Transcript:
Peter Crosby:
Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
Hey everyone. Peter Crosby here from the Digital Shelf Institute. Growing e-commerce at a global brand from an idea to scale is an adventure only for the brave and super smart. Colette Richards, Director of Alternative Sales and Distribution at Barcel USA, the snack division of Grupo Bimbo is one such person. And Lauren Livak and I were lucky enough to have her on the podcast to describe her journey, lessons learned and what she sees ahead for the digital shelf in 2023. Hint, it includes a shadow P and L. So Colette, I can't tell you how excited we are to have you on the podcast today to tell your story. You've taken Barcel on an amazing e-commerce journey. Thank you so much for coming on.
Colette Richards:
Oh, thank you so much. It's a pleasure to be here with you and Lauren. Thanks, Peter.
Peter Crosby:
Yeah, you kind of have been on the entire journey, which is, "Here's how you spell e-commerce and that's important. Yes. And there are two M's in the middle." I mean to really owning and leading an expert and expanding e-commerce team that is focusing on how to pivot for what is coming next, because we not live in interesting times, and so that's no easy feat. So we want to hear the good, the bad, the ugly of what you've learned and what you might have done differently is you can offer some advice to our audience. But first just bring us up to speed on where you started on your journey.
Colette Richards:
Oh, goodness. Back in 2018, Amazon was reaching out to us to partner with them to sell our brands on the Amazon platform. It was myself who was managing many other channels that were emerging channels at our company. So of course who got the nod? The person who was already juggling four or five balls with emerging business. And-
Peter Crosby:
Yes, I saw your title is Alternative Sales, which I thought was funny.
Colette Richards:
Yeah, so it's everything not developed. And that's okay because it helps, because I had that visibility and that title to begin to be able to understand it. But looking back, having it as one part of five, six things that I did, I don't think it really set us up as an organization to be able for me to do the research, the networking and the learning to put together the right team, the right training, the right internal evangelizing, as I learned to call it from Lauren, because it's truly what it is. It is a different animal that to sell it, you have to know it and you have to use your network to be able to see how it's working elsewhere. Because it's 27 years old, it's relatively a baby compared to traditional retail.
Lauren Livak:
And Colette, bringing your organization and evangelizing your organization is challenging. For anyone listening who's going through that, I'm sure they're all raising their hands and totally nodding their heads. So how did you do that? What did you do to help them learn, to help yourself learn and really bring the organization with you as you decided to really get into this alternative channel?
Colette Richards:
It's still a work in progress since 2018. What I did initially was do some base level learning. I scoured pieces of the Digital Shelf, I scoured Cleveland Research. Wherever I could get my hands on for why this was an emerging space that we wanted to play in how the consumers were shopping there and then what it was going to take. All the while screening emails from the Amazon team saying, "Hey, we want to partner with you. We'll give you all these great deals." And you have to really understand what you're setting yourself up for. So what I did in my organization, we're a food company and I would try to liken anything e-commerce, turn it back into something more from a traditional retail, because that's what the team I operate with understands.
So let's say we were talking about sponsored brands, spot and displays. To me, I was like, that's like an endcap, that's like a set sell. And when I was trying to tell them about, "Okay, distribution lanes on Amazon, one of the metrics you have for the algorithms is to have inventory available. If not, you drop off the page. What does that mean?" So I kept trying to make it as relatable back, but also preach the future and then COVID hit and here we are with an accelerated digital commerce space that more and more people are adopting and why do we have to really wrap our heads around it? So I'm continuing to evangelize because it continues to evolve and grow.
Peter Crosby:
Well, and part of that evangelism also includes really the broader concept of the Digital Shelf, knowing and trying to explain the impact that digital has on in-source sales as well and on the in-store experience. And are you seeing more of that sort of come to the surface in this next phase?
Colette Richards:
Yeah, I totally am. And that's something we're really focusing on this year. We have set up different KPIs. I mean there were setting up the initial metrics that you have. Score carding of what your content looks like, improving your searchability by ensuring that your descriptions are right, your bullets are right. But now it's learning that 60 to 80% of people who are in the store have the app open while they're shopping. So you're able to influence the in-store shopper even with the online content. So you want to make sure that your content is right, your digital assets are right.
