December 18, 2023 • 28 mins
We sat down with Matt Bergum, the Country Business Director for Canada at Bosch Power Tools, to dive into the state of ecommerce in 2024. We shed light on the distinctions between ecommerce and brick-and-mortar product launches, the balancing act that comes with a hybrid retail approach, the complex task of managing expansive product portfolios across various online platforms (and the resulting strain on margins), and the transformation of the power tools industry in the face of e-commerce. Expect to gain an insider's look into how Bosch is aiming to grow market share in an increasingly digital market.
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Episode Transcript
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Speaker 1 (00:01):
From Alloy AI.
This is Shelfling.
Speaker 2 (00:19):
How has the e-commerce landscape changed?
Speaker 1 (00:22):
How are new product launches different between
e-commerce and brick and mortar?
How?
Speaker 2 (00:26):
do you balance a hybrid approach to retail and
e-commerce On?
Speaker 1 (00:29):
every episode of ShelfLite, we answer questions
like these and more, with thehelp of leaders across the
consumer goods industry.
Speaker 2 (00:36):
Today we welcome Matt Bergam, Country Business
Director for Canada at BoschPowerTools.
Speaker 1 (00:41):
Matt is a sales and marketing leader with over 10
years of corporate salesexperience within the CPG
industry at Bosch and iRobot.
In addition to leading theCanada region for Bosch
PowerTools, Matt also hasresponsibility for Amazon in the
US and Canada.
Matt has led Bosch's push intoe-commerce and today we'll share
his passion and expertise withShelfLite listeners.
Speaker 2 (01:04):
I'm your co-host, joel Beal, ceo of Alloy AI.
Speaker 1 (01:08):
And I'm your co-host, logan Ensign, chief Customer
Officer at Alloy AI.
We'll be back with Matt rightafter this.
Speaker 3 (01:15):
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Speaker 1 (02:05):
Matt Burgum, welcome to Shelf Life.
Speaker 4 (02:08):
Thanks.
I'm super happy to be here.
I'm excited to join the podcastand share what I can share
about all things Ecom related.
Speaker 1 (02:18):
Amazing, Matt.
We've known each other a while,but for folks listening, how
about you tell us a little bitmore about your background and
how you found yourselfparticularly passionate about
e-commerce?
Speaker 4 (02:29):
Yeah, as mentioned there at the beginning, I've
been in CPG for the better partof my career and primarily in
CPG selling all major retailersin North America.
That's just progressed overtime, super passionate about
leading people and leading teams.
As obviously e-commerce hastaken over a big part of our
(02:52):
business and just the overallretail landscape, it's become a
pretty big passion of mine as weevolve in our business on the
Bosch Power Tool side.
It's something that I've hadthe pleasure of helping lead our
organization and moving in thatdirection.
It's a never-changing world andhappy to be a part of it.
Speaker 2 (03:15):
Matt, I think, as we look across different verticals
and areas in retail, some haveseen faster adoption of
e-commerce than others.
I'm curious at Bosch, andspecifically within Power Tools
what's that journey been like?
Speaker 4 (03:30):
Yeah, I know it's definitely an interesting
evolution.
For sure, power Tools issomething traditionally that
there's two main channels.
We have a professional channelwhere we're using Power Tools on
job sites, construction sites,that sort of thing, but we also
have quite a large DIY market.
Both of those two channels shopand purchase Power Tools very
(03:52):
differently.
We obviously have thehomeowner-use, diy use.
That's very used to purchasingonline, but on the professional
side of our business, that's adifferent model.
We're still seeing a heavydigital adoption on that front
as well.
Both are moving in the samedirection just as fast, but
(04:16):
we're definitely tackling eachside of those channels quite
differently.
Yeah, there's a lot going onwhen it comes to our evolution
in terms of supporting thedigital channel in general.
Speaker 2 (04:29):
You find between those professional and the DIY
consumers.
Are they generally buying inthe same place but buying
different products?
Is it buying in completelydifferent channels?
How does that work?
Speaker 4 (04:42):
Yeah, I mean, when you look at, say, a lot of the
business that we do online froma retail perspective whether
that be Amazon or some othermajor retailers we definitely
see a broad range of the typesof products that are purchased.
We sell very high-end,expensive professional tools,
but also tools that could beused more in the homeowner
setting at a lower price point.
(05:03):
We see the broad range there.
But when you talk about the waythat our business is held, sort
of on the professional side ofour business whether that be
in-store or brick and mortarthat obviously tends to shift
more towards some of ourhigher-end professional tools.
The broad range of ourportfolio is absolutely being
(05:25):
purchased online in manydifferent formats and it's our
job to make sure that we keep upwith it to support both sides
of it.
Speaker 1 (05:33):
I'd be interested to hear more internally how you all
think about it.
Maybe some of the challengesexpected unexpected that y'all
had on that front for a longtime.
Speaker 4 (05:41):
It was obviously surprising to us how quickly we
were seeing that shift frombrick and mortar into digital,
and then, obviously, during thepandemic, that became quite a
even more significant shift forus.
I think we've done a good job,especially over the last couple
of years, of looking at the waythat our business is structured
internally and making sure thatwe're in a position to support
(06:02):
that growth.
Not only what we're seeingright now, but where we see the
business going over the next 10,15 years and that's a big part
of where I've been involved verymuch so recently is preparing
us for that future growth ofwhere we're headed.
Traditionally, our business,prior to the growth in Ecom, our
(06:23):
business is very much brick andmortar, as many other CPG
brands in many other industries,and so that's why it's been
such a focus of ours to ensurethat we're prepared for where
digital is heading in the future, and so obviously, channels
like Amazon and others aredefinitely leading in that, and
(06:44):
that's where our focus is makingsure we're ready for that.
Speaker 1 (06:47):
And is that sort of across the board what it means
for supply chain, what it meansfor where you're going to spend
money, what it means fromproduct development.
