April 21, 2023 • 53 mins
Gordon Newman (Omnichannels Stories) and Ger Keohane (StudioForty9) are joined by ecommerce strategist and trainer Vinny O'Brien live on stage at StudioForty9's annual Excellence in Ecommerce Conference in Dublin.
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Transcript
Episode Transcript
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(00:00):
Five, four, three, two, one...
(00:07):
So we have Go from Houston.
This is Functional & Fabulous, the omnichannel podcast where we unbox tales of online retail and digital transformation.
In this episode, recorded partly live on stage in Dublin during StudioForty9's annual Excellence in Ecommerce conference, Ger doesn't stick to the f***ing plan...
(00:30):
Um, I'm gonna go off script a tiny bit.
Our guest Vinny gets feisty with the audience...
No pressure, this is payback.
So what's the question?
Gordon and Ger get excited about Street Fighter...
I've only got the Street Fighter action for that one.
Don't film that.
And the boys inflate their own egos...
Live podcasts, how do we think we did?
(00:51):
I thought we did really well.
I thought we did really well.
Roger couldn't keep up with us, but apart from that...
This episode of Functional & Fabulous is brought to you with pride by StudioForty9, retail ecommerce experts, omnichannel growth consultants and cut-through performance marketing specialists.
StudioForty9, where your digital retail success is built.
(01:16):
So, um, without further ado, I'm going to start with an introduction.
I have to read from the phone, so you'll have to forgive me.
Of course, this is going to be a podcast.
Nobody's going to be watching.
No heckling.
Except for the camera over there.
Don't mind the camera.
The camera's on.
I'll look in this direction like this, as if I'm talking to you.
So Vinny is actually a bit of a powerhouse in ecommerce.
(01:40):
He's an ecommerce consultant with an extensive and impressive CV.
The companies he's worked with are a who's who of Irish merchants and merchant services, including eBay Ireland, Arnotts, MicksGarage, Luzern, JD Sports, Argos, Unilever, Littlewoods, Shoe and MandM Direct, to name, I suppose, a few, which is an incredible CV.
He's a self-described notorious LinkedIn spammer who writes and speaks about the importance of balancing short-term solutions with long-term strategy.
(02:10):
He discusses the need to focus on opportunities rather than challenges, and investments rather than cost centres.
Right now, his research includes the future of hybrid TV advertising, the potential of cooperative services in terms of serving Irish merchants, and, of course, marketplaces, as he works to understand and explain alternative sales channels and new marketing avenues that help drive revenues for Irish businesses.
(02:32):
Vinny, it's wonderful to have you here today.
Thanks, Ger.
I'm having an existential crisis.
I don't know if I'm going to buy a leather jacket or a robotic lawnmower.
The midlife crisis in me says I'll probably end up with the jacket.
But thanks so much for having me.
I'm delighted to be here and amongst quite a lot of the best of Irish ecommerce, yourselves included.
(02:52):
I've been lucky enough to work with yourself and Gordon now for the last six months or so.
The introduction was too generous, with the exception of the LinkedIn spam element, but we'll touch on that maybe a little bit later on.
Although you did say yourself it was fair.
Oh yeah, I did.
No harm there.
Right.
Well, down to business.
First question.
So I want to ask you a question about something that I've no experience of working on.
(03:17):
The bush telegraph tells us that you're quite bullish on Amazon or marketplaces in general.
So first question is, is that true?
And the follow up is why?
Well, Gordon's a marketplace snob, so he never wanted to get into it.
That's why.
I was never allowed.
You never tried.
I tried knocking on your door numerous times.
(03:39):
I'm bullish on marketplaces, yeah,
so I think if we look at some of the things that the guys have already spoken about this morning, it's that people want to buy in different ways and we've got to present ourselves or make ourselves known and be available to them to buy in those channels,
and at those times that they decide to buy, because in reality, when we think about our own buying habits, we decide when we want to buy, when we want to buy, not really under the influence of advertising, per se, not all the time anyway.
(04:04):
So when I started working back in eBay in 2007, I think it was right now, you know, the UK market had really adopted the notion that it was okay to appear in all these channels because people had already decided they wanted to buy in different ways.
And the best examples I guess I can give were things like, in the fashion cohorts that they have, the very dedicated fashion buyers who love browsing, like, they will spend hours and hours going through eBay trying to find a perfect deal.
(04:31):
And that was in part because of their business model.
They had this auction model where you could go and say, I'm going to bid £5 to get those trainers because I might win on Sunday night.
And you kind of, you had this habitual thing that people were coming back to the site over and over and over again.
And what developed out of that as it brought full price onto the site was that people had this expectation that they would only get the best of products, but at a slight discount.
(04:55):
So in your merchandising cycle, it might have meant that if you were going into a six-week cycle of full-price selling, then you might be able to extend that through marketplaces or go there first, because that's where the buyers were going over and over again.
So as that evolved, I guess I've worked in marketplaces on and off now since 2007 in various guises with some successes, with some failures.
(05:18):
I worked with Ciaran, who's here in the audience, on marketplaces.
We ended up building our own API infrastructure into that, and it gave us the ability to expand.
Now, one of the reasons I would like to touch on, it's either the trading and profitability of it, that I think it's a really good ballast for us, is when we think about third-party selling or marketplaces selling, Amazon is the one that jumps to mind.
(05:44):
But Amazon has set this bar, and I'm going to contradict myself now in a second, but Amazon has set this bar that says to us, that is the standard in retail that we need to get to from a service perspective.
So when I say I'm bullish on things like Amazon, it's saying, if you think you can go and create an ecommerce experience that is not to the standard of an Amazon, you're not going to satisfy customers as well through your own site if you haven't put yourself through that experience or at least are aspiring to those standards.
(06:11):
Now, to contradict myself, the two sites that I love that were highlighted on the last presentation were Next and AO.com.
The reason I believe they're so good is service.
You can order off Next today, up until 10pm tonight,
it's going to arrive in your doorstep tomorrow.
In 2011, they had a concept store in Leicester where we were working with them in eBay to test all of these things.
(06:34):
They've invested in that since that point and even before.
We hear a lot about retail media, and we might get to that a little bit later on.
But Next started investing in their retail media platform in 2015.
They understood that they had traffic that they could leverage.
They understood the idea of expanding assortment, and they knew they now had the service proposition to allow brands to confidently put their product on there and say, yes, we want Next to be part of that proposition.
(07:01):
Final part of all this, I mentioned AO.com.
What we didn't see there was the detail.
If you look at the copy and the copywriting that goes through the AO.com site, it's phenomenal.
So in the TV listings, I know when you go into the category pages, there's so much going on in there, but it's worth spending time there.
When you go onto the TV page, it says, we have helped millions of customers choose their perfect TV.
(07:22):
It's not here.
Come look at TVs.
They get into that emotive experience of telling you what they've done, which is make people happy through sitting in front of a goggle box.
Long-winded answer.
Hopefully, there's something in there.
Yeah, definitely.
I suppose one thing that's of interest is we hear a lot about retail media now, and I'm not sure everybody in the audience knows exactly what that might mean.
(07:42):
Do you want to go into a little bit more detail on how it means in terms of opening up additional marketplaces for retailers?
Yeah, retail media.
I guess we've highlighted Meta and Google as the two fundamental places that we go to bring traffic into our businesses and onto our websites.
Over the last, I suppose, three or four years, predominantly, we've been seeing the evolution of what are called retail media networks.
(08:08):
They are high-volume retail websites that are monetising their traffic through saying, if you list our products on here, you can actually buy advertising space from us right now.
I first started working on the Walmart retail media network four years ago.
Most people won't know, but I'm director in a direct-to-consumer brand myself.
We sell thermally insulated tents in the US market.
(08:29):
That's our primary channel.
We use Walmart for that purpose.
Four years ago, it was terrible.
Walmart acquired Moosejaw, which was a specialist outdoor retailer about three years ago.
It's been sold, actually, in the last two months to Dick's Sporting Goods, and they bought it to bring all that ecommerce expertise in.
They wanted to understand, how do we allow brands to equitably buy ad space from us?
(08:52):
That's something that's been happening quite a lot in different industries.
If you look at Boots and Superdrug in the UK, they have been some of the frontrunners, the DIY group, everyone in that space.
They're now starting to monetise that traffic as well.
Can I just ask you a question there?
There's going to be lots of people in the audience that are used to getting their marketing support euros from their suppliers.
(09:16):
I know I would have done that in past roles.
How does retail media differ from marketing support money that you would get from your third-party suppliers?
Because it's gone the other way, I guess.
The full dynamic is shifting.
I don't know that they're going to want to do it.
(09:37):
I think some of that support might retrench a little bit, and you could see them going direct themselves onto somebody's marketplace.
I think there's a danger there.
I want to caveat that, Gordon, because the one thing that I would say about these platforms is that they're very much in their infancy.
Right now, what's going to come under question in the next few months is the performance of retail media networks.
(09:57):
You're going to see people saying, we've invested thousands and we're not getting the return that we want.
Ultimately, what people want to see is rate of sale in-store.
I'm working with an Irish food brand.
We're listed on the Jumbo platform in Netherlands and Belgium.
We've just completed a campaign yesterday.
We've invested quite heavily in it.
We couldn't even get an analytics report.
(10:19):
We won't get our first analytics report until next week.
We had to invest on the basis of a joint business plan...
So in that respect, it is just like marketing support...
Big black box. That's a tiny bit of an in-joke there.
But no, in all seriousness, the networks have to mature.
One of the other things that's going to come out of them is they need to hire better.
Right now, if we think that ecommerce has been isolated in their own industries, the ecommerce teams in these media platforms are completely separate to the retail team.
(10:48):
So what you're seeing is this clash of performance objectives and even siloed information like that.
So the brands that are going into it, they're going to suffer a little bit this year.
It's going to take maybe another 12 months to flush itself out.
But in two years' time, you're going to see some of the larger Irish retailers, I would imagine, starting to monetise that traffic.
And that presents to me an opportunity for Irish retail in general.
(11:09):
It's very interesting.
Basically, it's an area around the Irish retailers selling space to brands to sell through the websites as opposed to buying the stock and taking the risk themselves.
Yeah, and it kind of goes into that idea of co-op.
So I've long held this belief that Ireland, in certain areas... I live in Tralee, by the way, so it's a small trading town, relies heavily on retail and that's kind of its lifeblood.
(11:34):
I grew up in a small town just down the road in Kildare, and that's always been something that's been part of how I've grown up and been involved in my life.
So when the pandemic hit, everyone went online.
Every small shop in Tralee decided to build a store, and it made sense because they had to.
Now what I think they've got to start figuring out is, what are those tools of ecommerce that make sense for them?
(11:54):
It's not that everyone needs to have a full trading team, because let's be honest, there's not enough talent in the country for us all to have a fully fledged ecommerce scene.
But I think if you look at where ecommerce is moving in general, the roles that we will need to hire for are what we just looked at today.
It's merchandising.
It's being interested in data.
It's wanting to do something with it.
It's about content creation.
(12:16):
So the ecommerce theme of 10 years ago is going to look really, really different in the next three years.
So swinging back to our theme of marketplaces and, I suppose, tying it into this idea of cooperative, could marketplaces play a role then for those smaller retailers who maybe can't have a marketing team?
(12:39):
My belief has always been that they should.
But since 2007, when I joined eBay, we've struggled to get through that concept as a culture and as a nation.
And I'm not quite sure why.
And just to kind of give some sort of storyline for that, when I joined eBay about a week later, we were all called in the room and the eBay Ireland business was made redundant.
