Vice President Digital Acceleration at Walmart eCommerce
December 8, 2017 By Daniel Torres Dwyer
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LS International speaks with Walmart eCommerce’s VP of Digital Acceleration, Kate Pearson.
We discuss with Kate about how an army background has contributed to her career in business. Being someone who’s managed big teams in traditional Retail but is currently working on projects that are cutting edge, she’s developed a leadership style that’s enabled her to be successful in very diverse set ups, from the Army to Retail, Logistics and Strategy. “Many people think of the military as a command and control leadership style, but the military really encourages leadership development and is very influential on how we think about leadership in Business. I learnt how to motivate and develop future leaders and grow talent”.
During the Podcast we discuss:
A military background and leadership style in the business world
Innovations Kate has developed in Omnichannel
What’s next in the eCommerce journey
Moving from Operations to General Management
Daniel: I'm Daniel Torres Dwyer welcome to a new edition of our career success podcast. Today, we'll be joined by Kate Pearson, Vice-president Digital Acceleration for Walmart eCommerce. In this role she leads efforts to deliver a new ways to serve the blended customer at scale for Walmart US. She previously held leadership roles another large with that organization after beginning her career as an officer in the U. S. army. Hi Kate thanks for being here with us today.Kate: My pleasure, thanks for inviting me.Daniel: So look, Kate, you started your career in the army which is something that we see which is something we see sometimes, especially in the U. S., what leadership style did you learn in the army?Kate: That's a great question Daniel. You know, I think many people when they think about the military, they think about somebody that might lead with a very command and control type leadership style. And I'd say that I learned a great deal of discipline in the military and structure. But one of the things that many folks don't know from the outside is that the military really encourages leadership development and was influential. In fact, at least in the United States, on how we think about leadership in the business environment. So, I learned from an early age how to motivate folks, how to develop future leaders and how to grow talent and so I think that while I do like discipline and order and structure I think part of my leadership style is developing folks in and encouraging them to grow in their careers.Daniel: Okay, very interesting, and how has that added value to the rest of your career?Kate: Yes, I think the elements of kind of the discipline aspect had helped with ensuring delivery and high accountability. So that helped with ensuring that you have the goals that have been set in front of me, are able to be accomplished. But the other thing is that I have this really, same mindset of developing talent and over the years have developed an incredible network of leaders that I've had the pleasure of working with and now I get to see do incredible things in other organizations as well. So, it it's just been a wonderful blessing to have this network based on developing talent.Daniel: Aha, okay, great. Look let’s switch into the current industry you’re in which is Retail, specifically e-commence. And you're working at Walmart, which is a traditional retailer, has had to make some major changes in order to keep up to speed with the changes happening in the retail sector. In your experience so far what would be the top three innovation that you driven to helping in this transformation from traditional retail to what it’s generally called Omni-channel?Kate: Well Daniel my background is clearly in logistics and operations. So, my first role at Walmart was to build a fulfillment center network and in that we investigated a lot of mechanisms to make a world class fulfillment network and had the opportunity to build from the ground up. One of the really interesting things that I helped lead was putting robotics into some of our fulfillment centers to automate pick modules and other pieces of the, that are traditionally more about a manual or physical delivery system. So, that was a really neat thing that I did right out of the gate. The next thing that was fascinating in the second role that I had at Walmart was to look at really bending the curve in terms of technology with last mile. So, we had a partnership we kicked off with both the car systems Uber and Lift and created the last mile delivery mechanism and so really thinking about how to take advantage of and help kind of defray costs of the last mile expense into delivery. And now the current role that I have is customer facing in store technology and so there's a lot of interesting experimentation that were involved in: to look at internet things, looking at kiosks, looking at AR technology and to just changing the paradigm of what the store looks like today.Daniel: Okay, very interesting. And, for you personally as a professional what is exciting for you to be in E-commerce?Kate: Absolutely, so I've been in retail for about fifteen years and I’ll tell this: the pace at which we are moving is absolutely staggering. I have always been and had roles where we need to move very quickly and we need to be on our feet in terms of delivering things and putting the future forward into today and I would tell you that it is just incredible, you blink and so much happens, so I think that for me is just the exciting part of what we're doing. So, constant learning, constant change and really just adapting as quickly to what the future holds.Daniel: Aha! Okay, very interesting and further to this, actually, a part of the excitement is probably building up new things. In the next five year what do you