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Market Movers A discussion about the Importance of Customer Loyalty and the Operational Side of Retail

Buy online pick-up in store? Personalized shopping? A discussion and insight from Thomas Obrey, Co-Founder & CTO at PixelMEDIA about the operational side of retail and the innovations being seen on the eCommerce front.

Plus, the many ways customers are discovering new brands and re-envisioning the way brands stay in touch with customers.

Transcript

Al Lalani:

Welcome to the next episode of Annex Cloud Market Movers, where we bring in amazing market luminaries and experts. Today, I'm excited to welcome TJ. TJ is the co-founder and CTO of PixelMEDIA, a long time Annex partner, as well as an amazing expert on the Salesforce ecosystem. TJ, welcome to Annex Cloud Market Movers.

Thomas Obrey:

Good morning, Al. Thanks for having me. I appreciate it.

Al Lalani:

Great. TJ, it's been quite a challenging time, both economically, as well as internally within the US recently. We're going to keep it specific to business and then how we can help our common customers sort of realizing and understand the times and sort of plan for the future. The first thing I want to sort of focus on in your focus of commerce and digital transformation, you guys have done a terrific job over the years in helping companies digitally transform and bring commerce to the forefront. And some amazing successes in the Salesforce ecosystem, especially, could you talk a little bit about what's changed recently, and how digital commerce is sort of exploding? And how do keep people keep up with these times that are coming up?

Thomas Obrey:

Yeah, it's been interesting, the situation that we're in has shut down traditional retail, as we know it, and put a focus on digital. So I think what we're seeing with a lot of brands is a renewed focus on the seriousness of digital as a channel, that is sort of all-encompassing. So it's been interesting. We are fortunate to have a lot of brands that take digital very seriously. And when I say very seriously, I don't mean they never, the other clients don't, I mean that it's a central part of their strategy. So, we're starting to see while there are two and 300% increases in eCommerce. We're still seeing 78% revenue drops, right? So even when you get excited that eCom is going crazy, the reality is they're still down 70%. So, and as we're slowly starting to see the nation reopen and retail start to reopen, we're starting to see retail become the urban warehouse and the urban fulfillment center for digital. Whereas before digital was sort of the excess fulfillment center of retail in sort of a traditional sense.

So there's a lot of dialogue and there's a lot of dialogue about what brands could be done quickly and simply to lean into what's going on right now and try and get a leg up. Because everyone's cash-starved, time-starved, but there are some things that you can get going. Buy online, pickup at the store, buy online pick up curbside there's a lot going on. And I think there's a renewed interest in digital as the primary conduit for transactions. And retail is being sorted of re-looked at, especially in light of the events of the last couple of months.

Al Lalani:

Yeah, very interesting. You know, one of the statistics I was looking at is commerce as a part of retail about a decade ago was about 5.6%. move from there to about 14%, took it a decade. And, and just in this time, it's gone from 14 to 27%. So we've done almost about a decade worth of growth in less than two months in this sense. But at the same time, there are two sorts of specific things I want to get your insights on. One is if I'm an exec at a retail company that is hard hit by the times, where I'm trying to get my business going, as you said, I'm 70% down. So my thought focus is probably a little bit more operational rather than as longterm and I'm trying to survive.

And on the other side-

Thomas Obrey:

It's month by month.

Al Lalani:

Month by month. Exactly.

Thomas Obrey:

It is.

Al Lalani:

And then on the other side, there are some that are actually seeing a surge if they were digital-first, or if they were in a vertical like grocery, for example. Where they are not seeing the impact as heavily, they have a different problem, right. They have different operational challenges in how they're looking at it. So if I'm an exec in those sides and we can take two examples, how would I prioritize business, people, and just survival, versus figuring out what to do to improve and adapt?

Thomas Obrey:

Yeah. You know, Al, that's a really complicated question to give a one size fits all. So, I mean, I work with about 40, 45 brands right now, and they're all over the place. We've got a client that did 60% of their revenue online and they just came out of the problem stay. So they've already recovered. I got other clients that were doing 12% of revenue and they're doing staffing constant furloughs and payroll cuts and things like that. So there's really no one size kind of fits all. To be honest, I think what we're doing a lot with executives now is, what's important this week? Because in retail, especially in fashion and footwear, where we're heavily concentrated everyone's trying to get to the other side of the river. The next big milestone is actually fallen.

