Latest / Talk Commerce / Ecommerce Mastery with Sarah Engel of January Digital: Live from Shoptoberfest
Transcript
- Brent Peterson (00:03.906) Scotty O and Brent P what a sight! Live from Shoptoberfest, it's pure delight! Talk Commerce meets always off-brand! The biggest collab hand in hand! Sponsored by Shopware, fresh and grand! E-commerce insights, we take a stand! Music's alive, feel the band! Shoptoberfest finds across the land! Hi everybody, it's Scott Oshman from the podcast, Always Off Brand. And if you're wondering, I'm listening to Talk Commerce, why am I hearing some guy from another podcast? It's because Brent Peterson and I, well, we recorded these together. The one you're about to hear was recorded in Brooklyn, New York. Brooklyn over here at Shoptoberfest, presented by Shopware. And it's a doozy of an interview. Not only do we have the president of January Digital. Sarah Engel, who was one of the Ted Talk speakers. I mean, humble brag, but we also have Danielle Kurtz, who comes in, who's the senior marketing manager at January Digital, which is hard to say January Digital for me. Anyway, I'm going to get out of the way now because you're going to hear a great episode. It's talk commerce right here and always off brand at Shoptoberfest brought to you by ShopWare. Brent Peterson (01:32.652) Alright, welcome to Shoptoberfest brought to you by Shopware. Thank you very much. Scott Oshman and Brent Peterson here from Talk Commerce and I'm from Always Off Brand. We're dual thing. This is a dual, this is a merge, what is this? This is a collab, is this a collab? Collaboration. Now one of the people you're about to hear actually spoke at this event and she's, woof. Are you nervous? Because I'm a little nervous. I'm kind of nervous, I'm not going to lie. Sarah Engel from January Digital here. Sarah, welcome to the program. Thank you. I'm glad to be here. wait, hold on. I got to turn your mic up. That would probably help. should probably, professionals actually do mic checks before we hit record. Now we can hear you, Sarah. Say hello again. Thank you for having me. glad to be here. to see you. Are you though really glad to be here? Couldn't be more happy. Brent's questioning everything at this juncture. I only question Scott. I have four microphones. You've heard three people. is a fourth human sitting here, but her mic is only on if she wants to. here for sound effects, I'm here for emotional support, I'm here for whatever you need. fantastic. Danielle Kurtz. Danielle Kurtz everybody. So Sarah you just gave a big keynote. You were one of our TED Talks here at Shoptoberfest. We missed it. I'm just going to be honest. We basically missed I don't know what it's... I don't know what the name of it was. I don't know what you talked about. But for those listening and couldn't be here at this fantastic event, Shoptoberfest brought to you by... Shopware. What did you talk about? Brent Peterson (03:16.653) What were the big I feel like you had your priorities straight having beer. It's a beer hall. It is feel like you were doing what you were supposed Thank you. Thank you very much. All right. So yeah, Jason, the president, and Matt Carver, the nicest guy in the business, asked me to come and just talk about some of the challenges in retail and e-commerce right now. No, there's no challenges. Nope. It's not hard at all. Go ahead. So that's what we were talking about and I just kind of gave them some backstory about I've spent about half my career on the brand side and then at January Digital and January Consulting we work with a ton of brands, a lot of fashion, a lot of beauty, some CPG and so we're just having conversations constantly with retailers and brands about what they're challenged with, kind of helping them through that process and so was just talking through, you know, kind of harkening back to I was thinking about November 2020 when I was on the brand side and stores are closed. and everything is so complex and everybody's doing whatever they can to protect the distribution center. It's like, you know, at one point the corporate employees just were so held in high esteem all of sudden it's like go home, don't touch the distribution center. Everybody protected at all costs. And then FedEx stopped picking up. We're in November of 2020. We're in the holiday season. FedEx stops picking up. They're overwhelmed. UPS stops picking up. They're overwhelmed. USPS. Those are dark times. It was dark times. And it took me though a few days before I lifted my head up and I was like, wait a minute. I'm gonna call my friend Mike Africa. Shout out to Mike Africa. He was at Eddie Bauer at the time. He's at Lesley's pool now. Called him, like, man, are you having this problem? He's like, yeah, we're having this problem. This is what we're doing. I start calling around, calling around. All my colleagues, everybody's having the same problem. And I think that's like, that's the big takeaway was like that moment. I always think back about that moment where I finally lifted my head up and was like, everybody's challenged with this. It is not just me. I find that in most of our conversations with executives right now, it is still a very, it can be a very lonely and isolating industry. think you're the only one who hasn't figured something out and the reality is it is so challenging for everybody right now. Yes. So that's what we're talking about and in some of the biggest challenges that that we're seeing right now and I kind of went into three or four of those challenges. Do you think that that's That's Brett Peterson. You're listening to right now. We're in Payterson everybody from telecom. Sponsored by shop where shepherd