Shopping and Buying Aren’t the Same Thing Anymore, with Jeriad Zoghby, Co-founder at ACOS Labs and Co-author of Competing at Machine Speed

Transcript

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Lauren Livak Gilbert (00:00):

Welcome to Unpacking the Digital Shelf, where industry leaders share insights, strategies, and stories to help brands win in the ever-changing world of commerce.

 

Peter Crosby (00:22):

Hey everyone, Peter Crosby here from the Digital Shelf Institute. Jeriad Zoghby has spent more than 20 years as the C-suite whisperer for commerce with stints at leading firms like Accenture and IPG. Well, he's no longer whispering. He is shouting to the rooftops as the author of a new book, Competing at Machine Speed. In the book, he and his co-authors lay out how the operating model most consumer brands built over the past 50 years was designed for a world that no longer exists. They describe the new operating system for commerce that you will need, one built to continuously sense what is changing in real time, decide how to respond across an entire portfolio simultaneously, and how to act at machine speed without requiring constant human intervention. It's a detailed, bracing, and actionable read. Welcome back to the podcast, Jeriad. We always love to have you on.

 

(01:18):

Thank you so much for doing this.

 

Jeriad Zoghby (01:21):

Yeah, no, I think this may be the fourth time I've gotten to spend time with you guys for this. It's

 

Peter Crosby (01:26):

Not enough.

 

Jeriad Zoghby (01:27):

I love it every time. We'll

 

Peter Crosby (01:28):

Take it. Thank you so much. Well, this is an extraordinary moment to have you on because you have a new company that you have founded with some incredible folks in the business, co-founder at Akos Labs. Congratulations on that. Thank you. And you're coming out as co-author of a new book really talking about the moment we are in, the opportunities we are in, what's standing in the way. It's called Competing at Machine Speed. It's brilliant and it's so timely. So congratulations on all of that.

 

Jeriad Zoghby (02:02):

Thank you. I appreciate that. Yeah, it's been quite a journey. We've been working with it for about a year and it's exciting to finally get it out there.

 

Peter Crosby (02:10):

Well, we've talked to you a number of times and every time you come with such an incredible clear CEO mindset or what's happening out there, so your finger on the pulse, but also because of all of your work and agencies and otherwise, you understand what it takes to get shit done. So it's kind of a marriage of both of figuring out where is growth coming from in this new world? How do people stay dominant and win in this new environment? So it's so important, such a great book.

 

Jeriad Zoghby (02:45):

Peter, first of all, thank you for saying that. It was fun to finally get to talk about this. I'm never short on opinion, I'm ridiculous with it. But there was a couple of things that were fun about this book. One, we have the consumer study, or sorry, we did a study with 40 C-suite executives in the consumer goods industry, and that's layered throughout this. So you're having their quotes and their insights as part of this book. A global consumer study we did, although we focused on the US only for the book, and personal stories. To your point, the times to have sat down with a board or a CEO and talked about this, because for many of the people we all know and love in this community that you've built, there's often frustration going, "We're fighting the good fight and we don't always get the investment, the support, the other things we need." And it's interesting because often the CEOs themselves can't see it.

 

(03:49):

And once they do, it's a really shocking thing. And so that is one of the things that's layered throughout the book too, is those stories when a CEO grasped it for the first time and how impactful that can be because those are stories we hope that other people can use to drive the change that they're trying to do.

 

Peter Crosby (04:05):

Our listeners may want to give it to their favorite CEO for the holiday gift. Highlight the pages.

 

Jeriad Zoghby (04:17):

Yeah. Read this one story here.

 

Peter Crosby (04:20):

Yeah.

 

Jeriad Zoghby (04:20):

He no longer has his job. Exactly.

 

Peter Crosby (04:26):

So yeah, tell us a bit about navigating agentic commerce, the whole commerce world, what it means to be competitive in this environment. All of it's changing. And so just tell us a bit about what we all know we're going through but aren't quite sure what to do about.