Is it an expansive set ofconversations, or when you talk
about preparing for kind of evenmore Ecommerce distribution.
What does that mean?
Speaker 4 (07:06):
Yeah, I mean.
The more that our businessshifts to Ecom and digital, it
obviously has a significantimpact on every single
functional area within ourbusiness, right?
So when you talk about supplychain, you start getting into
topics like direct fulfillmentand dropship and some of the
added costs from a distributionperspective that we have to
(07:27):
navigate.
Then you talk about to yourpoint.
You mentioned productdevelopment, when we, depending
on the retailer, depending onthe channel, or we're selling
online, sometimes it requires usto have specific products,
exclusive products, differentpackaging, and so that that
requires us to make sure thatfrom a product development
standpoint, where we're takingthat into account, obviously on
(07:50):
the content side, adds a wholenother layer for us to ensure,
from a video pictures back inkeywords, everything from an SEO
optimization perspective, thatwe've got that dialed in.
It's a little bit differentthan putting it on a shelf in
brick and mortar.
Speaker 2 (08:14):
How did you kind of get started with Ecommerce and
power tools there?
What was the first step?
Was it starting to list onAmazon?
I mean you talked about, youknow, dropshipping.
There's obviously first partythere, there's third party.
There's so many different wayssomeone can start to enter.
I'm curious how this journeybegan for you and how it's
evolving.
Speaker 4 (08:33):
Yeah, I mean for our business in general.
I mean the obvious entrance forus is supporting that are key
retailers that we do businesstoday currently, brick and
mortar, that that will always bea focus of ours.
Make sure that we're supportingthose retailers and then, over
time if you think back over thelast few years, obviously as
Amazon has grown, that's that's.
We are a partner with Amazon aswell, and so that's that's from
(08:56):
a from a from a businessperspective, how that's evolved.
So we were heavily involved inevery channel of our business,
whether that's our professionaland professional industrial
business or our retail businessor pure online, pure play, like
Amazon.
Myself, personally, I had thebenefit within Canada, in a
(09:19):
smaller scope, to take a look atour overall business and our
opportunities and identify.
You know, we're a small teamand trying to find creative ways
to grow our business and findfind new opportunities to grow
the business, and so we've alsobeen able to explore, explore
other marketplace channels likeeBay and there's.
(09:41):
You know, marketplace is awhole nother animal, that is is
can be very difficult tonavigate from a channel
management perspective and sobut that that's been a passion
of mine as as we look at ouroverall portfolio and business
and try to find ways to grow.
How do we have we takeadvantage of these opportunities
(10:01):
but at the same time ensure,from a channel management
perspective, that we're nothurting ourselves across the
board?
Speaker 1 (10:08):
Well, matt, one of the things we we hear about
especially recently is kind ofthis emergence of e-commerce has
kind of presented newopportunities and new thinking
around new product launches,right?
Could you speak a little bit tothat and how you all sort of
leverage e-commerce channels fornew product launches?
Maybe some of the uniquechallenges there distinctions
(10:31):
from you know, maybe a purebrick and mortar product launch?
Speaker 4 (10:34):
Yeah, I mean when you , when you look at our business.
One of the things that that weare excited about at Bosch Power
Tools in general is the numberof new products that we are
launching this year and nextyear moving forward.
It's a big focus of ours toexpand our coreless platform and
, as we continue to put moresupport and effort behind our
e-commerce channel, it's a bigopportunity for us to ensure
(10:56):
that all those new products areproperly represented online
Because, depending on thecategory, for us, our analysis
shows that many of our purchasesthat potentially happen in
brick and mortar start online,and it's important for us to
make sure that that first touchpoint with our end users is a
(11:19):
really clean experience.
And so that's where, for us,regardless of the platform,
regardless of the website, thatwe've got our content dialed in.
We've got our back-end keywords, our SEO optimization dialed in
pictures, videos, a pluscontent, you name it.
We've got a team dedicated tothat to make sure that, no
(11:40):
matter where the listing is, isthat it's as clean and clear as
possible, so that an initialshopping experience is really
dialed in.
Speaker 1 (11:50):
Well, I think it's amazing in our era, maybe a good
signal, that a salesperson inPower Tools uses SEO a couple of
times in a conversation.
So changing landscape.
Speaker 4 (12:03):
We've got plenty of work to continue doing as we
navigate the ever-evolving world, but we've got plenty of
experts on our side that arehelping take us to get to the
level that we need to be at.
Speaker 2 (12:14):
What are some of the challenges that you would say
are more unique to thee-commerce side?
I mean, I know you'restraddling both worlds so you
see both obviously a huge amountof opportunity.
That's where so many of thebrands out there are seeing a
lot of growth.
Right now.
It has, I think, tailed off abit post-COVID where it was so
rapid.
But, yeah, curious those thingsfor people that are going
(12:37):
through that transition, kind ofthe gotchas, the things they
should be looking out for.
Speaker 4 (12:43):
Yeah, I mean on the spot.
There's a couple of things.
There's plenty of challenges aswe continue to grow our
e-commerce business.
I think the distribution piecewe already talked about.
There are a lot of differentways to, from a distribution
perspective, the manager-econbusiness.
We talk about directfulfillment, dropship.
Those are great ways to quicklyreach the end user, but at the
(13:03):
same time they come with a lotof added complexity and costs
associated with that.
And so, depending on theretailer that we work with,
there's plenty of differentoptions there, but we have to be
very careful about how we dothat so that we can scale
properly.
And then, in addition to that,we, bosch Power Tools today,
(13:27):
don't leverage D2C on our own.
That's something that we'relooking into, but not anything
that we do right now.
But that's another entirelydifferent channel that many
brands will look into.
That again adds a whole anotherlayer of complexity where
you're not relying on thebackend structure from another
(13:49):
retailer to help manage a lot ofthose things for you.
So the distribution sideobviously comes with its own
challenges.