And the new thing I've been kind of evangelizing is, think about when you're watching the Super Bowl or something. You're full, right? You've snacked all day, but all of a sudden a commercial comes on for something that you're like, "Oh my God, I got to have it." Well in our industry, how do I make food look good? How do I create content that is craveable or shows you how a different utilization for it? So how do I connect that emotion to the content I have online? Because that's really important. And the goal is for us to have sales on platform be higher, share wise, than it is in store. So we have changed some of our metrics and how we're looking at it and how we're assessing our digital shelf content. Just this year actually.
Peter Crosby:
That's really fascinating because when you look at a lot of the big brands, and we've talking about this for years, the share online is often much more fragmented and therefore lower than they have in the traditional in-store. But you guys are trying to flip that formula it sounds like.
Colette Richards:
Yeah, we are.
Peter Crosby:
That's really ambitious. And obviously, I don't want you to give away any secrets of how, but how do you think about that of gaining that market share? Is it finding new customers? Is it stealing existing customers? How do you think about that in the digital shelf arena?
Colette Richards:
To me it's getting new customers because there's the availability of the products, you're able to share with them, you're not getting lost in the store aisle. Think about it. When you're shopping in a grocery aisle, there's all those choices. And the kids can be distracting you if you're pushing the buggy or you have your list. But if you're on platform and you're popping up and you have good content, that's exciting, I really think that helps you go over the edge. I mean, let's think about it, you have the store aisle with hundreds of items, then you have a digital aisle, which you can then utilize an endcap, if you will, which is a sponsored display, sponsored search, sponsored brand. And you are popping up as more endcaps as the person shopping.
But now we're talking about, "Hey Alexa, add this to my grocery list." Or for those of you do like I do, we have our groceries where we write down what we ran out of instead of the old whiteboard and then you take it down. So there's all these ways that's making our shopping journey very precise. So how do we get into people's minds and how do we get in their share of thought? And that's what we're thinking about is, how do we stay relevant and very much in front of your mind?
Peter Crosby:
And I love the phrase craveable content, because one does crave snacks. And when I say one, I mean me. That's awesome. So for someone who was learning as they go and really dove in headfirst, like you said a part-time [inaudible 00:09:17], is probably what you did between 2:00 and 5:00 in the morning or something like that. If you were able to look back, you hinted at I think, but what would you have told your past self now as Colette of a scaled e-commerce team? How would you think about those sort of getting your feet under you and building the connections that you need? What would be your advice?
Colette Richards:
I would say, build your network, don't learn to build your network. Build your network. Search for a mentor in the space. I got very lucky. I asked people that I never would've asked in a previous life, but Lauren was my mentor. She and I had coffee time during COVID, even though it was virtual coffee time.
Lauren Livak:
It was the best, Colette.
Colette Richards:
It was awesome. But I also learned to use the folks on the Digital Shelf Slack channel. I asked. I used as many people who I could connect with to learn. Generally we were non-compete, but what I would've done is go, okay, really I'm a learner and I have to be careful to stop myself from learning and begin to try. So build your framework of step one, phase one. What do I need to do to be successful online? I need to have content. I need to understand how I have to spend to get that consumer into the digital store. And there's gazillions of them, right? To me, I think about building my store or my space in the middle of the tundra in Canada. Unless you advertise for it and tell people you got a store there, they're not going to come. So you've got to give them the reason to come to the store and shop or shop your products.
So think about the shopper's journey and what actually pulls them into what you're trying to sell and then how you're going to do it. And don't be afraid to not know something because in this space, I have never had more people willing to provide advice, share past experiences, help. It's an amazing space.
Peter Crosby:
It is an incredibly generous community. I mean we see it every day. I mean, people like you that are willing to come on a podcast and share what they've been through, all the way to just the answers that we're able to get by just talking to a bunch of people. It's extraordinary. And that's why I'm looking forward to the days as we continue to gather more in person, because that's just so much more fun. That's a way actually, but you end up having those serendipitous conversations that you don't always expect you to be able to do virtually. So it's been fun seeing that start back up again.
Lauren Livak:
You know what? I'm-
Colette Richards:
Oh, sorry. I was going to say too, when you're thinking about this, so much of this is computer learning, AI. And you're trying to negotiate with Amazon, who so much of their communication is computer generated. So if we don't begin having these conversations as humans selling to Amazon or learning from people who've worked there, how will all of us ever be successful? And that includes Amazon because we're still selling to people. So to me that's a point, well, I think this community is huge.