by the 2020 could have been a slow burn. could have slowly gotten to it right. Brent Peterson (05:41.593) Do you think that it was just a jolt that happened that forced everybody to get over a threshold that was gonna happen inevitably no matter what? Or do you think it happened and it wasn't gonna happen because... That's such a good question. Don't give him compliments, Sarah! No, no, no, no, no! I'm hitting the boo button, the no button, I'm hitting everything. my gosh. Do not compliment Brent on the... my gosh. He's gonna turn my mic down. I am, actually. Engineer Scotty could come and play here. Go ahead, answer that great question. Nice job out of you. question? I'm going lean into Brent Peterson. Go ahead. my goodness, I'm trying. So I think there are various things that happened during that time, some of which would have happened over time. know, customer's demands for free shipping, like those things, there were a lot of those types of things that were happening anyway. The type of technology stack you had, would we have all of sudden, within three weeks, spun up curbside pickup? And would you have pushed so far forward that quickly? I don't think so. I think some of those elements, we had to solve it overnight. What's more interesting now, fast forward, and that's what we talking about, current state today, you fast forward and so many brands stacked, so many, they were like, the customer has to have this, know, curbside and free shipping and, and, and, and, and, you're stacking and you're stacking and all of sudden your margin just tanks, right? And so it took us a couple years here to even that out. And I think people are still trying to even that out. What does my customer want? Not because it's what the industry says, not because it's what my competitors are doing. What does my customer want? Does she need 40 % off? free shipping? Maybe. Maybe not. Maybe she wants something else, right? And so I think that's kind of the phase we're in. But yeah, it sped up many, many things that were a slow burn. Like we knew we needed to do it, but we weren't really getting after it, right? And the brands who had gotten after it were so much farther ahead, right? So I think, you know, a lot of lessons learned in that regard. Even remote work. Like so many brands, like nobody's ever going to work at home. Well, I like to, I blame Zappos for all of our problems. Brent Peterson (07:54.667) Because Zappos was the first one on a large scale to actually say, we will send you product and you put it in this little thing and we will make it really easy to return it. So that's the root cause. And then as I was in these huge joint business, they used to call them annual vendor negotiations in Amazon with these big brands. by the way, the pounding you're hearing is not a horde of buffaloes coming. It's just we're on a big long table here at the brew hall. And when people hit the table, you hear it. Just listen, just go with it, embrace it like we have. Brent stopped finally hitting the table purposefully. Dance along. Yeah. My whole point is... They decided to get everybody prime two days free shipping. That wasn't the brand. That wasn't the manufacturer. Nobody put a gun to their head and said, yeah, no matter what the cost of size, it doesn't matter. Just get it to them in two days for free. And then they turn back on the manufacturers and the brands and say, yeah, you know what? We can't afford that. I'm like, well, no, it wasn't my decision. Why should I pay for it? So this is what happened with COVID, right? E-commerce boomed. and a lot of the traditional expectation that the consumer had, I think they're spoiled rotten. Sarah, what do think of that? They're spoiled rotten. I think we should pull it back and Tmoo's doing it and Shein's doing it and now Amazon's doing it with direct manufacturing. You know what? Wait. If you're to buy that 90 % off, wait for it for two weeks. What do you think, that 90 % off later, Hoson, from Tmoo. would ever do that? a friend right down the Rick Watson did. Shout out Rick Watson. That's really amazing. Everybody drink Rick Well, first of all, I feel like I need to defend. like I think they did something in the industry that had not been done before so I'm gonna go ahead and give him and Ray a shout out. That is true. They listened to their customers and they said forget the way we've always done it let's do something different. To be honest. Then everybody just followed along and followed along and followed along and didn't come up with a new what their customers wanted. And I think we all agree I say that but the reality it was magical. It It was so good. It was amazing. I did it all the time. Brent Peterson (09:55.403) I've got a shoe problem. I told you that, No. Anyway, Sarah, back to So what are the three or four things that... I know. The customers are spoiled. I'm going back to your customers are spoiled conversation. think that we've trained them. We've trained them what to expect. And we told them that, just wait for it. We're to go on promotion next month. we're going to be on promotion every second Wednesday. We've trained them to do that. We trained them to buy three sizes because we don't have great fit on our sites. We've trained them to buy three sizes and send two back. train them to do that and so untraining or having a different conversation I'll say with your customer is hard work and it takes a lot of time we were talking in the room in there about in my presentation that you missed during beer now she's getting the hang of the show now she's giving me shit which is exactly what she should be doing because that's how we roll here I love it Sarah talking about promotions