Main Takeaways:

  • Grant Van Kirk, the Head of Finance at ROKA, joins Brian and Phillip in this episode of Step by Step.
  • A single, all-encompassing tech solution is not always the best choice for your business and diversifying your tech stack can minimize integration demands.
  • How do you decide when it is time to add a piece of software to your tech stack?
  • Fulfillment expectations are higher than ever, but streamlining your operations can meet these demands and boost customer lifetime value.

The ROKA Story: A Quick Overview:

  • ROKA started in 2013 when two former Stanford swimmers entered a triathlon to get back into shape but were disappointed with the options of gear available to them.
  • They invented a wetsuit that didn't feel or perform like a traditional wetsuit and quickly became a staple in the triathlon community.
  • The brand has expanded beyond just being triathlon gear and is now available for a large spectrum of sports.
  • Triathalon gear is typically expensive so the average customer tends to be older and more affluent than other fitness consumers.

Some Background on Grant: The Journey So Far:

  • Grant started out as a tax CPA and after a while decided that he wanted more from his career.
  • He then went into the real estate industry in Dallas but had no company growth potential at his company, so he wanted to find somewhere that would allow him to grow and present him with more professional challenges.
  • His search eventually led him to find ROKA where he was attracted to the infinite professional runway that came with the young, growing brand.
  • Going beyond the responsibilities of a typical Head of Finance, Grant is additionally very involved with the operations side of ROKA.

An Evolving Position: Changing With the Times:

  • How are senior finance roles evolving in the realm of retail?
  • It is important to not only be an expert in what your position is but also to be knowledgeable about other positions within your company.
  • You won't be able to fully understand if your financials are correct unless you understand all of the systems that are supporting them.
  • From day one, Grant had to make sure that he was heavily involved in operations and logistics to make sure that the finances where correct and to be able to identify areas in which the company wasn't spending enough or could increase its expenditures.

Decoding the Attribution Model: From a Financial Perspective:

  • Different platforms will highlight different numbers to present brands with the most positive spin on attribution costs.
  • How do you translate different attribution data across disparate platforms?
  • Aggregating your data across platforms for comparison will allow you to correctly assess if a marketing tool is effective.
  • Once you have attracted customers to your site, the next steps are equally important to convert those visitors into customers.

Looking Under the Hood: Breaking Down ROKA's Tech Stack:

  • For its eCommerce platform, ROKA is currently running on Shopify Plus and pretty much everything that the consumer sees is also run through the platform.
  • To accommodate more features, ROKA is also using several custom modules such as a module that allows customers to design their own sunglasses.
  • After the purchase, all data is fed through ROKA's ERP (Enterprise Resource Planning) Brightpearl and from there is sent to one of three 3PLs (third party logistics) that ROKA divides its orders between.
  • For international orders, ROKA uses Shopify to provide local currency sales, but this can be a big headache because of how much manual effort is required to keep things updated.

Scaling With Growth: Selecting the Right ERP for Your Business:

  • ROKA started with Quickbooks for its initial ERP, quickly jumped to NetSuite, and finally settled on Brightpearl because it is a retail-specific ERP.
  • Brightpearl is the source of truth when it comes to data collection for ROKA.
  • ROKA has adopted the stance of not trying to have one package that does everything but rather relies on individual software options that are the best in their category for various operations.
  • Spending the time customizing an all-in-one solution can be better spent on other aspects of your business when separate software already performs at optimum levels with less customization.

Potential Challenges of a Diversified Tech Stack: Trials and Solutions:

  • One of the potential challenges of using several software solutions when building a tech stack is the inevitable task of integration.
  • ROKA has two rules when it comes to integration:
  • 1. Don't integrate if you do not have to.
  • 2. Your ERP has to be your source of truth.
  • After a customer makes a purchase, the information goes straight to the ERP for processing and that customer is also enrolled in the follow-up process.
  • ROKA uses about 10-15 pieces of software in its tech stack.
  • What are some best practices for automating your operations post-purchase?

Digging Deeper: Other Parts of the Tech Stack:

  • How do you know when to add a piece of software to your tech stack?
  • Due to customers being shocked about duty charges, ROKA had to implement a way to get cash upfront on purchases to not take a total loss when the package was not returned.
  • One of Shopify's pain points is managing exchanges and returns, so granting your customers the ease of returning products is a powerful way to boost customer lifetime value, which ROKA manages to do using Loop Returns.
  • Tools can not only serve the purpose they're built for but can also boost your customer acquisition by giving your consumers a positive experience.

Looking Ahead: Identifying Opportunites:

  • Grant highlights that there is an area for improvement in the software that ROKA's customer experience team has to use.
  • The nature of returns and customer experience are two parts of the same coin, so in contrast to the rest of their tech stack, the customer experience software could be consolidated.
  • Customer experience is a difficult job that presents unique challenges separate from the rest of the tech stack.
  • What are some ways that you could improve your tech stack to benefit your customer experience team?
  • Raised fulfillment expectations set by Amazon are making it more difficult to meet the demands of consumers.