see are going to be the big changes or transformations? Either both in Walmart or in retail as a whole?Kate: Yes, I would say that we’re at a really fascinating place in retail. There's been a lot of news coverage about the industry and about kind of the depth of retail or the decay of brick and mortar and what I'd share is that for organizations including my own, that are not embracing actively change and really looking at what they can be doing immediately to either maintain pace or leap frog in terms of technology are going to be left behind. So, I think there's going to be kind of a bifurcation where some organizations that can’t adapt quickly in and become not as relevant to the consumer that demanding more and more will begin to decay even faster and I think those that get it and are very active in changing the core of how they function as an organization like Walmart is going through and turn our stores into more than experience center where we delight folks with interesting interactive ways that the store becomes the choice that people want to go to and not have to go to, is what I see in five years. So, really focused on customer experience in the stores and making it a delight hearing something they enjoy going to is where I would see retail in five years.Daniel: Okay, Okay. And you mentioned before that you actually started your career in the army and then in logistics. Kate:YeahDaniel:So you've been from logistics into a more general management type of role. We normally see in the industry people that are Generals Managers coming from other functions project such as marketing, sales, finance or, for example, in retail, from store management. What value do you see in that starting supply chain then become a general manager?Kate: Yeah, what I would say is a couple of things I think there are two elements that at least in my experience have helped me. So, one, as a fairly junior level, because I was responsible for logistics, I had that for a view, if you will, of the end to end system from a physical standpoint. And even though I was a junior in my career I was looking across a business at more of a more of an enterprise level and I think having a systems orientation that creates has been really helpful for me to be able to think about the business in much broader terms than level of the organization I was in and I think that's one. And then I think the second thing is that in logistics, supply chain, those professionals and myself are very, very aware that we are a cost center to the organization. We are not typically delivering top line revenue and so we are very thoughtful about the P&L and how the potential negative impact we can have to profit. And so really having that PNL orientation has helped to really understand the whole business because you understand, one of the lines on the bottom side of the P&L so intimately. Daniel:Really interesting Kate. I think that this information will be very interesting to our listeners. Thanks for joining us and thanks to all our listeners and see you in the next edition of our careers podcast.Kate: My pleasure and I appreciate the time today and thank you to all the listeners as well.
For many in the US, Canada and in some European countries the Toys “R” Us chain of stores was an important part of growing up. Therefore, the iconic chain’s decision to shut all 735 of its US stores earlier this year has shocked many. This outcome was the culmination of many factors, such as the growing preference to buys toys online, the ability of competitors to offer superior “experiences” and the chain’s own poorly-made strategic choices of price as the go-to-market plank and not investing adequately in e-commerce capabilities and experiential retail (and of course, the burden of debt).
Analysts expect that in the short-term, rival retail chains will benefit from the closure of Toys “R” Us stores. Target is seen as a particular beneficiary because more than 90% of its stores are within five miles of Toys “R” Us stores. But by no means will Target be the only chain to benefit. Ollie’s Bargain, The Children’s Place and others see themselves gaining from the situation.
But the really savvy retail companies will look beyond such immediate benefits. Like every other business, the toy industry too is going through major change. Innovation and technology are driving not just new products but also customer experience during the purchase- whether in-store or online. The medium- and long-term beneficiaries of this shake-out in the toys and sporting goods retail industry will be those companies that understand the emerging contours of the business and focus on the new drivers of growth.
Some companies have themselves been at the cutting edge of these changes. Not surprisingly, they are doing well- for example, Build-a-Bear, which allows consumers to customize stuffed animals by offering a range of animal skins, clothes, accessories and even scents. Watching the “stuffer” working to create the stuffed animal of their choice is truly an amazing experience. And because adults love stuffed animals, the company has expanded its target customer segment beyond “kids” and “toys”. By opening stores in popular holiday destinations, Build-a-Bear now enables customization of stuffed animals with clothes and accessories that will always remind buyers of their holidays. In other words, they have ensured the longevity of the experience by creating a tangible memory aide.
Large toy manufacturers such as Lego, Hasbro and Mattel are also being impacted by the industry trends as well as the bankruptcy of Toys “R” Us, a major brick and mortar retail partner for these companies. They will perhaps use this disruption to realign their business strategies and embrace digital capabilities that enable new ways for these toy-makers and their brands and products to engage with customers and consumers around the world.
