October 25, 2024 • 56 mins
Our guest this time round is the 'notorious' Rick Watson. If e-commerce platforms were restaurants, Rick would be the food critic who would make them tremble most.
Rick, Ger and Gordon talk about the big things that get in the way of online retail success. Overindulgence in bespoke technology solutions. Not even knowing what customer problem the business solves in the first place. Rick has seen it all.
And the boys spend time discussing why Temu will open its jacket wide and invite you to go on a treasure hunt, while Amazon most definitely will not.
In short, this episode is about earning customer trust, creating a customer experience and managing customer data.
But the most important question of all goes unanswered. Where is sound engineer Elaine?
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
This is Functional & Fabulous, the omnichannel podcast where we unbox tales of online retail and digital transformation.
In this episode, some of us handle the absence of regular sound engineer Elaine better than others...
Yeah, boo Elaine...
Ger gets excited...
Write that one down, Mr Notebook guy...
(00:23):
Our guest explains the latest approach to ecommerce...
They'll hand you a drink, they'll sit you down.
And they'll show you things - a guy who comes up with a jacket, and he'll open his jacket,
It's like, do you want watches?
Do you want coats?
Do you want knives?
Do you want...
Ger remembers meeting a man with a shocking job...
(00:46):
What do you do in the business?
And he's like, well, I design the clothing.
Really?
What are you?
Why?
There's mention of data sharding...
The only thing I know about sharding is going to a hotel in London.
And our guest tells you everything you need to know about ecommerce...
Ecommerce at its base is so simple.
(01:09):
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.
Hello and welcome to the Functional & Fabulous podcast.
(01:30):
Our guest today is the notorious Rick Watson.
Rick has spent 25 years in ecommerce as an entrepreneur and operator.
He runs a consultancy business which focuses on helping merchants transform their digital operations.
And interestingly, he also works with software companies who are looking to plot future vision and enter new markets.
Top vendors, such as Shopify, call him the Notebook Guy.
(01:51):
And they keep a really keen eye on him to watch how their software is accepted into the ecommerce market and test the temperature of the water before they dive in with new features and functionality.
Rick, Mr Notebook, it's a pleasure to have you here today.
Awesome to have you on.
I think you are overstating perhaps slightly my role in Shopify software development.
(02:12):
Oh, it couldn't be overstated.
We were at a conference in LA together last October, I think it was.
About this time last year.
And it was funny because, you know, the C-Suite and Shopify were all watching Rick.
No, your furious scribblings, Rick.
(02:32):
And then there was this statement which was like, you know, What did you write down?
They were presenting, they're presenting these statistics and they're like, write that one down, Mr Notebook guy.
And were you like just drawing pictures of, like, dinosaurs and stuff, like, smiley faces?
Yeah, exactly.
Stick men, shooting arrows.
Very good.
(02:53):
So actually tell us a little bit about that just as we're kicking off, you know, what did the platforms that you work with and what you do for them and how that whole plotting division and the entry to the market works out?
Yeah, you know, there are a couple of different types of customers I work with.
Some of them, look, they're not worried about their platform at all.
(03:14):
They just need to grow and transform their business from a people process, marketing, operational point of view.
And so we work with them that way.
There's some that are plotting, like, major technology transitions at the same time, because perhaps a new investor, a new executive has come in and they have parts of the organisation that are a little bit old, older school and some parts that are newer school.
(03:36):
And having someone extra, firepower to help them plot through some of their changes that might include platform changes.
So if they're moving from some of the maybe legacy platforms, which I won't name at the moment, but then, you know, they might be looking at platforms like Shopify or BigCommerce or VTechs or Commerce Tools.
So a lot of it depends on their situation.
(03:57):
And so for me, look, there's no such thing as one size fits all.
If you're within a certain part of the market, it's no lie that Shopify is sort of one size fits most.
And they've done a really good job of sort of cornering the mid-market of direct-to-consumer and they're pushing further up market as well.
(04:21):
Yeah, I see you mentioning the Dreamforce a bit recently.
Is that what we're calling it?
Dreamforce, like look, there are a lot of sales.
I can't help but notice...
Like one thing sort of being independent helps me notice is I'm not on the hook to give a certain narrative or another.
(04:41):
And so I could just sit back and notice what's happening.
So if I notice, like, I don't know, like 30 ex-Demandware execs that are at Shopify now on their sales and solutions team, or there's a whole slew of new ex-agency people that used to be at LiveArea, PFS, Astound, like that are now moving to BigCommerce following Travis, the stampede to BigCommerce.
(05:07):
And, you know, it kind of looks like a recap of the Magento versus Demandare wars, but in Shopify versus BigCommerce.
Yeah.
Yeah.
It's interesting.
I was at the ecommerce expo in London recently, and the stands were BigCommerce, Shopify, SHOPLINE, Centra.
(05:27):
And I think that was it.
Yeah.
I think that was it.
I'm not sure.
Maybe Commercetools were around the place somewhere, but interestingly, no Magento, no Salesforce, no, you know, no Shopware, you know, so there's...
Notable by their absence.
Yeah.
The movement around the market is interesting.
Yeah.
I mean, in the last two years, I would say in particular, re-platforms have slowed down.
(05:52):
And it just seems like in the last 10 years,
while there are a lot of people re-platforming kind of mid-market,
in the enterprise space, it seems to be fossilised in amber or something,
where people are changing the front end experience and trying desperately
not to change the back office or anything that touches their ERP
or something like enterprise system, just because they know it will
(06:12):
create a three-year project.
The thing is, I think a lot of the narrative is around risk, and the risk is always going to be away bigger to move than to do anything else.
And you end up, I think we had a, when we spoke about this, the word Stockholm syndrome was kind of, you know, you grow to love the platform.
Yeah.
It's better here than you think it is.
(06:33):
Trust us.
Yeah.
Yeah.
I always think in those situations, though, it's...
Does anyone want to really, like, rip something out and rewire into their ERP?
It's not a fun front-end project.
And when I say fun front-end project, I mean, where you instantly see the benefits on your interaction with customers.
(06:55):
So I think you hit on something there, Rick, where you said, those enterprise customers are doing interesting things on the front end, but they don't want to do everything on the integration side.
Like if that bit's working, we're just going to leave that where it is right now.
Yeah.
Rather than spend like $2 to $6 million to re-platform all tons of integrations and this thing that we've had in place for 10 years, let's spend some more money on marketing.
(07:22):
And you're also, are you still on the board of the MACH Alliance?
Yeah.
So there's a group of industry advisors to the MACH Alliance that I do participate in on a quarterly basis.
We just talk about, this really just keeps the pulse on certain types of customers in the market.
And so it's a good place to learn new things and meet new people.
(07:44):
So how's the headless composable?
What's the temperature of that market at the moment?
Yeah, look, I think it depends on what your frame is from it.
I think there was a two-year period where there was so much money in the market that everyone said, well, we should build a custom front end.
And they started calling that headless.
And I think that was a mistake by probably 95 per cent of people who went and did that because then they realised, oh crap, we're a software company now.
(08:12):
We have to release things.
We need developers.
We need QA.
There are bugs on our website.
We've never had bugs on our website before.
Our website is crashing.
That was never a thing before.
How do we push from one environment to another?
So you have business executives that are starting to think about non-business oriented things, which never makes any sense.
(08:33):
Meanwhile, I think the folks that were interested in perhaps moving beyond the stock themes in the platforms and maybe hired a content management system or something more off the shelf, off the box that they can configure rather than completely re-engineer.
(08:56):
Those people had a much better time of it than folks that were saying like, oh, you need a custom HTML, like JavaScript front end because you want this one feature that 99 per cent of people probably don't need.
It's an interesting... I still don't quite...
The agencies made a lot of money, though.
(09:16):
Yeah.
But it's an interesting thing.
I just don't see the argument sometimes for the headless because like you say, you know, when I met a merchant a number of about a year or two back and he was talking about failovers, clustered environments, sharding databases.
And I was like, I said, are you an engineer originally?
(09:38):
And he's like, no, no.
And I said, what do you do in the business?
And he's like, well, I designed the clothing.
And I was like, what?
What are you?
Why do you know anything about sharding databases?
You know, but he had to because he had to get involved at that level because that was where the money was going in his ecommerce business at the time.
He was spending it all on trying to keep the website up and running.
(09:58):
The only thing I know about sharding is going to a hotel in London and, like, kind of using the spa.
I wasn't sure where you're going with that...
Yeah, I know.
Watching The Shard from your window...
We were in one of our, in one of our kind of nerdier WhatsApp groups.
We do have a friend that really doesn't understand the point of headless, and he's quite a prominent member of the ecommerce community here in Ireland and doesn't really have a lot of nice things to say around headless.
(10:34):
He's a, he's a huge proponent of taking off the shelf where you can configure, don't customise.
Yeah.
And I think I'm, yeah, I'm Team...
You're Team Configure?
I'm not going to say what his name is.
But I'm Team Configure.
Yeah.
I mean, I think the thing is what people fail to realise is that once you, once you start customising it, it's now your software pretty much.
(11:00):
And you've got to maintain this, upgrade it, run it, manage it.
And all of a sudden you're, you're, you're no longer a retailer.
You're a tech company.
One of the things I'm interested in, Rick, is your view on like, is there a tipping point where it actually becomes worth doing?
Or is it just, just not where, where you'd be advocating?
(11:22):
No, configure as much as you can.
Look for new businesses, it's hard to understand when that would happen.
If you're a multi-billion dollar enterprise, it's a little bit different situation because you have IT teams, you've done acquisitions.
You have multiple ERP systems.
You have all these things.
Not that you couldn't eventually, maybe one day, 10 years from now, move to something simpler, but you are where you are now.
(11:48):
You have custom business logic and microservices.
So, like, what I'd say about headless, and particularly, like, from the mock side, don't think about it unless you've ever built a microservice before thinking about mock.
Like, if you don't have developers, to your point, Ger, if you don't have developers on your team already releasing microservices, because that's just part of what you do.
(12:12):
You know what I mean?
I've had several, like, built-to-order manufacturing businesses use a headless approach because the standard, oh, I'm just going to connect this to a 3PL doesn't work because there's a lot of internal software they had to write to integrate all of their systems.
And then they could connect and compose different elements of their front end.
(12:35):
And the front end can be very standard, but sort of the middleware is more service oriented, because it has to interact with custom software.
Mm-hmm.
That makes sense.
In terms of like when you are consulting with businesses in the United States at the moment, what's your general approach?
I suppose just to start with, when you're thinking about or consulting with businesses to think about strategy, like, how far into the future are you thinking about planning?
(13:01):
Like, how many years is a strategy worth these days in the digital world?
Yeah.
I mean, look, you could say three months.
You probably wouldn't be far off, but reality is I think a standard timeline is three years.
And that's usually where you sort of start and end.
If you're going to invest over several hundred, over half a million dollars to $2 million, you're not going to pay back in a year.
