going through each round, and how did you close that final, large round on the third time? Lori: So, I think, honestly, the large round was the easiest, and I think it has to do with the proven numbers. Whereas when you're at seed in series A you're still selling yourselves as founders, as well as the concept. And I mean, it's a bit of a stretch for two women founders, and starting with swimwear as a garment category. Now, we always intended to be that larger lifestyle brand, and we're certainly executing on that now. But it's still difficult at the early stages to convince people that, that's the one, that's where you're going and see that you can do it. Lori: And I'm grateful that we have amazing investors on our team, and that we were able to get it done. Lessons learned, I think one of the most interesting lessons we learned along the way is ... I can give credit to a researcher at Columbia, Dana Kanzi, and she somewhere in 2017/2018, published an article in Harvard Business Review. Around the questions investors ask female founders, and I don't know if you've seen any of this research, but 65% of the time, women founders are asked what she refers to as prevention questions and 35% of the time promotion questions, and the opposite is true for men. Male founders, men are asked 65% promotion, 35% from it prevention. Lori: And the strategy we took immediately upon seeing that research is to always answer a prevention question or a promotion question it doesn't matter, with a promotion answer and not to get into that cycle of mitigating risk, which is essentially what happens as a female founder, if you're asked a prevention question you answer in a small way, here's what we're doing to keep us from failing, here's what we're doing to be the biggest and best possible we in the company can be, and it makes a big difference in the outcomes with regards to fundraising. And I'm a big believer that all women founders, and probably as it's important for all women in general, to really learn how to advocate for themselves and to not answer questions in the risk prevention the smallest way possible. Stephanie: Yeah, that's great. I want to dive a little bit deeper into that, because it's interesting. What is another or a few examples of a prevention question, and how would you answer that? And then what's an example of a promotion question just to make sure I fully understand the two? Lori: Sure. Okay. I was speaking to an MBA classroom, probably 18 months ago, and I told the Summersalt story, told our growth trajectory, fundraising path, clearly, we were hitting the top 1% metrics from a growth perspective worldwide as it relates to venture capital backed consumer startups. So, having this big story, and the first or second question I fielded from the class was essentially a prevention question and the answer was, given your extraordinary growth, how are you going to manage the crazy amounts of inbound, negative customer comments in regards to ... Like essentially just assuming that given our growth, we were going to have a lot of complaints. There was no reason for that type of question. Lori: And I took that opportunity to say, "Hey, stop, let's talk about what just happened, and certainly you asked me a prevention question, would you like to reframe?" And he did, and I think I'm sure, hopefully, we'll never do it again. But that being said, just understanding that happens a lot to women founders. And ironically, it's not just by male investors, its female investors too. And so, just understanding our own biases to make sure that we're allowing founders to paint their opportunity in the biggest possible way is super important. Lori: Promotion questions would be telling you about your growth plan to get to as XYZ number next year, or where are you going to be in three years? What's the biggest market opportunity? What's your next step? What's your next product category after swimwear? What's the fifth product category? So, all of those things, how do you reach your consumer on an ongoing basis increase that lifetime value and repeat purchasing behavior? So, all those things are growth oriented. Risk oriented would be anything that was around minimizing the bottom as opposed to maximizing the top line of the revenue. Stephanie: Got it. Yeah, I love that. That's such a good reminder, whenever someone's phrasing something in like a fear based approach, or like you're already set up for failure type thing, you don't need to answer that. And I like that just stopped them and said, "How about you rephrase that to actually ask a meaningful question instead of trying to have me go down like a negative spiral and answer it in a way that's going to hurt me ultimately." So, that's great. So, did you pick any investors that were strategic in the D2C swimwear space? Or how did you go about finding a good fit of investors? Lori: Well, swimwear in particular, I think there are very few venture backed companies, and I believe that as a category, it's not something that particularly male investors can relate to. And so maybe had been underfunded for that reason. In the past also, there were a lot of old school legacy brands that are sold with many, many multiple middlemen in swimwear space. So, a lot of licensed product that's essentially sold through independent sales reps, and then eventually through major retailers and so there was just huge opportunity for disruption there and we knew that. We certainly have many investors that have D2C experience just not in the swimwear space. Stephanie: Got it. That reminds me of Sara Blakely story with Spanx, when she's pitching all those investors and they're like, "I don't see a need for Spanx." And then I think one of the investors wives tried it on and they're like, "This is amazing." But it's sad, because you can't convince some of these investors like, "Well, this is what women need." And same thing with swimwear. A lot of them are probably like, "Ah, a bathing suit is a bathing suit." They don't understand why that is not the case. Lori: Yeah, and I think, again, it's about the early stages it's tougher than now we certainly have the quantitative metrics to back up our success, as well as to paint the bigger picture from a growth perspective. Stephanie: And how do you keep track of your inventory? When I was thinking about your waitlist earlier, what have you learned to maybe help not have as big of a waitlist or work on the inventory maybe issues? So, we've heard a lot of that happening, especially for the companies that have come on the show so far, who've gone through Shark Tank, and they've had huge surges in demand, and then they're trying to figure out their supply chain. Is there any best practices that you guys have found we can copy? Lori: Yeah. So, a couple of things, we have a robust planning process that we're managing on a daily basis, but certainly on a weekly basis, making adjustments. We do a couple of things incredibly well. We certainly forecast for growth, which that's ... If you've never worked with a venture backed company, and you're a planner, it's completely different than planning 2% up year over year. Like we're talking significant growth rates. Lori: And so we have a top line plan that we're looking to target. We have an overall breakdown of apparel to swim by month, were buying to that. And then what's different about Summersalt Is we launch multiple limited editions on an ongoing basis, and those are planned to sell out in two to three weeks. And so, we really plan obsolescence and have a good idea of what our weekly sell throughs are going to be throughout the year. Lori: And so, I think that we're quite sophisticated actually in our approach to inventory, as well as planning for those limited editions while we still have core product always available as well, that urgency that comes from the limited editions is interesting. And then on the other side of things on the supply chain side, you just have multiple amazing partners across the world, and so as we started to see supply chain disruptions this spring around COVID-19, that diverse supply chain set that we have and their ability to move at our speed. Lori: And remember we have that legacy of quick turnaround in manufacturing allows us to scale quickly to shift manufacturing quickly to mean into product categories that are important to the consumer right now, for instance, loungewear, while she might not be wearing a resort dress, if that makes sense, and to be close to her knees at any given time, which is critical and has proven invaluable, particularly this year, as we're both scaling and dealing with the COVID-19 supply chain disruptions. Stephanie: If someone didn't have a background like you and they're like, "I'm really looking to get into apparel or something." What steps would you tell them to find the right partner, manufacturer, or factory? How would you go about it if you didn't have anything to start with? Lori: So, the Commerce Department, you can actually track down Asian factories, we can look at our numbers on all pain tags or garment labels in garments. So, if you want to start taking notice of who's manufacturing what product and where that's a good way to do it. And then, I think there are several ... If you're looking to start on a small scale, there are several mini-manufacturing organizations and particularly in LA, that have domestic manufacturing as well as in New York. Stephanie: Okay, that's cool. Yeah. I always wondered, how do people find all these great partners who work so well? I mean, you also hear some of the bad stories as well. But a lot of people who've come on the show so far have good partners and I haven't asked the question is like, how are you finding these people? It seems so hard for me to think about working with someone in other countries who maybe haven't met before, and just interesting to think about that process. Would you advise companies starting out to always have more than one factory partner or? Because I'm thinking right now we were just talking about with like, everything with COVID. A lot of people are having problems with their supply chain and their manufacturers. Do you think a lot of people should pivot now to always have more than one, so they're not over reliant on just one partner or how are you all thinking about that? Lori: We believe in diversification, for sure. And of course, because we have multiple product categories. We certainly by definition, have multiple factories by their areas of expertise, but we want to have redundancy for all categories as well. And I think COVID-19 has certainly brought to light why that's important. But it's important from a fair pricing perspective, it's important from a logistics perspective. And also, as you continue to scale and you're in growth mode, like we are at Summersalt, it increases your capacity that much more. Stephanie: Very cool. So, another thing I was curious about originally, I saw that you were selling swimwear under your name, which, to me you have a great name. It's very designery, and then you shifted over to sell under Summersalt. And I wanted to hear what that process was like and why you switched to not selling under your name anymore? Lori: So, I think a couple of things. First of all, we wanted Summersalt to be a true disruptor in the space and sit next to other direct-to-consumer brands that are disrupting the category. What better name than Summersalt, right? We were amazed that it was still available. Stephanie: That's a good name. Lori: Yeah. And this idea that we're turning the industry upside down, as well as evoking the sense of summer and salts, and all things joyful and fun. So, first and foremost, it really was about building a brand of the future. And also, I don't need to be the center face of the company at all times. In fact, I've enjoyed just my role as CEO. And I certainly love to design and I have a very trained eye but I think my skill set is around building the business in whole so I'm very comfortable just letting Summersalt stand on its own. It doesn't need to be my name, for instance. Stephanie: Got it. I think that's always a debate when founders are first starting a company it's like, "Do you want to build a brand around yourself and have your name be the company or pick a unique name?" So yeah, that's interesting to hear your thought process behind that. So, little higher level eCommerce question. What trends are you most excited about over the next year? What are you following? What are you preparing for? Lori: So I think, fortunately for us, but unfortunately for our country COVID-19 has brought a once in a lifetime adjustment to the retail industry. And some forecasts are that as much as 50% of physical stores, particularly mall based stores are likely to close over the next 18 months. And what we know is that that demand is not going away, those sales are probably going to move online and so they just tailwinds and eCommerce in general, for brands like Summersalt are phenomenal. And I think it's truly being in the right place at the right time, having the ability and the resources to scale at a time when the demand is climbing. I mean, we see almost unlimited potential there. Stephanie: Is there anything you're changing from things that you've seen over the past six months or so that maybe you weren't thinking about prior to this? It can be a business model, website anything. Lori: So, I think the biggest thing for us is that the opportunity for Summersalt is bigger and it's sooner than we anticipated. So, this idea of being the go to eCommerce brand for our generation of women and consumer for women like us, she has fewer and fewer choices both in store and then physically. And then also a lot of the brands that she's turned to over the years, are struggling tremendously due to the COVID-19 headwinds. Lori: And so just knowing that she is likely to go to brands that she already knows and trusts I think we all in this time have a sense that we have so much change, We don't want to try just completely new brands, but Summersalt particularly she already knows us, she loves us, she's familiar and is able to know and trust the product as well as the consumer experience. It's really in our favor. Stephanie: Yeah, I think trust is so important and key right now, especially in this environment. Are there ways you go about garnering that trust, whether it's like developing a community and help generate word of mouth among your current consumers? How do you think about building that up? Lori: So, we have an amazing community of customers, women on social media, as well as an awesome customer happiness team. I don't know if you saw but in the midst of COVID-19 we launched Joycast, which really was a text based platform for women could customers, not just women, customers could text us and we would send back a little clip, or joyful uplifting message, video, image, anything that made her life a bit happier. Stephanie: That is great. Lori: We have an amazing customer happiness team that's led by a group of women that are either in a counseling program or they have a master's degree in English. It's just really all are great communicators, and have super high empathy for the consumer. And it's a quite a different approach than any of our D2C counterparts are taking. And what's interesting is the consumer has responded to this group and to our approach for customer service. Stephanie: Yeah, that's really fun. Did you see anything come from that experiment that you didn't expect? Lori: We had a lot of people that responded, it was amazing. Hundreds, thousands of texts, which was fantastic and it allowed us to feel like we were supporting her through a very difficult time. And I think our customer happiness team loves doing their part to make the world a little bit happier. And it was a difficult time for everyone. Stephanie: Yeah, I completely agree. So, before we move on to the lightning round, is there anything that I missed that you were hoping I would ask? Lori: No, I think that you've done amazing. Yeah. Stephanie: Oh, thank you. Well, let's move right into the lightning round then, it's where I will ask you a question and you have a minute or less to answer. Are you ready, Lori? Lori: I am ready. Stephanie: All right. If you were to create a Netflix original or documentary, what would it be about? Lori: Oh, I think the Netflix original would be about my life as a mom of two boys and my life as a startup founder and how at times it seems like those are completely two different worlds. But somehow I managed to navigate them both hopefully well. Stephanie: I would watch that. I have a lot to learn. So, I'd be your first viewer. Lori: Or not so well. Stephanie: It's a balancing act for sure. What's up next on your reading list? Lori: What's next on my reading lIst? I think I just finished a couple of interesting books but the one next to my bed is Million Dollar Brand. Stephanie: Is that good? I have that on my list. Lori: I think it's great ... Oh, sorry. Billion Dollar Brand not a million dollar. Let's Let's do that one again. The one on my reading list, next to my bed right now. Let's do it again. Stephanie: Yep, what's up next on your reading list. Lori: The book that is on my nightstand right now, next to my bed is Billion Dollar Brand sent to me by one of our investors. Stephanie: And are you enjoying it? I have that one on my reading list as well. I haven't gotten to it yet, though. Lori: It's great, and what's interesting is, I personally know several of the founders that are referenced in the book, so it's great to hear their early origin stories and hopefully they'll write a subsequent chapter on Summersalt. Stephanie: They will. Very cool. Yeah, I definitely have to check that one out. What new piece of tech are you enjoying most right now, it could be an app, it could be something you're using at Summersalt, that you are just trying out. That was exciting around tech that you're using. Lori: Tech wise, we are always using the latest and the greatest, but I think in the COVID-19 environment, I've never been more grateful for Slack. We used it pre-COVID but now that we have 100% fully remote team, our team was already somewhat integrated with Slack but now it's part of our day in and day out every minute. Stephanie: Yeah, us too. I love Slack. What new product are you most excited about launching? Or are you working on behind the scenes that no one else knows about? Lori: We have a few things that are top secret, but- Stephanie: I want to know them. Lori: We had some amazing loungewear launches this spring and summer. And I'm super excited about continuing to build out loungewear as a category and particularly for Q4 gifting. I think the consumer is going to be blown away. Stephanie: Cool. I can't wait. I'm all about loungewear these days. Lori: We all are. Stephanie: All right. Yes. Last hard question. What one thing will have the biggest impact on eCommerce in the next year? Lori: Oh, it has to be the store closures and the continued consumer reluctance to actually even go and shop in store and so just understanding that the growth of the category. Clearly it's taken 10 years to get to this point as far as adoption of eCommerce and I think we're going to see another 10 years worth of growth in the category in the next 18 months. Stephanie: Yep. Great answer. Lori, it's been a blast. Where can people find out more about you and Summersalt? Lori: Please go to our website summersalt.com, spelled like summer the season and salt like the seasoning. And then of course, we're on LinkedIn as well. Stephanie: That's the best way to describe Summersalt. I like that. Well, thanks so much for coming on the show. It was really fun and we will have to have you back once you hit that billion dollar mark. Lori: Thank you so much. I really enjoyed it. Stephanie: Yeah, same. See you next time. Lori: Take care.  