 

Jeriad Zoghby (04:41):

Yeah. And this phrase agentic commerce, you know me, I love to be provocative and challenge and have my own opinions, but there's a thing about agentic commerce, because I know it's the hot topic right now. We really think of it as both buying and shopping, and we've talked about this, buying and shopping are not the same thing anymore. It used to be, they're not anymore. We're all sitting at a stoplight or waiting for somebody to come out of a building or a kid to come out of school or you're waiting in line and you're placing an order because you expect buying to be fast and seamless and easy. And then later in the day you're scrolling and you're shopping and you expect to be entertaining and you're watching a video or you're using AI because you also expect shopping to be not only entertaining, but to make it easier for you to make a good decision and that you feel confident in it.

 

(05:29):

And I think one that we use the term bifurcation, but the bifurcation of buying shopping is not always understood. We all experience it. We just don't always think about what it does to brands.

 

(05:43):

And yet this split is leaning heavier on the shopping side. And we've seen this. We saw it with social commerce. I've been tracking, and I think you all know this, I've done this with your community a few times. We used to do global studies every year starting in I think 2018. And when social commerce started to grow, people were using it, people were for shopping, but buying was always lagging behind it because there's a trust factor that not everybody's willing to get into. And it doesn't mean it's not growing, it just grows slower. And it's the same thing we're seeing with Agenta commerce. The shopping side is rapid adoption. Everybody's like, "Well, of course I'm going to ask its opinion. Am I going to give it my credit card yet? Am I going to trust it to buy it without me making the final decision?" It always lags behind.

 

(06:31):

So I'd say the two things to keep in mind is one side of the agenta commerce, the shopping is going to not only get adopted faster, it's going to be more important. And I think we see this, I think most brands figure this out with GEO and AEO investments are making.

 

(06:47):

But at the same time with this shopping, buying split, we can't see it as everything is going to become it. We made the same mistake with digital, we made the same mistake with social were everybody goes and says, "But everybody's just going to stop shopping in stores and they're going to digital and everybody's going to stop shopping in digital and go to social." It's fragmentation. And as a brand owner, as a commerce leader or as a CEO of a brand company, that fragmentation should scare the crap out of you because all it means is, and my famous joke of you don't buy more diapers because Walmart adds curbside. It doesn't create parents, babies or baby poop. Same concept here with AI. There will be more ways to shop, more places brands have to show up and be relevant, and yet our consumption habits aren't necessarily changing, which means costs go up, sales do not.

 

(07:38):

And so if you don't grasp this fragmentation for what it is, honestly, you migh wake up on the wrong side of that cost model.

 

Lauren Livak Gilbert (07:47):

And the challenge here, Jeriad, and I know we've talked a lot about some of the research I've done around org structure, and you can't hire your way out of this.You can't add 20 more humans. We would all love that, but that's just not a reality. So from your perspective, and I know you tackle this kind of in the book, what is the solution that brands should be focused on and what actually needs to change for this to be possible because you can't hire 20 more people?

 

Jeriad Zoghby (08:13):

No, by the way, and I love your research. I though it was brilliant. Thank you. I

 

Lauren Livak Gilbert (08:16):

Appreciate

 

Jeriad Zoghby (08:17):

It. Honestly, more and more people need to not only lean into the research we did, but keep digging. And to your point, the math doesn't work. We have a chapter in the book called Death by Math, which is one of my favorite chapters. It's weird. I used to work in a restaurant that's sold Death by Chocolate. It's not the same obviously, but I had a really brilliant company I was working with for a while, and they had realized that they weren't moving fast enough. Sorry, this is a bit of a story that's in the book. And they realized it took them two months to update copy on a product page for something they did. And they got great results, but they realized that's just taking too long. So they literally took this all the way up to their board. They got board approval, they got funding for it.

 

(09:04):

They implemented it and they showed me the output of this project and where they were, and they were showing me, it looked like an Olympic track loop of all these things they're working on and fixing. And I remember telling them, I was going, "Yeah, it looks like you'll be about maybe five to 600 optimizations a year now." And they said, "Yeah." And I said, "You need to be doing about 400,000." And I did the math with them. I said, "Look, you got about 2,000 products. There's about four major retailers you need to be updating, and ideally you're doing it weekly. And I know that's a bit of a stretch goal, but that is where we're headed." And I said, "You do the numbers, that's 400,000 optimizations, not 500." And to your point, you cannot hire your way out of this. This is not about cost savings.