(13:27):
Yeah.
And so you have to at least plan out three years to help people understand like how is this going to help you long-term and where does this investment in creative or platform or build or software that you don't have today while your other software maybe ends of life, then that, the entire cashflow...
(13:50):
But from a strategy point of view, there's, you know, it's very, you know, call it multifaceted.
And a lot of it just depends on where the business is starting from.
It starts with kind of bottoms up and top down.
Like what are your goals?
Who do you want to be when you grow up?
Sometimes that's part of the problem.
They don't know who they want to be.
And they want to be three things and no one's made a decision about what they want to be.
(14:10):
That's sort of problem one.
The second thing is like a lot of people just don't know what's going on with the business.
They're doing 10 things, but they think they're doing one thing.
And so they're spending a lot of extra money that they shouldn't do or they're spending money inefficiently.
So there's kind of the future planning, where do we want to go?
And then the current assessment, which is, like, people process technology, could this be simpler, easier, faster compared to all the problems that you're having?
(14:37):
And so generally the employees know what's up, particularly the employees on the front line.
They're like, why does it take me X amount of time to do this?
And so you have sort of two sorts of businesses.
Business type A doesn't know what good looks like because they've been doing things the same way for 20 years.
And they're like, could this be better?
(14:57):
We're not sure.
And so that outside perspective that I bring can help people understand what the state of the art has evolved to, because many times they decided, like, maybe somewhere around the time demand were IPO or Magento, right before Magento was bought by Adobe, they installed one of these platforms and they've left it alone for 15 years.
(15:18):
And they're like, do we need to build custom?
Because we've built a lot of custom stuff around these systems to augment for issues in the platforms that perhaps haven't evolved as fast as the Shopify and the BigCommerces of the world.
And so some companies need to know what good looks like.
Some companies already know what good looks like, but they just need help getting there.
(15:39):
Like what are the steps?
Step A, I want to do this.
Step B, I need to do this.
How much do I need to invest?
What's the return going to be?
And then change management is always a huge part of that process.
Like tech is easy.
Process is a little harder than that.
People are the hardest.
Yeah.
And so then beyond, I suppose, the tech selection, which I think is a very frightening decision for a lot of people.
(16:04):
But after that, when you're getting into some of the changes that you're seeing and the trends that you're seeing, we talked a little bit about how ecommerce businesses are becoming media businesses, which I thought was very interesting.
Tell us a little bit about that and how you work with businesses to kind of build tactics around that side of the...
Yeah, I would say beyond technology, people and process is a big time.
(16:28):
So even just basic processes, like how do you add new selection?
What's your season plan?
Are you planning a year out and therefore already when it's released, it's behind the market because the markets change so quickly and Shein's adding 30,000 styles a week and you're adding 10?
So the market is a very different place.
(16:49):
Just the make-up of your executive team, the make-up of a digital organisation, how they interact with the marketing and merchandising teams.
What are your monthly, weekly, daily cadences and processes for planning, merchandising, marketing, promotions, markdowns, all these things?
How do you make your major technology decisions and investments?
(17:10):
Some people have no formal process.
And so it's very common for a business person to have an idea, hey, we should have this on our website.
And then it goes to IT and IT does the requirements.
The business is not involved in the requirements.
And so you get something that's very technically sound, but the business doesn't know how to use it and then they don't adopt it.
And so there are, like, very basic things that happen in the disconnect between business and technology.
(17:35):
We also definitely help them build bottoms-up marketing plans by channel, like how much you should be investing in paid search, paid social, organic, creative services over a number of years, help audit their lifecycle marketing.
Like, look, you're not growing because you're not acquiring enough customers.
Like, you're actually, your existing customers...
(17:55):
This is something we hear a long time...
Like, our paid marketing is not working.
So we stopped investing in it.
Like, when did you do that?
Like, oh, two years ago.
You look at their customer file.
Two years ago, their customer file stopped growing because they stopped investing in top-of-the-funnel marketing.
They thought like, oh, we should just make our existing base more productive.
Well, your existing base can get productive to a point, but you're not going to, like, double that.
(18:20):
You're not going to double your AOV.
You sell what you sell and you can augment that 10, 15, 20 per cent, but you're not going to double it.
And so if you're not acquiring new customers, you're dying because not every customer you acquire is going to come back.
And so it's super-important to judge, not just the productivity of your existing customer file, but the growth of that customer file.
(18:44):
How are you acquiring customers?
Can you afford to acquire customers at the current rate?
So we help customers understand at what price they can acquire customers and which channels they should be using to acquire them.
Is that quite a simple equation process, working through with the business?
It's a leading question...
(19:04):
It's a funny question because ecommerce at its basic is so simple.
It's so simple.
Product times conversion times AOV equals revenue, right?
So it's really the basics.
And if you acquire a customer for X and they don't come back, then you're not going to be profitable, right?
(19:28):
And so those are the basics that we try to get right first and just understand, like, are the equations off?
Is your customer file not growing?
Is your customer file not productive?
That tends to, it depends on the problem we're asked to come in and solve.
But part of it is like, what's the potential of this business?
(19:49):
What could this be if this business is going well, like three years from now?
If we had a better plan, where could we be?
If we had a better organisation, we had better marketing, where could we be?
The other types of question is sort of the reverse question, which is like, we were growing, now we're declining, why?
And so getting, going in to diagnose the business, marketing, merchandising, pricing, promotional pressures, competition, all these things, helping them understand like, what are they missing out on that they should be taking advantage of?
(20:21):
And out of curiosity, do you see, I'm seeing a little bit of renewed interest in inbound marketing and content marketing on ecommerce sites now, do you see that as well?
Or is the acquisition of customers largely still around, driven by paid media?
Look, paid is getting, continues to get more and more expensive.
(20:43):
And I think, it's not like people are moving away from it, but it can't escalate indefinitely.
The future, I tend to believe that the future of marketing is earned plus owned.
So if you don't have both owned, earned and paid, I mean, all of them, but in particularly, if you don't have healthy owned programmes, like this is your own channels, particularly like email, SMS, and then earned, which is, what do people say about you?
(21:15):
Either through influencers that you're working with, or just your own customers that are talking about you.
And that's your best marketing.
And if you don't have happy customers because of your products and service that you then re-amplify and use in your own marketing efforts, then you're really missing out on what commerce is these days.
(21:38):
That's, I think that's really interesting, Rick.
So we would hear a lot of talk about, it's important to have the data to know your customers.
So the segment of customers that you've got and how you develop the value proposition for them.
So when you talk about knowing your customers, or when we hear talk about knowing your customers, that's knowing them beyond the basic demographic data and beyond their purchase frequency data.
(22:14):
It's about understanding what really is the problem that you're solving, or what is the benefit that you're bringing to their life generally?
Gordon, I can't tell you how many companies I ask, what problem are you solving?
And they stare back at me blankly.
(22:37):
They don't understand.
Not only do they not have an answer, they don't understand the question.
Like, well, we sell furniture.
I'm like, really, that's your level of understanding of your own business and your customers?
So where do you go when someone does that?
Paint a story for me about what your customers are like.
(22:59):
And so, look, usually in these situations, they didn't found the business.
And that's why they don't have that knowledge.
They've taken over the business from someone else who was perhaps a founder.
And so, there generally are employees at the company.
Someone has done a brand, like brought in a branding expert in the past, and there's a deck laying around that tells the story of the brand.
(23:26):
And that story of the brand is not obviously, there's a lot of data and AI and ML and segments and things that you can do from an analytics and processing point of view, but there's also just sort of the emotional story of what your customers are trying to do.
And the company having the same shared picture across, like, how much are you trying to get someone to spend on their first purchase?
(23:52):
What might their second purchase be and why?
If you don't have clear answers to those questions, how often do they replace your product?
Why do they replace your product?
Who are they coming from?
And so, these common stories about a brand, like, to me, that's the foundation of your marketing strategy and who you are as a brand, what products you put on the website, how much you're willing to mark them down, what stories you're telling in social and paid advertising and your creatives, that really has to permeate your business.
(24:23):
And so, I think you have to, there's really two approaches in this situation.
One, Gordon, is you actually hire a proper brand design firm to come in and build them a story, because there is a story to be told.
They have thousands, sometimes millions of customers.
They just don't have a coherent story about it.
(24:43):
That's kind of one.
Second is you pull it from the archives of the history of the company.
Maybe you talk to the old founder or maybe there's an employee that's been there for 20 years that understands what is the soul of this brand and why does it exist and what problems are we solving for the customers?
So, those are the two places I usually go to.
It sounds to me like there's really two components to this.
(25:05):
One is defining it.
And then the other one is getting everybody on the same page so that everybody is aligned.
And until you've got to that point, how can you make a decision about strategy within the organisation?
It's a good question.
And it's so funny.
I grew up in technology and I would say the vast majority of problems that I run across are not technology problems.
(25:29):
They're people problems.
Even if they're not people problems, they are people problems because they're process problems, which means that even if it's the right people, if the right people are doing the wrong things, then that's a process problem.
And you could have, another problem that's common to see is people have too expensive technology for what they need, like a $30 million business that has software that is over-specified for where they are today.
(25:57):
And that causes huge maintenance costs.
It's more expensive to maintain and they can't get enough out of the software because they don't have enough people.
It's definitely a truism that at this stage, the technology has outstripped our ability to use it in some ways.
And it's an interesting point where businesses often don't understand the problems that they're solving.
(26:20):
People get, I guess, they get caught up in the business of doing business, the business of tracking sales and managing the margin and all of these kinds of things and forget sometimes that connection with the customer, the connection with the brand story.
Yeah, I also think that a narrative took hold, I would say somewhere around 2010, 2011, 2012, that technology is going to be a competitive advantage because you have this new channel and those who have the newest, latest and greatest tech are going to be the ones that benefit from that.
(26:52):
And it was sort of like the age of the engineer.
And so my company needs to hire engineers and build custom software.
And I think if there's one thing that's good about the age of free money that we have just went through and maybe hopefully aren't going back to immediately soon is that there's so much technology out there now that you can get most anything you want off the shelf.
(27:15):
And the folks that kind of kept it in their head that technology is my differentiator, what they mean in their head is like, I need to own this technology.
It needs to be mine.
And no one else can ever have something like this.
So if I'm using the same platform as someone else, then it means I'm going to have a vanilla experience, which, again, I think, Gordon, you would agree.
(27:39):
It's like you can configure a platform to do whatever you want.
You can tell any story you want on these out-of-the-box platforms.
Yeah, I always think that I would compare an out-of-the-box platform to a shop on a high street, like you can have 10 shops on a high street.
They're all buildings.
They've all got front doors.
The magic is what happens when you walk through the front door.
(28:01):
It's the product.
It's the merchandising.
It's the service.
It's the story that you tell when you walk through the door.
That's what makes the difference between a bad shop, a mediocre shop and a great shop.