September, or October so everyone's trying to make good decisions to survive on the retail side, into fall. Once they get into fall, everybody feels like, kind of the fog is going to open up and things are going to be okay. So what we're doing is we're having conversations every week and every two weeks about where are you struggling? What's important. How quickly can we pivot? We're also finding that there are a lot more good enough decisions being made. That perfection is the enemy of good. So we're seeing things where they're taking a step forward and they're trusting it because it is their channel and they're seeing good results. One of the things we try and tell folks on the retail side, traditional retail is that you've got one chance to get a feature out. You got one chance to make a move.

Now it's every week you get that one chance, and you got a hundred chances to look at that and revise it and make it better. So that's really what we're doing with our brands is, I'm having weekly or every other week executive-level conversations about, are we okay? Are you okay? Do we need to adjust your billing terms? Do we need to adjust your project load? Do we need to slow down? Do we need to speed up? Is there a priority change with retail opening up right now? And if there is what is sort of the criteria for opening. Because coming out of this, there are a thousand questions by a thousand people. Now, if you jump to the exact opposite side, where we're looking at traditional food and beverage and distributorships and warehouses, that quite honestly, Al for years have been dragging their feet on digital.

Nobody wanted to compete. They didn't want to compete with the grocery stores. They don't want to compete with the restaurants. And they've primarily been B2B. They really haven't taken B2C as seriously as they are right now. And what we're finding is it's the exact opposite of retail. Because they have a product. They have no way to get a product out. They have no way to mobilize. They've got trucks and people and warehouses that are three, four, five, 800,000 square feet, loaded up with dairy, and eggs, and cheese. And how do you get them out fast to market? The reality is they have a really low skew count. They have really low variance. So it's actually easy to get them up. It's really a good thing. If they're eager to sort of mobilizing them.

So it's kind of two different things. One is pent up inability to mobilize and move product. The other one is, we just need to survive and get into the fall because you got to remember in retail, all that product was paid for already. So all that product was made. I don't know how much of the audience is familiar with footwear and apparel and how that stuff works. But we have to get to the next mile marker. In food and beverage and consumables and things like that, it's how quickly and how gritty can we get? And we see people literally lighting sites up in weeks when previously they've been told it takes months. And when you're sitting on 300,000 square feet of perishables the speed at which you make decisions that feel good enough is pretty impressive.

So they have a whole different set of criteria, which is what happens when the markets do open up. Do you stay going direct? Can I still go to my distributorship down the road called Favorite Foods? Can I get 30 eggs? Can I get two gallons? I do it. I buy it. I buy everything in bulk right now. So there are two very different struggles. I think, beyond anything else, Al, what this has done is it's forced everybody to look at digital and say, this is a very, very important part of our future, regardless of whether it's a pre, a post, or during COVID type of an event. We're proving that we're making years of advancements in weeks and that this is an important part of the business.

So I think it's probably frankly, at the end of the day, the person that benefits the most are our consumers. It's you and it's me. And it's my kids. And it's my family. That's really ultimately because there's just a change in thinking and there's too much going on to have one answer for all. I know that was a long answer.

There's a lot to it. It's a very complicated topic.

Al Lalani:

It's a very complicated topic. And, with this becoming forefront, digital getting the forefront for many of these brands that weren't digitally native before. It forces us as technology providers or service providers to start innovating. Because maybe they're not ready today, but they will be ready in three, six months. And the consumers on the other end that there's a whole slew of new consumers that are discovering these services that weren't doing this before. And so their demands are different. They want an in-person experience, but now digitally done a little bit differently. And that will force us all to innovate differently. Now that might be, innovation might be on consumer experience, that innovation might be on the distribution of products. So it might be distributed from your store. And so as a technology leader on your side, I mean, are you starting to think about some of these innovations or how you can bake it in and, and bring it together in an easier way to people when they are ready, eventually?

