Jeff Herrera, CMO of Annex Cloud talks with ecommerce expert, Brian Beck of Enceiba, about the importance of a “Human first” approach when it comes to connecting with your customers. Plus, the advantages retailers, brands, and manufacturers have over Amazon.
Hey, Brian. Good to see you. I hope all is well. Thanks for making the time.
As you know, we've kicked off a series called Annex Cloud Market Movers. We certainly recognize the challenges of today's economy, and we're trying to bring in some key thought leaders such as yourself and some key influencers to help brands, manufacturers and retailers really understand what are the things that they should be focused on, how can they get through a 2020 Q2, Q3, et cetera, and how do they look at success for '20, '21 and beyond. So I thought it would be a great way for us to just have a video chat and try and add some value to our key constituents out there and see if we can help them with some of their key decision-making criteria to get through 2020. So welcome. I really appreciate you being here.
Well, thanks for having me, Jeff. I'm excited to be here.
You bet. Why don't we just kick this off and talk a little bit about what are the things ... Let's talk about the shock period, Brian. When this thing took place around mid-March there was this bit of a shock that took place. It hit us hard. One of the things that we noticed right away is that there was a natural tendency to stop, freeze, don't do anything, cut everything off and let's find out what we have to do to try and get through it.
So now that that 30-day shock is really over now and now we have to get back to doing the things that we're all charged to do, such as drive revenue and profits and customer engagement and success, all that, it would be great to just get your perspective on what are some of the things that brands, manufacturers and retailers should be doing right now, now that the shock is over, what are the things that they should be prioritizing? Obviously we want to talk a bit about customer retention as being a key part of their focus, because that's a big certain part of their business, as opposed to an uncertain part. We'd love to get your thoughts too as you talk to many brands, you talk to several different manufacturers. Help us understand what are the things that they should be doing now as it relates to going through Q2 and onto Q3 to help propel their business.
Well, thank you, Jeff for that. Yeah, I mean, it is in some ways really unprecedented what we're going through. I think of it as a time when it really is bringing to a point where companies should focus and how they can really take this as a call to action. I think about what we're seeing in our business, and I think this event has accelerated Ecommerce adoption by three to five years across consumer categories, business categories. It's really quite dramatic the impact it's had. Amongst our clients, for example, we're seeing revenue up 30, 40, 100% plus in Ecommerce. And it depends on the channel, it depends on the particular category, but we're seeing really tremendous growth amongst these different Ecommerce channels.
I think the companies that have invested in Ecommerce and tools like Annex Cloud and others have really now have been positioned to take advantage of having those tools in place. And I think what you're going to see out of this is when companies focus on those things and they focus on those investments they've made, they're going to be stronger coming out of it. It'll help them through the process of this and then help them on the other side.
As you know, I spend a lot of time with the B2B categories these days too, and manufacturers on the B2B side. I was just reading ... I don't know if you know the company, Watsco, Jeff, they're a big distributor. I was just reading their quarterly earnings. It's interesting. They started investing about six, seven years ago in Ecommerce and the tools and loyalty tools and all kinds of other things, and what they're seeing is a 12% growth in their Ecommerce sales and is helping to lift the overall sales. This is just released quarterly numbers. One of the most striking facts I saw is they're almost 100% increased use of their website and the mobile apps and other things that they're doing amongst their customers.
I think these behaviors are going to sustain. So the companies that have invested I think are going to benefit from this. The other key takeaway was that company Watsco, and this is happening in consumer sectors as well, they're focusing on their customer. They're focusing on customers, they've acquired and they're doing more to make sure that they're serving them really well through this period. They're creating conveniences, just like the retailers can do with omni-channel experiences, allowing for pickup at the branch locations, you reserve online, you go to their branch location or the store in their case, and you pick up the product that you need for your business.
I think this is a call to action for companies to make sure they're doubled down and focused on the assets that they built. And one of the key assets that companies have built is the infrastructure to talk to customers effectively. Frankly, if you don't have it, you've got to invest in it because this is the new norm. Everything is moving to be digitally enabled and digitally centered. I think those are just some of the things I'm seeing out of this and we're seeing happen with our customers.