And you can have all three of those on the same street.
And if you think about platforms in that context, you can all be on the same platform.
But what you do with that platform is what makes the difference.
(28:24):
Yeah, I couldn't agree more.
To take the conversation in a slightly different direction, we're delighted to have you joining us from the United States and interested to hear, I suppose, with respect to the US.
Amazon is a big topic of conversation in Ireland at the moment because Amazon.ie is scheduled to launch in 2025.
(28:45):
In its home country, how is Amazon viewed?
Is it still the Big Daddy?
Yeah, Amazon is the Big Daddy, I guess, or the Big Mama.
And it's not going anywhere for a while.
I can't tell you how many Amazon packages show up at my household.
My building in New York City has 1,000 units in it or some big number of units.
(29:12):
And I look at the mailroom of the building, to give you some idea of Amazon's penetration,
95 per cent of the packages are Amazon parcels.
You might see a few Walmart thrown in there, a few Chewy's for people with pets.
But I mean, it's still... you do see Walmart growing a lot.
(29:36):
Walmart is still, especially online, nowhere near the size of Amazon.
But they're growing faster, in some cases, probably three times faster than Amazon, I would say, in the US from an ecomm point of view, if I had to put somewhat of a number on it.
But Amazon, at some point, it's going to start running into the law of large numbers.
(29:56):
How many more Prime members can they get?
They have a couple hundred million already, I'm sure, from last I checked.
I want to guess, like, 200 million.
How many people are there in the US? Some of them are kids.
You know what I mean?
Some are families.
There's only so many more people that they can get.
As a result, new services need to pile on.
(30:18):
Now they have a grocery Prime, so that you can get your groceries delivered for $10 a month.
It's not included in your regular Prime.
Why are they doing that?
Well, they want to get more share of wallet from the same household, and it's expensive to deliver groceries compared to a normal 1lb parcel or something like that.
(30:38):
How important is Prime to Amazon as a business?
Prime is everything to Amazon.
Amazon without Prime is nothing, completely nothing.
I firmly believe that.
It's their moat, because you have a yearly subscription of Prime?
It's where you're going to go to shop.
Amazon is not failing you.
(30:59):
The fact that you have easy returns, it's not a week that goes by that we don't make a decision in our household about where to buy from.
Do we buy it from the brand, or do we buy it from Amazon?
And look, if there's something unique to the brand or special about it, great.
But if we don't know the brand, and we're not sure about it, and we're unsure if we might have to return it, we're 100 per cent going to buy it from Amazon, because we know we're not going to have a hassle returning it.
(31:31):
Even though Amazon's made returns slightly more difficult than before, we know we're going to be able to do a return.
Versus going to the brand, you're just not.
This uncertainty creates doubt, and doubt creates friction, consumer friction in their purchase experience.
It's such an interesting thing.
I think when we were speaking in the pre-recording, we compared it to PayPal, and we would have had businesses going into the UK.
(31:59):
And in the UK, we did an A-B test where we had a trust mark.
So it was, like, some, let's say, a lobby, a business lobby or whatever, and it was, like, trusted by this business lobby.
And we had the PayPal, you can pay with PayPal symbol on the PDP, so on the product detail page.
And the pages with the PayPal logo converted twice as high.
(32:25):
Wow.
Yeah, yeah.
So PayPal was the most trusted part, and by having PayPal there, they were converting far better than anything else.
And I think it was just even the fact that sometimes you have PayPal, if the business is not known in the UK at that time, people would buy with PayPal because they're not going to have a hassle with it.
(32:45):
I think it's the default for trust.
I'm interested in this idea of Amazon's prime moat.
And occasionally, moats can get stormed.
And I'd love to hear your opinion, Rick.
How to storm the moat...
How to storm the moat.
Has Temu got any chance,
do you think, of storming Amazon's moat?
(33:07):
Because I've heard Amazon be, I'm going to get this wrong, but it was something like, Amazon is the shop window for AliExpress, which is the shop window for Temu.
Now, I could have got that the wrong way around, but you get the idea.
Yeah, yeah.
Yeah, look, first of all, it's just a different shopping experience.
(33:27):
So if you've ever been on Temu, if you go shop at Amazon, you're like, I want this marker.
You go to the page with the marker, you click it, and it's in your house tomorrow.
You go to Temu, imagine you walk in through the front door of a Temu store.
They'll hand you a drink, they'll sit you down, and they'll show you things.
(33:48):
A guy comes up with a jacket, and he'll open his jacket.
It's like, do you want watches?
Do you want coats?
Do you want knives?
They're trying to learn about you so that they can later target you.
They have almost no interest in selling you something very quickly and having you walk away.
(34:08):
Yeah, it's less transactional.
If you go in the app, you just sort of know that's sort of what's happening.
Their job is to then, almost like a TikTok, they're trying to profile you so that they can then sell you, perhaps, the schlock deals that they have that are more interest based on what you clicked around and saw.
(34:33):
Amazon is just different.
Amazon is mainstream retail.
And I'd say Temu, it's primarily white label goods.
Again, kind of like you say, it's like these people that have been making products on behalf of other brands for years and years, and now they want their day in the sun.
They want to be the next Anker.
(34:53):
So when Anker came out with all their chargers and electronics equipment, they were an Amazon brand that now became an everywhere brand.
And so I think if you look at Temu, could someone break out as a new brand on Temu that didn't have a brand before?
(35:15):
I think it's possible because they're so cheap.
And they were somewhere anyway, maybe that brand would break out on Temu in the future and not Amazon.
It's possible.
But again, Amazon has so many shoppers, and it's so much more efficient to purchase there that you have to have more time to find the deal.
So it's a little bit more of the treasure hunt.
(35:36):
It's not competing directly with Amazon.
Amazon is not a treasure hunt.
Temu is.
eBay is a treasure hunt.
Etsy is a treasure hunt.
Off-price retail can be a treasure hunt.
A dollar store can be a treasure hunt.
And so there are lots of types of shopping that I think Temu has a much better chance of disrupting than mainstream Amazon.
(36:03):
Than boring old general merchandise...
Exactly.
...mission-driven shopping.
Described well.
Amazon has the best catalogue in the universe.
And they've spent 20 years perfecting it.
Reviews, product data.
I mean, they have much better product data than most brand websites.
(36:26):
Because they slap you on the hand if you don't.
You know what I mean?
The power of reviews alone in Amazon.
The number of times that I go to Amazon just to get the thing reviewed, regardless of whether I'm going to be buying it.
Just before we wrap up, because we're actually over time a little bit, but I just wanted to take this conversation in a completely different direction.
(36:48):
We talked a little bit about roles in ecommerce and what roles were missing in ecommerce teams and the org structure of an ecommerce team.
I'd just like to, I suppose, hear your thoughts on, in the United States, what role do you see is missing the most from an ecommerce team?
(37:10):
And maybe a little bit on, you know, what do you think is the ideal structure of an ecommerce team?
Yeah, look, ideal structure is somewhat hard.
I mean, you have to have someone who cares about acquiring customers.
You need to have someone who cares about activating customers.
So, like, lifecycle marketing.
You have to have someone who cares about the product and what gets put in front of those consumers and how quickly it's coming in and what your innovation pipeline is there.
(37:38):
I also think that if you look at the larger organisations, the biggest missing roles tend to be, I would call them, like, product managers or analysts and, like, data analysts.
Because you have IT who is focused on executing projects in a lot of cases, but they're not good at going into the business and helping them understand how this can be used and why it needs to be used.
(38:11):
Usually only the business can do that for themselves.
And many times they just assume that the tech is going to be so intuitive that they're going to be able to use it the right way without any help on their own.
And so product, you know, in software companies, that's called product managers.
They're actually building requirements, like gathering issues that are going on and building requirements for, like, these are the things that we need as an organisation.
(38:37):
And actually, by the way, these are the things we don't need.
And this is how you're supposed to use the software every day to be successful.
So many organisations don't have anything close to that role.
And I think the other role for data analysts, it's, again, they have IT teams and data teams that are collecting data, they're processing it and they're storing it.
(38:57):
But generating, the marketing person understands what consumers are doing, but generating new insights from the data that they already have, there's no one that's connecting that to the business in a lot of cases.
So that data analyst role, I think is hugely missing.
So, like, the difference between data and insights that you can act on, man, there's, like, a canyon divide in many businesses right now.
(39:27):
It's an odd one, like, people talk about data-driven decisions the whole time.
It's, I don't know, like, you can have lakes of data, but you might still not have any ever get close to a data-driven decision.
There's a big difference between having piles of information and piles of insight.
One piece of insight can change your business.
(39:47):
Tons of information, if you don't know what to do with it, you're going to get lost.
That was fascinating.
That was a really, really quick,
I think, 40 minutes.
We were getting the continuous five minutes over, 10 minutes over here from our lovely new sound guy, the sound guy in the back corner here, Danny.
(40:09):
He is a sound guy.
So Rick, it's been an absolute pleasure.
We covered so much.
Thanks a million for joining us today.
No, I appreciate it, guys, and happy to come back in the future.
Please do.
Please do.
I think we've unfinished business, Rick.
Thank you very much.
(40:29):
Thanks, Rick.
No problem.
Thanks a lot.
So in the words of Sade, Smooth Operator...
Rick is a smooth operator, isn't he?
He knows a bit.
He knows a thing or two about a thing or two, that fella.
And let's start off with what he knows about platforms.
Oh, well...
And I'm just going to swing in to the fact that I think 2011 when, or what did he say?
(40:55):
2010, 2011, when there was the big swing off between Demandware and Magento and I chose the biggest ecommerce platform that never was.
Like, Vendor could have been Shopify.
Oh, how I miss it.
But I just, I can't get over how things change in such a, like, reasonably small period of time.
(41:16):
Um, like, we went, you know, we went through a whole Shopware period, when I were a lad... We didn't have shoes...
We didn't have multi-tenanted SaaS...
You was lucky, you was...
Luxury...
(41:38):
So uh, like, it's just strange.
And that was the thing that I noticed at the ecomm Expo as well.
Uh, like there, there's new platforms and, you know, they're coming in and trying to, trying to take our merchants.
I think back in the day, you could never have imagined there might be something else other than Magento and, and Demandware.
And look how it, look how everything has shifted now.
(42:01):
It's amazing.
Yeah.
Yeah.
And you know, I mean, like, I suppose in a couple of years' time, well, who knows what we'll be talking about, but right now the, the SaaS, the configurable SaaS, the democratised technology...
The democratisation of technology...
There we go again.
That's what we have.
And like, and when, when we're having no conversation about uptime and sharding, it's, uh, it's probably a good thing for all of the retailers involved.
(42:24):
To be honest, I don't even want to know what sharding is.
I'm in blissful ignorance of what sharding is.
I would like to live the rest of my life not knowing that one.
I'll tell you about it later.
I'll totally pass.