If you want to keep up with what’s going on in the eCommerce industry, the best thing to do is to go straight to the source and ask. But where can you find a group of eCommerce business owners openly talking about their pain points, sharing tips about how they grow their businesses, and combining their knowledge to solve problems together?  Does such a mecca exist?  Andrew Youderian is here to tell you that it does. Andrew is the founder of eCommerce Fuel, and on this episode of Up Next in Commerce, he discusses how he built a community of more than 1,000 seven-figure eCommerce business owners, plus he shares all of the insights he’s gathered along the way. From questions about Amazon, to a crash course in community-building, to the single metric he says should guide eCommerce businesses today… Andrew divulges some of the industry’s best-kept secrets and more in today’s interview.  Key Takeaways: The Value of Selective Community Building: A community is only as strong as the people in it. Together, a community can deliver ideas, content, and capital to other members who would not be able to find those things on their own. But to ensure that all members are receiving value, it is important to be selective about the acceptance process.  Finding Your Way Through The Amazon: “If I'm selling to wholesalers, should I let them sell on Amazon?” “How do I control my brand identity on Amazon?” These questions and more are plaguing the industry and at eCommerce Fuel, the community is gathering to come up with answers, including how to capitalize on the recent delays in shipping Amazon has seen. Meaty Metrics: While most owners will point to revenue as the main metric to judge success, it is widely believed that revenue is one of the least important metrics when judging the health and long-term viability of a business. There are other metrics that are more telling, including repeat purchase rate, and one other that gets very little fanfare but could change the course of your business: price per visitor. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome back to Up Next in Commerce, this is your host Stephanie Postles and today we're joined by Andrew Youderian, the founder of eCommerceFuel. Andrew, welcome. Andrew: Hey, thanks Stephanie. I appreciate you having me on. Stephanie: So, is a weird feeling a podcaster being interviewed by a podcaster? What are your thoughts right now? Andrew: I think it's great. You have to do all the work and I can just sit back and relax. Well, unless you send some really pointed questions my way, so maybe I shouldn't be relaxed, so we'll see. Stephanie: Oh, yeah. I don't know. Andrew: But, yeah- Stephanie: You might have to sit up straight and get ready, this might be intense. Andrew: This may be, I need to stop slouching here. But no, it's good. Good to be on, it's fun to be on the other side of the mic for a change. Stephanie: So, I want to dive into your company eCommerce Fuel. I looked at it and it seems awesome. It seems like you have gathered so many insights from this company that you've built all around eCommerce, but I want to hear in your words what is eCommerce Fuel? Andrew: At eCommerce Fuel we provide community content and capital to seven figure plus store owners, and so we do that through an online form which is really the heartbeat of our community. We've got over 1,000 vetted store owners, and the idea was really just get a lot of people together that are doing this day in and day out, that we're running seven... our average store owner is probably doing three or four million dollars a year with their business, so that's community aspect. We also do a big event every year for our community through content, like you said I'm a podcaster. I've been doing the eCommerce Fuel podcast for I think it's about seven years now, which is crazy. Stephanie: Wow. Andrew: And then we have a capital arm as well where we invest in promising eCommerce businesses. We have 20 investors that have a lot of similar experience or world class experts, everything from Facebook marketing to email marketing to product design and so we invest in companies that we think are interesting, so that's what we do at eCommerceFuel. Stephanie: That's such a cool model. So, for you podcast I think I saw you had over 300 episodes. Andrew: Yeah. I think, actually I think we're... yes, we do. I've been, like I said, been doing it since July 2013. Yeah, been going at it for awhile. It's been fun. Stephanie: Yeah, that was really cool to look at your backlog and the guests that you've had on. So, your business models' really interesting how you have a capital arm and community, I mean two things that I would say are very hot right now. Everyone is always thinking about of course being investors, I mean at least here in Silicon Valley that's everyone's dream it seems like. And then building up a community is something that we've heard a lot of guests mention on the show, like how to properly build a community. What was your idea behind starting this business and having those different arms of the business? Andrew: They came in stages, so in a nutshell, left the corporate world and got my teeth in eCommerce for starting in 2008 on a couple different eCommerce businesses and built those up. So, I had a sense of this space and nobody was talking about eCommerce unless it was like from a Home Depot or like a Lowe's, like a, you know, Fortune 500 style? Stephanie: Mm-hmm (affirmative). Andrew: And so I started writing about what it's like to grow an eCommerce business for a small team or a single founder and developed a little bit of a following on the blog, started podcasting, and then from there that kind of just naturally led to me meeting all these great people and I thought what if we got a bunch of people in a community together that had some kind of vetting thresholds and just made sure everyone had some level of experience? And that launched the community and built that up over time and then the capital arm is fairly recent, really recent in fact, it's about five or six months old. That just came as a natural extension of seeing all these interesting entrepreneurs that hopefully we'd built some trust and report with, or that people knew about us from the time running the business. And then also just a really great group of investors who also had not just money, but a lot of in the trenches experience and advice to lend, so it kind of came in stages. Stephanie: Yeah, that's really cool. To start with the community aspect, what are the vetting procedures that people have to go through? How do you know who to bring in to keep it a high quality community? Because I think that's biggest problem when you're getting in all these Facebook groups or communities, you're like, "Oh my gosh, just everyone's in here and I'm actually not learning anything." So, what does it look like to get into your community? Andrew: Yeah, you're right. I mean, if I could only do one thing well in a community it would be bring the right people into it. So, our guidelines are a little nuanced but you need to be operating a seven figure business. If you have a very proprietary product that you've made from scratch or that is a little harder to make sometimes we'll take people in kind of the mid to high six figure range. If you're selling just on Amazon usually we require a little bit more than that, so that's on the revenue threshold sides. Andrew: So, we keep it no major SaaS vendors, and then for service providers we're really careful. I'd probably say only 10% of our applicants that we accept are service providers and they need to be recommended by an existing member because you can... An amazing email marketing expert that knows the space, that is respectful of people and isn't going to come in at a hard pitch and is going to build relationships the right way through adding value, is a huge asset. But we want to make sure those are the type of people we have and not people who are just trying to sign somebody up on the first day, so. Stephanie: Yeah, that's really important. How many people are in your community now? Andrew: We have about 1,100 members in the community. Stephanie: Okay. How did you go about building that up? What is your method of bringing new people into the community? How do you get in front of people and even tell them about eCommerceFuel? Andrew: Community building's interesting. You've got this chicken and an egg problem, right? Stephanie: Mm-hmm (affirmative). Andrew: And the way that I did it was when I was blogging and podcasting early on about eCommerce, just over that probably 12 month period really focus on not trying to monetize the business or anything, just trying to build authority, get a little bit of a reputation, and connect with people. Over the course of a year, just naturally, organically, met about 100 to 150 really interesting people. And any time I did, I'd just put a little tag on them in gmail and say, "Community seed member." Stephanie: Oh. Andrew: So, a year in a had this list of 150 people and I reached out to them and said, "Here's what I'm doing. I'm starting a community, are you interested?" And then over the course of about 30 to 45 days I dripped in, I added, about four or five people a day. I'd bring them in, I'd introduce them, I'd introduce them to other people, I'd ask them questions, kickstart discussions, and so it gradually grew. I didn't just drop everyone in at once, and it took about like 45 days but we had a bit of a community at that point. And then from there I had over the last year built up some traffic to the website, was able to put up a page that said, "Hey, here's the community. You can join," and that gave us kind of... because you need both things, right? Stephanie: Mm-hmm (affirmative). Andrew: Like in community you have to have new people come in because you always have a drop off even in the most healthy. So, from it was able to kind of, with a lot of work, get to self sustaining within probably 18 to 24 months, so. Stephanie: Wow. Yeah, that's great. And it is a paid community? Andrew: It is, yes. It's a paid community, so it's... yeah, it is. It's $99 a month. Stephanie: That also helps... Okay, yeah. I'm sure that also helps with quality and bringing in people who are serious and really want to learn and contribute to get their monies worth. Andrew: Oh, it helps so much. I mean, for a couple reasons why. We have, just like you said, on the vetting side, yeah, it shows that people are actually serious about this. The other nice thing is it gives us the resources to do things like hire a real community manager. We have someone full time that their whole job is just to vet people to make sure that if people have questions that don't get answered they can move them to the right people. It let's us invest in technology, we've probably poured six figures plus into the custom tech for the community, so yeah, it makes it a lot easier. Stephanie: Yeah, that's really cool. When it comes to keeping the community engaged, because to me that's one of the biggest things to make sure people keep renewing their membership and they want to check in everyday and see what's new and see who's talking, how do you go about keeping them engaged? And maybe what have you seen works and what didn't work? Like any tests that you've done where you're like, "We've tried this and this failed," or, "We tried this and this really increased engagement a lot and helped keep it going?" Andrew: I think the best thing you can do, two things, the first thing is to actually have discussion and content that are highly relevant to what people are doing day in and day out. So, again, kind of going back, if you get the right people in the same room that's 80-90% of the battle. From that point, setting up custom notifications is really important. So, some of the custom tech that we've talked about, when people sign up we don't just blast them with every single discussion that pops up, that's crazy, right? They'd just drowned in a fire house because we have like 5,000 comments every months in there. But we do try to figure out like, hey, what are you an expert in and what are interested in learning about? And then when they join we tailor their notifications to try to create the highest level of a signal to noise ratio possible, and so that's another thing. The third thing is just maintaining a really respectful environment, like we have a pretty strict no jerks rule. I probably shouldn't say this, but I get a lot of pleasure out of throwing people who are just downright disrespectful and just, you know, kind of just generally unpleasant out of our community because they're horrible. Stephanie: Yeah, good. Boot them. Andrew: And also non-solicitation. We kind of have a one strike, one warning, and then if you do it again you're out. So, we don't put up with pitches, you know, if people are hard pitching stuff they're out. So, I think those are the big things that help with maintaining an active community where people keep coming back to. Stephanie: Yeah, those are such good points and it's not only applicable to your business but even thinking about any eCommerce business of how to build up... I mean, everyone talks about building these communities but how do you actually make it helpful and personalize it to people in a way that people want to engage on your social media post or they want to engage on your blog or tag themselves wherever they're in your clothing or with your mug or whatever. So, I think these lessons actually can apply across industries as well and not just upon building a community like you're doing. Andrew: Yeah. Community building, it's interesting, it's kind of like a brand. It is a brand. It's insanely hard to get up and running, like the amount of time and energy and love and relational just work that you need to put in, I don't say it in a bad way, but just building relationships takes a tremendous amount of work. It takes a ton of time, just like building a brand. But it's insanely defensible, I mean, if you're willing to put in that, you know, if you have a multi year approach. You can't steal people's friends, right? Stephanie: Yeah. Andrew: And that's what happens, whether you're building a community for your brand or kind of a micro niche community like this for eCommerceFuel, is people come in and they stay because they get value and they stick around for a couple months but then they come to an event, they connect with people via PM, and then build genuine friends. I don't know, you'd be hard pressed to tear me away from my good friends and it's really defensible in that department, so. Stephanie: Yeah, I agree. I love that. So, you probably get a lot of really good insights into the world of eCommerce and where things are headed just by some of the questions that some of the members in your community are asking each other, and I wanted to know what kind of top questions do you see occurring right now where it's like quite a few people are asking the same type of question or these same things keep popping up? Andrew: Yeah. Let's start with the 500 pound gorilla in the eCommerce space, and that's Amazon. Some of the questions I think people are asking on there is how do I... I'll just go through a handful of them and then maybe we can talk about ones that are most interesting to you. If I'm selling to wholesalers, should I let them sell on Amazon? How do I control my brand identity on Amazon? There's some interesting popping up right now about how... I don't know if you've noticed this, but Amazon Prime used to be for awhile it was free shipping, then it was two day, and it was one day, and now it's like- Stephanie: Yeah. Andrew: ... three to five days if you're lucky depending on where you live. Stephanie: Yeah, I did notice that and I was like, "What's happening here? Usually I can get my stuff for my son in like a day and now it's taking a week." Andrew: Yeah. It's kind of crazy, and of course because of just with COVID eCommerce is blowing up, the capacity is limited on the delivery networks. But it's interesting because it kind of levels the playing field at this moment in time for independent brands because the shipping factor is not so much of an issue, and in fact a lot of people are probably are almost in... If somebody gives you something and takes it away it's worse than if they just had never given you anything to begin with, right? Stephanie: Yeah. Yeah, yeah I feel way more sad right now than I ever would have before this. Andrew: Exactly, right, because the expectation's there. So, that's creating an