Brian, sure. I think you've said something pretty important, which is you want to take the right customer action now. This is a time to take the right action. To your point, everybody's been staying at home, safer at home, everybody's working from home, kids are at home, everybody's at home doing multiple different things. But I think what's really important is now you have this digital experience, and you and I have grown up on it. We've grown up on ... When you were at Harbor Freight Tools and PacSun and Overnight Prints and coming together and bringing mobile to Ecommerce and making sure that that whole experience was optimized, now you really have to have a customer engagement model, a customer journey and you have to be able to make sure every touchpoint in that journey is relevant and meaningful. That's what you're looking to do.
Maybe you could talk a little bit about this economic crisis, and now you've got the in-store experience. It's coming back though. We're seeing signs that some of the in-store opportunities are coming back. We saw that with Macy's, we saw that with Best Buy. There are plans in place to bring back more of the in-store element. But to your point, everything right now is a laser focus on digital, customer retention, loyalty. What is that right optimal customer engagement and experience right now for these unprecedented times? How should these brands, manufacturers, and retailers really capitalize, really capitalize on that customer engagement model for both digital and mobile?
Yeah, great. I mean, yeah, it's pretty incredible. I've been home for what, I think eight weeks doing school, my wife's workings in the other office. It's crazy. Frankly, look, we're blessed to be able to ... there are so many people who aren't, and so we're thankful for our perspective.
Jeff, this is the time for human connections. I think that's true of you think about what we do on our weekends and we get our friends together and we have virtual wine tastings and over zoom with ... some friends we haven't talked to in six months or a year. I think this is a time for human connections. And I think the brands, the companies, the manufacturers, retail, whatever you that understand that and aren't deaf to it and use the tools they have in place to make those human connections are the ones that are going to be remembered, are the ones that are going to succeed through this
What does that mean? It really about, you mentioned it, it's the path through, the journey and a relationship with a brand and really understanding that. So what can you be doing today? Well, number one, I think you have to realize that digital is the new center of that relationship, and that's going to be that way for the foreseeable future, at least the next year I think. I mean, I'm not an economist, I'm not a urologist, or whatever, but I think we're going to see that this digital will now be the center because it is the only real way we can do things.
And then I think on top of that, you're then going to see every function in the business have to really engage digitally. That can be if you're talking about salespeople or associates or people that provide service, that's now digitally enabled. If you think about everyone's getting everything through the mail, so it's Ecommerce. How can we use those channels to surprise and delight? That term that we've used for years in B2C and that also applies to B2B, provide something in the package that surprises and delights the customer, and really reinforces that human connection that a business I believe can have with an individual buyer, whether that's a consumer or a business buyer.
What is the right experience? I think it's got to be digitally enabled. I think it's true of the ... digitally enabling their traditional physical channel, so if that's sales, store associates, whatever, interacting customer service. But understanding that this is an opportunity for you as a brand to, if you get past the shock of the initial 30 days, as you said, Jeff, it's about, "Okay, what opportunities does this provide me with at this time when human connection is so important?" Things like surprise and delight is one concept.
I think it heightens the importance of loyalty programs in terms of how important loyalty is to those channels that you've invested in taking them to the next level. This is why we're talking today largely. Annex Cloud provides a lot of this type of solution to companies. For your business, you guys provide a tool which can really deepen those things. I think companies would be wise to make sure they're investing in ... if they have your tool in place, using it to think out of the box, to put things in boxes, to surprise and delight, to make that connection that goes beyond just transactions, because too often companies, and you and I know this, we've lived in this industry for 20 years and it's not just about a trend where, "Hey, give me 10 points for my transaction that I just made." No, it's about a human connection and understanding that journey, and at each point of that journey, what is the moment that matters and connecting more deeply at that moment.
Hopefully, that addresses your question, Jeff.
It does. That's really helpful. I think people will understand that there's an element now told to social connectivity in the absence of physical contact, we have to nail that, and the way that you can nail that is a comprehensive, strategic, well thought out loyalty program where you can establish those connections, you can establish the opportunity to do more with the brand outside of your point, just doing transactions because that doesn't cut it in today's environment. If I'm paying for something, I want to own it. But guess what? If I have an engagement with a brand where we're talking about all the things that I believe in that they stand for, and then I'm willing to talk about these great experiences that I have, whether it be tied to events, whether it be tied to social causes or what they've done to promote their certain business elements and I can talk about those things in social media ... That's actually a good point, Brian.