(13:00):
They decided they didn't want to invest in it anymore.
They couldn't afford to put traffic into it.
And it stayed like that until about three years ago.
We started a programme.
And I did it voluntarily with a few other people to see, could we revitalise this idea of marketplaces helping Irish retail?
And it was just pre-pandemic.
So it probably hit at the wrong time.
So we trialed it with Tralee, where I was based.
And we trialed it in Drogheda at the time.
(13:22):
And what we said was, we'll give you free access.
We'll put an account management team behind this.
We'll give you free listings.
We'll give you storefronts.
And to the point that they wanted to start pumping money into the advertising of it.
And it fell on its face.
And the reason it fell on its face was the stores themselves didn't have the resources to get catalogues built.
They didn't want to put products online.
They were trying to deal with people coming into the shop.
The realities of a small business trying to build up the capability, now a lot of that infrastructure is in place.
(13:49):
I think the timing of it was probably wrong.
But now there's an understanding that it might not be the be-all and end-all for us.
But it might be an incremental revenue stream.
It might be the thing that pays the lights or the heat bill or something.
But it's a contributory factor.
One of the things I like, I suppose, about the evolution of Shopify in Ireland, and I'm kind of moving on from there, is that the technology has got better to the point that we don't all need to be technological experts to deal with it.
(14:14):
Anyone who has a bit of desire to go and learn and will sit in front of YouTube for a while, which, let's be honest, we all will, has got the capability to become someone who is useful from an ecommerce perspective.
So again, that comes down to one of my older Gordonisms of the democratisation of technology, and that being available to anyone that now wants to learn, and accessible in terms of cost.
(14:39):
So those barriers have kind of gone.
So culturally, could we be at a tipping point where time could change, and maybe that kind of cooperative marketplace model, could we be on the cusp of that in Ireland now?
It's time to have a conversation, I think.
And that sounds so stupid and clichéd.
(15:00):
And coming out of my mouth, it sounds even worse.
But I think we do have to, because the unit economics of Ireland, Ireland is tiny.
We're the size of Greater Manchester.
There's a ceiling to which we can all grow if Ireland is going to be our only market.
And I was listening to Ciaran Crean, who's out there somewhere, Ciaran, I think I saw you earlier on, and we were chatting.
And Ciaran was talking with Gary Fox in the Entrepreneur Experiment about what would MicksGarage look like in other countries.
(15:25):
And I think he said the penetration rate that we have in Ireland, if we were to be in a bigger country like Germany, MicksGarage would be a quarter of a billion turnover of a business.
You know, that tells its own story.
So Ireland has this limited capacity if you only trade in Ireland.
Now, what it also presents for us, if we look at things like co-op services, and by that I mean we could have four fulfilment centres or six fulfilment centres all around the country, allowing small retailers to pay a portion of it in.
(15:53):
To say, we're going to pay, instead of having our own fulfilment service, we will pay for that service.
You apply that to marketing, you apply it to warehousing, you apply it to technology.
All of a sudden, that operating expense and cost that is kind of crippling everyone right now is there to be questioned.
And it means that instead of every small retailer in Tralee—I'm going to keep using the Tralee analogy, it's all I've got in my head right now, sorry—but it means that it may become equitable for them at some point to access these services and access customers.
(16:22):
Because when you think about it, we're spending all of our money in advertising through Google and through Meta.
Let's say there was Ireland Inc., a giant department store, where we actually shoved all of our money into that type of traffic.
And that will work for a certain type of retailer.
So I think the timing is right.
We have co-op in our nature.
It's in our blood.
It's what we've done for a long, long time.
(16:43):
So I think the idea of shared services is something that we get.
It's part of our DNA.
It's an interesting idea.
It's something I've always been fascinated by as well.
We see time and time again people putting their marketing budget behind particular campaigns where they actually don't end up having any stock to sell once they get the traffic to the site.
And trying to share that kind of load across a number of retailers could be very interesting.
(17:06):
But with the democratisation of the tech, and we've had a discussion this morning, so the barrier to entry to start selling online is quite low nowadays.
If we had cooperative services, the barrier to fulfillment and to providing good services, access to marketing would be quite low as well.
All of a sudden, we're flooding the market with a whole bunch of retailers who have difficulty, let's say, distinguishing themselves from each other.
(17:32):
Do you worry about that side of things?
I mean, everybody in the room is already worried about how to distinguish themselves in a crowded marketplace.
If we lower barriers even further, how are retailers going to be able to sell to their customers?
I think we're changing the barrier, not lowering it, because they're already there at this point.
I think we've jumped beyond that low threshold.
(17:55):
What I'm suggesting is that you redeploy the resource that's required to get there.
So if I go back to the point that if you take Chris's presentation on customer experience, that's an incredibly difficult and time-consuming, and probably prohibitive activity or even place to get your head into.
Whereas if your job is to do what you know well, which is merchandise, price, get assortment right, buy properly, if they're the things that you're putting your energy into, then I think that people will start reaping the rewards because they're doing the activities that they should be doing.
(18:32):
They're going to be putting time and energy into successful merchandising tools and techniques that they've been doing anyway.
And it allows them to maybe go through that learning phase a little bit differently, because all of a sudden you're not asking someone to think through the language on the page for customer experience or branding.
And the other side of it is getting the customer experience elements right.
(18:52):
I think we saw the box from Fairlie up there.
And that unboxing experience is something that if anyone wanted to test where you are from a customer experience, mystery shop.
Go on and buy something from one of your competitors.
See what the follow-up communication's like.
See what kind of 90-day communication plan they have for you as a customer to get into that cohort marketing that Brad talked about.
(19:13):
So I think all of a sudden, Ger, you're actually asking people to do the things that they know how to do inherently.
And in terms of flooding the market, I think they're fighting in that space anyway.
What we're saying to people is make it easier, because one of the things that I think we all feel at this point, like three years after or three years after the explosion of Black Friday and pandemic is that we're all tired.
(19:34):
You know, the clock goes back to zero every morning.
We're asked to do these things over and over and over again.
And it's relentless and it's tough.
And unless you have the passion to keep doing that every day, it can be exhausting.
The difference between a 1.5% compression rate and 2% is night and day for some people.
And in terms of developing and encouraging a test and learn culture here in Ireland, what do you see that could be interesting for experimentation, looking into sourcing product overseas, fulfillment centres in different areas, that sort of thing?
(20:07):
I suppose there's a couple of points there.
The test and learn can be picked up in a number of different ways.
There's so many channels out there right now from a marketing perspective.
I think the first thing to try and figure out is, you know, if you've got a wide customer base, you know, if you're a department store-type retailer, you're going to have a huge demographic to try and tap into and understand where they are.
(20:28):
So your ability to test and learn can be quite broad because you can actually start being a little bit brave and moving through markets.
And I was chatting to Aimee Connolly from Sculpted by Aimee on Thursday night.
And that's one of the things they did really, really well.
And test and learn doesn't have to be limited to just ads or online channels.
One of the things she tested really early was the introduction of retail into her business.
(20:49):
So she was a pure player online.
They have over 500 outlets now between Ireland and the UK, and they've moved into the Middle East and have aspirations to bring that on.
And one of the things she said was within that marketing AB testing, that she was able to throw up what she called moments for everyone in the supply chain to benefit from margin opportunity or merchandise or promotional activity.
(21:09):
And she just was able to understand what each of those channels brought to her.
But that was through test and learn.
And over time, not trying to be all things to all people, but figuring out what was the motivation behind wanting to be involved or not, and understanding where customers were.
One of the other really interesting, I suppose, nuggets that she threw out there was that skin care that she's in is so broad that she could she could cater to every ethnicity, every skin type, every condition that's out there.
(21:37):
But she's not going to because it would spread her too thin in terms of product production and manufacturing, and push her into all these areas that would ultimately, I suppose, overtrade the business.
And they're not ready for that right now.
So instead, they're keeping it tight by understanding that test and learn process.
So I think that was really interesting.
The other side of it, then, if you look at how we source products, one of the things that I've seen quite a lot is that people are now starting to look at different ways, different places to manufacture as opposed to different ways.
(22:06):
So we've been used to Far East manufacturing.
Like, if I take Crua our tent business, we started looking to Turkey, to Spain and to Mexico as the three places now that we want to start producing our product in.
And the product development costs and production costs used to be so high that we couldn't do that before.
But now what we see with the increased cost of freight and everything else, even though it's come down over the last two years, we now see that it's possible for us to manufacture in North America, given that we can get road freight.
(22:33):
We can then go from factory to shop floor or to our distribution center in California to get closer to our customer.
And that's one of the things that's really important to us, because our tents are, you know, they can be anywhere from 65 kilos up to 130 kilos.
So they're bulky, they're big.
No one wants to handle them.
An Post would run a mile if they saw them.
Sorry if you're here, but it's ugly freight.
(22:56):
It's not nice, you know.
So for us, we have to look at different ways to make our business survive, first of all.
And then to get beyond that, we want to be able to do almost just-in-time manufacturing to say, well, if you want a tent in blue, we don't do it, but we'll do it for you in 12 weeks.
And by the way, this is how you order it.
And we go through that process.
So it opens up a new way of working for us by going through that process.
(23:16):
And I know there are Irish brands who have done that as well.
So it gives a bit of certainty into your supply chain also by having it close by.
I think there's a couple of emerging Irish apparel brands.
There's one called Almost Home, which I actually love.
And they do a lot of their manufacturing now and design and product development in Portugal.
(23:37):
So great story, great place to get product developed.
It's within Europe.
And it gives them, as you say, that kind of flexibility to have shorter production runs, faster time to market, easier shipment, gets their costs right down.
Yeah.
And I think, what did you say they're called?
Almost Home?
Almost Home.
There must be something in that industry.
(23:58):
There's also Final Bend.
They're another leisure company in Ireland.
If you were in Cheltenham last week
you'd have had a field day with them.
No, but it's something I've seen more and more.
There's a company.
Has anyone heard of The Smooth Company?
Hands up if you've heard of them?
No?
Thank you.
Smooth Company are a little hair stick.
It's like a little pull-back stick you can use for your hair.
Not for me, Ger or Gordon, but well, maybe...
(24:21):
Maybe.
Just in the back...
But the company didn't exist a year ago.
And the product was designed by Aine Kennedy and her grandfather.
And they've gone through an organic growth pattern.
They use Instagram as their primary sales channel.
They're up to a healthy six figures, pushing towards seven in terms of turnover.
It's profitable.
(24:42):
They use the channels really narrowly.
They have a Shopify store.
It connects their catalogue to all the places they want to be.
So they recognise Shopify, as great as it is from a front-end perspective,
it's a great cataloging tool.
So they can do so many different things with it from an operations perspective.
It's allowing them to grow in the way that they want.
But they've moved all their manufacturing to Portugal.
So in the last, I think, about three months, they have moved everything from, again, the Farly saying, we want to be able to get into shorter production cycles.
(25:08):
We want to be able to deliver in three or four days.
And that means we can manage cash flow way better as a small growing business.
And it means for them, one of the interesting questions that Ciaran was asking the podcast is around funding.
It means that they don't have to go for funding.
They're organically growing this and repatriating the profits back in to design new products and to keep the wheels turning.
(25:29):
And so moving away a little bit from questions of supply chain and manufacturing and so on, one of the things I've heard you speak about a lot recently is hybrid TV and radio advertising.
You seem to be quite passionate about it.
Do you want to explain what it means and why you're so excited about it?
(25:50):
Yeah, there's great growth potential.
