The Budget Flows Where the Performance Goes and Other OmniCommerce Lessons, with Kacie McKee, Head of Omni-Commerce and Digital Acceleration at Kenvue

Transcript

Our transcripts are generated by AI. Please excuse any typos and if you have any specific questions please email info@digitalshelfinstitute.org.

Peter Crosby (00:00):

Welcome to unpacking the Digital Shelf where we explore brand manufacturing in the digital age. Hey everyone. Peter Crosby here from the Digital Shelf Institute. I don't know whether it's a holy grail, but certainly a worthy grail is getting your organizations to behave with an omnichannel mindset to hopefully connect with the consumer, however, and whenever they choose driving better conversion and a more strategic joint approach with your customers. Kenvue has organized around that mindset to ensure that they are spending their next dollar in the most productive place possible. That takes clear signals, communication and strong relationships, all things Lauren, Levi Gilbert and I talk about with the fantastic Kacie McKee, head of Commerce and Digital Acceleration at Kenvue. Kacie, welcome to the podcast. We are so excited to have you on. Thank you for being here.

Kacie McKee (01:01):

Of course, I'm excited to be here.

Peter Crosby (01:03):

Yeah, we talk about omnichannel day in and day out on this podcast, but you actually live it. Not only omnichannel, but omni commerce. Your resume on LinkedIn, going from e-commerce to omnichannel to omni commerce was like a little time capsule of digital transformation. It was so impressive. You've been there, you've done that, and you're doing the next thing, which is so exciting about. So let's start with your current commerce role and what you oversee and go from there.

Kacie McKee (01:32):

Yeah, sure. So current role is kind of a hybrid of many things. I know that Omni in this space is kind of a buzzword so hard to unpack at each different company what that means for us. It's actually shelf excellence. So really thinking about end-to-end, what does that look like? So I actually own in-store and digital, so that means I own shopper marketing, retail media, but I also own in-store display and a lot of in-store activation. So that is why we say end-to-end shop excellence. And then I also own things like digital promo. There is some e-comm sales mix into there. So it's really a lot of everything, but it's an evolution. And I think when you create roles like this, you start to see them evolve over time. First they own this, then they own this. So we're on a journey to what commerce means to us. So today it's shelf excellence focused on activation, but you're starting to see some of the business operations fall into my role as well.

Lauren Livak Gilbert (02:26):

But that's a great lead into my next question, which is how did this role get here? Because this wasn't always the case, even from, I know my days when I was in the same kind of company thinking about it. Talk about how it shifted and why it shifted and why you chose to go in that direction.

Kacie McKee (02:43):

Yeah, I think a lot of companies are feeling this way, but I would say it's actually due to, and I'll switch back and forth between consumer and customer. So customer being the retailer, I think the customer had a lot to do with it. So when we're looking at where our sales are coming from and we're seeing such in the omni customers like a Target or a Walmart, such a proliferation of sales in buy online pickup in store or online pickup and delivery like OPD, and you're starting to see this more digitally influenced sales happening, and then you're seeing the emergence from a retail media perspective of a lot of in-store digital placements. But I think it just started to beg the question of who owns those things? And in an organization where we had someone just leading e-comm or just leading in-store or just leading promo, it was really hard to define who owned those things. So it was sort of this discussion internally along with our customers of where are we headed, where this sales headed from, and how do we think about who owns across those touch points to make sure that we're really delivering on that consumer experience. So it happened probably over a year, and I was doing the majority of the e-comm strategy work at Kenvue. And so naturally I took the omnichannel role and just expanded on the digitally influence piece and then picked up the in-store piece along the way. You say

Lauren Livak Gilbert (03:55):

You sit in, go ahead. I was just going to say one clarification. You sit in sales, correct? I do

Kacie McKee (04:00):

Sit in sales just for everybody who is

Lauren Livak Gilbert (04:01):

Listening. Yes, they do. Okay. I think that's an important clarification because it's always where does it sit in sales or marketing? But

Kacie McKee (04:07):

There is always that debate of is it a marketing responsibility, is it a sales responsibility? I do sit in sales currently, yes.

