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Ecommerce has come a long way from its early days as a separate part of the company that you set up and just hope to see returns on. Now, ecommerce is pivotal for just about every organization — but there is one faction of businesses that still lags behind.
There are $17 trillion dollars worth of B2B payments made every year. Yes, trillion with a T. And half of those payments are still being made manually. Clearly, there is a massive shift that still needs to happen in the B2B space, and Deloitte Digital is helping make those digital transformations a reality.
Paul do Forno is the Managing Director at Deloitte Digital, and on this episode of Up Next in Commerce, he helped us understand the struggles B2B brands are facing and how moving them into the digital space could spell a massive change in the ecommerce industry. Paul also dives into some of the major trends he’s keeping an eye on in the ecommerce world, including how ecommerce continues to scale around the globe, most notably in Latin America. Plus, he shares some tips for businesses who are overwhelmed by the amount of channels and platforms they suddenly have to play in. Spoiler: he says do less. Tune in to hear more!
Main Takeaways:
- Massive Call And Response: Bigger brands are struggling to stay connected to their consumers in a way that scales. Today, customers are looking to have a more authentic relationship and connection with the brands they engage with and support. For enterprises, connecting one-to-one is nearly impossible, so they are investing in tools like A.I. and conversational platforms to keep up with this newer generation of customers who crave connection.
- Dinosaurs Still Exist: So much B2B activity is still done manually, which means that there are trillions of dollars of transactions that could be moving online if/when B2B companies finally shift their activities to the digital space. The problem is that many B2B companies are miles behind their B2C peers in terms of optimizing the digital space for their many personas. It will take a lot of tools and transformation to bring those traditional B2B companies into 2021, but it will be necessary because the next generation is not interested in manually doing business and would much rather work with companies that have effective digital tools.
- Do Less: Brands can get caught up in the hype and the attempts to keep up with the Joneses. Instead, they should focus on being great at one platform or marketing activity. Plus, it’s critical to never forget the basics — like making sure your email list is generating the leads and engagement it should be to power your business.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“For some of the smaller brands dealing with a few interactions, it’s somewhat easier, but when you have thousands and thousands of followers, how do you manage that [one-to-one connection] on scale? What they mostly get concerned about, they want to be closer to the consumer and listen to them and interact, but being able to scale that in both a combination of A.I.-related tools and responses, but also human responses that can do it in scale that are tailored to the brand voice, that’s the challenge.”
“Some of the largest scale CPG companies are doing record numbers of ecommerce, but they also partner with massive retail chains. They’re trying to balance not stepping on their channel conflicts, and so many are using ecommerce as a mechanism to explore, do special arrangements, special formulations, and learn and get data.”
“Before, when ecommerce was quote unquote more of a side business, it was more of a set it and forget it. Well, let’s set it up. We’ll set up the implementation, then we’ll look at it, we’ll make some changes every once in a while. Now, your core commerce business is your lifeline and for some businesses it’s getting to 50, 60% of your overall business. You need to continue to change the priorities.”
“In the U.S. there’s $17 trillion dollars of B2B payments done… and half of that is done manually. Meaning, if somebody writes a check, they send the check off, it’s wired. It’s not done digitally….If you actually look into what the B2B challenges are, number one, many B2B purchases are very complex and there’s many personas….There’s no quick, easy, CX solution. Then the bigger pieces is, traditionally how B2B sold was with a handshake over lunch, right? …obviously we know that’s all changing and… millennials are now the largest part of the workforce. Guess what?… Your expectation of your salespeople now are, ‘Hey, where are my digital tools?’ When you talk about B2B commerce, it’s about what are all the digital ways to interact, to be easier to do business with as you sell? In fact, what ends up happening is the top three things that people like for B2B commerce is order status, product information, and just doing a quick re-order. When you look at that, it’s more about, hey, how do I make my life easier interacting with my customers?
“When I define B2B commerce, I like to say it’s not about the purchase. It’s about making your business easier to do business with and reduce the friction.”
“Getting real data direct from your customers that you then can build on, that it’s not something that is a couple weeks, a couple months and you got it. It’s something that over time you build up and you start to learn from…. Building up your first party data as a brand or building up your email list is so critical, and the benefits that you’ll build definitely increase over time.”
“Try and be good on one platform first. It’s easy to think, ‘Oh my god, we’re so behind. We’ve got to have a Tik Tok. We’ve got to have Facebook, we have to have all the platforms all at once.’ We guide them to start with one that’s as close to your authentic brand as you can find, and then try and build it and iterate on it and master one before you really try and go after another because, again, there’s limited resources and limited people. Trying to spread it across all is a lot worse than trying to be good at least on one.”
Mentions:
Bio:
Paul is a Managing Director at Deloitte Digital a leader in the Commerce and Content Practice. He brings more than 25 years of experience in strategy, digital experience, consulting, technology, and digital.