Despite all these winds of change, it is fair to say that certain things will remain the same going forward: kids will want to touch, feel and experience a toy before buying it. Earlier, walking into a toy store was the only option; now, technologies make it possible for kids to do almost exactly that from the comfort of their homes. Toy-makers and retailers will rely more on “unboxing” videos and pop-up stores to attract kids to their products and brands and thus drive growth and profits. And of course, they will need social media smarts to direct and harness influencers in the form of other kids who can make a certain toy cool (or not).
With the government’s emphasis on Make in America and cutting the trade deficit with China (the world’s largest manufacturer of toys), American companies such as Crayola (crayons, silly putty etc.), Beka (building blocks) and DirtKing USA (tricycles) are expected to do well. So too could niche players like Green Toys and Begin Again. The former recycles milk jugs to make its vehicles and playsets, while the latter uses sustainably harvested rubberwood and plant-based dyes to make its interactive toys (including replica John Deere tractors). But the future could just as well be shaped by start-ups like GoldieBlox or Tiggly or littleBits, that cleverly combine STEM learning or robotics with fun. And that might just be the new engine of growth the industry needs to bounce back.
Companies such as MGA Entertainment too seem to have found the magic sauce. Though they have been around for many decades, they were not as well-known as say Mattel or Hasbro. But as CEO Isaac Larian recently said, “Clearly our innovative product, packaging and marketing is hitting a chord with consumers around the globe, especially in the UK”. The company’s name may not be top-of-mind recall, but its franchises and brands sure are- Little Tikes, L.O.L. Surprise, Bratz etc. are already names to reckon with in the US and UK; they are expanding rapidly in Europe and Latin America. The company has tied up with Amazon as well with retailers like Walmart and Target. For overseas markets, it has tied up with local players. It thus melds ecommerce with brick-and-mortar presence.
The history of business is full of examples where nimble and innovative newcomers have got the better of established players. A similar story is likely to play out in the toy retail sector as well. Whether you are part of a company that’s being threatened or are in a company that is perceived as a threat and wishes to push home its advantage, you need the right talent to win this war. Clearly, no child’s play, this, but then, even toys are serious business.
The global cosmetics market in 2017 was valued at over US$532 billion. This large market, which includes products for the likes of hair care, skin care, oral care, color cosmetics, fragrances, soaps and shower gels etc. is expected to grow at an annual rate of more than 7% in the next five years.
Historically, this market has been dominated by large players with well-known brands such as L’Oreal, Coty, Revlon, Elizabeth Arden... but like in most other consumer markets, the winds of change are blowing in the beauty products market too. The following trends are especially noteworthy in terms of their impact on the future of this business and how players must respond, as they impact both the demand and supply sides of this industry:
Baby Boomers and Generation X consumers are being supplanted by millennials and Generation Z
Growing move away from synthetic chemical-based products to those made from natural ingredients
Rapid growth outside western markets, especially in countries like China
Ready capacity for outsourced manufacturing is available in North America, Europe and Asia
Outsourced R&D of cosmetics and beauty products is now far easier than before
Convergence of channels to enhance experience
Digital technologies are making it easier for sellers to connect with and sell to consumers and prospective consumers
Social media is playing a key role in influencing first-time product users.
The most disruptive outcome arising from the combination of the above trends is the rise of the so-called “indie” players in the beauty products industry. These are typically new companies or brands, “independent” of large existing players.
What makes “indies” successful?
Given their newness, indies are in a good position to be able to take advantage of trends at every stage of the value chain.
Target market: Customers from Gen Z are digital natives. They rely on input and opinions of peers rather than brand recall or advertising. In the LS International Career Success Podcast, Gianni Pieraccioni, experienced Board-level executive with decades of experience in the consumer products space makes prescient observations about Gen Z, which accounts for a major chunk of first-time users. He says “These are people who either reject or do not know the brands of their mothers… they are the selfie generation… and they really are very much individualistic consumers”. He further adds, “They don’t look for brands… they see products rather than brands and jump from one to another in a perennial search…”.
Indies are able to come out with new products and because the loyalty to brands is rapidly decreasing in a key segment of the market, they can target that segment very effectively. And because this segment has both the money and the willingness to spend, it represents an ideal niche for up-and-coming indies.
Reduced time-to-market: By outsourcing R&D as well as manufacturing, indies are able to compress the time needed to launch new products or target new geographies. In addition to not having to lock up capital in fixed assets like manufacturing facilities or invest in in-house R&D, indies have the flexibility to capitalize on unique opportunities- for example, categories with shorter life cycles. These drive revenue and cashflows, while also creating brand awareness.
