Unless you’ve been living under a rock, you’ve probably heard that ecommerce has had a bit of a boom in the last couple of years. But does that mean a bust just around the corner? Some people think so. And even if the industry doesn’t see a full implosion, there will certainly be rumbles and challenges every brand will have to deal with. Some of the inflated demand will fall away, and more and more competition will continue to creep in. Nate Kennedy has a plan to face the turbulent times ahead, and he broke them down for me on this episode of Up Next in Commerce. Nate is the VP of Global eCommerce and Customer Experience at Horizon Hobby, which is a corporation that manufactures and sells high-end, hobby-grade radio-controlled cars, planes, boats, and accessories. In the last few years, Horizon Hobby has re-platformed, invested in paid media, and saw the value of influencers. So what’s next? Tune in to find out!
Main Takeaways:
- Start Small: Going all-in on an idea you believe in might be exciting, but it can also be a big mistake. You have to test your ideas before investing time and resources into a tool, channel, or product that you believe will be a big hit. The customer will be the truth-teller, and you have to get their feedback before you make any big moves.
- Turbulence Ahead: COVID created some artificial momentum for ecommerce and buoyed growth for a while. In the next two years, brands will have to create their own momentum and build demand for their products amid much more competition.
- Bring Customers To You: The way to stand out is to be different — everyone knows that. But in practice, that means experimenting with your programs, your events, and your customer loyalty offerings to see where you can actually build an experience that will propel you beyond just selling products and into a place where you can become a lifestyle brand customers keep coming back to.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“We wanted to be on Salesforce in time for 2020 shopping season, and we barely made it. We were able to experience the benefit of a platform like Salesforce versus the old WebSphere platform that we were on and the antiquated self-grown Tower Hobbies platform that that site was operating on, and we immediately saw upticks and convert version rate down ticks in bounce rate.”
“Sometimes people jump at what they believe the right thing to do is when in reality, the better move is to test an idea on a small scale, and then look at the results before you move everything.”
“The biggest single way that we’ve grown the business over the last two years is through paid media. We have invested in ways that Horizon had never invested in the past and we’ve seen some success, but what we’ve come up against recently is that we’ve sucked all the air out of the room. With regards to paid media, where you’ve got competition like Amazon and some other people, you can hit a ceiling very quickly of how much you can afford to spend. And we we’ve hit that ceiling. And so in 2022, we’re going to look at a different ways to grow the business… We’re gonna invest in affiliate marketing in ways that we’ve never invested in affiliate marketing in the past.”
“I do believe there’s some turbulence ahead, especially, especially if you’re comparing first half 2021 to 2022, we, we, aren’t gonna have the, the artificial momentum that COVID created… So we’re going to have to create our own momentum and creating that momentum while customers are going back to normal life and able to go on vacation… there’s going to be a lot more competing for the discretionary dollars.”
“The keys to success are number one, look for things outside of paid media to grow your business, to find new customers. Two: leverage every tool you have for customer retention. You’ve got to use your loyalty club like you’ve never used it before this year because you’re going to have to be pulling people into your store versus them actively looking to go there. And the just keep your eye on the prize. Understand your customer behavior and your KPIs, and be looking at them on a daily basis. And if you start to see slippage,don’t freak out. But at the same time, if it becomes a trend over a few weeks, you need to really go back and look at what you’re doing.”
“I’’m curious to see how much of the momentum that we have seen in the last two years driven by COVID and being locked down, how much of that momentum stays and how much people go back to wanting that in person shopping experience. I think that that the convenience of ecommerce will help it stay, but I believe that after being locked down for a couple years, people want this interaction, this way to communicate with individuals. And so understanding how we can do that in ecommerce is going to be thing that is an adventure to me.”
Bio
VP of Global eCommerce and Customer Experience at Horizon Hobby. I strive to make a positive impact on the world and those around me. I am lucky enough to be married to my amazing wife Natalie. I enjoy my days as a father to 2 fantastic young men(Zach, and Noah) and 2 Labrador Retrievers(Beverly & Chungus). I also play a lot of golf and enjoy collecting sports memorabilia.
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. Welcome to Up Next in Commerce. I’m your host, Stephanie Postles, CEO at Mission.
Stephanie:
Today on the show we have Nate Kennedy, who’s the VP of global eCommerce and customer experience at Horizon Hobby. Nate, welcome to the podcast.
Nate:
Thank you for having me.
Stephanie:
Yeah, I’m very excited to have you on because there’s a lot of things I want to dive into today with you. First, I wanted to go through your background because I was looking through your LinkedIn and you’ve done a lot of impressive things. And so maybe starting with what you were doing at Select Blinds and your role there because I think you were there for like 15 or 16 years. And I was reading through some of the stuff you were doing like increasing revenue and profitability and all these really good stats. So I was hoping we could kind of start there and what your journey looked like while you were the EVP there.
Nate:
Sure. So Select Blinds was a company that a friend of mine and I started together in 2003. We were in eCommerce already with a company called lowestmortgage.com at that point that we exited out of shortly thereafter. But we started this with him, myself and a programmer in an office together. And in 30 days, we had a website up and running selling window coverings direct to the consumer.
