Wielding the Levers of Growth at a Challenger Brand, with Matt Kreuger, SVP Digital Commerce and Marketplaces, Buffalo Games

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. By the time he landed at his current private equity-led company, Matt Kreuger had 15 years under his belt building out e-commerce from scratch, growing global operations, and learning what it takes to drive growth across all different routes to the consumer. But as he says, what was doesn't mean what is. Everything is always changing. And Matt, from his seat as SVP digital commerce and marketplaces at Buffalo Games is engineering growth with a lean and agile team and processes that are continually refined for today's opportunities as well as preparing for tomorrow's. In addition to all the tech and the processes though, he finds more often than not that his secret weapon is empathy. Matt Kreuger, welcome to the podcast. We are so happy to have you on. Thank you so much.

 

Matt Kreuger (01:15):

Thank you for bringing me here. It's an honor as always and it's good to see you both again.

 

Peter Crosby (01:19):

So we're going to talk about a topic today that may or may not matter to our audience, but I'm just going to go for it anyway. Where the hell is the growth going to come from? Do you think anyone will care? Is that necessary to talk about?

 

Matt Kreuger (01:33):

Do you really want to start out the podcast with that tough of a question? I mean, it seems like every day that's a challenging one.

 

Peter Crosby (01:39):

I'd like you to answer it in as few sentences as possible. No, that's a whole podcast. We're good. But before we get there, yeah, you're right. Let's talk a little bit about where you are. You're at a PE backed brand and you've had a bunch of other experiences across the spectrum. So I'd love for you just to talk about your background and then where you find yourself today and what's top of mind for you.

 

Matt Kreuger (02:02):

Yeah, absolutely. I mean, not to go back too far and ramble, but I was a sneakerhead athlete in high school. I thought I was going to work for a professional sports team. Anyways, I fell in love with sports and merchandise and it just happened to be in an e-commerce pure play retailer, eastbay.com, which was owned by Foot Locker. So a long time. So I really cut my teeth on sports and internet and websites and I didn't know what that would come 15 years ago. And so I started that really from category marketing. This is kind of when SEM and paid search was just kicking off way back in the day and now- Early

 

Peter Crosby (02:43):

Adopter.

 

Matt Kreuger (02:44):

Yeah. Yes. And so it was really fun, but I cut my teeth in e-commerce way back then and then moved to the brand side at Keene Footwear, which is really where I cut my teeth on the Amazon side a few years later out on the West Coast. And then I just became fell in love with Amazon and marketplaces and global marketplaces. And honestly, where I started following Lauren and Peter, I mean, you guys from way back when. Yeah,

 

Peter Crosby (03:09):

I remember.

 

Matt Kreuger (03:10):

So I just became obsessed with it and we had a really good run there. I had a phenomenal team. COVID and pandemic actually happened, which was obviously very challenging for most, but it was an accelerator and a big learning time for us. And eventually left the keen side and moved over to the private equity side. And I've worked in nonprofit, big public with Foot Locker and family owned private. And so I like to think I have a little bit of a diversified background to understand what kind of motivates and how to influence. And I think in e-commerce, private equity is a different beast. It can be a good beast. It doesn't always have to be the scary word out there that I've learned, which I've been very much appreciative of. E-commerce and private equity is a complex roadmap and I think it takes time. It takes a ton of education, but I'm super glad of the road I've had prior to this to help influence as much as I can.

 

(04:04):

And I would encourage anyone to get involved in this aspect if they have the opportunity to.

 

Peter Crosby (04:11):

And when you think about the priorities in a PE firm, is it sort of immediately greed comes to mind? That's probably not the right way to think about it. So what is the ethos of how you approach your growth trajectory?

 

Matt Kreuger (04:39):

Yeah, I think greed's a funny word and I think that kind of goes to that negative connotation that you go. Yes, you know

 

Peter Crosby (04:44):

I was joking.

 

Matt Kreuger (04:45):

No, yeah. But I think everyone's not naive to some of that, but I've been blessed to work with a PE firm that's been supportive and I think that's one thing I learned. But from an objective point of view, value creation is one of the big terms along with profitable growth. I think the interesting part about value creation is it's not always tied to top line or bottom line dollar sales figures. Don't get me wrong, that is a major part of the whole thing. And EBITDA is king at the end of the day, but there is certain types of strategies one can decide or employ that can create value for the organization setting up for an exiting an acquisition that doesn't always have to correlate to a dollar figure. So for example, if we may grow our top line, but if our inventory levels are three or four times higher than what the overall revenue run rate is, that's going to devalue our revenue and our value creation.