And maybe another entirelydifferent area that, especially
on our side, that we continue toadd more support to is
everything on the advertisingside of things, especially when
we talk about what our strategyis with Amazon and some of our
(14:14):
other retailers.
It is a very competitive market.
When you search for Power Toolsonline, there are obvious main
brands, but there are many otherbrands that have made their way
into the US and Canadian marketthat we are often competing
against.
So when we talk about CPC andjust everything that we're doing
(14:35):
from an advertising perspective, it can be very expensive to
advertise and it's somethingthat we continue to navigate.
But from a search relevancyperspective and from a search
ranking perspective whetheryou're talking about Amazon or
Google or wherever it may bethat continues to be something
for us to navigate.
Speaker 2 (14:57):
So, matt, to drill in a little bit more there, if
you're selling into atraditional retailer and you're
being placed on a shelf or anend cap or wherever it is,
obviously there's a limitedamount of product that they can
put there and you kind of havethese gatekeepers that decide
who's getting shelf space, whoisn't Online obviously a lot
easier for Amazon to say if youwant a list, you could come here
(15:19):
and list.
So do you just find thatthere's a whole set of
competitors that you're seeingonline that you wouldn't
necessarily be competing with asmuch in store?
Speaker 4 (15:28):
Yeah, for sure.
I mean, that's the world thatwe live in now, and I think one
of the things that we have to becareful of and in any brand has
to be careful of is that theconcept of an end-less aisle was
a very hot topic, say pre-COVID, but now, as we all look to
ensure that our distributionstrategies are scalable and that
(15:53):
the offering that we're puttingout there is understandable and
shoppable, the concept of anend-less aisle has quickly
shifted, and so many retailers,many brands.
The only target was list asmany products as you possibly
can, and we are very much comingoff of that now and saying no,
(16:15):
no, no.
This is the core assortmentthat we want to focus on.
This is the core assortmentthat we want to list and
advertise and drive traffic to,and this concept of the race to
the top of the number oflistings that you can possibly
have is not where we're focusedon anymore.
Speaker 1 (16:33):
And you're saying that the retailers aren't
focused on that level, thatthere's a shifting in sort of
philosophy?
Speaker 4 (16:40):
Yeah, I mean a lot of it comes down to, when you
think again, the complexity ofthe Ecom model.
When you look at our portfolio,we sell very large heavy tools
those cost a lot of money toship and on the flip side, we
also sell very small tools like,or accessories like, drill bits
(17:01):
that low dollar amount that cancost a lot of money to ship on
a percentage basis.
And so when you look at ourbroad range of products that can
be listed, what we're seeingnow is what makes the most sense
, that's driving the most margin, and how do we balance having
the right portfolio but alsohaving a profitable portfolio?
Speaker 2 (17:25):
Is this shift?
Is that being driven more byretailers?
Is it being driven more bybrands, like yourself saying
this is just too complicated andcumbersome from a supply chain
standpoint?
Is it everyone realizing thisis just not ideal?
Speaker 4 (17:39):
Yeah, I think it's a little bit of both.
I mean, when you look at itfrom a retailer perspective
again, it comes back toprofitability.
That's the name of the gameright now.
Whether it be network and cashflow or distribution costs or a
combination of the aboveretailers are looking at the
saying we have to make sure thatour portfolio is profitable
(18:01):
when for the longest time on anycommerce, like you said, it was
a land grab and it was justskyrocketing top line sales
growth.
And now it's about how do wemake sure that sales growth is
also profitable when you look atit from a brand perspective,
like from our side the effortthat it takes to manage the
(18:25):
proper content and theadvertising strategy and all of
that.
When you look at a portfoliolike ours where we have six,
seven, eight thousand differentskews, that's quite an effort to
ensure that constantly we'reupdating and optimizing eight
thousand different listings onvarious different retailers.
And so we also have to take alook at our portfolio and say
(18:49):
we're going to dial this down toa hundred core products and say
these are the ones that we'regoing to make perfect and ensure
that those ones are drivingwhat we're trying to accomplish,
and break that down intodifferent categories with
different levels of focus.
Speaker 1 (19:04):
That's super fascinating.
It almost feelscounterintuitive because you
think e-commerce and you thinkscale and what I'm hearing is
actually e-commerce presentspotentially even more challenges
to scale when you talk abouthuge amounts of skews.
It's super fascinating sort ofdynamic there.
Speaker 4 (19:18):
Well, again, it comes along with the increase in
competition, because early on,when it was a land grab and a
listing game one picture, coupleof bullet points, just get it
listed with a price.
Now we have very clearguidelines around what it
requires to consider a producthaving, say, a plus content.
It's six to eight bullets, 150characters per bullet, it's
(19:43):
seven pictures, a couple ofvideos and then you get further
into what we would consider tobe A plus premium content, where
you're getting even furtherinto some pretty cool shopping
experiences and it's essentiallyimpossible to do that for eight
thousand products.
Speaker 2 (20:00):
I think, just speaking as a consumer, I think
this is a very positive thing.
I don't know if you're familiarwith the paradox of choice,
this idea that when we'reoverwhelmed with the amount of
options it's not a good thing.
People don't enjoy it.
And having better productofferings that are more curated,
where there's more information,as you said, that kind of
(20:21):
endless aisle I think that's theterm you used Sounds great in
concept, but in reality it'skind of paralyzing.
And I know for myself.
Sometimes I go into Amazon tobuy something.
I'm like I don't even know whatto buy.
I mean, there's a hundreddifferent options.
Speaker 4 (20:36):
And that's where, obviously, when we talk about
content SEO optimization I meanwhen you look at something like
an Amazon search relevancysearch ranking is the name of
the game.
If you are not top five again,personally for me, will I ever
go to the second page?
Do I ever even scroll hardly tosee what the other options are?
(20:58):
Not really Right.
So that's when we look at howdo we prioritize what we're
working on.
It's search relevancy, searchranking.