Stephanie:
That’s early, 2003.
Nate:
It was. It was really early. And we knew we were onto something in the first month when we did like $35,000 in sales-
Stephanie:
Wow.
Nate:
Without really much advertising at all. So over the years as we grew, my responsibilities grew. So I learned a lot. I would like to say that I didn’t go to a four year college. I tried it and it wasn’t for me. So I got an education in eCommerce through the experience of selectblinds.com and what to do and what not to do, how to grow your business in a lot of different ways.
Nate:
And so as the business grew, my responsibilities grew. We signed a deal in 2004 with Extreme Makeover: Home Edition where we did all of the homes for every show that they aired. And so that was cool. It got us a lot of exposure.
Stephanie:
Wow. How did you get that deal? Like what did it look like to actually close that and then be the exclusive partner for that?
Nate:
So it’s a pretty interesting story. The father of Rick, who was my partner, he visited Extreme Makeover while they were in Gilbert working on a home and said, just mentioned to them, “Hey, my son has a window coverings company.” And they said, “Interesting. Hunter Douglas is who we were partnering with and that contract expires after this show. Could you get us your son’s contact information?”
Stephanie:
Wow.
Nate:
And so Rick called them the very next day and they set up a conversation and we just filled a gap that they had. They didn’t have anybody who could fill that role.
Nate:
The hardest part of that relationship was turning orders around in 24 hours. They would give us the measurements and we would have to have the blinds made and shipped the very next day. And there was nobody who was willing to take on that type of a job. And we were able to, with one of our really good suppliers, we were able to execute and make that work.
Nate:
So the beauty of this is there was no financial of commitment from us outside of providing them with window coverings and making sure somebody was there to install them, which is the best kind of advertising you can do.
Stephanie:
Yeah, I’d say so.
Nate:
Yeah, so we had a nice run with them for four or five years. And as we partnered with them, we were able to leverage the relationship and market ourselves as the partner. They didn’t do a lot of marketing for us, but we were able to leverage that, putting it on marketing materials. We created a mailer that had some window coverings in it and we had right on the cover, “As seen on Extreme Makeover: Home Edition,” AND all that fun stuff.
Nate:
So what we saw was while we were partnered with them, we saw growth rates of over 100% year over year every year that we were with them. And we were doing other things as well, but I think the driver behind that initial growth was Extreme Makeover and the partnership we had.
Nate:
Sometimes you get lucky, and this is definitely a situation where I would say we got really lucky to be in the right spot at the right time.
Stephanie:
But also being able to deliver though.
Nate:
Yeah.
Stephanie:
Like people can get lucky, but then also being able to make it work behind the scenes to be able to get the blinds quickly and someone on site, I mean, that’s a lot of coordination to make that work. So luck plus being able to actually deliver.
Nate:
Yeah. My definition of luck is when preparation meets opportunity, and we had prepared to be able to do things like this by offering two day shipments on window coverings on our website ahead of this. And so when this opportunity came, we just had to shrink it by a day and we were able to execute and make that [inaudible]. So you’re right, there’s always an element of execution when it comes to leveraging luck.
Stephanie:
Wow. That’s cool. Okay, so where is Select Blinds today?
Nate:
So Select Blinds was acquired in May of 2019 by a… I can even tell you who it is at this point. They were acquired by Hunter Douglas.
Stephanie:
Oh wait, that was the original person who was on Extreme Makeover.
Nate:
Yeah. So they ended up acquiring us. Rick is still there as a chairman of the board type position. When they acquired us, my vested interest was bought out and so I chose to exit at that point. I wanted to do something different, something fun. Window coverings is great, but it’s not fun.
Stephanie:
Yeah.
Nate:
And I wanted to be able to prove to myself that I was more than a one shot wonder and that I could do what I’ve done at Select Blinds in other industries.
Nate:
So I exited and was just planning on spending the summer with my son who was a senior and getting ready to go to college and I was just going to take some time. And after 16 years of grinding through, I felt like I wanted to do that. And about 60 days after I exited, I got a phone call from a recruiter who said, “Hey, I saw you’re not at Select Blinds anymore and I have a company that needs some help with eCommerce. Would you be interested?”
Nate:
And so I looked at their sites. They were kind enough to share analytics data with me to give me an idea of how they were doing. And I jumped at the opportunity because I saw a lot of potential in what they were planning to do and how they were leveraging the internet and how they were trying to attack eCommerce. I thought that I could bring some value to the table. So we made that decision.
Stephanie:
Yeah, I want to hear about this now. So you’re talking about Horizon Hobby.
Nate:
Yep.
Stephanie:
First, before we get into what Horizon Hobby is, I actually want to hear about what metrics you were looking at where you saw potential before even knowing about the company or anything.
Nate:
Sure. So the first metric was their email conversion rates. I saw email conversion rates that were really suboptimal and so I immediately knew that whatever was happening from an email perspective wasn’t targeted. And so I saw that was an opportunity.
