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Interview

Interview: The Critical Role of Channel Optimization in Modern Commerce, with Don Brett Chief Digital Officer at NBG Home

There’s so much noise in ecommerce today, and filtering out that noise to find the meaningful signal to push your business forward can be hard to find. Don Brett, Chief Digital Officer, NBG Home, shows us how his playbook, refined over the years, can lead to modern commerce success.

SHOW NOTES

Instacart Webinar

TRANSCRIPT

Peter:

Welcome to unpacking the digital shelf where we explore brand manufacturing in the digital age. Alright, everyone. Welcome. We're really happy to have you here. Uh, Peter Crosby here, executive director of the digital shelf Institute, where they virtually live unpacking the digital shelf podcast episode. We are grateful to have hundreds of people signed up for this virtual webinar audience today. I feel like we need virtual applause here right along with them. My co-host Rob Gonzales is here. Hey Rob, this huge virtual audiences and making you too nervous you all right now. See, what's great about doing this. Virtual is no one can tell how short I am. I like intimidating on camera or whether you're wearing.

Peter:

So the conversation we're having today is foundational for any brand looking to win on the digital shelf. Every brand over time must create a combination of people, process and technology that works towards a strategy of continuous experience and performance optimization across every channel. It's truly a journey, not a destination. And our guest today is in the trenches of that journey. And he's generously agreed to share his strategies with all of you. Don Brett is the chief digital officer at global home decor manufacturer NBG home. And if you don't follow him on LinkedIn, yet you should, uh, Don's uh, just, he's a constant source of data and viewpoints on e-commerce and digital shelf excellence. And, uh, for some reason, he agreed to come on with Robin MI and, and share that with us live. So Don, thank you so much for joining us. Happy to be here, Don, let's start out a bit. Tell us a little bit about your, your professional journey through e-commerce and to your current chief digital officer role at MBG home. Is it everything that you imagined growing up?

Don:

It's a good question. You know, my journey has been, I spent many years at a publicly traded, uh, larger durables company and I had a great learnings from my experience. There spent several, you know, really spent a good deal of time in customer facing roles. A third of my career, a third of my career spent internally facing a go to market development type roles. And then the other third in digital and M and a, and I would say so much has changed with so much is still the same. You know what I would say when I made the leap into digital fully with both feed, probably what I thought it was going to be. It actually has evolved into something quite different, but when you boil it down to its low lowest common denominator, so much of is, is, is honestly the, the same, uh, with regards to fundamentals of business and how to win.

Don:

Um, so I would say so much of it's the same, but I think what's so exciting about our space is there's new opportunities around every corner. And we can look at so many different things, whether it's buy online and pickup in store, whether it's the migration to omni-channel as opposed to just brick and mortar or digital. And e-commerce we think about the digital shelf, which we talk about a lot within, within this group, we talk about, you know, profitability, fulfillment shifting to ad dollars. There's so much honestly that it just is exciting space to be in.

Rob:

Yeah. So Don, I want to, I want to kick this off. Um, part of this was inspired by a conversation we had a year, maybe more than a year ago where you, the first time that I had heard it. So I'm considering that you coined this phrase, um, as channel optimization as a strategy. And I love it because it actually is saying that what we're going now digitally, even though there's a lot, that's in common with business as usual in terms of the past there's there's aspects of the scale of the challenge and of the interconnection within a company's teamwork and process and framework, that makes it feel like something that's different or different in kind, um, if not just different shapes. So can you give a quick overview as to what channel optimization means to you and how much it covers just to kick off the presentation?

Don:

Yeah, sure. You know, and, and thanks for that, Rob. I think one of I've had so many folks on the journey with me along the way, and in case he's listening and Casey's not guru from commerce IQ, um, wink, wink, channel optimization is finally made its way to there, to the big screen. So, uh, we find, we finally made it here, uh, on, on, on Robin Peter's webcast, uh, podcast. So, um, uh, yeah, I mean, it's a good question, Rob. I think honestly it comes down to, uh, the basic premise of connecting us, having a single source of truth for a set of capabilities to, to scale across a company and a channel. So if you think about the, if we think about brick and mortar and many of our journeys, it is you think about it like a very stable, large cruise ship and, and it moves slower, but it's in, you know, where it's going and you can plan for it. And you've been, you've been in it for many years. Digital in nature is much more volatile and it's changing daily. So you need the ability to have a single source of truth, uh, from connecting the digital components of digital sales, marketing, supply, and analytics, and having those work together allows you to honestly have a scalable, uh, capability, uh, that will is differentiated, uh, for many in the market, which to your point, it is a newer term, but I would expect will be a very common popular term over the next three to four years.