So if we look at where audiences are kind of gathering and we're all kind of getting back to a bit of normality, that we're trying to figure out ways to go and bring audiences in.
So if I take Crua our tent example again, we were trying to figure out how to get mass market in America.
We couldn't buy our way there.
Every time we tried to spend, we would hit a limit in terms of conversion and customers and everything that we could get in.
(26:13):
So we couldn't afford to go into linear TV, what's called like regular TV advertising.
We didn't particularly want to either because it was too challenging.
But we knew beyond selling in five core states that we sold in that we wanted to expand it.
So we started exploring this idea of connected TV.
So there's a platform called Mountain TV owned by Ryan Reynolds, or part-owned or whatever.
(26:34):
I threw that in because I tried to dress like him today and I failed miserably.
It used to be in ecommerce, you could just run a pair of Converse and you were a genius.
But those days have sadly passed us by.
But the idea for me was I was looking at customer behaviours.
And this is where the whole idea came from was people were at home.
They're watching Netflix or going on to other streaming services.
(26:54):
Increasing consumption of that type of media was what we're doing.
If you look at radio, just to kind of broaden the horizons, they were getting into podcasts, Snap and all that goes with it.
So our consumption patterns as consumers are changing.
So it makes sense that we start positioning our product in that space as well.
So we started using this self-serve platform to put our own ads up there.
(27:15):
I think they've got about 4,000 combinations of demographic positions that you can go after.
So we could target people who bought from us before, people who hadn't.
We stopped advertising at Meta three years ago to 18- to 34-year-olds because we never sold a tent to an 18- to 34-year-old, ever.
So we just stopped advertising, like we said to hell with it.
We're just, there's no point.
It's a waste of money.
(27:36):
Whereas when we look at connected TV, we can tell a different story through different content type and we feel that we should be reaching those people because all of the other customer insights and research tells us that these are the people who are now shopping all the time.
So I'm really bullish on it as an advertising vehicle.
A couple of other quick behaviours that are creeping in.
If you look at Netflix, they're bringing in advertising costs because I suppose they want a new revenue stream.
(27:59):
The user base is dropping, but people are dropping to the lower, the entry point account of Netflix.
So instead of paying $17, you're paying $8 or whatever.
That introduces the idea of ads.
So you're forced to watch them.
So me as an advertiser, I'm thinking this is good, cheap traffic for me to go top of funnel and say, hey everybody, look at us.
We sell insulated tents.
You didn't even know you need one.
(28:21):
Now everyone's going to go buy them.
So that's been quite successful for us in terms of top of funnel.
If we look at Ireland as a market itself, Sky is introducing this into the platform.
I know I've used radio advertising for a lot of localised retailers to great success using Alexa devices.
Dick's Sporting Good in America, 70% of all its advertising revenue goes through Alexa.
(28:41):
So they will use localised radio ads for the local Dick's Sporting Goods to come and buy whatever it is, fishing tackle.
You name it, you could go there and get it.
But that's where they spend all their advertising revenue.
So if I'm understanding this correctly, Vinny, we're saying TV is dead, long live TV.
And you can now buy advertising programmatically in the way that we would have been used to buying display advertising in the past or paid social in the past.
(29:07):
Am I understanding this correctly?
You have such a good habit of summarising my long-winded answers so well.
I might get you to do the next one for me as well.
Effectively, but it's evolving, it's getting better.
Like everything, it's going to hit the UK before it hits here.
They're going to be launching in-TV placement.
So the Sky Glass TV is going to have a camera fixed on the top of it from May.
(29:28):
You're going to be able to try clothing on during a show and say, do I want to buy this now and scan a QR code to say, just take my money.
It's fascinating.
I'm going to go off script a tiny bit and see, does anybody in the audience want to ask, anybody brave enough to appear on a podcast?
James Byrne?
(29:49):
Ciaran, can I ask you, can I ask you a question now?
Because Ciaran, I talked about the co-op side of things and Wave, I know you're talking to us later on, but it's that economies of scale idea that's bringing you to retailers' doors and getting you into talking.
Is that fair to say?
No pressure.
This is payback.
So what's the question?
(30:09):
It's the idea that services at a certain level, kind of aggregated amongst a lot of retailers, are where Irish ecommerce can bring costs down.
Yeah, I think a lot of people have talked about that over the years, but ultimately when you get different corporates together, they all have their own interests and priorities.
And we looked at that relative to logistics or indeed operations and infrastructure.
(30:34):
In theory, it's great.
But that whole cooperative view of things is incredibly difficult.
To implement and get together, to the point I don't actually think there was a model, viable model worldwide on it, would be my view.
But we'll have a chat about it over tea.
Effectively, it's what you provide, though.
When you look at the range of services that have emerged from MicksGarage, that's how I think about it.
(30:55):
But still it's for us, right?
So it's a commercial entity.
And like we're no different than, you know, yeah, we do some 3PL services, we have some software, et cetera.
But ultimately it's not necessarily a collaborative thing.
It is very much offering services to different e-com or retail operations to emulate what we're doing to a great degree.
And just to pick up on that, I don't think it needs to be collaborative.
(31:17):
I just think the service needs to be available and paid for.
It's just that the aggregation of it all brings it together.
If you look at The Hut Group in the UK, that's what they've done very, very successfully over the last 10 or 15 years.
Another group called eComplete do the same thing.
They bring all this revenue under their management and they negotiate contracts on the aggregated totals for people.
(31:38):
So there's an evolution, there's a path already been plotted for us to say that that type of endeavor can work.
Yeah, I think there's a flywheel effect, isn't there?
You know, so where you can, where increasing volume brings increasing opportunities, whether it be commercial, tactical or operational.
And I think that's why The Hut Group are fantastic at it.
(31:58):
They're amazing at it, you know, relative to, and, you know, what MicksGarage, we would aspire to be them to some degree where you have your own platform in there and thereoff you can roll and spin and take the advantages of your existing operations, assuming you have them honed down to a great degree to allow you to do that.
So, no, for sure there definitely is a wider flywheel effect once you've hit a level, a certain scale on it.
(32:20):
And Ger, I'll throw that to you as well.
Hold on, so usually the audience asks the questions, you know.
Is there anybody else in the room you'd like to terrorise before I hand the microphone over?
You just put me in my place, so I'll shut up.
No, not at all.
No.
Is there any other questions you'd like to ask to the audience?
We'll turn it around for a little bit.
(32:41):
Well, I'm going to throw that back to you then as well, because look, we're all here because we're talking about ecommerce and where it's going.
And we've looked at some of the roles here.
One of the things I'm interested in is the development of those roles and some of the things we've seen like merchandising.
I think that's going to be a really important skill set to have in the business over the next few years.
(33:02):
One of the things Gordon used to do was retrain people internally really well.
But Gordon had a team of 400 people or 600, depending on who you talk to, and a payroll of whatever.
But where do you see the future of roles going in ecommerce?
I get asked it all the time.
Yeah, we get asked it all the time as well.
There are certain areas, I think, that are missing that will be key in the future.
And one of them is trading.
(33:24):
It's an area that's effectively, let's say, akin to some of the stuff that Brad was showing us.
A person in the business who's looking at the cohorts and making data-driven decisions on what kind of product is working really well, let's say, at the top of funnel to get people into the website?
What are people buying first?
And then looking at that and saying, right, well, I don't really want to sell a lot of these.
(33:48):
It might not be a very high margin product, or you might be driven to compete in price with everybody else.
But you could say, well, people who buy this buy something, buy other things.
They buy this and they need another product with it.
And I'm going to start marketing to those people to sell them up through the chain.
They come in to buy, let's say, a bag of flour at €1 or €2.
(34:09):
And now I'm going to sell them organic flour.
And then after that, I'm going to sell them yeast.
And after that, I'm going to sell them...
A person who looks at the business and the online activity and trades the site at that level, that's something that I think is currently missing in ecommerce roles.
Gordon, I can see you're...
I'm super passionate about this.
I think what we've seen, if we take this idea that tech has now become democratised and we've all got much more access to it, that means that we can focus on the things that are great within our retail organisations.
(34:46):
So what are retailers really good at?
We're really good at proposition development.
We're really good at merchandising.
We're really good at trading because that's what we've done for hundreds of years.
So I think those skills translated to digital environments are the key skills to be bringing into your business.
(35:08):
They're also the rarest in a digital environment.
But if you can bring those skills in, and then some of the things that you might have you brought in in the past, you can now kind of push out to agencies and to technical partners.
So really, do you want to be running a team of developers, or do you want to be running a team of retailers?
And I think running a team of retailers is just, like, obviously massively biased as a retailer, but much more interesting and much more fun.
(35:35):
And get your partners to do all the tech stuff.
And for those of you playing buzzword bingo, Gordon has now said democratised three times, so you win a prize.
But just to pick up on that really, really quickly, one of the really interesting things coming out of the eBay world was the idea of a trading manager.
I'd never seen it before in Ireland.
And to this day, we haven't seen it at scale.
(35:55):
eBay produced so many traders, and people have to think on their feet.
And there's so many wonderful stories of how people use that trading mentality to do things like get rid of refurbished stock.
So we did loads of work with Tesco on that, loads of work with Currys.
We turned, I think, 10 SKUs into a $2 million a month line through certified refurbishment and selling refurbished stock on eBay and Amazon in a three-month period.
(36:17):
Argos used to think we were doing an amazing job of clearing stock on eBay.
When we first got them on, there were clearance bargains of that lovely black and yellow branding, which you love.
And it was the thing in the corner of the store that ultimately became their clearance aisle.
Argos did about $20 million a year with us on eBay.
And at the end of our first year, we thought, yeah, great for us.
Let's go on the lash.
We'll drink it up.
(36:37):
Thought it was great.
And Argos were so disappointed.
And what they were disappointed was their buyers had bought wrong.
So we were out celebrating their misery.
They were getting battered on it because they had to write that off balance sheet every single month and then just clear it through eBay.
Now, I won't get into too much right now, but they had a warehouse with a till at the end of the warehouse.
And they used to ring through all the orders at the end of every single day.
(37:00):
And that's how they handled it until it became a fully omnichannel business.
But that trading, that would be one of the things I'd love to see creeping into the trading mentality.
We just have a tiny amount of time before we have to close for lunch.
Is there anybody in the audience brave enough to take up the challenge of putting a question to either Vinny or Gordon, or myself?
(37:20):
Oh, I have a few.
I have a few hands.
I'll hand over to you.
Will you call out your name and company?
And use this here?
Hi, how's it going?
My name is Colin Harmon.
I'm from 3FE Coffee.
I'm interested in your perspective on the UK market.
So you mentioned the size of the Irish market is quite small obviously,
and for a long time that was kind of something that we would love to get into, like other businesses.
(37:43):
But at the moment with duties and VAT and lead times and everything else that's come with Brexit, is there any point even addressing it in your mind?
And then if we're looking to Europe, do you think that's a viable entity as well in terms of a market?
Or should we just keep focusing on what we're doing for the moment until something easier pops up?
I love your coffee, by the way.
(38:03):
Just if you could send it to Tralee, that'd be great.
I like Gordon's take on that.
I worked with a coffee brand recently.
We entered the UK market for about six, maybe eight months.
Initially, when we went in there, it was fine, became very unprofitable very quickly.
And with rising costs, it became kind of insurmountable.
(38:24):
It didn't make sense.
You're spending £1 to get 50p back, that type of return.
Now, one of the areas that we have seen success is in the EU.
And that's where looking at this idea of third-party partners can be really useful.