 

(09:51):

This is not about, "Oh, and then I can use AI and I don't need as many people." I would argue that even with AI, you're going to need more people than you have. And this is one of the things we really anchored to in the book was this model we call the five 1580, which is that you need to start allocating your human and your agent talent more intelligently. So if you think about it, what we end up doing is we over-rotate to firefighting, "Oh, I'm getting punished by Amazon because of some price match thing that happened somewhere and I'm trying to react to it." But we're also only focusing on the top products and often not in the best way. So if you think about it, if you said, "Hey, my best products, my flagship products, top 5% is usually what that means, they're about half my volumes.

 

(10:38):

My humans have to own that. I screw those up." That's devastating. That's me having to report something new to the streak, but the system should be supporting everything they do, whatever agentic system I'm building. But the next 15% should be human QA'd, system's doing all the work, but it never passes without a human doing it. And the last 80%, the 80% that we know has not been touched in 12 to 18 months that nobody can claim that, "Well, I don't want a system touching that because it's like no one's touching it." Let the system run. There's almost no risk to it. This is something I learned when I was in supply chain 20 years ago. You find that balance between allocating your best resources to the top of your product portfolio and you allocate automation to the very bottom, and that's this balance of risk and reward.

 

(11:26):

So to your point, that's an operating model change. That's not just a technology thing of I've got it in Agentik system, but really being thoughtful about the role people play on every level of that 51580, because even with the automation, it's humans setting the bounds, setting the guardrails. It's just being executed at machine speed finally, which is what was missing before.

 

Lauren Livak Gilbert (11:48):

Yeah, I like to say the math doesn't math. It's one of my favorite graphics where you can actually look out. If you were to update right now, best in class, I'm air quoting to your point, is seasonal, which most brands don't even do. They maybe touch it once a year, but if you're updating that on multiple retailers across even social commerce, you just can't do it. But I guess the question I have for you, Jeriad, is for companies that are like, okay, we need to do this, but have organizations that are hesitant to automating the 80% or having the guardrails, do you have any stories or anecdotes about how you can break through that?

 

Jeriad Zoghby (12:31):

I have a stat that I think is pretty provocative. It's funny because I'm going to mention two categories in particular. So first one is face moisturizer, because there's a lot of big brands that fight in face moisturizers, and this is the same stat for both categories, but it's how much of this category sells are dominated by first party products, the big brands you're used to competing with, the ones you recognize all the time, and what percent are actually being owned by third party brands? And I don't know if y'all remember, and for those who don't know, there's a weird neck wrinkle cream brand that does 60,000 to 200,000 units a month that literally does not have a product name. And when you look at the face moisturizer category, third party's winning 52 to 48. When you look at, and this is the one that blew me away, prenatal vitamins, 70% of the top 100 prenatal vitamins are third party, including the number one.

 

(13:28):

And we live in a space where we know the difference between... And that's not to say third party products are bad, they're not, but it's the product that Amazon says, "I'm not even selling. This is effectively a flea market. If they bring a great product, great. If they bring crap, it's not my problem." And the reason I highlight this is, and there's a whole chapter in the book called the Barbarian Swarm, and the principle of it is - Peter's

 

Lauren Livak Gilbert (13:50):

Favorite.

 

Jeriad Zoghby (13:54):

If you think about it, you go and say, "All right, to your point, if I don't fix this, what's the risk?" The risk is that 80, 90% of your portfolio is unmanaged. You're only firefighting at best and often just completely ignored for a long period. Now, those products are in that. No one does assortment optimization perfect, but assortment is in there on purpose. And if part of your assortment, even if it's not volume led, is weak, this is where those small brands come and attack, and they just chop away at the category over and over and over. And so I highlight this because one, this is where your biggest risk is for growth because these brands are looking and saying, "Oh, that product doesn't do well. I've read its reviews. I know." And actually, and I'll maybe talk about this later, but I have a good friend who built an entire business and went public doing this, but seeing the weak spots in the category, going and reading the reviews, developing new products, launching them with the right marketing, and just attacking every weak spot that's in there, and that's why we call it the barbarian swarm.