Rob:

I like the analogy of a brick and mortar is a cruise ship. I'm just thinking of what the digital version of that would be like a swarm of jet-skis

Don:

Jet-skis. Yeah, that's right. Jet-skis that's exactly right.

Rob:

Um, so the, the, the interesting thing about this, and I think you had a, you had a stat that you had borrowed from guru in the commerce IQ team. That really, when, when you showed it to me, it really drove home. The difference in kind here on the cruise ship, you can plan, you can plan ahead, you know, the next three ports of call, where you're going to be dropping stuff off, you know, how many passengers you have and this swarm of jet-skis, they're just kind of zipping around all over the place and, you know, you can't even count them. Um, so can Y can you walk us through that?

Don:

Yeah, sure. So if, if you know, for, for those that are looking on the screen right now, if you see what's on, on our screen, you can see if you, again, this is from commerce IQ, but if you, if you think this framework is extremely helpful to think about, to think about how this is not business as usual, this is, this is honestly a new use case that requires a differentiated set of capabilities to be able to service in scale. And if you look at what's on the, what we've got here is just as a for instance, if you had 400 ACEs or items in your assortment or your range, if you were going to have 30 variables that you were monitoring, there's seven days in the week, let's say you had 10 people on a particular team, and let's just say they work 12 hours a day, you know, five days a week, you would have to make two decisions per second, across sales, digital sales, across digital marketing and across digital supply chain. And the fact is nobody can make that many decisions. And many of us have been in larger companies, and we know that it takes many, many cases. It takes two days to get half of a decision made much less two decisions per second, um,

Rob:

To two days of how many meetings.

Don:

Yeah, so many meetings, so many multiple P and L's and strapped lands.

Rob:

That's, what's so interesting about this is like the in brick, there's a, there's like a partnership in a dance that happens within each channel, right. Um, and, and even within each partner and the partners are moving at the same pace that you are. And, and I've been, I've been looking into shifts in the apparel space recently, for example, the move from seasonal launches to more continuous launches and almost the death of seasonality on, on some, some apparel categories. And, uh, to get, to get back to the, you know, the cruise, the cruise ship analogy. If you move over to the jet ski world, you just don't know where those things are going to go next. And, um, one of the stats that we saw recently as target changed their site schema 160 times in the year 20, 20 alone. That's like once every two days.

Rob:

Um, and we started trying to count the number of times that Amazon changed something that requires somebody to process and think about, um, I know we, we interviewed, uh, Carlos, the CEO founder of [inaudible] recently, whose team has, uh, over 500 point checklist for new product launches on Amazon. Um, which is, which is, I mean, just 500 point checklist and they're evolving it nearly daily there's there is something fundamentally different about this, uh, this scale. So, um, the question is here. All right. So you've recognized this you've identified the scale of the challenge. What do you, what do you, what do you honestly, what do you, what do you do about it, uh, who who's gotta be involved within, within the company to actually give you a chance of getting anywhere close to 84,000 decisions a week? Sure.

Don:

Yeah. So, you know, when you think about it, I, I will dive, dive in a little bit deeper to this point. I think somewhat more holistically in a high level we think about, and we will come back to this in a second, you know, P the tried and true, which stands stands the test of time, people, process and technology, which we can circle back to, but through that kind of broader schema of people process in technology, if you just think about it, whether it's a CPG, whether it's a durable, whether it's privately held public, any, it doesn't matter this. If you know, we have, you know, we talk a lot about the flywheel of, you know, whether it's the 89 algorithm at Amazon, whether it is the algorithm of any other retail.com, et cetera, internally, if you point that internally for a moment that flywheel also applies internally.