Speaker 2 (21:08):
So let's talk a little more about Amazon.
I know Amazon's always evolving.
There are many differentelements we can take on this,
but some of the things thatwe've heard and I know you
mentioned in advance that thiscalls around more margin
pressures, walmart being veryfocused there.
So, yeah, curious if you canexpand a little bit on trends
you're seeing specifically withthem, because I know you again
(21:30):
work with them both acrossCanada and the US.
Speaker 4 (21:32):
Yeah, I mean it's not I wouldn't say that it's
anything that's not obvious,that you can see generally in
the marketplace and it's notjust Amazon, it's all over
retailers that margin pressureis a very massive focus right
now and you look at some of thethings that Amazon is doing as a
(21:52):
company, Everything's pointingtowards quarterly reports on
operating margin.
That's like a very key focusright now of how Amazon's
improving operating margin, anda lot of that comes down to what
they're doing on the retailside.
But you also look at Amazon'sprofit drivers, where Amazon ads
is driving the majority oftheir profit right now.
Aws on the Amazon side is alsoa key profit center for them.
(22:16):
But when you look on the retailside, it's definitely a
challenge.
When you look at thecompetition that's coming into
the marketplace and what that'sdoing, the overall impact of
pricing in the marketplace.
Amazon's really good atensuring that the customer
experience is great by alwayshaving the lowest price, but
that often comes with somechallenges on the margin side,
(22:36):
and so it's.
You know, from an Amazonperspective, it's definitely a
challenge.
Speaker 2 (22:40):
And, broadly speaking , you said this is not just an
Amazon thing, this is everywhere.
Another trend we're seeinginventory reductions, just
making sure people are runningas lean as possible.
I mean, is that a trend?
I know inventory is built upduring COVID at least.
Once we got past those, allthose supply chain issues, Are
you continuing to see pressureon your side around people
(23:02):
saying we just want to run aslean as possible?
Speaker 4 (23:04):
Yeah, I mean, when you look at again, this is not
just a Bosch thing, this is nota retail or a specific topic in
general.
Coming into 2023, as demandslows overall in retail in
general, when we talk aboutthings like inflation rates and
just general consumer demand,we're coming out of
(23:25):
manufacturers and retailerscoming out of 2022.
That came into this year withmassive inventory levels, and so
you walk into the year with alot of inventory at the same
time that consumer demand iscoming down and discretionary
spending is coming down and it'sbeen a very interesting year
when it comes to inventorymanagement overall, and so
(23:48):
that's again you couple thatwith margin pressure and so it's
been an interesting dynamic forsure in any retail space this
year.
Speaker 2 (23:58):
That is a common story.
We're certainly hearing, I knowespecially, I imagine, actually
in your space are the holidaysbig for you?
Speaker 4 (24:06):
Yeah, definitely I mean depending on the retailer,
but absolutely I mean when welook at our seasonality of our
business.
When you think power tools,spring is a heavy season for us,
just as projects kick off inearly spring.
Father's Day is a big seasonfor us.
But when you think Ecom, thenthat obviously centers around
things like Prime Day, the fallPrime Day and then obviously
(24:33):
Black Friday, cyber Mondayperiod.
So definitely we still see alot of gifting going on for our.
We have our professionalbusiness that's very much end
user job site related, but wealso have just a seasonal as
many other categories.
Speaker 2 (24:47):
Yeah, it makes sense.
And do you see, when you'retalking about those headwinds
again we're seeing across theindustry this year.
Is it similar across the DIYspace and professional, or do
you find that one's a littlemore stable than the other?
Speaker 4 (24:59):
Yeah, I mean DIY in general again, not just say not,
not, not our category or ourbrand as a whole.
This is a market trend ingeneral.
Diy has seen a massive shiftthis year.
If you think through thepandemic, we saw a really
significant DIY boom of craftingand DIY projects.
(25:22):
And when I think about my ownhome new deck, new fence, new
everything and then and then nowwe walk into this year that how
many, how many new decks andnew fences need to be built, and
then on top of that againinflationary pressures and
discretionary spending, and soDIY has has seen some some
(25:42):
significant declines headinginto this year.
But at the same time, on theprofessional side of the
business whether whether it becommercial construction,
residential construction we'reseeing that much more stable
compared to DIY.
Speaker 1 (25:57):
I guess how do you stay on top of that, that
shifting, because I bet youspend time trying to predict and
forecast.
But what are some things you doto try and stay as current with
what's going on in the market?
How do you think about that?
Staying close to the consumer?
Speaker 4 (26:11):
Yeah, I mean, it's a battle.
I wish we had our, our magiceight ball where we could have
Planned for such a significantshift on the on the DIY side.
It's definitely not somethingthat we expected coming into the
year anybody in our space, andso it's for us it's more about
looking into into next year andin 2024, as we we do business
(26:33):
planning, and what does theoutlook look like for and so
we've got a Specifically an RSI.
We have a pretty extensive teamthat's that definitely supports
us on Helping map out what whatfuture looks like and dialing
in proper forecasting.
But our focus, our focus, isvery much so on on the
professional side of thebusiness and what we can do to
(26:54):
attack that at commercial andresidential construction side of
things, and and that's where wesee a lot of upside for us
moving forward- so, withoutgiving away, I guess this the
secrets here, matt, which I'msure you wouldn't, but you know
where, where do you see things?
You know going in, you know thepower tool industry as we look
forward and in general,reporting is is 2024 is going to
(27:17):
be another challenging year forsure, and so now that's our job
as a brand to to take that,understand that and identify
ways to To get creative and goafter that.
We've got plenty of marketshare to steal.
So, no matter how much themarket is growing, we we still
have plenty of market share togo after and that's what we
focus on.
Speaker 1 (27:37):
So fascinating, fascinating.
Well, matt, it's been apleasure.
Thank you so much for joiningus here on shelf life,
absolutely.
Speaker 4 (27:43):
Thanks for thanks for having me and and always happy
to chat with you guys.
