In the first episode of Season 2 of Step by Step, Scott Hill, SVP of Product at Brightpearl is on the show to talk about Brightpearl, the technology ecosystem, and how this season of Step by Step is going to teach our audience how to build an eCommerce Tech Stack!

Main Takeaways:

  • Scott Hill, the SVP of Product at Brightpearl, joins Phillip and Brian in this episode of Step by Step.
  • What are some of the topics that will be covered in this season of Step By Step?
  • Brightpearl empowers retailers by automating all of their back-office operations and allowing them to focus on growth rather than problem-solving?
  • Where do you start when it comes to building your technology stack?

What is Brightpearl?: A Brief Rundown:

  • Brightpearl is a retail operations platform that helps retail brands, retailers, and wholesalers automate all of their back-office operations.
  • Essentially, Brightpearl takes over everything after the consumer presses the buy button.
  • Once the order has been made, Brightpearl takes care of order management, inventory management, integrated financials, and workflow automation.
  • Brightpearl creates excellent efficiencies for its customers do they can focus on growth and not worry about the logistics of operations.

Scott's Story: The Journey So Far:

  • Scott has been with Brightpearl for about seven years and is in charge of all product management within the company.
  • Some of his responsibilities are taking the product to market, working with customers and partners, and figuring out how to build and what to build.
  • His first position at Brightpearl was a very brief stint in technical support, but he moved very quickly to pre-sales (but he was always going after product).
  • Before starting at Brightpearl, Scott was academically looking into computer game design and found that product design was mostly game design (but with fewer aliens).

The Reason Behind It All: Why Is Brightpearl Behind this Step By Step Season?:

  • Brightpearl is focused on the technology ecosystem and wants to work with and highlight the other technologies that its customers might want to use for all of the activities that Brightpearl doesn't cover.
  • Brightpearl has found a common theme in the fact that technology is essential to the success of a business. Still, even the most technologically savvy merchants don't know how to navigate the complex world of the technology market.
  • There is so much innovation happening, so how do mid-market merchants navigate through the market?
  • It's challenging to run a business today because of just how many technological factors and channels need to be considered when setting up your technology stack.

Goals for the Series: What Can You Expect to Take Away?:

  • The hope is that this series will equip people with the knowledge of how to navigate their way through the market.
  • This is not a vendor recommendation series but rather an agnostic overview of the experience that likeminded retailers go through when trying to grow their business.
  • The series will also be a great starting point for retailers and brands to be able to go off and do their research to find what works for them.
  • This series is the first part of Brightpearl's project, which will then lead to the launch of a new study of mid-market merchants in the United States.

High-Level Topics: A Sneak Peek at What's To Come:

  • Selecting what to sell and product sourcing can be considered where the story starts as it is choosing the right product and finding ways to grow efficiently.
  • Different seller profiles have different motivations, and finding a way to differentiate amongst your competitors is another topic that will be covered.
  • Collaborations are a new way to introduce new products in a low-risk way by partnering with other brands to diversify their product portfolio.
  • When is the return not worth the risk when expanding your product offerings?

Winning the Content Game: Diversifying Your Portfolio for Niche Audiences:

  • Content adds to the value of your product and differentiating it, which then benefits your assortment.
  • There are a lot of things happening right now that are focused on creating an audience first and then selling products to that established audience.
  • Bloggers are turning into billion-dollar retail powerhouses, and we are now at a point where anyone who can amass an audience around a niche topic can create a brand.
  • If you have the right tools, you can stay lean in your operations and be very successful.

The Ins and Outs of Order Fulfillment: The Brightpearl Process:

  • The two main reasons why this portion of your business is so essential are efficiency and increasing customer lifetime value.
  • The more efficient someone is at managing and shipping their orders then the less money they will have to spend on inefficiencies.
  • With the cost of acquisition going up, there has been more focus on increasing customer lifetime value.
  • Merchants need to make sure they deliver on their promises, and you need to be equipped on the backend to live up to your word.

Diving Deeper: More On Customer Acquisition:

  • The main challenge regarding acquisition is its cost, which is only going to keep rising in the future.
  • Once traffic hits an eCommerce site, then your customer acquisition strategy needs to be spot on to most efficiently acquire your customers.
  • Everything should be built to increase the order value and basket size through branding and messaging with zero friction.
  • This is the main topic in the series where there is the most saturation, so how do you figure out what is going to deliver a return?

The Power of Data: A Crucial Part to Any Business:

  • Everyone wants to know how well they're doing, so they need support to prove that their decisions are lucrative.
  • Data allows brands to understand what they need to ask themselves and what questions they are answering with the data they collect.
  • Knowing what you should not be doing is just as important as knowing what is working.
  • A significant problem that merchants see is the overall completeness of the data they have.