 

(05:49):

So we have to make sure we're balancing. So instead we go at 10% growth and our inventory only increases by 20% versus maybe 25 or 30% growth and our inventory increases by 100%. Those are just different types of things that we have to take into account. And within the e-commerce sector, for sure I look at it, especially with Amazon or anyone, we want to understand that we're growing in tandem and we're not just shipping in items and hoping they sell. We have to maintain a healthy business because long-term, that's going to be a better trajectory to create value and overall profitable growth for us.

 

Lauren Livak Gilbert (06:22):

Is one of those things also thinking about the category and how you're advancing the overall category? Because I feel like that's a strong indicator of how you as a brand are working with your partners to actually, to your point, bring long-term value across the entire category.

 

Matt Kreuger (06:39):

Yeah, I think you hear this a lot, right? Category dependent and that's very true in this case, especially if you're a market leader in certain categories and we are. So that growth mechanism or that I would say SKU optimization process, it really does take a partnership and some are better than others of course, but you really do have to figure out how to partner with them to stay relevant when you are leading and/or how do you enter when you are brand new? And that I think is a little bit different now compared to what it was four, five, six years ago. And especially when you're hearing what is true, hey, you got to start on Walmart Marketplace to even think about getting in store. You got to go through the trenches on Amazon 3P potentially before you bring it in 1P. There's definitely that. And it depends on category, but I think the one thing that I've found that's a little bit different is depending on a category, certain models may not work for us anymore.

 

(07:37):

So we are highly considering what's best for us, but also what's best for the retailer to grow category share because not every retailer wants to carry a pool table in their warehouse or something like that, but we might see a market opportunity. So we have to understand what's the best way for us to operate in today's ecosystem versus just, hey, ship it in, sell it and see what happens type aspect.

 

Lauren Livak Gilbert (08:02):

Yeah. And Matt, so a lot of that is we talked about category growth, we're talking about growth overall. Peter kind of teed it up. It's a heavy hitting topic. We let you take the slower route into this and talk about your history, but we really want to get to this meaty, meaty topic around growth drivers. So there's a couple more than a couple. There's a lot of different growth drivers that people can focus on, but we're going to dive into just a couple of them. One of them being global expansion. So can you talk a little bit about how do you think about that as a growth driver? And if someone's thinking about global expansion, where should they start?

 

Matt Kreuger (08:36):

Yeah, I mean, absolutely. Yo hear it in many topics, public earnings, et cetera. It's an avenue that can be very lucrative from a growth perspective, but it can also be very complex. So I would encourage anyone just that's absolutely where you can get dollars, but make sure you have your house in order domestically because honestly, the foundation that you have here, whether that's from staffing, technical resources, operational resources, that being as efficient as possible is going to make your global expansion so much more effective and efficient. But outside of that, I think global expansion for me today is much different than it was in 2017, 2018. I stood up a global team, had people in five different countries around the globe and learned a lot and it was the right thing to do at that time. Now that changes a little bit, especially with different ways that the marketplaces are operating.

 

(09:33):

And so I would just encourage anyone to really think about what works best for you as a brand, what is based on your resources Because how I stood up my team globally and grew globally at Keene versus how I would do it here at Buffalo Games is completely different. And we've even talked about we want to own everything end to end as brands and have full control to do that profitably with the resources needed to do everything in these marketplaces. It's really, really challenging. And so we've looked at different distributor models that we trust and vet and I think you have to really use what works best for you in your brand position and not just follow a, hey, put people everywhere around the globe, replicate what you're doing in the US and move forward.

 

Lauren Livak Gilbert (10:13):

I was just going to say, I like the way you're thinking about it with having someone in region. I'm curious when you think about if you're doing global expansion in your past based on what you've done, does it make sense to have a global central team, then have someone who sits in the region who reports back and then you can combine all of that expertise together? Because I think sometimes what happens is people just deploy a team in the region and then there's no connection back into the broader digital center of excellence or whatever that looks like and you lose those learnings.