In the past, Paul has led some of the world’s largest digital platform programs with some of the biggest brands. His work showcases his passion for leading and creating solutions that blend creative, experience, technology, and business operations for omni-channel clients.
Paul is a thought leader in digital and e-commerce and is a frequent speaker at e-commerce events such as NRF, Shop.org, and eTail. He has been featured as a digital subject matter expert on Forbes.com, Digiday, and Internet Retailer. He has worked closely with the research analysts and holds several executive advisory board positions with top digital platform vendors.
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Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce
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Transcript:
Stephanie:
Hey everyone and welcome back to Up Next in Commerce. I’m your host, Stephanie Postles, CEO at Mission.org. Today on the show we have Paul de Forno, the managing direction at Deloitte Digital. Paul, welcome.
Paul:
Thanks. Excited to be here.
Stephanie:
I’m excited to have you. I was looking through your background and I saw you were on a list of the hundred most influential people in ecommerce and I was like, we need him. We need Paul. Why do you think you got on that list?
Paul:
I think first of all, in some ways I’m the old guy who’s been around carrying the ecommerce flag for a long time, so I’ve been doing ecommerce for 20 years. When you’ve been around that long, 20 years ago it was, trust me, ecommerce is going to be big, honest. Most of the big companies just looked at me and said, “Yeah, it’s just a tiny percentage. We don’t have the time to focus on it.” I’ve gone through the whole lifecycle from, “Yeah, I don’t think ecommerce is going to be big,” to, “Oh my god. What are we going to do? Everything is ecommerce.”
Stephanie:
Yep, what did your journey look like? What have you worked on over the years, and then what does your role at Deloitte Digital look like now?
Paul:
Yeah, I’ve had some pretty interesting projects all along. We help customers at Deloitte, we’re one of the largest implementers and SIs all the way from strategy, studio design, implementation, and run ecommerce and digital platforms. Kind of soup to nuts, end to end for some of the largest Internet retailers both B2C and B2B. My background, I’ve worked with some of the largest retailers and brands in the world, getting them online, selling, and also supply chain and connecting up all of those things.
Paul:
I’ve had the great experience of 20 years ago working with some of the earliest big retail brands of them … It’s kind of funny, when they first started, they treated ecommerce like a store because at the size that they were, on some of them, they were like … And literally, they would call it store number 1099 and that’s the way they treated it almost like a completely separate channel over the to the side. Yeah, let’s put some money over there and grow and then see what happens. That from over time, then it became more of a challenge of omnichannel.
Paul:
How do we make sure that the channels aren’t fighting against each other because we dealt with some retailers that literally would … They wouldn’t want returns to come in to the store because those sales and we’re not getting them credit, right? That came back and if they exchanged for something else, and so they would be internal fighting because the bonuses of the executives weren’t aligned. We’ve gone kind of like it’s off to the side, it’s big enough to challenge, to now it’s almost the reverse. Retail wants to get more love from the ecommerce side.
Stephanie:
Yeah, it’s a funny and an interesting flip that we see. We’ve had some guests on the show who said the same thing, like when I started out in ecommerce, they had us in a different building, like on the campus that they were at, they’re like, that’s the ecommerce team, they’re doing their own thing. We’ve had a couple people say how siloed they were and now, like you said, interesting how retail is like, come on, come give us a little love now.
Paul:
Yeah, exactly.
Stephanie:
When you’re looking through all these trends that are happening right now, I know that back in the day you were going to a lot of conferences, you were flying all over the world probably, and now I see and follow you on Clubhouse. Tell me a bit about how you’re staying on top of the trends and what kind of things are you discussing now on Clubhouse or wherever else you’re doing these virtual events?
Paul:
Yeah, I’ll maybe separate … Definitely right now as we’re speaking it’s almost a year to the day that I haven’t been on a plane. In the last 20 years, over a 100,000 to 150,000 miles a year that I’ve been flying around.
Stephanie:
Oh my gosh.
Paul:
One, my wife has gotten to know me.
Stephanie:
Hi, Paul, nice to meet you.
Paul:
But, it’s given me a lot of opportunity to connect digitally and do more research and some of the new tools, like you talked about, Clubhouse, and I’ll come back to that. I think what this has just done is accelerated ecommerce and how important that is and commerce everywhere and brought it forward, and there’s a lot of interesting trends that have popped out. Some of the things that may not be as evident, so in the past year, one of the biggest growth areas just for convenience has been around the growth of commerce around groceries, because we had to, right? You got a lot of the biggest stores growing and anywhere from 70% to over a 100%, and so a lot of the innovation has happened in groceries because it needed to, right? The companies that invested more have done well.
Paul:
For example, if you look at how Target has done, right? They were able to stay open because they had groceries and so they actually grew and were more profitable and a lot of that why they grew was their investments in shipped, a number of different way they pick from their stores, and so it’s amazing that not only did they grow that much but their profitability on the ecommerce channel went up which is almost unheard of in a time like this. They executed unbelievably well.