Peter Crosby (04:13):

Well, what I love about it, first of all, when you were first describing it, I immediately thought of the consumer because when you listed off those things, it's where the consumer connects with the brand and makes their next mini decision along their journey to conversion and ultimately loyalty and all that kind of stuff. So to me, and then when I thought about, okay, probably happier consumer feels more connected to it, and then secondly, it made me feel like happier organization hopefully, because a lot of what was standing in the way of that happening is, sorry, but it's the silos. It's like the different incentives aligned and different. And then when you said sort of, well, I owned e-commerce, so I think I don't want to misquote you, but something like naturally I took, but that's not really necessarily natural. I mean, I think for you to be doing that says a lot about how Kenvue thinks about when you were talking about digital influence kind of e-commerce, not the same necessarily high growth channel that it was, but that's an organization that understands the digital influence and how vital it is. It sounds like. So sorry, that was a long thing for me, but those were the, because you were talking about consumer customer and then organizationally, I just think it makes perfect sense. So tell me I'm right or wrong.

Kacie McKee (05:42):

I do think you, you're right. I would say, I don't know if it's easier. I think that's the piece I picked out when you said that. I think the goal is to get to easier. I think it's hard no matter what side you on, because we're just at the point of breaking down silos and roles that sit in the space that I'm in, you're breaking down silos still internally, even though you own across multiple things, you're still breaking down silos because it's a very new way to think about where revenue is flowing and how to service that revenue. And so again, you're breaking down old models and silos internally to drive that end-to-end activation. And then you're still breaking down silos externally, like the customer, while they know that sales are generated now in these different modalities, they're not necessarily also structured to be able to talk across an end-to-end activation plan.

(06:33):

And so I don't know that it's easy, Peter, but I agree that it makes sense and why it might not be natural for someone in e-comm to move into it and can be recognized Probably the importance of the switch from just e-comm to e-comm plus the digitally influence sales. I do think a lot of companies are going to start moving in this direction. I think it would be hard not to, and to your point, not only is the customer asking for it, but the consumer shops this way and it's really hard to remain relevant if your experience isn't the same end to end, and they're feeling like it's a choppy experience across different touch points. So I do think people will end up here. I don't know that it's easy, but no journey ever is.

Peter Crosby (07:11):

No, yes. I apologize for even it might be. Well, no, it makes perfect sense because early adopters always pay the price, right? Early adopters have to figure out the tough things that later on the papers get written about it, that talk about it being so obvious, but in fact, it's really hard work. But to the early adopter often also goes the spoils. So I'm sure, I hope that that's where it's going for you and your team.

Kacie McKee (07:42):

Yeah, listen, I would love to say there's bountiful spoils to be had, but what I think is really unique about being in this role, and I think the value that it adds to Kenvue, and I think the future of our relationships is that it has to be right now because it isn't easy and we are breaking down silos. And my job, the job requires such an ability to influence the decisions that are being made across silos and such an ability to build those relationships and then drive that influence and then pull everyone together end to end. Because processes aren't not only built that way right now on either side and decision making isn't made that way. And so I have to put a high emphasis on relationships in order to do that. There's so much transparency that has to happen right now. And so I have to be very transparent with my customer partnerships, with my retail media partners on performance on where we are in the journey.

(08:38):

I think where I was going with it is that the trust and transparency has to be there. And so the way that you build the trust is through the transparency because it's not easy. And so you really got to say, this is where we are in the journey. This is what our performance looks like. And it's sort of like you're building towards a future together. I would say people can see the future on both sides, and we can see how potentially CPGs will be structured and how potentially customers will be structured, but we know we're not there yet. So it's a build on a, I would say probably a two to three year journey, which starts with how do you guys get really honest about what's painful today and work through that pain and really rely on those relationships that you're building both internally and externally to do that.