It's been a blast.
Speaker 1 (27:50):
You've been listening to Matt Burgum, country
business director for Canada atBosch power tools.
That's all for this week.
See you next time on shelf life.
From Alloy AI.
This is Shelfling.
Speaker 2 (00:19):
How has the e-commerce landscape changed?
Speaker 1 (00:22):
How are new product launches different between
e-commerce and brick and mortar?
How?
Speaker 2 (00:26):
do you balance a hybrid approach to retail and
e-commerce On?
Speaker 1 (00:29):
every episode of ShelfLite, we answer questions
like these and more, with thehelp of leaders across the
consumer goods industry.
Speaker 2 (00:36):
Today we welcome Matt Bergam, Country Business
Director for Canada at BoschPowerTools.
Speaker 1 (00:41):
Matt is a sales and marketing leader with over 10
years of corporate salesexperience within the CPG
industry at Bosch and iRobot.
In addition to leading theCanada region for Bosch
PowerTools, Matt also hasresponsibility for Amazon in the
US and Canada.
Matt has led Bosch's push intoe-commerce and today we'll share
his passion and expertise withShelfLite listeners.
Speaker 2 (01:04):
I'm your co-host, joel Beal, ceo of Alloy AI.
Speaker 1 (01:08):
And I'm your co-host, logan Ensign, chief Customer
Officer at Alloy AI.
We'll be back with Matt rightafter this.
Speaker 3 (01:15):
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that you can't respond toproblems at the shelf until the
(01:37):
bullwhip hits you in the face.
That's a cow, actually.
Now there's Alloyai to help.
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Speaker 1 (02:05):
Matt Burgum, welcome to Shelf Life.
Speaker 4 (02:08):
Thanks.
I'm super happy to be here.
I'm excited to join the podcastand share what I can share
about all things Ecom related.
Speaker 1 (02:18):
Amazing, Matt.
We've known each other a while,but for folks listening, how
about you tell us a little bitmore about your background and
how you found yourselfparticularly passionate about
e-commerce?
Speaker 4 (02:29):
Yeah, as mentioned there at the beginning, I've
been in CPG for the better partof my career and primarily in
CPG selling all major retailersin North America.
That's just progressed overtime, super passionate about
leading people and leading teams.
As obviously e-commerce hastaken over a big part of our
(02:52):
business and just the overallretail landscape, it's become a
pretty big passion of mine as weevolve in our business on the
Bosch Power Tool side.
It's something that I've hadthe pleasure of helping lead our
organization and moving in thatdirection.
It's a never-changing world andhappy to be a part of it.
Speaker 2 (03:15):
Matt, I think, as we look across different verticals
and areas in retail, some haveseen faster adoption of
e-commerce than others.
I'm curious at Bosch, andspecifically within Power Tools
what's that journey been like?
Speaker 4 (03:30):
Yeah, I know it's definitely an interesting
evolution.
For sure, power Tools issomething traditionally that
there's two main channels.
We have a professional channelwhere we're using Power Tools on
job sites, construction sites,that sort of thing, but we also
have quite a large DIY market.
Both of those two channels shopand purchase Power Tools very
(03:52):
differently.
We obviously have thehomeowner-use, diy use.
That's very used to purchasingonline, but on the professional
side of our business, that's adifferent model.
We're still seeing a heavydigital adoption on that front
as well.
Both are moving in the samedirection just as fast, but
(04:16):
we're definitely tackling eachside of those channels quite
differently.
Yeah, there's a lot going onwhen it comes to our evolution
in terms of supporting thedigital channel in general.
Speaker 2 (04:29):
You find between those professional and the DIY
consumers.
Are they generally buying inthe same place but buying
different products?
Is it buying in completelydifferent channels?
How does that work?
Speaker 4 (04:42):
Yeah, I mean, when you look at, say, a lot of the
business that we do online froma retail perspective whether
that be Amazon or some othermajor retailers we definitely
see a broad range of the typesof products that are purchased.
We sell very high-end,expensive professional tools,
but also tools that could beused more in the homeowner
setting at a lower price point.
(05:03):
We see the broad range there.
But when you talk about the waythat our business is held, sort
of on the professional side ofour business whether that be
in-store or brick and mortarthat obviously tends to shift
more towards some of ourhigher-end professional tools.
The broad range of ourportfolio is absolutely being
(05:25):
purchased online in manydifferent formats and it's our
job to make sure that we keep upwith it to support both sides
of it.
Speaker 1 (05:33):
I'd be interested to hear more internally how you all
think about it.
Maybe some of the challengesexpected unexpected that y'all
had on that front for a longtime.
Speaker 4 (05:41):
It was obviously surprising to us how quickly we
were seeing that shift frombrick and mortar into digital,
and then, obviously, during thepandemic, that became quite a
even more significant shift forus.
I think we've done a good job,especially over the last couple
of years, of looking at the waythat our business is structured
internally and making sure thatwe're in a position to support
(06:02):
that growth.
Not only what we're seeingright now, but where we see the
business going over the next 10,15 years and that's a big part
of where I've been involved verymuch so recently is preparing
us for that future growth ofwhere we're headed.
Traditionally, our business,prior to the growth in Ecom, our
(06:23):
business is very much brick andmortar, as many other CPG
brands in many other industries,and so that's why it's been
such a focus of ours to ensurethat we're prepared for where
digital is heading in the future, and so obviously, channels
like Amazon and others aredefinitely leading in that, and
(06:44):
that's where our focus is makingsure we're ready for that.
Speaker 1 (06:47):
And is that sort of across the board what it means
for supply chain, what it meansfor where you're going to spend
money, what it means fromproduct development.
Is it an expansive set ofconversations, or when you talk
about preparing for kind of evenmore Ecommerce distribution.
What does that mean?
Speaker 4 (07:06):
Yeah, I mean.