 

Matt Kreuger (10:48):

I think you're spot on. I still feel like a digital center of excellence and the cohesiveness between global, vertical and regional horizontal is key. I can't imagine how many wrong decisions I would've made without my leader in Europe, for example, not just about the business, but also just the cultural aspect of getting anything implemented in the building there is, I mean, I say to my team, 50 to 60% of our jobs in e-commerce is just influencing and educating. It's kind of hard to do when you're across the sea 90% of the time and that culture is very important. So I personally don't think you can do it at scale.What might've changed is just how many people or what types of roles you need in those regional spaces because that could be maybe streamlined or done in different ways, but I still think in person in geo at some scale is so important to have from a deployment perspective.

 

Peter Crosby (11:43):

Yeah, I was thinking that when Lauren was saying this, I was like, oh, global and regional organizations, EBITDA management. I was like, how do you balance those? And it sounds like that it can be leaner perhaps in the regions at this phase in driving global expansion because there are some preset ways of working and experience that you can work off of

 

Matt Kreuger (12:11):

And all retailers are making more advancements to share more resources and stuff. So that's helping it along the way too. But I think testing and learning versus full deployment, especially in a PE-backed world where getting too heavy too fast can be very challenging. But I think that's a good way of saying it, Peter, of you don't have to go all in all at once and you can leverage. There's more tools now and yes, artificial intelligence will absolutely help us scale here. I'm not going to beat that to a dead horse, but you don't have to go all in right away to show positive growth, positive profitable growth outcomes. And I think that's important for most to understand.

 

Peter Crosby (12:55):

And we were talking earlier about category growth, I think all of what you're talking about really involves a tight partnership with your retailers and finding that sort of common objectives and goals. And I'd love to just have you talk about how you work that partnership to your advantage while still obviously making it the retail advantage because rising tide boats, all that. So how do you think about it?

 

Matt Kreuger (13:31):

I like how you said that. I think it's unique in nature and without putting my foot in my mouth too, too many times, I've really had to position and change my narrative of thinking almost retailer their position first. And that seems a little bit selfish, but I need to win with the retailers today, especially whether it's Amazon or whatever it may be, how can I enable them to win so I have to put myself in their shoes because we don't always have someone to talk through there. It's a little bit different than potentially our other brick and mortar partnerships or whatever it may be, which that is super nice to have still. Honestly, the in- person and the handshake agreement.

 

Peter Crosby (14:11):

Humanity, who knew?

 

Matt Kreuger (14:13):

Yeah. And humanity is still a big piece to it. I mean, we're fortunate enough to meet with some of our Amazon contacts and those human pieces, although maybe not as present as we'd like them to be, are still super important. And it allows us to demonstrate that we're thinking in their shoes and ultimately at the end of the day, they're held to a number. So anyway, we can help them, not first, but equally understand, hey, we're not just here to ship you a ton of product, we're here to help you grow as a unified partner. And whatever medium that is, it still includes humanity and we've enjoyed that aspect of it. I wish there was more and I think we'd be in a better place in certain areas than some, but that's another day's challenge.

 

Peter Crosby (15:01):

Yeah. And what is the consumer response, what the consumer is doing, what the shopper is doing? How does that enter into the conversation? Are you bringing data to the meeting or the virtual conversation or whatever that helps guide some of that? Or is it a two-way conversation data-wise?

 

Matt Kreuger (15:29):

I would say it's almost more of a on- way conversation in some ways to respectfully, and I can understand it. The retailers are being tasked with overseeing more categories, more SKUs, like online, Omni, marketplace, et cetera, retail, media push, everything. So there's a lot to manage there. But I mean, it's mostly majority for us bringing comprehensive data sets and we lead with data. My team knows that doesn't mean we always listen to every piece of data because there's a litle bit of a gut and science in this e-commerce world that you, both of you know very well,

 

(16:05):

But it's mostly I would say we root everything in deep analysis and then try and scale it up to be like, here's what we're seeing, here's why we're seeing it, even if it's bad. We also show the bad aspects of like, look, we messed up here, this is on us, but this is on your team. And so we try to balance that. So it's both bad and good datasets, but I would say honestly, primarily it's mostly our internal team that is providing many of the data and trend sources rooted on what's happening on whatever platform you're working on.

 

Lauren Livak Gilbert (16:39):

Do you find that as a big differentiator that can help you get maybe your foot in the door if you don't have a ton of budget with some retailers? Because you're not a massive CPG company that has insane budgets for retail media or for any of these initiatives. And so maybe sometimes, and let me know here, it might be hard to get more time with them or to get more opportunities. And is that data piece or is there anything else that you use as more of a agile kind of nimble budget brand to get more opportunities or partnerships with them?