The Post-Purchase Process: Increasing Customer Lifetime Value:

  • It costs about five times more to acquire a new customer than it does to earn repeat business from an existing customer.
  • Most brands focus on customer acquisition, but the focus should primarily be shifted to customer retention.
  • Technology is saturated on the front end when it comes to acquiring but tends to be less saturated when it comes to winning the repeat purchase.
  • How do you execute such a positive experience for a customer that you then get them to purchase four more times?
  • Support has become the new sales when it comes to customer retention.

Brands Mentioned in this Episode:

As always: We want to hear what our listeners think! What is a step you can take today to improve the knowledge regarding your technology stack?

Let us know in the content section on Futurecommerce.fm, or reach out to us on Twitter, Facebook, Instagram, or Linkedin.

Have any questions or comments about the show? You can reach out to us at info@futurecommerce.fm or any of our social channels; we love hearing from our listeners!

Phillip: [00:00:00] Hello and welcome to Step by Step, a podcast by Future Commerce presented by Brightpearl. This is Season 2 of Step by Step, and you are listening to the very first episode. So welcome. If you're just jumping into Step by Step, this series exists to get deep in the weeds and teach you the fundamentals about a concept. This season is all about your tech stack. If you are in leadership at a high growth brand and find yourself struggling to make decisions about which technologies and platforms to run your business on, this series is for you. In the five part series that we have ahead of us, we are going to talk to people just like you who are solving this every day in their brands. CIOs, CTOs, CMOs, CFOs, operators at retail brands, it doesn't matter who you are or what role you're in, you are faced with building out a tech stack that allows your business to grow and to meet the needs of your customer. Joining us today on our first episode of Season Two is Scott Hill, the Senior Vice President of Product Management at Brightpearl. Scott is a wealth of knowledge, and he's going to help us get situated and acquainted with all of the topics that we going to need to be successful to learn everything we can over the next five episodes. Let's go ahead and get right in to learning step by step.

Phillip: [00:01:20] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:01:25] And I'm Brian. Today we have a special guest, Scott Hill, Senior Vice President of Product Management at Brightpearl. Welcome, Scott.

Scott: [00:01:35] Hi, guys. Thanks for having me.

Phillip: [00:01:36] We were talking in the pre-show that at the time of recording, the days are shorter in Bristol. And you were saying that your commute... It's dark on the way in. It's dark on the way out. But we have some bright things to talk about in the world of Brightpearl today. For those who may not know what Brightpearl is... I'm pretty good at finding random things to bring up in the beginning of interviews... If you could, for those who don't know what Brightpearl is, tell us a little bit about the product and your role at the company.

Scott: [00:02:11] Yeah, of course. So Brightpearl is a retail operations platform. So we specifically help brands, retailers, and wholesalers automate all of their back office operations. So a nice way of thinking about where our territory is, is we take over everything after the buy button. So if you're a retailer, and you're using your eCommerce store and various technologies to achieve a sale Brightpearl kicks in once that sale has been made, and we take care of all of the order management, the inventory management, integrated financials and really the workflow automation that those businesses need to thrive and scale competitively. So we consolidate orders across multiple channels. We manage inventory in real time. So we really take care of everything that's backoffice. And the point being is that we can automate and make great efficiencies for our customers so that they can then focus on growth. And my role within Brightpearl, so I take care of one of the product management. I've been with the team for about seven and a half years now, staring at the calendar. So really just looking after all of our products, taking them to market, working with customers, partners, et cetera, to figure out exactly how to build and what to build. Yeah. And just being in the details.

Brian: [00:03:25] How did you get into Brigtpearl? Tell us a little bit more about yourself, your history.

Scott: [00:03:29] The actual role that I sort of started with was a very brief stint in technical support here in Brightpearl and then moved pretty immediately over to be pre-sales, or the US term for the role of sales engineer. So really the technical know how within the sales team, which was really sort of a way of which, you know, I was obviously interested in learning how to do that stuff, but it was really I was always after product. So prior to Brightpearl, academically I was looking into computer game design and trying to figure out exactly where in technology I fit, basically, you know, so product management is games design just with, you know, less fun things than aliens and bullets and stuff. But there's a lot of commonality. So, yeah, I started and sort of spent the first I think it was eleven months in that technical sales role, and then I was invited to and jumped at the chance to sort of take care of product. And then it just grew from there. Over the last few years I've grown the team around me. And Brightpearl itself has changed on the way, we're much further upmarket now, which obviously presents different challenges.

Brian: [00:04:36] Tell us a little bit about why Brightpearl is doing this show. What is the goal? Why are we doing this mini series on your eCommerce tech stack?