Paul:
Then on the other side, another interesting related to the grocery which kind of because it forced people to try something new, the largest growing segment on online grocery was actually baby boomers, and it’s because they never were forced to do it. They were always used to going to the store, and so we really see that as a watershed moment of hey, to get over the hump, hey, this isn’t as bad. Then as soon as you try something and you do it a couple times, it’s going to change how people behave.
Paul:
we expect the adoption rate going forward for boomers, for example, and older will continue. It won’t necessarily be at the same rate, but is an important threshold that they’ll continue to embrace it.
Stephanie:
Yeah, I agree. All right, so when thinking about these new consumers who are online who weren’t thinking this way before, how are you advising brands to communicate and talk and do things differently? Because it is such a different generation coming online. We’ve had quite a few people mention you have to think very differently when it comes to customer service or even the whole unboxing experience. People want different things. What are you seeing among your biggest brands right now around what’s working to connect with this brand new group of users who are not online before?
Paul:
Yeah, there’s a whole bunch of battling trends that are in here. In fact, on Clubhouse we had a discussion around the eco considerations of delivery, and that got into we brought in a packaging expert and one of the interesting thing that we talked about is that, hey, everybody has all these cardboard boxes, right? People would love to find out opportunities to minimize what kind of packaging and we all probably had the experience of getting a huge package and having one little item in it. I think the whole consideration around eco and environmental is something that I just saw some research, that’s at the top of the list of considerations.
Paul:
Things such as that and packaging and reducing it is a factor of when you’re designing for stuff. Looking for opportunities that you can batch up or minimizing the packaging or making it recyclable and also balancing having a great opening unboxing experience, and so you have to balance those things, right? The environmental side and also the brand side, which is hey, the expectations of brands such as Apple put on, on this hey, you want this great experience in opening. There’s a lot of non … Things that you didn’t have to worry about even 10 years ago because if you look at some of the studies of what gen Z and beyond are looking for, those considerations are much higher up than they were for other generations.
Stephanie:
It definitely seems like it can set up some of the newer based for failure though because it seems like you always have to stay ahead and be trying something new where it could kind of take you off your path of building a great product and a great company when you get too focused on some of that stuff. How do you think about the trade-off to stay focused but then also stay on top of consumer expectations that seem to have very rapidly changed in the last year where I wasn’t really hearing a lot of consumers talking about eco-friendly packaging and really caring about that, and now it seems like that’s a huge thing that we’re hearing time and time again about this is a new expectation that you have to keep up with now.
Paul:
I think a little bit about it is around just the how do you be authentic brand? In many ways, some of the trends that we’ve been seeing is around less production, right? Some of the advertisement or even things that are helping to actually convert much higher are actually user-generated content that people in authentic … You want to see how real people act, real people and real products, as opposed to a runway model or a runway person showing off this great … Because of that, first thing we would say is try and be authentic to your brand and especially right now the over-production is actually a hindrance on many brands.
Stephanie:
For some of the larger brands you work with, I mean, I could see that being hard for them to want to keep up with the times but then also staying authentic to your brand. Like you said, I know it has gotten some companies in trouble for trying to do the cool thing, keep up with whatever that trend is, try and jump on something. When these big brands are coming to you, what are they struggling with right now and how are you working with them around this new UGC kind of content that a lot of these smaller D2C companies are like, yeah, of course, that’s what we’re going to do, but when it’s a large company, they’re like, I don’t even know how to do that and how do you flag it and how do you think about the content coming in. Can I even trust it? How are you guys guiding them down that path?
Paul:
I think that for many larger companies in many ways it’s kind of a how do you manage dealing with this on scale? Because in some of the smaller brands, dealing with a few interactions, it’s somewhat easier, but when you have thousands and thousands of followers, how do you manage that on scale? What they mostly get concerned of, they want to be closer to the consumer and listen to them and interact, but being able to scale that in both a combination of AI related tools and responses, but also people responses that can do it in scale that are tailored to the brand voice, that’s the challenge. We kind of work through different strategies to help them get through that.
Stephanie:
What are some other things that these brands are struggling with? What are you hearing right now that they’re trying to work with you on?
Paul:
Yeah, and we work with brands both from B2C to B2B, and so I’ll actually give two examples just to get a broad spectrum. On the B2C side, I think the … And depending on the different segment. The B2C side on CPG we’re seeing massive spikes because of all the purchases that we’ve seen especially going through stores, and that’s a lot of the food, CPGs are just spiking. They’re trying to figure out, okay, great. This is a great opportunity to scale. How do we now embrace and engage and maybe put out some direct to consumer feelers to learn?
Paul:
In many ways, a lot of the CPGs are going way more direct. Some of the largest scale CPG companies are doing record numbers of doing ecommerce, but they also partner with massive retail chains. They’re trying to balance of not stepping on their channel conflicts, and so many are using ecommerce as a mechanism to explore, do special arrangements, special formulations, and learn and get data. As we see, for example, in that area is just there’s been so much innovation going on, they’re trying to keep up to the pace. They struggle with, well, what do I do first? How do I prioritize on some of these? Most of it is around helping to prioritize and segment some of the ideas to get them into marketplace faster.