Nate:
I looked at the amount that they were spending on paid media. It wasn’t very much. They had grown organically to the point that I came on board. And when you grow organically, it’s slow growth year over year. And so I immediately saw an opportunity for me to come in and potentially leverage paid media to add some gasoline to the fire, which is essentially what paid media is, it’s just gasoline.
Nate:
And so I jumped at those two. And then their websites were subpar and I saw an opportunity to come in and redesign the websites. And those three elements, I thought that there was very little chance of not being successful.
Stephanie:
Yep. Cool. Okay. So now we can talk about the company a bit and then we’re going to probably go back to some of those pieces to hear more details, but what is Horizon Hobby for anyone who doesn’t know?
Nate:
So Horizon Hobby is a corporation that manufactures and sells high end hobby grade radio-controlled cars, planes, boats, accessories, things of that nature. It is a really cool company because they produce some really cool products. And my kids were probably more excited than I was to have me join this team because of the cool products that they sell.
Nate:
But we’re a house of brands. We have a lot of other brands that people may have heard of. Horizon Hobby kind of sits in the background, but brands like ARRMA, Losi, E-flite, Spektrum, Axial. Those are the big brands that we support and that most people who are in the RC industry or who play with RC products would know those brands.
Stephanie:
Yep. Yeah, I have three sons. And so when I was looking at the website, I was like, “Oh my gosh, I don’t even want to let them see this.” My four year old would want all of these things, especially the remote-controlled boat.
Nate:
Oh yeah.
Stephanie:
And the airplanes. Everything on here is like a dream. So very, very cool company that I didn’t even know existed.
Nate:
Yep.
Stephanie:
So when you got there, I mean, you talked about the three things that you wanted to focus on, is that kind of what the first year looked like?
Nate:
It was. So in the first year, one of the first decisions that had to be made is what web platform, what eCommerce platform we were going to move to. They were on WebSphere, an old version. They had missed I think two upgrades, if I remember correctly. And so they were way behind on the technology side.
Nate:
And we had two sites. We had horizonhobby.com and then we have towerhobbies.com. They had just acquired their biggest competitor, which was Hobbyco, and that website came with it. So we had two website selling a lot of the same things and both working on different platforms. So the first step was to migrate everything to a single platform for an efficiency that could be gained.
Nate:
And so I went, and with our CFO, he and I worked very closely together to identify which eCommerce platforms we should look at. And ultimately, which one we decided to land with was a decision that he and I and the CEO made together based on everything that we learned.
Nate:
So that was the first step second. And so the other parts of that are, depending on which eCommerce platform we choose, there were potentially opportunities to move other third party services like email marketing to someone who more closely aligned with that eCommerce platform.
Nate:
And in our case, we decided to go with Salesforce Commerce Cloud. And so it made a ton of sense to just move our email over to Marketing Cloud and move our service team into Service Cloud. So in the first year and a half, we took on the huge task, I mean, it was huge it was [crosstalk] of migrating all of our systems to Salesforce. And we did it really quickly. Probably in hindsight, probably more aggressively than we should have because we had a lot of cleanup to do at the end, but we wanted to be on Salesforce in time for the 2020 shopping season and we barely made it.
Nate:
So we were able to experience the benefit of a platform like Salesforce versus the WebSphere, the old WebSphere platform that we were on and the antiquated self-grown Tower Hobbies platform that that site was operating on and immediately saw upticks in conversion rate, downticks in bounce rate, and just customer behavior reacted. While the vocal minority said, “Why did you change? Why did you move my cheese?” because that’s what we did, we moved their cheese dramatically, [inaudible] the data said that the customers were responding really well to the changes because it was a step forward in where eCommerce shopping had gone.
Stephanie:
Yep. Yeah. I mean, also this type of company is perfect to be ready for the 2020 shopping season. I mean, everyone’s probably getting into hobbies, getting even more excited than ever. Even me personally, I was thinking about different drones, and we have two of them. And I never was thinking about that maybe a couple years ago when I didn’t have a lot of time at home or outside or whatnot. So that was a perfect time to transition over, I’m sure.
Stephanie:
What else did you see happened afterwards? What did it feel like? I mean, did you have teams who were used to different platforms? You have companies that are being acquired. Some people might want to be like, “I want to do it the way I’ve always done it.” How did you get it everyone on board when it came to that transition to all move in the same direction?
Nate:
So I think the easiest way to describe this is I had two teams who were working on… We were doubling the effort. We had to create content for Horizon Hobby and there was no way to move it to Tower Hobbies. So, so we were creating content on my team twice. So when I told them that we would be able to create content one time and that we’d be able to push it to both sites, understand that we would need to make some slight tweaks to the verbal content to keep SEO rankings where they needed to be the team, the team was very supportive and just jumped at the opportunity to be able to reduce the amount of work that had to be done by creating the efficiency of doing it once.
Stephanie:
Yep. Were there any surprises as you were going through the re-platforming?
Nate:
So, yeah, there were a lot of surprises. The biggest surprise to me was so we chose a path and the path that we chose was that we were going to re-architecture the Horizon Hobby site and then we were going to leverage that architecture for all the brand sites we wanted to launch as well as towerhobbies.com. When we got into it shortly after launch, we realized that within 90 days, Google had identified that because we had now moved to one platform, that we were one entity, and the organic ranking started to tank for both sites depending on what you were searching for.