Scott: [00:04:48] So the context and where the conversation came from within Brightpearl was really around our focus on the ecosystem. So we're very much around Brightpearl is here, we do what we do best, and we want to play with and work with all of the other technologies that one of our customers might want to use for all of the activities that Brightpearl doesn't cover, basically. So that's the thought and sort of the original context. And then diving into that a little bit more to find out, well, what is it the world needs? Really from the experience of speaking to these thousands of merchants over the years, we've really found a common theme and that's that technology is essential to the business success. But even the most technologically savvy merchants just don't know how to navigate the complex world of our market. So there's just so much really. There's so much innovation going on as well. You know, everything from AR driven in-store experiences, all the way through to people trying to emulate robotic warehouses. Just there's so much going on. So the question that we're looking to answer is how do mid-market merchants navigate this? You know, when they go to a retail or technology show and they see everyone's different stands and vendors, et cetera, how do they figure out where to invest in what integrates with what? How should they prioritize, you know, what it is they're actually shopping for? So all of these big questions on really how to navigate the area.

Phillip: [00:06:13] It's very difficult to run a business like this these days. It used to be you just throw up a web site, and you have a catalog there, and people would buy. And nowadays, you know, social is very noisy, organic traffic is not so organic anymore. We find we have to acquire and pay for a lot of traffic. And then after you get the customer, you have to get the product to them. And sometimes customers have outsized expectations on what that experience should be like, how quick it should get to you, what the box looks like. It's not easy these days. And it's pretty cool to have a technology platform like Brightpearl that can help inform all of the strategy that a modern retailer or brand might need to compete today and to be current. And I love that a platform like Brightpearl sort of sits at the center at the intersection of all of that experience. So that's pretty interesting. Brian, I cut you off there. What are you going to say?

Brian: [00:07:13] Oh, I was to say it's similar to what you said. Like it's crazy the amount of technology that's available right now. I mean, I remember when the Big Show, the NRF Big Show, here in the states in New York in January. It's the largest show in retail. And you know, when you used to go to the Big Show, it you'd step in and you'd see things like cash registers and credit card machines and things like that. Now, the first thing you see when you step in to the main exhibit hall at the NRF Big Show is Microsoft and Oracle and SAP. And like all of these like big name technology companies are front and center because now retail and commerce... It's all one thing. It's not omni channel. It's just commerce. And technology is such a big part of that. And I can't even imagine stepping into that show for, let's say you went there for the first time or even the second time or the third time, like knowing how to navigate that show and like what's important, what's good, how do you know what's right for your business? It's a big deal.

Phillip: [00:08:27] And it's probably a big deal depending... Your world view is different, depending on who you are. If you're a retailer, like a traditional retailer, you have one view of the technology you need. If you are an upstart direct to consumer product that is trying to build a brand, you have one view of what you need from a technology perspective. And if you're doing wholesale you probably have still yet another view of the types of technology and assistance that you need. So I'm curious, Scott, if you have some takeaways or some hope that at the end of the series, what each one of those different constituents, if you will, each one of those personas of the listener who might be a retailer or a brand or a wholesaler might be trying to do and you know what they might be trying to learn and what their different motivations might be at the end of the series.

Scott: [00:09:21] Yeah, it's exactly that. You guys have summarized it better than I could. So the hope is that, you know, we're equipping people with with the knowledge of how do they go about this market? How do they know what they need? And it's a super important thing from day one of us just having this idea, you know, all the way through to today that this is not a vendor recommendation project. It's not us trying to cherry pick out to say, "Hey, if you need something around, you know, product lifecycle management, these are the guys to use. They're the best." It's absolutely not about that. It is trying to be as agnostic, including, you know, as we judge ourselves. It's really just informing the market. You know, here's the experience of like minded retailers in this world. So therefore they can learn from those experiences and then go about their own research.

Brian: [00:10:12] And you care so much about this topic that you're actually doing a study on the technology stack? Tell us a little bit about that study.

Scott: [00:10:20] Yeah, of course. So for this this project, it manifests itself in two ways. So first and foremost, what we're doing today. You know, so there is the podcast series. And the other is some new research that we're publishing. So the content of the research... So we've surveyed 200 mid-market merchants in the US and that's across multiple industries, different retail business models. But the interview is three core questions. So what have you invested in the last twelve months? What do you consider of those to be a good return on investment? ie: What of those has delivered a return already? And what will you be investing in in the next 12 months? So we figured that for merchant considering either a specific purchase or maybe doing some planning for 2020, understanding what their peers and competitors think is important enough to invest in and should be highly beneficial to your question earlier. It's really just guiding, you know, in this in the Wild West of planning for next year. What's everyone else doing? What successes and failures have other people had?