This social connectedness now we're sort of seeing this resurgence of social. We've seen this now with Facebook and Instagram and Yelp and all these kind of social sites, more so than ever before where people are talking about, "Guess what I did in-home with my family, making meals, playing games, doing Tik Tok videos, whatever it may be. That's now a critical part. And I think if you do have a really good focus on customer retention, the way that you're describing, you're able to emphasize the importance of that, reward people for doing that. That's the experience outside of just, "Hey, I spent 50, $100 in the month of April to get 10% off my next purchase," now you're actually talking more about all the things that we did together because I believed in what I was doing with the brand and I was willing to tell my friends, family, and everybody else about it.
You're seeing more of that now than ever before, this whole customer retention, loyalty-based focus, being able to really zero in on those experiences, right?
Totally Jeff. It's back to the human connection thing. If you want to beat number one, and I won't name names, but sometimes I get emails from retailers or brands that are tone deaf to what's going on. Yeah. I think you have to, as a marketer today, you want to break it down to that connection and you want to speak to the crisis and how you're responding to it. In fact, this even presents opportunities to ... I've seen companies highlight how they're giving back to their communities or supporting healthcare workers. That's important stuff.
It's not easy for businesses right now. I mean, gosh, it's a time where businesses have had to furlough people. We've had some clients that have had to do that. It's not an easy time, but I think those that really focus in on understanding their current customer and thinking out of the box about ways to better support them, it's the asset you've acquired and it's the thing that, again, not being tone deaf to it, but really doubling down on that.
The social connection thing, Jeff, I totally agree with you. Ways for you to be as a brand speaking to your customer in that channel, more than just a transaction, but talking about what you're doing in the community, how you're helping, what you're doing to support your current customers, connect with them, those are all important things I think that brands need to be doing right now to see themselves through. And those that connect I do really believe will come out of this faster. I mean, you see Macy's is reopening stores now. You're going to see some return to some level of normalcy over the next few months, but I think it's going to be a digitally centered normalcy and I think people are going to be really looking to the omni-channel loyalty experience and things like that versus just a transaction in one channel versus another.
Awesome. Well listen, no conversation with you is going to go on without a conversation about Amazon, so we got to talk about Amazon. We have to. You're one of the industry's leading experts on Amazon and your insight is going to be greatly appreciated to a lot of our prospects and clients as well as your own, and then of course our industry.
Let me just give you some quick numbers here. These numbers are shocking to me. Not a surprise, not a surprise, but definitely huge. Just reported that in North America sales, they did 46 billion. Again, that's just North America. 46 billion in Q1 2020, compared to Q1 of 2019, 35 billion. Huge, huge increases. Worldwide 75 billion in Q1 2020 compared to worldwide 2019 at 59 billion. So Amazon has always been the biggest thing out there and we all recognize that. It's always a challenge for brands, manufacturers, and retailers to figure out ways to successfully coexist with somebody that big. If they needed any additional help they got all online.
If you could help add some perspective around what should these verticals do. Think of fashion apparel, think of skincare, think of beauty, think of outdoor luxury, whatever it may be, what are the things that they should be doing right now as it relates to the Amazon effect, more so than ever before? And you'll recall the research that took place with Wunderman Thompson that isolated that most digital leaders view loyalty as the best way to compete with Amazon. I saw that research with Wunderman Thompson.
In a few minutes, if you could just add some perspective there with your expertise around in today's environment what should brands, manufacturers, and retailers are thinking about as it relates to the Amazon effect?
Yeah. My company, Enceiba, runs Amazon programs for dozens of brands across B2B, B2C categories. Yeah, Jeff, I mean, what you're seeing is that people are turning to Ecommerce channels dramatically during this time. Everyone's locked at home, they have no other options. Of course with Amazon at traditionally it's close now to 50% of Ecommerce sales, it's the default place people are going. We're seeing Amazon sales up 30, 40, 50, 100% with many of our clients. Not all of them, by the way. It depends on the category you're in, very much so.
Is the influence increasing across B2B and B2C channels of Amazon? Absolutely. When I say influence, I think we have to carefully think about how Amazon fits into a strategy for brands, for manufacturers, retailers, et cetera. Number one, you can't ignore Amazon right now. That's more obvious than ever. I mean, gosh, look at the numbers you just shared. So we can't ignore Amazon, but I think we have to also really understand where they fit. When we talk to our customers, we're talking about their Amazon strategy, but also how it fits in their overall go to market.