Spreading Thing: So Many Channels, So Little Time:

  • There are different channels that consumers visit first when it comes to discovery, purchase, or entertainment, so how do you diversify your marketing strategies for such different platforms?
  • Most people go to Amazon first when it's time to shop so if you are not at the top of Amazon's search, it is going to be hard to get there.
  • You need to have a social presence and there is a lot of pressure to not just be on social, but have many more touchpoints for your brand.
  • Amazon intentionally makes it difficult to track customers, so it's hard to see what is actually your customer that is just purchasing through Amazon.

Brands Mentioned in this Episode:

As always: We want to hear what our listeners think! What are some ways that you can improve your tech stack by diversifying the tools that you are currently using?

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!

Retail Tech is moving fast, but Future Commerce is moving faster.

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 Episode 4 of 5. If you're just jumping into the series midway through, I suggest that you go back and listen from the very beginning. And this season is all about building out a tech stack. That's right. We're getting into the weeds to teach you how to build a technology stack that drives a high growth eCommerce brand. If you're in leadership at a high growth retail brand, and you find yourself struggling to make decisions about choosing technologies and platforms to run your business, well, you're not alone. And on this season of Step by Step, we have retail experts and leaders who are operators at brands just like you who have already solved these challenges. CIOs, CTOs, CMOs and CFOs, no matter who you are or what role you're in, you're faced with building out a tech stack that allows your business to grow and meet the needs of your customer. Joining us today on the show is Grant Van Kirk, who is the Director of Finance at ROKA. People in finance have very particular needs when it comes to adopting technology. And let's just face it, your run of the mill eCommerce platform isn't going to cut it and you're run of the mill ERP platform probably does a disservice to all of the accounting needs and the modern choice of technology that exists in an accounting organization. So I was really impressed to hear from Grant and how he goes about choosing technology and how they stitch technology together so that they can provide best in class pieces of technology to each area of the business. ROKA is also one of those rare sports brands that I happen to be intimately familiar with and depend on myself as an athlete, and I'm very excited to have a company like them featured on the show. So sit back and relax as Grant Van Kirk from ROKA Sports teaches us everything we need to know about building a tech stack, step by step.

Phillip: [00:01:55] Hello and welcome to Future Commerce, a podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:02:00] And I'm Brian. And today we have a very exciting guest for our show, Grant Van Kirk, Head of Finance at ROKA. Welcome, Grant.

Grant: [00:02:09] Hi, how are you?

Brian: [00:02:10] Good, good. How are you doing? Welcome to the show. So happy to have you.

Grant: [00:02:13] I'm doing great. Thank you. I'm happy to be here.

Phillip: [00:02:17] Where in the world are you? Where are you based?

Grant: [00:02:19] I am based in Austin, Texas.

Phillip: [00:02:21] All right.

Brian: [00:02:22] Good old Austin.

Phillip: [00:02:24] Wow. See, there're sometimes... So I'm in Palm Beach, and the two of you... Brian is in Seattle. You're in Austin. Both of those have a lot of tech in those cities. And it's hard to hire a tech in Palm Beach.

Grant: [00:02:37] A little bit.

Phillip: [00:02:38] If I wanted like a World-Class financier, you know, or a socialite, I have people right across the right the street I can go hire.

Brian: [00:02:49] You can hire a socialite. {laughter}

Phillip: [00:02:50] You guys are in the thick of it. If I want to throw a cocktail party or a champagne hour, I've got the right people.

Brian: [00:02:58] Or a retirement party.

Phillip: [00:03:00] Yeah definitely. The retirement party happens in the northeast and then they come down here.

Brian: [00:03:04] Oh that's true. That's true.

Phillip: [00:03:06] Grant, tell us a little bit about ROKA as a brand for those who may not be familiar.

Grant: [00:03:09] Sure. So ROKA started in 2013 in the triathalon space. Short story is two former Stanford swimmers did a triathlon to get back in shape and they didn't actually train as hard as they should. So they bought all the gear they could to try to make up for their lack of fitness and were very frustrated with the wetsuit options the market currently had. One was a market agency CEO, and the other one was a product developer and actually currently a securities and exchange lawyer. So they kind of had the right skill set to go build a new wetsuit and kind of created the first of its kind wetsuit that doesn't feel like you're swimming in a suit jacket and quickly kind of just invaded the triathlon space and became the global Ironman sponsor. And we have several World-Class triathlon champions and Olympic gold medalists. And we've expanded from there to kind of all performance sports. So triathlon's at a very unique crossroads of cycling and run and swimming. And it gives you a very great reason to expand into all sort of challenging athletic endeavors. So we have MMA fighters, we have cyclists, we have a world-class kayaker... We're out to conquer and to help people face whatever their challenge is.

Brian: [00:04:38] That's so cool.

Phillip: [00:04:39] That is cool. That's actually how I knew the brand, too. We were talking preshow about this because I've done a triathlon here and there, and that's how I understand ROKA to be. Also interesting about the triathlon space is you tend to come across, you know, affluent individuals who are willing to buy quality.

Grant: [00:04:56] It's an expensive sport. Yes.

Phillip: [00:04:58] It is. Yeah. And does that, just as an aside, as the brand expands are you finding that you're expanding your product line and making it more accessible over time as well?