Thomas Obrey:

Yeah, it's a really interesting question. So how do I keep up with demand while innovating on what we see in front of everybody? I think that the reality is, is that there's no one size fits all. The brands are all over the board, and some are really bullish and leaning into it, and they want to be innovative. And some of them are quietly, frankly, scared for their lives, and what can we do to get through this week? So we are, and I think what's going to happen is that we're going to find that the digital team is going to be shoved in with traditional retail and traditional merchandising. And I think we're going to be able to have much more open dialogues about what does the store mean? What does retail mean? What is the in-person experience?

What is the shipping and unboxing experience? So we are, we're having those dialogues. But right now, probably frankly, Al a lot of folks are just trying to get to the other side and get on dry land. But we are, we're seeing a lot more really interesting conversations about how do I replicate retail online. And the reality is we can't replicate retail online. We have to stop thinking that we can, but how can we get kernels of the in-person experience to feel a little bit better online? Like if you go look at a hundred brands, there are probably only five looks between all of them, realistically. So how do we innovate? How do we look at what our retail is? What is retail going to mean to us? And how do we get the personalized, in-person experience?

Because a lot of things value from this type of dialogue. And that's another really interesting area. I think we're going to see a lot more of this. I think we're going to see, just like we saw Zoom kind of fly off the handle with what's going on with their stock and meetings and product updates. I think we're going to start seeing a very different way of interacting with customers. And I think the thing that people have to keep in mind on the brand side, whether it's perishables and grocery, or fast fashion or sort of old school retail, is that we're coming out of 12 to 16 weeks of embedded forced life changes. And I'm going to tell you right now, I'm going to go to the office guy. I'm in my house, this is my kids and artwork back here.

I can't imagine going to the office every day after this. The idea that I can go on my porch and have lunch with my kids. The idea that I can go split some wood for a 15-minute break, and can come in here is life-changing. And the fact that we've had UPS, FedEx, and the mail person here all at least four or five times a week, has really changed how we think is consumers about what it means to be active and get out and do things. I would much rather spend four hours at home in my yard with my children than take an hour’s drive for a two-hour wait in the mall for an hour drive home. So I think retailers have to start thinking about that and realize that this actually, isn't going to go away. How do we keep the momentum going?

How do we keep digital as the focal point? And how do we shore up some of the broking experiences that are out there? Because I don't think we're too far away from, we all go on those little sites where the little chat window comes up and you have no idea who you're talking to. We're probably only six months from me being able to click to Al and have this dialogue. Because you and I can have a much better dialogue like this. And I think this has proven certainly those of us in the professional world that have to do Zooms, we're way more productive, like this. Emails and chat windows and Slack. And this is it, this exists and it's good. And we need to embrace it and find the best way forward. And how do we get that into the buying experience is going to be a critical skill.

Al Lalani:

Yeah. And I saw an example of that a few days ago, specifically, I think it was Gucci with... And it's an upscale ran, but it's disrupted the model now. And so what they're doing is they're introducing this personalized shoppers that are essentially doing what you were talking about. Just showcasing the brand, actually going to each of the products, showcasing the product in a more personalized way, having a conversation with the receiver, as opposed to just displaying something in there. And so that's- An example of what you're talking about. Exactly.

Thomas Obrey:

Yeah. And I think we're going to see a fundamental change. I don't know that we'll ever get back to normal. I think this kind of is the new normal, but we have to embrace how you and I buy now. And how our friends buy and how we all shop, and how fulfillment happens. The unboxing experience is never been more important than it is right now. And even these micro dialogues that we have.

Buying the right product, in the right size and getting an authentic person to give you an authentic opinion, and knows the brand, and knows the products and can say, "I know that sounds like a great idea, but actually, why don't you show me your closet? Can we go up and can you show me what's in your closet and how..." I mean, we're there now. And when you think about that, that's everything from yard work, to cooking, to cleaning. It's literally everything it's pervasive. And we've allowed everybody in the last 12 weeks into our homes. You guys are in my house right now. It's not going to go away. And I think that brands are eager to find out what the best way to harness that is.