What about my new analogy, though?
All the shops on the high street are the same.
It's what happens when you walk through the door.
(42:45):
Oh my God.
I'm going to keep that one.
Yeah.
You're going to be, you're going to be the new Dean McElwee, with your, like, sayings and aphorisms.
The fingertips of desire...
So, um, yeah, God, we got through a lot there.
I, the, the Amazon Prime, you know, how, how powerful Amazon is in the States.
And that Prime is the moat for Amazon, um, and makes it that much more impenetrable, you know, or harder to, harder to win against, we'll say.
(43:15):
Um, it's an interesting point, you know, that, that, that piece around the trust, the piece around the convenience and the fact that it is, it's the solution that people trust.
So I'm sure that's going to give Irish retailers cold comfort.
Yeah.
Yeah.
I mean, and the worst part about it is, or well, let's say in that context is this whole thing about, will we buy from the brand directly, or will we just buy it through Amazon?
(43:39):
And the fact that you would choose to buy through Amazon, not through the brand is, you know...
Testament to its strength.
Yeah.
Testament to its strength, but also it's, I, I don't know how to put it, but, you know, it's, as a brand that wouldn't fill me full of joy.
They're the ultimate multi-brand retailer.
And in a lot of ways they're fulfilling the, the role that supermarkets and department stores...
(44:05):
Yeah...
...fulfill, and they've done that in an online context and they've done it so brilliantly.
What I really enjoyed there was the snippet about Temu and how can Temu compete with Amazon?
Well, actually Temu is different to Amazon.
I haven't really given this a lot of thought until speaking to Rick there, but he's right.
(44:30):
Temu is the fun foraging,
I don't know...
Do you have a little, I have a little Temu binge like once a month.
I'd end up buying like a burger press and the dog car mat, and then I'll buy something random just to confuse it.
I love the, uh, the analogy, you know, the guy that opens up the coat.
Can I interest you in some watches?
(44:50):
No, spin my wheel.
The other piece that I liked, uh, I do like one of, I do like one of these, you know, this plus this equals this, but owned plus earned plus paid is interesting.
It's an interesting way of thinking about your, your customer base or your traffic sources or your, your source of revenue.
Um, what do you own?
(45:11):
What, what are you going to do to earn the referrals and people talking about you and that kind of thing and amplifying your message?
And what are you going to do about paid and how you're managing the mix, you know, of those, of those three, three pieces or three sources of traffic?
Well, I think the point you made there is paid's not going to get any cheaper.
No.
(45:31):
So therefore owned in order to get, in order to own that media, you've got to get, or that, that real estate, you've got to get a customer onto your base.
And, and earning that comes from your brand.
And you really have to have a clear understanding of what problem your brand is solving for customers, or what role your brand is playing.
(45:56):
What is your value proposition for customers?
What makes you so much better than the competitors, or what is it that, that gives you that talkability?
Yeah.
And that's really core.
I think too, like, you can't... there's so many white label options for every single product now that you've really got to, you've really got to cut through.
(46:23):
There has to be some sort of emotional connection, not just the functional benefits.
It's got to be fabulous.
Of course.
But the interesting thing, you know, is the observation that people don't understand the problem that they're trying to solve for their customers.
I can, I get that.
I can understand it because it's a hard, in some ways it's a hard way to think.
(46:45):
But if you think about it instead, like what are people actually looking for?
What are they putting into Google searching?
What questions are they asking when they find you?
You know, like the furniture company, is it most comfortable chair to read on?
You know, chair for, for lounging around in all day?
Uh, watching, watching television, eating my dinner in, you know, having TV dinners.
(47:05):
What are people actually looking for?
Best snoozy-snoozy nap time chair...
Yeah.
Yeah, yeah, exactly.
And just understanding, like maybe even coming at it from that angle, like, what is it that the customers are looking for?
What, you know, as opposed to, you know, sometimes I find it's like, that kind of a problem you're trying to solve is...
I think, I think that can be quite nebulous, but let's say like, you know, I'm a fan of naps.
(47:26):
Love a nap.
So if you take the snoozy-snoozy nap time chair, are they selling me a chair to nap in?
Or are they selling me that feeling on a Saturday afternoon where it's a little bit sunny, the sun's coming in and you just doze off in the chair and then you have a little cheeky 20 minutes.
(47:47):
And then after you cheeky 20 minutes, you're ready to take on the world.
That's what they're selling.
Take on the world, go out for an IPA.
Go out for an IPA, kick off my slippers and put down my pipe.
No, but that's what they're selling me.
They're selling me, like, the elevation of that special moment on a Saturday afternoon.
(48:08):
And if you can encapsulate that, that's what makes you talkable.
It's not just a chair.
This is an M&S chair.
No, there are other supermarkets and general merchandise stores available.
I really liked the, I don't know, did we bring it up in the podcast previously, but your little fan moment for Vacation, you know.
(48:33):
Oh, I don't know.
Have we talked about Vacation?
I don't think we have on the podcast, but can we?
It's just, it's unforgettable.
This, idea of the, the suncream that makes you smell great...
It's, like, the world's best-smelling suncream, it's awesome...
Honestly, like it just goes in so many directions that you're going to be a, putting suncream on yourself, tanning yourself on the beach in Miami, Florida-type kitschiness, and somebody's going to go smelling you...
(49:03):
Oh, it's like, and if you haven't and you're listening and you've got this far, like, I am fanboying over Vacation.
And even if the idea of the world's best-smelling suncream does not do it for you, then go, go and look at it just for the packaging.
Oh, it's great.
(49:23):
Yeah.
Really, really good.
And it is all, but it's all about that experience.
Like, as you were saying, you know, the, the Saturday afternoon snooze.
Suncream is suncream unless it's Vacation.
Then it's just the, what it evokes.
I think it's just a masterclass in branding.
Yeah.
What did you think about, uh, separately and going back to some of the things that we covered, what Rick was talking about, but the narrative that took hold that tech was going to become a competitive advantage?
(49:52):
I presume like, you know, at this stage with the democratisation of technology, I guess it's not at all about the tech.
It's about what you do with it, and how you use it and whether or not you're able to, it's like, you know, you hear the thing about the human brain...
We're using like, you know, 8 per cent of our brain kind of a thing.
Technology is a little bit like that.
We're probably using about 3 per cent of what it can do.
(50:14):
Yeah.
Well, look, there's two of us sitting around this table.
Obviously we don't count Roger, who's, like, floating around keeping us, keeping manners on us.
One of us is a very accomplished and highly technical, technically skilled...
And the other one is Ger...
...engineer.
(50:36):
Well, one of us couldn't write a, write a line of code to, to save his life, and he's wearing a green jumper.
So I am, I have always been of, of the view that technology is the enabler, but when you have, when you have that, it's what you do with the technology that gives you your advantage.
(50:58):
And I don't know, like, has any retailer ever, you know, really nailed competitive advantage by having a faster API call?
I don't think they have.
And if it has been, it's been as a result of somebody else building it.
Well, now that you mention it, actually that very, very thing, it does give a competitive advantage to Screwfix, the speed at which the, they can take an order from the, from the ecommerce site and have it processed in the local store.
(51:32):
And some ridiculous, ridiculously fast thing, like, I mean, 30 seconds or some, something nuts...
Or bolts, if it's Screwfix...
Oh, yes.
Something nuts or bolts.
Oh my God.
Sorry, Roger.
It's Roger who tells the dad jokes around here.
I mean, [Unintelligible] and get out of here.
(51:54):
Yeah, fair.
But other than, other than Screwfix...
I will take that.
But in 2010, like, your API calls to your payment services provider, we're actually like, that was a make-or-break thing.
Yeah.
But really there's somebody that deals with payments as part of their platform,
that's now solved that issue.
And as a retailer, you haven't got to worry about that, and you shouldn't be worrying about that or, or as a brand, you shouldn't be worrying about that sort of stuff.
(52:20):
What you should be worrying about is, you know, the things that they... do you think they're sitting there in Vacation?
Like, as they're, like, coming up with whatever fabulous sun products they are, and how they're coming up with right now and how they're styling it?
Do you think they are wondering about, like, you know, the architecture of their tech stack?
We need to throttle more API calls.
(52:42):
They're not going to be, like, they're going to be, like, oh, I need to go and shard myself or whatever it is that sharding is.
No, I don't think they're there.
I think they're in their jacuzzis.
They're in their jacuzzis.
They're, like, they're wandering around...
They're having a great time.
They'll probably get DJ Khaled over, like, for the afternoon.
They're all going to sit around in a hot tub and drink champagne out of the bottle.
(53:04):
And that's kind of what you should be doing.
Do you know what, we need to get onto them and find out.
I'd be really disappointed if they're all sitting around and talking about like API calls.
As soon as I pull myself out of my nap chair of my dreams, that's what I'm going to do.
And then just finally the role, the data insights.
(53:25):
Like as you say, you know, one insight is worth a pile of information.
I mean, you know, really, you know, you can't...
Isn't it, though?
Yeah.
I've got 47 million X-year-old customers living in X place.
Great.
That gives you something.
But what are you, what are you going to say to those people?
(53:46):
It's the age-old problem.
Well, age-old...
Okay.
It's 15 or 20 years, but it's a very old problem.
I've got all my data, you know, but what's my question?
All of the answers are here.
All the answers are in this pile.
Go and choose one.
I'm still trying to decipher what my question is going to be.
(54:08):
Yeah.
Well, that's it.
I thought that was it.
That's an interesting role, but really it comes, I think...
Potentially that would be that, it would be premature to put that role in,
if you haven't worked out what the questions are that you should be asking of the data to get the insight that you need. Oh, that actually sounded sort of thought about, that...
(54:30):
There's, those roles are the roles that are the working on the business roles.
You know, rather than the working in the business.
It's not, the trading one is the one that is my answer to that question of the missing role.
It's the trading person, the person who's, and it's kind of a similar thing.
I suppose, the person who's looking at what's going on on the website and wondering why we're not selling more of X, or how do I... now that customers have bought Y,
(54:51):
how did I get them to buy X?
And, you know, those sorts of things where you're actually watching what's going on and using that information to drive an action.
So I suppose...
But when you know that information, what do you then do with it?
And how do you permeate that through the business?
So how does that go to buying?
How does that go to merchandising?
Or in the case of product businesses, how does that go into the MPD cycle so it can be better the next time round?
(55:13):
Yeah.
How does that go into a supply chain?
Is everybody on the same page?
Is everyone aligned?
So it kind of starts there and how the organisation responds to that.
I'll tell you now, as soon as I've explained to you what sharding is, you can tell me what to, tell me all about the MPD cycle.
Honestly, I know about, if the MPD cycle in percentage terms, I know less than 1 per cent of what the MPD cycle is.
(55:41):
But we can go and talk MPD cycling and sharding all you like.
Well, on that note, a pleasure as always.
Thanks to Roger, our glorious and ever-patient producer.