interesting opportunity. One of the things that Amazon just recently came out with I think in the last couple days was re-introducing... Way back, I don't know, two, three, four, I don't know how many years ago, multiple years ago, you used to able to ship your products from Amazon's warehouses to customers. You could use them as a 3PL fulfillment center without Amazon branded boxes. They changed that for many years and just this week I think they changed back to saying, "Oh, actually you can use our fulfillment services with your own proprietary boxes," or at least with unbranded boxes. And I think potentially... Who knows why they did it, it was kind of perplexing to a lot of people, but perhaps because they realize that they're losing on the shipping game and other merchants maybe are starting to migrate other places and if independent merchants are able to deliver the same shipping without Amazon maybe more then we'll move off. And one thing that we've done, we've done a State of the Merchant Report for the last three years, and our one for this year should be hopefully coming out fairly soon. But a trend that is really noticeable is the number of people that are going to Amazon is really... it's not reversing but it's plateauing very significantly. Andrew: And even just chatting with merchants and seeing a lot of case studies, people are taking a lot harder look at is it worth going on Amazon for how much channel risk you take on, how much loss of control of the consumer that you give up, you don't have addresses, all these things. They're just taking a lot harder look at is this good for my business long term? Stephanie: Yeah. So, do you think 2020 will show that a lot of people are pulling back from Amazon? Andrew: That is a good question. I think not a lot of people, but I do think when we released the report I made this prediction in the report too, so very likely could just fall on my face in the mud here, but I think the percentage of people who sell on Amazon, it was about 55% of all stores that we surveyed last time, I think that will decrease a small amount. I don't think we're going to see a precipitous drop but I think it goes from 55% to maybe 54 or f... I think we start to see that inflection point. Stephanie: Yeah, that's really interesting. The one thing I also read in your 2019 report was about the different marketing channels that people were using and I saw that Amazon ads had the highest ROI but not many people are using it, so I'm wondering what are your thoughts around that aspect of using it as a marketing tool? Andrew: Yeah. No, it's... Wow, good prep work. If you're on Amazon, Amazon ads you have to have a... people reported them being the most effective sales channel that they use. So, if you're on the platform they work really well, so definitely should be doing that if you're on the platform. I think it's just more of a... it's not a question so much of should we use Amazon ads if you're on the platform, you absolutely should. It's more of a question of do we want to be on Amazon in the first place? But, yeah, for people selling on Amazon they work really well. Stephanie: Yeah, okay. But then the other interesting thing I saw was that the average order value was way lower for... because if it's maybe a direct to consumer site or anywhere else people can maybe stack on additional things from your brand, where I think I saw on Amazon the average order value was much lower which makes me think you're not getting that, hey, you should maybe also try this from my brand and this from my brand as well and kind of increase the cart value. Andrew: I think that could definitely be part of it. I think a big part of it too is that if you have people on Prime there's no free shipping threshold, right? Have you ever ordered a... what's a good example here? Like a $3 koozie and it shows up and you're like, "How did they pay for the shipping for this? They lost money on this." Or even better, you order a $7 paperweight set that weight like 10 pounds and they ship it. There's no threshold so it's easy to impulse buy small stuff on Amazon. Stephanie: Yeah. Good point. Andrew: Whereas if you're buying from an independent merchant not always, but more often than not you're going to have some kind of free shipping threshold. So, either you're intentionally going to seek it out or you're buying multiple things so I think that probably also has a big part in why those order values are different. Stephanie: That's a good point. That's a good reason to look further into data and not just look really quickly like I did through the report. So, what other trends are you thinking are happening either right now, because a lot's been changing because of COVID and things are kind of just all over the place where some people are struggling, some people aren't. It seems like the market is changing quickly. What other trends or things happening do you see that people are surfacing in your community, or are you building into your next report coming out? Andrew: Yeah. So, eCommerce obviously no surprise here is just exploding, and we did a survey, this was in March when the world was falling apart and nobody knew what was happening and it was much more uncertainty than there even was now, and you saw early on in that you kind of saw a very big dip for the first probably week when COVID really started spiking and being taken seriously. And then you saw kind of half and half, half the businesses were doing okay or growing and half were failing, now I'd say you definitely have some businesses that are really struggling. If you're in the event space, if you sell items in the event space, any of the kind of in person things are having a hard time, but by large I'd say most of our stores are doing, you know, most of the industries are doing really well so that's fantastic. One thing that's tough, it's a downside, and anybody who's selling is probably going to be aware of is just the sales tax issue in the Unites States is just an absolute disaster, just on making- Stephanie: Tell me a bit about that because whether- Andrew: It's just a dumpster fire. Stephanie: I don't know if I... well, I actually probably have avoided anytime I see tax I'm like, "Oh, no thank you." So, I would love for you to dive in a bit and tell me why is the sales tax a disaster because [crosstalk 00:18:28]. Andrew: Yeah, so I'll try to be somewhat brief because you could probably talk about this for quite awhile, up until two or three years ago pretty much the case was if you... The only places you had to collect sales tax for was if you had Nexus in a state. So, if you had... I run a business out of Montana and Arizona, so Montana doesn't collect sales tax and so traditionally we've only had to collect sales tax in Arizona. There's a big Supreme Court case that came across in 2017 or 18. It was Wayfair versus South Dakota and pretty much the shakeout from that was that the Supreme Court said that states can require sellers that are outside of their state, they have no physical presence in their state, if they sell to a customer within their state they can collect sales tax on them if they reach a certain threshold. If they sell either a certain dollar volume in that state or if they have a minimum number transactions for that state. And it could be as low as 200 transactions and $50-100,000. So, the problem that causes is that now you have companies who create this economic Nexus and now all of a sudden they have to be responsible for collecting and submitting sales tax not just to 50 states but to potentially sometimes all these different municipalities and cites, and just creates a disaster of a compliance thing. Andrew: So, you've got companies that have sprung up to try to deal with that, and one top of that, if you sell on Amazon, technically if you have inventory... Normally, you send your inventory into Amazon and they a lot of times will split it up in three or four warehouses so it can be delivered quickly. Well, technically now if you have those inventory in those four states you have Nexus in those states and you have to also collect sales tax. So, it's just on the Amazon front, on the independent front, it's just created... We don't have any central governance for this. What I think would be best is if the federal government kind of took it over and said, "Hey, we'll create a national sales and redistribute." But at the moment you either have to deal with an insane amount of complexity, especially as you get larger, or you have to run the risks of being out of compliance and facing huge fines. It's a really rough place to be. Stephanie: Wow. How are you seeing eCommerce companies tackle this? That is not something that I've even thought about honestly, and it kind of scares me to ever start an eCommerce store now. Andrew: Yeah. There's a lot of different ways. Sometimes there's places... I have a company called The Tax Valet that helps out, they do a really good job. Kind of a personal hands on approach to doing this. Some merchants will use SaaS software like Taxify or TaxJar to be able to do that kind of stuff, Avalara as well. And some people just roll the dice and say, "Hey, this is a nightmare I'm not going to try to deal with this," so there's a lot of different... it depends on your risk tolerance, it depends how big you are, but people are taking a lot of different approaches to it. But to do it right it's really unfortunate. Stephanie: You'll have to hire someone. Andrew: Yeah, hire someone or really go deep on the SaaS side of things and dive in. Stephanie: Yeah, that sounds messy. Well, earlier you were talking about the howling out of eCommerce and I wanted you to talk a bit about that because we're talking still about the trends and what it's going to look like in the future, and I thought you had an interesting take on that so I'd love for you to go over that if you could. Andrew: Sure. And again, of course totally could be wrong here, but when I look forward into the future I feel like Amazon's going to be hallowed out in the sense that, or excuse me, eCommerce is going to be hollowed out in the sense that you have... On one side, you have brands on Amazon that sell either one or two things, they're either well known national brands, like the... well, I don't think Nike sells on them anymore so that's a bad example, but the... Why am I blanking on big national brands here? Tide for example could sell on there or Rubbermaid or Adidas, brands people... household names. They sell on there because it's just they know that brand, they go find it, and they want to buy it. You have people who are selling really small things, like we're talking about koozies or you needs stapler, or maybe you need a little backyard pool for the fact that your cousins are coming over and you really don't care if it breaks in three weeks and so you buy that. But then for anything in the middle that's like kind of not a huge national brand but also something that you want to have that's quality, I think a lot of those companies are going to start... people are going to buy much more from the companies themself, direct to consumer. Andrew: Because they can merchandise them better, the shopping and check out experiences are getting easier. I think brands are increasingly not going to sell on Amazon because there's, in addition to all the things we talked about, you also have huge IP issues and people ripping you off. So, I think that's going to be the hallowing out of eCommerce when Amazon's going to be a big donut and in the middle a lot of people are going to be selling directly on their own sites just because it makes more sense for all the reasons I mentioned, so. Stephanie: Yeah, that's interesting. We've also talked a bit about the conscious consumer that's kind of rising out of all this and how people are starting to care about what is the source of this product, is it actually sustainable? Is it a quality product? And less about can I have more and more focused on quality and sustainability. Have you heard that trend as well in your community? Andrew: Yeah, I would say I think that's something that's been kind of gradually increasing over the last five to 10 years. I think more than anything how it ties into our conversation is that Amazon over the last couple of years, and they've been fighting it and they've done some, to their credit, they've done some things to combat it, but they still have a... If you buy something on Amazon most people are not going to think it's... there's a little bit of a thought that it's probably not high quality, a little bit of a stigma for buying stuff on Amazon especially if it's not a name brand. Part of that- Stephanie: Even the name brands people wonder if it's it... is this a legit name brand, I've seen that a lot in comment and reviews. Andrew: Oh, totally. Partially because of review manipulation, partially because of counterfeiting, and partially because there's just a lot of... I mean, there's everything on Amazon so how do you filter through it, right? Stephanie: Yeah. Andrew: So, yeah, I think that's part of going back to that [inaudible] about the hallowing out of eCommerce unless it's a brand you absolutely have faith in or it's something that you don't care about the quality. Would you rather buy one of those borderline things from Amazon and roll the dice with an unproven brand, roll the dice with one of those mid-tier brands being counterfeited? Or, especially if you can get it just as quickly either because Amazon is shipping stuff really slowly or because increasingly independent merchants can deliver it more quickly with some of these other options via straight from the horse or straight from the source rather. So, yeah, I think for me that's how the quality issue ties in I think to the larger discussion. Stephanie: Yeah, that makes sense. Do you think that is why the drop shipping model has kind of decreased? I saw on your report that that is not as big of a thing as it used it, and I just remember... maybe even like last year, over the last couple years that was a huge thing. Everyone just said, "Start a eCommerce company and just drop ship things and let other people take care of it for you." What are you seeing with the drop shipping trend? Andrew: Yeah. So, when we talk about drop shipping I think it's important to differentiate two different things that come into people's minds. One is drop shipping, you can build a great high quality business based around drop shipping. A couple of businesses I started were drop shipping based businesses, one of them's still, under a great new owner, is still doing well. Really at the end of the day it's less about the product quality and more about how it's delivered. So, like Home Depot for example, they drop ship a ton of their stuff, some of their even big name brands because they're can't afford to hold everything in stock and that can potentially work out reasonably well. I think where it got a really bad reputation with all AliExpress side of things and so where- Stephanie: Yes, that's the stuff I read. Andrew: Yeah, right. And that's a whole different ballgame, and for people who, you know, if you're not familiar with that the 30 second version is you go onto AliExpress which lets you pretty much ship pretty much ship products directly from the factory in China to consumers in the US very cheaply through some kind of loopholes in the postal service. You can set up a store really quickly but by and large the products are garbage. They're just crappy, so that I think is where... There was a big rise in that, people ran that for a while, tried to run with that, but the problems were you couldn't build a brand around it because the products were awful, and because it took weeks to get your product to your customer, and probably because most likely if you're launching one of those businesses you know nothing about the product, so. Stephanie: Yeah. Never seen it, you don't even know if it'll make it or not. Andrew: Yeah. But even on the other side I'd say, that all aside, even if you're selling really good quality products, Amazon in the last five years has completely solved distribution. When I started for awhile I sold trolley motors, I sold CB radios, and back in those days you really could get a business up and running purely by sourcing a relationship with a wholesaler, doing a decent amount of marketing, having reasonable customer service and you were in business. But like today if you know what you want to buy, you know the brand, and you want it at a fair price, at a reasonable quickly