So yeah, welcome Ronan.
– Thank you for having me here. A pleasure to be here.
Yes. It’s a pleasure to have you, and I’m very interested to get your feedback and your advice because I think that the topic that we have in hand today is quite a hot topic. So I wanted to first of all start with the basics.
Especially why do you think that brands are going direct to consumers now? And after this crazy year that we’ve had 2020, how do you think that the consumer expectations have changed?
– Okay so, of course it is not a new thing, the brand are definitely considering the DTC channel for many years now.
But due to the new situation, the new reality of the of the COVID situation, of course now it’s not even a question of, should we go or shouldn’t we
go, it’s a do or die question. So of course during some months all the shops, all your resellers, all your partners are closed due to the pandemic. You don’t have any choice to take over the control of your sale channel, and of course to directly sell to you to your final customer.
– Okay cause, do you think that there’s like a specific time in terms of the maturity of the brand that you would recommend setting up a DTC channel, when is it too early or too late, what can you recommend in that sense?
– Well, of course here there is many, many different cases. Now it depends on many, many criteria. If you are a brands which sales depends on the 99% of your resellers, then of course you have a lot of pressure when you open your DTC Channel, because at the end of the day you want (indistinct) the competition of your partners. And also, in terms of strategy, you can’t just take these decision lightly. You have to really, really try to integrate this strategy thinking of your own goods but also to the fact that you can’t without let’s say, negotiate with your partners, and decide to shift your sales
from a channel to another.
And of course, many, many brands at the moment, don’t have a sufficient let’s say a, percentage of sales in the direct channel to puts all their effort in this channel without
considering what’s really brings the money in the company.
– I don’t know if there is a moment where they should or shouldn’t, but of course each situation should be really analyzed well. Of course, due to the
external situation like COVID, as I said previously, but of course, due to the real numbers, and the real situation that
they have in term of sales. And that’s for sure the, the most important fix to do.
– Okay, okay, cause if let’s say a brand, a company, a marketing manager, and the team decides to launch that brand DTC,
and builds a DTC store, what would you say are the five or six or what are the must haves that you would say to set up
a successful store online?
– Well, you have said something very, very interesting because this is one of the points that usually is the biggest mistake from the brand. The first thing I would
say would be to make sure that they are the internal expertise of digital/e-commerce in-house.
– Most of the brands when they decide to open the channel they say, okay, we don’t have an e-commerce director because we never needed it. So, which department should we use to launch the activity and then they decide most of the time
– Give it to marketing. But marketing, I’m no expert at all, in DTC sales, not expert at all in e-commerce, and most of the time, this is not the right way to do it. So the first thing, the most
the important thing of course before launching your DTC activity is to make sure that you contract and you build
a team we’ve expect in well, at least digital/e-commerce experience.
– Okay, cause obviously there’s a lot that goes into building a DTC store. Just the same as in a physical store. So obviously there’s not just kind of the setting up the first stages. How would, you mentioned that you need a very capable team to build the technical expertise in order to do that. But then there’s also kind of the supply chain aspect of it as well. Because when you have the consumer
going into the store and picking up the product itself, then it’s very easy. But when you need to bring it to their house and deliver it, that’s an added difficulty that probably companies need to face as well.
Would you say, would you give any advice on that?
– Exactly the well the brands I have to make a shift between a B2B logistic, to a B2C logistics, which is totally different. But of course they, I mean, my advice would be that, they should think about how
can I use my own process and technology that I already have, and adding new technologies and new process, combine all those assets together, to be able to give the best B2C experience for my final customers. The idea is not to create an activity which is totally disconnected from the, let’s say, original activity and supply chain, but to integrate this new activity in the actual systems, and
technologies, and process, and to be able to really, have let’s say, synchronized process with all those aspects.
Because if you start thinking of the DTC activity as let’s say an external activity, not connected with what you have already, then it’s the best way
to create some problems of stock (indistinct), delay on the delivery, and of course the final customers do not like this kind of issues.