Grant: [00:05:09] So are our first products, the wetsuits, those range anywhere from $350 to $950, which, you know, may sound crazy if you're not in the space, but those same people will go buy a $10,000 bike and not feel bad about it in the slightest.

Phillip: [00:05:25] Yup.

Brian: [00:05:25] Right.

Grant: [00:05:25] It might save them five minutes on their race, and that's a huge deal. And when you're going to spend two hours in the water, you want to make sure you you can swim well. So, yeah, they tend to be older, more affluent. And that definitely helps things like your AOV and your LTV. And it's a really nice place to start as a brand. As we've kind of tried to open up to more people and more lifestyles. Absolutely. We've got to come down on a lower price point. So one of our biggest categories right now are sunglasses. We made sure they start below $100. Now you can go up and get nicer ones. But we also want to make sure we appeal to a broader audience on the price point.

Brian: [00:06:07] Interesting category expansion. We were just talking earlier with ZLINE about category expansion, and how they've used it as sort of a customer acquisition strategy and they've grown their business that way. I think it's huge. Tell us a little bit about yourself, Grant. How did you end up at ROKA, and in your specific role at ROKA, no less?

Grant: [00:06:30] Sure. So I actually started out as a tax CPA and I worked for KPMG. Had a great time there, really liked KPMG, but eventually decided I wanted to be more than just a tax CPA. And so I went on. I was in Dallas at the time and anybody who's anybody does real estate in Dallas. So I went into real estate for several years, really enjoyed working there and got to really figure out how to run a well managed accounting and finance department. But I kind of took over the tax department, the accounting department and the finance department. But I was reporting to this very young CFO who was not planning on leaving anytime soon. And the company was a boutique firm, which was great if you were a partner, but it also meant they had no desire to ever get bigger. So I didn't have any company growth to expand to. I didn't have any upward growth to expand to. I was trying to find somewhere where I could continue to grow and take on more work and more challenges and found ROKA, and they needed a new head of finance. And I was very attracted by the basically infinite runway of a young growing brand. And it has been a wild ride ever since.

Brian: [00:07:45] So cool. And it's very interesting because you're also very involved in the operations side of ROKA. Talk to us a little bit about, you know, how you see that the role of the head of finance evolving right now in the world of brand and retail.

Grant: [00:08:05] Sure. So one of the things everybody says about a small company that's kind of cliche in the interview is to say everybody has to wear a lot of hats. And while we've grown a lot since I joined in 2016. At the beginning, you really had to know both what you did and what other people did. And as I got into it, I noticed something wouldn't look right on my financial statement or my margin would suddenly move and I would need to go investigate why. And you can't really do that. And you can't really understand if your statements are right unless you also understand all of the systems below them that feed your ERP. So basically from day one, I had to start getting involved in the logistics and are we receiving inventory in the right way that makes sure COGS later, six months down the road gets reported correctly? Or are we shipping stuff the right method and booking that in the system? Are the POs written correctly? A lot of things that logistics, for instance, wouldn't normally be under the finance role. I think you've got to understand and know if you want to actually do your job well as making sure the finances are right. And you know where either the company is spending too much money or where it's not spending enough money.

Brian: [00:09:22] That's really interesting.

Phillip: [00:09:26] Yeah. So in this world right now, as you're growing a brand, right? You're attracting new customers. You're doing things to expand category. One of the topics of conversation has been attracting customers costs money now. It's always cost money. It costs more money now, I think, than it used to.

Grant: [00:09:50] Right.

Phillip: [00:09:50] And retaining them, too, costs quite a bit of money. And not for nothing, the tool kit that you use to put all of that into action and just to get them onto the site and then, you know, to purchase from you, that all costs money, too. Talk to us a little bit about how you, in finance, approach those sorts of things. We've had guests on the show in the past that have said things like budgets are for CFOs, but marketers, if you've got a return on ad spending, you have a positive return on ad spend, why wouldn't you shop as much money into that funnel as you could?

Grant: [00:10:26] Well, honestly I don't think they're wrong on the second part, but I think the CFO part is to make sure they actually are getting the return on ad spend that they think they are and that they actually get as good of customers. Every system you use is going to report some rosy number on how well they're getting in new customers. And the real trick, everybody's secret sauce, is whether or not the attribution models, whether or not they're actually getting the customer set that CAC.

Phillip: [00:10:53] And how do you hold that accountable in the organization? What kind of tools are you using to make sure that those numbers are vetting?

Grant: [00:11:02] Sure. So we kind of take a let's put everything in the funnel, and not the marketing funnel, but in the CAC funnel and try to figure out some sort of equal ground. So we'll take the Google Analytics report and we won't ignore, for instance, the Facebook report. We're well aware that our numbers that present very well for Facebook. And Google has numbers that present very well for paid search and for their display ads. At the same time, we try to layer in other things, such as a post-purchase survey that we put on every purchase. We do a sessions count based on when things go live. So we did a serious ad run over the summer and they gave me post logs, and you know the exact minute that it went live. And you can really test down to the minute on Google Analytics. Did I see a traffic bump? We try to take as many different sources as we can and try to come up with our own truth on how accurate we think or how effective a marketing tool is.