 

(14:54):

It's like I've got my walls up and roam, but the barbarian swarms don't come in through the front gate. They attack where you're weakest and they grow. And the craziest thing is, because this isn't in any way a negative thing on small to medium brands, they're also not immune to that. If you're a mid-size brand and you're running it and you're going, "Oh, good, I'm the successor in this," my answer is no, you're the next one to get attacked. And the only real winner in this is the person running the arena and selling tickets to it, which is Amazon, walmart.com. And again, not bad guys or bad people, but this is the business model they've chosen. And so to your point, when you asked what would motivate it, it is, do you understand that your future is under threat because the model that you're competing in now where all the growth seems to be happening is going to the barbarian swarm, which is why these businesses aren't growing and why these CEOs keep getting fired.

 

(15:52):

So maybe the stat I should have led with is the CEO firings. That would've been more provocative to get people to change their ways.

 

Peter Crosby (16:00):

I think what you pointed out in the book is, because just a moment ago you said this is the business model they chose, but in truth, you say in the book, it's kind of the only way that retailers can have a good balance sheet is by doing what they're doing. I think that's what

 

Jeriad Zoghby (16:21):

You said. No, no, it's spot on. No, no, it's funny. We all saw this, if you've been around long enough, when Walmart really became a powerhouse, they forced people to reinvent the way they ran their business because you just couldn't make money the same way with the price models that Walmart forced on them. There is a part in the book, and Lauren, this may even answer a little better to the question you asked, which is there's a part of the book that talks about what we call the Yellow Pages moment. And if you think back to the Yellow Page, and people forget this, I actually was even involved a little bit with the Yellow Pages when they were digitizing and stuff back in the day when I was doing my consulting work. The Yellow Pages did evolve. They did digitize, and yet they still died.

 

(17:07):

Why? Why did they die if they did everything "the right way"? It's because while they were digitizing their business model, Google was inventing an entirely new one. They didn't take the technology and upgrade the old. They built something from the ground up that was new. Google Maps is not a digitized version of a bunch of PDF maps. They reinvented what navigation was and what advertising was. That point about the Yellow Pages moment is what every brand is dealing with right now, because you can either take AI and augment what you do today with it. And if you have a broken process, it just means you have a faster broken process, or you can take a step back. And to Lauren, I think this is a key thing you were starting to poke around in is make the investment to rethink that operating model, to build it the way it needs to be from ground up.

 

(18:04):

And it's because you're at this Yellow Pages moment. The reason that became such a big deal is you have such a technology disruption hitting the market, it is natural to go and say, "How do I make what I'm doing better?" And it's not the wrong thing to do, but if in parallel you're not also building the new or buying the new so that you're ready for the future, then you're screwed. And that's what happened to Yellow Pages. They could have bought the Google kind of alternative. They could have tried to build the Google alternative. Instead, they tried to upgrade what they had. And that would be my one, and we wrote the book to be that friend that's real honest with you, is not afraid to tell you that this isn't going to work out for you, maybe you need to take a step back.

 

(18:47):

And that's that part of that book is if you're trying to augment what you're doing with AI, you are doing nothing more than sinking slower. It's the equivalence of shoveling water off of a sinking ship. You can get bigger buckets and shovel it faster, you're still sinking. And that is what we're seeing in our industry. It's why growth is starting to be such a challenge for these companies and the cost structure doesn't work. It's because the ship is sinking because they're still just trying to find a bigger bucket and thinking that solves things. It's not going to. So to Lauren's point, look at that research, really challenge yourself and think about how do you build the operating model that it has to be versus how do you make the operating model you have better? Because making it better is not going to be sufficient. Sorry, that was very dark.

 

(19:36):

I couldn't help myself.

 

Peter Crosby (19:37):

No, no. I mean, there's always the wake up call and then there's the, okay, now what do we do about it? And that's part of my question is when you say redoing the operating model, it sounds to me like you're looking at almost every area of the business and figuring out what needs to... Or tell me how big does this get? What is this project? I know there's a whole book on it, so it's hard to do in a...