Lauren Livak Gilbert (09:21):

And a big piece of that, I imagine Kacie is also around budget, right? Because if you own shopper and you own e-commerce and you own retail media, you're combining budget from multiple different places in the

Peter Crosby (09:35):

Multiple

Lauren Livak Gilbert (09:35):

Different ways of how it hit the p and l. Can you talk a bit about how you think about budgeting and working with the brands and pulling all of those pieces together?

Kacie McKee (09:45):

Yeah, I mean we've been really, really honest with our customers that we will fund the things that drive the highest ROI and the most competitive ROI. So that doesn't necessarily have to be media, it can be trade. So if they are actually performing at or above, we do have to have the tough conversations externally, which we could talk about in a minute. But then internally we have to have the tough conversations then around where do we want to fund? And you have to level set with your customers in order for the things you're building internally to be successful externally.

Peter Crosby (10:18):

Wow. So many questions. No, it is amazing. And so I immediately start thinking about data because for you to be able to align everybody internally and externally, you have to agree on the facts. I

Lauren Livak Gilbert (10:35):

Imagine that's true.

Peter Crosby (10:37):

We don't seem to have to in the world today, but at least what you are doing, you have to agree on facts. And I'm wondering how long has it taken you to get to a place? Are you comfortable with your facts? Is that part of what helps you be able to have those conversations?

Kacie McKee (10:54):

It's such a great question. Honestly, I would say no one in the industry is comfortable with the facts right now, but we're as comfortable as we can be with the facts. We've decided we follow MMM pretty strictly. And I know there's a lot of debate in the industry of does MMM need to be updated? Does it measure things the way we need to be measured across retail media? But I think without having a standard across all different customers and all different media types, it's the best directional information that we have today to understand what performance is and a fair way to measure performance across everything in order to be able to make decisions the way we need to make them. There are other things that we overlay across the MMM, but really that's the backbone that we discussed. So yeah, we're comfortable in that. That is the Kenvue way right now, but I think we're also open to where the industry is going and keeping our ears open to what the future of that might be.

Peter Crosby (11:50):

You hinted at it before, but I'd love to deep dive into with your customers the facts that you bring, joint business plan. How is all of that coming together and what's your role in, it sounds like pretty important that you have those relationships and manage them well.

Kacie McKee (12:08):

Yeah, I think even more so right now with the macro environment, super important to have those relationships and that trust built. I think, and I can't speak for everyone, but I think a lot of this started from a transactional place. You have inventory to sell and I want to buy the inventory. I think a lot of how it's evolved over the last couple of years is building around those longer term relationships and taking it out of that transactional place and really making it about the holistic partnership that you have as Kenvue to a certain customer or as that customer to Kenvue. But I am always aware of what is going on in the retail side of the JVPs because on our side we have one p and l and one way that we fund the customer and that has to be aligned to our growth goals for the year.

(12:50):

And when I say growth goals both sides, what does that customer want to accomplish? What do we want to accomplish? And that p and l has to service both of those things. And if you think about those things two separately, you don't have an aligned plan to deliver that growth. I think my role in that is in understanding what we want to accomplish on the retail side is making sure that we're making the right smart, fair media decisions, but that those media partners on the customer side also understand our total growth goals with their customer, taking them out of just the media role and saying, media is delivering this against this total growth opportunity and here's where we want to go with customer X, Y, Z over the next two years. This is your role in that next two years. I think that invites them to be a big part of the seat at the table and takes it away from being like, well, this is retail and this is media and never the two shall meet, never the two shall talk. I know there's friction around how those things are funded and wanting to remain separate to be a retail media network. I just don't think you can separate the conversation around growth and joint growth together. I think that's where the piece around how you be jointly successful falls apart if you're not doing that.

Lauren Livak Gilbert (13:59):

And do you find that the retailers are receptive to having a joint conversation because they're also figuring this out, right? They have multiple people coming to you being like, Hey, we're the people that you talked to for retail media, we're the people we talked to you for in-store, right? So what is the reception on their side and do you find that they have it together?