you're probably going to go to Amazon for something you discreetly know that you want. So, Amazon's solved, at least before COVID and probably still I'd say a large degree, they solved distribution. So, how do you add value? You got to add value through some other way, usually that's through a lot of education or a really curated product line if you're going to sell existing products and those can be harder to get right. So, I don't think drop shipping is completely dead but I think it's gotten significantly harder versus even just two or three years ago. Stephanie: Yeah, that makes sense. So, one question I always try to ask on here is about metrics and data, and with access to your community I want to know what kind of metrics do people talk about as their success metrics or what do you hear people debating about when it comes to metrics behind if a business is doing well or not? Andrew: Yeah, I think the one everyone loves to talk about is revenue, right? But I think that's probably a pretty horrible metric to use. It's easy, and we're totally guilty of it, that's one of our thresholds for even membership. So, guilty as charged, I'm going to slay myself along with everyone that I slay here. We use it because it's easy, we use it because it's socially acceptable. It's way easier to say, "I do three million in revenue versus I made $600,000 last year. It's also way easier to say, "I did three million revenue," than, "Oh, I only made $20,000 last year and that was I didn't pay myself anything," right? Stephanie: Yeah. Andrew: But metrics that I think are most important, one that... To be totally frank, in the community we don't talk a ton about... a lot of our conversations really don't revolve around what metrics should you track. Bottom line is a big one, of course. Conversion rate's a big one, average order size is a big one. Repeat purchase rate is a big one. And I'd say we don't have tons of conversations about them, but I think probably the most important ones to think about today are repeat purchase rates because advertising is doing nothing but getting more expensive. It's getting harder and harder to get in front of people without paying the big tech gatekeepers. So, the more likely a customer is to come back to you and needing that product the more likely you can actually build a viable long term business, that's a big one. I think profitability per visitor is a huge metric. It's harder to calculate but if I was going to run my business on one metric it would be profit per visitor to my website. And the reason I say that is because it encapsulates a lot of things, conversion rate, traffic, all these different things. Andrew: But it really makes you focus on pricing. If I would have to identify the one thing that I have done across multiple businesses in my life that has had the biggest impact and taken the least work, hands down it would be pricing. And so few people play with it. Some people can't, a lot of people can. And it's terrifying to change prices because we all fear that when you change the prices that your business is going to disappear, but that rarely happens especially if you do it in a really smart way. And what you should be maximizing is your profitability per visitor, at least for new customers at a minimum. So, yeah, those are some of my thoughts on metrics, and again we don't... total frank, we don't talk a ton about... those aren't the hot topics but I think those are some of the things to really think about. Stephanie: Yeah. So, now you've opened up, what are some of the hot topics? What are some of the heated debates that are going on behind the wall? Andrew: That's a good question. You know what, let me pull it up. Stephanie: Yeah, open it up. Let's see. Andrew: I'm going to pull it up here. Stephanie: Sounds good. Andrew: So, we have a cool little feature. Let's just surface all the top discussions from the last year. So, I can't... for confidentiality I got to be sensitive, but here's some of our top stories from the last let's say month. The story about how someone sold their brand, their business that they built over the years and just the emotional rollercoaster and what they learned, and how they were looking to hire multiple... How to use influencers on YouTube to build an eight figure business. Stephanie: Oh, that's a good one. Stephanie: Yeah, the influencer one is interesting to me because it kind of brings about the question of the social shopping experience and how the US is so based... right now, I mean, a lot of people are looking towards influencers. Whereas other markets, like China, are not really as much about that. It's more about the social shopping experience. What were your thoughts, or what was the debate when it came to the YouTube influencers and how they utilize that, and do you think that's a longterm trend? Andrew: Yeah. I think one of the big themes I've seen is that the really big influencers a lot of times are spendy and hard to track, but you could potentially get a better ROI if you focus on helping maybe working with smaller influencers either for less money or just for product. Because it's, I don't know, I don't know about you but when I'm on Instagram and I see someone using a product, and especially if they even mention it in any little way I'm immediately a little suspicious. I'm like, "Is this person really like this product or are they just getting it comped and they're having to fulfill their end of the agreement that they signed up for?" Stephanie: Yeah, especially the more popular they are, like as it goes up to the really popular famous people then I'm like, okay, do you actually use that whitening strip? How much are you getting paid for that? Andrew: Yeah, and so I don't think influencer market is going away. I mean, we've had famous people endorsing things for decades, maybe 100+ years, especially in the United States, but I do think, yeah, I just think you can also waste a lot of money on it if you're not doing it carefully. Stephanie: Yeah, I completely agree. So, on your podcast I'm thinking, this is like self serveant, so I'll go with it, but what are some of the best questions that you've asked your guests before where you continued to get the best answers or the best stories? Andrew: Oh, good question. One of my... A couple ones, I would say what's the biggest mistake, or what's... excuse me, what's the last thing you apologized for I think is an interesting one. Stephanie: That's a good one. Andrew: I think another one is what's your number? Like, what's your number to be happy, like if you had X in the bank and what's your number where you'd be happy without having anymore? It's interesting to get a sense. You get numbers from all over the place from a million to 100 million, sometimes bigger, so. Stephanie: Oh, gosh. Andrew: Yeah. A lot of the questions are very specific to the individual person and their story, but for two general ones I'd say I like those ones and get some really interesting ones those times. Stephanie: Yeah, that would be really interesting. A good kind of peak into who that person is or how they think too. I like that. Andrew: Yeah. Stephanie: So, I know we haven't gotten to talk about the capital arm of your business yet and I wanted to kind of go into what that was like starting it up and what kind of issues you were encountering when starting a capital arm? What does that look like and I want a little behind scenes for the new side of your business. Andrew: Sure. Well, thank you. I appreciate it. Yeah, and I'll say in total transparency, like I said, very early into this. We're only about four or five months into this, so still pretty new. But you asked, and specifically were you hoping to know kind of some of the hard parts about starting that? Stephanie: Yeah, like what was the... not the thought process, because that seems pretty obvious like you have this great community and you maybe see some of the challenges that are going on, but what was it like starting a investment arm and what kind of challenges have you run into so far in the first four months? Andrew: Yeah. So, what it was like, it was terrifying. And I think- Stephanie: Sounds like it. Andrew: Yeah, traditionally you kind of have these two approaches where either you go out and raise a bunch of money and then you get all these commitments and you close on it and then you have to go out and put this money to work. It's kind of your life for the next often 10 years, and it's a traditional fund route. The other route is what's called syndicate where you pretty much do deals on a deal by deal basis, which gives you a lot more flexibility but the problem is every time you get a deal you got to go pass the hat and call a million and half the people are out, you know, of those half a quarter of them decide at the last minute that... like the funding process is a nightmare on that side. So, putting it together I kind of did something of a hybrid of those two where we have a group of about 20 investors that are tentatively in. I know them, they trust me, I trust them, and there's kind of a... they signed an informal thing that says, "Hey, I'm in for the next three years for this amount of money." So, hopefully it gives us the flexibility of not have to go out and deploy money just to deploy money, but we can also can be a little flexible, and we can also have the commitment from some people to go forward. Andrew: So, that's totally on the technical fund side, probably super boring to most people. But in terms of some of the challenges, I think that the challenging thing is just the number of deals you have to look at to try to find a good deal. I mean, I looked at over 100 deals so far at some level of depth and it's just finding, A, just good companies, B, where it's a good fit for both parties, and C, where you can see it working out well for everyone. It's really hard to find good deals, especially as a minority partner that comes in to invest, especially on the eCommerce side because our approach and what we're trying to do is buy, invest, in the long run with companies to build profitable businesses, like we're not trying to flip them. And I think in tech investing you can get away with a lot of sloppiness because you're kind of swinging for the fences. So, if you have a bunch that don't work out it's a big deal, most of them don't work out. Stephanie: They don't. Andrew: But with eCommerce, our model... we're looking to do singles and doubles and it's just hard to find really good businesses that you feel are going to be around for three to five years. So, the hardest part for us has just been finding great businesses that we feel check all our boxes, so. Stephanie: Yeah, that makes sense. Is there a common theme behind what these businesses are needing capital for? Andrew: Yeah, I would say... So, financing for eCommerce businesses is tricky. There are some options out there, there's things like Shopify Capital, there's ClearBank, there's PayPal Capital, Amazon Lending, all these things, but they're expensive. They also take a... often times you don't pay them back on a fixed rate, you pay them back on a percentage of revenue which can be good and bad. So, inventory financing is a big one but I'd say the people that we talk to it was probably half and half. Half of them want money for inventory financing to grow the business and half of them just really would love to have someone who has spent $15 million on Facebook ads in their career to be able to help them and give them some high level guidance on what to do and some thoughts there, or someone who's done a lot of importing to be able to tap into that knowledge based in that network, so. Stephanie: Yeah, I agree. When were thinking about fundraising back in the day I was like, "I actually don't really care about people's money as much as are they going to help me?" Like, I really don't want the most famous investor because I highly doubt they will spend any time with me. I want the person who's ready to get their hands dirty and help me with the nitty gritty stuff that I'm looking for help with. Andrew: Oh, totally. Yeah, there has never been... There's so much money sloshing around right now, right? And so there's a lot of places that get money, which is good if you're raising money, but it's greed. I think the real value ad is the experience side and the money is just kind of a nice perk that comes along with it often. Stephanie: Yeah. Yeah, I completely agree. So, you've been looking at a lot of businesses and you have a lot of businesses in your community, what is one thing that you wish online sellers would either start or stop doing? Andrew: Start or stop doing... Stephanie: I like to throw out the hard balls. Andrew: Yeah, no this is good. I would say I wish people would start having more fun with the copy in their business. So, one thing I always... and I didn't, I can't claim- Stephanie: That's a good one. Andrew: I can't claim credit for this one, but I've always liked to try to make the copy and confirmation emails and things like that fun and interesting and a little bit different as opposed to like, "Thank you for your order. Your order is 49732. We appreciate your business." Such a great... Transactional receipts are one of the most opened emails across all emails, shipping ones absolutely, and if you're trying to build a brand there's no better point to be able to, you know, have some fun and be able to be different and differentiate yourself, right? So, I think that's a big one. You can extend that to the product packaging, your website, all that stuff. But I would say take a little more risks and have a little bit more fun. I would check out a site called mancrates.com, have you heard of them? Stephanie: No, tell me a bit about them. Andrew: They're so good. They're so good. They sell fun gifts for men, so for example, instead of ordering your dad a tie you can order him a 16 inch by 16 inch wooden crate of beef jerky and steak rub that he has to open with a crow bar when it shows up to his house, Like stuff like this that's different. Stephanie: Oh my gosh. Andrew: And the copy is freaking just hilarious. So, check them out if- Stephanie: Oh, that's good. I'll have to check that out. Andrew: Yeah, they're really good. It's just you're buying an experience for the recipient and people pay up for it, so. Stephanie: Yeah, now more than ever with people not going out as much, not going in stores and stuff, you do have to figure out how to differentiate yourself. And I think that's a good point that, I mean, right now I'm even thinking I bought something and I'm getting the actual logistics email of DHL or whatever will be shipped at this time, and it's all this other text that I don't care about, so it's like, "Okay, I actually don't care about this email that's coming through." And if they would've made it unique and fun and exciting... like I don't even know what this is that I bought, that's how bad it is. There's no branding or anything, it's just coming apparently. Andrew: Yeah, if they were like, "The DHL guy had a wreck but your package was so important that he grabbed it from the fiery box and he crawled with one arm bleeding out and he handed it to the last person he saw and said, 'Deliver this, please. Deliver it to Stephanie,' and then he died." Stephanie: Oh my gosh. Andrew: That might be intense and maybe it doesn't work for all brands, but it sure as heck gets your attention and you're like, "Whoa, this is interesting." Stephanie: You need to write for our brand. I'm going to bring you on our team, Andrew, just for your copy. I need that. Oh man, that's good. All right. So, I want to do a higher level eCommerce question because I just think you're, one, you're willing to take a risk and you're willing to predict the future which I like. I appreciate that. So, I want to hear either what disruption is coming to eCommerce that's not already here, because a lot of people have said, "Oh, COVID's the biggest disruption." That answer's already been taken, so either the biggest disruption or you can tell me what the future of online commerce looks like in five years. Andrew: Biggest disruption coming, I'll try to tackle both of them. Biggest disruption is I think that... man, it's just coming from the guy. You talk about be willing to predict the future, I made a bet with somebody when Amazon was $200 a share that Alibaba was gonna out pace it. And now that Amazon is $3,000 a share, it was a humbling experience and it cost me a very experience steak dinner. That being said, here's my prediction... Stephanie: That's all right. I want your prediction still. Andrew: I would say the biggest disrupter, oh man... I'm going to throw a couple things out there, I think text is going to be a big one, SMS. But that's not like a big disrupter as much as just a new marketing channel that us marketers can leverage for awhile until we completely destroy texting for everybody which will probably take three or four years. Stephanie: That's a good one though. What are thinking around using that as new marketing channel? Andrew: Oh, I just think, I mean, if you look at the... I think email is just getting harder and harder unless you really want to hear somebody's email. So, I just signed up for the service HEY, are you familiar with that from Basecamp? Stephanie: I've heard about it and I seen a bunch of drama on Twitter about it, so. Andrew: Yeah. There has been... probably between them and the App store and all that kind of stuff? Stephanie: Yes, yes. Andrew: Yeah. So, one of the reasons I signed up for them is because they have this thing where you can screen your emails now, and the first time you get an email from a new sender you can say, "Hey, I want this person to pop in my inbox, or no, Johnny, from Michigan I don't care about your boat covers. Don't ever talk to me again. It's unsolicited." So, that kind of thing, I think email is going to be... there's going to be more and more tools and services that let you curate your email and really slice down who gets to hear from you and so email is going to get harder and harder. But if you look a just text message delivery versus email it's an order of magnitude higher engagement, readability, click through, et cetera, and I think that marketers are already, I mean, they're already starting to do that. People that I know that are on the leading edge have five, I haven't six figures, but definitely seen some good mid tier five figure SMS lists and they just do really well. So, the problem is you got to be really careful because when people text me about things that I'm not interested in... like texting for me is very personal. I text my wife, my family, my good friends. Andrew: I don't text with Bobby's Boat Shop in Michigan, and if he sends me a promotion via text I'm going to be pissed off. So, you got to be really careful about how you use that but I think that will be a big marketing channel going for, so. Not really sure if that's really a disrupter and it's already kind of here in some regards but I'll throw that one out there. Stephanie: Yeah, I like that. I think that's a good one though to think about how to be careful when you start using these new channels, because completely agree. I've had I think someone just texted me this morning who's like, "I'm the education blah, blah, blah person of your district." I'm like, "What are you texting me right now? Don't." Andrew: Oh, totally. You can really... and I think there's some pretty stiff penalties for not being careful about that in terms of if you just spam people via text, which is good. But yeah, nothing's worse than getting a text from someone you really don't want to hear about, so. Stephanie: Yeah, I agree. All right. So, next we have a lightning round, if you're ready, Andrew. It's where I'm going to ask you a question and you have a minute or less to answer. Andrew: Perfect. For each question? Stephanie: Yeah. Andrew: Awesome. Is there like a booing sound if I go over so I stop talking? Stephanie: No, it'll just be me, "Boo! Boo!" in the background. Andrew: Do it, do it. Stephanie: All right. What's up next on your Netflix queue? Andrew: I don't really... Oh, actually I do have... what is it? They're in Arizona, there's a place called Biosphere 2 where they locked all these people into this kind of self contained environment as a training mission to go to Mars, and they isolated them from earth atmospherically for two years, and surprise surprise it was a huge trauma fest. Can't remember the name of the movie but that's what I'm watching next on Netflix. Stephanie: Oh my gosh, that sounds insane. Andrew: Spaceship Earth is the name of the documentary. Stephanie: Spaceship Earth, okay. I will have to check that out. Very interested in that, and I also pontificate about Mars sometimes on our other show Mission Daily, so it's perfect for me. Andrew: Oh, perfect. Watch it tonight. Stephanie: All right. Where are you going next for your travel destination when you can travel? Andrew: Probably down Tucson, Arizona where... I'm up in Montana right now, but probably Tucson, Arizona which is where we live, so. Stephanie: Cool. Andrew: That's kind of a cop out. I need a better one. Stephanie: Wait, you live in Montana and you live in Tucson? Andrew: We're up here, we spend some time in the summertime up in Montana just to see family, friends, like that. Stephanie: Oh, cool. Andrew: Yeah, so we're heading back there soon. Don't have any plans at the moment but the next big trip I would like to take would be to Mongolia. Stephanie: Oh, that would be very interesting. Do you have an Instagram? I'll have to follow along when you go there. Andrew: @capalisthippie, so. Stephanie: Okay, I'll follow you. If you were to create a Netflix original, what would it be about? Andrew: Oh, this is easy. It would be... I'm fascinated with the question of where is the balance between running a business and being ambitious and chasing entrepreneurial success and having a great life and traveling and seeing your family and nurturing other side of yourself, and I feel like so few people get that right. So, my documentary would be pick 12 entrepreneurs from varying levels of that spectrum, live with them and follow them for two months each and try to come to some conclusions about if you were going to try to design your life to be able to maximize both of those, where's the line? Stephanie: Yeah. That's a really good one. I need help with that right now. Andrew: I think a lot of us do. Stephanie: Yeah. What podcast guest are you trying to get on that you just can't get, like they're just not responding and you really want them? Andrew: Oh, that's a good one. I think awhile we were trying to get Tim Ferriss on the show, which is super cliché. It didn't work out. Stephanie: Ouch. Andrew: Yeah, I know. I'm still upset about that, Tim. What is the favorite piece of tech that makes you more efficient? Andrew: Good question. I would say text expander is a big one so you can do saved replies and bump those out. Yeah, I'd say that's probably one of my favorite. Asana is another great one. I love Asana for we manage all our SOP's and long term projects there, so I'd say those two. Stephanie: Yeah, completely agree. I like them. All right, the last one, what new eCommerce tool are you hearing about that a lot of people in your community or outside of it are having success with right now? Andrew: I would say there's a tool called Bonjoro, and it's not necessarily just for eCommerce, but it allows you to send custom welcome videos to people really easily. If you think about sending a video to a customer it's probably not the filming that's the hard part, it's probably like the okay, I have to film it and then I have to send it, and then I have to edit and export, and it just lets you cue up these emails, send videos to people for kind of nicer customer service touch. So, yeah we use that for onboarding for a lot of our members and I've heard people have good luck with that, so. Stephanie: That's cool. Well, Andrew, this has been such a fun interview. Where can people learn more about you and eCommerceFuel? Andrew: Yeah, if you like podcasts, which at the end of listening to me talk for 45 minutes you prob are- Stephanie: Do you want more? Andrew: ... a glutton for punishment, yeah. I would love to have you as a podcast listener on the eCommerceFuel podcast, so you can get that anywhere you get podcasts, iTunes or elsewhere. But yeah the big home is just eCommerceFuel.com, so you can learn about the community there if you're a store owner and want to get plugged in or if you have an interesting business that are looking for either money or probably more importantly some expertise from a group of really experienced eCommerce investors. Yeah, I would love to have a discussion with you. So, eCommerceFuel.com is the best place for all that stuff. Stephanie: Well, it's been a blast, Andrew. Thanks so much and we will see you next time. Andrew: Yeah, this has been fun. Thanks for having me on.

In today’s digital age, even the most traditional enterprises are moving processes online. Unfortunately, though, the shift to online is not as simple as turning on a faucet.  Wolseley Canada is a leading wholesale distributor of plumbing, HVAC/R, and waterworks products and earns more than $1 billion in revenue each year. Today, the company has one of the industry-leading B2B eCommerce sites, but getting to that point in their digital transformation hasn’t been easy. Gail Kaufman, the Vice-President of Marketing & eBusiness at Wolseley Canada, dropped by Up Next in Commerce to walk us through how she has helped lead that movement online, and the speed bumps they encountered along the way.  Gail touched on everything from building the initial backend infrastructure to the replatforming experience that happened as they learned more about their customers and what they needed from an online experience. But what did they need? And how did those needs affect the training of internal employees and the shift toward implementing A.I.? Everything is connected, and you’ll find out how.  Main Takeaways: Bundle Things Up: In the past, customers were often forced to go to one website to buy a certain plumbing part and then another to get their HVAC supplies. In recent years, Wolseley has brought together the many entities of the company in order to start delivering a unified message and a singular experience on the eCommerce site, eliminating a pain point and saving time for customers.  How A.I. Can Be Deployed: When deployed strategically, A.I. has the potential to have a huge impact on the bottom line. Wolseley is already seeing promising results from this through a partnership with a leading A.I. research department at University of Toronto.  The Importance of Training: The journey from analog to digital is not exclusive to the customer. Employees also need to be trained not only in how to use the eCommerce systems, but how to sell this new digital buying experience to the customers. Customer Engagement Leads The Way: When determining the success of your eCommerce site, the only true indicator is engagement. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Welcome to Up Next In Commerce. This is your host Stephanie Postles, co-founder of Mission.org. And today, I have Gail Kaufman on the show, the vice president of marketing and eBusiness at Wolseley Canada. Gail, welcome. Gail: Hi, Stephanie. Thank you so much. Glad to be here. Stephanie: Yeah, I'm really excited to have you. It feels like you're so far away, where are you calling in from? Gail: I am calling you from Burlington, Ontario, which is just about a half an hour Southwest of Toronto. Stephanie: I think you're our first guest on the show it's calling in from that area, what's the weather like? Gail: Perfect, it's beautiful out. We had a little rain last night. It's cooled down a little bit, but we've definitely been experiencing some very what I would call South Florida weather recently. Stephanie: Rain, something I miss here in California. My two-year-old always asks like, "When will it rain?" And he always brings out his umbrella and I'm like, "I don't know. Don't ask me." So Wolseley, I saw that you've worked there for over 14 years and I was really intrigued and I really wanted to kind of hear about what that journey's been like. What is Wolseley to start and then tell me a bit about your role and how it's transformed over the years? Gail: Well, Wolseley Canada is a leading wholesale distributor of plumbing, HVAC/R, and waterworks products. We have about 200 or so locations coast to coast, 2,500 employees. And we are part of Ferguson PLC, which is the world's largest trade distributor, plumbing and heating products. So very large organization in North America, and we are listed on the London stock exchange and on the FTSE 100 Index. So that's a little bit of overview of the company. Yeah, very large company. So yes, I have been with Wolseley for a number of years. And the role has really evolved since then. I started as director of marketing. And since that time, I've taken on a variety of different responsibilities under, still within marketing obviously, but the scope has then flowed and expanded over the years. Gail: In 2009 was when I got involved with the Ecommerce piece at Wolseley. The platform previously sat in business development and then it was moved over to marketing. And at that time, we had had a very long standing relationship with a digital agency who really pretty much drove the development and the day-to-day management. And so when we really started to get serious about eBusiness, it really made sense to transition that over into marketing where we could really sort of wrap it into our value proposition for our customers and give it the right focus. And so obviously that was a really great opportunity for me too. So that was really where my engagement with eBusiness started. Stephanie: Very cool. And was this something that you were starting to get interested in before they were making that switch or was it kind of like you were thrown into it like, "Here you go, you're going to take this whole business and it's coming into marketing, it's all yours"? Gail: I would say it was interesting because the world had started to change. Certainly in our channel, Ecommerce was not prevalent. But certainly sitting in marketing, it was like we need to do something here. So when I was given the opportunity to take that, it was good. It was a nice development for me, and I felt like we could really do something important with it. It was a direction that we needed to move in, and I thought I was in a good position to do something with it. Stephanie: Yeah, that's great. So just to make sure I fully understand, how were customers buying from you all before 2009 and then what did it look like afterwards? Because I haven't bought a HVAC unit recently, so I'm trying to think about how that worked for you guys. Gail: So in a very traditional fashion, our customers would interact with us through an outside sales rep or in a branch, pretty much that was it. I would say before 2009, we did have a presence online, but it wasn't fully transactional. So there was a website, someone could place an order. But in fact, they weren't really placing an order because it wasn't fully transactional on the backend. So 2009 is when we really got serious about having a fully integrated platform. So before then, it was really coming into a branch, calling a sales rep. And that's still very much how many wholesalers continue to operate. Stephanie: Yeah, I was going to say for this industry, I can imagine the people who are in this business getting used to doing things the way they always have like I always buy from this one company, I go into the store and they place a big order for me. How much education was involved when you start introducing online ordering? What did it take behind the scenes to change that consumer behavior to say like, "Hey, we have a platform now, go here instead"? Gail: Well, that's a great question and certainly one that comes up a lot. I can tell you it's been a journey. But invariably when this comes up, talking about engagement of our customers, I always have to say, first and foremost, this is really about engaging our own associates. It's making sure that they really understand the value proposition, that they are comfortable, that they are proactive in talking about Wolseley Express, really understanding how it impacts the customer from a convenience and efficiency standpoint. That is a very large piece of work unto itself. We recently did a survey with our customers and they indicated that the number one reason they tried the platform was because their salesperson recommended it. So that's a very influential relationship. Gail: So it's really important not just for our outside sales reps, but also for our branch associates. They have really strong relationships with our customers, so it's really about how do we start making Ecommerce and promoting Wolseley Express, just part of what we do? We're really great about talking about products, we're really