Thanks to the sound man.
He's a sound man.
He's a very sound man.
Daniel.
Yeah, boo Elaine, deserting us.
But Daniel, you're great.
Thanks, Gordon.
(56:01):
Thanks, Ger.
You've been listening to Functional & Fabulous with Ger Keohane and Gordon Newman.
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.
This is Functional & Fabulous, the omnichannel podcast where we unbox tales of online retail and digital transformation.
In this episode, some of us handle the absence of regular sound engineer Elaine better than others...
Yeah, boo Elaine...
Ger gets excited...
Write that one down, Mr Notebook guy...
(00:23):
Our guest explains the latest approach to ecommerce...
They'll hand you a drink, they'll sit you down.
And they'll show you things - a guy who comes up with a jacket, and he'll open his jacket,
It's like, do you want watches?
Do you want coats?
Do you want knives?
Do you want...
Ger remembers meeting a man with a shocking job...
(00:46):
What do you do in the business?
And he's like, well, I design the clothing.
Really?
What are you?
Why?
There's mention of data sharding...
The only thing I know about sharding is going to a hotel in London.
And our guest tells you everything you need to know about ecommerce...
Ecommerce at its base is so simple.
(01:09):
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.
Hello and welcome to the Functional & Fabulous podcast.
(01:30):
Our guest today is the notorious Rick Watson.
Rick has spent 25 years in ecommerce as an entrepreneur and operator.
He runs a consultancy business which focuses on helping merchants transform their digital operations.
And interestingly, he also works with software companies who are looking to plot future vision and enter new markets.
Top vendors, such as Shopify, call him the Notebook Guy.
(01:51):
And they keep a really keen eye on him to watch how their software is accepted into the ecommerce market and test the temperature of the water before they dive in with new features and functionality.
Rick, Mr Notebook, it's a pleasure to have you here today.
Awesome to have you on.
I think you are overstating perhaps slightly my role in Shopify software development.
(02:12):
Oh, it couldn't be overstated.
We were at a conference in LA together last October, I think it was.
About this time last year.
And it was funny because, you know, the C-Suite and Shopify were all watching Rick.
No, your furious scribblings, Rick.
(02:32):
And then there was this statement which was like, you know, What did you write down?
They were presenting, they're presenting these statistics and they're like, write that one down, Mr Notebook guy.
And were you like just drawing pictures of, like, dinosaurs and stuff, like, smiley faces?
Yeah, exactly.
Stick men, shooting arrows.
Very good.
(02:53):
So actually tell us a little bit about that just as we're kicking off, you know, what did the platforms that you work with and what you do for them and how that whole plotting division and the entry to the market works out?
Yeah, you know, there are a couple of different types of customers I work with.
Some of them, look, they're not worried about their platform at all.
(03:14):
They just need to grow and transform their business from a people process, marketing, operational point of view.
And so we work with them that way.
There's some that are plotting, like, major technology transitions at the same time, because perhaps a new investor, a new executive has come in and they have parts of the organisation that are a little bit old, older school and some parts that are newer school.
(03:36):
And having someone extra, firepower to help them plot through some of their changes that might include platform changes.
So if they're moving from some of the maybe legacy platforms, which I won't name at the moment, but then, you know, they might be looking at platforms like Shopify or BigCommerce or VTechs or Commerce Tools.
So a lot of it depends on their situation.
(03:57):
And so for me, look, there's no such thing as one size fits all.
If you're within a certain part of the market, it's no lie that Shopify is sort of one size fits most.
And they've done a really good job of sort of cornering the mid-market of direct-to-consumer and they're pushing further up market as well.
(04:21):
Yeah, I see you mentioning the Dreamforce a bit recently.
Is that what we're calling it?
Dreamforce, like look, there are a lot of sales.
I can't help but notice...
Like one thing sort of being independent helps me notice is I'm not on the hook to give a certain narrative or another.
(04:41):
And so I could just sit back and notice what's happening.
So if I notice, like, I don't know, like 30 ex-Demandware execs that are at Shopify now on their sales and solutions team, or there's a whole slew of new ex-agency people that used to be at LiveArea, PFS, Astound, like that are now moving to BigCommerce following Travis, the stampede to BigCommerce.
(05:07):
And, you know, it kind of looks like a recap of the Magento versus Demandare wars, but in Shopify versus BigCommerce.
Yeah.
Yeah.
It's interesting.
I was at the ecommerce expo in London recently, and the stands were BigCommerce, Shopify, SHOPLINE, Centra.
(05:27):
And I think that was it.
Yeah.
I think that was it.
I'm not sure.
Maybe Commercetools were around the place somewhere, but interestingly, no Magento, no Salesforce, no, you know, no Shopware, you know, so there's...
Notable by their absence.
Yeah.
The movement around the market is interesting.
Yeah.
I mean, in the last two years, I would say in particular, re-platforms have slowed down.
(05:52):
And it just seems like in the last 10 years,
while there are a lot of people re-platforming kind of mid-market,
in the enterprise space, it seems to be fossilised in amber or something,
where people are changing the front end experience and trying desperately
not to change the back office or anything that touches their ERP
or something like enterprise system, just because they know it will
(06:12):
create a three-year project.
The thing is, I think a lot of the narrative is around risk, and the risk is always going to be away bigger to move than to do anything else.
And you end up, I think we had a, when we spoke about this, the word Stockholm syndrome was kind of, you know, you grow to love the platform.
Yeah.
It's better here than you think it is.
(06:33):
Trust us.
Yeah.
Yeah.
I always think in those situations, though, it's...
Does anyone want to really, like, rip something out and rewire into their ERP?
It's not a fun front-end project.
And when I say fun front-end project, I mean, where you instantly see the benefits on your interaction with customers.
(06:55):
So I think you hit on something there, Rick, where you said, those enterprise customers are doing interesting things on the front end, but they don't want to do everything on the integration side.
Like if that bit's working, we're just going to leave that where it is right now.
Yeah.
Rather than spend like $2 to $6 million to re-platform all tons of integrations and this thing that we've had in place for 10 years, let's spend some more money on marketing.
(07:22):
And you're also, are you still on the board of the MACH Alliance?
Yeah.
So there's a group of industry advisors to the MACH Alliance that I do participate in on a quarterly basis.
We just talk about, this really just keeps the pulse on certain types of customers in the market.
And so it's a good place to learn new things and meet new people.
(07:44):
So how's the headless composable?
What's the temperature of that market at the moment?
Yeah, look, I think it depends on what your frame is from it.
I think there was a two-year period where there was so much money in the market that everyone said, well, we should build a custom front end.
And they started calling that headless.
And I think that was a mistake by probably 95 per cent of people who went and did that because then they realised, oh crap, we're a software company now.
(08:12):
We have to release things.
We need developers.
We need QA.
There are bugs on our website.
We've never had bugs on our website before.
Our website is crashing.
That was never a thing before.
How do we push from one environment to another?
So you have business executives that are starting to think about non-business oriented things, which never makes any sense.
(08:33):
Meanwhile, I think the folks that were interested in perhaps moving beyond the stock themes in the platforms and maybe hired a content management system or something more off the shelf, off the box that they can configure rather than completely re-engineer.
(08:56):
Those people had a much better time of it than folks that were saying like, oh, you need a custom HTML, like JavaScript front end because you want this one feature that 99 per cent of people probably don't need.
It's an interesting... I still don't quite...
The agencies made a lot of money, though.
(09:16):
Yeah.
But it's an interesting thing.
I just don't see the argument sometimes for the headless because like you say, you know, when I met a merchant a number of about a year or two back and he was talking about failovers, clustered environments, sharding databases.
And I was like, I said, are you an engineer originally?
(09:38):
And he's like, no, no.
And I said, what do you do in the business?
And he's like, well, I designed the clothing.
And I was like, what?
What are you?
Why do you know anything about sharding databases?
You know, but he had to because he had to get involved at that level because that was where the money was going in his ecommerce business at the time.
He was spending it all on trying to keep the website up and running.
(09:58):
The only thing I know about sharding is going to a hotel in London and, like, kind of using the spa.
I wasn't sure where you're going with that...
Yeah, I know.
Watching The Shard from your window...
We were in one of our, in one of our kind of nerdier WhatsApp groups.
We do have a friend that really doesn't understand the point of headless, and he's quite a prominent member of the ecommerce community here in Ireland and doesn't really have a lot of nice things to say around headless.
(10:34):
He's a, he's a huge proponent of taking off the shelf where you can configure, don't customise.
Yeah.
And I think I'm, yeah, I'm Team...
You're Team Configure?
I'm not going to say what his name is.
But I'm Team Configure.
Yeah.
I mean, I think the thing is what people fail to realise is that once you, once you start customising it, it's now your software pretty much.
(11:00):
And you've got to maintain this, upgrade it, run it, manage it.
And all of a sudden you're, you're, you're no longer a retailer.
You're a tech company.
One of the things I'm interested in, Rick, is your view on like, is there a tipping point where it actually becomes worth doing?
Or is it just, just not where, where you'd be advocating?
(11:22):
No, configure as much as you can.
Look for new businesses, it's hard to understand when that would happen.
If you're a multi-billion dollar enterprise, it's a little bit different situation because you have IT teams, you've done acquisitions.
You have multiple ERP systems.
You have all these things.
Not that you couldn't eventually, maybe one day, 10 years from now, move to something simpler, but you are where you are now.
(11:48):
You have custom business logic and microservices.
So, like, what I'd say about headless, and particularly, like, from the mock side, don't think about it unless you've ever built a microservice before thinking about mock.
Like, if you don't have developers, to your point, Ger, if you don't have developers on your team already releasing microservices, because that's just part of what you do.
(12:12):
You know what I mean?
I've had several, like, built-to-order manufacturing businesses use a headless approach because the standard, oh, I'm just going to connect this to a 3PL doesn't work because there's a lot of internal software they had to write to integrate all of their systems.
And then they could connect and compose different elements of their front end.
(12:35):
And the front end can be very standard, but sort of the middleware is more service oriented, because it has to interact with custom software.
Mm-hmm.
That makes sense.
In terms of like when you are consulting with businesses in the United States at the moment, what's your general approach?
I suppose just to start with, when you're thinking about or consulting with businesses to think about strategy, like, how far into the future are you thinking about planning?
(13:01):
Like, how many years is a strategy worth these days in the digital world?
Yeah.
I mean, look, you could say three months.
You probably wouldn't be far off, but reality is I think a standard timeline is three years.
And that's usually where you sort of start and end.
If you're going to invest over several hundred, over half a million dollars to $2 million, you're not going to pay back in a year.
(13:27):
Yeah.
And so you have to at least plan out three years to help people understand like how is this going to help you long-term and where does this investment in creative or platform or build or software that you don't have today while your other software maybe ends of life, then that, the entire cashflow...
(13:50):
But from a strategy point of view, there's, you know, it's very, you know, call it multifaceted.