So maybe not that you're using Amazon FBA as your warehouse to distribute across Europe, but there are partners out there who can do that.
(38:44):
I worked with a food conglomerate.
We set up a DTC path coming out of The Netherlands.
The reason we were able to kind of do it in a profitable way was we realised that road freight coming out of there could get to anywhere in Europe in three days.
Most of Northern Europe, which is where the market we wanted, Germany, Netherlands, Belgium, that kind of area, was able to be serviced in one day.
(39:04):
So the actual cost of getting product there was cheap because we were getting it into Rotterdam, and it was a better place for us to get product into.
So I would say EU over UK is worth looking at.
I would use a conduit such as a marketplace or a third party to help justify the business case for it, and then work out of there as well.
There may be other things that you find that evaluate your pricing strategy.
(39:27):
So are you at the level you could be to support being in that market as well?
You know, you're quite a premium product.
Can you price up and enter market?
Can you design new products?
I've seen people who've used that entry strategy to design new product lines specifically for a market because there is an opportunity there.
So the idea of test and learn is something I would certainly have a look at.
(39:48):
Gordon, anything to add?
Very little to add other than what I've learned this morning is that I think there's clearly an opportunity to leverage third parties, to leverage marketplaces, to give you some reach to test.
I think that could be an option.
And then there's also going and assessing the individual marketplace opportunity.
(40:12):
So how big is the overall market for what you sell?
And how much penetration do you have in there, if any?
And how competitive and noisy is it?
Once you're looking at that, you see, okay, well, this is an attractive market.
Market A is more attractive than market B.
So therefore, localise for market.
What did I say?
Market A.
(40:34):
Localise for market A.
And also, what are those tools that you can use to reach that market?
And one of the things I learned last week from talking to Vinny, which was a new thing for me, is there are over 400 marketplaces?
450.
450 marketplaces.
So there's different marketplaces for different verticals, for different specialisms.
(40:57):
So I think there's a good bit of research to be done there.
So a very long-winded, not quite straight answer.
Okay, I'm going to give the last question here to James, because he was also brave enough.
And they picked on me...
Can I leave a question at the end, then, Ger?
I'm sorry?
Can I leave a question at the end?
Yeah, sure.
Go on.
Guys, I'd be interested to know your thoughts on Amazon.
(41:20):
They're, I suppose, still in startup phase here, in terms of their distribution.
And I would love to know what impact you feel they're having today, and then how far along their journey in Ireland you feel they're going to be?
Quick hand pass there from Gordon.
He'd make the Irish World Cup team at this rate.
Look, they haven't done what they want.
(41:41):
They're underutilised.
Depending on who you talk to, they're not overly committed to trying to push that too hard right now.
Amazon have just laid off 27,000 staff globally, and they're rationalising costs.
So I don't see them pushing too hard on it right now.
What they want is availability of assortment.
I think they're going to let the market find its own feet, then start coming back in and trying to get more product on the shelf.
(42:04):
They've done something similar in Belgium.
They've had better success there, so they've followed it through with further investment in the product.
And they've cut down the number of third-party sellers that they're having globally, in general.
One of the other big moves that they've made, I guess, from a vendor perspective is that they're not allowing resellers.
So they want to deal with brands directly as part of the relationship mentality that they have.
(42:24):
Battening down the hatches, they want long-term profitability.
They're coming under shareholder pressure.
Andy Jassy's in there now instead of Jeff Bezos, and that's going to be his legacy, I guess, is trying to deliver profitability in the long term.
So I think we still have an opportunity to work alongside Amazon as part of our strategy.
250 of the top 500 retailers in the UK have just been surveyed and produced a brilliant report recently.
(42:48):
And 58% of their search volume for branded search goes through marketplaces before it goes to their own website.
So there is a need to be visible if you are a brand owner.
And you might decide that in the long term it's not for you, but it might be part of your top-of-funnel visibility strategy.
One of the things that you learn from Amazon very quickly is the PXP page.
(43:09):
That's Amazon A-plus content just delivered through Shopify.
So there's a lot of the sensibilities that we can learn from marketplaces or the rigours that it put us through.
And this is going to be my final question that I think we can take from it.
So my thought to leave on this is that I don't think we need next-day delivery.
It's been the barrier that's crucified us for so, so long.
We have a country that's easy enough to get around in two or three days.
(43:31):
There's not many products that are not in that area of necessity enough that says we need to have, as a core service, fast delivery.
And final point on that is if you look at the UK market, it's saturated.
Of those 250 brands, they have coverage for about 104 stores each, which if you were to break it down into miles, I just wrote about this last week, every store in that 250 is covered every 16 miles in the UK.
(43:58):
As a strategy for a business, that is not good.
There's going to be more of those closed down, reduce the store footprint.
We've an opportunity to think differently about it in Ireland.
And that's what I want to take out of today.
It's just to think different.
Well, just to wrap up, because we're eating into lunchtime, literally.
Oh, well, not literally.
We're not eating at all.
But just as a show of hands, who thinks next-day delivery is crucial for Ireland?
(44:23):
Just to answer Vinny's questions, show of hands, next-day delivery, crucial?
I'm giving that, like, maybe 20% approximately?
So 80% believe next-day delivery, not so important.
There's the answer to your question, Vinny.
Okay, thanks very much, everybody.
It's been great to have the opportunity to do the Functional & Fabulous podcast here today.
(44:46):
And lunch is served at the back of the room.
Thank you.
Well, Vinny was a live wire there, wasn't he, Ger?
What did you think?
Oh, I thought marketplace, marketplace, marketplace, marketplace, marketplace.
He is a fan.
And to be honest, I've very little experience of actually selling on marketplaces.
(45:08):
But he raises some good points.
The points are fabulous.
They were really, really good points.
I have to stop using the word fabulous so much...
Splendid.
There were splendid points.
There's nothing wrong with being fabulous, Ger.
But the points are great.
And they were so varied.
And so, so many of them, so varied, from the examples of sell-through of clearance items still at a decent exit margin.
(45:32):
So you're protecting your exit margin while discounting it.
But you're selling it in the likes of, let's say, an eBay or something like that, where
people are satisfied with a discount, knowing that it's below the price and you manage to
get your product out the door that way and clear that way, from that sort of thing to
obviously internationalisation, you know, getting in front of a larger market, getting
eyeballs onto your product and using and leveraging marketplaces for new ventures in
(45:57):
the product that you're selling.
You know, there are so many different examples.
The retail media that he spoke about, the idea that potentially, I mean, you know, it may be a little bit into the future for in Ireland, but potentially you could look at selling advertising space to the brands that you have for them to actually promote their own product.
(46:19):
I think there's something really interesting going on in this space at the moment.
And there's a couple of examples of it.
I think Kingfisher are a really good example of, kind of both marketplaces and retail media potential.
They've launched their marketplace site.
It's doing phenomenally well, and it's allowed lots and lots of new product to be added in and to be sold over and above.
(46:45):
I think there's talk of, if I get this wrong, I'll get in trouble.
It was either Boots or Next.
The 26% of all their revenue generated through the marketplace.
And then that opens up that opportunity to build a retail media business online because you've got different traders now leveraging that property, be that Boots or be that one of one of Kingfisher's sites like B&Q, and actually them competing on it in a way that we've only really seen domestically on the big A.
(47:22):
Yeah, they're scratching the surface on it, you know.
And this is one of the things with Vinny that I always find when we're speaking with him.
His ideas and the level that he's thinking, but his ideas are so big.
Sometimes I feel like they're almost too big for the country.
Oh, he thinks at a whole other different level, and that's one of the reasons why I love spending time with him, because the inspiration that that can give you.
(47:50):
I have literally, the ideas spinning around, what could we do with a cooperative Ireland?
And I think if you've got that big marketplace with all of the independent retailers contributed to it, that could be the ultimate destination for Irish shoppers.
I mean, he thinks so big and so fast and so far ahead.
(48:13):
I do struggle to keep up.
But he's well able to defend his ideas as well.
I mean, I went on my little walkabout.
Apologies, Roger, as I gave him a little heart attack manning the video.
And we had a chance to talk to Ciaran Crean.
Ciaran is a practitioner, you know, I mean, he has experience.
(48:35):
He's been in the trenches.
They're still in the trenches.
You know, MicksGarage is a hugely successful, very active proposition.
They're coming out with the Wave OMS. And Vinny grilled Ciaran Crean.
Ciaran Crean equally grilled Vinny right back again, it was cut and thrust.
I loved that little bit of, that little bit of interaction there.
But Ciaran's right.
I'm assuming you've been to the MicksGarage warehouse.
(48:57):
Yes, I have, of course.
And seen Wave in action.
I think everybody in the country at this stage, and if you haven't been, you should go.
But I thought that that was really interesting because it was the two sides of the coin there and discussing, well, why might this not work versus absolutely, this is how this could work.
(49:17):
And that's, I think we need that level of debate.
Yeah, and it's a lovely, healthy level of debate.
Because sometimes, I mean, obviously, the theory is there for a reason.
And the kind of, let's say, the more, you know, research-driven academic side of things, that's there for a reason.
That's to allow us to push forward an agenda or allow us to push forward ideas.
(49:38):
The practice is also there for a reason.
It's like that because you actually have to do it.
You have to implement these things.
And what is our experience of doing it?
And where do we fall down sometimes?
And I think it was great to see.
It was like, you know, Double Dragon, where the two fireballs were right in the middle of the room.
(49:58):
So if I could do that, like, I've only got the Street Fighter action for that one.
Don't film that.
But that was brilliant.
And then we moved on to programmatic TV.
And that is something that Vinny's super excited about.
It's such a good opportunity.
It's been the dream to actually deliver really relevant TV advertising instead of TV being purely this broad-reach media tool.
(50:26):
Yeah, I think there was maybe, it feels like a couple of years ago, people nearly gave up on this idea of ads.
Well, ads on television, because we were skipping them left, right and centre.
But obviously, now Netflix is changing around to offer the basic subscription package with ads.
And that gives you the opportunity to, as a retailer or as a person who's looking to promote and to generate demand, it gives you the opportunity to get into living rooms in Cork City, in the suburbs of Dublin, to directly target your specific customer with a range of ads that apply to them and gives you the opportunity to generate demand.
(51:04):
That's where we all need to go to.
We all need to, we need to get those eyeballs.
We need to get people in front of the product.
We want to show off what we have to sell.
So it's, he's right.
It is so interesting and tempting and such a lovely, it feels like such a lovely approach to be able to, you know, talk to people directly in their, you know, in their living rooms, basically.
(51:28):
It's brilliant.
I think endless source of inspiration.
Well worth a follow on LinkedIn, if you're listening and you don't already.
I have a question for you though, Ger.
Live podcasts.
How do we think we did?
I thought we did really well.
Roger couldn't keep up with us.
But apart from that, I don't know what people thought when I thrust a furry mic under their nose...
(51:53):
You were running around with your microphone.
Speak now.
Which one do I talk into?
Speak into both of them.
Do I go left?
Do I go right?
I thought it was really interesting to do that with an audience.
And it was a lot of fun.
And if they're listening, thank you for taking part and listening to the podcast.
(52:18):
That was a really fun way to spend an hour in an afternoon.
Yeah.
Live from the StudioForty9 Conference 2023.
Thanks so much, Gordon.
It's been a pleasure as always.
Thanks, Ger.
I can't wait till the next one.
Thanks to our listeners.
Take care.
You've been listening to Functional & Fabulous with Ger Keohane and Gordon Newman.