Nate:
And so we’ve had to pivot quickly to make some changes to the Tower Hobby site to make it look less like the Horizon Hobby site and to have the content be a little different to be able to, I don’t want to say fool Google, but to be able to communicate to Google that these are two separate entities. And to be completely fair, Tower Hobbies focuses on selling distributed products, things that Horizon will distribute that other manufacturers make, and Horizon focuses a lot more on the proprietary stuff, the things that Horizon actually manufactures itself. So they live in two different worlds, but there is some overlap there.
Stephanie:
Yeah. Okay, that’s good to know you can’t just copy and paste the site and make it all the same or else, yeah, your organic reach plummets. Were you able to regain that after you kind of shifted things a bit?
Nate:
We’re still working on it, but we’re seeing progress. We’re seeing progress to the rankings coming back. And we’ve been able to test, this is where testing comes in, we’ve been able to test things on specific category pages and then see how Google responds to that before we take on the effort of doing everything sitewide.
Nate:
I think sometimes people jump at what they believe the right thing to do is when, in reality, the better move is to test an idea on a small scale and then look at the results before you move everything. Because if we had jumped and done it all and hadn’t tested it and it was wrong, I’d probably be looking for another job.
Nate:
So I’m glad that we went about it the way we did. And I’m a big proponent of testing things and understanding if they’re successful or failing quickly, and then moving from that to accomplish the bigger task.
Stephanie:
Have there ever been experiments or tests that you’ve done where you had really strong conviction around, you’re like, “I know this is the answer we’re going to get,” and then you were actually surprised by the outcome?
Nate:
Yeah. That’s happened a lot actually.
Stephanie:
A lot?
Nate:
Yeah. I mean, just the prime example of this is while I was at Select Blinds, we had this concept that people wanted to shop by color. We just knew that’s how they wanted to buy window coverings. So we built this whole thing on the premonition that people wanted to shop by color, and this is really where I learned the lesson of do something small. Don’t jump in with both feet.
Nate:
And so we probably spent five months building this engine that would allow people to shop by color, plastered it on the homepage, and like 3% of our customers engaged with it.
Stephanie:
Wow. How did they want to shop instead?
Nate:
So what we learned is that the customers typically wanted to shop by price first or they knew ahead of time coming into our site which category they wanted. Whether they wanted wood blinds, shutters, honeycomb shades, they knew what they wanted before they came in and color was just a second decision.
Nate:
And I wasn’t the only one that had this premonition. Like my team sold me on it, “This is really what people want.” And we leveraged things like how often do people expand the color inside the product and it happened all the time. So there was data that supported this as a move, but we were looking at the data the wrong way.
Stephanie:
I mean, that’s like us as humans, we always think like, “Oh yeah, this is so obvious. This is how I would do it,” or, “I see a little bit of the data showing that,” and then actually putting something out there for the world to use or for someone to buy and being like, “Oh, nevermind.”
Nate:
Yes. Absolutely.
Stephanie:
That’s great. Okay. So we’ve talked now a bit about re-platforming, so now I want to hear you started losing your organic reach, but you guys are also growing very quick. We’re talking about how these past few years have been amazing and lots of new customers. How did you maybe start attracting new customers and raising awareness since you’ve been at Horizon Hobby?
Nate:
So the biggest single way that we’ve grown the business over the last two years is through paid media. We have invested in ways that Horizon had never invested in the past. And we’ve seen some success, but what we’ve come up against recently is that we’ve sucked all the air out of the room with regards to paid media. You can very quickly in an arena like this where you’ve got competition like Amazon and some other people, you can hit a ceiling very quickly of how much you can afford to spend. And so we’ve hit that ceiling.
Nate:
And so in 2022, we’re going to look at different ways to grow the business. The CEO and I have had some very candid conversations about what he would like to see and where the opportunities really lie. We’re going to invest in affiliate marketing in ways that we’ve never invested in affiliate marketing in the past.
Nate:
We’re working with Google on… They have a really cool opportunity called BrandConnect, where they connect your brand with creators on YouTube. And then they’ll feature your product either as an integrated part of the video or in a bracketed segment where you’re the sponsor to bring awareness to people who would probably be interested in your brand if they knew you existed.
Nate:
Due to persona overlaps that exist in the persona stuff that we’re working on and then what Google has shared with us, we’ve got a pretty good idea of who our customers are and what their other interests are. So we want to be in those areas where we can attract them to what we sell.
Stephanie:
That makes sense. I was just talking to the CEO of a company called Ridge. They are known for like Ridge Wallet [crosstalk]
Nate:
I have one.
Stephanie:
Oh, okay.
Nate:
I actually have one in my pocket.
Stephanie:
All right, you’re one of their influencers.
Nate:
I love my Ridge Wallet. It’s awesome.