Al Lalani:

Makes sense. I think one of the other topics that is near and dear to our heart is the topic of how we keep customers around. I mean, there's been this time where we've had a little bit of a disconnect with our customers. Our customers are finding new ways to discover us. Our customers are finding new ways to even consider whether we go there or not. And I'm a big movie buff. So we did a discussion around movie theaters and you can't go there anymore. And for me not having that experience and restarting that experience means someone needs to bring me back into that experience and make me feel good about what I felt good about before.

And so it's re-earning that customer trust, re-earning that customer trust and then retaining that customer is even more important than before. What are your thoughts on the Importance of loyalty program and retention, and how important that might be in the years to come?

Thomas Obrey:

Well, I'll tell you what, I don't have any conversation in the last year in the volume that I have loyalty conversations. The importance of loyalty program is number one, and it's coming up more and more. And I think it, we've become almost lazy to what it means to keep customers loyal. I think that there has been this expectation that if we have a good product and a good service, they'll keep coming back. And we treated it almost as this institutional relationship, but loyalty comes up on every project that I work on. I'm literally doing a project right now in a completely unrelated, vertical than we normally work with. And loyalty is there number one thing. So I think we have to re-envision what it means to stay in touch with the customer. I still think even as mature as digital feels, and we see, it's easy to point to Apple’s and the Nike’s and the Pumas and the Addidas’s of the world.

But the reality is, is they're one 10th of 1% of really what's possible. Most brands aren't doing basic welcome campaigns, most brands aren't doing educational series on a highly evolved, highly intellectually deep product set or something like that. So I think loyalty is critical. And I think between Importance loyalty programs in general recognition, point systems, single sign-on authentication, closing the loop on communications, email, I think we can do a better job with that. And I think people are just starting to wake up. I've had more conversations in literally the last six months on loyalty than I've had in the last five years. Which is roughly about how long I've known you as a matter of fact. But we're seeing an explosion in it because we're starting to see traditional retailers where loyalty was what they did start to move into digital.

And we've never really had a lot of loyalty thought leadership in digital, in my opinion. That's always been a retail thing for me, or at least my experience has been. So I think it's big. I think it's probably one of the largest segments of opportunity right now. I don't think about brands... I think they sometimes look at it and they think, am I being too annoying? Am I sending too many emails? Am I trying too hard? Are my points worth enough? Are my affiliates at worth enough? And I think we have to stop doing that. I think we have to just be really smart. It's not a rip and repeat, you need to think about it. It is an integrated multichannel, multi-day multitouch campaign, but once you get them, you get them. And it isn't all about selling products. Sometimes it's just about teaching them something they didn't know.

And I don't know about you, Al, but as a kid going through school, the teachers that stick out in my mind and the people in my life that I never forget are the ones that taught me something. So I think like brands, if we start thinking about how do we become educators and friends, and humanize the brand-customer connection, I think we'll see a lot of doors open on the loyalty space, personally.

Al Lalani:

Absolutely. And this is a great point. You bring up, it's about the entire customer experience. It's not about sales only, and education is a huge, huge part of that customer experience, especially now.

Thomas Obrey:

It's a long play. You got to have a long play.

Al Lalani:

Long play. Absolutely. And across channels. I want to go back to a point that you mentioned before and switch a little bit from business to personal because you said, we're in this for a while. Life has changed significantly for all of us in here. You write a lot about that on LinkedIn and by the way, for everyone else, if they don't follow TJ on LinkedIn, please do that tomorrow. Because I really like and follow what a lot of stuff you're writing, but this one's more on the personal side that you write a lot about the change in life and how we are all being able to kind of adapt in our own personal lives. And we all have to succeed personally before we can succeed in business. We have to adapt ourselves personally to this new normal before we can start helping everyone else around us. What's your advice around how you're trying to think about this. And I know you've shared some of that on LinkedIn. But if you can help there, that'd be great.

Thomas Obrey:

Yeah. Well, I think it's interesting. I think that, so for me, when we started work from home, it was a challenge for me. I don't work from home, and I'm not used to being around my kids 24/seven. And I think that I quickly came to this realization that work didn’t work for me. It was just life. And my family wasn't just family to me. It's everything I do. My kids are everything to me. I have three teenage boys. And I started to have a lot of thoughts, which is why I actually started writing on LinkedIn is about, I think we have to draw a hard line between Thomas Obrey or TJ as the professional, and TJ is the father that cooks, and roast beans, and bakes bread from scratch. And then the TJ that you see at trade shows, which I own like the midnight to 5:00 AM sort of schedule with everybody.