 

Jeriad Zoghby (20:03):

No, no, no. Actually, it's a great question because there was something that we... And sorry, I'm going to nerd out a little bit on my book here, but the design of the book was written with three phases. What's happening? Because there really is both what changed, the bifurcation of retail where we're buying and shopping in separate places, which creates fragmentation. The fact that the retail business industry is shifting to a model that you pay for access. I don't just put your brand on the shelf and try to make money on markup and own brand products. I literally am now selling services to the brands because it's higher margin. And we've seen Walmart make this incredible... I mean, as somebody who tracks Walmart, it's brilliant. They finally figured out not only does Amazon have the right retail model, how do they make it work for them in a way that is even better?

 

(20:53):

And then finally, the walled gardens. So when you look at that, you go, "Okay, well, those are massive changes. What does that mean for me as a brand?" It means the math no longer works. It means the barbarian swarm is taking advantage of it. And sadly, in most cases, I'm simply trying to upgrade what I have. So when you look at that front end piece of the book, it's saying, "Here's the argument for what went wrong." And the fact that it's not just a, "Hey, it's not as good as it used to be." No, literally we are playing a different game on a different game board and you're not ready for it, and you're going to have to take a step back and rethink this. And honestly, this is where the CEOs struggle the most. They're like former chess grandmasters that are now playing some online game that just doesn't make sense to them anymore.

 

(21:39):

So when you go through the phases of the book, the second part is what is the right architecture? When I mean architecture, I don't even mean technology, I mean the right business model, the right operating model to really solve this. And then to the question you ask, and I know I took three blocks around the neighborhood to get to your question, Peter, but when you get to the back end of it and you say, "What has this become?" It's not just that you're running commerce better, and this is really the north star of the book, is that commerce is no longer a function inside the organization. Commerce acts as the central nervous system to the enterprise. And if you think about it, it makes sense. The commerce channel is where you get the greatest signals on everything happening in your market, competitors, new trends, consumer feedback, who's winning and who's losing.

 

(22:28):

There's no greater channel to tell you what's happening, almost like burning your hand on a stove, and simultaneously there's no better channel to react in real time to those reactions, copy changes, media changes, assortment changes, and if you have the control over it, pricing changes, which of course you can if you're first party. But point being is, think about how that impacts every decision supply chain should be making every day, finance should be making, marketing should be making. So if you really see the power of it, it plays two roles. One is operationally, commerce should be that feed-in mechanism and also the ability to pull levers on the way out. And then at a higher level, if you really are seeing everything that's happening in that channel, everything people are looking for and how that trends, everything that people are complaining about, things they're wanting, suggestions they have, I've seen some of the most incredible ideas in things like consumer reviews, and not to mention new products forming in those third...

 

(23:31):

Third parties are way more innovative than first party. They can move way faster. If you saw that, instead of coming up with a new idea once a year for whatever, why wouldn't the CFO create their own internal VC engine and go, "I'm sitting on signals coming all the time. Why wouldn't I play small bets and just start making this a machine so that I can move as fast as those small brands do? Because if I don't learn to move faster, honestly, your scale is the biggest weakness you have. It makes you slow." So when you ask about what the future is for me and where we're going in the book, and I know I'm kind of reframing your question a little bit, is it's not just that commerce becomes that central nervous system, it's that brands become a much more dynamic type of enterprise. They can move at the speed of a small brand and they can deal with this fragmentation at a speed that we call machine speed, like the machines are running it.

 

(24:24):

Humans still own the judgment, humans still set the strategies, humans still basically go back to doing the work they were supposed to be doing, but now you can actually do it at scale.

 

Lauren Livak Gilbert (24:34):

And Jeriad, are you seeing any brands do this even at a small scale or any examples of organizations that are like, "Oh, we know this is happening. Let's get on this. Let's change our model. Let's do this," or is everybody still kind of in the light bulb moment phase?

 

Jeriad Zoghby (24:50):

I think it's a great question. I think there's a lot of big brands doing some really interesting work. I also think they're severely hamstrung by legacy processes, legacy organizational expectations. And let's be honest, it wasn't, what, five, six years ago? I still remember a brand telling me seven years ago, "Why do I care about Amazon? I sell things like frozen pizza," because to them, that's all it was. And then curbside comes along and local delivery comes along, and then the next thing they're saying is, "But does it really matter?" And then the next thing they say is, "How can you help us do it better?" And then the next thing they're saying is, "Help," because they're freaking out at that point because it continues to shift. But when you ask who have I seen actually pull this off, it has been small brands only. There is a friend of mine, and I think he's okay with me mentioning this, because he was just absolute genius.