 

Matt Kreuger (17:13):

Yeah, I think it's a really good question and I have to commend my partners and whether that's our CMO or our chief commercial officer, they've came from large organizations and now they're in a smaller leaner organization, but man, our team is scrappy. And yes, we'll pick certain things that we want to go full in and we'll do research studies and we'll bring that data to absolutely create a pitch that we feel very confident in. So whether that's consumer research products or we'll bring data from other channels to help guide what we're seeing the consumers doing to support an initiative. So we get really scrappy in certain those things, but absolutely from a marketing piece, we've deployed certain pieces that appear to be so- and-so spent $100,000 on that campaign and it costs us 2,500 bucks. I'm just rambling numbers here, but we are really lean and scrappy and that goes to I think the quality of relationships we have with some of the people we work with versus just the quantity and what money can buy.

 

(18:12):

And I have to give a lot of credit to our brand teams and our product teams for being very lean. The one piece that I think can set Lean Teams apart is adopting trends and new features early. So just for example, Walmart is a great partner of ours, but they've released some new features that their merchants and team are pushing and we aren't necessarily like, okay, this is going to add a ton of value or a ton of impressions or a ton of results, but it's important to them. And so we lean in and we jump on it immediately and that small win right there, we can pull a little bit of data out of there and show them visually with the data that allows them to feel like, hey, Buffalo Games is a great partner. They're leaning in. We're going to help support them even more.

 

(18:58):

So being just nimble and adopting things that may not drive every dollar in return is still that humanity and kind of relationship building aspect that I think is important

 

Lauren Livak Gilbert (19:08):

And putting yourself in the mind of what the retailer wants and they want these new strategies, capabilities to be adopted. So I think that makes a ton of sense in how you say that.

 

Peter Crosby (19:17):

You got to fake that empathy is my takeaway from this whole ...

 

Matt Kreuger (19:22):

I'm glad you said it and not me.

 

Peter Crosby (19:25):

No, it's authentic. I know, I know.

 

Lauren Livak Gilbert (19:28):

I love it. Well, okay, so Matt, so another potential option from a growth perspective could be acquiring a company. And so from your perspective, that is an option, right? Then I mean, we're seeing a lot of consolidation, a lot of changes in our kind of industry. So how would you evaluate something like that and how would you think about that as a growth driver?

 

Matt Kreuger (19:48):

First off, I would encourage anyone who has a better part of due diligence and if you have any type of interest in that, go learn because it is fascinating. It was one of the reasons why I came into PE because I love the due diligence process and it is a lot of work on top of your everyday job, but it's where you can learn different insights about different businesses, obviously, and it's important to keep that in mind. But from my perspective, yes, acquiring businesses is absolutely a growth mechanism. We've done it here a few times, including one a little bit over a year ago. I think for us it was a position more of product innovation and uniqueness from a brand point of view. But also when we looked at it, the company that we acquired was at a much heavier percentage of digital business than brick and mortar.

 

(20:36):

And so from a complimentary perspective and a value creation aspect of it, that's an immediate injection into our overall penetration of business between brick and digital, which creates more value creation. So there's different aspects of why you would do it, but we've even ... I think it's interesting how does a retailer acquire an agency? There's different ways you can look at it just as versus companies to add exponential power in your internal teams. I'm not saying we're doing that, but there's unique ways we've looked at it. But the interesting part of it for me is you go through the regular due diligence process, but when you're looking to acquire a company, for me in the digital space is a litle bit different due diligence than I would say the typical, as all my other executive counterparts are doing. We're going heavy into market penetration, pricing overview, 3P sellers.

 

(21:29):

And I can go more in that if you have follow-up questions, but it's a different type of due diligence when you go into acquiring a digital business versus just a more traditional business in the sense of retail.

 

Peter Crosby (21:40):

Tell me more. Yeah, what is it that makes that digital business? Does it require more inspection and the due diligence is just different because you're also looking, I would imagine, at data and tech, but tell us more.

 

Matt Kreuger (22:00):

Yeah, depending on the sophistication of the company and whether that's DTC, marketplaces, dropship, whatever it may be, you are looking almost, the numbers only tell maybe 15% of the story. Of course, growth, profitability, et cetera. The typical profit and loss is absolutely a part of it, but I'm looking at how extensive is it going to be to migrate them from them, their tech stack to our tech stack? What's that cost going to be? Is it a separate ERP? Is it not? Because there's a cost to all of that and that doesn't mean I'm getting all this personnel to do that or incremental resources. So there's an intangible cost to that. From a commercial landscape, yeah, I mean, whether it's Amazon, marketplace, business, DTC, how many third party sellers do you have on certain items that are high performing? What is your global penetration? How many other retailers?