Phillip: [00:11:24] That's a big part of what makes Future Commerce so different in our space is that we're practitioners. We're not a technology partner. We're not retailers. We both have assisted in helping build brands for 20 plus years. And we find that people learn the most when they hear others who are in their shoes talking about a shared experience when they came in contact with a challenge and how they overcame that challenge. And it's that that makes this particular show and this series, I think, very different to what you might find out in the world of content. And we were drowning in content these days. I've said 2019 was the year of the podcast. Everybody has a podcast. But I think that the actionable insights that you get from within the content itself is really what's valuable. And so I'm really hopeful that that each of the retailers that will be featured in this series are going to give the types of insights and advice that a modern brand needs to be successful today. Brian, do you want to kind of run down some of the high level topics?

Brian: [00:12:39] Yeah, exactly. Let's give a little preview of what's ahead and what to expect out of this show. And Scott, we'd love to have Brightpearl take on these topics and why you've selected them as important to each merchant that's listening. And so maybe we just can start from the top. One of the things that we are going to be doing a dedicated episode on is selecting what to sell and product sourcing. So what about this is, would you consider, important to merchants? Why do we start here? What do you think is key to this area?

Scott: [00:13:18] So I think that the reason that we start here is because it's almost where the story starts. So the topics that we'll talk about in a second are all off the back of having the right product and how do you perform against that and grow efficiently. So the why to start with selecting what to sell is because whether it's a new business, whether it's a new range or anything like that, this is where they start. So, you know, design and manufacturing, if it's a brand, it could just be different forms of product research and sourcing if they're multi-brand retailer. But the whole question of what am I going to sell? is the basis for any of these conversations.

Phillip: [00:13:59] And the what are you going to sell is assortment and category... It's how do you differentiate yourself amongst a whole slew of competitors or peers in the marketplace? Right?

Scott: [00:14:11] Yeah, exactly that. And I think some of the challenges in this area is that the hypothesis is that this is an area where there's not a huge amount of tech being used in that mid-market. So Excel is very dominant. So whether it's ranging, sourcing, all of the management, etc. is just being done in these huge and complex spreadsheets, which is fine to a point, but it doesn't really take advantage perhaps of technologies that are available or how much should people be thinking about investing here within their tech stack? So I think it's fair to say it's the most under digitized, if that's a real term, retail landscape in contrast to the other topics, I mean. So I think that's why it's so interesting is because going into this project we didn't really know, you know, is there a dominant player here other than just doing it in spreadsheets? So I think that's why it's a good place to start.

Brian: [00:15:10] That's a really good point. Yeah, actually, any technology that I saw to this effect, speaking of the NRF Big Show, when I was at the NRF Big Show, it was all in the NRF Innovation Lounge. There were some larger players out on the main hall, but those that especially for the mid-market and SMB range like it was all in sort of the innovation category. You're coming to this topic, and there's different constituents that have different motivations as we come in here. As Phillip mentioned, there are different profiles. Talk to us a little bit about those different profiles. You have retailers, you have brands, you have wholesalers. I think that each of those different constituents has different motivations. Talk to us a bit about those motivations.

Scott: [00:15:56] Starting with retailers... Their main motivation, I think, is that if you're selling the same stuff as your competitors, how do you differentiate? How do you compete? So within this topic, it's all around, "Well, is there a particular product that I can dominate in, whether it's because of something else I'm able to upsell?" So just service, which we'll cover later. Or if it's a particular category, et cetera, where you can obtain a low cost price, so then you can play with it otherwise. So I think the main motivation as a retailer from talking to them is just being interested to see how tech might be able to help them be better retail partners to their supplier brands and remain competitive whilst they do so. I think that for brands on the other side, it's kind of the reverse. So their brands get very excited about the direct to consumer shift because it looks like a upside. You know, direct relationships with consumers, you get closer to them, understand them, build better products, etc.. So by cutting out the middleman, you know, there's a goal of keeping margin there, which obviously is what everyone is hunting for. I think the reality and where this topic then comes back to the message is that it's so much harder than that. It's why retail channel partners and wholesale partners exist. So specifically on the topic of product development, it's the questions of how do brands leverage that additional consumer insight to actually bring it into their own product mix to make sure it's what the market wants? Because they're no longer able to rely on that middleman doing the translation. And then I think, you know, talking about the middlemen, wholesale are in the middle. So in many ways, they have the same challenges as the retail channel. You know, how do they still stay relevant to brands in the DTC world? But they don't have the advantage of that direct consumer relationship that retailers have. They can't do all the follow ons and such. So I think for them, the motivation and the question to be answered is, "So what role does technology play?" particularly in the supply chain, so they can keep their costs as tight as possible and eke out all those additional points of margin that they're all driven by.

Phillip: [00:18:14] And they're all sort of incentivised differently.

Scott: [00:18:17] Exactly.