Don:

This is the ability to connect availability, traffic and conversion, as, as points, as deliverables within availability, though, we have to connect our supply chain teams. We have to connect just in this example, our revenue growth management teams, or sales planning, or trade-marketing marketing, depending on what CPG or whatever company it is. And you have to connect our sales team, that those groups work toward driving availability, uh, uh, efficiencies. Then, then we go into traffic and we have to think about our digital marketing teams, driving traffic through retail, retail media, which we've talked a lot about in our space. And, and ultimately not only in retail paid media, but making sure our product detail pages, which Robin think you might know.

Don:

I think you've, co-founded a company based on digital shelf and, and making sure we have optimized digital shelf, uh, you know, imagery and content. So we drive conversion and then you, and then you connect it to the actual conversion component and you have digital content and consumer relations. So you think about that. All of those, they need a single source of truth and di and channel optimization quite honestly, is, is in its simplest form is about connecting those groups with a single source of truth. The internal view, essentially, of what, uh, the external flywheel would refer to you need internal mechanisms and capabilities to support and enable that.

Peter:

Yeah, Don, I mean, to me, when you talk about connecting all these groups, that really is the important part is to do this at scale, um, the, the integration sort of the, the, the handoffs and the workflows happening between all of these people need to be transparent and, and there needs to be accountability and confidence in order to be able to go to market. Yeah, that's right. Well, let's, let's dig into, um, into kind of, you mentioned, you know, the tried and true people process technology. Do you want to dig into that a little bit and how that sort of adds up to, um, to the, uh, process that works at scale?

Don:

Sure. Um, and I would say, you know, along my journey, I've learned a great deal, and I've had the fortune to learn a lot in my path, um, from, from positives, as well as negatives that I've incorporated into our future state. And when you think about it from a people perspective, a lot of this comes down to, and, and it's hot in, uh, I find it helpful to paint the broad picture and then click in at its highest form. What I've found very efficient, uh, very effective from an operator digital operator change agent point of view is clarity around strategy, clarity around, or design and operating model clarity around culture and clarity around capabilities. Now, if we click into that one later, the people component is very important. Talent in this space is not the easiest to acquire because it's somewhat of a niche capability.

Don:

It will not be in a few years as we in North America moved from 15 to 20% penetration, closer to 30, similar to the UK. And I think China bought North of 50, uh, last year, well, this year. So, but people, as it stands right now, at least in the us are, uh, um, and globally for that Mac for that matter is finding the people that are able to bring others along in the journey from a culture perspective, but also have the capabilities and competencies from a digital perspective to truly be change agents. So that's one thing I've found to be extremely, extremely important to make the equation work, getting talented, understands digital, and can also bring others along in the journey as a change agent from, uh, one click below that or to the side of that for that matter is, is process. So asking ourselves, have we created the right process for the future state of the company being very, very clear and prescriptive about what the process is.

Don:

If we have, if we have Claire, if we have vision clarity and we have resources, but we do not have clarity of our process and ways of working the formula does not work. I've learned this, I've experienced this, just trust me to our little trust tree here. It does not work if the process is not, uh, is not clearly defined. And then technology, you, you know, as I think about our tech stack from a, from a PR perspective of, you know, I think Eric Long is a good friend of mine, and we talk a lot about this. And, you know, Eric is in another industry in beauty and, uh, but a tech stack with whether it has an R D platform or whether it has a relationship platform, a content channel optimization platform. And as a, for instance, like Salsify would sit for me and that's not, that's not a paid advertisement.

Don:

That's that's true is, is, is, you know, a content platform and making sure, uh, a for us a capability that enables us to win at scale, which part of that syndication capabilities, et cetera, but you go across the tech stack, making sure we have technology that is best in class. And that, you know, we say the term scalable a lot, but it's, it's really important as we think about the majority of probably the audience on a more, the majority of the folks we speak with that we're around a lot of these companies are, there might be some companies below, you know, a hundred million or so, but if you think about the majority of where a lot of what we talk about is in that billion to 10, $15 billion range. So scale, you really need scale scalable capabilities. I found that having that technology that can do that is extremely important, especially as we connect sales channel optimization here, right? Again, um, sales, supply chain and marketing from a digital perspective,

Rob:

Oh, I want to go back to the, the, you know, the foundation of all this as a good team. And, you know, you, you started by saying, uh, you know, you really need to get people in that speak digital. I remember a conversation I had a couple of years ago with another chief digital officer, John Pierre, um, who told me that he, he was trying, he entered a beauty organization, is new CDO, wanted to bring in talent, external, you know, from external the organization that really understood digital, but the comp bands didn't really match because if you're going to get good digital talent, there's just, it's a supply demand thing. There's fewer of them out there that have deep experience, they cost more. Um, and then let's say that you get over that and you can fix the compound issues. There's also the issue that like most of you can't turn over most of your company in order to, um, in order to do this well.