I think what brands have an opportunity to do is to create a really a bespoke experience on their site, to steal a word from ... I think the Brits came up with that one. At least I always hear English folks say that word.
That's right. That's right.
So anyway, bespoke experience. What I mean by that is look, you can do things on your site, including loyalty, which are different and unique relative to what Amazon does and that is the challenge to brands. It's bring these customer experiences to market in a way that ... I deal with Amazon every day. I'm on the phone with them five, six times a week. They're magnificent at what they do. They're really good. They are a transactional vehicle. They are a preferred transactional vehicle. They're a way for customers to go and find products. They're a search engine. You can learn about products, you can learn about brands, but ultimately it's a search engine with a fantastic transactional mechanism to get you your product quickly.
I think that element does fit into an Ecommerce strategy. Not everyone agrees with me, but I think it's an important part of it. I think that the brand though has an opportunity to take the experience that they can deliver, knowing who their customer is. This is the challenge to you brand, it's do you know your customer? And this is a time to get to know your customer because you're sitting at home, spend time with the data, look at your loyalty program, and really understand who they are and understand how you can create an experience that meets their needs in a personalized way, in a custom way that goes beyond what Amazon does.
It sounds simple. As you and I have lived, Jeff, I mean, we've done this ... I've been doing this for 20 years, it's not always easy to achieve that, but when you do it well, and you speak to the customer and how they're going to use your product in the field after they buy it. I love the REI example. You've heard me give this before. I buy the hiking boots and then REI sends me a note on where I can go use them. Well, hey now I can go hiking. I can't do anything else right now, but I can go up in the mountains, but there's nobody else and I can use those hiking boots.
That's what I'm talking about. It's a bespoke experience that connects the brand to the customer and does it in a way that Amazon isn't going to do. That's not Amazon's business model.
Does Amazon have a role? Yes. Does your own Ecommerce have a role? Absolutely. And in your own Ecommerce and in your own digitally enabled channels, you need to use that understanding of the customer and center it around the loyalty initiatives because that's how you establish a human connection as a brand. During this time that's just really important.
Awesome. Well listen Brian, I can't thank you enough. You offered some really great perspective to a lot of our clients and prospects out there. For those that want to learn more about these videos that we're doing, they can find us at https://www.annexcloud.com/marketmovers. And for you, congratulations on your book. Very happy to see that come out. That's going to benefit a lot of people in our small ecosystem so many different people. So thank you for that. But outside of LinkedIn, where else can people find you?
Yeah. Outside of LinkedIn, they can find me in two places. One is Enceiba. It's firstname.lastname@example.org, They can email me there. They can also go to my book website ... since you mentioned it, Jeff, The name of the book is billiondollarb2becommerce.com. So if you just put the dot come at the end of the name of the book, you can see the book. It's oriented towards companies that sell obviously B2B, which applies to consumer brands as much as it does B2B brands.
Awesome Brian. Listen, thanks so much. Have a great rest of the week and let's do this again, okay?
Awesome. Thanks, Jeff. Stay safe out there.
CMO, Annex Cloud
Since 2010, Annex Cloud has provided industry leading loyalty solutions to more than 250 leading brands and retailers, including Jenni Kayne, Hewlett-Packard, Bed Bath & Beyond, e.l.f. Cosmetics, Olympus, Sugarfina, Mizuno, MacKenzie-Childs, VF Corp., with the ability to engage tens of millions of their customers one-to-one at scale.
The Annex Cloud platform provides fully integrated Customer Loyalty, Referral Marketing, and User Generated Content (UGC) solutions that seamlessly work together to optimize the customer journey and deliver a unified customer experience that is designed to accelerate revenue growth, retain valuable customers, increase average order values (AOV) and drive repeat order frequency.
With more than 100 years of experience in Ecommerce optimization, Enceiba's team stands ready to launch, manage, and optimize your presence on Amazon. We are the only services provider that focuses exclusively on building Amazon programs for manufacturers and brands. Our clients see results. The brands we work with generate tens of millions in annual sales from Amazon. We take our clients to these levels faster than they can get there on their own.
Enceiba is a full-service partner - we take the burden off of you and fully manage your Amazon account. We reduce risk and get you more revenue from Amazon, faster. We help you take control of Amazon, eliminating unwanted sellers, and ensuring your brand shows up the way it should on the #1 search engine on the planet earth.