Phillip: [00:12:06] So once you've attracted traffic and once it's on the web site, you know, that's the sort of moment where you've attracted the moth to the flame. That piece of the tool kit is very important. You've got them on the site. What eCommerce platform are you using today and what role is that playing for you and your organization and telling the story of your brand?

Grant: [00:12:32] We use Shopify. We're on Shopify Plus, I think like most young brands our age. And I mean, it's everything the consumer sees basically is running through Shopify. We have a lot of custom stuff on our end. There's I think as every company gets bigger, they realize there's certain things you can't do, like we have a whole custom module for building your own sunglass and we have a whole Rx module, so that you can put it in your prescription for your eyewear, be it, you know, just regular readers or something more advanced like a progressive lens. But all of it is ultimately running through Shopify.

Brian: [00:13:11] And then where's that data feed to after the purchase?

Grant: [00:13:18] Sure. So on the actual items, we're feeding all that first through a middleware to our our ERP, Brightpearl. And then from there it goes down to whatever 3PL we're using. We have two places in the US and another place in Europe that we divide our orders up between.

Brian: [00:13:36] You mentioned Europe. So you're using Shopify Plus internationally, as well?

Grant: [00:13:43] We are, yes. We use it to provide local currency sales for the EU and British pound.

Phillip: [00:13:51] How does the management of all of those different geos work for you in Shopify? I imagine that takes quite a bit of manual effort. {laughter} How do I say that nicely?

Grant: [00:14:03] Yeah, it's definitely a pain in the butt. You'll notice if you follow our two websites closely that there is a big lag between something getting updated on our international website at times and our US website. They're also they're not the same markets. Like a message that works in the US may not resonate in the UK. They do speak the same language, but they're not the same customer. And trying to manage both is really like trying to manage two business units entirely.

Brian: [00:14:33] I would imagine your ERP plays a big part in that in helping manage that. At least after after purchase process. Given that you're using Shopify internationally and in multiple regions, what did you consider when you were making the purchase? Did you have your ERP already picked out before you picked Shopify? Or was that afterwards? How did that work out?

Grant: [00:15:00] We started in QuickBooks when we were really small and then kind of quickly jumped to Netsuite to try to get bigger. But after that, we've adopted a tech model of we're gonna try to find the best piece of software that does the specific purpose we need. So we ended up with a ton of different softwares, which I'm actually okay with, and I like it. So we moved off of Netsuite onto Brightpearl because it is a retail specific ERP. And we only use it for the ERP. So it is the source of truth. But we use something different for business analytics. We use something different for customer, for our CRM. We don't try to have one package that does everything. We want to find the one package that does each thing very well and take it just a best in class to each piece.

Phillip: [00:15:50] That sounds so different to what the common knowledge might have been, you know, 10 years ago, which is find one monolithic platform that can do it all and everybody will be equally miserable across the organization. Now you're successful. Right?

Grant: [00:16:07] Yeah, I think that's probably absolutely true. You can find the monolithic one. That was the old school way. And you spend a ton of time trying to make it custom to do all the things that you need it to do for your specific business, or you can kind of take the small pieces. So we have an app that does returns. We use a different app for customer experience team and we use a different app for our loyalty program and reviews. And then there's, you know, all of those are feeding into Shopify and that feeds into our ERP. And we're trying to really just focus on having something that does that one task well, because, you know, if you were using Yotpo five years ago or four years ago, it was a totally different platform than it is now.

Phillip: [00:16:56] Totally different platform. Right.

Grant: [00:16:58] Right. And so each of these platforms is evolving way quicker than one single monolithic thing could evolve. And if you're going to stick with that monolithic thing, you're going to fall behind on the best way to do customer loyalty or referrals or any new, the Pop-Up module or whatever eCommerce thing is at the time.

Brian: [00:17:18] Purpose-built solutions that are innovating in rare area of expertise and adding value in their area of expertise rather than a very broad... It's amazing. I love this option for building a system.

Phillip: [00:17:37] I mean, if you were to draw a comparison to, you know, the size or the scale of your business, there was a period in time, maybe not so long ago, 10 years ago, maybe fifteen, where you might have reached for SAP, right? You might have reached for a true enterprise business solution that you weren't ready to grow into yet and then suffered for lack of agility because your team just is bogged down under the weight of having to manage big, big, big ERP. What's your response to something like that? Like having entertained the larger packages in the past and then gone this direction, do you think that that makes you more nimble and more apt or prone to compete and make quick decisions?

Grant: [00:18:28] Yeah. No, absolutely it does. I've definitely looked at SAP. There's a lot of SAP options and I know a lot of companies are on it, probably enterprise level companies that are a little bit bigger than we are, but...

Phillip: [00:18:39] Sure.

Grant: [00:18:41] No, I very much value the adaptability. Everything in this company changes very quickly and the ability to quickly adjust a system or to add look at what, you know, this company is doing on their website. We really want to add that to ours and that experience for the customer to ours or, you know, we provide a home try on service for prescription glasses, so you can try to frame and know if you like it before you put in your prescription.

Brian: [00:19:08] So cool.

Grant: [00:19:08] That is not something that a big enterprise is interested in doing. That would be a very hard system to implement. If you've got a lot more middleware and backend software, you've got to manage around that.