Rob:

And yet most of your company per the earlier slide has got to be involved in some way. So there's, there's an upskilling of your existing staff. That just is an inevitable, um, and inevitable hard aspect of digital transformation. And, and without that, without getting the team that you've got on board while augmenting it with experience from the outside, it seems like it would be hard to do so I, you know, you guys are, uh, MBG, you guys have like large products right there. Um, you know, relative to like a toothpaste tube or anything like that. I got to imagine that the manufacturing, uh, product design logistics and shipping are more old school than they are new school. The company's been around a while. Like, what's the, what tricks or ideas do you have to bring along the, uh, those functions into this new, more volatile jet ski world, um, from, from the more predictable world that they were, that they were used to?

Don:

Yeah, that's a, it's a good point. I think first to the, to the comment around why, you know, many cases from a feasibility, you know, even let's just say, you know, there's a P and L equation of, Hey, making sure you get the right talent and you can, you can afford that talent, but then there's to cultural component of it. You know, I've found in my learnings, it's not effective. Uh, in me personally, sample size of one to have an entirely outward team that's brought in from the outside and no legacy knowledge and because that's extremely valuable. And so it tends to be more of, you know, a 50, 50 type of D it transformation is enabled by a combination of new infusion and legacy knowledge, I think to your other point. It really, again, I go back to like, it's highest form. It's really about the holistic value stream and all of us as leaders.

Don:

We just think about where it starts from even just, if you look at one side of the page and go to the next from, from a sourcing point of view and where, where, you know, brands are sourcing from where it gets over distribution and transportation, as it gets all the way through product marketing, as it gets through sale, the whole entire value stream, it's important to not operate in a silo, this digital transformation, it needs to be infused and collaborated with holistically, or you really cause what we try to, what you want to try to create as one plus one equals three. And if you run totally separate, you unintentionally create a one plus one equals negative 0.5 and you defeat and you get a lot of us versus them mentality. So this is a bit of art and science in my learnings done.

Peter:

When you talk about art and science, um, can we focus on the art for a minute? The, how, what are the secrets that you've found for spreading? I mean, you do it on LinkedIn so beautifully, but spreading knowledge throughout the organization. So the sort of, to me, there's a, there's a combination of, and you tell me if this resonates with you of knowledge and inspiration, like you have to get people excited about the journey that we're on, that this transformation is actually really cool. I know it can be hard, but the, the opportunities. And certainly I would imagine this last period has sort of shown the potential of this to be a growth driver for the business, but then also, how do you, because you won't get that always that digital talent that you want, how do you drive the, the knowledge back into the organization? What are those conversations like?

Don:

Sure. Yeah, I think about it. And I think it's really when I found the most effective use to bring others along in the journey and succinctly, and simply is going back to the text book is our strategy clear and going back to strategy, I have one page my team can in my team and knows. And just in my example, my business stakeholder partners in that value stream, they know what the one-page strategy is for, for digital, for the digital agenda, digital three 60 strategy. And everyone's clear about what that strategy is. That's really, really important. It's oftentimes something that is harder to do then folks would realize at first, a good strategy, a quality, a proper strategy is not something that's done in one day. It, it honestly takes time. And whether takes you two weeks to get a proper strategy, that's holistic in nature is very, very important because everything should tie back to strategy.

Don:

Then it goes to clarity around the operating operating model of the company, how we're going to operate from a digital perspective in relation to the other areas of the value stream, what our org design is going to be. That is very important. Not you don't want that to be an unintentional. And then as we look at our culture, we want to create a culture that is very centered upon trust and transparency, and everyone understands what's happening and then its capabilities. And I think if we check the boxes of those four, we are on our way to bringing everyone along in a successful transformation. But it's, it's really important to go back to the less is more. We need to check those boxes and not try to solve every possible scenario.