The more that our businessshifts to Ecom and digital, it
obviously has a significantimpact on every single
functional area within ourbusiness, right?
So when you talk about supplychain, you start getting into
topics like direct fulfillmentand dropship and some of the
added costs from a distributionperspective that we have to
(07:27):
navigate.
Then you talk about to yourpoint.
You mentioned productdevelopment, when we, depending
on the retailer, depending onthe channel, or we're selling
online, sometimes it requires usto have specific products,
exclusive products, differentpackaging, and so that that
requires us to make sure thatfrom a product development
standpoint, where we're takingthat into account, obviously on
(07:50):
the content side, adds a wholenother layer for us to ensure,
from a video pictures back inkeywords, everything from an SEO
optimization perspective, thatwe've got that dialed in.
It's a little bit differentthan putting it on a shelf in
brick and mortar.
Speaker 2 (08:14):
How did you kind of get started with Ecommerce and
power tools there?
What was the first step?
Was it starting to list onAmazon?
I mean you talked about, youknow, dropshipping.
There's obviously first partythere, there's third party.
There's so many different wayssomeone can start to enter.
I'm curious how this journeybegan for you and how it's
evolving.
Speaker 4 (08:33):
Yeah, I mean for our business in general.
I mean the obvious entrance forus is supporting that are key
retailers that we do businesstoday currently, brick and
mortar, that that will always bea focus of ours.
Make sure that we're supportingthose retailers and then, over
time if you think back over thelast few years, obviously as
Amazon has grown, that's that's.
We are a partner with Amazon aswell, and so that's that's from
(08:56):
a from a from a businessperspective, how that's evolved.
So we were heavily involved inevery channel of our business,
whether that's our professionaland professional industrial
business or our retail businessor pure online, pure play, like
Amazon.
Myself, personally, I had thebenefit within Canada, in a
(09:19):
smaller scope, to take a look atour overall business and our
opportunities and identify.
You know, we're a small teamand trying to find creative ways
to grow our business and findfind new opportunities to grow
the business, and so we've alsobeen able to explore, explore
other marketplace channels likeeBay and there's.
(09:41):
You know, marketplace is awhole nother animal, that is is
can be very difficult tonavigate from a channel
management perspective and sobut that that's been a passion
of mine as as we look at ouroverall portfolio and business
and try to find ways to grow.
How do we have we takeadvantage of these opportunities
(10:01):
but at the same time ensure,from a channel management
perspective, that we're nothurting ourselves across the
board?
Speaker 1 (10:08):
Well, matt, one of the things we we hear about
especially recently is kind ofthis emergence of e-commerce has
kind of presented newopportunities and new thinking
around new product launches,right?
Could you speak a little bit tothat and how you all sort of
leverage e-commerce channels fornew product launches?
Maybe some of the uniquechallenges there distinctions
(10:31):
from you know, maybe a purebrick and mortar product launch?
Speaker 4 (10:34):
Yeah, I mean when you , when you look at our business.
One of the things that that weare excited about at Bosch Power
Tools in general is the numberof new products that we are
launching this year and nextyear moving forward.
It's a big focus of ours toexpand our coreless platform and
, as we continue to put moresupport and effort behind our
e-commerce channel, it's a bigopportunity for us to ensure
(10:56):
that all those new products areproperly represented online
Because, depending on thecategory, for us, our analysis
shows that many of our purchasesthat potentially happen in
brick and mortar start online,and it's important for us to
make sure that that first touchpoint with our end users is a
(11:19):
really clean experience.
And so that's where, for us,regardless of the platform,
regardless of the website, thatwe've got our content dialed in.
We've got our back-end keywords, our SEO optimization dialed in
pictures, videos, a pluscontent, you name it.
We've got a team dedicated tothat to make sure that, no
(11:40):
matter where the listing is, isthat it's as clean and clear as
possible, so that an initialshopping experience is really
dialed in.
Speaker 1 (11:50):
Well, I think it's amazing in our era, maybe a good
signal, that a salesperson inPower Tools uses SEO a couple of
times in a conversation.
So changing landscape.
Speaker 4 (12:03):
We've got plenty of work to continue doing as we
navigate the ever-evolving world, but we've got plenty of
experts on our side that arehelping take us to get to the
level that we need to be at.
Speaker 2 (12:14):
What are some of the challenges that you would say
are more unique to thee-commerce side?
I mean, I know you'restraddling both worlds so you
see both obviously a huge amountof opportunity.
That's where so many of thebrands out there are seeing a
lot of growth.
Right now.
It has, I think, tailed off abit post-COVID where it was so
rapid.
But, yeah, curious those thingsfor people that are going
(12:37):
through that transition, kind ofthe gotchas, the things they
should be looking out for.
Speaker 4 (12:43):
Yeah, I mean on the spot.
There's a couple of things.
There's plenty of challenges aswe continue to grow our
e-commerce business.
I think the distribution piecewe already talked about.
There are a lot of differentways to, from a distribution
perspective, the manager-econbusiness.
We talk about directfulfillment, dropship.
Those are great ways to quicklyreach the end user, but at the
(13:03):
same time they come with a lotof added complexity and costs
associated with that.
And so, depending on theretailer that we work with,
there's plenty of differentoptions there, but we have to be
very careful about how we dothat so that we can scale
properly.
And then, in addition to that,we, bosch Power Tools today,
(13:27):
don't leverage D2C on our own.
That's something that we'relooking into, but not anything
that we do right now.
But that's another entirelydifferent channel that many
brands will look into.
That again adds a whole anotherlayer of complexity where
you're not relying on thebackend structure from another
(13:49):
retailer to help manage a lot ofthose things for you.
So the distribution sideobviously comes with its own
challenges.
And maybe another entirelydifferent area that, especially
on our side, that we continue toadd more support to is
everything on the advertisingside of things, especially when
we talk about what our strategyis with Amazon and some of our
(14:14):
other retailers.
It is a very competitive market.