– Yeah, we want everything and we want it now. So I definitely understand the challenge there cause as well, something
that you mentioned, how can companies kind of have the right balance between a physical store and a DTC store? Because obviously the trend is to go into the online space but you can not forget that in the end it is important to have a presence on the real world. From that perspective, would you give any advice on what what is the right balance or how they should approach, companies should approach having a physical store and an online store as well?
– Of course, you know, again those brands and retailers who have the, let’s say the assets to already have some physical
contact with the consumers, of course they have to leverage these assets, and use it to bring a better experience to the final customers. We are talking in this case about the concept of unified commerce. So that means that we don’t especially push one channel in front of whatever you don’t consider it that you have one activity online and one activity online and one activity offline, you really consider your selling activity because you are selling as a wall and as a complete and integrated experience for the final customer. So it’s not about, okay, what percentage of sales online or offline or how can I treat those different channels, but really to try to integrate those channels in the same strategy, also (mumbles) commerce. This concept of unified commerce has evolved within time you know, we started with cost (indistinct) activity, only channel activity, customer centric activity. And now the new concept is a unified core.
So this is something that you should apply to your strategy.
– So Ronan, imagine that you finally get through all of these hoops, imagine that you have the right team and e-commerce team in place. Imagine that you build the right
unified e-commerce strategy and the supply chain system to to deliver the product to the house of the costumer. And then how do you make sure that the DTC channel you’ve
built keeps running, optimize keeps up to date?
Is there key indicators that you would like to mention, to be good to keep in mind in order to make that happen?
– Okay, yeah, of course, you know, I think there is a lot of KPI that are totally common between the offline or online world to measure the satisfaction level of the final customers. But if there is one KPI which is very important especially in the online of course, when you’re launching an e-commerce business is the CAC, meaning that the cost of acquisition of your customer, the idea of any business
is to be profitable. And you know that’s to get customers online you’re spending a lot of money in all the digital channels like Google, Facebook, Instagram, for instance and you have to be very, very precise at the moment to measure what costs you to get this customer.
A (indistinct) where KPI in the same matter, would be to calculate the lifetime value of the customer. Okay, so let’s say that I’m able to spend this amount of money to get my customer, and this take a lot of my margin, but at the end of the day, it’s not a problem if I know that this customer will repeat the purchase X time during the year. So this is also a very, very important metrics to make sure that your activity is actually profitable online. And in this case those KPIs are very different from the offline world.
– Okay, cause one last question I’m particularly interested in this one because of course, you know, I work with people in e-commerce all the time. I’m a head hunter and I’ve worked with leaders in this space. So I wanted to ask you, what’s your take on, what is the future of e-commerce leader going to look like, what is he gonna need, or she gonna need to be successful?
– Look for me, the best characteristic that someone in e-commerce should have, is to be able to say I don’t know about e-commerce.
– Why? Because basically if you disconnected yourself more than one month, two months, then you’re out of date. The velocity in which this sector is evolving is amazing, it’s totally incredible. And every weeks there are new technologies, retail tech, MarTech, e-commerce tech, (indistinct), they can help you to improve your activity, and to improve your KPIs and to have a better online or let’s say unified commerce activity.
So this is for me, the most important thing, not to be sure. Okay, I’ve been working in e-commerce for 17 years now I know, no, you don’t know,. Because if you don’t keep this curiosity to test, test, inform yourself, be able to really benchmark all the technologies that can help you to evolve and transform your activity, then you’re not a good e-commerce manager or e-commerce director.
– I liked that, I liked that. Being smart is really being aware as well of what you don’t know more than what you actually do know.- So I like that idea. And on that note, thank you so much Ronan for your advice, for your questions, for your insights. I think it’s very, very interesting, and I think you addressed several points that in 2021 will definitely be on everybody’s mind. So thank you so much for that advice.
A pleasure having you in the Podcast