Rob:

Actually, that brings, it brings to mind another topic for me, which is a measurement. And, and, um, I mean, this can tie to bonuses. This can tie to all kinds of things, but, um, companies that are, that are legacy businesses are structured with a certain type of set set of metrics that individuals, um, leaders of teams and so forth are measured upon. And that, that you track regularly, um, and digital for those, for those that are digital natives, there's like a thousand measures that you look at. You're just Amazon. You can look at a hundred different measures and every single day, and be looking to tweak things all over the place and that volatility and the craziness of digital, you can't really expose it to the whole organization. You can't have everyone have a hundred KPIs, right. And, and be responsive to everything that happens that are out there and actually maintain the same business. So are there, um, when you, when you're looking to get alignment across all the teams and everything, what are the key measures? The key KPIs that you look at for, uh, you know, to drive alignment across the teams and across the processes like you're talking about, right.

Don:

That's a good point. I think this is not a fully exhaustive list, but if you think about what would be the handful of KPIs that teams would focus upon from a digital sales perspective, POS market share and share a voice one rear facing one front facing one's rear facing and past pastime. One is current actual today w where we're ranking our ASP's obviously freight is costing significantly more now. Um, so ASP's making sure we understand that last five box, um, as a, as a, for instance, from sales, from a marketing perspective, there's certainly no shortage of, of KPIs it's return on ad spend a cost CPC, average order value, um, or digital shelf, glance views, conversion rates. All of these are this, again, this is not fully exhaustive, but making sure the team has a list of five metrics that they're pretty relentlessly monitoring and reacting to tied back to the strategy of what we said we would deliver.

Don:

And from a supply chain, you can see the rep out of stock fill rate and accuracy and finance and analytics. It's really, you know, we want sustained profitability at scale. So, you know, our PPM or our margin for our retail partners and internally, um, so you can kind of go there and see, but having a list I've found in my journey that are probably five, five or less KPIs each functions looking at, uh, enables you to really, um, not boil the ocean and be very focused and be very, very good in a couple areas that drive 80% of the value.

Peter:

So Don, um, I wanted to, cause I think those KPIs, you know, Rob talked about incentives, uh, and you know, I'm sure so often you're needing to tie each piece of the organization to what it is they are trying to achieve in driving the flywheel. And so I was wondering if you could kind of tick through the, the four elements that you talked about at the beginning sales, marketing, supply chain analytics, and beyond the KPIs, you know, what are the, what are the things that you dig in and, and, uh, the processes that you're trying to drive, um, in order to deliver those KPIs, like how do people in each department sort of think about their, their mission?

Don:

Sure. You know, I think it's, I think it's really important. I mean, for me, some of the things that are top of my list as we go into this year and continue through are quite honestly adherence to the strep plan that we declared, uh, adherence to our clarity around the org design and the operating model, uh, our culture and clarity around what we're, what our values are and an advantage set of capabilities. You know, again, not a, not a, a set, a couple of names on here that a brand that I feel are, are, are strong brands, uh, and capabilities that I personally, um, have, uh, have incorporated into our model. And then this is not always the most popular, but it's a non-democratic allocation of resources towards the biggest bets, uh, fueled by capabilities that we noted earlier, the old saying of going, you know, where the, where the puck see where the puck is going and, and build towards that is, is no more truer now than it's ever it's ever been. And quite honestly, I'm very fortunate to work with someone. I I've been on the journey with for many years and she's in a tremendous CEO and she really gets digital. And, and that buy-in from the senior level is extremely critical to drive transformation at scale, um, in my, my experience.

Peter:

And, and I think that, you know, your, and, and researchers in some ways, the fact that they invested in a chief digital officer, I think is it shows that the power of that top leadership, you know, is that, um, how have you used your chief digital officer role? Like when you came in and, and were forming this organization, did you understand what your full responsibility set is, or is that something that you mold as you come into the company and, and look around and sort of see where gaps are and cause there's, you know, there's a lot of organizations have CDO roles and they sort of have different areas of responsibility. It seems like you have a really, um, a wide range of, of responsibility and authority within, within, um, actual with driving revenue. Is that, is that a normal situation, or do you feel like that's important for, for you to have the impact you need?