 

(25:44):

I met him in 2017, Yaniv Serg. I've known him for 10 years, just an absolute genius. When I met him, he was selling third-party product. In fact, he took his company public. He left. After 10 years, he was just wiped, left it, went away because he started in 2014, and he was the first person I saw that saw the potential and what the information was. I had him join me for a conference event where I gave him 10 minutes. I presented some stuff on personalization back in the day, and I gave him 10 minutes, and I watch everyone's mouths just hang open going, "What?" Because this was 2018, and he goes, "Yes, I've used my AI system, not the ChatGPT kind of stuff. I'm more like what we call narrow AI now." And he goes, "Here's where I've studied this category. It shows me this is a weak category.

 

(26:35):

Nobody really dominates in certain things. Here's where I've had the review analysis done to help me understand that if I launched a product with these features, it would do much more successfully." I then took this back to the manufacturer in China who makes this for these small appliance makers, big names like Westinghouse and GE. And then I got into market, and I had already built all the marketing materials for it. By the way, that was a six-month cycle to take over an entirely new category, and that he was using AI and automation to place his media placements, and he was making PDP changes daily on an entire portfolio of products because he was just like, "But this is the way it has to work." It wasn't a case of how do I make the old world faster? He built the new world to work in the environment he saw.

 

(27:21):

He was just, and to this day, absolute genius, but that was 2018. So you look around and you go, there was only one of him, only one of him. I remember being just blown away by it because we were trying to partner and stuff, and he actually came to work with me at IPG and he was our chief commerce officer for the, what would we call him? The chief commerce AI officer.

 

(27:51):

But now you look at these small brands and you go, "How many more small brands out there who go and say," Well, I'm not him, but I have Claude and I have ChatGPT, and how much faster can I move than that big brand who has to go through an eight-week compliance cycle when I am the compliance cycle and I have 40 products, not 2,000, and I'm in one channel right now, not 10 or 20. And this is my point about being a bigger brand. Your scale is your greatest weakness right now, and it's why the operating model has to change, because it's only a weakness because of the way you operate. You're operating the way the business worked 10 years ago, not the way it works today. Those small brands who are growing up today, we're going to see that rapidly accelerate because what Yaniv did is he was capable.

 

(28:43):

It's not that he saw something others didn't see, he was just capable of doing it. All small, medium brands are capable now. We're going to see this become much more competitive. So that would be my warning. I know we keep anchoring back to the operating model, but it is the key to all of this. You have to rethink how you operate in this future world.

 

Peter Crosby (29:02):

Okay.

 

Jeriad Zoghby (29:04):

I'm sorry. You know me, I always get in the doom and gloom. I will say this, the book is very, very positive. Well, it's prescriptive

 

Peter Crosby (29:14):

And positive.

 

Jeriad Zoghby (29:14):

It's very prescriptive. It is. It just wants to anchor to reality because that's where we get caught, is I want it to be reality, not just for all the people in our community that know what's going on, but for the people who give us the funding that sometimes miss.

 

Peter Crosby (29:29):

And that's kind of what I'm thinking now for this last question, which is our listeners who are the people that understand this kingdom the best, what you're saying is the commerce, the source of what could be your future innovation and change, they are the keeper of those kingdoms. And so if they're sitting there at a large brand that is as you describe, Should they go start their own thing or is there a battle to be waged that's challenging and interesting in career making in this moment? And what would your advice be to somebody in that position?

 

Jeriad Zoghby (30:22):

I love that you said career making. I could not agree more. It is the battle worth fighting. I'm sure we're going to see plenty of people spin out and tackle things, but there is an ambitious here. The book is very ambitious to be honest, but it's also one of those things where you look and go, it's either that or dying, slow death. It's not going to be an in between. To your point, I remember, and I think this is even in the book, I had a meeting with a CEO of a large North America brand. It's a global brand, but it was the CEO of the North American business. And we talked for 15 minutes and within 15 minutes he said, "I need a four-day offsite with my ELT just for this topic, just for digital commerce." And then that led to a whole working session.