Phillip: [00:18:18] In every channel that you're in you have different hurdles to clear. You have different points of margin you're trying to win. And sometimes, I've seen, in certain types of organizations, all of those channels are trying to win the same customer.

Scott: [00:18:36] Exactly.

Phillip: [00:18:36] And so they're conflicting with each other. And it's really difficult, especially when you're growing at a fast pace to figure out how you can work together instead of working against each other. And I find that really fascinating, too.

Brian: [00:18:48] I also think it's really interesting people are using assortment as a growth strategy. And so retailers are drawing on brands to provide them with more niche products, more variety, more options. And they're using it to capture customers that they would have missed out on otherwise.

Phillip: [00:19:13] I have a thought about this, which wasn't part of our notes. But I'll pontificate for a moment. I feel like for a company that creates products... They have a tool or a mechanism that they create consumer goods or products. That is their way of having a logical reason to bother a customer. But in reality, the new evolution of brand, the next phase of growth is we don't need to launch a product to have a legitimate reason to bother you to pay attention to us again. We are creating very engaging content or other branded sort of activity that exists outside of the product interaction itself and the purchase decision itself. So you see a lot of brands are creating... If you're a cookware brand, you might be posting recipes. If you're a health and wellness brand, you might be posting, you know, how you use your product in conjunction with lifestyle, like as a cyclist or a runner or yoga. And I think that these are new approaches and sort of fresh takes on becoming way too diversified as a business and have to compete against a bunch of different categories. I'm not sure, Scott, if that's something that sort of resonates with your customer and one of the challenges you see, or if that's a trend that you're tracking at the moment.

Scott: [00:20:32] It is. Yeah, I would agree. So I think that that's a tactic that a lot of merchants are deploying. I'm trying to think about a funny term for it. But, you know, just having dominance within the catalog, so they can capitalize on upsell opportunities or what makes them unique is that they stock the whole range from these five people as opposed to going to them direct. And I think that from a product sourcing point of view, that's one tactic. And then you kind of pay for that later. So the operational efficiency of that wide catalog is obviously 5x a simpler, more defined catalog, you know, such as the inventory management piece, supply chain, etc.. A lot of people doing drop shopping is a good way to experiment in this area. That comes at the financial premium of paying someone else for the delivery service, as well as the inherent risk of you not being the company that delivered it to the front door. So I think that that is certainly one tactic that many businesses deploy. And I think it's just paid for somewhere else.

Brian: [00:21:39] I think another interesting strategy that's cropping up here, and again, this isn't in our notes. This is fun. But the idea of collabs. Collabs are our new way to introduce new products in a various sort of low risk way. And so people are adding to their catalog simply by partnering up with another brand that's tangential to what they do. I think that's really cool.

Scott: [00:22:05] Yeah, definitely. And the hope there is that you see differentiation, right? So rather than just, you know, you and I can have competing businesses that are identical all but our logo and a slight price competitiveness. So, you know, to the consumer's point of view, that just means that there's two places for them to potentially get this one product. But it's not really anything unique about us. Whereas if we were collaborating, as you say, then it might be that you're going to two brands together to think about this new product that you can get from both of us at the same time. So I think that that's more interesting from a marketing point of view.

Brian: [00:22:45] Kind of back to Phillip's idea that content is just as important as assortment. It's almost like content actually creates assortment because you're adding to the value of your product.

Phillip: [00:22:56] Yeah.

Brian: [00:22:56] You're differentiating it. I think that's really interesting.

Phillip: [00:22:59] I find it's really difficult. Like I want this to be an evergreen series, but there's a lot of things that are happening right now as we're recording this that really sort of exemplify the world of creating an audience first and then selling products to them. We've had some shows on Future Commerce recently where we talked about celebrities who launch consumer goods brands. And I find that to be... It's not new necessarily, but the way that it's being done is it's not just on the back of the movie celebrity or performer, singer, songwriter type celebrity anymore. We have people that are content generators at heart, you know, bloggers who are turning into billion dollar retail powerhouses.

Brian: [00:23:48] Marie Kondo.

Phillip: [00:23:48] And that's yeah. And I mean, I was trying not to say that or to pin it at a moment in time. But I do think that we have a moment right now where anyone who can amass some sort of an audience around any niche topic does have an opportunity to create a brand that has the ability to sell products, whether that's a broad marketplace or in a very niche industry. And I think that that's... If you have the right tools, you can stay lean and become very, very successful. And, you know, Kylie Jenner just sold for six hundred million to Coty at a 1.2 billion dollar valuation. And I think that that sort of exemplifies this, the world of lean team, right technology, right moment in time, massive audience that's paying attention can lead to massive success.

Scott: [00:24:45] So I've recently had the experience of seeing that completely at the other end of the scale as well, which is like business validation points. So a friend of mine, I'm not going to name drop because then she'll know that her husband let her business idea slip.