 

(22:48):

What's your pricing structure? Because it's great that you might've sell 300,000 units, but if it was at 40% markoff and I'm not going to be able to do that profitability, that's a challenging game for me that I'm going to have to change. So the intangibles and the extra work you have to do to acquire those intangibles, whether that's through a digital shelf tool, retail media partner, whatever it may be, those are the additional insights that normally don't come through the traditional due diligence process that you have to be really, really focused on to ensure that whatever your expectations are once you integrate and once you acquire and once you grow, those aren't factors that weren't considered in the overall forecast because if you don't and all of a sudden you're like, oh, I can grow this business three times, but you're not operating on an even playing field compared to what it was when you pre-acquisition, that's a challenging conversation that I don't encourage anyone to have possible.

 

(23:41):

So that's more of the quantitative, but the intangible aspects of due diligence in the digital business that I find fascinating.

 

Peter Crosby (23:49):

Yeah, it's really looking around the corners, right?

 

Matt Kreuger (23:51):

Yeah.

 

Lauren Livak Gilbert (23:52):

I also think it's important, I like you calling out the kind of infrastructure piece because there's a cost perspective, obviously, but time because there's a cost to change the technology or to migrate or whatever that looks like, but it also takes a ton of time to do that, getting your data right, mapping all of that out. So I love that as another aspect to think about when you're evaluating a company, not only how much will it cost, but how long will it take to actually get to that value that you're promised by the spreadsheets that you're listing out?

 

Matt Kreuger (24:24):

It's often, unfortunately, it's not the sexy aspect of it and no CEO, no board wants to be told, "Hey, this is going to cost us X because we got to migrate their data and their tech system." It's not fun to talk about. I'm not saying it is, but I'm a massive believer in technical operations. Lean technically efficient operations will really fuel growth to our original comment of e-commerce in the future and that's going to require work. I'm an MDM PIM PXM type of nerd and that's not a plugin to this podcast, but- I have no idea

 

Peter Crosby (24:58):

What you're talking about.

 

Matt Kreuger (24:59):

Yeah, no idea. But I've seen it right now, just I've seen bigger bottlenecks because systems technology haven't integrated that are sales inhibitors versus allowing us to accelerate sales because we physically and technically cannot work together. And I think that's a massive miss and another intangible that people don't focus enough on when you're integrating these companies either acquisition-wise or building new standing up new business units, whatever it may be. I'd

 

Peter Crosby (25:34):

Like to dig into this a litle bit more because one of the places where you hope growth is going to come from, you talked about a bit of lean operations and being able to be agile and I think there's also the opportunity on both the digital shelf and the Agentix shelf for showing up more places or making sure that ... And I don't know, as one of the challenger brands, perhaps the coverage of content isn't as much of a challenge just for the big ones. But when you think about the ability of AI fueled processes to help power not only efficiency, but also improve the context product content that will feed more and more of these use cases that maybe you're not able to, what's your feeling about it? Are you bullish on this stuff, but do you think it's a two year from now?

 

(26:35):

Or how do you think about the opportunities to actually fuel top line growth there?

 

Matt Kreuger (26:42):

I think it's an area where we all know what happened with the Agentic release of OpenAI and CardCheckout and all the things that happening. I'm still very bullish on this aspect. I mean, I can't tell you how many times I want to be like, "Hey, I want this recipe for dinner tonight, order the recipes and have them there and just voice and do it. Every day I want to do it. " But I don't think it's that far off. I think certain companies will be able to get there faster than others because of, again, leanness, nimbleness, certain people being very risk averse, certain people not being it. I think if you have centralized systems that can feed and help you automate content creation, whether that's written, creative, et cetera, you're just going to be able to push out that much more content and keep it relevant, which I think is even more important than potentially maybe an older school way of doing things where there's a lot of red tape.