Stephanie:
Trying to keep up with what’s happening really quickly, I’ve seen a lot of them acquiring these smaller D2C companies and kind of putting them in a mini innovation hub where it’s like we don’t want to disrupt your process but we want to learn from you. Do you see that as a successful strategy for some of these more legacy brands to be able to learn while also keeping their brand identity or is that not really working?
Paul:
Yeah, I’ve seen some awesome acquisitions and unbelievable great talent that some of the large … Just to stick to the CPG space, that’s been probably the most aggressive of picking up new brands and learning, right? I think it’s actually a brilliant … That’s why some of the premiums are getting paid. It’s not just necessarily for the product and what margins, it’s also from the know-how, because what ends up happening if you look, and this is something that that’s probably the area that Club CPG on Clubhouse is probably one of the largest clubs and they have an amazing talent there, and there’s been a number of acquisitions and they’re on there talking about their story.
Paul:
What’s really good about doing some of those acquisitions is these people have been very close to the customer, right? They’ve really interacted, as opposed to you’re getting perhaps a new executive who’s rotated around, right? These people understand the customer and had that relationship, had to build up the D2C. They really know all the different channels. They’re able to provide that voice to the customer and how to go direct so much more. I’ve seen it be really successful and understand especially some of the early purchases that they’ve made. It’s actually worked out really well, more from the people experience than even the product.
Stephanie:
It does seem like you can lose sight of that the larger you get, especially the more data you’re getting. It’s hard to get as informed and be able to actually find trends or themes. When you’re working with a lot of these companies, what is your measurement of success when you’re like, okay, we are going to transform this company. We’re going to bring you guys to 2021 and what’s relevant now. How do you look back and see if a digital transformation was successful?
Paul:
First of all, it’s important that we judge success by the way companies measure their success. When we work with different companies, we try and understand what are their outcomes of success and their success can be … The first thing you think, how much revenue did you grow? But some might not be. If it’s a new brand and they want to get out there and they’re trying to change their positioning, their goal might be a number of stories that got out, building brand awareness, changing the perspective, and so we always start with making sure that we understand what are their key outcomes and then provide some guidance on how do you get to those key goals.
Paul:
Looking at from a digital perspective, kind of like as I was saying before, it’s also important to have an understanding of the voice of the customer and the sentiment. It’s one thing to say what people might … When you interview them. It’s almost more important to see what they actually do, right? And using different tracking NPS scores, using different … Looking at the data of actual purchase stories and mapping it onto example profiles. That then provides much more of a richer … Even from compared to people say what they do is different than what they actually do and looking for actual intent in what they’ve done, and so making sure we’re getting the right data is really important as well.
Stephanie:
Even if they have a lot of different outcomes, it seems like the solutions that you could bring to them could be kind of similar though. From what I’ve heard, there’s a lot of decentralized processes going on, so you need to figure out a way to pull them all in and reduce your crazy marketing tech stack. Have you seen that on your side too that people might have very different outcomes but right now a lot of people have similar solutions or the solutions that you’re presenting to them are kind of the same things?
Paul:
Yeah, in many ways some of our … What we do to help customers in some ways is to help … There’s probably so many voices in the room and so many stakeholders is how do we help them bring them together and help to prioritize and to facilitate that conversation? Because that’s the real hard part when you’re dealing … If you just have your own one product and your own single [sheet] you can make a decision and go.
Paul:
When you have hundreds of product lines and executives around the world and how do you facilitate the discussion, that’s really what we help to do. Be it similar strategy to other companies or not, you need to help bring the internal alignment, and that’s sometimes the hardest part because once you get to execute, many companies can do that. The harder part is how do you get agreement and prioritization with the different stakeholders.
Stephanie:
What kind of advice do you give for anyone who’s struggling with that right now? What do you guys do to gain that alignment and have a go forward plan?
Paul:
Number one thing is start small and try something. You could spend forever talking about it and don’t be afraid to fail. Get something in the market. We try and do agile sprints, and so from a development perspective we’ve been doing agile for a long time but we’re also pushing into doing agile marketing so that we get into the same kind of feeding into that, so that okay, let’s get something out there, let’s try it, learn, and then from there go through the experiment, prove it, or make the changes and then scale, and keep that on an ongoing basis and trying to institutionalize that that it’s an ongoing, you need to keep …
Paul:
That’s the business and how do you keep rolling that, because before when ecommerce was quote unquote more of a side business, it was more of a set it and forget it. Well, let’s set it up. We’ll set up the implementation, then we’ll look at it, we’ll make some changes every once in a while where now your core commerce business is your lifeline and some businesses it’s over getting to 50, 60% of your overall business. You need to continue to change the priorities and especially as all of the changes that have come down the line from Facebook, from Google, is changing your whole marketing strategies.