comfortable with talking about pricing and competitive pricing. But it's like, how do we start to expand the conversation around value in other ways? Stephanie: That makes sense. What was the process like trying to retrain your employees who have maybe been used to something a certain way to then start being like, "Hey, make sure you also mentioned this, and this is the way we do business now"? What was that training process like? Gail: It's an ongoing training process, and it's really about giving them a level of comfort with the platform. They certainly don't need to be experts, but they really need to understand the why. So we have to look at different types of customers, there's different features that may resonate with some customers over other customers. There's training, there's coaching on how to have conversations. I think we have a pretty good approach to it actually because it's very holistic. So we're providing you the training, we're providing you the why, we've got a number of different tools that we provide. And we also really dig into our data and help them really understand the different types of customers who we would consider high potential customers, why we consider them high potential customers. And ultimately, it's about, A, identifying the customers and helping them have those conversations. So that's working down through our sales management network and our branch network. So it's a very multifaceted process, it's very hands-on. Gail: The other thing I didn't mention is we've talked about sort of the onsite experience and sort of why Wolseley Express is so helpful to a customer from a convenience standpoint and efficiency standpoint. But there's also, which I should mention is the whole training around the fulfillment piece. So if they have a great experience onsite, that's good. But if something falls down and the fulfillment part of the program where I didn't get the material or I didn't get the material when I was expecting to get it, that's a whole other area that we've spent a lot of time with our operations people to really make sure that we're closing the loop on that. So that's another piece. Stephanie: Yeah, makes sense. What parts of fulfillment did you invest in heavily that you saw the largest improvements from? Gail: It's really about system training, when a web order comes in, this is what it looks like. This is where you look on a sales order to make sure that every step of the way that people were picking up the orders because when an order prints out, it's sort of in with all the other orders. That's the way it works. So we need to make sure that we prioritize these, that someone's looking for them. Because we're not keying in the orders, we want to make sure that they don't get lost along the way. So the fulfillment is not much different other than the order comes in the same way. But in the early days, it was kind of strange because all these orders print out, so the people that are responsible for the customer they'll pick off their own orders. Stephanie: Like someone goes fist, thanks you very much. Gail: Because they're talking to that person either on the phone, maybe talking to them across, so there's this human interaction that's happening. But when you all of a sudden get this order that shows up, it's like these orders were being sort of just left. Well, that's not mine. Well, yeah, it is yours, it's everybody's. That's sort of the foundational stuff that we had to address at that level to make sure that all of these orders were getting processed with excellence. Stephanie: So when I think about wholesalers and industrial wholesalers, I don't really think about typical companies investing a lot in the user experience and making sure ... I mean, you were mentioning like convenience and having a good user experience on the site. Do you think there's an opportunity for disruption in this field, and how are you guys going about that to make sure that your customers are getting the best experience on the site that's also maybe translating to a higher AOV each time? Gail: Well, I think it's about knowing your customers. And so what we've been doing I would say over the past three to four years, we have invested a significant time and effort into our customer experience program. So that gives us a real time pulse on our customers. We use Net Promoter score, that's a very common way for companies to measure customer experience. So we are always constantly looking at NPS, reporting on it. We have a wealth of insights that we derive from that. And then we take all of that feedback, of course some of it's relating to online, some of it's not. But it's really about taking that feedback, closing the loop on it, and then really being aware of sort of those overarching themes that are emerging and then how do we address some of those through operational improvements? Stephanie: Did you see any similar themes that people were giving you feedback on that maybe you weren't expecting or it was kind of like an aha moment where you were like, "Oh, 20% of our customers just said the same feedback, we need to implement this instantly"? Any surprises there when doing this? Gail: I would say not a lot of surprises. But one thing that comes up from time to time, which shouldn't come up from time to time is pricing. We may get customers that will say, "Well, I checked out Wolseley Express, and I can always get a better deal when I go to your branch." That should never happen. And the reason that should never happen is because Wolseley Express, it's fed from the same system. So the price is the price, is the price. So that is an opportunity for us to go back and identify where we be having people doing overrides where they shouldn't be. So that's definitely a coaching opportunity that does come up sometime. And that is a great example of when you're really paying attention to that customer feedback and doing something with it. And so you can really address those issues because if someone's always thinking, well, I'm not going to use it anymore because the pricing is always wrong or it's always higher, that should never happen. Stephanie: Yeah, because it kind of creates a waiting game where the customer's like, well, I see a discount maybe in the app or in the branch or something like that, I might as well wait until that better price when really there shouldn't be any discrepancy to begin with. So it kind of creates a different mindset. Gail: And it erodes trust. And I think that's a key tenant of shopping online. And certainly in the early days when we were talking about how do you get your customers to engage with it? When they engage with it, you better deliver. So your pricing has gotta be right. They have to have the confidence that when I look online and I see that my branch has 100 copper tees. And if I place an order for 50, they actually have them. They actually have them, someone's actually going to pick up the order and they're going to actually send it to me. In the early days when shopping online wasn't that prevalent, there was a lot of, I would say, trepidation. Gail: So it was kind of easy for customers to talk themselves out of it and just think, "Yeah, I don't know. It sounds interesting, but I think I'll just call my guy. That way I know I'll get what I need." Trust and reliability is still really important, but I think through all of the efforts and through really focusing on not only the online experience but the fulfillment piece, it's not really an issue anymore. Stephanie: So what was that replatforming experience like? What drove you to want to replatform in the first place, and what was it like? Gail: There were some core enhancements we want made to address speed. A lot of it was relating to the architecture of the site, so there were some things that we needed to do to improve speed. A responsive design was certainly one of those things. So it was a real large project. And at this point as well, we took the development in-house at that time too. So we have a great working relationship with our IT group here. So how my group operates is we are working with the customers, we've got the infield sort of feedback loop working really well. We really drive the training and the education and the activation efforts. And all of the insights that we get, we have regular engagement with our IT team. Gail: We have a massive development list as everybody who has a site does. We're just working through it taking into consideration the priorities of the business, what's happening with our customers and then working with our IT partners to bring this stuff to life. So that was another major piece of this replatforming, allowed us to bring all of this stuff in-house, which ultimately gives us much more flexibility to manage what's happening. And of course, we go out and we grab all of the cloud based solutions that enable it to do what we need it to do. So how we did this, I don't know, I think it was like 18 months start to finish, which was a pretty good clip for a project of this size. Gail: And then of course came the reeducation process, again, starting internally. So we did a coast to coast road show, and I think we had about eight different markets where we went into and really tried to do some pretty in depth workshops with our own teams to really give them insight into what the changes were, most importantly, why we were doing them and what this meant for our customers, which was all good news. So that's when we went responsive and that's when we eliminated the app.   Stephanie: Okay, very cool. So earlier we were talking about replatforming and all that, is there anything that you changed where you were like, this had the biggest driver of results or conversions or something? Any technologies you implemented or that you built in-house or anything during the replatforming process that you can attribute to having the most impact on the business? Gail: Oh gosh. When we replatformed, we actually changed up the whole user experience. We really spent a lot of time, we engaged some experts in that field to really help us make sure that it became much easier to navigate. When customers hit a site, they don't want to have to try to figure it out. They want it to be easy to navigate, they want it to be intuitive. So I would say how we organize the information, one of the things we did, we created my Wolseley page. So when you come in to the site, my Wolseley page is all there. And it's really well organized, it shows all your quotes, all of your previous orders. There's a little piece there on credit. All of your lists, all your draft orders, everything, it's all in one spot. And I would say that was a major step forward in terms of ease of use for our customers. I would call that out as one major thing. Stephanie: Yeah, that makes sense. I've heard, especially when it comes to the B2B side of Ecommerce, having it so that a customer can log in and just hit reorder or if they put in one piece of pipe. Hey, look at me I sound like I know what I'm talking about. And then it says, you should also order this as well, like add this to your cart too because you definitely need this if you're going to be using this pipe. Just thinking of ways to not only increase the order value but also just help the customer so they don't have a delivery come and then be like, "Oh no, now I don't have the key piece and I have to wait another week for a couple screws to come in," or whatever it may be. So I think that's a really important point about making it easy to use. Gail: Absolutely. You just prompted something. So when you're talking about customers also bought or did you remember, that's a really important part of it. So we have formed a partnership with the University of Toronto who are real leaders in the artificial intelligence space. And so we actually have been working with them for a couple of years and just recently have implemented AI on Wolseley Express. And that is really helping us with the recommendation engine. Stephanie: That's interesting partnering with a university. Tell me a little bit more about that. Did you give them a bunch of your data where they kind of ran it through the models and trained the models for you guys? What was that partnership like? Gail: Well, the partnership is on ongoing. And yes, so we thought who better to engage with than people that are really, really involved in AI to the extent that they are? So we didn't exactly know what we were going to do with it, but we do know there's a lot of different applications for AI. So it was like, "Gosh, how would this apply to our business?" So this was a real obvious one. We have massive amounts of data, so we did share our data with them. And where we landed on the project that we used as a landing off spot was we really want to improve the recommendation engine that we have. So that was a project that was chosen. Like I said, we just unleashed that just recently, a couple of weeks ago. And so we're working on other opportunities with them as well, there's other places that AI can be really helpful to us. Stephanie: Yeah, it sounds like such a fun project to not only partner with someone like that who is probably cutting edge and wants to try a bunch of experiments, but then also maybe starting to see some of the early results coming in where you're like, "I never knew that just showing people these two items instead of this one could result in a 50% increase in order size

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

If you’re looking for insights into the trends of the eCommerce industry, look no further than Adam Rose, the Chief Talent Officer, of eCommerce Placement. Adam has had a long career as a recruiter, including the last decade at eCommerce Placement, the company he founded to focus on the industry he believed was the future. That bet has paid off, and as the eCommerce industry has grown and changed, Adam has been in the middle of it all. What are the skills eCommerce based businesses are looking for? Where are eCommerce leaders focusing their attention and investing in growth? How is consumer behavior leading the shifts we’re seeing in the industry and how can those working in the industry be successful using analysis of that behavior? Which industries and companies are emerging as big-time players in the eCommerce landscape? Adam has the answers to all of those questions, and he shared them with us on this episode of Up Next in Commerce.   