Stephanie:
Oh my gosh. That’s so funny. Okay, so he was also awesome and he was the one I was telling you where he called himself like a doomsdayer when thinking about the upcoming future. But anyways, he talked a lot about tapping into influencers, not through an official program, but going for the long tail and how that’s how they scaled and grew so quickly. And it wasn’t going after the big names who were already on an influencer platform, it was finding the hundred smaller channels, whether it was fixing appliances or I think he talked about someone on the farm, those are the people who oftentimes sell the most because they have such an avid viewership.
Nate:
Yeah. Micro influencers, that’s what I call them.
Stephanie:
Yeah.
Nate:
And the beauty of micro influencers is that they, their viewership or their following is much more highly engaged than some of these bigger personalities on YouTube.
Nate:
So we’re working with YouTube right now on the BrandConnect thing and we’re leveraging creators at different level so we can understand how profitable it is at each level to be able to be involved with these influencers. So we’re going to kind of do what Ridge has already done.
Nate:
And you know who was really good at this is Warby Parker.
Stephanie:
Oh yeah.
Nate:
They grew their entire business this way. And I don’t think they spent much on pay per click marketing at all. I think mostly all of it was through this micro influencer program that they had.
Nate:
So there are ways to do it, and it’s uncomfortable when you haven’t done it before. And this is something that’s new to me, so I’m getting an education, but the beauty of it is you’re paying those marketing engines, which are your creators, on conversions rather than on traffic. And that makes it a lot easier to see success because you’re not paying for stuff that doesn’t convert.
Stephanie:
Yeah. And this is also the perfect business for this type of influencer style.
Nate:
Yes.
Stephanie:
I mean, I’m already imagining the hobbyists, how big of fans they are and probably watching every single video when it comes to, “Okay, let’s see how this remote control car can handle rocks or how this boat can handle waves.” I can already imagine there’s a avid fanship over these products.
Nate:
Yeah, our product lends itself to video really well. And so in 2022, leveraging video as an opportunity to drive traffic and revenue is something that’s going to be critical to the success that we’re looking to achieve because it’s not going to be easy. And paid media is going to be so competitive this year that I don’t believe, even after the first week of being in this year, I don’t believe that if you’ve been growing your business strictly on paid media, you’re going to struggle the find success in 2022.
Stephanie:
Yeah. So how are you thinking about the next one to two years? I know before we were recording, we were talking about there’s maybe some turbulence ahead. I’ve heard that quite often from quite a few guests that have come on and I want to hear your perspective on the coming year or two.
Nate:
So I do believe there’s some turbulence ahead, especially if you’re comparing the first half 2021 to 2022. We aren’t going to have the artificial momentum that COVID created. I don’t believe. You never know. COVID, I thought it’d be gone by now, it’s still here, but I don’t believe we’re going to have more stimulus and shutdowns and forcing people to sit at home and twiddle their thumbs and look for things to do.
Nate:
So we’re going to have to create our own momentum. And creating that momentum while customers are going back to normal life and able to go on vacation, able to hopefully someday they’ll be able to buy a car at a decent price-
Stephanie:
We’ll see.
Nate:
Yeah, we’ll see, you never know, but there’s going to be a lot more competing for the discretionary dollars, which is where I live. And also, I am concerned about the inflation situation that’s ongoing right now and the external factors that we can’t control that we’re going to be subject to.
Nate:
But yeah, just in the first couple weeks of this year, we’ve seen a reduction in global demand for what we’re selling. And we’re coming out of the holidays, so we see a dip coming out of the holidays anyway, but overall, I think there’s some reasons to be concerned about what this year’s going to look like. I mean, the keys to success are, number one, look for things outside of paid media to grow your business or to find new customers, two, leverage every tool you have for customer retention. You’ve got to use your loyalty club like you’ve never used it before this year because you’re going to have to be pulling people into your store versus them actively looking to go there.
Nate:
And then just keep your eye on the prize. Understand your customer behavior and your KPIs and be looking at them on a daily basis. And if you start to see slippage, don’t freak out. But at the same time, if it becomes a trend over a few weeks, you need to really go back and look at what you’re doing.
Nate:
I just with my team last week, we had a whole hour and a half conversation around new promotional ideas for 2022 because what we did in 2021 isn’t going to work. And so we’ve got some really cool ideas that we’re hoping will move the needle.
Nate:
And the one thing that I have that a lot of people don’t have is I have really cool products that come out all the time. And the people at Horizon who develop and build these products, they’re the key to my success in reality, because if they stop producing these really cool products, my business would eventually go to zero.
Nate:
And so leveraging the technology that they’ve created and the innovations that they come up with is something that’s going to be really important to me this year. Someone like a selectblinds.com that I don’t work at anymore, but I see real turbulence for something like that. That’s a commodity and the pricing is going to get squeezed. Your margins are going to get squeezed. It’s going to get really competitive on paid media. I just think that situations like that where you’re selling a commodity are going to struggle this year.
Stephanie:
Yeah. I agree. What are some maybe new bets that you’re thinking about that are big and audacious and you don’t know if they’re really going to work this year? You don’t have to tell me all the things you’re brainstorming, but maybe what are some fun ideas that you guys are thinking about?