(52:41):
If you'd like to know more about the podcast, or about StudioForty9 and Omnichannel Stories, please go to functionalandfabulous.ie. Our sound engineer was Elaine Smith, and the show was produced by Roger Overall.
Five, four, three, two, one...
(00:07):
So we have Go from Houston.
This is Functional & Fabulous, the omnichannel podcast where we unbox tales of online retail and digital transformation.
In this episode, recorded partly live on stage in Dublin during StudioForty9's annual Excellence in Ecommerce conference, Ger doesn't stick to the f***ing plan...
(00:30):
Um, I'm gonna go off script a tiny bit.
Our guest Vinny gets feisty with the audience...
No pressure, this is payback.
So what's the question?
Gordon and Ger get excited about Street Fighter...
I've only got the Street Fighter action for that one.
Don't film that.
And the boys inflate their own egos...
Live podcasts, how do we think we did?
(00:51):
I thought we did really well.
I thought we did really well.
Roger couldn't keep up with us, but apart from that...
This episode of Functional & Fabulous is brought to you with pride by StudioForty9, retail ecommerce experts, omnichannel growth consultants and cut-through performance marketing specialists.
StudioForty9, where your digital retail success is built.
(01:16):
So, um, without further ado, I'm going to start with an introduction.
I have to read from the phone, so you'll have to forgive me.
Of course, this is going to be a podcast.
Nobody's going to be watching.
No heckling.
Except for the camera over there.
Don't mind the camera.
The camera's on.
I'll look in this direction like this, as if I'm talking to you.
So Vinny is actually a bit of a powerhouse in ecommerce.
(01:40):
He's an ecommerce consultant with an extensive and impressive CV.
The companies he's worked with are a who's who of Irish merchants and merchant services, including eBay Ireland, Arnotts, MicksGarage, Luzern, JD Sports, Argos, Unilever, Littlewoods, Shoe and MandM Direct, to name, I suppose, a few, which is an incredible CV.
He's a self-described notorious LinkedIn spammer who writes and speaks about the importance of balancing short-term solutions with long-term strategy.
(02:10):
He discusses the need to focus on opportunities rather than challenges, and investments rather than cost centres.
Right now, his research includes the future of hybrid TV advertising, the potential of cooperative services in terms of serving Irish merchants, and, of course, marketplaces, as he works to understand and explain alternative sales channels and new marketing avenues that help drive revenues for Irish businesses.
(02:32):
Vinny, it's wonderful to have you here today.
Thanks, Ger.
I'm having an existential crisis.
I don't know if I'm going to buy a leather jacket or a robotic lawnmower.
The midlife crisis in me says I'll probably end up with the jacket.
But thanks so much for having me.
I'm delighted to be here and amongst quite a lot of the best of Irish ecommerce, yourselves included.
(02:52):
I've been lucky enough to work with yourself and Gordon now for the last six months or so.
The introduction was too generous, with the exception of the LinkedIn spam element, but we'll touch on that maybe a little bit later on.
Although you did say yourself it was fair.
Oh yeah, I did.
No harm there.
Right.
Well, down to business.
First question.
So I want to ask you a question about something that I've no experience of working on.
(03:17):
The bush telegraph tells us that you're quite bullish on Amazon or marketplaces in general.
So first question is, is that true?
And the follow up is why?
Well, Gordon's a marketplace snob, so he never wanted to get into it.
That's why.
I was never allowed.
You never tried.
I tried knocking on your door numerous times.
(03:39):
I'm bullish on marketplaces, yeah,
so I think if we look at some of the things that the guys have already spoken about this morning, it's that people want to buy in different ways and we've got to present ourselves or make ourselves known and be available to them to buy in those channels,
and at those times that they decide to buy, because in reality, when we think about our own buying habits, we decide when we want to buy, when we want to buy, not really under the influence of advertising, per se, not all the time anyway.
(04:04):
So when I started working back in eBay in 2007, I think it was right now, you know, the UK market had really adopted the notion that it was okay to appear in all these channels because people had already decided they wanted to buy in different ways.
And the best examples I guess I can give were things like, in the fashion cohorts that they have, the very dedicated fashion buyers who love browsing, like, they will spend hours and hours going through eBay trying to find a perfect deal.
(04:31):
And that was in part because of their business model.
They had this auction model where you could go and say, I'm going to bid £5 to get those trainers because I might win on Sunday night.
And you kind of, you had this habitual thing that people were coming back to the site over and over and over again.
And what developed out of that as it brought full price onto the site was that people had this expectation that they would only get the best of products, but at a slight discount.
(04:55):
So in your merchandising cycle, it might have meant that if you were going into a six-week cycle of full-price selling, then you might be able to extend that through marketplaces or go there first, because that's where the buyers were going over and over again.
So as that evolved, I guess I've worked in marketplaces on and off now since 2007 in various guises with some successes, with some failures.
(05:18):
I worked with Ciaran, who's here in the audience, on marketplaces.
We ended up building our own API infrastructure into that, and it gave us the ability to expand.
Now, one of the reasons I would like to touch on, it's either the trading and profitability of it, that I think it's a really good ballast for us, is when we think about third-party selling or marketplaces selling, Amazon is the one that jumps to mind.
(05:44):
But Amazon has set this bar, and I'm going to contradict myself now in a second, but Amazon has set this bar that says to us, that is the standard in retail that we need to get to from a service perspective.
So when I say I'm bullish on things like Amazon, it's saying, if you think you can go and create an ecommerce experience that is not to the standard of an Amazon, you're not going to satisfy customers as well through your own site if you haven't put yourself through that experience or at least are aspiring to those standards.
(06:11):
Now, to contradict myself, the two sites that I love that were highlighted on the last presentation were Next and AO.com.
The reason I believe they're so good is service.
You can order off Next today, up until 10pm tonight,
it's going to arrive in your doorstep tomorrow.
In 2011, they had a concept store in Leicester where we were working with them in eBay to test all of these things.
(06:34):
They've invested in that since that point and even before.
We hear a lot about retail media, and we might get to that a little bit later on.
But Next started investing in their retail media platform in 2015.
They understood that they had traffic that they could leverage.
They understood the idea of expanding assortment, and they knew they now had the service proposition to allow brands to confidently put their product on there and say, yes, we want Next to be part of that proposition.
(07:01):
Final part of all this, I mentioned AO.com.
What we didn't see there was the detail.
If you look at the copy and the copywriting that goes through the AO.com site, it's phenomenal.
So in the TV listings, I know when you go into the category pages, there's so much going on in there, but it's worth spending time there.
When you go onto the TV page, it says, we have helped millions of customers choose their perfect TV.
(07:22):
It's not here.
Come look at TVs.
They get into that emotive experience of telling you what they've done, which is make people happy through sitting in front of a goggle box.
Long-winded answer.
Hopefully, there's something in there.
Yeah, definitely.
I suppose one thing that's of interest is we hear a lot about retail media now, and I'm not sure everybody in the audience knows exactly what that might mean.
(07:42):
Do you want to go into a little bit more detail on how it means in terms of opening up additional marketplaces for retailers?
Yeah, retail media.
I guess we've highlighted Meta and Google as the two fundamental places that we go to bring traffic into our businesses and onto our websites.
Over the last, I suppose, three or four years, predominantly, we've been seeing the evolution of what are called retail media networks.
(08:08):
They are high-volume retail websites that are monetising their traffic through saying, if you list our products on here, you can actually buy advertising space from us right now.
I first started working on the Walmart retail media network four years ago.
Most people won't know, but I'm director in a direct-to-consumer brand myself.
We sell thermally insulated tents in the US market.
(08:29):
That's our primary channel.
We use Walmart for that purpose.
Four years ago, it was terrible.
Walmart acquired Moosejaw, which was a specialist outdoor retailer about three years ago.
It's been sold, actually, in the last two months to Dick's Sporting Goods, and they bought it to bring all that ecommerce expertise in.
They wanted to understand, how do we allow brands to equitably buy ad space from us?
(08:52):
That's something that's been happening quite a lot in different industries.
If you look at Boots and Superdrug in the UK, they have been some of the frontrunners, the DIY group, everyone in that space.
They're now starting to monetise that traffic as well.
Can I just ask you a question there?
There's going to be lots of people in the audience that are used to getting their marketing support euros from their suppliers.
(09:16):
I know I would have done that in past roles.
How does retail media differ from marketing support money that you would get from your third-party suppliers?
Because it's gone the other way, I guess.
The full dynamic is shifting.
I don't know that they're going to want to do it.
(09:37):
I think some of that support might retrench a little bit, and you could see them going direct themselves onto somebody's marketplace.
I think there's a danger there.
I want to caveat that, Gordon, because the one thing that I would say about these platforms is that they're very much in their infancy.
Right now, what's going to come under question in the next few months is the performance of retail media networks.
(09:57):
You're going to see people saying, we've invested thousands and we're not getting the return that we want.
Ultimately, what people want to see is rate of sale in-store.
I'm working with an Irish food brand.
We're listed on the Jumbo platform in Netherlands and Belgium.
We've just completed a campaign yesterday.
We've invested quite heavily in it.
We couldn't even get an analytics report.
(10:19):
We won't get our first analytics report until next week.
We had to invest on the basis of a joint business plan...
So in that respect, it is just like marketing support...
Big black box. That's a tiny bit of an in-joke there.
But no, in all seriousness, the networks have to mature.
One of the other things that's going to come out of them is they need to hire better.
Right now, if we think that ecommerce has been isolated in their own industries, the ecommerce teams in these media platforms are completely separate to the retail team.
(10:48):
So what you're seeing is this clash of performance objectives and even siloed information like that.
So the brands that are going into it, they're going to suffer a little bit this year.
It's going to take maybe another 12 months to flush itself out.
But in two years' time, you're going to see some of the larger Irish retailers, I would imagine, starting to monetise that traffic.
And that presents to me an opportunity for Irish retail in general.
(11:09):
It's very interesting.
Basically, it's an area around the Irish retailers selling space to brands to sell through the websites as opposed to buying the stock and taking the risk themselves.
Yeah, and it kind of goes into that idea of co-op.
So I've long held this belief that Ireland, in certain areas... I live in Tralee, by the way, so it's a small trading town, relies heavily on retail and that's kind of its lifeblood.
(11:34):
I grew up in a small town just down the road in Kildare, and that's always been something that's been part of how I've grown up and been involved in my life.
So when the pandemic hit, everyone went online.
Every small shop in Tralee decided to build a store, and it made sense because they had to.
Now what I think they've got to start figuring out is, what are those tools of ecommerce that make sense for them?
(11:54):
It's not that everyone needs to have a full trading team, because let's be honest, there's not enough talent in the country for us all to have a fully fledged ecommerce scene.
But I think if you look at where ecommerce is moving in general, the roles that we will need to hire for are what we just looked at today.
It's merchandising.
It's being interested in data.
It's wanting to do something with it.
It's about content creation.
(12:16):
So the ecommerce theme of 10 years ago is going to look really, really different in the next three years.
So swinging back to our theme of marketplaces and, I suppose, tying it into this idea of cooperative, could marketplaces play a role then for those smaller retailers who maybe can't have a marketing team?
(12:39):
My belief has always been that they should.
But since 2007, when I joined eBay, we've struggled to get through that concept as a culture and as a nation.
And I'm not quite sure why.
And just to kind of give some sort of storyline for that, when I joined eBay about a week later, we were all called in the room and the eBay Ireland business was made redundant.
(13:00):
They decided they didn't want to invest in it anymore.
They couldn't afford to put traffic into it.
And it stayed like that until about three years ago.