And because indies have outsourced manufacturing arrangements, they can scale up or scale down quantities more quickly. By tying up with manufacturers who have excess capacity around the globe, indies can also focus on reducing logistics costs, thus being able to benefit from the ability to reduce prices or gain from higher bottom-lines.
Marketing: Online sales eliminate the need for indies to invest heavily in their own stores. To take advantage of merchandising opportunities in brick and mortar stores, they can tie up with companies like Ulta, the US-based beauty product chain that offers superior customer experience by converging channels. In the above-mentioned LS International podcast, Mr. Pieraccioni explains how Ulta is making a difference. “You enter a store and you have mass-market products, prestige products and professional products… and the reason why they can offer all three categories and overcome the idiosyncrasies of the channels and the exclusivity of the channels is because they also offer services in store. They offer skin care services, makeup services and a full salon for hair color, hair care. So, by doing this, they are basically creating an experience for the consumer…the consumer is allowed to have access to every kind of product from every kind of channel in one place.”
Using social media channels to create demand is now very much a reality. For example, the US brand Glossier (which already has a cult following) was launched on Instagram; its website came much later. Glossier’s products were developed based on interviews conducted by founder Emily Weiss, a former beauty editor with Intothegloss.com. As Glossier’s web site informs visitors, Ms. Weiss “wanted to make beauty as much of an element of personal style as fashion” and that “Personal choice is the most important decision a brand can never make”. This fits perfectly with the highly individualistic style that a growing number of younger generation consumers are- irrespective of whether their gender and location.
Marketing as a business function has been one of the earliest to acknowledge the power of digital media and social media to influence target segments. Over time, technologies have made it easier to profile individual preferences and tastes with such finesse that customers are sent digital marketing communications based on evidence of their interest. In this knowledge-powered economy where there is greater propensity to consume video than pages of text-based copy, informed vloggers (video bloggers) are emerging as a powerful set of influencers, especially in the beauty products industry. Beauty bloggers like Zoella, Tanya Burr and others have millions of followers across channels like YouTube, Instagram and Snapchat. In a recent blog, beauty blogger Sophie Bianchi writes that in her opinion, “beauty vloggers are influential due to their likability, similarity to viewers, physical attractiveness, expertise and trustworthiness”.
The emergence of beauty bloggers as influencers is a huge change from times when celebrities were used as brand ambassadors. Another reason why the venerated habit of celebrities endorsing beauty products started losing its sheen was because technology allowed images to be doctored to make models look perfect. So people like you and me, who were supposed to be influenced by advertisements featuring “flawless” models, started becoming sceptical. In combination with other reasons listed earlier, loyalty to brands started to erode.
Digital technology is making it even easier for consumers to purchase online. Mr. Pieraccioni points to how in China, consumers can already purchase directly from social media platforms, without separately having to visit company websites or ecommerce portals. Such capabilities give indies tremendous opportunity to leapfrog more-established competitors with much larger advertising budgets.
If the above sounds like huge change for the industry, it’s because it is! Indies need talent that understands the brick-and-mortar aspects of this business, while traditional players need talent that can shake up ossified, conventional ways of thinking and infuse agility, innovation and technology-enabled transformation so that they too can remain relevant in the emerging landscape. And of course, established players willing to acquire indies need experienced talent for deal-making and integrating the acquired company with the acquiror.
PS: Men use beauty products too and the range of products they are willing to try is only growing. So right there’s another box you have to think outside of! https://www.reuters.com/brandfeatures/venture-capital/article?id=30351https://www.glossier.com/abouthttps://www.huffingtonpost.co.uk/sophie-bianchi/beauty-bloggers-zoella_b_11566248.html?guccounter=1https://www.theguardian.com/fashion/2018/mar/08/glam-or-sham-are-youtubes-beauty-vloggers-selling-out
The FIFA World Cup has started on and the sponsorship circus is on. When brands try to get traction from their partnership with the elite football teams and the World Premium Football competition we can question the future of sponsorship in the new digital era.
A long time ago, when Gen Z’s parents just graduated, i.e. approximately 25 years ago, sponsorship was all about putting brand names on panel boards around the football pitch and on team jerseys. The objective was to raise brand awareness in a gamble that the TV audience will help recognise and memorize the name and/or logo.