Kacie McKee (14:20):

I would say they give the standard response, which is we negotiate separately, we're separate. I have seen movement in certain customers towards a joint conversation because I think, again, you can negotiate separately. That's one thing, negotiating separately, but understanding the joint opportunity that the partnership brings I think is the most important part. And so that's where we've tried to make progress over the last couple of years. We still negotiate largely separately, but the conversations that we have leading up to those negotiations around our joint opportunity and about it not being in year transactional, but about how are we investing for future growth. So I think that they're more than willing to have, I think the negotiating where rubber meets the road, still mainly separate, but we've seen movement and surprisingly big customers towards the joint conversation, and I think they're feeling it just as much as we are that need to come together to invest in a really smart way.

Lauren Livak Gilbert (15:21):

Well, they also want more media dollars, so I feel like it's beneficial for

Peter Crosby (15:25):

Them. Well, that is kind of what I was thinking about where the receptiveness to this level of joint business planning is because you've become an important part of their balance sheet in a bigger way than you ever have before, and that raises your influence in those conversations, I would imagine.

Kacie McKee (15:46):

Sure. I think one of the interesting things in the industry that I don't know if it's talked about broadly, but when I talk to people, I get a lot of head nods. I'm hoping to get head nods from you guys, is that there isn't all this incremental dollars to go around. It's really like how do you maximize the bucket in which you have and where do those dollars really need to play? And I think that's a fairly new conversation that we're starting to have with our retail media partners. So to your point, Peter, yes, they want more dollars, but getting those dollars is harder than it has been in the past because they are playing with a smaller bucket of money.

Lauren Livak Gilbert (16:20):

Well, that's going to be my next question around retail media because since you own it, you have to have these conversations around every single retailer with every single brand, and you have to figure out the budget and the planning. Would you consider retail media at your organization centralized but then activated regionally? How would you describe that coordination internally?

Kacie McKee (16:43):

Yeah, I think it's highly coordinated. I think any model that you talk about is highly coordinated. We have what we call an integrated central planning model. So that's where the brand teams really set the tone for what are the brands going to deliver for the year, what is their goals in market? And then my team really is customer facing and focused on how do we articulate the customer growth goals for the year and what they're going to accomplish. And so between the brand teams and my teams, that's where we really create this sort of integrated brief conversation and the centralized media planning team plans across both national and retail. They take both of those briefs and that integrated view on what our goals are across brands and customers and really says, here's how we think we can best spend the dollars.

Lauren Livak Gilbert (17:28):

Can you talk about that flexibility though? Because that's hard with from a finance perspective, from a coordination perspective because that's a fundamental change in how you operate and especially how a team like finance is built. So how did you get there and what helped them understand that complexity?

Kacie McKee (17:48):

I think it's a great question, and I think maybe, I dunno, flexibility broadly I think is harder than what I was talking about, which is the ability in year to pivot your goals based on some of the performance things that are happening. So that means certain keywords become, or trends become super important. Are you flexing from a day-to-day search perspective to those keywords that matter most? Do you understand what your share of search is paid in organic wise and making those trade-off decisions? Are you thinking about your traffic coming to your customers and how to impact that traffic and what media would need to be turned on? So

Peter Crosby (18:23):

We can talk about whether they, they're not equal, but they are times of uncertainty where decision-making needs to happen swiftly and signals have to be read quickly. And I'm wondering, because you were around doing your work during COVID, so you lived through that period and I'm wondering, without getting obviously into too much detail, but I'm just wondering about how you are staying nimble and sane in a time where pricing is just a, anyway, it's all kind of a shit show to a certain degree.

Kacie McKee (19:10):

Amen to that.