Stephanie:
What about from a B2B perspective? I know earlier you said, okay, we got these two different viewpoints. What do you see in the B2B world? Which sometimes gets forgotten. We don’t have many B2B people on the podcast very often and it’d be interesting to hear what does that side of the world look like.
Paul:
I’ve been focused more on that in the last year or two because it’s such a big growing area. Just to lay the land, to understand how big B2B is, from a B2B perspective, just in the U.S. there’s $17 trillion dollars of B2B payments done.
Stephanie:
Wow.
Paul:
That’s just in the U.S. Right now-
Stephanie:
That’s massive.
Paul:
It’s completely massive and half of that is done manually. Meaning, if somebody writes a check, they send the check off, it’s wired. It’s not done digitally, and so when we talk about B2B commerce, again, people right away think B2C, it’s just about the order, but actually when we talk about … Or, the other myth or misconception that frustrates B2B people is, well, if just make it a cooler screen and easier to use on the web, then you’ll be better, right? Then those are the myths and putting lipstick on problems.
Paul:
if you actually look into what the B2B challenges are, number one, many B2B purchases are very complex and there’s many personas. It’s not like, hey, I like this shirt, got it, they converted well, I’ve optimized, I buy it. Some of these deals are million dollars, half a million, and you need to go to procurement, you’ve got the business, you’ve got the people using it. It has to go through an RFP process, you have to buy versus … Right? It’s so much more complex on the number of personas, that’s an important thing. There’s no quick, easy, CX solution. Not to say that CX isn’t important, but it’s not like B2B. The first thing, if you start from that premise, that helps.
Paul:
Then the bigger pieces is traditionally how B2B sold was handshake over lunch, right? Traditionally, middle age guys shaking hands and “Hey, let’s do this deal. There we go,” and the last thing I want to do is look at the damn website, right? Well, obviously we know that’s all changing and last year was the big thing in the workforce, millennials are now the largest part of the workforce. Guess what? Many of those, it’s not all men. They’re retiring at a very fast rate. Your expectation of your sales people are hey, where are my digital tools? When you talk about B2B commerce, it’s about what are all the digital ways to interact, to be easier to do business with as you sell?
Paul:
In fact, what ends up happening is the top three things that people like for B2B commerce is order status, product information, and just doing a quick re-order. When you look at that, it’s more about, hey, how do I make my life easier interacting with my customers? That’s just important to understand the difference between B2C and traditionally on B2B side.
Stephanie:
What kind of opportunities do you see in the B2B world then? Do you see any new innovations coming about? Obviously having a platform that can meet the needs of the customers and to me it seems like it has to be personalized depending on what the business is and how your customers order, but what do you see right now that could be coming in the next couple years to help B2B?
Paul:
Well, kind of seeing where B2B is in their lifecycle, and so in many retailers, they’re now onto their third iteration of a platform from B2C, and for most B2B, they’re on maybe their first or they haven’t really, right? Many of the B2B clients we’re dealing with, oh, we put something up in 2004 and we’ve just been living with it and we still have to use IE to access it, and so we’re dealing with web 1.0. They can’t get it on their phone, and so a lot of it is just we need to make it easier for them and looking for ways to make the sales person’s life easier.
Paul:
In the analogy of how B2C commerce is trying to be omnichannel, on the B2B side, it’s helping your sales person and CRM. The lines between CRM and B2B commerce have blended together and it’s really a tool to help the next generation business person to, hey, all my follow-ups, my data, you might get leads. Did you know your customers are looking at your products? You’ll get that lead information, and so that you can follow-up with them or hey, have you deferred … How many times has the business guy gotten a call? Hey, where’s my order? I haven’t got it.
Paul:
They end up spending half their time, and so the other big learning that we’ve got because it involves sales people so much is that you have to include them early and often during the process. For example, we had this happen one time. We had a customer come to us and say, “Man, we just spent all this money on this great new ecommerce platform for B2B, and we’re just not getting the adoption.” A couple lessons learned and they asked us to come in and do an assessment. We went in, we started talking to the customers and the customer said … We ended up hearing this three different ways.
Paul:
The customer is like, “Oh, man. I love Joe. He’s my best salesman, but he told me that if I put my sale through the B2B commerce, he’s not going to get a bonus so I just called him to make sure he got his bonus.” It’s like, oh my god, of course you need to get the sales persons incentives align such that they don’t get penalized for using the website, and that was like, oh yeah, that makes sense.
Paul:
Also, you want the sales people to be … You want them to evangelize and get them to embrace leveraging it. That’s such a key … That change management in B2B and getting your sales people involved is super key for success.