And a lot of it just depends on where the business is starting from.
It starts with kind of bottoms up and top down.
Like what are your goals?
Who do you want to be when you grow up?
Sometimes that's part of the problem.
They don't know who they want to be.
And they want to be three things and no one's made a decision about what they want to be.
(14:10):
That's sort of problem one.
The second thing is like a lot of people just don't know what's going on with the business.
They're doing 10 things, but they think they're doing one thing.
And so they're spending a lot of extra money that they shouldn't do or they're spending money inefficiently.
So there's kind of the future planning, where do we want to go?
And then the current assessment, which is, like, people process technology, could this be simpler, easier, faster compared to all the problems that you're having?
(14:37):
And so generally the employees know what's up, particularly the employees on the front line.
They're like, why does it take me X amount of time to do this?
And so you have sort of two sorts of businesses.
Business type A doesn't know what good looks like because they've been doing things the same way for 20 years.
And they're like, could this be better?
(14:57):
We're not sure.
And so that outside perspective that I bring can help people understand what the state of the art has evolved to, because many times they decided, like, maybe somewhere around the time demand were IPO or Magento, right before Magento was bought by Adobe, they installed one of these platforms and they've left it alone for 15 years.
(15:18):
And they're like, do we need to build custom?
Because we've built a lot of custom stuff around these systems to augment for issues in the platforms that perhaps haven't evolved as fast as the Shopify and the BigCommerces of the world.
And so some companies need to know what good looks like.
Some companies already know what good looks like, but they just need help getting there.
(15:39):
Like what are the steps?
Step A, I want to do this.
Step B, I need to do this.
How much do I need to invest?
What's the return going to be?
And then change management is always a huge part of that process.
Like tech is easy.
Process is a little harder than that.
People are the hardest.
Yeah.
And so then beyond, I suppose, the tech selection, which I think is a very frightening decision for a lot of people.
(16:04):
But after that, when you're getting into some of the changes that you're seeing and the trends that you're seeing, we talked a little bit about how ecommerce businesses are becoming media businesses, which I thought was very interesting.
Tell us a little bit about that and how you work with businesses to kind of build tactics around that side of the...
Yeah, I would say beyond technology, people and process is a big time.
(16:28):
So even just basic processes, like how do you add new selection?
What's your season plan?
Are you planning a year out and therefore already when it's released, it's behind the market because the markets change so quickly and Shein's adding 30,000 styles a week and you're adding 10?
So the market is a very different place.
(16:49):
Just the make-up of your executive team, the make-up of a digital organisation, how they interact with the marketing and merchandising teams.
What are your monthly, weekly, daily cadences and processes for planning, merchandising, marketing, promotions, markdowns, all these things?
How do you make your major technology decisions and investments?
(17:10):
Some people have no formal process.
And so it's very common for a business person to have an idea, hey, we should have this on our website.
And then it goes to IT and IT does the requirements.
The business is not involved in the requirements.
And so you get something that's very technically sound, but the business doesn't know how to use it and then they don't adopt it.
And so there are, like, very basic things that happen in the disconnect between business and technology.
(17:35):
We also definitely help them build bottoms-up marketing plans by channel, like how much you should be investing in paid search, paid social, organic, creative services over a number of years, help audit their lifecycle marketing.
Like, look, you're not growing because you're not acquiring enough customers.
Like, you're actually, your existing customers...
(17:55):
This is something we hear a long time...
Like, our paid marketing is not working.
So we stopped investing in it.
Like, when did you do that?
Like, oh, two years ago.
You look at their customer file.
Two years ago, their customer file stopped growing because they stopped investing in top-of-the-funnel marketing.
They thought like, oh, we should just make our existing base more productive.
Well, your existing base can get productive to a point, but you're not going to, like, double that.
(18:20):
You're not going to double your AOV.
You sell what you sell and you can augment that 10, 15, 20 per cent, but you're not going to double it.
And so if you're not acquiring new customers, you're dying because not every customer you acquire is going to come back.
And so it's super-important to judge, not just the productivity of your existing customer file, but the growth of that customer file.
(18:44):
How are you acquiring customers?
Can you afford to acquire customers at the current rate?
So we help customers understand at what price they can acquire customers and which channels they should be using to acquire them.
Is that quite a simple equation process, working through with the business?
It's a leading question...
(19:04):
It's a funny question because ecommerce at its basic is so simple.
It's so simple.
Product times conversion times AOV equals revenue, right?
So it's really the basics.
And if you acquire a customer for X and they don't come back, then you're not going to be profitable, right?
(19:28):
And so those are the basics that we try to get right first and just understand, like, are the equations off?
Is your customer file not growing?
Is your customer file not productive?
That tends to, it depends on the problem we're asked to come in and solve.
But part of it is like, what's the potential of this business?
(19:49):
What could this be if this business is going well, like three years from now?
If we had a better plan, where could we be?
If we had a better organisation, we had better marketing, where could we be?
The other types of question is sort of the reverse question, which is like, we were growing, now we're declining, why?
And so getting, going in to diagnose the business, marketing, merchandising, pricing, promotional pressures, competition, all these things, helping them understand like, what are they missing out on that they should be taking advantage of?
(20:21):
And out of curiosity, do you see, I'm seeing a little bit of renewed interest in inbound marketing and content marketing on ecommerce sites now, do you see that as well?
Or is the acquisition of customers largely still around, driven by paid media?
Look, paid is getting, continues to get more and more expensive.
(20:43):
And I think, it's not like people are moving away from it, but it can't escalate indefinitely.
The future, I tend to believe that the future of marketing is earned plus owned.
So if you don't have both owned, earned and paid, I mean, all of them, but in particularly, if you don't have healthy owned programmes, like this is your own channels, particularly like email, SMS, and then earned, which is, what do people say about you?
(21:15):
Either through influencers that you're working with, or just your own customers that are talking about you.
And that's your best marketing.
And if you don't have happy customers because of your products and service that you then re-amplify and use in your own marketing efforts, then you're really missing out on what commerce is these days.
(21:38):
That's, I think that's really interesting, Rick.
So we would hear a lot of talk about, it's important to have the data to know your customers.
So the segment of customers that you've got and how you develop the value proposition for them.
So when you talk about knowing your customers, or when we hear talk about knowing your customers, that's knowing them beyond the basic demographic data and beyond their purchase frequency data.
(22:14):
It's about understanding what really is the problem that you're solving, or what is the benefit that you're bringing to their life generally?
Gordon, I can't tell you how many companies I ask, what problem are you solving?
And they stare back at me blankly.
(22:37):
They don't understand.
Not only do they not have an answer, they don't understand the question.
Like, well, we sell furniture.
I'm like, really, that's your level of understanding of your own business and your customers?
So where do you go when someone does that?
Paint a story for me about what your customers are like.
(22:59):
And so, look, usually in these situations, they didn't found the business.
And that's why they don't have that knowledge.
They've taken over the business from someone else who was perhaps a founder.
And so, there generally are employees at the company.
Someone has done a brand, like brought in a branding expert in the past, and there's a deck laying around that tells the story of the brand.
(23:26):
And that story of the brand is not obviously, there's a lot of data and AI and ML and segments and things that you can do from an analytics and processing point of view, but there's also just sort of the emotional story of what your customers are trying to do.
And the company having the same shared picture across, like, how much are you trying to get someone to spend on their first purchase?
(23:52):
What might their second purchase be and why?
If you don't have clear answers to those questions, how often do they replace your product?
Why do they replace your product?
Who are they coming from?
And so, these common stories about a brand, like, to me, that's the foundation of your marketing strategy and who you are as a brand, what products you put on the website, how much you're willing to mark them down, what stories you're telling in social and paid advertising and your creatives, that really has to permeate your business.
(24:23):
And so, I think you have to, there's really two approaches in this situation.
One, Gordon, is you actually hire a proper brand design firm to come in and build them a story, because there is a story to be told.
They have thousands, sometimes millions of customers.
They just don't have a coherent story about it.
(24:43):
That's kind of one.
Second is you pull it from the archives of the history of the company.
Maybe you talk to the old founder or maybe there's an employee that's been there for 20 years that understands what is the soul of this brand and why does it exist and what problems are we solving for the customers?
So, those are the two places I usually go to.
It sounds to me like there's really two components to this.
(25:05):
One is defining it.
And then the other one is getting everybody on the same page so that everybody is aligned.
And until you've got to that point, how can you make a decision about strategy within the organisation?
It's a good question.
And it's so funny.
I grew up in technology and I would say the vast majority of problems that I run across are not technology problems.
(25:29):
They're people problems.
Even if they're not people problems, they are people problems because they're process problems, which means that even if it's the right people, if the right people are doing the wrong things, then that's a process problem.
And you could have, another problem that's common to see is people have too expensive technology for what they need, like a $30 million business that has software that is over-specified for where they are today.
(25:57):
And that causes huge maintenance costs.
It's more expensive to maintain and they can't get enough out of the software because they don't have enough people.
It's definitely a truism that at this stage, the technology has outstripped our ability to use it in some ways.
And it's an interesting point where businesses often don't understand the problems that they're solving.
(26:20):
People get, I guess, they get caught up in the business of doing business, the business of tracking sales and managing the margin and all of these kinds of things and forget sometimes that connection with the customer, the connection with the brand story.
Yeah, I also think that a narrative took hold, I would say somewhere around 2010, 2011, 2012, that technology is going to be a competitive advantage because you have this new channel and those who have the newest, latest and greatest tech are going to be the ones that benefit from that.
(26:52):
And it was sort of like the age of the engineer.
And so my company needs to hire engineers and build custom software.
And I think if there's one thing that's good about the age of free money that we have just went through and maybe hopefully aren't going back to immediately soon is that there's so much technology out there now that you can get most anything you want off the shelf.
(27:15):
And the folks that kind of kept it in their head that technology is my differentiator, what they mean in their head is like, I need to own this technology.
It needs to be mine.
And no one else can ever have something like this.
So if I'm using the same platform as someone else, then it means I'm going to have a vanilla experience, which, again, I think, Gordon, you would agree.
(27:39):
It's like you can configure a platform to do whatever you want.
You can tell any story you want on these out-of-the-box platforms.
Yeah, I always think that I would compare an out-of-the-box platform to a shop on a high street, like you can have 10 shops on a high street.
They're all buildings.
They've all got front doors.
The magic is what happens when you walk through the front door.
(28:01):
It's the product.
It's the merchandising.
It's the service.
It's the story that you tell when you walk through the door.
That's what makes the difference between a bad shop, a mediocre shop and a great shop.
And you can have all three of those on the same street.
And if you think about platforms in that context, you can all be on the same platform.
But what you do with that platform is what makes the difference.
(28:24):
Yeah, I couldn't agree more.
To take the conversation in a slightly different direction, we're delighted to have you joining us from the United States and interested to hear, I suppose, with respect to the US.