Don:

I think it depends on the company and the size and the complexity and several other facets. But I think as I think about where I've been on my journey, it's, it's, you know, there's been different iterations of whether it's a pure center of excellence model with no P and L accountability or whether it was an operator role with very little center of excellence type of input or whether it was a combination of all of the above. I think there's different iterations that work differently for different companies in different points in their journey. But what I've found is, again, just super simply clarity around the strategy, clarity around the operating model, clarity around the culture and clarity around the capabilities really, truly will enable success, um, of, of such a transformation, similar to what we're talking about.

Rob:

It doesn't, I we're, we're getting close to time. I wanted to throw a curve ball at you. Um, and this is, uh, NBG is, is owned by private equity. Um, one of like an incredible private equity company actually in, in retail and manufacturing, um, Sycamore owns, you know, lane Bryant, loft, land Taylor express, staples, bell caught topic. Talbots I mean, it's, it's just got, um, a suite of brands that are under their portfolio does being owned by private equity and being private, give you an advantage. Does it mean that, that you can be a little more long-term focused? Do you have more flexibility on, uh, rebooting the Oregon org design as being owned by Sycamore in particular give you leverage because there's so many other, uh, manufacturers and retailers that are under the umbrella. I mean, what's D do you think that you've got an unfair advantage that a public company does not have at this, in this same world?

Don:

I think it, I think it certainly gives us a leg up Sycamore inherently gets digital probably more than most private equity groups in my experience only. I think they very much get it and they very much see the value of digital and the value creation and how early in the journey we actually are, uh, within, uh, within the U S specifically, I think that from the buy-in though from the same framework would apply the same rules would apply in a public situation and setting with the exception of Rob. You mentioned it, the ability to view it, view investments and structure an Oregon strategy in a, a year, two year, three year horizon, as opposed to a two month to three months horizon. So I think that is definitely a component that is different that I would say I certainly enjoy, uh, being part of Sycamore for that of of many reasons, but that's certainly one of the, one of them

Peter:

John likes to close. We actually got a great question from, from one of our attendees that I think is actually a great way to close out this podcast. I need a strong case to persuade our it leadership who are old school and want to leverage their archaic homegrown tools versus best-in-class tools as the single source of truth. What are some key points to make them get, buy in and get on board?

Don:

That's a great question. I was just talking to someone at a very large home improvement chain yesterday about this topic. I think, I think the ability to just objective for me only my experience, the ability it's a build versus buy, right? That's the, the old where, where it all ends up and where I've found the legacy, it organizations they want to help. They mean, well, they are smart, but in some cases there's not, not in my current role, but I've seen overestimations and abilities and timelines, um, somewhat out of a, uh, I don't want pride babies, the right word or something along those lines. And the ability to just convey the business case for I'm making it up. If it's a hundred thousand dollars by decision versus a undetermined, uh, build decision that is loose and deliverable dates, I would show the business case clearly and, and show the payback in a shorter time horizon, which honestly would be as opposed to trying to connect disparate pieces and legacy information, which also asking yourself, this is kind of cliche, but it's so true. Will this scale will that, will that band-aid will that solve scale? If we're 50% bigger, a hundred percent bigger in 10 more geographies, et cetera, et cetera,

Peter:

It's a, it's a great way to close and, and a important conversation. If, if businesses are going to take advantage of, of the growth strategies that are, that are possible, uh, in the, in the digital channel. So Don thank you so much for contributing to the DSI and sharing your strategies with us. We're really grateful. Um, thank you so much. Thanks for having me. And since we're talking about managing channels, you know, one of the most impactful e-commerce players in grocery is Instacart and on March 18th at 12:00 PM Eastern, I'll be grilling Kiri, masters who's founder of digital marketing agency, bobsled marketing, and the author of a new book Instacart for CMOs. Uh, Carrie will be outlining the key strategies and tactics to maximize performance on this quickly evolving channel. We'll include the link to the webinar in our show notes for the podcast, and also in our follow-up email to our studio audience here, along with the link to this recording, um, and, uh, again, uh, an encouragement to, to follow Don on LinkedIn. Uh, he'll be, he shares stuff like this all the time and is really generous with his knowledge. So thanks again to Rob and Don, and thanks to all of you for being part of our community.