Phillip: [00:24:59] Sure.

Scott: [00:24:59] So she is effectively creating a subscription business around some household items. It's probably as vague as I can be, but anyway. So in talking to, you know, I was just having lunch with them and saying, "OK. So what are the specific products, etc. that are going to be in this box?" "Nah, we'll figure that stuff out later." Their entire work right now is all around almost, you know, nurturing and creating relationships with influencers on Instagram and stuff like that. It's all just around testing to see, is there a market here for us before we even think about the ranging? So, yeah, to your point, I think that just seeing all this... Seeing the content as a key way of maximizing the market, I think that there's also validation of market, too.

Brian: [00:25:47] Definitely.

Phillip: [00:25:48] A hundred percent.

Brian: [00:25:49] Alright let's move on to the next one, which is order fulfillment and sort of backend reordering... The full Brightpearl process, if you will.

Scott: [00:26:00] Yeah.

Brian: [00:26:00] So obviously I can think of why this is important, but Scott, talk to us about why this is important.

Scott: [00:26:10] I'm going out of my way to be as unbiased as possible. So it's all good. So, yeah. Why is this important? It's obviously close to the heart. The two main reasons we think it's important... First of all, it's just the age old point of efficiency. So the more efficient someone at managing and shipping their orders, the less money they have to spend on inefficiencies there. You know, if they're able to use technology to do something that otherwise would be a manual process, there are just immediate gains to be had there. In all means of the word monetary time. You know how paranoid somebody is, etc.. But I think to take it away from that with the cost of acquisition continuously going up, there's just this growing emphasis on increasing the customer lifetime value. Another key KPI is the repeat purchase rates. So a point a validation for that last piece, we know from some joint research with Trustpilot, the company, over 70% of issues that drive negative reviews and therefore negatively affect those guys are caused by issues related to the back office. So not shipping something on time, shipping the wrong thing, etc. So I think why is this important to a merchant? They need to make sure they can deliver on their promises. So, you know, for everything that we said, whether it's content, whether it's marketing, etc., you're not competitive unless you're offering very fast delivery times very competitively, you know, often free shipping, all of that kind of stuff. You need to be equipped on the backend to live up to your word. So a customer went through your checkout because of these promises that you made as well as the product. You need to make sure that you can live up to them basically, and you don't slip up.

Phillip: [00:27:57] Could we talk a little bit about the customer acquisition side and how customer acquisition and tech is sort of evolving in the space to try to capture customers both that are net new and those who are looking to repurchase again?

Scott: [00:28:13] Yeah, of course. I think the main challenge area here is cost, for this particular topic. So the cost of acquisition. So it's only going up and it's only going to keep going up. So in the last five years, it's doubled. So while this should drive merchants towards thinking about lifetime value and repeat purchases, as I said before, it also means that they have to continue to be efficient and effective. So I think what it boils down to is once traffic hits the eCommerce site and the conversion journey, it just has to be spot on. So that means, you know, we covered it already, authentic messaging and branding, everything that's built to maximize the average order value and the basket size through branding. And, of course, zero friction that has to be there. So I think that it's just exciting. I think that this is probably the main topic where there's just saturation. You know, if we talked about the experience of walking into an event hall, you see all these names and they're doing something with the word "cart."

Phillip: [00:29:18] Yeah.

Scott: [00:29:18] You know, there's something in there about conversion or something like that. And even myself, who, you know, I spend all my time in this area. I look around all of those like I don't really know what they're doing. And therefore, I don't know how valuable it is. So, you know, if you're a merchant, how do you answer this question? So I think that's the main reason that this was a really important topic for us, is because it's kind of the opposite to our first topic where actually there's everyone's doing something here. So as the merchant, how do you figure out what's actually going to deliver a return, what's not just a fad?

Brian: [00:29:51] This is huge because it's such a challenge point for merchants right now. And this is one of the largest areas where retail is evolving. What do you see ahead right now? You know, as the cost of acquisition goes up, we're seeing new social channels emerge and new ways to reach out to customers. We're seeing the emergence of video. You know, there's just so many ways to acquire customers right now. What do you see as the evolution of this space right now, Scott?

Scott: [00:30:23] I think part of it is a bit unknown, hence the research. I think from my side ad management is certainly coming in. I mean, there's the big elephant in the room that I didn't mention, of course, is Amazon. Right? So you need an Amazon strategy as a merchant, whether that's because you're selling on there and how much do you want to go all in versus just your advertising strategy, probably including Amazon PPC. The fact that they have more product searches on Amazon, specifically product searches, than Google cannot be ignored. So I think ad management platforms are somewhere that's interesting to look at because again, that's previously sort of been seen as a bit of a dark art or you hire in someone to do it specifically as opposed to how can technology help me here? And then I think further to our first topic, it's around merchandising, the conversion of that merchandising. So how best to organize products and product content to optimize the conversion and therefore the effectiveness of my site.