3 Takeaways: Ecommerce offers positions of the future, and right now very few colleges are offering programs that prepare students for them. Those who want to get into the industry need to be lifelong learners and seek out new knowledge Consumer behavior has completely changed, and industries are seeing a shift that they thought they would have years to prepare for, happen in just a few months. That has led to a movement to build Ecommerce teams quicker than ever before CPG companies are starting to heavily invest in Ecommerce, which presents an opportunity for people who want to work in Ecommerce the ability to work in a newly-entrepreneurial environment but with more resources For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Transcript: Stephanie: Hey everyone. Welcome back to Up Next in Commerce. This is your host, Stephanie Postals. And today I have Adam Rose on the show. How's it going? Adam: It's going great. Thank you. Really happy to be here. Stephanie: Yeah, I'm really excited to have you here too. Tell me how did you first get involved in the world of e-commerce? What led you to create this company? Adam: Yeah. So eCommerce Placement, we are a leading e-commerce recruitment firm and what we do is we work with online retailers, e-commerce technology companies, really anyone that touches upon e-commerce. And we're recruiting across the full spectrum of e-commerce functional areas. So that's leadership roles, strategy and management, digital marketing across the whole channels, site merchandising, operations, analytics, logistics and fulfillment, creative technology, the entire gamut. And we've been doing this for 10 years and e-commerce as you know has been growing year after year. So we're just very fortunate to be in this space and one that's really interesting. Adam: Yeah. So, well I've actually been in recruitment my entire career. It is all I know and all I can do. But I went to school and I have a bachelor's degree from Rutgers in psychology and realized I didn't really want to be a psychologist, but I minored in labor and employment relations, which is essentially HR. And that got me into thinking about recruitment or HR as a career. And I ended up getting my masters in HR manager at Rutgers as well. And when I got out of school, I started in more of a generalist HR role at a financial services company doing benefits and compensation and recruitment. And the recruitment piece is what I really liked and decided that's what I wanted to stick with. So I was doing recruitment for several different financial services companies and then a little bit of pharmaceutical as well. And it wasn't until I landed a corporate recruiting position at Borderfree that I got into e-commerce. And Borderfree was a startup e-commerce software as a service company. Adam: And what they did was they allowed US-based online retailers to sell their products overseas to international customers seamlessly. Just like if they were here within the US, yes. And we had about 50 employees at the time when I joined and I grew that company to about 350 before it was sold to Pitney Bowes, much larger organization. Yes, but it was there that I saw that e-commerce was a really hot industry, that folks were still figuring it out. It was a really cool industry if you're an entrepreneur, if you like startup environments, which I did, very different from financial services and pharmaceutical. And I saw that there was a huge need for e-commerce specific recruiting agencies out there. We were working with some of the larger recruitment firms that were just very generalists. They didn't focus in e-commerce, but they were trying to help us regardless. Adam: And I saw that they just didn't have a good understanding of what we did, the types of candidates that we needed, where they'd be coming from, what they'll be doing. And after a while I said to myself that I could do that. I see what these agency recruiters are doing on their end and honestly it seems better than what I'm doing on the corporate side because they're not having to deal with a lot of the paperwork that I have to do, a lot of the internal struggles that I have. And they were doing the best part of recruiting, in my opinion, which is just proactively going out there and sourcing top talent. And that's what got me into recruiting in the first place and got me excited about it. I think it's one of the most strategic parts of business is bringing in the right talent, without that talent that your business may not be so successful. So that's really what got me thinking about making the switch and 10 years later I'm really glad that I did. Adam: And what we're really good at right now is just the fact that over the past 10 years, we've built this huge e-commerce talent network. We have our proprietary database of candidates, we utilize LinkedIn where we have a huge network and following there. And that's a differentiator that a lot of other recruitment firms don't have. And we're also building very longterm relationships with prospective candidates, following them throughout their career. Just being there for them, regardless of whether or not we have opportunities for them in providing advice around their resume, around their career goals and that playing the longterm game is, in this business, I think very important. Stephanie: Cool. Yeah, that's exciting. So how do you vet talent? Because it seems like, at least when I was at Google Day's interview questions were kind of hard to rely on because people would get through and you'd be like, "How did you get here? You definitely don't belong here." So what are some good tips that you could give to other e-commerce brands who are looking to hire? What kind of interview questions or tactics or strategies do you do to vet candidates to make sure that they're the right fit for the company and actually have the knowledge that's needed? Adam: Yeah. So the first thing is that the company itself really has to have a good idea of what their needs are. And that's our job too, is working with them initially to make sure that we're all on the same page. And a lot of times our clients don't even have job descriptions created. And then we have to work with them directly to create that job description and make sure that everything's buttoned up so that when we are going out there and trying to identify the right candidate and speaking with them, we have really good sense of what they're looking for. And I'm talking to them about what their day to day job looks like, the responsibilities, where these people should be coming from and what their soft skills are needed for these positions, everything. And then we go out there and we take a look and do some research to what similar companies, what are some of the competitors out there that maybe we should be tapping into? Adam: Job titles may differ between organizations too. So we'll make a list of all the different job titles that could potentially match this position. And then we'll do an extensive search on that end. And then once we get them on the phone, it's really just conversational. We don't do very hard hitting questions. Our goal is just to make sure that A, the candidate is interested, that this would be something that they could potentially see themselves doing in the future and that they also have the right skillset for it. And that comes out during a conversation when you're just asking them, tell me a bit about your experience. Walk through your background with me. Do you have experience on this side of the business? And if not, is that something that you think you could tackle in your next role? So it's really just getting to know the person. Adam: And then what we do is we send a summary of their experience, their resume, their compensation expectations over to the client and they decide from there whether or not they think this person might be the right fit and they'll get them on the phone and usually to do an initial phone interview and go from there. But what we aim to do is really focus on quality over quantity. There are a lot of recruitment firms out there that kind of give us a bad rap by sending over 100 candidates for a position and- Stephanie: These people I Googled and they're looking for work on LinkedIn. Adam: Exactly, exactly. And hoping that one of them sticks and they're just throwing them at the wall. But we don't do that. We send over three, four, maybe five candidates and these are all people that we feel you would at least benefit from by getting on a call with them. And our resume to hire ratio is insanely high. Our interview to hire ratio's insanely high and we're really proud of that. Stephanie: That's awesome. So are there any skills that these e-commerce company companies specifically are looking for that are hard to kind of find right now? Like there was a shortage and people who knew... engineers always refer to engineers out here, is there a skill where all the companies want this right now and if you had the skill you would get scooped up but I can't find it. Adam: You're totally right about engineering. Any technology position is incredibly valuable right now for e-commerce organizations. And that's everything from engineering to product management, which is a really interesting field for a lot of people to get into that really makes this business strategy and technology that I try to steer people into because they're always needed. Stephanie: And that's not actually a career path that you're told about in the early days. I know I heard about product management, I'm like, "What does that actually mean?" And then, well you kind of should be a little bit technical and you should also have a strategic hat on when you're thinking, I'm like, "I've never heard of this when I came out of college. Why not?" Adam: That's right, that's right. These are roles that people really just fall into. And that's across all of e-commerce. There are very few colleges out there that offer any type of program in e-commerce. So when you get a degree in marketing, you may not be thinking about e-commerce marketing. It's a very vast field and that's just an example. So these are positions of the future that I try to steer new grads into or those that are looking to make a career change because this is an incredible field. But getting back to your question, our hottest positions right now are anything related to Amazon. Companies are really doubling down on their Amazon business, whether it be a marketing or sales, channel management, Amazon is huge. It's the elephant in the room, right? So- Stephanie: It seems obvious, but when I hear that I'm like, "Oh, I wouldn't think about hiring for a role specifically focused on Amazon," but it makes. Adam: Yeah, Amazon, other marketplaces, retailer.com channels. If you're a brand or manufacturer of products that are sold on Overstock, Wayfair, Zulily, you need to manage your online sales strategy and execution on those sites. So there are roles that are specifically focused on doing that as opposed to their direct to consumer channel off their own website. It's a very vast and complex e-commerce industry. Stephanie: Yeah. No, that's really interesting. How would someone develop skills for an Amazon specific role? It seems like you would have to maybe be a seller on Amazon and to know all the ins and outs. You would actually have to have been there, done that to be able to help another company? Adam: Yeah. So, yes. And part of what we get tasked to do is go out there and find individuals that have very relevant skill sets that can come in day one and hit the ground running. And that's what we're good at. But when I advise people on how to get that experience, you have to start small. You have to take on additional responsibilities. If you're in a direct to consumer role right now and you're specialist, start taking on more general generalist responsibilities, start dipping your feet into Amazon and just start asking questions and learn because this is the future and this is how you grow in your e-commerce career. E-commerce is really cross-functional. You need to work across all different departments. Across marketing and merchandising and promotions and fulfillment in no matter what role you're in. And you're going to have to deal with e-commerce metrics and web analytics in almost every role that you're in. Adam: So that's another question I get for individuals that are looking to get into e-commerce and they don't know how to do it and they don't know how to differentiate themselves. Maybe they've been working on the retail side, the retail brick and mortar side, and they're seeing everything that's going on now and they're like, "Oh, Adam, I really want to get into e-commerce. How do I differentiate myself? What do I do to get my foot in the door?" And one of the things I always recommend is get certified in Google Analytics. It's free. Google, they allow you to do this on their site. They have a program. And that's something that is incredibly important for you to know. Almost every company uses Google Analytics in some way even if they do have a more sophisticated web analytics software and it's free and you can put it on your resume and it's great to talk about during interviews. So things like that and I think are really important. Stephanie: Got it. Well, how do you see the industry changing? Seems like e-commerce, of course, is changing really quickly and when I think about having... I mean, I love Google, I work there. But I think having Google Analytics as a certification, what's next? Because I know at least on our side, when it comes to marketing campaigns and things like that, Google Analytics isn't somewhere that we utilize anyways even if we're not e-commerce. But I'm thinking about what's coming next after that? What are the next platforms or tools or technologies or focus areas maybe that would come after that that someone could dive deep into along with Google Analytics because they are a force used by everyone in the industry too. Adam: Yeah, no, it's a good question. And there are new platforms coming out all the time. There are platforms that are getting acquired left and right. There are tons of different marketing technologies out there, whether they're related to paid search or email marketing. What I find is that companies, for the most part, don't really care what you have experienced in as long as you have some sort of experience in these technologies because you can pick it up. It doesn't take a genius to figure these out, but it does take someone that has a digital mindset or somebody that really could tackle the complexities of these different programs. Adam: But if you've mastered one, it's really not that hard to master others. So yes, there are new platforms and new technologies coming out all the time and you really should do your best to update your skillset. But from my perspective, companies, in terms of what they're requiring, you don't need to have experience across all of these different tools. Which is good because how are you going to get your hands on Adobe Analytics if your company is not using it? It's very difficult, right? So I think it's important to demonstrate your ability to learn these new programs first and foremost. Stephanie: Yeah, completely agree. That's what we look for when... whenever I'm going through the hiring process here, I look for more of like, do you have the ability to learn something and you have experience showing that you've tried new things and learn new things. You don't have to know exactly how to use Adobe Audition, but could you pick it up because you've tried it? A different tool or something. Adam: Yes. Yeah, it's a bit of a balance and sometimes a bit of a fight when we're working with our clients and they want skill sets that are so specific and experience that is very specific to what they're doing currently. Where it's like, "Hey, do you really need that or can this person learn that?" And then they start thinking about it and we come to a bit of a compromise there. Stephanie: Yep. Cool. So I'm sure with all the companies that come to you for hiring right now, you might be seeing a different trend. Whether maybe it's online grocery picking up and people asking you for help there. What industries do you see growing the fastest right now with everything going on? Adam: Yeah. You're totally right and online grocery is huge right now and these are industries that were just novel, they were new. Online alcohol delivery, very new and that has been accelerated during these current times. And you look at pet food, you look at children's toys, you look at home improvement, furniture. These are areas that are doing very well. Consumer health and beauty. We're working with clients that are in these spaces right now that they're e-commerce volume is where they wanted it to be a year from now, but they haven't hired accordingly because who knew? And they're scrambling and that's very common right now. But they know that things are going to continue to spike even after everything's back to normal and digital transformation is going to be accelerated more so than ever before. Adam: There's going to be increasingly heavy investments in e-commerce and omni-channel. So we're still in a really good spot. Everything is still really new. E-commerce as a whole is surprisingly a very small percentage of overall revenue for a lot of retailers and every point that jumps up is a lot for these companies and we're going to continue to see that. So think about online furniture where consumer behavior has just completely changed where in the past people wouldn't do it. They wanted to go to a store and sit on a couch or try out a bed and now you don't need to do that. People are way more comfortable shopping online for these types of products without ever seeing it, without ever feeling it in person. And we're going to see that across many industries at this point. Stephanie: Yeah, I agree. Do you think things will stay the same post pandemic because some things I'm thinking like furniture anyways, I would still want to try out and sit, whereas beds, I'm pretty used to buying a mattress and being able to send it back. But furniture, a lot of companies, anyways, you can't just send it. Are there certain industries that you think will kind of go through a dip period again after everything calms down and then maybe ramp back up or you just think everything's going to stay elevated at where it's at now? Adam: Well, some of the elevation right now is severely elevated just because of everything that's going on so we'll see a dip for sure. But overall across the board I do think e-commerce activity is going to remain... the