 

(27:43):

And so I'm bullish on it. I think how it comes to life is still a little bit to be on how impactful it is. I would love to say I'm spending a lot of time in agentic brand coverage, et cetera, and I would love to be more. I just have a litle bit of other priorities right now, but I am still very bullish in this space that it's going to make our teams more efficient to create more content. I just want to put a plug out there for ... I just hope we don't get into a place where we stop monitoring what's getting created because I think that's- I'm in the loop, baby. Yeah, that's a ballgame that I don't want to go down to. And I want to make sure that my teams and everything I do, we make sure we're creating quality content still with a faster rate of speed.

 

Peter Crosby (28:29):

And I think the other monitoring piece of it is because the Agentix Shelf is much less under the brand's control than the digital shelf, monitoring what's happening out in the influence realm, the Reddits and

 

Lauren Livak Gilbert (28:46):

Whoever

 

Peter Crosby (28:46):

Else of the world is super important. And that's sort of a collaboration, I would imagine, with the brand marketing team to make sure that that input's always coming in because thinking of your nimbleness, the more you're listening, the more you can add a new context or use case or something like that quicker than your competitors. And I feel like those little niche things are going to be where you can grab market share. Does that make sense?

 

Matt Kreuger (29:16):

I think from your perspective where I'm even more bullish in the acquisition of Agentic Commerce is the operational and genticness of working together in the backends to feed and meet the consumers where they're shopping. So i.e. I have an agent that's listening to Reddit, it hears this call out, it shoots it into our content system, maybe an agent hears that, takes information from our product management system, injects it to respond to that person and it's all happening autonomously behind the scenes. Now I'm simplifying this. Obviously there's a lot of technical aspects and components that come into it, but that efficiency versus what we've had to do previously of monitoring social media hashtags and then Going to this site and figuring out what they're saying and then validating it and then sending it here and sending it to a marketing team to write a content review or a blog article or video or whatever to justify it.

 

(30:11):

That should all happen in, I don't want to say seconds, but in a much better time than what it was and be autonomous in the background in the future.

 

Peter Crosby (30:19):

That little scenario you just spun, I'm going to clip it out because I think that that vision is what I think helps sharpen the mind in terms of where the attention ought to go, which is if you get your process brilliant basics, then that will feed all the production of the brilliant basics out onto the various shelves that you have to deal with.

 

Matt Kreuger (30:46):

It's that and the dynamics of it, and this is always going to be changing on features and bullets. Everything that you're going to see online is going to become more dynamic. I think I'm not a pro AI going to replace everyone. I think it's going to enable a lot more people, but people having time to feed those responses with much more quality of information so that we can move faster is going to be even more important in the future. Yeah,

 

Peter Crosby (31:12):

I was reading a Forrester blog today and they were saying that for CIOs, the next thing is the AI CIO in that they're going to be responsible for outcomes, not just the systems. And that's a promotion if you think about it, but it does change for all of us the way in which that has to shift. Okay. Thank you for going down that tributary with me, but back to the main river, which is measurement and how you measure success and what metrics you focus on without giving away the store. What matters to you weekly, monthly, annually that you stay focused on?

 

Matt Kreuger (31:52):

Yeah, it's changed year in, year outside of the traditional, hey, we want to grow sales. That said, depending on the category, when I came into the position through East Point, the wins there in 2022, those metrics are much different than what I'm focusing on now in 2026. I'm really just on the commercial side, inventory management on both our side and the retailer side. The consumer is pretty price sensitive right now as we all know. So as we're doing and planning next year, how much business are we doing off promo versus on promo compared to years history? And the inventory planning around that is super important for me to set us up for 2027. So I'm looking at that in combination with ASP to make sure that we obviously have had to push some price increases through just given the nature of the geopolitical and economic world right now.

 

(32:54):

How much of that is impacting our future and what does that do for us in the future? And then in retail media aspect of it, we're trying to lean and be as efficient as possible, but a helpful balance of onsite, offsite and promotions. I think as most brands haven't historically spent a lot of media off the overall onsite search, sponsored products, et cetera, that's changing a lot. And so I'm really trying to focus on, I wouldn't say quite MMM yet, but offsite impact to onsite search. And that's a key indicator that I'm going to use to help budgeting in the future.

 

Peter Crosby (33:32):

And is that changing because it's becoming so expensive to do onsite or is there some sort of surround sound or finding a new consumer or what's driving that?