Brian: [00:19:22] One thing that I could see as a potential challenge, you know, spreading around your technologies is you have a lot of integration that you have to do throughout the process. Talk to us a little bit about, you know, how that experience has been given the approach you've taken.

Grant: [00:19:38] So we have kind of two rules on that. One is kind of simple. We don't integrate it if it doesn't need to be. Our customer experience team, the software they deal with Zendesk is actually not generally plugged into our Brightpearl because it doesn't need to be. It works with Shopify instead. And the other rule on that, though, that we learned very quickly on is that your ERP absolutely has to be the source of truth. It is not Shopify. It is not even your 3PL. Although the 3PL probably has a great inventory count. Maybe you just need to push that through on your ERP, but you have to rely on the ERP to be the right number or at least whatever number all other systems are going to make their decisions off of.

Phillip: [00:20:26] If you're thinking about the, just kind of getting over to the customer journey and following the customer journey down the funnel... So they're on the site. They're interacting with Shopify in some geography. They're making a purchase. What happens after the purchase is made? How does that data inside the eCommerce platform get into a place where it can be actioned? And maybe you could take both the journey of like the accounting piece and the fulfillment piece.

Grant: [00:20:58] Okay. Sure. Well, the fulfillment piece is relatively straightforward. It goes straight from Shopify to our ERP. And at that point, anything we need to do to the order happens there. And what I mean by that is the obvious one of which warehouse to go to? But also the less obvious of do we need to put product insert on the order? On our custom sunglasses sometimes there are some pieces that need to get added that the customer doesn't even know about. We add those and make sure the order is right and then push it down to the 3PL to get fulfilled. From there, it kind of reverses itself back up the chain. It goes back from the 3PL as processed, to the ERP, then to Shopify, and then they get their email notification. And that's the kind of the basic fulfillment part. But then from there on, we look at the whole thing as one big continuous journey for the customer. So the follow up emails that are prompted for the review of the product 30 days later, or if a customer experience manager helped them with a purchase, follow up on that experience. How was it? Did you like what you got? Are you interested in other products? We kind of try to tailor the whole thing and think of the package and email flow as one thing. On the accounting side, I think it's also relatively straightforward. I mean, you pull it down from Shopify and then everything's got to happen in the ERP, and it's got to be right, too. You've got to have the right connection with the 3PL to know when it shipped so you can book the sale because obviously sales don't happen until it's shipped. So you can book the COGS and the cash receipt down from Shopify as well.

Brian: [00:22:48] Roughly how many pieces of software do you think you use to manage that whole process?

Grant: [00:22:53] Probably 10 to 15. I'd have to go and count them all.

Brian: [00:22:59] Totally. I wasn't looking for an exact number. {laughter}

Phillip: [00:23:02] No we'll wait. We can edit this... {laughter} We aim for accuracy on Future Commerce. That's such a small handful. {laughter}

Brian: [00:23:17] Tell us about some of those pieces of software. So you've got Shopify. You've got Brightpearl. What else are you using across this process? Are you using an ESP? Using a shipping calculation piece of software? What are some of those pieces of software and how did you know when you needed to add a piece of software to do something that you were probably doing manually prior?

Grant: [00:23:45] So I'll deal with kind of that question first. We added Zonos recently. Zonos is an app that allows us to calculate the duties and import taxes upfront on a purchase internationally. Now we do offer, you know, some local fulfillment in Europe, but we still had a ton of international orders. We're not the US Ironman sponsor, we're the global Ironman sponsor. And so there's a ton of shipments to Australia or even to China and Singapore. And, you know, we have South African customers or our Middle East customers. One problem we were having is it does not matter how clearly you stated that there will be a duty's charge when you receive the package, customers are going to be shocked at how much those duties are, and they're going to reject that package and want a refund. And oftentimes it's more expensive to try to get your product back than the product is actually worth. So you're shipping it to Kazakhstan. We actually had to ban Kazakhstan because this happened every time and the product gets there and you have to abandon it. And you spend a lot of money getting that there and you've lost the sale. So one of the things we had to do was alright we got to find a way to just charge him upfront and we'll pay for the duties and taxes. But we will have already collected the cash. Ad so it's kind of on them to to know upfront. And that I think has has really helped both our international sales and our success rates, so to speak, of them actually accepting the package.

Brian: [00:25:18] So cool.

Grant: [00:25:19] Another one. Another good one actually would be we have a returns app. And this one is, I think, something a lot of people struggle with on Shopify is how do you manage the exchange and returns? Because when you have a customer that wants to make a return and/or an exchange, they tend to actually be your most valuable lifetime customers. People who have good returns experience tend to buy a lot more. It's kind of a well-documented thing you can find. And so having an experience where it's really easy for them to make the return or to make the exchange or it prompts them to instead of just returning it and not getting a new one to, "Here's what else you can get. And here's the store credit to go buy," and makes it really easy to place that follow up order right away. It really helps you to go from losing a sale to replacing it.

Phillip: [00:26:11] Brian knows all about ease of return in that he recently discussed on a show that he bought five different mattresses from five different online vendors and then promptly returned all of them. So yeah.

Grant: [00:26:27] I'm sure that he does.

Phillip: [00:26:27] I hated him telling the story. So that should say something.