When you search for Power Toolsonline, there are obvious main
brands, but there are many otherbrands that have made their way
into the US and Canadian marketthat we are often competing
against.
So when we talk about CPC andjust everything that we're doing
(14:35):
from an advertising perspective, it can be very expensive to
advertise and it's somethingthat we continue to navigate.
But from a search relevancyperspective and from a search
ranking perspective whetheryou're talking about Amazon or
Google or wherever it may bethat continues to be something
for us to navigate.
Speaker 2 (14:57):
So, matt, to drill in a little bit more there, if
you're selling into atraditional retailer and you're
being placed on a shelf or anend cap or wherever it is,
obviously there's a limitedamount of product that they can
put there and you kind of havethese gatekeepers that decide
who's getting shelf space, whoisn't Online obviously a lot
easier for Amazon to say if youwant a list, you could come here
(15:19):
and list.
So do you just find thatthere's a whole set of
competitors that you're seeingonline that you wouldn't
necessarily be competing with asmuch in store?
Speaker 4 (15:28):
Yeah, for sure.
I mean, that's the world thatwe live in now, and I think one
of the things that we have to becareful of and in any brand has
to be careful of is that theconcept of an end-less aisle was
a very hot topic, say pre-COVID, but now, as we all look to
ensure that our distributionstrategies are scalable and that
(15:53):
the offering that we're puttingout there is understandable and
shoppable, the concept of anend-less aisle has quickly
shifted, and so many retailers,many brands.
The only target was list asmany products as you possibly
can, and we are very much comingoff of that now and saying no,
(16:15):
no, no.
This is the core assortmentthat we want to focus on.
This is the core assortmentthat we want to list and
advertise and drive traffic to,and this concept of the race to
the top of the number oflistings that you can possibly
have is not where we're focusedon anymore.
Speaker 1 (16:33):
And you're saying that the retailers aren't
focused on that level, thatthere's a shifting in sort of
philosophy?
Speaker 4 (16:40):
Yeah, I mean a lot of it comes down to, when you
think again, the complexity ofthe Ecom model.
When you look at our portfolio,we sell very large heavy tools
those cost a lot of money toship and on the flip side, we
also sell very small tools like,or accessories like, drill bits
(17:01):
that low dollar amount that cancost a lot of money to ship on
a percentage basis.
And so when you look at ourbroad range of products that can
be listed, what we're seeingnow is what makes the most sense
, that's driving the most margin, and how do we balance having
the right portfolio but alsohaving a profitable portfolio?
Speaker 2 (17:25):
Is this shift?
Is that being driven more byretailers?
Is it being driven more bybrands, like yourself saying
this is just too complicated andcumbersome from a supply chain
standpoint?
Is it everyone realizing thisis just not ideal?
Speaker 4 (17:39):
Yeah, I think it's a little bit of both.
I mean, when you look at itfrom a retailer perspective
again, it comes back toprofitability.
That's the name of the gameright now.
Whether it be network and cashflow or distribution costs or a
combination of the aboveretailers are looking at the
saying we have to make sure thatour portfolio is profitable
(18:01):
when for the longest time on anycommerce, like you said, it was
a land grab and it was justskyrocketing top line sales
growth.
And now it's about how do wemake sure that sales growth is
also profitable when you look atit from a brand perspective,
like from our side the effortthat it takes to manage the
(18:25):
proper content and theadvertising strategy and all of
that.
When you look at a portfoliolike ours where we have six,
seven, eight thousand differentskews, that's quite an effort to
ensure that constantly we'reupdating and optimizing eight
thousand different listings onvarious different retailers.
And so we also have to take alook at our portfolio and say
(18:49):
we're going to dial this down toa hundred core products and say
these are the ones that we'regoing to make perfect and ensure
that those ones are drivingwhat we're trying to accomplish,
and break that down intodifferent categories with
different levels of focus.
Speaker 1 (19:04):
That's super fascinating.
It almost feelscounterintuitive because you
think e-commerce and you thinkscale and what I'm hearing is
actually e-commerce presentspotentially even more challenges
to scale when you talk abouthuge amounts of skews.
It's super fascinating sort ofdynamic there.
Speaker 4 (19:18):
Well, again, it comes along with the increase in
competition, because early on,when it was a land grab and a
listing game one picture, coupleof bullet points, just get it
listed with a price.
Now we have very clearguidelines around what it
requires to consider a producthaving, say, a plus content.
It's six to eight bullets, 150characters per bullet, it's
(19:43):
seven pictures, a couple ofvideos and then you get further
into what we would consider tobe A plus premium content, where
you're getting even furtherinto some pretty cool shopping
experiences and it's essentiallyimpossible to do that for eight
thousand products.
Speaker 2 (20:00):
I think, just speaking as a consumer, I think
this is a very positive thing.
I don't know if you're familiarwith the paradox of choice,
this idea that when we'reoverwhelmed with the amount of
options it's not a good thing.
People don't enjoy it.
And having better productofferings that are more curated,
where there's more information,as you said, that kind of
(20:21):
endless aisle I think that's theterm you used Sounds great in
concept, but in reality it'skind of paralyzing.
And I know for myself.
Sometimes I go into Amazon tobuy something.
I'm like I don't even know whatto buy.
I mean, there's a hundreddifferent options.
Speaker 4 (20:36):
And that's where, obviously, when we talk about
content SEO optimization I meanwhen you look at something like
an Amazon search relevancysearch ranking is the name of
the game.
If you are not top five again,personally for me, will I ever
go to the second page?
Do I ever even scroll hardly tosee what the other options are?
(20:58):
Not really Right.
So that's when we look at howdo we prioritize what we're
working on.
It's search relevancy, searchranking.
Speaker 2 (21:08):
So let's talk a little more about Amazon.
I know Amazon's always evolving.
There are many differentelements we can take on this,
but some of the things thatwe've heard and I know you
mentioned in advance that thiscalls around more margin
pressures, walmart being veryfocused there.