volume is just going to be extremely high. And to your point with wanting to shop for a couch but still sit on it, yes. But companies are getting way better at returns, making that an easy process and deliveries. Consumers are demanding faster and faster and they're expecting faster and faster deliveries and companies are really working on that. And there are a lot of vendors out there that are 3PLs and similar to that are supporting them in getting those items up to these customers as fast as possible. And you're going to see an increase in online volume just due to the fact that it's becoming much easier. The barriers are breaking down. Stephanie: Yeah, I agree. I just wanted to order something off Amazon, and I saw now that you don't have to bring a box back, you just bring it back to the UPS store and will ship it out with no box. And I'm like, "Oh, this is awesome." Because that is actually what has held me up from returning things is not being able to find a box and being lazy. But I can definitely see a lot of industry's changing and making that return process a lot more seamless. So then I will feel comfortable buying furniture or other things like that. Adam: That's right. Stephanie: Yeah. Very cool. So do you see any technological patterns or trends coming down the pipe that you're excited about because of this? Because I'm sure the underlying tech will have to change for a lot of these companies who, like you said, they weren't expecting this this year. They're maybe expecting a year, even five years down the line. Adam: Yeah, I'm a bit of a technology nerd, especially consumer technology, just personally. And what had really excited me prior to the pandemic was everything that was going on in regard to augmented reality and virtual reality and e-commerce. That was another field that was kind of teetering. We didn't know if it was going to be successful. We didn't know if that was going to be adopted. But now with people not going into stores as much, it makes a lot of sense. If you want to see what your beauty product looks like on you without even going into a store and you are able to do that just by holding your phone up. That is amazing. You can see your different hair colors, you can, going back to furniture, you can place that furniture in your room using your phone without even going into a store to see it. So there's a lot of really neat things that they can do on that AR, VR side that can make customers a lot more comfortable shopping online than ever before. Stephanie: Yeah, no, no. That's a really exciting space right now. Have you seen companies embracing that now? Companies who were not embracing it before actually starting to think about embracing it now? Because it still feels like a field that feels a little bit hard to break into right now, because it's like, "What tech do I need? How do I get started?" Adam: It is very, very new. And I think that most companies that are thinking about it are mostly in just the very early development stage where they're talking about it. They're putting in into some strategic plans, but still need to work out the kinks. There are very few companies that do it right, right now, but I it's I think an interesting field to watch. Stephanie: I'm still trying to think about too how the difference between how a company can use AR versus VR. Because VR feels easier to me because you're in that world and things don't have to be perfect. AR still has to be perfect. So I'm trying to think about, at least when we were trying to get things to work on Google maps in an AR version and it was really hard. I mean, it was snowing in Zurich and then the whole time the app would go down and some will change a piece of a building and put a sign on it and then the localization would be wrong and then it'd go down again. So I'm trying to think about which one would come first or maybe at the same time. Adam: So it's certainly not perfect and the technology is getting better every year. VR is very expensive. You need to have a complete headset and there are not a lot of freestanding headsets either. So it needs to be connected to a computer as far as I'm aware. AR is a lot easier. You can utilize your smartphone and the technology is a little bit more limiting, but it does allow you to do a lot more with it. So I think companies are probably better off investing in augmented reality to start seeing how that grows because consumer adoption of virtual reality headsets, it's just not there yet. But everybody has a smartphone. Stephanie: Yeah, I agree. And I think I just saw maybe Magic Leap, I mean, other than having to lay off a bunch of people, they're shifting to enterprises now and they're not focusing on consumers. They're also wondering if there's going to be a hiccup there with the companies who were producing the big headsets that were more expensive if they're going to be there after all of this. Adam: Yeah. For consumers, I'm not really sure. But other industries, for the medical field, I can imagine Magic Leap being huge, right? So there's a lot of potential there and we'll see how it grows on the consumer side. Stephanie: Got it. Are there any industries in e-commerce that you're most excited about right now other than the ones that are popping up now. But before all this started, are there industries that you were focused in on? Adam: So it's interesting. When we first started, our business was very much comprised of fashion apparel companies, consumer electronics companies. It wasn't until the past two, three years that CPG companies started investing very heavily in e-commerce. They were a little bit late to the game and they realized it. They started figuring out e-commerce and we're talking food and beverage companies, we're talking consumer health companies. And it's very exciting times for them where they're figuring out direct to consumer, they're figuring out marketplace, they're figuring out retailer.com and did they have very large complex businesses. Adam: A lot of these are very omni-channel too where they have stores and they're incorporating their mobile application into their omni-channel strategy. So we're working with a ton of these and I think that the opportunity there is really interesting as they really focus more on the customer journey as well. That they can the customer... if you're going into a store, you don't really have the ability to customize an experience for that customer as they walk into a store and look at your product on the physical shelf but on a digital shelf you can do that. So there's a lot of opportunity there for emerging CPG companies to provide a really interesting customer journey to their experience that they otherwise couldn't. Adam: And that is beneficial if your product is a subscription based, right? How do you maintain loyalty in a subscription environment? How do you differentiate yourself from a lot of other CPG brands out there? Maybe even ones that compete on price. So these companies are really trying to figure it out and hiring very large e-commerce teams to do so. So for us it's been a lot of fun working with them and for candidates, it's if you want to work in a very entrepreneurial startup like environment, but still for a very large company that has a ton of resources to make it successful, CPG is the way to go. Stephanie: That's the most fun when you have resources to actually try something [inaudible 00:29:03]. Adam: Yeah, yeah. A little less risky, but still you get the benefits of that startup environment. Stephanie: Yeah, no, that's fine. Are there any companies that you either hear your clients looking to as leaders to watch or that you advise them like, Hey, you should check out maybe this company because they're a leader with this, this and this. Is there anyone that we should look to either mimic or follow? Adam: Everybody wants to be the next cool startup in e-commerce. And everyone's like, we want to be the next Casper. We want to be the next- Stephanie: Dollar Shave Club. Adam: Dollar Shave Club or Harry's or whatever it might be. But this is where you have to level set with early stage startups and entrepreneurs. They think many times that they're going to be able to acquire top talent just because their idea is so cool. And that's often not the case and they're oftentimes looking to pay them more heavy on the equity side than base compensation. And they think that because of their idea's so cool that people are going to see the potential on this and that's going to be okay for them. The truth is that's not the case. That if you're an early stage startup or an entrepreneur, you have to pay market rates. You just do. That's the only way to be competitive. If you want top talent in the marketplace, you're going to have to do that on top of providing equity. So we have to level set sometimes and make sure that they understand that and it's a challenge, but you're talking about their baby when you do that but that's just what we see in the marketplace. Stephanie: Yeah. Very cool. Have you seen salaries grow over the past 10 years when it comes to what people are willing to pay e-commerce talent? Adam: Yeah. Yeah. E-commerce it pays well, it does because this is a huge revenue area for companies. They have a lot at stake here and these are roles that are highly specialized and there's not a huge talent market out there. If you want to remain competitive, you have to pay highly competitive rates. So companies know this, they get it, they understand it. We work with companies that are based outside of major cities, but for their e-commerce talent, they really want to pay city rates, city market rates just to remain competitive and for not just acquisition but for retention too. They don't want them jumping to another company. And this is going to be a significant factor going forward too with all these companies investing heavily in e-commerce and e-commerce teams growing and every company looking to hire e-commerce talent, how do you remain competitive? Adam: And that is, first and foremost in my opinion, compensation. And then companies are going to have to start thinking about remote or flexible work arrangements because this is what everybody wants. People reach out to me daily asking me if we have remote opportunities. This was before everything happened. And now I think that this is going to be front and center in people's minds and on their wishlist going forward and companies are either going to need to adjust to this or be okay with losing out on top talent. Stephanie: Yeah. And I think this might've been a good forcing function to get those companies to a place where they feel more comfortable as long as they see good results. A lot of people have been working from home now, I could see some companies seeing bad results and some seeing good ones so it all depends. Adam: I'd hate for them just to base it on this time right now because it is such an unprecedented time that people are... their kids are home. It is very difficult to get things done and have to figure out how to work remotely maybe when they haven't in the past. And it's just a very unique environment right now. Test it when everyone's back at work and things are a bit back to normal. That I think would be the true test. Stephanie: Yeah. Have you seen any of your clients adapting quickly to try and create good work from home type opportunities where maybe they're like, "Okay, I'm going to shift that job req to be remote now instead?" Or are they a little bit slower with that? Adam: Yeah. So certainly a lot of our clients have said, "This is the final straw. These roles are going to be remote. Don't worry about having people work in house for this or onsite." But what's happening now is that everything is remote where candidates are being interviewed over the phone and over Zoom. They're being hired over Zoom. They are getting onboarded over Zoom. They're going through orientation over Zoom. So everything is virtual and it's a learning curve for everybody. It's a learning curve for these companies. It's a learning curve for candidates. I've had candidates that had to do presentations, interview presentations over Zoom, and that's very unique and different and- Stephanie: Awkward. Adam: Very awkward. There are a lot of new challenges there. Stephanie: It's like, "Are you laughing over there? Oh, it's just frozen. Okay. Oh, awkward." Adam: Yes, yes, exactly. Exactly. So we're all figuring this out at the same time. And I think that in a more normal environment that companies will see that this is the future, you can't stop it. Stephanie: All right, so towards the end of the interview here we do this thing called a lightning round sponsored by Salesforce Commerce Cloud. It's where you can quickly answer whatever comes to mind and you have one minute and you have about five questions here. Adam: Okay. Stephanie: Are you ready Adam? Adam: I am ready. Stephanie: Okay, I'll start with the easier ones first and then we'll have a harder one last. All right. Since we were talking with you and our producer Hillary, that it's lunchtime for you guys. What's up next for lunch? Adam: Oh. So I am a big granola fan and I will eat granola for every meal of the day. And that's what I will probably hit up for lunch. Stephanie: Yum. I haven't heard your stomach rumbling yet so amazing. What's up next on your Netflix or Hulu queue? Adam: Interesting. I have had Ozark on there the new season for a long time. I just have not had the opportunity to watch it. But that is a really interesting show and I've been looking forward to it. Stephanie: Awesome. I see our producer, Hillary is in my dock right now in all caps saying, "I love granola too." That's good. Adam: I'm glad. Stephanie: That is a fan favorite. What's up next in your travel destinations? When you are allowed to travel? Adam: Oh man. I can't wait to get out of the house, first and foremost. But assuming we can get out this summer, Maine has been our favorite destination for summer trips. We go to Portland, Maine. Love it there. The restaurants are fantastic. It's on the water, there tons of parks to go to. We bring our kids, our dogs and the whole family goes and just they have a great time. So I'm hoping to still get there at some point. Stephanie: Awesome. Yeah, it sounds really pretty. What's up next on your reading list or podcast list other than this podcast or [inaudible 00:37:46]? Adam: So my favorite podcast probably have to be How I built This with Guy Raz. So I listened to that pretty religiously and I love hearing the stories of these entrepreneurs and how they get started and what they did to scale and the challenges that they did face. And one of my favorite questions that Guy likes to ask is how much of your success can be attributed to luck? And surprisingly, almost everybody says a lot. And I find that just a really interesting. And, again, we talked about being in the right place at the right time and I think that's really interesting. Of course, you make your own luck by getting yourself out there and working hard but the luck is certainly is a big factor. Stephanie: Oh yeah, completely agree. A lot of the reason we're here is because of luck for sure. And timing and being like, "Oh, glad that happened when it did, because if not, we might not be at this company right now." Adam: That's right, that's right. Stephanie: So completely agree. All right. The harder question. In your opinion, what's up next for e-commerce pros? Adam: For individuals in e-commerce? Stephanie: Yeah. Adam: What's up next? I think that we're going to be seeing a lot of activity, a lot of companies doubling down on e-commerce like I mentioned. And what they're going to be looking for are people that can understand the entire e-commerce ecosystem and that may be everything from retail, brick and mortar to omni-channel to direct e-commerce. Companies are going to look for people that can integrate their strategies and everything is becoming more integrated. There may not be different channels anymore. They're all blending together. So for people that understand the business, that is going to be critical for these companies, and that's where you should be really focusing on your skillset. If you're a specialist right now, start learning outside of your box and start thinking about the business and how it operates and how everything ties together, because that's what's going to be most important. Stephanie: Love it. Great answer. All right. Thanks so much for coming on the show, Adam. This is fun. Adam: Is great. It's a pleasure. Thank you so much.