Nate:
So one of the things that we have launched in a beta form right now is we’re styling an elite, we call it elite loyalty. It’s a Prime style loyalty club where those customers will pay to be a part of this club. And at the same time, they get like front of the line customer service, they get pre-access to releases that we’re going to be selling. They get notified by their… They have a concierge team that works reaches out to them anytime we’re going to launch something that they might be interested in.
Nate:
So I really think that leveraging this almost white glove service is something that we’re going to attack this year, and then just ideas on how we can build a relationship with the customer. And I can’t give you all of the ideas that are coming out, but there are some things that we’re going to do this year that will provide an experience on our website and with our brand that you won’t have anywhere else.
Nate:
And I think that doing things like that that separate you from the competition are how you’re going to build that lifestyle brand, which is, when I talk to our CEO, and he’s one of the best people in the world, by the way, I love our CEO, and he’s always thinking about how Horizon can be a lifestyle brand because that is his vision for Horizon. He looks at YETI. He looks at REI. He looks at all these different lifestyle brands, and Nike is another one that he likes to leverage, and how can we become that? And he’s very supportive of any ideas that we have that will move the needle that direction.
Stephanie:
I love that. I mean, it also seems like there’s a big opportunity to build the community around these products. I’m just imagining competitions and races. I mean, once you have that group of people who look to your brand for things like that, it’s like instant community, instant loyal fans. They’re not going to go away from the brand names that they’re all competing against. And there’s so many opportunities I see with this company, which is really, really cool.
Nate:
Yeah. And we do a lot of that. We have many events every year where we bring the customers to us. We have a event in Champaign, Illinois every year called RC Fest where we go out, we have a flying field out there, and we go out and build tracks for the cars and we invite anyone who wants to come.
Stephanie:
Wow, that’s cool.
Nate:
And check out all the cool stuff that we do. And then we’ve got events like Axialfest, which is a crawling. We have these really cool crawlers that crawl up mountains like Jeeps and stuff. And people just die for that stuff. But we do that. We’ve done it at Donner Ski resort in California the last few years. And so people will come out there. We’ve had like 1500 people come out and camp-
Stephanie:
Oh, I bet. Yeah. I was already imagining this.
Nate:
And just spend the week with us.
Stephanie:
Yeah. I didn’t even know you guys did this, but of course, of course that works.
Nate:
Yeah, it works really well. And the struggle is doing enough of this to get to every part of the country where we know our customers live and having them be able to participate in this. Because once you become a part of the community of RC, you get sucked in. I mean, there are flying fields all over the country where we know that people who have our products get together and they fly together.
Nate:
So really cool and there’s so much of that opportunity for a community around this product that we sell.
Stephanie:
Yeah. That’s very, very cool. How do you think about or are you thinking about branded content or video content, like putting your different products within TV series or things like that? I mean, Formula 1 is always a series that I about like, wow, they obviously crushed it, and then how can other brands play in that same field when it comes to putting products organically into something, not that Formula 1 did that, but you get where I’m going. How can you think about that as well?
Nate:
So last year we dabbled a little bit in NASCAR. So we had a partnership with Michael McDowell and Front Row Motorsports where we were the premier sponsor for three races that they did. Okay. And so we had him doing some content for us. We provided him with RC cars. He was running around with his kid and the content was really well-received.
Nate:
So as far as TV shows and stuff, we haven’t really gotten to… It may have happened and I don’t know about it because we’re a big company, but yeah, you’re right, things like that. We were in a McDonald’s commercial last year with one of our products and it sold out right as the commercial launched.
Stephanie:
I bet.
Nate:
And so everybody’s looking for this product and, well, we don’t have it. But those things happen. They happen through marketing and I’m not as closely tied to the corporate marketing as I am to what I’m working on, but it does happen occasionally.
Stephanie:
Yeah, I can only imagine. I’m just thinking about some of the shows that my four year old watches, dinosaur shows, all this other kind of stuff. And having the products in there, I’m like the second anyone will see that, even myself, I’d be like, “Ooh, how do we find that? That’s much need.”
Nate:
Yeah. It’s cool stuff. And our stuff tends to skew a little older than four because it’s more hobby grade, but they’ll see it and they’ll think it’s really cool, right? From the moment that they see.
Stephanie:
And then the parents will want it.
Nate:
Yeah, more something mom or dad are going to run, or grandpa’s going to run or an uncle’s going to run and the kid’s going to be like, “Oh my gosh, yeah, I want that.”
Stephanie:
Yeah.
Nate:
So it’s really cool. And when it comes to the planes, we have this really cool technology that allows for someone to have a controller and be flying a plane and to have a buddy box with someone who’s really good at flying next to them. And they could take the plane when they get into trouble so they can learn [crosstalk].
Stephanie:
Oh, that’s cool.
Nate:
So the biggest thing about flying an airplane is you’re worried you’re going to crash it.
Stephanie:
Yep.
Nate:
There are ways around that. And we’ve got a lot of tools to help people who might be interested in getting into flying and overcome that without the fear of crashing it and I’m out $300 on this plane I just bought.