Amazon is a big topic of conversation in Ireland at the moment because Amazon.ie is scheduled to launch in 2025.
(28:45):
In its home country, how is Amazon viewed?
Is it still the Big Daddy?
Yeah, Amazon is the Big Daddy, I guess, or the Big Mama.
And it's not going anywhere for a while.
I can't tell you how many Amazon packages show up at my household.
My building in New York City has 1,000 units in it or some big number of units.
(29:12):
And I look at the mailroom of the building, to give you some idea of Amazon's penetration,
95 per cent of the packages are Amazon parcels.
You might see a few Walmart thrown in there, a few Chewy's for people with pets.
But I mean, it's still... you do see Walmart growing a lot.
(29:36):
Walmart is still, especially online, nowhere near the size of Amazon.
But they're growing faster, in some cases, probably three times faster than Amazon, I would say, in the US from an ecomm point of view, if I had to put somewhat of a number on it.
But Amazon, at some point, it's going to start running into the law of large numbers.
(29:56):
How many more Prime members can they get?
They have a couple hundred million already, I'm sure, from last I checked.
I want to guess, like, 200 million.
How many people are there in the US? Some of them are kids.
You know what I mean?
Some are families.
There's only so many more people that they can get.
As a result, new services need to pile on.
(30:18):
Now they have a grocery Prime, so that you can get your groceries delivered for $10 a month.
It's not included in your regular Prime.
Why are they doing that?
Well, they want to get more share of wallet from the same household, and it's expensive to deliver groceries compared to a normal 1lb parcel or something like that.
(30:38):
How important is Prime to Amazon as a business?
Prime is everything to Amazon.
Amazon without Prime is nothing, completely nothing.
I firmly believe that.
It's their moat, because you have a yearly subscription of Prime?
It's where you're going to go to shop.
Amazon is not failing you.
(30:59):
The fact that you have easy returns, it's not a week that goes by that we don't make a decision in our household about where to buy from.
Do we buy it from the brand, or do we buy it from Amazon?
And look, if there's something unique to the brand or special about it, great.
But if we don't know the brand, and we're not sure about it, and we're unsure if we might have to return it, we're 100 per cent going to buy it from Amazon, because we know we're not going to have a hassle returning it.
(31:31):
Even though Amazon's made returns slightly more difficult than before, we know we're going to be able to do a return.
Versus going to the brand, you're just not.
This uncertainty creates doubt, and doubt creates friction, consumer friction in their purchase experience.
It's such an interesting thing.
I think when we were speaking in the pre-recording, we compared it to PayPal, and we would have had businesses going into the UK.
(31:59):
And in the UK, we did an A-B test where we had a trust mark.
So it was, like, some, let's say, a lobby, a business lobby or whatever, and it was, like, trusted by this business lobby.
And we had the PayPal, you can pay with PayPal symbol on the PDP, so on the product detail page.
And the pages with the PayPal logo converted twice as high.
(32:25):
Wow.
Yeah, yeah.
So PayPal was the most trusted part, and by having PayPal there, they were converting far better than anything else.
And I think it was just even the fact that sometimes you have PayPal, if the business is not known in the UK at that time, people would buy with PayPal because they're not going to have a hassle with it.
(32:45):
I think it's the default for trust.
I'm interested in this idea of Amazon's prime moat.
And occasionally, moats can get stormed.
And I'd love to hear your opinion, Rick.
How to storm the moat...
How to storm the moat.
Has Temu got any chance,
do you think, of storming Amazon's moat?
(33:07):
Because I've heard Amazon be, I'm going to get this wrong, but it was something like, Amazon is the shop window for AliExpress, which is the shop window for Temu.
Now, I could have got that the wrong way around, but you get the idea.
Yeah, yeah.
Yeah, look, first of all, it's just a different shopping experience.
(33:27):
So if you've ever been on Temu, if you go shop at Amazon, you're like, I want this marker.
You go to the page with the marker, you click it, and it's in your house tomorrow.
You go to Temu, imagine you walk in through the front door of a Temu store.
They'll hand you a drink, they'll sit you down, and they'll show you things.
(33:48):
A guy comes up with a jacket, and he'll open his jacket.
It's like, do you want watches?
Do you want coats?
Do you want knives?
They're trying to learn about you so that they can later target you.
They have almost no interest in selling you something very quickly and having you walk away.
(34:08):
Yeah, it's less transactional.
If you go in the app, you just sort of know that's sort of what's happening.
Their job is to then, almost like a TikTok, they're trying to profile you so that they can then sell you, perhaps, the schlock deals that they have that are more interest based on what you clicked around and saw.
(34:33):
Amazon is just different.
Amazon is mainstream retail.
And I'd say Temu, it's primarily white label goods.
Again, kind of like you say, it's like these people that have been making products on behalf of other brands for years and years, and now they want their day in the sun.
They want to be the next Anker.
(34:53):
So when Anker came out with all their chargers and electronics equipment, they were an Amazon brand that now became an everywhere brand.
And so I think if you look at Temu, could someone break out as a new brand on Temu that didn't have a brand before?
(35:15):
I think it's possible because they're so cheap.
And they were somewhere anyway, maybe that brand would break out on Temu in the future and not Amazon.
It's possible.
But again, Amazon has so many shoppers, and it's so much more efficient to purchase there that you have to have more time to find the deal.
So it's a little bit more of the treasure hunt.
(35:36):
It's not competing directly with Amazon.
Amazon is not a treasure hunt.
Temu is.
eBay is a treasure hunt.
Etsy is a treasure hunt.
Off-price retail can be a treasure hunt.
A dollar store can be a treasure hunt.
And so there are lots of types of shopping that I think Temu has a much better chance of disrupting than mainstream Amazon.
(36:03):
Than boring old general merchandise...
Exactly.
...mission-driven shopping.
Described well.
Amazon has the best catalogue in the universe.
And they've spent 20 years perfecting it.
Reviews, product data.
I mean, they have much better product data than most brand websites.
(36:26):
Because they slap you on the hand if you don't.
You know what I mean?
The power of reviews alone in Amazon.
The number of times that I go to Amazon just to get the thing reviewed, regardless of whether I'm going to be buying it.
Just before we wrap up, because we're actually over time a little bit, but I just wanted to take this conversation in a completely different direction.
(36:48):
We talked a little bit about roles in ecommerce and what roles were missing in ecommerce teams and the org structure of an ecommerce team.
I'd just like to, I suppose, hear your thoughts on, in the United States, what role do you see is missing the most from an ecommerce team?
(37:10):
And maybe a little bit on, you know, what do you think is the ideal structure of an ecommerce team?
Yeah, look, ideal structure is somewhat hard.
I mean, you have to have someone who cares about acquiring customers.
You need to have someone who cares about activating customers.
So, like, lifecycle marketing.
You have to have someone who cares about the product and what gets put in front of those consumers and how quickly it's coming in and what your innovation pipeline is there.
(37:38):
I also think that if you look at the larger organisations, the biggest missing roles tend to be, I would call them, like, product managers or analysts and, like, data analysts.
Because you have IT who is focused on executing projects in a lot of cases, but they're not good at going into the business and helping them understand how this can be used and why it needs to be used.
(38:11):
Usually only the business can do that for themselves.
And many times they just assume that the tech is going to be so intuitive that they're going to be able to use it the right way without any help on their own.
And so product, you know, in software companies, that's called product managers.
They're actually building requirements, like gathering issues that are going on and building requirements for, like, these are the things that we need as an organisation.
(38:37):
And actually, by the way, these are the things we don't need.
And this is how you're supposed to use the software every day to be successful.
So many organisations don't have anything close to that role.
And I think the other role for data analysts, it's, again, they have IT teams and data teams that are collecting data, they're processing it and they're storing it.
(38:57):
But generating, the marketing person understands what consumers are doing, but generating new insights from the data that they already have, there's no one that's connecting that to the business in a lot of cases.
So that data analyst role, I think is hugely missing.
So, like, the difference between data and insights that you can act on, man, there's, like, a canyon divide in many businesses right now.
(39:27):
It's an odd one, like, people talk about data-driven decisions the whole time.
It's, I don't know, like, you can have lakes of data, but you might still not have any ever get close to a data-driven decision.
There's a big difference between having piles of information and piles of insight.
One piece of insight can change your business.
(39:47):
Tons of information, if you don't know what to do with it, you're going to get lost.
That was fascinating.
That was a really, really quick,
I think, 40 minutes.
We were getting the continuous five minutes over, 10 minutes over here from our lovely new sound guy, the sound guy in the back corner here, Danny.
(40:09):
He is a sound guy.
So Rick, it's been an absolute pleasure.
We covered so much.
Thanks a million for joining us today.
No, I appreciate it, guys, and happy to come back in the future.
Please do.
Please do.
I think we've unfinished business, Rick.
Thank you very much.
(40:29):
Thanks, Rick.
No problem.
Thanks a lot.
So in the words of Sade, Smooth Operator...
Rick is a smooth operator, isn't he?
He knows a bit.
He knows a thing or two about a thing or two, that fella.
And let's start off with what he knows about platforms.
Oh, well...
And I'm just going to swing in to the fact that I think 2011 when, or what did he say?
(40:55):
2010, 2011, when there was the big swing off between Demandware and Magento and I chose the biggest ecommerce platform that never was.
Like, Vendor could have been Shopify.
Oh, how I miss it.
But I just, I can't get over how things change in such a, like, reasonably small period of time.
(41:16):
Um, like, we went, you know, we went through a whole Shopware period, when I were a lad... We didn't have shoes...
We didn't have multi-tenanted SaaS...
You was lucky, you was...
Luxury...
(41:38):
So uh, like, it's just strange.
And that was the thing that I noticed at the ecomm Expo as well.
Uh, like there, there's new platforms and, you know, they're coming in and trying to, trying to take our merchants.
I think back in the day, you could never have imagined there might be something else other than Magento and, and Demandware.
And look how it, look how everything has shifted now.
(42:01):
It's amazing.
Yeah.
Yeah.
And you know, I mean, like, I suppose in a couple of years' time, well, who knows what we'll be talking about, but right now the, the SaaS, the configurable SaaS, the democratised technology...
The democratisation of technology...
There we go again.
That's what we have.
And like, and when, when we're having no conversation about uptime and sharding, it's, uh, it's probably a good thing for all of the retailers involved.
(42:24):
To be honest, I don't even want to know what sharding is.
I'm in blissful ignorance of what sharding is.
I would like to live the rest of my life not knowing that one.
I'll tell you about it later.
I'll totally pass.
What about my new analogy, though?
All the shops on the high street are the same.
It's what happens when you walk through the door.
(42:45):
Oh my God.
I'm going to keep that one.
Yeah.
You're going to be, you're going to be the new Dean McElwee, with your, like, sayings and aphorisms.
The fingertips of desire...
So, um, yeah, God, we got through a lot there.