Sport Marketing Sales agencies have continued to flourish by selling to medium-sized-wannabe-big companies the opportunity to have their name around the pitch of a national or European matches or other sporting events, comparing real advertising time with hazardous visibility raising more internal C-suite pride than consumer intention to buy. When it comes for big or major events, on site visibility has moved from prime argument for partnering to must-have but not-enough-to-have, a somewhat reinsurance for the potential sponsors.
The measurement of the so-called TV exposure is still a golden standard as a KPI and the bread and butter of some research companies in the sports industry, without demonstrating the impact of the sponsorship as delivering big numbers in terms of equivalent advertising’s time and valuation, which doesn’t provide any insight about the performance of the brand among the main target audience of the corporate sponsors.
With premium right holders driving the most of their revenue from broadcasters with a correlated effect to push the matches’ broadcasts from free to air TV to pay TV with sometimes very narrow audience, the power of the brands as event sponsors is shrinking and the potential influence of the TV brand exposure is a less and less sustainable argument. Although TV is still king in terms of media consumption for sporting events, sport is going digital and social. The youngest audience and young adults have been shifting from TV to digital devices – the Olympic Games 2016 in Rio have been the turning point and the FIFA World Cup 2014 suffered from a decline of TV audience of the youths for the first time ever due to a transfer of viewing to digital devices (Laptop, mobiles, tablets). The digital landscape has currently no recognised measurement standard similar to what exists for TV, which brings more uncertainty about the understanding of the impact for sponsors.
Mc Kinsey already pointed out in 2014: “Sponsorships have become an integral component of marketing strategy. Yet many companies still do not effectively quantify the impact of these expenditures, even for events requiring significant spending such as the World Cup. A systematic commitment to a menu of analytic approaches allows executives to identify sponsorships that create value as well as those that don’t live up to their names.”
Disrupting the sponsorship approach is now mandatory to hit brands’ objectives as it’s more
and more is all about consumer engagement, impact and return on investment.
Brands should focus on 5 key rules to get more impact and traction and none of them is about brand exposure during the games.
Exclusive territory of expression vs. exclusivity of product category: so far Coca Cola gets the exclusivity of communication for the product category soft drinks and water for the main contracts. Now to raise the interest of the consumers, brands should define a territory allowing them to demonstrate what they bring to them and their community. The territory can be shared with several corporate brands as long as the consumers get the message: sustainability can apply to energy carrier, water supplier, waste management company… It’s all about a convincing and acute story telling towards the company main target audience.
Exclusive contents vs. “same right for the same category of sponsors” policy. Since the late 80’s, sponsoring packages were the same among the sponsors of a set level. Now each brand needs to offer a unique experience to their customers and consumers to differentiate from their competitors and deliver a strong advantage against those which are not official sponsors and use the theme. This implies as well that the right holders (for example an International Sports Federation) carve out some media rights to allocate them to their sponsors such as behind the scenes stories, athletes’ preparation … We have all seen during the last winter Olympics athletes sharing directly on their social media depriving the sponsors from potential activation.
Preferred access to data and analytics. Very few organisations are able to nail down all their data in a same place (for example ticketing buyers, merchandising consumers, audience). So far the ticketing data of the last Olympics or FIFA World Cup don’t belong to their respective international organisation, preventing to share with their international sponsors a clear picture of the fans. Sponsors should access data and connect them with the own ones to elaborate sophisticated and efficient activation’s plan.
Co-creation of unique assets. One of the privileges of an official sponsor is to use and print the logo of the sponsored event or organisation on products. Millions of Coca Cola bottles have been carrying the logo of the FIFA World Cup, for example, all over the world. This doesn’t deliver any advantage neither to customers nor the company itself as such. Sponsorship will move to strategic alliances allowing the co-creation of new products and new services with a revenue sharing scheme for a mutual benefit of the right holders (more potential revenues if the strategy is correctly defined and implemented), the corporate company (more profit if the offer is very attractive and unique vs the competition or money saving if the sponsorship doesn’t prove to be successful), the consumers (better engagement with the co-branded product or service).
Definition of sponsorship purpose. A sponsorship deal is usually contracted for a set period of time and the corporate company is focusing on getting a return of investment during this set period of time. The subject of legacy is more and more of importance for the companies’ shareholders, staff and consumers. What should the sponsor achieve to make its world sustainably better? This element is now crucial for companies willing to partner with mega events such as the Olympics or the FIFA World Cup