Stephanie:
Yeah, which seems like it’s a big training aspect to it too, make sure that they fully understand it to where then they can essentially sell the customers on using it and can act as customer service as well, because I’m sure their customers can be like, “I don’t know how to order it on here,” and if the sales person is like, “I don’t know either,” that’s a big red flag. Are there any other hiccups like that that you’ve seen either in B2B or B2C where companies are like, oh, this isn’t working. This new platform that we’re using isn’t working and you’re like, well, let’s talk a little bit about how you guys even thought about implementing it and you left out a big piece like this. Any other stories around that?
Paul:
Yeah, and number one it’s always about … It’s so important getting the voice of the customer and getting representative people early on to provide input and feedback, because what ends up happening is if you don’t listen to … And we’ve had examples of rolling out systems trying to solve for what we thought was the problem but it wasn’t really the problem. The way you bundled orders or the way products were bundled and you prioritized that and you didn’t get the adoption, when actually they’re focused on another set of problems or departments. That whole piece about getting user input early and often is so critical. The number one thing as you roll that out, you need the voice of the customer.
Stephanie:
In times like this that are changing so quickly, how do you think about separating the signal from the noise? I can see just so many companies try to keep up with other smaller brands and there’s so many new things to try right now. It seems like it’s hard to know what’s actually going to be a lasting trend where you actually should put that as part of your processes or your platform. There’s just so many tools and plugins and things. How do you all think about separating the two and being like, this one’s a longer term trend and this is just something short that we see dying off in a year or two?
Paul:
Yeah, a couple of things that we do and obviously there’s things that you want to lay out and over long-term and shorter term, but number one, look for ways … First of all, understand what your brand promise is. Depending on your brand promise, you might prioritize things different, right? If you’re a luxury item versus if you’re an item at the dollar store. You have different brand promises and you want to be consistent to your brand promise, and so that’s the first thing.
Paul:
The second thing as far as in general on commerce is continuously look for friction points. Do your tests with your customers and see what are things that are causing them to stop. As you go through all the different steps of the purchasing journey, if you’re seeing friction points, how can you reduce that friction? Meaning, hey, this page seems really slow. I don’t know why. Let’s reduce that. Hey, this content is not connecting well. How can we use other … For example, and I mentioned it before, hey, getting authentic content of the real users’ pictures. That will help people convert higher.
Paul:
It’s an ongoing iterative, so I think what you have is this … And you’re always plotting this, like how can you reduce friction and bang for the buck in a short-term that you can do versus a longer term investment that might then pay back, because it’s easy to be like, okay great, we need a 3D VR AR strategy. We’re like, well, how is that going to help your $10 item? Obviously that’s an extreme example, but if you have a brand promise and you look for ways to reduce the friction to make your life easier, and similarly on the B2B side, that’s why I always stress when I define B2B commerce, I like to say it’s not about the purchase. It’s about making your business easier to do business with, reduce the friction.
Stephanie:
I love that. What kind of longer term investments are you seeing being made right now that they might not see a payoff for a couple years? Because I know that Deloitte and I think Salesforce partnered on coming up with scenarios for the next three to five years, and so it’d be interesting to hear what you’re seeing being implemented based on maybe the scenarios that these companies so all you get is put out there, which ranged to me from happy to very sad scenarios. I’m like, I guess it just depends how you’re feeling that day which one you go with. I went with the happy ones.
Paul:
Especially for companies such as CPG that aren’t used to having direct relationship with their customer, for example, big investments that take a while to really understand is the data, right? Getting real data direct from your customers that you then can build on. Those are things that it’s not like, okay, a couple weeks, a couple months and you got it. It’s something that over time you build up and you start to learn from, and so that’s probably one of the biggest areas of especially getting your first party data, and especially since as you might have heard here recently, Facebook is reducing some of the data that they’re sharing and how you’re able to market and so is Google. Building up your first party data as a brand or building up your email list is so critical, and the benefits that you’ll build definitely increase over time.
Stephanie:
It seems like it’s an easy thing to say, yeah, obviously build up on that one-on-one connection with your customers, build up your email list, but it also seems like it’s going to be very competitive because every brand is trying to do that now. It seems like every commerce company is turning to a media company that are all trying to have their blogs and newsletters and be on Tik Tok and Clubhouse and everywhere. How do you think brands can compete and build up content that actually pulls people into their community so they can have access to that first party data?
Paul:
Yeah, so I think the tactics on some of those platforms on core data and getting some of that primary, that’s onto … I think once you get into content and being outward brand, outward bound, I think the focus is and kind of the things that we’ve talked to our clients about is try and be good on one platform first. It’s easy to be like, oh my god, we’re so behind. We got to have a Tik Tok. We got to have Facebook, we have to have all the platforms all at once. We kind of guide them on, okay, start with one that’s as close to your authentic brand as you can find, and then try and build it and iterate on it and master one before you really try and go after another because, again, there’s limited resources and limited people. Trying to spread across all is a lot worse than trying to be good at least on one.
Stephanie:
Where do you normally find yourself suggesting brands start out at? It seems like Instagram is always a good bet for any company that has product pictures and things like that, but is that usually where you send them to or is it always very varied?