Brian: [00:31:30] Conversion is such a huge topic all on its own. I'm excited to talk about this one with the merchants ahead on the series. And it's something that's you know, it's almost it's own discipline, as we look at our customer acquisition.

Phillip: [00:31:48] Yeah.

Brian: [00:31:49] It's getting the traffic to the site and then actually turning that traffic into your own customers. And then what does that even mean to turn someone into a customer? You mentioned Amazon. Like, is that actual customer acquisition? I think that's a big question ahead.

Scott: [00:32:07] Yeah, I completely agree. I think that it's a term that you can ask five merchants, and you'll get five different definitions back. And Amazon will play a part in the majority or perhaps... So I think post conversion is just huge. And I think from the technology point of view, you know, as I said, that's where there seems to be the most saturated sort of market in the list of vendors that are sort of saying how positively that affect it. I'm sure they all are. But as a merchant, how do you navigate that? How do you actually go shopping for something that works for your business?

Phillip: [00:32:44] Yeah. And, you know, we've heard a lot of criticism of agency selection or even putting out RFPs for selecting automation platforms, and it certainly can be very daunting. And you probably can't do any of it without really, really good data to make sure that what you're doing is moving the needle in some way and is effective for your business. So on that topic, I know analysis and business intelligence and forecasting are critical to a business. But what could a Brightpearl customer or someone in your world who is in this space, what could they lend to this conversation? Why talk about this and why is this important?

Scott: [00:33:36] Yes. I think well, obviously, everyone wants to know how well they're doing. So they need some sort of decisions for whether that's completely in a manual, whether there is technology being employed, etc.. So I think the why is this important for this conversation? I think it's understanding two things. I think the first is what do I need to ask myself? So what do I need to ask my data, rather. I've got all of this being presented back to me, those technologies that make data very visible, very appealing, etc. But what question am I actually answering with this stuff? If I got a chart that's all in the red, what do I need to stop doing or what I need to start doing? So I think there's a merchant mindset of how do I interpret the data points, the tools that these give me? And I think secondly, and which I probably should have started with, a major problem that merchants see in this space, and I think that buyers need to be aware of, is just the completeness or the quality of data. So, you know, without great data, without a complete picture, they're only getting half a story. And therefore, you know, any decisions you make off of that are only sort of half informed. So super important metrics in retail...average order value, cost of acquisition, a key one mentioned earlier that the customer lifetime value... Those cannot just simply be derived from reports that only look at sales. You need to go further. You need to look at the financial data of the business. So I think why this is an important topic within this conversation is as a merchant, what do I need to think about, what successes, etc. have other people seen when it comes round to selecting a reporting vendor, business intelligence vendor? Because there're so many traps to fall into.

Brian: [00:35:34] Yeah, that's a really good point. You get a lot of merchants that are even, you know, they're not to the point of being able to select a business intelligence vendor, and they're running some crazy Excel spreadsheets. I've seen some pretty interesting things out there. And they're looking at things like Tableau or some other like big BI tool, and they're looking at an empty shell that they've got to fill, and they've got to get trained on it. They've got to know how to connect it, and they've got to do all this stuff. And there are some really interesting in-between tools out there. But I think you've got a really good point. Data is siloed, and it's sitting out there in these siloed lakes. And there's gotta be a way to bring those things together, so I think I'm very excited to talk to a merchant about this subject as well. You mentioned something that I think is another topic that we'll be bringing to the table. And it's one that I'm very passionate about, and that is the post-purchase process. How do you increase the lifetime value of a customer? How do you manage your returns? How do you manage your customer service? How do you make a customer feel like more than just a ticket? And so talk to us about why you see this as important. And you know what you see is some of the challenges here.

Scott: [00:36:57] Absolutely. I think, again, it's age old... The whole... I'll stay on the conservative side and say that it costs five times more to attract a new customer than keeping an existing one to come back and do those repeat purchases. So I think why is this important? Because out of the box a merchant is more focused on acquisition than retention, which is just crazy. So we need to shift that focus because of how successful someone can then be within their business. So I think, you know, the reality is, is that you really have to be focused on everything. So you do have to think about acquisition, then you have to pay attention to retention. As we say at the moment, retention sort of falls by the sidelines. So retaining customers needs to be a huge part of a merchant's strategy. And I think that's where, again, technology, as we covered, is saturated all on the frontend. Here's how you immediately convert someone. But perhaps there is a little bit less emphasis on the repeat purchase. So I think that the challenge areas here are perhaps a summary of the previous four. Where it's, you know, how do I execute everything? So I got them in first place. That's fine. But how do I execute such a great experience for that consumer that I then get them back four more times? So all of the operational sort of side of things is of course there for living up to the promise, as we said. Review technologies as well. You know, the power of positive reviews. But, you know, very importantly, the detrimental effect of negative reviews. So trip up somewhere so much so that someone needs negative review that's going to be seen by potentially millions of future customers. And then the obvious negative effects that that has. So I think that it's just that that's why it's so important. It's being able to see how technology can help you focus on retention and future purchase, whether it's, you know, related products, a service upsell, whatever happens to be relevant... I think that is just interesting to see how technology can help someone focus on the second and beyond sale.