So, yeah, curious if you canexpand a little bit on trends
you're seeing specifically withthem, because I know you again
(21:30):
work with them both acrossCanada and the US.
Speaker 4 (21:32):
Yeah, I mean it's not I wouldn't say that it's
anything that's not obvious,that you can see generally in
the marketplace and it's notjust Amazon, it's all over
retailers that margin pressureis a very massive focus right
now and you look at some of thethings that Amazon is doing as a
(21:52):
company, Everything's pointingtowards quarterly reports on
operating margin.
That's like a very key focusright now of how Amazon's
improving operating margin, anda lot of that comes down to what
they're doing on the retailside.
But you also look at Amazon'sprofit drivers, where Amazon ads
is driving the majority oftheir profit right now.
Aws on the Amazon side is alsoa key profit center for them.
(22:16):
But when you look on the retailside, it's definitely a
challenge.
When you look at thecompetition that's coming into
the marketplace and what that'sdoing, the overall impact of
pricing in the marketplace.
Amazon's really good atensuring that the customer
experience is great by alwayshaving the lowest price, but
that often comes with somechallenges on the margin side,
(22:36):
and so it's.
You know, from an Amazonperspective, it's definitely a
challenge.
Speaker 2 (22:40):
And, broadly speaking , you said this is not just an
Amazon thing, this is everywhere.
Another trend we're seeinginventory reductions, just
making sure people are runningas lean as possible.
I mean, is that a trend?
I know inventory is built upduring COVID at least.
Once we got past those, allthose supply chain issues, Are
you continuing to see pressureon your side around people
(23:02):
saying we just want to run aslean as possible?
Speaker 4 (23:04):
Yeah, I mean, when you look at again, this is not
just a Bosch thing, this is nota retail or a specific topic in
general.
Coming into 2023, as demandslows overall in retail in
general, when we talk aboutthings like inflation rates and
just general consumer demand,we're coming out of
(23:25):
manufacturers and retailerscoming out of 2022.
That came into this year withmassive inventory levels, and so
you walk into the year with alot of inventory at the same
time that consumer demand iscoming down and discretionary
spending is coming down and it'sbeen a very interesting year
when it comes to inventorymanagement overall, and so
(23:48):
that's again you couple thatwith margin pressure and so it's
been an interesting dynamic forsure in any retail space this
year.
Speaker 2 (23:58):
That is a common story.
We're certainly hearing, I knowespecially, I imagine, actually
in your space are the holidaysbig for you?
Speaker 4 (24:06):
Yeah, definitely I mean depending on the retailer,
but absolutely I mean when welook at our seasonality of our
business.
When you think power tools,spring is a heavy season for us,
just as projects kick off inearly spring.
Father's Day is a big seasonfor us.
But when you think Ecom, thenthat obviously centers around
things like Prime Day, the fallPrime Day and then obviously
(24:33):
Black Friday, cyber Mondayperiod.
So definitely we still see alot of gifting going on for our.
We have our professionalbusiness that's very much end
user job site related, but wealso have just a seasonal as
many other categories.
Speaker 2 (24:47):
Yeah, it makes sense.
And do you see, when you'retalking about those headwinds
again we're seeing across theindustry this year.
Is it similar across the DIYspace and professional, or do
you find that one's a littlemore stable than the other?
Speaker 4 (24:59):
Yeah, I mean DIY in general again, not just say not,
not, not our category or ourbrand as a whole.
This is a market trend ingeneral.
Diy has seen a massive shiftthis year.
If you think through thepandemic, we saw a really
significant DIY boom of craftingand DIY projects.
(25:22):
And when I think about my ownhome new deck, new fence, new
everything and then and then nowwe walk into this year that how
many, how many new decks andnew fences need to be built, and
then on top of that againinflationary pressures and
discretionary spending, and soDIY has has seen some some
(25:42):
significant declines headinginto this year.
But at the same time, on theprofessional side of the
business whether whether it becommercial construction,
residential construction we'reseeing that much more stable
compared to DIY.
Speaker 1 (25:57):
I guess how do you stay on top of that, that
shifting, because I bet youspend time trying to predict and
forecast.
But what are some things you doto try and stay as current with
what's going on in the market?
How do you think about that?
Staying close to the consumer?
Speaker 4 (26:11):
Yeah, I mean, it's a battle.
I wish we had our, our magiceight ball where we could have
Planned for such a significantshift on the on the DIY side.
It's definitely not somethingthat we expected coming into the
year anybody in our space, andso it's for us it's more about
looking into into next year andin 2024, as we we do business
(26:33):
planning, and what does theoutlook look like for and so
we've got a Specifically an RSI.
We have a pretty extensive teamthat's that definitely supports
us on Helping map out what whatfuture looks like and dialing
in proper forecasting.
But our focus, our focus, isvery much so on on the
professional side of thebusiness and what we can do to
(26:54):
attack that at commercial andresidential construction side of
things, and and that's where wesee a lot of upside for us
moving forward- so, withoutgiving away, I guess this the
secrets here, matt, which I'msure you wouldn't, but you know
where, where do you see things?
You know going in, you know thepower tool industry as we look
forward and in general,reporting is is 2024 is going to
(27:17):
be another challenging year forsure, and so now that's our job
as a brand to to take that,understand that and identify
ways to To get creative and goafter that.
We've got plenty of marketshare to steal.
So, no matter how much themarket is growing, we we still
have plenty of market share togo after and that's what we
focus on.
Speaker 1 (27:37):
So fascinating, fascinating.
Well, matt, it's been apleasure.
Thank you so much for joiningus here on shelf life,
absolutely.
Speaker 4 (27:43):
Thanks for thanks for having me and and always happy
to chat with you guys.
It's been a blast.
Speaker 1 (27:50):
You've been listening to Matt Burgum, country
business director for Canada atBosch power tools.
That's all for this week.
See you next time on shelf life.
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