Lauren Livak:
And we talk about that a lot. How can brands partner with retailers and have joint conversations and make it be mutually beneficial for both sides? So I completely agree with that. I know Peter does as well because we've had a lot of conversations around that, and we appreciate members like you who are willing to jump in and have those conversations. And Colette, I just wanted to ask, for someone who had this as a part of their job, and it can be very overwhelming to then be responsible for this channel. And where would you start? So I know you talked about what you would do differently, but where is the first thing for someone who's like, "Okay, I'm taking on this channel, whether it's part-time or full-time." What do you do first? Or what did you do first?
Colette Richards:
What I did first was put products online at Amazon, which I would never tell anybody to do.
I would say, "You have to lay your foundation." Your foundation is, what am I going to sell? Where am I going to sell it? How am I going to digitalize my assets? And I didn't know a lot about what that meant, but how do I make sure I have the right images so that the consumer says yes to me? And then how do I describe my assets? How do I ensure that I maximize free search and minimize my spend so my spend can do more? And then we talk about spend. If you're in the traditional, there's the marketing silo for spend, and there's yours if you want to run promotions.
This is the peer intersection of those two departments and if you don't break the silos down on your teams, you're going to keep having to evangelize longer and longer. Because this is where the money meets the consumer in a different space and together you have got to allocate where the monies are coming from to gain the sales. And to me, it's important to be in the funnel on the platform as opposed to in the platform, in the universe. And the reason I say that is we did a TikTok campaign with an influencer. We had 8.6 billion views. 8.6 billion views-
Lauren Livak:
That was a B right? A billion.
Colette Richards:
Insane. And we really didn't see a lift in sales.
Peter Crosby:
Wow.
Colette Richards:
So that's off platform, NAT awareness, and we didn't see a lift in sales. And I'm still thinking about this. I still believe down the road we're going to find a way to find, it's not going to be pure attributed, but there's going to be a way to start making some ratios or something of impressions, down to on platform where you can then see the attributed or the shopper journey. Haven't figured it out yet, but there's got to be a way. And you've got to really start connecting not only your spend but your measurements as well. And that's where we keep evolving with what our measurements are. I mean, we were really happy to improve our return on ad spend last year. We had some atrocious ad spends on some platforms. And now I can say that our worst one is a 3X. Our best one's a 12.
Peter Crosby:
Wow.
Lauren Livak:
That's amazing.
Peter Crosby:
That's really impressive. What you just said just brings up a couple of things in my mind. I mean, one is that, the importance of that alignment between marketing and trade spend and making sure that those silos break down. And did you find that that was something you did first at a sort of peer-to-peer level? Did you need to raise it up in the organization to get those conversations to happen? Did you have to bring in finance? How do you drive that alignment from where you were sitting?
Colette Richards:
So from where I was sitting, I saw that there was spend happening from our marketing department on platform. And that's where I first got the look at some really, really negative ROAS, because it was all done in the awareness space. And I was like, "This, no, this doesn't work. We have got to ensure that when we spend money on platform, it's about converting to sales." So that's where I said, "I believe this belongs in the sales bucket. Give me that money. I will repurpose it throughout the course of the funnel." And we took it to a third party. We have a consulting agency who actually was doing our hands on keyboard, pay-per-click, as we geared up, because I didn't have the staff for that. And ironically, a little bit earlier today, my on platform manager was walking me through one of the tools you can get online, Helium 10, that helps you identify the right keywords and how they can see in a monthly timeframe, the attributed sales.
So there's a lot you have to learn and unpack. But like I said, I think I would take it one step at a time and prove, give me a piece of this business to show you how if I play on the platform properly with search, it's the highest conversion area. And then we'll put some sponsored display, sponsored brand in there to see how that performs and don't over complicate it. This comes from my science background days. I'm a biology major by trade. You've got to have a control and you've got to have the experiment. If you have 10 experiments and one control, you're not going to know what works. So pace yourself.
Lauren Livak:
And it takes time too, right? I think that's something to call out that people forget, like yes, it's the internet. Yes, it's algorithms, but it takes time for those algorithms to pick things up and for things to actually appear. So if you do a test and learn for two days, you're not going to get any value out of it. Like minimum two weeks to really see anything happen. And I think that's something to get used to in the digital space.
Colette Richards:
It is, but Lauren, if you compare that to the traditional retail space, two weeks is nothing. Two weeks is a drop in the... You're not even probably executed in a hundred percent of the stores in two weeks, let alone think you're ready to run a test. So we have to assume that just because things happened overnight in that space, you have to give it time to allow the machine learning to happen.