We started a programme.
And I did it voluntarily with a few other people to see, could we revitalise this idea of marketplaces helping Irish retail?
And it was just pre-pandemic.
So it probably hit at the wrong time.
So we trialed it with Tralee, where I was based.
And we trialed it in Drogheda at the time.
(13:22):
And what we said was, we'll give you free access.
We'll put an account management team behind this.
We'll give you free listings.
We'll give you storefronts.
And to the point that they wanted to start pumping money into the advertising of it.
And it fell on its face.
And the reason it fell on its face was the stores themselves didn't have the resources to get catalogues built.
They didn't want to put products online.
They were trying to deal with people coming into the shop.
The realities of a small business trying to build up the capability, now a lot of that infrastructure is in place.
(13:49):
I think the timing of it was probably wrong.
But now there's an understanding that it might not be the be-all and end-all for us.
But it might be an incremental revenue stream.
It might be the thing that pays the lights or the heat bill or something.
But it's a contributory factor.
One of the things I like, I suppose, about the evolution of Shopify in Ireland, and I'm kind of moving on from there, is that the technology has got better to the point that we don't all need to be technological experts to deal with it.
(14:14):
Anyone who has a bit of desire to go and learn and will sit in front of YouTube for a while, which, let's be honest, we all will, has got the capability to become someone who is useful from an ecommerce perspective.
So again, that comes down to one of my older Gordonisms of the democratisation of technology, and that being available to anyone that now wants to learn, and accessible in terms of cost.
(14:39):
So those barriers have kind of gone.
So culturally, could we be at a tipping point where time could change, and maybe that kind of cooperative marketplace model, could we be on the cusp of that in Ireland now?
It's time to have a conversation, I think.
And that sounds so stupid and clichéd.
(15:00):
And coming out of my mouth, it sounds even worse.
But I think we do have to, because the unit economics of Ireland, Ireland is tiny.
We're the size of Greater Manchester.
There's a ceiling to which we can all grow if Ireland is going to be our only market.
And I was listening to Ciaran Crean, who's out there somewhere, Ciaran, I think I saw you earlier on, and we were chatting.
And Ciaran was talking with Gary Fox in the Entrepreneur Experiment about what would MicksGarage look like in other countries.
(15:25):
And I think he said the penetration rate that we have in Ireland, if we were to be in a bigger country like Germany, MicksGarage would be a quarter of a billion turnover of a business.
You know, that tells its own story.
So Ireland has this limited capacity if you only trade in Ireland.
Now, what it also presents for us, if we look at things like co-op services, and by that I mean we could have four fulfilment centres or six fulfilment centres all around the country, allowing small retailers to pay a portion of it in.
(15:53):
To say, we're going to pay, instead of having our own fulfilment service, we will pay for that service.
You apply that to marketing, you apply it to warehousing, you apply it to technology.
All of a sudden, that operating expense and cost that is kind of crippling everyone right now is there to be questioned.
And it means that instead of every small retailer in Tralee—I'm going to keep using the Tralee analogy, it's all I've got in my head right now, sorry—but it means that it may become equitable for them at some point to access these services and access customers.
(16:22):
Because when you think about it, we're spending all of our money in advertising through Google and through Meta.
Let's say there was Ireland Inc., a giant department store, where we actually shoved all of our money into that type of traffic.
And that will work for a certain type of retailer.
So I think the timing is right.
We have co-op in our nature.
It's in our blood.
It's what we've done for a long, long time.
(16:43):
So I think the idea of shared services is something that we get.
It's part of our DNA.
It's an interesting idea.
It's something I've always been fascinated by as well.
We see time and time again people putting their marketing budget behind particular campaigns where they actually don't end up having any stock to sell once they get the traffic to the site.
And trying to share that kind of load across a number of retailers could be very interesting.
(17:06):
But with the democratisation of the tech, and we've had a discussion this morning, so the barrier to entry to start selling online is quite low nowadays.
If we had cooperative services, the barrier to fulfillment and to providing good services, access to marketing would be quite low as well.
All of a sudden, we're flooding the market with a whole bunch of retailers who have difficulty, let's say, distinguishing themselves from each other.
(17:32):
Do you worry about that side of things?
I mean, everybody in the room is already worried about how to distinguish themselves in a crowded marketplace.
If we lower barriers even further, how are retailers going to be able to sell to their customers?
I think we're changing the barrier, not lowering it, because they're already there at this point.
I think we've jumped beyond that low threshold.
(17:55):
What I'm suggesting is that you redeploy the resource that's required to get there.
So if I go back to the point that if you take Chris's presentation on customer experience, that's an incredibly difficult and time-consuming, and probably prohibitive activity or even place to get your head into.
Whereas if your job is to do what you know well, which is merchandise, price, get assortment right, buy properly, if they're the things that you're putting your energy into, then I think that people will start reaping the rewards because they're doing the activities that they should be doing.
(18:32):
They're going to be putting time and energy into successful merchandising tools and techniques that they've been doing anyway.
And it allows them to maybe go through that learning phase a little bit differently, because all of a sudden you're not asking someone to think through the language on the page for customer experience or branding.
And the other side of it is getting the customer experience elements right.
(18:52):
I think we saw the box from Fairlie up there.
And that unboxing experience is something that if anyone wanted to test where you are from a customer experience, mystery shop.
Go on and buy something from one of your competitors.
See what the follow-up communication's like.
See what kind of 90-day communication plan they have for you as a customer to get into that cohort marketing that Brad talked about.
(19:13):
So I think all of a sudden, Ger, you're actually asking people to do the things that they know how to do inherently.
And in terms of flooding the market, I think they're fighting in that space anyway.
What we're saying to people is make it easier, because one of the things that I think we all feel at this point, like three years after or three years after the explosion of Black Friday and pandemic is that we're all tired.
(19:34):
You know, the clock goes back to zero every morning.
We're asked to do these things over and over and over again.
And it's relentless and it's tough.
And unless you have the passion to keep doing that every day, it can be exhausting.
The difference between a 1.5% compression rate and 2% is night and day for some people.
And in terms of developing and encouraging a test and learn culture here in Ireland, what do you see that could be interesting for experimentation, looking into sourcing product overseas, fulfillment centres in different areas, that sort of thing?
(20:07):
I suppose there's a couple of points there.
The test and learn can be picked up in a number of different ways.
There's so many channels out there right now from a marketing perspective.
I think the first thing to try and figure out is, you know, if you've got a wide customer base, you know, if you're a department store-type retailer, you're going to have a huge demographic to try and tap into and understand where they are.
(20:28):
So your ability to test and learn can be quite broad because you can actually start being a little bit brave and moving through markets.
And I was chatting to Aimee Connolly from Sculpted by Aimee on Thursday night.
And that's one of the things they did really, really well.
And test and learn doesn't have to be limited to just ads or online channels.
One of the things she tested really early was the introduction of retail into her business.
(20:49):
So she was a pure player online.
They have over 500 outlets now between Ireland and the UK, and they've moved into the Middle East and have aspirations to bring that on.
And one of the things she said was within that marketing AB testing, that she was able to throw up what she called moments for everyone in the supply chain to benefit from margin opportunity or merchandise or promotional activity.
(21:09):
And she just was able to understand what each of those channels brought to her.
But that was through test and learn.
And over time, not trying to be all things to all people, but figuring out what was the motivation behind wanting to be involved or not, and understanding where customers were.
One of the other really interesting, I suppose, nuggets that she threw out there was that skin care that she's in is so broad that she could she could cater to every ethnicity, every skin type, every condition that's out there.
(21:37):
But she's not going to because it would spread her too thin in terms of product production and manufacturing, and push her into all these areas that would ultimately, I suppose, overtrade the business.
And they're not ready for that right now.
So instead, they're keeping it tight by understanding that test and learn process.
So I think that was really interesting.
The other side of it, then, if you look at how we source products, one of the things that I've seen quite a lot is that people are now starting to look at different ways, different places to manufacture as opposed to different ways.
(22:06):
So we've been used to Far East manufacturing.
Like, if I take Crua our tent business, we started looking to Turkey, to Spain and to Mexico as the three places now that we want to start producing our product in.
And the product development costs and production costs used to be so high that we couldn't do that before.
But now what we see with the increased cost of freight and everything else, even though it's come down over the last two years, we now see that it's possible for us to manufacture in North America, given that we can get road freight.
(22:33):
We can then go from factory to shop floor or to our distribution center in California to get closer to our customer.
And that's one of the things that's really important to us, because our tents are, you know, they can be anywhere from 65 kilos up to 130 kilos.
So they're bulky, they're big.
No one wants to handle them.
An Post would run a mile if they saw them.
Sorry if you're here, but it's ugly freight.
(22:56):
It's not nice, you know.
So for us, we have to look at different ways to make our business survive, first of all.
And then to get beyond that, we want to be able to do almost just-in-time manufacturing to say, well, if you want a tent in blue, we don't do it, but we'll do it for you in 12 weeks.
And by the way, this is how you order it.
And we go through that process.
So it opens up a new way of working for us by going through that process.
(23:16):
And I know there are Irish brands who have done that as well.
So it gives a bit of certainty into your supply chain also by having it close by.
I think there's a couple of emerging Irish apparel brands.
There's one called Almost Home, which I actually love.
And they do a lot of their manufacturing now and design and product development in Portugal.
(23:37):
So great story, great place to get product developed.
It's within Europe.
And it gives them, as you say, that kind of flexibility to have shorter production runs, faster time to market, easier shipment, gets their costs right down.
Yeah.
And I think, what did you say they're called?
Almost Home?
Almost Home.
There must be something in that industry.
(23:58):
There's also Final Bend.
They're another leisure company in Ireland.
If you were in Cheltenham last week
you'd have had a field day with them.
No, but it's something I've seen more and more.
There's a company.
Has anyone heard of The Smooth Company?
Hands up if you've heard of them?
No?
Thank you.
Smooth Company are a little hair stick.
It's like a little pull-back stick you can use for your hair.
Not for me, Ger or Gordon, but well, maybe...
(24:21):
Maybe.
Just in the back...
But the company didn't exist a year ago.
And the product was designed by Aine Kennedy and her grandfather.
And they've gone through an organic growth pattern.
They use Instagram as their primary sales channel.
They're up to a healthy six figures, pushing towards seven in terms of turnover.
It's profitable.
(24:42):
They use the channels really narrowly.
They have a Shopify store.
It connects their catalogue to all the places they want to be.
So they recognise Shopify, as great as it is from a front-end perspective,
it's a great cataloging tool.
So they can do so many different things with it from an operations perspective.
It's allowing them to grow in the way that they want.
But they've moved all their manufacturing to Portugal.
So in the last, I think, about three months, they have moved everything from, again, the Farly saying, we want to be able to get into shorter production cycles.
(25:08):
We want to be able to deliver in three or four days.
And that means we can manage cash flow way better as a small growing business.
And it means for them, one of the interesting questions that Ciaran was asking the podcast is around funding.
It means that they don't have to go for funding.
They're organically growing this and repatriating the profits back in to design new products and to keep the wheels turning.
(25:29):
And so moving away a little bit from questions of supply chain and manufacturing and so on, one of the things I've heard you speak about a lot recently is hybrid TV and radio advertising.
You seem to be quite passionate about it.
Do you want to explain what it means and why you're so excited about it?
(25:50):
Yeah, there's great growth potential.
So if we look at where audiences are kind of gathering and we're all kind of getting back to a bit of normality, that we're trying to figure out ways to go and bring audiences in.