Stephanie:
Yep. I have felt those feelings before. And I know Hilary listening will probably laugh because she was here. We were having a team offsite in California I think a few years back and we brought our DJI drone. It was the company drone that we were using to get video footage. And I hadn’t really flown it that much and I was like, “Oh, let’s just put it up in the air and see how it goes.”
Stephanie:
Not only did I almost hit one of our team members because we were trying to take video of ourselves, I went so high into the air and I sent it down the beach because we were in Pismo Beach or something, and everyone’s like, “Oh, where’d the drone go?” And I was like, “Oh, it went to the right down here.” And I was looking. I’m like, “All the beach looks the same on the video camera. I don’t know, I see a beach. I think it went down that way.” And they’re like, “Why don’t you call it home? You can push a button that says come back to home,” and I hear it coming from the other way. I didn’t even know which way the drone went. I wouldn’t have known how to fly it back home if I had to manually fly it back home. Thankfully it was just the return to home button that saved me.
Stephanie:
But long story short, I can see how that would be a very helpful feature for more amateur flyers like myself.
Nate:
That’s awesome.
Stephanie:
So the last question I want to ask is what you’re most excited about over the coming one to two years. You called it an adventure, which I love the optimism around the turbulent times to come, calling it an adventure, but what are you most excited to tackle?
Nate:
So I’m excited, personally, I’m excited to learn how to grow a business without leveraging paid media to the level that I have in my past. So that’s the first thing that I’m excited about. And I know I’m going to have some failures along the way, but it’s a part of the adventure.
Nate:
And I’m excited to understand where eCommerce goes. Like I was at, I hate to go to Walmart, but I was there the other day and they have moved everything to self-checkout. There is almost never a register where you can go have someone check you out. A joke that my wife and I make all the time is they should give us a W-2 for the work that we’re doing checking ourselves out.
Stephanie:
Yeah.
Nate:
But I’m curious to see how much of the momentum that we have seen in the last two years driven by COVID and being locked down, how much of that momentum stays and how much people go back to wanting that in-person shopping experience.
Nate:
And I think that the convenience of eCommerce will help it stay, but I believe that after being locked down for a couple years, people want this interaction, this way to communicate with individuals. And so understanding how we can do that in eCommerce is going to be something that is an adventure to me.
Nate:
One of the things that I’m just looking at, and it’s not a secret sauce or anything, is over in China, they have these personal shoppers that they do these shows. And they do some of that here too, but it’s not nearly as prominent here as it is in China where they’re shopping to you through the website. It’s something I want to see if it’s something feasible for what we do.
Nate:
The stuff that we sell, it’s very technical. And so having a live audience when we were to launch a product and having the product developer there and answering questions with an audience on the day we launch I think it’s something that might be really cool and might be something that the customers would respond to well.
Nate:
So I think we’re going to have to find a way to bridge that gap between the convenience and the personal contact. And so we’re doing a little bit of that with our concierge team on horizonhobby.com. We’ve got some other ideas on how we could potentially bring that one-to-one experience to the website.
Nate:
And so that’s kind of where our focus is going to be in the next two years. And I think that if you’re nervous about what the next two years bring, that’s something I would say you should probably focus on.
Stephanie:
Yeah. Certain things I think people will never care about singing again. When it’s commodity items, they’re like, “Yeah, I just need to order this,” and I always get that. And then other things, for sure. I mean, I know I still don’t really like ordering clothes online. It still doesn’t work out for me.
Nate:
Well, the one other thing that’s critical, what we’re going to have to look at is making your return process as easy as possible because the biggest hassle buying something online is having to return it.
Stephanie:
Yeah.
Nate:
And so as eCommerce entrepreneurs, because we’re all entrepreneurs in eCommerce, we need to look for ways to make that process more along the lines of what Amazon does. I mean, they’ve looped Kohl’s into the mix and they’ve got all these different places that you can return your stuff that you’re probably going to go anyway.
Nate:
And so luckily for us, we have 1200 hobby stores around the country that support our brand. And so working with them to create an omnichannel opportunity I think is critical to the overall success of Horizon as we move forward.
Stephanie:
Yeah. Yeah. For the return thing, I always think of why can’t we just tap into FedEx or UPS every time? Just, “Here you go, can you just take this back? Let me just hand it to you. Let me put it in my mailbox.” Why is that so hard?
Nate:
It’s so hard because they can’t even ship stuff to you on time right now. They can’t even fathom having to pick up as much as their shipping.
Stephanie:
No, I know.
Nate:
But I’ll tell you who’s going to be in a position to do it sooner than anyone else is Amazon.
Stephanie:
Yeah, for sure.
Nate:
With their own delivery network. I would not be surprised if in the next three to five years, Amazon starts offering competitive services to consumers to compete with FedEx and UPS and the postal service.
Stephanie:
Oh yeah. For sure.
Nate:
I see it coming.
Stephanie:
They’ve got the network.
Nate:
They do. They do. And eventually-
Stephanie:
They’re always preparing for things behind the scenes and they pop out, “Hey, I’ve been here the whole time and now we’re good.”