Lauren Livak:
Right, exactly. And Colette, you have put all of these things and place than the organization is shifting and you were able to get more people on your team. So can you tell us how that evolved and what helped you get to the place where you could add more resources and really have it be your full focus?
Colette Richards:
What's happening now is we are getting a lot more granular and working with each of the strategic platforms we operate on to show the sales dollars we're regenerating. How it's growing at a faster rate than our traditional retail. This year we're adding shadow P and Ls to understand that my little team and this amount of spend is actually a better P and L performance than the traditional retail. So we're adding different components to show that there is this opportunity that the marketplace and the business place and consumers are demanding it.
So honestly, I think what I've shown is, we are performing well. I need more people because we're missing the opportunities as it relates to making sure we have the right negotiation, even though it's not us salesperson negotiation. You're negotiating for space and you're negotiating for partnerships on this, the bigger platforms. And you want to have that share of mind with the sellers, if you will, of the retail media space, of the Walmart Connects, of the Kroger programs and platforms. I mean, goodness, we had the Instacart commercial happen because we were trending well on their site. They approached us. So it's an opportunity that you just have to keep understanding that it's happening and you can either be behind or you can catch up like we did, or you can be a leader. And I've met some great leaders in this space through Salsify. So it's all about evangelizing and look at what's happening next.
Peter Crosby:
And I love the North Star that you set, which is we want our market share online to be greater than offline. And when that's what you're trying to achieve, if that's your North Star, then that dictates some of the ways in which you need to invest and the innovations that you need to try to be able to achieve that as opposed to, "We want to grow e-commerce X percent a year." No, we want to grow relative to our competitors and that growth will therefore drive the standard growth that we want to drive as well. But that's a great ambition and I love it.
Colette Richards:
Well, plus my demographic meets that. My demographic is anywhere from 12 to 24 or moms of that age group. Well, if I have kids and I have a college aged student, it's like Instacart, anybody delivering, Amazon. That's the go to. That's the standard. So if that's my demographic, I want to play where they're shopping.
Lauren Livak:
And Colette, I'd love if you could just to add a bit more color around the shadow P and L piece because I think it's a very unique way of thinking about it, where a traditional P and L doesn't necessarily account for the gains that you see in e-commerce because it was not built for e-commerce. And when we talk about the word profitability, it is defined so many different ways, depending on the company that you talk to. So can you talk through whatever you're comfortable sharing around how you're thinking about shadow P and L?
Colette Richards:
Yeah, so we're really looking at how I am connecting to the consumer with these products? Granted, majority of it's going to be fulfilled through the store. So I still need the vehicle to get it in place, in store, in the dark warehouses, wherever. But I really want to take out the pool money because that's where we call it the bottom line money that we invest for on platform, the marketing funds. But what is that really doing for us?
So I'm still working it out with finance and with some colleagues to figure out how to make it look best, but to show the impact of what we always just couched as pool, trade fund, marketing funds, I wanted to show the work it's doing and that's how I'm thinking about it. And I touched on these dark warehouses. I think that's a thing of the future that we all need to wrap our heads around, because I think there's going to be more and more shopping like that, which decreases the size of the shelf that we have. So we all better get better at marketing to people with that craveable content, because that's the future. More and more malls are going to be empty. More and more big stores are going to be empty because it's a heck of a lot cheaper for a retailer to fulfill to you out of one warehouse rather than 10, 20, 30 stores.
Peter Crosby:
And so how does that fact change the way you think about your role and the role of content in connecting up with consumers and getting them what they need when they need it?
Colette Richards:
Well, to me it's twofold. So I had the opportunity to visit a warehouse, a really automated warehouse operated by Peapod. And it's where Tetris meets the Rubik's cube is how they do this distribution model. First of all, if you don't have your PIM right, they can't even enter the products in. So your specs better be right and all your intelligence for them to scan and input better be right. But then secondly, for us to make sure that our consumers understand what the product is and launching new products, you're going to have to get them to taste it. You're going to have to get to be interested. So if you have a core product, how do you figure out how to do a sampling program with Peapod to send it to their homes? Or how do you figure out how to maybe do something bounce back?