So if I take Crua our tent example again, we were trying to figure out how to get mass market in America.
We couldn't buy our way there.
Every time we tried to spend, we would hit a limit in terms of conversion and customers and everything that we could get in.
(26:13):
So we couldn't afford to go into linear TV, what's called like regular TV advertising.
We didn't particularly want to either because it was too challenging.
But we knew beyond selling in five core states that we sold in that we wanted to expand it.
So we started exploring this idea of connected TV.
So there's a platform called Mountain TV owned by Ryan Reynolds, or part-owned or whatever.
(26:34):
I threw that in because I tried to dress like him today and I failed miserably.
It used to be in ecommerce, you could just run a pair of Converse and you were a genius.
But those days have sadly passed us by.
But the idea for me was I was looking at customer behaviours.
And this is where the whole idea came from was people were at home.
They're watching Netflix or going on to other streaming services.
(26:54):
Increasing consumption of that type of media was what we're doing.
If you look at radio, just to kind of broaden the horizons, they were getting into podcasts, Snap and all that goes with it.
So our consumption patterns as consumers are changing.
So it makes sense that we start positioning our product in that space as well.
So we started using this self-serve platform to put our own ads up there.
(27:15):
I think they've got about 4,000 combinations of demographic positions that you can go after.
So we could target people who bought from us before, people who hadn't.
We stopped advertising at Meta three years ago to 18- to 34-year-olds because we never sold a tent to an 18- to 34-year-old, ever.
So we just stopped advertising, like we said to hell with it.
We're just, there's no point.
It's a waste of money.
(27:36):
Whereas when we look at connected TV, we can tell a different story through different content type and we feel that we should be reaching those people because all of the other customer insights and research tells us that these are the people who are now shopping all the time.
So I'm really bullish on it as an advertising vehicle.
A couple of other quick behaviours that are creeping in.
If you look at Netflix, they're bringing in advertising costs because I suppose they want a new revenue stream.
(27:59):
The user base is dropping, but people are dropping to the lower, the entry point account of Netflix.
So instead of paying $17, you're paying $8 or whatever.
That introduces the idea of ads.
So you're forced to watch them.
So me as an advertiser, I'm thinking this is good, cheap traffic for me to go top of funnel and say, hey everybody, look at us.
We sell insulated tents.
You didn't even know you need one.
(28:21):
Now everyone's going to go buy them.
So that's been quite successful for us in terms of top of funnel.
If we look at Ireland as a market itself, Sky is introducing this into the platform.
I know I've used radio advertising for a lot of localised retailers to great success using Alexa devices.
Dick's Sporting Good in America, 70% of all its advertising revenue goes through Alexa.
(28:41):
So they will use localised radio ads for the local Dick's Sporting Goods to come and buy whatever it is, fishing tackle.
You name it, you could go there and get it.
But that's where they spend all their advertising revenue.
So if I'm understanding this correctly, Vinny, we're saying TV is dead, long live TV.
And you can now buy advertising programmatically in the way that we would have been used to buying display advertising in the past or paid social in the past.
(29:07):
Am I understanding this correctly?
You have such a good habit of summarising my long-winded answers so well.
I might get you to do the next one for me as well.
Effectively, but it's evolving, it's getting better.
Like everything, it's going to hit the UK before it hits here.
They're going to be launching in-TV placement.
So the Sky Glass TV is going to have a camera fixed on the top of it from May.
(29:28):
You're going to be able to try clothing on during a show and say, do I want to buy this now and scan a QR code to say, just take my money.
It's fascinating.
I'm going to go off script a tiny bit and see, does anybody in the audience want to ask, anybody brave enough to appear on a podcast?
James Byrne?
(29:49):
Ciaran, can I ask you, can I ask you a question now?
Because Ciaran, I talked about the co-op side of things and Wave, I know you're talking to us later on, but it's that economies of scale idea that's bringing you to retailers' doors and getting you into talking.
Is that fair to say?
No pressure.
This is payback.
So what's the question?
(30:09):
It's the idea that services at a certain level, kind of aggregated amongst a lot of retailers, are where Irish ecommerce can bring costs down.
Yeah, I think a lot of people have talked about that over the years, but ultimately when you get different corporates together, they all have their own interests and priorities.
And we looked at that relative to logistics or indeed operations and infrastructure.
(30:34):
In theory, it's great.
But that whole cooperative view of things is incredibly difficult.
To implement and get together, to the point I don't actually think there was a model, viable model worldwide on it, would be my view.
But we'll have a chat about it over tea.
Effectively, it's what you provide, though.
When you look at the range of services that have emerged from MicksGarage, that's how I think about it.
(30:55):
But still it's for us, right?
So it's a commercial entity.
And like we're no different than, you know, yeah, we do some 3PL services, we have some software, et cetera.
But ultimately it's not necessarily a collaborative thing.
It is very much offering services to different e-com or retail operations to emulate what we're doing to a great degree.
And just to pick up on that, I don't think it needs to be collaborative.
(31:17):
I just think the service needs to be available and paid for.
It's just that the aggregation of it all brings it together.
If you look at The Hut Group in the UK, that's what they've done very, very successfully over the last 10 or 15 years.
Another group called eComplete do the same thing.
They bring all this revenue under their management and they negotiate contracts on the aggregated totals for people.
(31:38):
So there's an evolution, there's a path already been plotted for us to say that that type of endeavor can work.
Yeah, I think there's a flywheel effect, isn't there?
You know, so where you can, where increasing volume brings increasing opportunities, whether it be commercial, tactical or operational.
And I think that's why The Hut Group are fantastic at it.
(31:58):
They're amazing at it, you know, relative to, and, you know, what MicksGarage, we would aspire to be them to some degree where you have your own platform in there and thereoff you can roll and spin and take the advantages of your existing operations, assuming you have them honed down to a great degree to allow you to do that.
So, no, for sure there definitely is a wider flywheel effect once you've hit a level, a certain scale on it.
(32:20):
And Ger, I'll throw that to you as well.
Hold on, so usually the audience asks the questions, you know.
Is there anybody else in the room you'd like to terrorise before I hand the microphone over?
You just put me in my place, so I'll shut up.
No, not at all.
No.
Is there any other questions you'd like to ask to the audience?
We'll turn it around for a little bit.
(32:41):
Well, I'm going to throw that back to you then as well, because look, we're all here because we're talking about ecommerce and where it's going.
And we've looked at some of the roles here.
One of the things I'm interested in is the development of those roles and some of the things we've seen like merchandising.
I think that's going to be a really important skill set to have in the business over the next few years.
(33:02):
One of the things Gordon used to do was retrain people internally really well.
But Gordon had a team of 400 people or 600, depending on who you talk to, and a payroll of whatever.
But where do you see the future of roles going in ecommerce?
I get asked it all the time.
Yeah, we get asked it all the time as well.
There are certain areas, I think, that are missing that will be key in the future.
And one of them is trading.
(33:24):
It's an area that's effectively, let's say, akin to some of the stuff that Brad was showing us.
A person in the business who's looking at the cohorts and making data-driven decisions on what kind of product is working really well, let's say, at the top of funnel to get people into the website?
What are people buying first?
And then looking at that and saying, right, well, I don't really want to sell a lot of these.
(33:48):
It might not be a very high margin product, or you might be driven to compete in price with everybody else.
But you could say, well, people who buy this buy something, buy other things.
They buy this and they need another product with it.
And I'm going to start marketing to those people to sell them up through the chain.
They come in to buy, let's say, a bag of flour at €1 or €2.
(34:09):
And now I'm going to sell them organic flour.
And then after that, I'm going to sell them yeast.
And after that, I'm going to sell them...
A person who looks at the business and the online activity and trades the site at that level, that's something that I think is currently missing in ecommerce roles.
Gordon, I can see you're...
I'm super passionate about this.
I think what we've seen, if we take this idea that tech has now become democratised and we've all got much more access to it, that means that we can focus on the things that are great within our retail organisations.
(34:46):
So what are retailers really good at?
We're really good at proposition development.
We're really good at merchandising.
We're really good at trading because that's what we've done for hundreds of years.
So I think those skills translated to digital environments are the key skills to be bringing into your business.
(35:08):
They're also the rarest in a digital environment.
But if you can bring those skills in, and then some of the things that you might have you brought in in the past, you can now kind of push out to agencies and to technical partners.
So really, do you want to be running a team of developers, or do you want to be running a team of retailers?
And I think running a team of retailers is just, like, obviously massively biased as a retailer, but much more interesting and much more fun.
(35:35):
And get your partners to do all the tech stuff.
And for those of you playing buzzword bingo, Gordon has now said democratised three times, so you win a prize.
But just to pick up on that really, really quickly, one of the really interesting things coming out of the eBay world was the idea of a trading manager.
I'd never seen it before in Ireland.
And to this day, we haven't seen it at scale.
(35:55):
eBay produced so many traders, and people have to think on their feet.
And there's so many wonderful stories of how people use that trading mentality to do things like get rid of refurbished stock.
So we did loads of work with Tesco on that, loads of work with Currys.
We turned, I think, 10 SKUs into a $2 million a month line through certified refurbishment and selling refurbished stock on eBay and Amazon in a three-month period.
(36:17):
Argos used to think we were doing an amazing job of clearing stock on eBay.
When we first got them on, there were clearance bargains of that lovely black and yellow branding, which you love.
And it was the thing in the corner of the store that ultimately became their clearance aisle.
Argos did about $20 million a year with us on eBay.
And at the end of our first year, we thought, yeah, great for us.
Let's go on the lash.
We'll drink it up.
(36:37):
Thought it was great.
And Argos were so disappointed.
And what they were disappointed was their buyers had bought wrong.
So we were out celebrating their misery.
They were getting battered on it because they had to write that off balance sheet every single month and then just clear it through eBay.
Now, I won't get into too much right now, but they had a warehouse with a till at the end of the warehouse.
And they used to ring through all the orders at the end of every single day.
(37:00):
And that's how they handled it until it became a fully omnichannel business.
But that trading, that would be one of the things I'd love to see creeping into the trading mentality.
We just have a tiny amount of time before we have to close for lunch.
Is there anybody in the audience brave enough to take up the challenge of putting a question to either Vinny or Gordon, or myself?
(37:20):
Oh, I have a few.
I have a few hands.
I'll hand over to you.
Will you call out your name and company?
And use this here?
Hi, how's it going?
My name is Colin Harmon.
I'm from 3FE Coffee.
I'm interested in your perspective on the UK market.
So you mentioned the size of the Irish market is quite small obviously,
and for a long time that was kind of something that we would love to get into, like other businesses.
(37:43):
But at the moment with duties and VAT and lead times and everything else that's come with Brexit, is there any point even addressing it in your mind?
And then if we're looking to Europe, do you think that's a viable entity as well in terms of a market?
Or should we just keep focusing on what we're doing for the moment until something easier pops up?
I love your coffee, by the way.
(38:03):
Just if you could send it to Tralee, that'd be great.
I like Gordon's take on that.
I worked with a coffee brand recently.
We entered the UK market for about six, maybe eight months.
Initially, when we went in there, it was fine, became very unprofitable very quickly.
And with rising costs, it became kind of insurmountable.
(38:24):
It didn't make sense.
You're spending £1 to get 50p back, that type of return.
Now, one of the areas that we have seen success is in the EU.
And that's where looking at this idea of third-party partners can be really useful.
So maybe not that you're using Amazon FBA as your warehouse to distribute across Europe, but there are partners out there who can do that.
(38:44):
I worked with a food conglomerate.