Paul:
Yeah, it just depends on where they’re at. Some brands have … Again, some of this stuff isn’t cool, but SEO and email marketing have some of the best returns and they’re super still unbelievably effective. Focusing on those and making sure those are solid, you get some of the best brand for the buck … You get your bang for the buck. Sorry. Because it’s easy to go the shiny happy route, but the core of understanding kind of the SEO and how it’s connecting on all your different content and how you’re coming up in search results all across and mobile related, that’s still … And again, email marketing on ecommerce, we did a study here recently and saw that some of the most successful brands are their leads are coming from up to 40 to 50% of their net new sales are coming from email related.
Paul:
We make sure that you have your core fundamentals ready before … And you might do this like a portfolio, right? Like hey, maybe you’re dipping your toe into … Get a few Tik Tok videos out there and explore with a couple people, and know that you’re not going hard on that but making sure that you get your fundamentals down first.
Stephanie:
Yeah, that’s such a good reminder I think just for business in general but to stay focused and make sure that you’re not getting caught up in the craziness and everything new. Make sure you have your email list good and that you actually own that and you’re sending out good stuff. I don’t know if this question could get you in trouble, but I’m going to ask it anyways. What is something you believe around ecommerce that many don’t agree with you on?
Paul:
Huh. I’ll have to think about that one. It’s kind of funny in some ways because I’ve come through the whole … I’m the old guy in ecommerce, and so I’ve been the one being like, ecommerce is going to be bigger than it is. I feel like in the last six months that now I’m the hey guys, retail is not going away. Retail has been here for hundreds of thousands of years. It’s not going away. There’s a lot of proponents out there, I won’t name any names, but ecommerce is everything, and I’m the ecommerce guy and I’m like, no it’s not. Understand it’s too easy to say things are black or white for clicks, as opposed to understanding the nuance.
Paul:
If you look at in China, they just met a massive milestone. They’re now over 50% of retail is via ecommerce. If you look at the states, relatively speaking, depending on which calculation you’re looking at is anywhere from 17% or 22%, let’s say it’s somewhere in between that. Less than half of the penetration in China, and so I don’t think over the long-term retail won’t be 100% ecommerce, right?
Paul:
Over time, it might get in the U.S., because of the way we’re distributed and the ease of buying at retail, you might get up to 50, 60% in the next 10 years but you’re never going to get to a hundred and ecommerce is not everything and more the conversation should be retail has just many forms. I’m now pivoted to make sure that we don’t forget the importance of these great real life experiences and then how you can balance and leverage commerce online.
Stephanie:
That’s great that you’ve had to flip now to defend the other side. I’m assuming you think that retail is going to be changing though in some way or shape or form.
Paul:
Of course.
Stephanie:
How do you see that playing out?
Paul:
I talked about the grocery and that’s a great example. They are now changing the way they see their line … Because one of the biggest growth areas in this past year has been about BOPIS, buy online, pick-up in store. You probably saw, like you might have gone to a store and there’s all these pickers. If you go, like half of the people in the store were employees picking for pick-ups. Just recently Walmart announced how they’re going to re-jigger and automate so that parts of their stores are add-ons will be automated specifically targeted towards BOPIS.
Stephanie:
Wow, interesting.
Paul:
They’re looking at maybe rolling that out over the next year or two over 200 stores. It’s pretty significant. Then if you look at Kroger, they bought Ocado which is one of the largest robot … Being able to bring together delivery in stage and they’re looking for closer to the store to provide support for BOPIS as well. What you’re going to see is this the way real estate is leveraged very differently than the big huge aisles with the big cart. It may be optimized slightly differently.
Stephanie:
Yeah, that’s something I’ve been thinking about optimizing retail locations, and when I think about having someone go and buy my groceries, all the dry goods just get what I need, but when it comes to my fruits and veggies and things like that, I still think people sometimes they have a certain kind of avocado they want, they have a certain color banana they want. It seems like there’s a way to segment the store and the stuff can just be picked out for you because you know what you want, and then there’s another part of the store that you can still go in and interact with and grab the things that you want because there’s actually preferences around them. I don’t know what that looks like but it seems like an interesting thing to think about.
Paul:
Exactly. It’s just going to change.
Stephanie:
Yep. Just a minute before we hop into the lightening round, I did have a question around Internet or ecommerce penetration. You were mentioning that and it does seem like there’s a lot of opportunities all around the globe because certain areas have very lower ecommerce penetration because of a lot of reasons. Are there any regions that you’re betting on right now or that Deloitte’s looking into of there’s some opportunities coming up here once X, Y, and Z is solved?
Paul:
Yeah, the area that has the biggest potential for growth right now that is behind … If you look at just relatively speaking, to give everybody a perspective, from an ecommerce adoption, China is number one, Europe and the UK are generally a little bit ahead, and a lot of that has to do with they’re smaller and it’s easier from some of the delivery. The biggest growth area that we see right now in the next short-term is around Latin America.