Nate:
It’s coming. Yeah, it’s coming. And FedEx and UPS I’m sure are aware of this, but they’re going to get a new competitor and it’s going to be Amazon.
Stephanie:
Yeah. Watch out. All right, Nate, let’s shift over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. You are a customer. That is great. This is where I will ask a question and you have a minute or less to answer.
Nate:
Okay.
Stephanie:
Are you ready?
Nate:
I am ready.
Stephanie:
All right. First, what’s up next on your reading list?
Nate:
So I just finished The Checklist Manifesto.
Stephanie:
How was it?
Nate:
It was good. Sometimes we over-complicate solutions to problems and a simple checklist sometimes can help solve really difficult problems.
Nate:
So next on my list is I have a book… The founder of Horizon Hobby wrote a book and In Plane Sight is what it’s called. And the CEO sent us all a copy of it. And so that is going to be next on my reading list.
Stephanie:
Cool. I will also check that out because that’s similar to a podcast title we have called Hidden in Plain Sight.
Nate:
And it’s a really catchy name because it’s got plane, P-L-A-N-E because he started Horizon Hobby.
Stephanie:
Oh.
Nate:
So I want to understand the foundation of the company.
Stephanie:
Yeah. Cool. Well, he sounds like someone we need to bring on one of our other podcasts, since we have many.
Nate:
Absolutely.
Stephanie:
So yes to that. Okay, next question. If you had a podcast, what would it be about and who would your first guest?
Nate:
Okay, it would be about sports cards because in 2020 to 2021, I have gone back to my childhood roots and I have dove into sports collectibles with both feet and I am all in. So I would be absolutely there. And my first podcast guess would be my favorite football player of all time, Dan Marino.
Stephanie:
Nice. Yeah, I’ve actually heard quite a few people getting into that over the past year or two and getting back into Pokemon cards, which I still know I have some at my parents’ house. I need to go back and find them.
Nate:
My kids had a whole bunch of first edition stuff that we still have in a box. I haven’t pulled it out, but yes, Pokemon card are another thing.
Stephanie:
You’re rich.
Nate:
Yeah. Maybe. Who knows?
Stephanie:
Yeah, you definitely got the good ones, I’m sure of it. Next question. What’s the best piece of advice you’ve ever received?
Nate:
The best piece of advice I’ve ever received? I would say don’t sweat the small stuff. Sometimes we get, and I am terrible at this, I get caught up on something that becomes my focal point that really isn’t that important. And I think sometimes when we focus on small things, you miss the opportunity to hit the big things.
Nate:
So quickly identify if it’s a big issue or not by validating how often something happens. And if it’s not, move it off your plate and give it to someone at a lower level and let them try and find a solution when they have one, or just forget about it completely if it’s a really small task. Like I had something my team brought to me where it was 0.12% of our traffic engaged in something. That’s just not worth talking about. So that would be my advice, don’t sweat the small stuff.
Stephanie:
That’s good. Okay, the last one, when you want to stay on top of what’s happening in eCommerce and what things to try out and what new big bets to take, where do you go to look for your inspiration? Like what are you reading? Who are you watching to try and get inspired, especially the coming year?
Nate:
So I spend a lot of time in Salesforce. They have this cool thing called Trailhead that allows you to understand their products and they put on stuff all the time talking through what they see coming. And then the best place that I found to be able to do this is there’s advisory boards around the country where you’re able to communicate with peers in the same field and have conversations with them around different topics. And I have one scheduled for the 26th of this month actually, where you get to be in a roundtable and you get to talk to people about the issues that they’re experiencing.
Nate:
And so I spend a lot of my time talking to people more than I do out searching for content because the content can sometimes be dated and I like to live in the here and now and feel what’s happening in the moment.
Stephanie:
Interesting. Yeah, I’ve usually shied away from those kind of groups because they’re always reaching out like, “Oh, join this CEO group, this one, this one, this one.” And so it’s actually nice to hear that you’re saying there are helpful ones out there-
Nate:
There are.
Stephanie:
If you find the right ones.
Nate:
That’s correct. You have to find the right one though. I’ve been through a few of them and they’re not all the right one. So you have to find the right one.
Stephanie:
Okay. Well, that’s great. Well, Nate, thank you so much for joining us today. This was really fun chatting about all things eCommerce and hearing about what you guys are up to at Horizon Hobby. Until next time, where can people learn more about you and Horizon Hobby?
Nate:
You could go to horizonhobby.com to learn all about what we do and the products that we offer. And there’s a careers tab. If you’re looking for a new opportunity, I would suggest you hit that tab because we are looking for a lot of talented people to join our team. And if you’ve got a passion for motor sports or for flying or just foe eCommerce in general, come join us. Work is fun at Horizon Hobby. So who doesn’t want to go fun?
Stephanie:
Yep. I mean, I bet. I feel like this is a newfound hobby now of mine. Just from looking at the website and seeing all these new things, I’m like, “This is my future now.”
Nate:
That’s awesome.
Stephanie:
Thank you very much.
Nate:
You bet. Have a great day. Thanks for having me.