We set up a DTC path coming out of The Netherlands.
The reason we were able to kind of do it in a profitable way was we realised that road freight coming out of there could get to anywhere in Europe in three days.
Most of Northern Europe, which is where the market we wanted, Germany, Netherlands, Belgium, that kind of area, was able to be serviced in one day.
(39:04):
So the actual cost of getting product there was cheap because we were getting it into Rotterdam, and it was a better place for us to get product into.
So I would say EU over UK is worth looking at.
I would use a conduit such as a marketplace or a third party to help justify the business case for it, and then work out of there as well.
There may be other things that you find that evaluate your pricing strategy.
(39:27):
So are you at the level you could be to support being in that market as well?
You know, you're quite a premium product.
Can you price up and enter market?
Can you design new products?
I've seen people who've used that entry strategy to design new product lines specifically for a market because there is an opportunity there.
So the idea of test and learn is something I would certainly have a look at.
(39:48):
Gordon, anything to add?
Very little to add other than what I've learned this morning is that I think there's clearly an opportunity to leverage third parties, to leverage marketplaces, to give you some reach to test.
I think that could be an option.
And then there's also going and assessing the individual marketplace opportunity.
(40:12):
So how big is the overall market for what you sell?
And how much penetration do you have in there, if any?
And how competitive and noisy is it?
Once you're looking at that, you see, okay, well, this is an attractive market.
Market A is more attractive than market B.
So therefore, localise for market.
What did I say?
Market A.
(40:34):
Localise for market A.
And also, what are those tools that you can use to reach that market?
And one of the things I learned last week from talking to Vinny, which was a new thing for me, is there are over 400 marketplaces?
450.
450 marketplaces.
So there's different marketplaces for different verticals, for different specialisms.
(40:57):
So I think there's a good bit of research to be done there.
So a very long-winded, not quite straight answer.
Okay, I'm going to give the last question here to James, because he was also brave enough.
And they picked on me...
Can I leave a question at the end, then, Ger?
I'm sorry?
Can I leave a question at the end?
Yeah, sure.
Go on.
Guys, I'd be interested to know your thoughts on Amazon.
(41:20):
They're, I suppose, still in startup phase here, in terms of their distribution.
And I would love to know what impact you feel they're having today, and then how far along their journey in Ireland you feel they're going to be?
Quick hand pass there from Gordon.
He'd make the Irish World Cup team at this rate.
Look, they haven't done what they want.
(41:41):
They're underutilised.
Depending on who you talk to, they're not overly committed to trying to push that too hard right now.
Amazon have just laid off 27,000 staff globally, and they're rationalising costs.
So I don't see them pushing too hard on it right now.
What they want is availability of assortment.
I think they're going to let the market find its own feet, then start coming back in and trying to get more product on the shelf.
(42:04):
They've done something similar in Belgium.
They've had better success there, so they've followed it through with further investment in the product.
And they've cut down the number of third-party sellers that they're having globally, in general.
One of the other big moves that they've made, I guess, from a vendor perspective is that they're not allowing resellers.
So they want to deal with brands directly as part of the relationship mentality that they have.
(42:24):
Battening down the hatches, they want long-term profitability.
They're coming under shareholder pressure.
Andy Jassy's in there now instead of Jeff Bezos, and that's going to be his legacy, I guess, is trying to deliver profitability in the long term.
So I think we still have an opportunity to work alongside Amazon as part of our strategy.
250 of the top 500 retailers in the UK have just been surveyed and produced a brilliant report recently.
(42:48):
And 58% of their search volume for branded search goes through marketplaces before it goes to their own website.
So there is a need to be visible if you are a brand owner.
And you might decide that in the long term it's not for you, but it might be part of your top-of-funnel visibility strategy.
One of the things that you learn from Amazon very quickly is the PXP page.
(43:09):
That's Amazon A-plus content just delivered through Shopify.
So there's a lot of the sensibilities that we can learn from marketplaces or the rigours that it put us through.
And this is going to be my final question that I think we can take from it.
So my thought to leave on this is that I don't think we need next-day delivery.
It's been the barrier that's crucified us for so, so long.
We have a country that's easy enough to get around in two or three days.
(43:31):
There's not many products that are not in that area of necessity enough that says we need to have, as a core service, fast delivery.
And final point on that is if you look at the UK market, it's saturated.
Of those 250 brands, they have coverage for about 104 stores each, which if you were to break it down into miles, I just wrote about this last week, every store in that 250 is covered every 16 miles in the UK.
(43:58):
As a strategy for a business, that is not good.
There's going to be more of those closed down, reduce the store footprint.
We've an opportunity to think differently about it in Ireland.
And that's what I want to take out of today.
It's just to think different.
Well, just to wrap up, because we're eating into lunchtime, literally.
Oh, well, not literally.
We're not eating at all.
But just as a show of hands, who thinks next-day delivery is crucial for Ireland?
(44:23):
Just to answer Vinny's questions, show of hands, next-day delivery, crucial?
I'm giving that, like, maybe 20% approximately?
So 80% believe next-day delivery, not so important.
There's the answer to your question, Vinny.
Okay, thanks very much, everybody.
It's been great to have the opportunity to do the Functional & Fabulous podcast here today.
(44:46):
And lunch is served at the back of the room.
Thank you.
Well, Vinny was a live wire there, wasn't he, Ger?
What did you think?
Oh, I thought marketplace, marketplace, marketplace, marketplace, marketplace.
He is a fan.
And to be honest, I've very little experience of actually selling on marketplaces.
(45:08):
But he raises some good points.
The points are fabulous.
They were really, really good points.
I have to stop using the word fabulous so much...
Splendid.
There were splendid points.
There's nothing wrong with being fabulous, Ger.
But the points are great.
And they were so varied.
And so, so many of them, so varied, from the examples of sell-through of clearance items still at a decent exit margin.
(45:32):
So you're protecting your exit margin while discounting it.
But you're selling it in the likes of, let's say, an eBay or something like that, where
people are satisfied with a discount, knowing that it's below the price and you manage to
get your product out the door that way and clear that way, from that sort of thing to
obviously internationalisation, you know, getting in front of a larger market, getting
eyeballs onto your product and using and leveraging marketplaces for new ventures in
(45:57):
the product that you're selling.
You know, there are so many different examples.
The retail media that he spoke about, the idea that potentially, I mean, you know, it may be a little bit into the future for in Ireland, but potentially you could look at selling advertising space to the brands that you have for them to actually promote their own product.
(46:19):
I think there's something really interesting going on in this space at the moment.
And there's a couple of examples of it.
I think Kingfisher are a really good example of, kind of both marketplaces and retail media potential.
They've launched their marketplace site.
It's doing phenomenally well, and it's allowed lots and lots of new product to be added in and to be sold over and above.
(46:45):
I think there's talk of, if I get this wrong, I'll get in trouble.
It was either Boots or Next.
The 26% of all their revenue generated through the marketplace.
And then that opens up that opportunity to build a retail media business online because you've got different traders now leveraging that property, be that Boots or be that one of one of Kingfisher's sites like B&Q, and actually them competing on it in a way that we've only really seen domestically on the big A.
(47:22):
Yeah, they're scratching the surface on it, you know.
And this is one of the things with Vinny that I always find when we're speaking with him.
His ideas and the level that he's thinking, but his ideas are so big.
Sometimes I feel like they're almost too big for the country.
Oh, he thinks at a whole other different level, and that's one of the reasons why I love spending time with him, because the inspiration that that can give you.
(47:50):
I have literally, the ideas spinning around, what could we do with a cooperative Ireland?
And I think if you've got that big marketplace with all of the independent retailers contributed to it, that could be the ultimate destination for Irish shoppers.
I mean, he thinks so big and so fast and so far ahead.
(48:13):
I do struggle to keep up.
But he's well able to defend his ideas as well.
I mean, I went on my little walkabout.
Apologies, Roger, as I gave him a little heart attack manning the video.
And we had a chance to talk to Ciaran Crean.
Ciaran is a practitioner, you know, I mean, he has experience.
(48:35):
He's been in the trenches.
They're still in the trenches.
You know, MicksGarage is a hugely successful, very active proposition.
They're coming out with the Wave OMS. And Vinny grilled Ciaran Crean.
Ciaran Crean equally grilled Vinny right back again, it was cut and thrust.
I loved that little bit of, that little bit of interaction there.
But Ciaran's right.
I'm assuming you've been to the MicksGarage warehouse.
(48:57):
Yes, I have, of course.
And seen Wave in action.
I think everybody in the country at this stage, and if you haven't been, you should go.
But I thought that that was really interesting because it was the two sides of the coin there and discussing, well, why might this not work versus absolutely, this is how this could work.
(49:17):
And that's, I think we need that level of debate.
Yeah, and it's a lovely, healthy level of debate.
Because sometimes, I mean, obviously, the theory is there for a reason.
And the kind of, let's say, the more, you know, research-driven academic side of things, that's there for a reason.
That's to allow us to push forward an agenda or allow us to push forward ideas.
(49:38):
The practice is also there for a reason.
It's like that because you actually have to do it.
You have to implement these things.
And what is our experience of doing it?
And where do we fall down sometimes?
And I think it was great to see.
It was like, you know, Double Dragon, where the two fireballs were right in the middle of the room.
(49:58):
So if I could do that, like, I've only got the Street Fighter action for that one.
Don't film that.
But that was brilliant.
And then we moved on to programmatic TV.
And that is something that Vinny's super excited about.
It's such a good opportunity.
It's been the dream to actually deliver really relevant TV advertising instead of TV being purely this broad-reach media tool.
(50:26):
Yeah, I think there was maybe, it feels like a couple of years ago, people nearly gave up on this idea of ads.
Well, ads on television, because we were skipping them left, right and centre.
But obviously, now Netflix is changing around to offer the basic subscription package with ads.
And that gives you the opportunity to, as a retailer or as a person who's looking to promote and to generate demand, it gives you the opportunity to get into living rooms in Cork City, in the suburbs of Dublin, to directly target your specific customer with a range of ads that apply to them and gives you the opportunity to generate demand.
(51:04):
That's where we all need to go to.
We all need to, we need to get those eyeballs.
We need to get people in front of the product.
We want to show off what we have to sell.
So it's, he's right.
It is so interesting and tempting and such a lovely, it feels like such a lovely approach to be able to, you know, talk to people directly in their, you know, in their living rooms, basically.
(51:28):
It's brilliant.
I think endless source of inspiration.
Well worth a follow on LinkedIn, if you're listening and you don't already.
I have a question for you though, Ger.
Live podcasts.
How do we think we did?
I thought we did really well.
Roger couldn't keep up with us.
But apart from that, I don't know what people thought when I thrust a furry mic under their nose...
(51:53):
You were running around with your microphone.
Speak now.
Which one do I talk into?
Speak into both of them.
Do I go left?
Do I go right?
I thought it was really interesting to do that with an audience.
And it was a lot of fun.
And if they're listening, thank you for taking part and listening to the podcast.
(52:18):
That was a really fun way to spend an hour in an afternoon.
Yeah.
Live from the StudioForty9 Conference 2023.
Thanks so much, Gordon.
It's been a pleasure as always.
Thanks, Ger.
I can't wait till the next one.
Thanks to our listeners.
Take care.
You've been listening to Functional & Fabulous with Ger Keohane and Gordon Newman.
(52:41):
If you'd like to know more about the podcast, or about StudioForty9 and Omnichannel Stories, please go to functionalandfabulous.ie. Our sound engineer was Elaine Smith, and the show was produced by Roger Overall.
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