their promotions discounts and just the like promotional drugs that the whole industry is on and I've worked with so many brands, I've done it myself on the brand side, I've worked with so many brands over the past year even who are trying to pull back on that, who are trying to talk, but it all comes from a point of customer understanding, like what does she really want, he really want, what does my customer actually care about? Because they might care about sampling, they might care about early access, they might care about getting loyalty points that they're gonna turn in for something they actually want and care about, but what you train them to do is just wait for the sale, wait for the sale, wait for the sale, and you've used chance. like email which had so much power in the past to do nothing but just bombard people mass blasts with promotions. And so you've lost effectiveness there. So a lot of your own channels have lost effectiveness. So I think that it absolutely can be solved. We solved it many times, but I will say it takes about 18 months. It takes a lot of senior level, we're in 2025 planning right now. Sit with your team and go, how many days were we on promo in 24? How many days are we willing to accept in 25? You have to sit with your calendar and be like, okay labor day sale was this long We're gonna cut it back one day like it's painstaking but you've got to go through that process if you actually want to like elevate the Understanding of your customer of the worth of your brand and if you want to protect margin like you've got to go through it How do you feel up about no? so I did a little CTO gig where The company CTO. What is that chief whatever teacher where there was no? Brent Peterson (12:25.007) We call it a full price brand. Or a discount price, as JCPenney's did. did 40 % off all the time, right? Yeah, that's a whole other... Go ahead. There is a difference between somebody waiting for the sale and then somebody not knowing when the sale is going to happen, right? That's the whole point of a sale. Like, it's a surprise. Nordstrom did a great job anniversary sale. Twice a year, you kind of live for it. That's right. That's surprise and delight. There's some great ways to go about that when you are trying to curb promotions and trying to make it this exciting moment Use your social media in that regard I've even done the thing where you gate beforehand you go this this special exciting thing is coming and you gate it beforehand and you're doing email collection and you launch it to them and it's this big exciting moment rather than like that's another Wednesday and there's another sale like got to like go through that process to be willing to like Retrain your internal team to right like you can't always pull the promo lever and expect a different result is not a promo it's just your price. Just how much it costs. It's one of my favorite sound effects of all time. What's the initial for that? Oy vey. But promotional. I mean, if you go back to history of retail, I've been in retail a long time. And I love the fact that you were a brand and now you're on the other side. You know, can call either side the dark side, whatever. I've been kidding about that. I was on brand. I was in agency for a while, then I went to brand, then I went back to agency, but no one really cares about that. Anywho, what I was going about was the fact Great story. Thank you, thank you. Great story. Edit, edit, edit. The point is, the United States of America, okay, have been conditioned to your whole point, right? to a sale. I called on the great country of Canada and a lot of retailers in Canada and a lot of retailers in Europe. That's not how they rolled. They were full price. They didn't have to be on sale every five minutes to get the sale. Now that haze out of the barn. We've infected the rest of the country and I call it the lazy lever. you want to, if you have the problem here, let's just talk real stuff, okay? The problem is that you got to hit a number. The reason we have promotional overkill. Brent Peterson (14:40.813) is because corporate America has to hit a number. That's the truth, is it not, Sarah? Because we're still measuring on comps, which is about the bluntest forced way to go about it, right? Yeah. And it's not to fault any of the people putting the promotions in place. They're doing their jobs. The quarters off, this, the board, whatever it is, they have to hit it. And now we're conditioned to it. And the funniest thing is 20 % isn't enough anymore. People are really having a good time with their beers. Putting them up, putting them down, putting them up, putting them down. Sarah, tell us, tell us, you mentioned three. Was there a question in there, Brent? I said it, no. I don't know if you've had a question. Did I have a question? Did I have a great question? No. Don't think I'm not counting, because I am. You have one, I have zero. Tell us, give us the 10,000 foot view of your tar. You mentioned three points. Three points! did. did say three points. All three. So the point was, if those were the challenges during COVID, what are the challenges right now? And I could come up with six or seven, but I had time for three. One is certainly rising costs of business, right? And so, you know, I talked to a board member recently and they said money's not free anymore. Everything requires scrutiny, everything. And to our conversation we had earlier about that kind of downswing after COVID. when you threw so much at the business that was going to impact your margin. So it's like, all right, that you have to have a strong business case. The good news is, which I almost always can find a silver