Brian: [00:26:31] I am the worst kind of customer.

Grant: [00:26:35] Yeah because those mattress firms don't even get the product back do they?

Phillip: [00:26:38] No, they don't.

Grant: [00:26:38] They have to donate it.

Brian: [00:26:39] Some of them do. Oh. Some of them do. {laughter}

Phillip: [00:26:41] I don't know what they do with it. Anyway, so in that vein, how are you handling return back? Is that a separate package of software that, you know, handles and brokers all of that?

Grant: [00:27:01] Yeah. So we still allow for a free returns, and we want it to be pick up on your doorstep so that you don't have to go drop it off somewhere because that can be a huge pain. I have kids. And if it weren't for the fact that, you know, we have FedEx and UPS delivering at our office, it would be almost impossible for me to get to the store between trying to manage personal and work life.

Brian: [00:27:29] I hear you there.

Grant: [00:27:29] So we try to make it really easy, and then, yes, we do have a software called Loop Returns that we use. You can do it on an app on your phone. We have a prepaid packing slip already in the package. You really don't have to do anything. It's as simple as possible. I saw there was a Bloomberg article just a couple days ago on companies moving away from fee returns because people have abused it, I guess. I don't think we're actually going to go anywhere close to that. I think we're going to continue with the free returns as long as possible. We do monitor for chronic return and returns. Like we found one guy that would order a new swim skin every race he went to and then just return it right back.

Phillip: [00:28:17] {laughter}

Grant: [00:28:17] He's not allowed to buy anymore. But for the most part, we let everybody return their product.

Phillip: [00:28:25] Don't give people ideas.

Grant: [00:28:28] We'll find them.

Brian: [00:28:30] Do you see some of these tools then as almost like customer acquisition opportunities as well? Like I see free returns absolutely as a strategy to at least retain customers, if not make someone feel more comfortable with the purchase.

Grant: [00:28:45] Yeah, I think it does both things. So we provide a lot of apparel and sunglasses, accessories... So that's really a fashion thing for a lot of people. Even if it's workout gear, it's still a fashion item for people. They want to look good in whatever they're wearing. No one wants to look ridiculous. And whatever it is, a wet suit or sunglasses. So having something where you can go online, you can buy it. But if you don't like it, you can definitely return it. Or if it doesn't fit right. Which is, you know, everybody's problem with apparel. You can go return it. It's super easy to return. I think that does lower the barrier significantly, and so it does provide a great customer acquisition role. And then on the customer retention role, yeah, if you have a bad return with the company, you're not going back to that company. But if you had a great experience and a great return with that company, we do find people continue to look and continue to try again. Just because the sunglass didn't look on their face quite the way they wanted, doesn't mean they don't want sunglass still, or just because the sizing was slightly off. That happens. They still want that product. It's just they thought they were medium and maybe they're large or vise versa.

Brian: [00:30:00] Yeah, I definitely find that to be true for myself. It's interesting. You know, you use these tools as ways to improve operational efficiency, but also, as customer acquisition and retention tools, on the back end even. What are some areas where you see some opportunity in your business right now, maybe some challenge areas or maybe some opportunities where you feel like you could be doing more for your customer or getting more efficient? Talk to us about some stuff that you're looking at ahead.

Grant: [00:30:37] Sure. So you mentioned even on the back some of the stuff that we look at as a customer tool. And I would say that's absolutely true. All of it is a customer tool. So on the front end, there's the customer experience software. There is the return software. There is the review software. And on the back end, there's, you know, stuff like making sure there's a product insert or a guide in the box. So it definitely covers the whole gambit. But where we really think there's an improvement opportunity, I would have to say, is in the software that our customer experience team has to use. And I think there's too many of them. This is going to counter what I said about having a best in class version. But I think this is a narrow enough scope. There should be one system that can do the returns and can do the customer management and pull up previous tickets that customers had, like Zendesk. Because those are essentially two sides of the same function. So I would say kind of with all the various software suites that our customer experience team has to use, I think they need to be consolidated. And I think that's happening. Yotpo recently bought S'well, which is a loyalty program. And I think that that industry is slowly working on it.

Phillip: [00:31:55] There was sort of a big public hubbub around people dissatisfied with their customer experience team who liked to complain to them publicly and in Slack about certain things.

Brian: [00:32:09] Ahem {cough}

Phillip: [00:32:09] Okay, fine. I'm talking about Away. You can certainly understand if that is the state of customer experience tools in the ecosystem, how you can arrive at a fragmented customer experience and maybe how you can arrive at frazzled CEOs under a lot of pressure.

Grant: [00:32:32] Yeah, absolutely. And then just customer experience teams... You're always on. It's a difficult job and it has its own challenges as well.

Brian: [00:32:41] Yeah, absolutely. Another thing I was thinking about recently is Amazon has reset customer expectations for so many things. But, you know, order fulfillment is clearly at the top of the list.

Grant: [00:32:54] Right.

Brian: [00:32:56] It's funny no one had really thought about using, or maybe not no one, but they recognized more than anyone, the value of operational efficiency as a customer acquisition tool and basically have completely reset customer expectations.

Phillip: [00:33:17] Yeah. For everybody.