 

Matt Kreuger (33:45):

A litle bit of both. I would say yes, the expense onsite is absolutely seen. I would say though, naturally on some retailer sites, we're seeing the organic aspect of it take a pretty significant hit if you're not generating traffic to that site in general. I think the algorithm's weighing that in a little bit more. So there's a little bit of a gamified aspect of it where you're having to really run your own business end to end. I don't know if Amazon particularly in this case may support that, continue to supporting you moving forward. But then there's also aspects like, I forget who I was talking to, but we know TikTok Shop, what is it, on three purchases are now influenced by TikTok. So there's also just that natural nature of consumers discovering where products are being found and we know we have to be there.

 

(34:33):

And so I wish I had a more sophisticated and sexier answer there, but that's just the natural reality of it, if I'm

 

Lauren Livak Gilbert (34:41):

Honest. But how do you balance that having nimble budgets? You know you have to be there for TikTok and in a couple months, I'm sure something new will come up or AI will change their strategy. I know using measurement and using dashboards to indicate, "Hey, we should be spending here," but also at the same time you don't have unlimited budgets. They're probably not increasing year over year. So as a nimble company, how are you either reprioritizing or fluidly budgeting to be able to account for that?

 

Matt Kreuger (35:10):

For me, it's been two decisions and even though the PE aspect is lean and mean, we've been supported by continued growth and investment in testing, so I'm very thankful of that. But for me, it's been two things. One, I've really pushed on our team to, we can't do everything and what was doesn't mean what is. So we've walked away from a few categories that were strong from us previously, but due to consumer signals, the returns and the costs just aren't there where we can allocate those dollars to other more profitable business sections for us. And that's tough. It's not easy telling certain departments that we're planning your businesses down, but we know there's a better opportunity over there. So that's number one. Number two for us is, as I mentioned earlier, you got to be in on just being okay with testing a few pieces because you never know what's going to hit.

 

(36:00):

And some of that's just a gut check. And so you have to be a litle bit uncomfortable of, you know what? I might not be able to get every KPI from this new ad unit or this new channel right off the bat. But in my opinion, we're talking about a few thousand dollars. We're not going to go drop a million dollars on this new test. And so for that for me to always be a little bit learning is important. So I'm comfortable with that. Those would be the two pieces that I think are most important to me. And the last piece I would say is you have to be willing to break the barriers and change odds of how people think about traditional marketing. And some people are like, I used that previously, it didn't work. Well, that doesn't mean it's always still today, or we don't know what the content's changed.

 

(36:49):

And AI, we've done campaigns where we've pushed out 150 different pieces of content on one or two or three products versus just one product and just because it didn't work previously doesn't mean it's not going to work down. We've seen some success. So you got to constantly keep trying things in my opinion. Well,

 

Peter Crosby (37:06):

It was doesn't mean what is. I like that. I think I paraphrased you, but that's what really stuck with me out of that, constantly reassessing, reevaluating and trying new things. And that's one of the joys of being ... Well, lean might not be a joy always, but agile definitely is and it's an advantage. Lauren and I had a conversation with a few executives the other day who are sort of at the behemoths of CPG and they're jealous to some degree. As much as they know they have a budget they can throw at things and have a lot of institutional power, they know they have to figure out how to grab some of that magic in order to compete with you and others in your category, which I think is part of the fun and super fascinating to watch from the cheap seats here.

 

Matt Kreuger (38:03):

It's a lot of fun. I don't want them to go too fast because I also like listening to those leaders because they're usually so far ahead that I learn to prepare for what we're doing now. But yeah, it's a tough ... And I empathize with them when you have large conglomerates in traditional systems that they want to be nimble, but sometimes it's just out of their hands. So I can appreciate that.

 

Peter Crosby (38:23):

There's that empathy again. That's the key. Matt, we are so grateful that you joined us for this conversation. I think this, where's the growth coming from? It's always top of mind, but particularly so in times of chaos and change and also the development of when all of a sudden this agentic stuff and the agents potential is in front of you, balancing all of that while at the same time keeping an eye on what you need to achieve this quarter is a really impressive job and we're so grateful that you shared your insights with our community. It's really valuable.

 

Matt Kreuger (39:06):

I can't say thank you enough. I've learned so much from the both of you. It's an honor to be here and I hope everything continues to be well for the both of you and thanks again for the opportunity.

 

Lauren Livak Gilbert (39:16):

Thank you. Thanks so much, Matt.

 

Peter Crosby (39:18):

Thanks to Matt for all his insights and empathy for incredibly curious podcast hosts, satisfy your curiosity on all things digital and agentic shelf by becoming a member at the DSI, digitalshelfinstitute.org. Thanks for being part of our community.