Peter Crosby (19:11):

Yes, we've earned our exquisite badge today. We've never had an expletive in the podcast. Love it. But it seems like it deserves it. Yeah. Anyway, I was just wondering how your organization real

Kacie McKee (19:24):

Is thinking about that real today. Yeah, listen, I think any large organization, nimbleness is just a tough thing to deliver. Your organizations are not necessarily built to be nimble. I think nimble is always an ambition, but it's hard to deliver and that is not a knock on any big organization. I think there's just the rate of change right now in the macro environment. It doesn't really matter how nimble you were even built to be. It's hard to keep up. I would say just communication. Do you know what I mean? Being very, very intentional about how you deliver signal communication throughout your organization and being very clear on who needs to receive that signal communication to say these are the decisions then that need to be made based off of that. And then being really willing to lean in and partner cross-functionally to deliver against it because it's not always going to go in the favor. And when I say your favor, the things that the outcomes that you would originally had planned for the beginning of the year, you may have to lean in and make different decisions. So I would say honestly, it comes down, communication can make or break nimbleness. I think in this environment.

Peter Crosby (20:33):

I love the idea of signals and then communicating the signals clearly because when control lessons, all you can do is just, again, we're sort of back to agreeing on facts, at least get to the thing where, and then people make the best decisions they can. I mean that's the story of upheaval is who's doing that? And then in some ways, and we won't know until afterwards, were there places in which you could take advantage of that opportunity to sharpen your business and get better at it because of what you had to do to get there. Did you find that coming out of COVID that it drove innovation in a way that you didn't expect?

Kacie McKee (21:18):

I was on the agency side actually, and it was actually a fascinating place to be just because I worked across so many CPG clients and to watch them all respond to that was interesting. And so there was a lot of categories that I worked across that were nascent before COVID and then the volume of demand versus very different assortment decisions to be made and how do I want to show up online with my assortment? And you saw very, very big companies coming together very quickly to deliver very differentiated assortment, very differentiated experiences showing up on channels that they'd never had before. So yeah, I think COVID really think forced the conversation and forced a lot of companies hands on, what should we do differently and how do we react to the massive shift in consumer behavior based on the external COVID environment?

Peter Crosby (22:11):

And hearing you talk that through and thank you for doing that, that was really helpful. Trying to wrap my mind around whether there is that same opportunity in this period or it's just so much, it's so chaotic that there's COVID became clear, okay, this is how we're going to be living now for whatever period of time we've got to change the way we do things. This feels different maybe to me at least. I don't know. Are you feeling that this is an innovation fueler or is it just let's get through the day?

Kacie McKee (22:43):

I mean, maybe both, right? I feel like it's such a fair thing to say. I feel like COVID, I don't want to say black and white, I think that's unfair, but it was really like this channel or that channel. And so when you're thinking about innovation and resource allocation, you can really shift the focus from one channel to the other just based on where the shopping was happening. I feel like we're in an environment now where it's everything all at once, and I feel like that's a really hard environment for companies to then understand where to place bets. We say omnichannel, and that's what I mean by a buzzword. It really means everything everywhere, all at once. And to prioritize when you're in a world where it's everywhere all at once and align resources and to think through what that strategy looks like, I think that's hard. And I think innovating inside of that is hard. So yeah, I think it's probably both a little bit of survival and then a little bit of not sure how to innovate in this specific environment and maybe a little bit of pausing and waiting to see if it becomes more clear how to innovate.

Peter Crosby (23:46):

Yeah, yeah. As you were describing the convenience and value themes that the consumer was feeling in that period, do you think those are the same themes now? Or is it more because heard a number of people talk about the fact that in this period consumers are willing to do premium for the right thing, so it feels different in a way. Yeah. I'm just wondering how you think about

Kacie McKee (24:13):

That. No, it's good. I do think about it a little differently. I think COVID was a lot around necessity. You know what I mean? What can I get that's necessary? And we had all those runs on the necessary items and maybe a pullback on more premium items and things that didn't necessarily fit inside those necessities because you weren't necessarily going anywhere. So maybe makeup isn't as important, right? You're only hanging out at home. Whereas now I feel like that's not necessarily the case and we're seeing a lot of change from a beauty perspective. And the beauty category is really taking off and accelerating. So I do feel like it's slightly different, and I do feel like we're seeing this bifurcation of value and taking that middle price point, brand assortment, whatever, and really trying to understand what the value is there. So there's brands that are falling into that value equation, and then I think there's definitely a willingness still to pay for premiumization, but it really has to matter. And they really have to believe in that premiumization. And I am not sure that behavior existed during COVID. I really think it was, unless maybe you're alcohol, right? Then maybe the premiums maybe that mattered more than not, but I can

Peter Crosby (25:27):

Attest to that

Kacie McKee (25:28):

It was value around necessities and I feel like now it's value because the dollar maybe doesn't stretch as far as it once used to. And so I need those brands to mean more to me and it's necessities, but it's also anything else that I'm buying. And then if I'm going to buy premium, it's really big investment for me, therefore I have to believe in that premiumization.