Brian: [00:33:18] For everybody. For all businesses now. And so do you see fulfillment and what happens after the buy button as critical to your survival and growth and really success as a business?

Grant: [00:33:38] Yeah, of course, people want to have a good experience in receiving it, not just in placing the order. Kind of what really matters is what happens after the press the buy button. Yeah. And Amazon obviously with Two Day Prime... Almost every thing gets there in two days and a lot of times the next day. And if it doesn't get there you're like, man, I have to wait three whole days for this? This is ridiculous.

Phillip: [00:34:03] {laughter} Yeah.

Grant: [00:34:04] I think they value the experience as much as they also value making it really hard for anybody else to compete. You know, they're building their own fulfillment industry partially with the delivery part and taking over from FedEx. I think partially to kind of cement their place and get control of the costs that it probably was too expensive for them to do two day fulfillment, but they could absorb it and other people couldn't. So it was a great anti-competitive move, if you will, to do something no one else can even though it costs you money.

Phillip: [00:34:39] Yeah.

Grant: [00:34:39] Do you think consumers are cognizant that that's not something that's really realistic of most brands? And I think there is some forgiveness on having a longer delivery time.

Phillip: [00:34:55] Yeah.

Grant: [00:34:55] You can't get it today. Sorry.

Phillip: [00:34:57] Yeah, not to worry anybody or stress anyone out that might be listening if you are finally getting up to... Let's say that you have a 3PL that is, you know, delivering two day shipping across the board, you're meeting your customer expectations, and you're just crushing it. Well, I hate to tell you, you know, Amazon's delivering 50% of its own packages now. And of the ones that they deliver direct to doorstep, they send push notifications saying we're 10 stops away, watch it in transit. They send a text message from the driver to ask you, "Hey, where would you like me to leave this?" or "What's your gate code?" Oh, and you know what else they do? They take a picture of the package on the front step now to show you where they left it.

Grant: [00:35:40] Yeah that's crazy.

Phillip: [00:35:40] It's the expectation is being reset yet again that not the speed of delivery, but the quality of the experience in transit is going to become the next Amazon effect. And I mourn for all of us who are like rooting for other people to compete against Amazon. Yeah. So that was a little aside just to depress everybody.

Grant: [00:36:03] I think the other carriers are going to have to step up on that. I don't think it's the brands that are going to have to force that. The other carriers, if they want to stay in business, they're going to have to do that.

Phillip: [00:36:11] A hundred percent. There is an element of magic, just to touch on the positives here. There is an element of magic that somehow, and I don't remember how it's happened, but UPS and FedEx especially have been able to figure out at some point that I have an account and to tell me that like via text message or email, that I have a package arriving even when it's just by email.

Grant: [00:36:35] Right.

Phillip: [00:36:35] Like I ordered something. And then they tell me it's coming and then I can delay the shipment. I think that they could scale to get there. And they're going to have, you know, economic pressure to have to do so because, you know, they don't have the volume that they used to and now they have the infrastructure that they have to support. So I find that that's going to be fascinating to watch. For a brand like ROKA, like what is your customer expectation of you? Can they purchase on Amazon and do they then expect that same experience from you direct? And one other question in that vein, if they are purchasing from you in other channels, how do you encourage them to come over and purchase direct and is there a benefit to it?

Grant: [00:37:14] Sure. So. I'll deal with the direct side first and then the Amazon. On the direct side, absolutely. They can get two day free shipping, or not free for two days, but they can get free shipping and they can get two day or next day if they need to. We have a lot of people who are buying something right before an event or a race or something like that. And they need it wherever they are, immediately. On the Amazon side, we do sell almost all of our products on Amazon. We're looking at adding other channels to that as well. And part of the reason for that is just trying to be a) as successful as possible and b) kind of get our name out there. And it's our customer acquisition tool just to be on every market, because not everybody has heard of ROKA, but they might be on Amazon looking for goggles or for swimsuits or some sort of product we offer. So they can get all that. And we do both fulfilled by merchant and fulfilled by Amazon, so they can get the Prime, and then for some products to keep it in-house. But we offer the Prime shipping just from in-house. I think you kind of have to be on Amazon these days, honestly. I know Nike just pulled off of it, but we're not Nike.

Phillip: [00:38:34] Yeah, very few are right? There is something that I was saying a lot in 2018, which I'm skeptical if it's still true, but it definitely felt true at the time, is that very few people go direct to Google anymore when they're ready to make a purchase, when they're ready to make a product purchase,.

Grant: [00:38:55] Right. You go to Amazon.

Phillip: [00:38:55] They go to Amazon Direct and in the same way when they want to be entertained, they're going to YouTube. And when they want to discover things and browse for things that they don't know that exists like, you know, product discovery and browse they go on Instagram. And that's the world that we actually live in now. That's what I was saying anyway, two years ago. I'm curious how you see that play out. Like, do you feel the pressure to be in all those channels and creating content and being on social etc?