I think we have to start humanizing the reality that in order for this to work, what you and I are doing, we have to acknowledge that I'm a dad and you're a dad. And my dog is right next to me. I don't know if you guys saw his head come in. He kept smacking me in the shoulder. He wants me to pet his neck. I'm going to have kids screaming in the background. So I think this humanized us in a certain way. And I think it forced us to be more tolerant and patient of the reality of what we always dealt with and held behind the scenes as professionals. We all go to work and we get mad at each other and there's all this angst. And it's like, oh my God, I can't wait to get in the car and go home.

And the reality is we all get up. We all got in the car, we all went to work. We all had the same arguments. We all got in the car. We all went home. We took care of our families. And I don't think that that's two separate things anymore. I think it's one thing. And I think we're working more than ever. I'm working 12 hour days. I'm busier than I've ever been to. And I don't have a commute. But I think the other part is that we all are still struggling for balance. And I think if I had one word of wisdom for anybody, is that I don't look at this anymore as being trapped. I look at this as a really interesting opportunity. I get to walk outside, whenever I want for ten minutes and clear my head. It's okay that I'm working 12, 14 hour days because guys, the reality is I'm not working 12 or 14 hour days.

I am available for 12 or 14 hours, but I take time off in the morning. I take time off in the early afternoon. I cook for my kids. I go get the mail. How many of us had a chance to go get the mail and clear our head after a tough call? We didn't. And I think that we have to find ways to balance it. Anybody that even watches this video, when you're done shut this and go outside and walk around your yard. And if you don't have a yard, just walk around your block, and leave your phone at home. And just embrace the freedom that you've been able to do that. Obviously there's a lot of things you need to consider where you live. But for me, I found a new level of balance that I didn't know existed, and I'm closer to our employees, and I'm closer to my friends.

And if you read some of my LinkedIn stuff, I realized that I don't miss all of the work events. I miss all the people. I miss hanging out with you, Al. I only saw you four times a year. We talked for a half-hour, but God, I miss that. Same with Steve. And I miss the people. And I think that's the thing that I now appreciate more than ever.

Al Lalani:

Yeah. And I think that's the same with us. And I used to be a big believer in everyone in the office. And I'm sort of opposite now and so I'm already adapting. I mean, I'm like, I can't go back. I want to stay with my kids all the time. My daughter will come in, she'll hug me and she'll go back, and I did not have that before. I was in the office, from 8:00 AM to 6:00 PM, 7:00 PM. And I missed those hugs, that random hugs, they just come and give me that. And I think that brings pleasure in life and some of these things are great.

And so just learning to adapt what we have and just like you know, the days are extending, but we feel they're extending. But as long as we can find some internal happiness, I think as you said.

And get what we can get. You talked about walking out in there and I live in LA and, beautiful city, but I didn't walk out and see the sun as much when I was in the office that I do now. I'm able to actually experience it, the weather, which is beautiful. So that's great words of advice, TJ, at that point, we'll end this one. I really appreciate you taking the time and spending some time today.

Thomas Obrey:

Absolutely.

Al Lalani:

We will share this with everyone else and for everyone else, if you want to see other ones like the one we did with TJ, please go to Annexcloud.com/marketmovers. TJ, thank you again.

Thomas Obrey:

Thanks, Al.

Featured Speakers

Al Lalani

Al Lalani

Co-Founder, Annex Cloud

Thomas Obrey

Thomas Obrey

Co-Founder & CTO at PixelMEDIA

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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.

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PixelMEDIA helps lifestyle brands launch, manage, and grow their eCommerce business on Salesforce Commerce Cloud. By leveraging the world’s leading eCommerce and customer experience platforms, in partnership with our certified team, Pixel enables brands to increase their online revenue. We help to discover the possibilities for some of the hottest brands in eCommerce including Red Wing Shoes, Samsonite, Tourneau, Life is Good, and iRobot.

To learn more about PixelMEDIA, visit pixelmedia.com.