I, the, the Amazon Prime, you know, how, how powerful Amazon is in the States.
And that Prime is the moat for Amazon, um, and makes it that much more impenetrable, you know, or harder to, harder to win against, we'll say.
(43:15):
Um, it's an interesting point, you know, that, that, that piece around the trust, the piece around the convenience and the fact that it is, it's the solution that people trust.
So I'm sure that's going to give Irish retailers cold comfort.
Yeah.
Yeah.
I mean, and the worst part about it is, or well, let's say in that context is this whole thing about, will we buy from the brand directly, or will we just buy it through Amazon?
(43:39):
And the fact that you would choose to buy through Amazon, not through the brand is, you know...
Testament to its strength.
Yeah.
Testament to its strength, but also it's, I, I don't know how to put it, but, you know, it's, as a brand that wouldn't fill me full of joy.
They're the ultimate multi-brand retailer.
And in a lot of ways they're fulfilling the, the role that supermarkets and department stores...
(44:05):
Yeah...
...fulfill, and they've done that in an online context and they've done it so brilliantly.
What I really enjoyed there was the snippet about Temu and how can Temu compete with Amazon?
Well, actually Temu is different to Amazon.
I haven't really given this a lot of thought until speaking to Rick there, but he's right.
(44:30):
Temu is the fun foraging,
I don't know...
Do you have a little, I have a little Temu binge like once a month.
I'd end up buying like a burger press and the dog car mat, and then I'll buy something random just to confuse it.
I love the, uh, the analogy, you know, the guy that opens up the coat.
Can I interest you in some watches?
(44:50):
No, spin my wheel.
The other piece that I liked, uh, I do like one of, I do like one of these, you know, this plus this equals this, but owned plus earned plus paid is interesting.
It's an interesting way of thinking about your, your customer base or your traffic sources or your, your source of revenue.
Um, what do you own?
(45:11):
What, what are you going to do to earn the referrals and people talking about you and that kind of thing and amplifying your message?
And what are you going to do about paid and how you're managing the mix, you know, of those, of those three, three pieces or three sources of traffic?
Well, I think the point you made there is paid's not going to get any cheaper.
No.
(45:31):
So therefore owned in order to get, in order to own that media, you've got to get, or that, that real estate, you've got to get a customer onto your base.
And, and earning that comes from your brand.
And you really have to have a clear understanding of what problem your brand is solving for customers, or what role your brand is playing.
(45:56):
What is your value proposition for customers?
What makes you so much better than the competitors, or what is it that, that gives you that talkability?
Yeah.
And that's really core.
I think too, like, you can't... there's so many white label options for every single product now that you've really got to, you've really got to cut through.
(46:23):
There has to be some sort of emotional connection, not just the functional benefits.
It's got to be fabulous.
Of course.
But the interesting thing, you know, is the observation that people don't understand the problem that they're trying to solve for their customers.
I can, I get that.
I can understand it because it's a hard, in some ways it's a hard way to think.
(46:45):
But if you think about it instead, like what are people actually looking for?
What are they putting into Google searching?
What questions are they asking when they find you?
You know, like the furniture company, is it most comfortable chair to read on?
You know, chair for, for lounging around in all day?
Uh, watching, watching television, eating my dinner in, you know, having TV dinners.
(47:05):
What are people actually looking for?
Best snoozy-snoozy nap time chair...
Yeah.
Yeah, yeah, exactly.
And just understanding, like maybe even coming at it from that angle, like, what is it that the customers are looking for?
What, you know, as opposed to, you know, sometimes I find it's like, that kind of a problem you're trying to solve is...
I think, I think that can be quite nebulous, but let's say like, you know, I'm a fan of naps.
(47:26):
Love a nap.
So if you take the snoozy-snoozy nap time chair, are they selling me a chair to nap in?
Or are they selling me that feeling on a Saturday afternoon where it's a little bit sunny, the sun's coming in and you just doze off in the chair and then you have a little cheeky 20 minutes.
(47:47):
And then after you cheeky 20 minutes, you're ready to take on the world.
That's what they're selling.
Take on the world, go out for an IPA.
Go out for an IPA, kick off my slippers and put down my pipe.
No, but that's what they're selling me.
They're selling me, like, the elevation of that special moment on a Saturday afternoon.
(48:08):
And if you can encapsulate that, that's what makes you talkable.
It's not just a chair.
This is an M&S chair.
No, there are other supermarkets and general merchandise stores available.
I really liked the, I don't know, did we bring it up in the podcast previously, but your little fan moment for Vacation, you know.
(48:33):
Oh, I don't know.
Have we talked about Vacation?
I don't think we have on the podcast, but can we?
It's just, it's unforgettable.
This, idea of the, the suncream that makes you smell great...
It's, like, the world's best-smelling suncream, it's awesome...
Honestly, like it just goes in so many directions that you're going to be a, putting suncream on yourself, tanning yourself on the beach in Miami, Florida-type kitschiness, and somebody's going to go smelling you...
(49:03):
Oh, it's like, and if you haven't and you're listening and you've got this far, like, I am fanboying over Vacation.
And even if the idea of the world's best-smelling suncream does not do it for you, then go, go and look at it just for the packaging.
Oh, it's great.
(49:23):
Yeah.
Really, really good.
And it is all, but it's all about that experience.
Like, as you were saying, you know, the, the Saturday afternoon snooze.
Suncream is suncream unless it's Vacation.
Then it's just the, what it evokes.
I think it's just a masterclass in branding.
Yeah.
What did you think about, uh, separately and going back to some of the things that we covered, what Rick was talking about, but the narrative that took hold that tech was going to become a competitive advantage?
(49:52):
I presume like, you know, at this stage with the democratisation of technology, I guess it's not at all about the tech.
It's about what you do with it, and how you use it and whether or not you're able to, it's like, you know, you hear the thing about the human brain...
We're using like, you know, 8 per cent of our brain kind of a thing.
Technology is a little bit like that.
We're probably using about 3 per cent of what it can do.
(50:14):
Yeah.
Well, look, there's two of us sitting around this table.
Obviously we don't count Roger, who's, like, floating around keeping us, keeping manners on us.
One of us is a very accomplished and highly technical, technically skilled...
And the other one is Ger...
...engineer.
(50:36):
Well, one of us couldn't write a, write a line of code to, to save his life, and he's wearing a green jumper.
So I am, I have always been of, of the view that technology is the enabler, but when you have, when you have that, it's what you do with the technology that gives you your advantage.
(50:58):
And I don't know, like, has any retailer ever, you know, really nailed competitive advantage by having a faster API call?
I don't think they have.
And if it has been, it's been as a result of somebody else building it.
Well, now that you mention it, actually that very, very thing, it does give a competitive advantage to Screwfix, the speed at which the, they can take an order from the, from the ecommerce site and have it processed in the local store.
(51:32):
And some ridiculous, ridiculously fast thing, like, I mean, 30 seconds or some, something nuts...
Or bolts, if it's Screwfix...
Oh, yes.
Something nuts or bolts.
Oh my God.
Sorry, Roger.
It's Roger who tells the dad jokes around here.
I mean, [Unintelligible] and get out of here.
(51:54):
Yeah, fair.
But other than, other than Screwfix...
I will take that.
But in 2010, like, your API calls to your payment services provider, we're actually like, that was a make-or-break thing.
Yeah.
But really there's somebody that deals with payments as part of their platform,
that's now solved that issue.
And as a retailer, you haven't got to worry about that, and you shouldn't be worrying about that or, or as a brand, you shouldn't be worrying about that sort of stuff.
(52:20):
What you should be worrying about is, you know, the things that they... do you think they're sitting there in Vacation?
Like, as they're, like, coming up with whatever fabulous sun products they are, and how they're coming up with right now and how they're styling it?
Do you think they are wondering about, like, you know, the architecture of their tech stack?
We need to throttle more API calls.
(52:42):
They're not going to be, like, they're going to be, like, oh, I need to go and shard myself or whatever it is that sharding is.
No, I don't think they're there.
I think they're in their jacuzzis.
They're in their jacuzzis.
They're, like, they're wandering around...
They're having a great time.
They'll probably get DJ Khaled over, like, for the afternoon.
They're all going to sit around in a hot tub and drink champagne out of the bottle.
(53:04):
And that's kind of what you should be doing.
Do you know what, we need to get onto them and find out.
I'd be really disappointed if they're all sitting around and talking about like API calls.
As soon as I pull myself out of my nap chair of my dreams, that's what I'm going to do.
And then just finally the role, the data insights.
(53:25):
Like as you say, you know, one insight is worth a pile of information.
I mean, you know, really, you know, you can't...
Isn't it, though?
Yeah.
I've got 47 million X-year-old customers living in X place.
Great.
That gives you something.
But what are you, what are you going to say to those people?
(53:46):
It's the age-old problem.
Well, age-old...
Okay.
It's 15 or 20 years, but it's a very old problem.
I've got all my data, you know, but what's my question?
All of the answers are here.
All the answers are in this pile.
Go and choose one.
I'm still trying to decipher what my question is going to be.
(54:08):
Yeah.
Well, that's it.
I thought that was it.
That's an interesting role, but really it comes, I think...
Potentially that would be that, it would be premature to put that role in,
if you haven't worked out what the questions are that you should be asking of the data to get the insight that you need. Oh, that actually sounded sort of thought about, that...
(54:30):
There's, those roles are the roles that are the working on the business roles.
You know, rather than the working in the business.
It's not, the trading one is the one that is my answer to that question of the missing role.
It's the trading person, the person who's, and it's kind of a similar thing.
I suppose, the person who's looking at what's going on on the website and wondering why we're not selling more of X, or how do I... now that customers have bought Y,
(54:51):
how did I get them to buy X?
And, you know, those sorts of things where you're actually watching what's going on and using that information to drive an action.
So I suppose...
But when you know that information, what do you then do with it?
And how do you permeate that through the business?
So how does that go to buying?
How does that go to merchandising?
Or in the case of product businesses, how does that go into the MPD cycle so it can be better the next time round?
(55:13):
Yeah.
How does that go into a supply chain?
Is everybody on the same page?
Is everyone aligned?
So it kind of starts there and how the organisation responds to that.
I'll tell you now, as soon as I've explained to you what sharding is, you can tell me what to, tell me all about the MPD cycle.
Honestly, I know about, if the MPD cycle in percentage terms, I know less than 1 per cent of what the MPD cycle is.
(55:41):
But we can go and talk MPD cycling and sharding all you like.
Well, on that note, a pleasure as always.
Thanks to Roger, our glorious and ever-patient producer.
Thanks to the sound man.
He's a sound man.
He's a very sound man.
Daniel.
Yeah, boo Elaine, deserting us.
But Daniel, you're great.
Thanks, Gordon.
(56:01):
Thanks, Ger.
You've been listening to Functional & Fabulous with Ger Keohane and Gordon Newman.
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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