Grant: [00:39:24] Yeah, I think... I think you're absolutely right on that. Most people go to Amazon first for shopping. So the problem there is if you're not already at the top of Amazon, it's gonna be very hard to get there. How do you get them to hear about you? And I think social is still a huge one. You've really got to have a social presence. That's still not an option. I know people aren't thrilled with Facebook at this point, but they're still using it, and they're definitely still using Instagram. So, yes, there's a lot of pressure to be on Instagram and Facebook and LinkedIn, even as a social one that is growing. And we're still doing, obviously, Google search and display ads. But you do see, you know, I've seen a lot of these eCommerce brands, be it Bombay or Away travel, they're branching now beyond kind of digital marketing and they're expanding to like Sirius XM. There's a lot of eCommerce brands these days on all those news channels, podcasts... On podcasts you're going to hear a lot of eCommerce brands. So I think there's more pressure now instead of to just just do social, to have more touchpoints, because social has gotten a little too expensive to be able to be your sole customer acquisition channel.

Brian: [00:40:44] Have you had any feedback from customers that they've actually shopped for you on Amazon, but then they got nervous about purchasing because they were worried that they might be getting fake products? Not from you directly because obviously you're selling directly for Amazon, but like from a third party provider. And then they actually came and purchased from your web site instead?

Grant: [00:41:09] No, we haven't seen a lot of that. Amazon does intentionally make it very hard to track a customer and know whether or not they're already your customer. I do think we actually have a lot going the other direction who are familiar with us and buy on Amazon because it's faster or they are just buying more stuff on Amazon. I'm not really sure.

Brian: [00:41:33] Got it. You know, that makes sense. And especially since you have a very defined strategy for Amazon, that probably is a little bit less concerning to your customers. Like, you know, buying directly from a brand on Amazon is a lot less scary than buying from a third party seller.

Grant: [00:41:50] Right. We have a brand page. You can go visit it. We're clearly actually ROKA Sports.

Brian: [00:41:57] Right. Have you had a deal with like third party sellers trying to kind of encroach on that?

Grant: [00:42:04] We do. And that was the whole reason Nike joined on Amazon was to try to stop that. And we do. We definitely try to make sure we're always in the buy box. And if we ever sell B2B, there is always an exclusion that you are not allowed to sell it on Amazon for sure. The way I think a lot of that happens tends to be if you run too big a discount, people who are familiar with you will buy a ton of product and then try to go sell it on eBay or Amazon at a higher price. So just don't do a massive discount.

Brian: [00:42:35] Yeah. Totally.

Phillip: [00:42:37] Yeah, it seems like such a challenge, you know, to balance the benefit of all the channels and trying to be all things to all customers. You know, they want you to be on Amazon. Some want you to be direct. Some want you to have loyalty. Some want you to have... Some of them see you as you know, more budget eyewear, some see you as performance. And that's I think some athletic and outdoor and apparel brands have mastered that balance. But it seems like it's a skill to be acquired, for sure.

Grant: [00:43:06] Right.

Phillip: [00:43:06] On the fulfillment side, if you were to look into the future, what do you think will drive operational success for you? I'm sure you're looking to make money in your finance role. I'm sure you're looking to make money on, you know, every part of the customer experience and making sure it's equitable for you as a business. What can you do in the future to achieve that while still meeting customer expectation?

Grant: [00:43:35] Sure. So I think, you know, for a long time it's always been shipping and handling a big part of any direct to consumer that's not a brick and mortar business. It's been a large part of their income statement. And I don't think that's going away anytime soon. It's still a massive cost that everybody's going to focus on a lot. So the first one would be, you know, figuring out how to to make sure we're doing it as efficiently as possible, making sure there's no misships, making sure we're using the right shipping method. And if it is international, charging for the delivery. But optimization is not a growth strategy. It's healthy and necessary, but it's not how you grow. So the follow up would be how do you make the whole unpackaging experience even better? So we spend a ton of money just on the package of each sunglass or the package of the wet suit and making sure, you know, you can brand the item package. And then you're seeing a lot of brands these days, brand the corrugated package that it gets shipped in.

Phillip: [00:44:39] Yeah.

Grant: [00:44:40] I think if you're going to be a direct to consumer eCommerce company, everything you do has to be high touch or no one's going to take the chance on an Internet company. They want to get that touch in person instead.

Phillip: [00:44:52] I think that those are astute words from what sounds like an exceptional operator in the space. And I really appreciate all your candor here today. It's been awesome.

Grant: [00:45:02] Sure. Thanks, guys.

Brian: [00:45:02] Thank you so much, Grant. Yeah, great to have you.

Phillip: [00:45:05] Thanks to Grant, who is Head of Finance at ROKA and their performance sports wear apparel and various accouterment brand in the world of athletic sports. And if you want, you can go check them out at ROKA.com. We want you to check us out at FutureCommerce.fm. We want to hear you, you know, engaged in this conversation. Lend your voice and you can do that by dropping us a line at hello@FutureCommerce.fm or participating in the conversation there on our web site. And make sure that you subscribe wherever podcasts are found or get in on our newsletter that goes out every Wednesday at 2 p.m. called FC Insiders. And it's your scoop on all things that are happening in the world and our take to help you shape your world view of what's happening in the world of retail. Retail is the thing that connects us all, right? eCommerce connects us all. And it's vital that you understand how the customer is beginning to expect things from you. And we help you every single Wednesday, 2 p.m. to shape that view. That's it. Thank you so much for listening. And let's all shape a future that we're all proud of.