lining in almost anything, but the good news is your competitors have the same price constraints. They have the same challenges. They have the same inflation. They have the same wage hikes, right? All of those things are the same. I think that's one good thing. The other good thing is that I think people are getting really creative with it. I'm seeing new products and new categories and new promotions and new collaborations. And I pointed to our friends over at Crocs, like the Taco Bell Crocs, who would have thought that needed to happen and yet they sold out, right? And so like the creativity I think is higher than it's ever been but it's coming from a place of pressure. So that was one of the points that we spoke to. One of the other points we spoke to is just the like changing demands of customers and I will shout out my mom who lives in rural Texas and she will often like be shopping with one of her favorite brands and she's like why can't they get it to me tomorrow? Amazon can, right? Like you know that Brent Peterson (16:59.221) is the reality right if Amazon can get it here the next day or two days out why can these my favorite brands not do that and Danielle that'd be a perfect wah wah wah wah. It's also changed it for the little mama pop right my sister owns a little you know like meat processing facility where they sell beef steaks. You know a little a little little meat processing plant what? and they always compete again. They're always like, no, I can't get free shipping. You have to free shipping. That's where the industry's at. Brace your product for free shipping. Yeah. So we talked through that. talked through the shipping constraints, the promotional challenges. And I think, again, I think there are interesting things coming out of that, but it's taking a long time to undo. And so it's like, to your question earlier, you did have a good question. Did I? It wasn't great, but it was good. I'm blushing. Which was, you know, are they just going to expect more and more more and more? And I think that as we're heading into holiday right now, there is a tipping point in that process. So it's like, at the beginning of the season, people are early shopping and they may be looking for that promo. You get further on in the season and all of sudden shipping and getting things on time is a lot more important than the price. so, you know, building like literally day by day, week by week calendars is very helpful. during the holiday season to be able to, so you're not only having a promotional level. The other thing I was going to say though is the, I think the complexity of promotions, some of that is we're just trying to comp, which is like crazy that we, know, the business is still running that way and I do believe strongly in having much deeper KPIs and just starting to retrain organizations and even board members to be able to speak that language. That said, there are also a lot of inventory challenges that are leading to that, right? So it's like the planning mechanism, the inventory challenges, lead to that the wholesale distribution everybody's trying to figure out right now what worked in the past doesn't work this year and it doesn't matter whether it's Nordstrom or Sephora or whomever everybody's really challenged with that this year so I would say that's some of the other complexities I think that are leading to a lot of discounting but that is my side note. we discounted ever again I'm not trying to be contrarian or whatever I mean I just met for Sarah she's like why is he arguing with me but I'm just I'm saying my jaded view which is you know aren't we always Brent Peterson (19:26.521) We're discounted, aren't we always? Just going to the mat. It's holiday. The traffic is incredible. You make or break it for a lot of brands, for a lot of manufacturers. But to your point about full-price brands, I I've worked with a few who really held the line. Even then, they would sometimes have the dirty secrets be like, we'll do it online and only a sale tab. We won't do it in store, because the store is protected. But they made it into an event. They made it into something fun and exciting, but it's rare. difference between discounting and then always having as a discount a discount discount before or discounting after because you have too much inventory right I think there's a difference in that you want to get rid of it right versus taking marks versus I'm gonna mark it down because I want to sell more of it Sarah but I the other element get ready for sound effect I don't know which one you're gonna get ready for Danielle but competitive said his change so dramatically and a lot of times brand sarah man asked you this now you're in january that we got to talk about january also severe clients or whatever but what what happens is the competitive said even on full full price brand i haven't had to go to a promotional discount everything else the competitive set is getting so dicey, you kind of are forced to whether you want to or not. Do you think that's something, that we're making too big a deal of that or do you see that a broad brush across all categories? think, and Danielle, you actually wrote an article about this recently, but I think Gen Z is definitely of that perspective of if somebody's gonna do that offer, somebody's gonna, discovering so many brands in a social media context, so many offers that are available, so the loyalty is not they're in the same way. The loyalty is there when they're aligned from a values perspective. There's a deeper alignment, but I think that's probably one of the biggest groups that's saying, yeah, if you're going to offer me a better deal or a sampling opportunity, I'm