Brian: [00:39:10] Yeah, I would agree. I think it's a super powerful. And I think the beauty of technology right now is that we're starting to see the emergence of technologies that allow you to take your sort of different channels and create a consistent conversation across them, which I think has been a huge struggle previously. So it's super exciting to see technologies like this emerge that allow you to have a more natural flow of conversation with those customers and a focus on that. And like you said, it's so much easier to work with an existing customer and get a repeat sale than it is to go get a new one. Looking ahead to see how customer service teams are used to being more than just, "Did I satisfy your need that you called about?" but like become an actual tool to help people find more things that they're going to enjoy and sort of be that personal touch sales side. That's such a huge opportunity for businesses right now, for merchants right now.

Scott: [00:40:27] I think you've nailed it with the word "sales." I think that support teams are now revenue teams.

Brian: [00:40:34] Yes.

Phillip: [00:40:34] {laughter} Yup.

Scott: [00:40:34] So there are sales teams that, as much as they'd probably all hang up on me at that sentence, that is the reality. And especially in the industries that we're talking about. So yeah, the post-sale support, whether it be a phone call around, you know, "How can I return this?" or actually "Where is my order?" et cetera, that experience has a huge impact on the consequent things. I think as you were terming it a conversation, I think that's a great way to look at it. So, you know, I hypothesize that merchants are spending way too much attention looking at the technologies that can help them start the conversation, which is, of course, important, but the conversation doesn't end there. Where does the conversation continue to go? So the questions that are asked then and then, you know, the next time you see that person, what happens? So I think yeah, I think that there's huge opportunities for people to benefit here.

Phillip: [00:41:34] There was a whole subplot of The Office in a later season, in the U.S. version of The Office, which is...

Scott: [00:41:40] Your version is so much better.

Phillip: [00:41:43] {laugher} You can't say that to some people, though.

Scott: [00:41:46] No, I know.

Phillip: [00:41:46] They very vehemently sort of disagree with that. But in a later season of The Office, there is a whole subplot of one of the characters getting a promotion from turning delivery drivers into sales people and having products on the truck that are just ready to sell. And they're ready to go right there because customers couldn't amend an order after it had already been placed. And I find that little nuances like that that do translate to real success in business even come out in popular media. And they seem sort of like no brainer initiatives that should be enabled in an organization. But in many cases, you just can't do it because you're limited by the technology. You're limited by the tech stack. And I find that if we can overcome that, businesses will be able to meet the demands of their customers. And that's what I'm so excited about the next few episodes here of this series and how we can have real life retailers talk about how they're driving this in their own businesses. And I think that's what's most valuable here. Any last thoughts for us, Scott? Any any hopes or dreams or fears? {laughter} Anything that you're hoping to get out of these next four or five episodes ahead of us?

Scott: [00:43:07] I think I'm super excited to just hear the rural response to the question, how is someone gone through these various topics? What went through their head, you know, especially on that last one, which is so integral to upselling and the future conversation with that customer. I think in summary, the tech stock for retail project is designed to be nothing to do with vendor selection. It's all just about surfacing the information for each topic on how to use all of the information to make faster, better decisions. So it's all about knowing when to invest in something, evaluating all the different solutions out there and navigating the lists, navigating the huge imposing banners at events... So we've developed this series, all of the research, all of our customer interviews, and any content you can find through Brightpearl.com is all around helping people navigate the topic as opposed to just giving them the answers.

Brian: [00:44:08] So excited. Well, thank you so much for coming on the show, Scott. And we look forward to the rest of the series.

Scott: [00:44:14] Yeah. Me, too. Thanks for having me.

Phillip: [00:44:15] Thank you. And thanks to Brightpearl for making this series possible. We want to hear from you. The best way you can do that, you can lend your voice to this conversation, and any episode that we have, over at our web site and that's FutureCommerce.fm and drop us a line. Let us know how you are implementing change in your business and what your tech stack looks like. And you can do that by sending us an email at hello@FutureCommerce.fm Thanks for listening. And remember, Future Commerce exists to give you insights to shape your future.