Stephanie:
I was just going to say Latin America. I’ve heard a lot of VCs that you probably follow mentioned how they’re going to be up and coming with them.
Paul:
Mercado Libre based out of Brazil is one of the fastest growing and there’s also another shop app that’s just skyrocketed out of Brazil, and so they see Latin America, because again they’ve been behind on the retail penetration and they’ve been behind, but this whole COVID just pushed that all along. I think that’s the next big massive growth compared to everywhere else.
Stephanie:
I was just looking at them yesterday so it’s funny you mentioned that. All right, well let’s move over to the lightening round. The lightening round is brought you by our friends at Salesforce Commerce Cloud is our awesome sponsor. This is where I ask a question and you have a minute or less to answer. Are you ready, Paul? All right. First one. What one thing will have the biggest impact on ecommerce in the next year?
Paul:
It might actually be how this shipper container problem right now, all the ports are behind and not clear when some of the massive packaging and shipping issues around the world get sorted out. That might be the determinant, because if you can’t get the products around the world, you might not be able to deliver what you want.
Stephanie:
That’s a good one. Do you see any resolution with that? I don’t understand what the problems are there. I’ve not looked into the shipping container world, so what’s happening there and what could solve that?
Paul:
It’s kind of a combo of stuff, and this has happened in a number of industries. It’s kind of fascinating because it also kind of effected the way we planned. When you went back to a year ago into the spring and when you went back to all the historical of what happened when you had a large change and potential recession and what the impact was, you went back to, well, the shipping container industry went back and said, well, all our historical … We got to pull back. They pulled back. What ends up happening, because of the ecommerce shift and spike, their demand very quickly … They pulled back and it’s hard to then build it back up when you’re dealing with massive ships and containers around the world.
Paul:
By late summer, they realized oh crap, we’re way behind and we need to catch up. That was part of it. Then you have a bunch of issues of hey, people on the essential front lines are just getting COVID and they can’t deliver it, right? You have a combination of conservative planning, COVID actually effecting people, to geopolitical problems of hey, we don’t want to receive packages and you’re looking at different areas in the world that actually impact that. That’s just another part of it that contributed to it. There was an article in Detail just this past weekend in New York Times that went into a little bit more detail.
Stephanie:
That’s an interesting one and that’s a lot at play. That’d be a good field or area to watch. Next question. If you had a podcast, what would it be about and who would your first guest be?
Paul:
Oh, man. I’ve actually been kicking around potentially doing … This might be a little bit of what are the slow ways to be successful at ecommerce, right? Because it’s funny because I’ve been on Clubhouse now for six months and you’ve got all of these entrepeneurs that hey, make seven figures, eight figures in a month or two, but the thing … ecommerce seems overly easy to get into, but to scale and be successful is very hard because there’s so many factors that play a part of it that you don’t have full control of it. If I had a podcast that I would do, I would say the slow way to success to ecommerce.
Stephanie:
I like that. I’ve seen a lot of those people on Clubhouse, their bios of I’ll scale you to a million. I’m like, nah.
Paul:
Yeah, right away it’s like, next.
Stephanie:
Yeah, I just don’t trust it, not for a second. What’s up next on your reading list specifically around ecommerce trends? What are you reading every day to stay on top of the latest?
Paul:
It’s something that I probably spend a couple hours a day reading lots of stuff. I actually use Feedly, I have all these keywords that kind of feed in, and I follow a lot of … There’s a lot of great podcasts out here. Of course, I got to plug my friend, even though he works at a competing company, he used to work for me, Jason Goldberg. The Jason and Scott Show is probably the best ecommerce podcast out there.
Stephanie:
Yep, I like theirs too.
Paul:
He’s also a personal friend. I’ve known him for a long time. There’s a whole crew of people out there that are passionate about it, and so I’m kind of geeky about it. It’s funny, Jason as the retail geek but in some ways I’m more the ecommerce geek.
Stephanie:
Yep, I like it. That is a good one to stay on top of. I like that. Then the last one, what one thing do you not understand that you wish you did?
Paul:
Oh, man. I’ve come more from … I’m more on the strategy and the technical side and the implementation. While I understand the marketing side okay, I really don’t have the in-depth digital marketing side of it and I’d love to be able to spend more time and really focus around that area of how to really effectively connect. That’s almost like another side of the brain that I have not spent the time on there.
Stephanie:
Yep. That’s a good one. All right. Well, Paul, thanks so much for coming on the show and giving us a glimpse into what you’re working on at Deloitte Digital. Where can people find out more about you or where can they follow you at?
Paul:
The easiest … I’m quite active on Twitter, on deFornoP, you can follow me, and I try and share a couple articles a day of … I curate good stories on both B2C and B2B commerce and people can also reach out to me at Deloittedigital.com or on LinkedIn.
Stephanie:
Amazing. Thanks so much, Paul.
Paul:
Awesome. Thank you.