going to go down that path. But you might have some more to share on that, Danielle. I am a Gen Z spokesperson. Yeah, my daughters are as well. And I will say it's true. I will shop by price unless there's a value that I really find myself aligning with, and I will go that Brent Peterson (21:42.243) but otherwise it's really hard to convince me with any other factor but... will you pay more for something that's important to you? I would say so, but I'd really have to be convinced. Not in my casual browsing, not when I'm needing something last minute, but if something is repeatedly hitting me over the head and I'm like, okay, I can get on board with this. Yeah. The other big thing that we talk about a lot is just the reality of advertising. It's just keeping up with the Joneses. and the channels for advertising. Yeah, yeah, now retail media is going to be $18 billion. It's basically Amazon today. Ladies and gentlemen, I've said that a thousand times on the show. Everyone wants to talk about retail media. 80 some percent is amazon.com today, today. It's going to is spoiling for everybody because they started the two day shipping. Yeah, right. And they've shown the world that you can make the highest margin in your business on selling advertising. Yes. And so everybody's like, hey, that sounds cool. let me ask Danielle just quickly, how do you feel about all the ads that you see and just you're getting hit nonstop on your phone with ads and everything else? Why do you feel about that? You know what? If it's... organically coming to me and it matches the content that I'm viewing and I'm being served something that's interesting to me and it flows in my feed, I'm not really bothered by it. It's when something really disrupts my browsing or viewing experience that that's what I'm like, okay, I gotta get out of here. Like a mobile pop-up. Yes. The most annoying thing. I'm gonna buy this right now. Pop! Yeah, we gotta just ban those. Can you just ban those, Brent? you make a to happen in Seattle. Can you make a call? Yeah, I'll make a call. Brent Peterson (23:26.479) But Gen Z also values authenticity, so if a brand is serving me something that is authentic to them, that I'm authentically connecting with, it's an influencer unboxing video that I would watch organically, that is what's resonating with me. I'm constantly hearing from my daughters who are 27 to 25, I'm following this person, even my wife, I'm following this person XYZ. I looked at this recipe, went to a coffee shop in Boston last month, front was there at E-Tail, I went to a Greystone coffee shop because my daughter said I follow a person and I'm a coffee snob and you gotta go to this place. Literally. Yeah, guilty. That's the power. You were influenced by way of Gen Z. Yeah, that's right. And they have a huge influence on the two generations above them. Skinny jeans. think generational psychology is fascinating. But Sarah, as we get you out of here on this, as you can't wait to get out of here, mean, just, listener, can't see it, but she's just like, most fun I've had all day. Okay. Talk about January. What do you guys do? Who do you do it for? What's happening? So, January Digital, we're a digital agency, tend to be the digital agency of records, so we're running full funnel marketing for a lot of amazing brands. Folks like Carhartt and Kendra Scott and Interstate Batteries and a lot of beauty, a lot of fashion, and some CPG. So that is the agency side of our business. We also have January Consulting, the consulting side of our business. They're all former brand folks, like I am, from a wide array, like a phenomenal background, some merchants, some marketers. some e-comm folks, and so I think we really position ourselves as a marketing leadership company. as opposed to, you you won't see us only doing paid search. You will see us really getting deeply involved in a client's business. So we usually are having those conversations directly with the CEO, CMO, you know, sometimes founders. What are the business challenges? How do we get after that? What are those KPIs to the conversation we just had? How do we relook at our business? What should the data look like? We have a phenomenal data and analytics Brent Peterson (25:34.741) team and then we go about that from a strategic point of view so our consulting crew will come in and do anything from hey we'll do this leadership assessment where do you fall in the marketplace what's your competitive set to you know major shifts in in people's businesses major digital transformation efforts those types of things and then our agency team you know is phenomenal at every element of the funnel and so they're you know saying okay these are your business goals you know yeah you don't care if you sit down and I think about this a lot having been on the inside where you say somebody sits down you have one paid search person and one social and one and they sit down go paid search looks so great Google look great and I'm like my business is down 15 % right the room and so we very much set out to build a different organization that that understood business at a much deeper level so yeah that's what we're focused on We could keep going. I have so many more questions. We can't. yeah, it's really good. All good stuff. Yeah, no, it's fantastic. Thank you for coming. Thank you so It's great to meet you. You did great on not only the sound effects, but also the Gen Z representative here. I'm a jack of all trades. Yeah, you are. Outstanding. All right. Thank you guys. for having us. January Digital, fantastic job. We will talk to you next time. What? We're here at Shoptoberfest, sponsored by Shopware. Thank you. Thanks. Bye bye.