Peter Crosby (25:50):

Yeah, fascinating. So Kacie, to close out here, I'm try and sort of go back to where we started, which is the importance of communication, the importance of moving in this direction for companies to move towards omnichannel, omni commerce to serve the consumer and the customer, and then of course the organization better. If our listeners aspire to be able to find a way to break down the silos and create a role like this to shift the mindset from their role to this way that they feel the company should be operating, what's your advice for them and is it a particular brand of alcohol?

Kacie McKee (26:38):

It's a good question. Every organization is so different and they're in a different spot in sort of what their journey looks like and how they're structured, right? To be able to deliver a role like this, I think you just have to understand that the consumer is really looking for an end-to-end experience. And when I say that, if it's everywhere and everything all at once, they are shopping both digital figi all the time. And if any one of those experiences isn't the same or there's missing content or they don't see you, I think you really miss out on becoming part of their consideration set and becoming part of that mix of what they're shopping for. And so I would tell any of the brands listening, any of the companies listening, you want to be in people's consideration set. And the way to do that is create that experience end to end so that they really get to understand you as a brand. They know you, that it feels the same no matter where they are. And so what is it going to take as a company to deliver that from an end-to-end perspective? Generally it's a role like this that can really try to pull together all of the pieces across all the different touchpoint from an activation standpoint and really make sure that you're delivering on that experience and that you're able to measure the output of that experience.

Peter Crosby (27:59):

Remind me, when you went to Kenvue, was it into the omnichannel role? So was this already, this was the belief already

Kacie McKee (28:07):

As we separated from j and j into being Kenvue into this more omni role, and that was generally that conversation of seeing the digitally native influence show up, and then it was sort of like, well, why would we have everything digital disconnected from an in-store experience and why wouldn't all those things be tied together? And so that is how we ended up as sort of this total omnichannel end to end role.

Peter Crosby (28:30):

Well, it suggests to me that what you were able to do in your first role was build trust and relationships, and that is the key. Every time we speak with folks who are on the path that our listeners are on, those are just critical to any of the conversations. Often for so long, e-commerce was on their back heels and just trying to survive over in the corner, and now it's nice to see it blend together.

Kacie McKee (29:05):

Yeah, absolutely. I think you said it very nicely, right? Anyone that's been in the e-commerce space for long enough, it's so much about relationships. You were introducing, I think I was talking to someone the other day, introducing a foreign object right into the organization is always painful. And it's how you help people understand what that foreign object is and get them used to that foreign object. And if you've been doing this long enough, you create the understanding of how to build those relationships and really story tell around what that foreign object looks like and now foreign object has just changed. So it's more along that same journey of how do you leverage the relationships and the ability to story tell into making sure that we are now capturing where the consumer is shopping. Moving forward.

Peter Crosby (29:50):

While you were talking, I was thinking about growing up. This is I'm old, so I watched the bionic man, that is the foreign object. It's your strength. I can see farther. Yeah, that's a good foreign object. There are some that I, yeah. Kacie, thank you so much for sharing the journey and the mindset and the travails with our audience. We're really grateful.

Kacie McKee (30:14):

Yeah, thank you. Thank you for having me. This was fun.

Peter Crosby (30:17):

Thanks again to Kacie for a look behind the scenes at an omni commerce organization. Don't miss out on Lauren's upcoming research on omnichannel org best practices. Become a member of digital shelf institute.org and we'll let you know when it's coming. Thanks for being part of our community.