Okay, "Hey, you ordered this, I noticed you ordered this. Did you forget online?" Or maybe a digital coupon goes out with the order and then it's got to be the content to make sure you're looking at the broader terms. If somebody's searching for a long tail, broader term, they're looking for something with keto or gluten-free or whatever that content is that they're looking for, that you're either bidding on it or you have it in your title to make sure you capture what people are looking for or think about emerging trends in the restaurant. I'm food, I'm always thinking about the food products. So what's hot and trendy on Yelp? What's hot and trendy in these spaces and how do I make sure I make it relevant? I'm all about connecting the dots. So make it relevant to me, whether it's 'cause I'm going out for groceries or I'm going to get dinner if I want something that's craveable at the moment. So that's what I'm thinking about now.
Peter Crosby:
So I need to dig a little bit more, not into that topic, but now that you've whetted my appetite for what you're looking at over the next year or so, do you have a couple of other things that are on your mind?
Colette Richards:
One thing we're really looking at is how we can use the on-demand delivery, the Gopuffs, the Uber Eats, and that, to connect with consumers on the go. So they're not necessarily looking at going for a grocery store run, but they're in a hotel, they're in the spring break for us right now. How can I target them to be instantly supplying the munchies that go with maybe travel or exciting times? So that's one big area that's new for us that I'm targeting as well as, how do we begin to be better at launching new branded items. So we're looking at a couple different areas that we haven't played in. And how do I connect my current portfolio to them or how do I partner with other providers of food things that would make sense with that product and kind of piggyback? So how do I make those connections?
Peter Crosby:
That's really cool. And I know also, and you've sort of sprinkled it in throughout, but for profitability, you have more sales and then you spend less doing it. So I'm sure you must be thinking about how to do everything that you're doing as effectively, as efficiently as possible and with being able to put your human beings on the really value added stuff and let machines do the rest, is that on your mind?
Colette Richards:
Completely on my mind. As a matter of fact, we were just looking at a different pay-per-click provider who's doing a lot with the machine learning and the algorithms. And actually we're going to put our toe in that little pond to make sure it works for us with one of our accounts. And if it yields higher returns, we'll probably move more towards that. Because machine learning now can tell you what consumers want, what they're looking for, how they're looking. Why not take advantage of that low hanging fruit if you know how to harvest it?
Lauren Livak:
And Colette, I think that's what is really incredible about what you've built and what you've done. And I've seen this and in our many conversations, you're willing to dip your toe in, see if it works, test it, and then decide from there. And I say that because for anyone listening who's like, "I don't know where to begin or I don't know if I should try it." Testing and learning is a really viable option in this space because you just really won't know until you try. And there's a lot of different things that could potentially, you would decide to invest in or you would get some data that would put you in a different direction. So I really applaud you for doing that because that is the nature of the e-commerce space and it's how you figure out what's coming next and just being comfortable with that is so important.
Colette Richards:
I couldn't agree more because there's so much that comes at you. If you want to analyze it all day long, you're never going to make a move. And I think you have to be careful. I have to understand what I'm trying to do, what am I looking at to see if I'm getting there? And like I said earlier, being from kind of that biology mentality in the lab, don't put too many variables into the mix, otherwise you don't know what's working. So when your gut says, "Try something new." Try something new. If you start, me, I start feeling like, I think, "We have too many variables in here, guys. Let's back up." And know what's working for you. But don't be afraid to try.
Peter Crosby:
I think that is just so important. I love the way you've talked about your North Star, the shadow P and L, the experiments that you're running. All of them are focused around your inherent understanding of the role that e-commerce and digital can play in lifting the overall business and figuring out how to make sure you understand what that looks like, how it's measured, and how the rest of the business can sort of understand it. So you can all unite your work around getting the greatest overall return for the company. And that's really hard. Barcel, being part of Grupo Bimbo, there's also a bigger organization beyond where you're focused that I'm sure working on exactly the same thing. So yeah, thank you Colette for sharing your journey with our audience and for the courage and the grit and the intelligence that you approach the work that you do. It's really inspiring.
Colette Richards:
Thank you so much. It was a pleasure talking to you. And I'll never forget the mentorship I had with Lauren, and we still converse when I have questions.
Lauren Livak:
Thanks, Colette. It's been so amazing to see what you've been able to do. So really appreciate your support.
Colette Richards:
Thank you.
Peter Crosby:
Thanks again to Colette for sharing her journey. You heard how much value she gets from the DSI, and why aren't you a member? Head on over to digitalshelfinstitute.org and click the button. Thanks for being part of our community.