 

(31:12):

Why did that 15 minutes matter to him? And the one thing I would say to anybody who has got that ambition, and also to be honest, half the time it's not even ambitious, it's just frustration going, "I know there's a better way to do this and I'm tired of just the nickeling and diming of it. It's going to take major change." What was interesting is when I spoke to this person, and I think most of us have it, but we have to keep it in mind, is this person's also dealing with, at the time, tariffs, supply chain issues, supplier issues, litigation issues. CEOs always have this massive amount of things that are always more important. So if it didn't feel more important to him, not to me, to him, it doesn't matter. And the thing I did do is I didn't come in and try to explain how Amazon worked or walmart.com worked or Curbside worked.

 

(32:05):

I basically showed him your cost model is breaking. You're basically in a death spiral because costs are going to continue to go up and your operating model's not catching up. And because of that, you continue to lose share. And it was a very simple discussion. And it's the kind of thing where he goes and says, "I am responsible." And most CEOs, deep down, they want their businesses not just to succeed, but to win, to be the best. And when they can see in simple terms, "I am set up to lose," that's when they're going to pay attention. So I would say this, one thing is that we get so caught up sometimes in the operational minutia of what we're dealing with and we try to translate it even in simple terms. It's a waste of your time. Don't translate it in simple terms. Help them see why it matters to them and only matters to them.

 

(32:53):

And I do think that we have to be ambitious because you almost owe it to the company you work for. Again, this is one of those things where we're seeing it, they're losing share, but cost model does not work and shoveling the water over faster is only going to hold you for a little while. And then I went doom and gloom again. But yes, Peter, I say you fight the good fight and you go with the ambitious thing. And hopefully the reason we wrote this book, because I've been dealing with this for 10 years, and don't get me wrong, it's not the first time I was working with commerce was 10 years ago, but we've been really focused on this narrative for 10 years. First event, Salsify event I went to was in 2018 and gave a talk, rolled gave a talk, showed that George Clooney video, if y'all remember that with a provocative George Clooney video for anybody who's ever seen it.

 

(33:39):

We've been talking about this for so long, to finally write it down was one, to get it outside of us, but two is that 15-minute conversation should be happening with every brand, small, medium, and large right now. And it's to empower anybody to be able to have that conversation, to know the stories, to have the data, because that's a big part of it. The book is full with the data, it's filled with the quotes to help people have these conversations and also for those boards and CEOs to have the reference.

 

Lauren Livak Gilbert (34:13):

And Jeriad, this is a systemic change. It's a big, big change. If you were to say three things that a brand could go and do tomorrow to start, what three categories, what three functions, what three things could they tangibly put their hands on to really help?

 

Jeriad Zoghby (34:34):

That's a great question. This is going to be a bit off the top of my head, so it's going to be a little mushy. First one is, I think there is a significant amount of information sitting in the market and no one's paying attention. This is a big reason we launched Ecoslabs. No one's paying attention to the market. I remember, I kind of have to hide this, I was working with a brand and we found out, if anybody's never seen this, it's the most shocking thing in the world. In the juice category, if you go on Amazon, you look through the reviews, you look on Google, you'll find that juice and mold box is a huge, huge, huge theme because what happens is the slightest nick lets a little air in creates mold, it doesn't leak, no one knows it, kid drinks it, thinks it's pulp, it's disgusting, freaks parrots out.

 

(35:21):

There's millions of people talking about this in Google. Brands did not know this was happening. Rold and I did this six, seven years ago for a brand, showed them this, maybe not quite that long ago, showed them this and showed how it could lead to a new product development, new marketing. Point being is your greatest innovation is actually just from listening.

 

(35:44):

Most of the time we are very insular as brands. We think we're not because we're like, we send out marketing all the time and we do these tests and it's like tests are the same thing as yelling at people and seeing when they turn around. Actually listening to your consumers is the most powerful innovation channel you have and building that mechanism honestly isn't that hard. Now granted to be able to do it to the level that for another day is different, but can you get value out of it right now? Yes. And I think not enough companies are doing it and I think it would help drive momentum and funding with that. I think the second thing, when you're looking at agentic operations and really trying to scale things, focus on the long tail. The long tail is where there's little risk and because of the scale of it, the number of things, there is reward and that allows you to learn because the one caution I have, and we have a whole book on...

 

(36:38):

Joan Smith was critical to this book because I've known Joan forever. She's a transformation genius, worked with her on so many clients over the years when we were at Accenture together. And we have this book on the exoskeleton and it's the idea that AI is a bit like wearing an exoskeleton. If you put an exoskeleton on a five-year-old, they're going to destroy your house because they don't have the coordination and the judgment, but they have power. And that's a bit of the risk with companies as they roll into agentic stuff is that if they don't do it the right way and they don't learn to strengthen the judgment skills of the people in charge of it and also rolling it out in safe places, it's almost like practicing with an exoskeleton in a china shop versus practicing with an exoskeleton in a sandlot. And the long tail is the sandlot.

 

(37:26):

So I would say the second thing is practice where you have minimal risk, you can learn fast, you can break shit, and it doesn't cost you much.

 

(37:38):

And I think the last one is, and this is kind of a weird thing, but goes back to the stuff we were just talking about, which is learn how to talk about in simpler terms. It's a weird thing of CEO empathy. They don't give a shit at first. They don't care about your problems. It's not because they're bad people, it's because they literally have a line of people waiting to tell them how their problem is bigger than yours. The moment you learn how to translate it into their world in the simplest ways where you don't explain anything about your world, this is why the diaper thing, I actually used that with the CEO and pointed that out because he had been told that digital was the next great growth thing. And when I pointed out that you don't sell more diapers just because there's another channel, but it's more cost for you, that was shocking for him.

 

(38:26):

You know why it resonated? Because he's a consumer. I didn't have to explain science. I didn't have to explain search algorithms. I didn't have to explain PDPs or what a different acronym meant. I simply said in simple terms, this is bad for you. It can be good in that you can win share, but only if you lean in, but it's going to cost you and so your model isn't set up for the cost structure problem. And then that's something a CEO, because they're all brilliant in their own ways, goes and says, "Holy shit, we got to fix that." So that would be the last one is be that CEO empathizer. It sounds weird to say it that way, but it's true. So they can actually see that you actually are sitting on the biggest problem the company's dealing with because - And the biggest opportunity,

 

(39:12):

Right? No, absolutely. And the biggest opportunity. And sorry for anybody from supply chain, I'm not knocking you right now, but point is I grew up in manufacturing and supply chain. It's one of the reasons I always think these ways, it's not that those things aren't critical, but you will not have a business if you don't have demand. And right now demand is eroding and until they fix this operating model problem, they aren't actually set up to fix it. TV ad's not going to fix it. 500 optimizations a year aren't going to fix it. You got to change the whole way you're doing this.

 

Peter Crosby (39:47):

The book is Competing at Machine Speed and your two co-authors, you've mentioned Rol, Joan. I mean, just the combination of your three perspectives just makes it really rich and valuable. So for pre-order, where should folks go, Jeriad?

 

Jeriad Zoghby (40:08):

We have a website competing at Machine Speed. Sorry, I know that's super long URL, but it's competingatmachinespeed.com and the book should be out October 27th and we'll have pre-ordering on that site too.

 

Peter Crosby (40:22):

And then at some point, obviously we'll be up at the usual outlets. There's a bookstore called Amazon online that people could try. We'll

 

Jeriad Zoghby (40:32):

Have an audio book. Yeah, we'll have an audio book and we're even going to have a machine version. Now the machine version won't give you the whole book, but for somebody who's wanting to use some of the stuff from the book to test against their plans and anything else, we're going to have that available too.

 

Peter Crosby (40:47):

Oh, great. Jeriad, thank you so much as always for the bracing wake-up call and for the prescriptions and the passion that you have for really wanting folks to make the leap in this next transformation. It's really inspiring and helpful, so thank you. Well,

 

Jeriad Zoghby (41:05):

It's always a pleasure and it's always a blast for me, and thank you for always letting me run my mouth, so thank you.

 

Lauren Livak Gilbert (41:10):

Thanks so much, Jeriad.

 

Peter Crosby (41:12):

Thanks again to Jeriad for sharing his concepts with us. The DSI wants to be a part of this operational shift, so become a member at digitalshelfinstitute.org. Thanks for being part of our community.