[Music] Hello everyone, I'm Brian Amaral and welcome to the Clientelling Podcast. In each episode, we'll be talking to the retail industry's most knowledgeable and successful executives, those luminaries that are creating value with the intersection of retail and technology. In every episode, you'll hear about new, innovative and transformational customer-centric ideas that are redefining shopping and creating high-value customer experiences. If you haven't already done so, be sure to subscribe to the podcast and let your friends know by liking us on social media. So, let's get on with the show. Well, I'd like to welcome Scott Lux. We really have a privilege today of having another retail rock star on our show. Scott has experienced in various aspects of e-commerce, digital strategy, marketing, and analytics from both the brand side and from an agency perspective. Scott began his digital career in Seattle as a VP of online product development for Chase. From there, he moved to the Global Digital Agency possible. While it possible, he led digital strategy and e-commerce, but Nordstrom, entertainment weekly, and REI. After five years with the agency, he not only moved to New York, but he moved back to the brand side, leading e-commerce and digital initiatives for lifestyle and contemporary fashion brands from Morgan total group to Diesel, John Verbatos to Intermix. He is currently an adjunct professor at Columbia and FIT, and the VP of digital marketing and digital commerce at Theory and Helmet Lang. Welcome Scott. It is great to have you on the show. Yeah, thanks for having me. I'm glad we could finally make this happen. Yeah, well, I think the world has changed a lot since we first talked about doing this. I think we originally scheduled something. I think the very last week of February, and I think one of us was not feeling so well at the time, and then, gosh, within a matter of a couple of weeks, when we're trying to reschedule podcasts, we're the last thing in anybody's mind. The world had certainly changed an awful lot, and as we watched retail in-flow, right? But I'm really happy that a few months later, we've been able to get together and talk about, we're things have been, and perhaps where we think it's going. I think you are about to start a new job at Theory, if I'm not mistaken. Is that right? Right around the time that we were speaking there and at February, beginning of March. That must have been a really crazy time to be doing that, right? It was. Yeah, why don't you tell us a little bit about what it was like to join a new company right at the point that retail changed fundamentally? I think my first day was March 9th, and I remember it vividly. The prior week went to lunch with my old boss, Jerthy Rao over at Intermix. She's the CEO and president there. And we were having lunch, and it was packed, like typical New York mid-town lunch scene. And we looked at each other and we said, "Should we even be doing this?" So it was before anyone had announced closures or anything in New York. It was still happening just Seattle and West Coast. We were like, "Oh, surely that'll let us know if something is, you know, we should be more careful." And we went home and that was that. And I started a theories based in the meat packing district in New York. Day 1 with March 9th. We started to hear a little bit of noise about things possibly shutting down but had the opportunity to meet my team. Day 1. And as the week progressed, more and more people that lived in New Jersey or had commutes started becoming less and less comfortable coming in. And by that Friday, everyone was pretty much advised, "Take everything home that you need because that's when Cuomo had announced the work from home or quarantine." Right. That was going into effect. So the second week on the job was 100% remote. And it was definitely an interesting time. It started a new career, new company. Being able to meet people remotely, try to build those relationships with something new. And then lead a managed team on top of doing all that remote. But in such a non-president of time, when everything kind of got reset at that moment. And it gets so scary for everybody, right? I mean, those first couple of weeks, I know that we were spending a lot of time sitting back and saying, "Okay, what are these retailers thinking about right now?" And what they were thinking about as everybody was shutting down was, "What are we going to do with this inventory that we've got in our stores? How are we going to work with our leases? How are we going to cut back on things? What are we going to be able to do to keep the business going?" And then how do we empower our e-commerce and our digital teams to do what they need to do in order to deliver something to this market to keep this business alive? And that sort of fell right on your shoulders while I can tell. Yeah. And it's interesting, too, because hindsight we can look back. But at the time, we weren't even thinking about inventory to be honest with you. The conversations we had first and foremost were, how do we continue to message and talk to or engage with our consumers? So whether that's email marketing, whether that's our organic social or paid creative that's running, we looked at that under a microscope just to see like do customers or potential customers even want to hear from us. And if so, what's the appropriate tone and voice? So I think that was the first kind of thing we started to look at was, what is the messaging? Is it appropriate to communicate? Is it appropriate to push product? Right. To talk about sale because at that time, the thinking was, "Okay, let's plan on almost a rolling two weeks." And, you know, everyone didn't know how long it would last. So the thought was, "Okay, stores will reopen in two weeks. Whole sale." They were kind of having rolling closures depending on the part of the country. Right. But as things progressed and we got further in, when everything shut down, we realized, "Okay, this is going to be a while." Then we had to really pivot, put all of our attention and eyes within the entire company, which was good and bad to be honest with you. Yeah. Focused on e-commerce, one being new. But suddenly, we were the only channel open and responsible for trying to keep the lights on. Right. Wow. Yeah. That's quite a set of challenges. You know, it's true. We had almost forgotten the fact that initially most people thought, "Hey, this is going to be a two week." You know, a two week. Everybody's going to go home for a couple of weeks. I didn't believe that at the time, you know, just kind of thinking through it. But I guess that that really was where most people were. There was this expectation that, "Okay, we're going to go through a little period here. We need to stay away from each other." And then it's going to come back on. Gosh, what a change from that. Yeah. And especially being in New York, because you think about the timing, you had a little bit on West Coast, Midwest, who was relatively untouched for the most part in the conversation. And then New York was just hit really, really hard, very rapidly. So even at that time, we were thinking, "Okay, maybe New York will take longer, but other areas will continue to open back up." Right. Rather quickly. And so definitely post-muting challenges. We had questions again back to the messaging. How do we make sure our employees stay safe and healthy. And our warehouse team. So a lot of considerations. And then it evolved fairly quickly. It's like, "Okay, you start to see other brands move into promotionality." That's when, as you alluded to, you start to see the inventory back up. That posed a whole new set of questions on how promotional should we be. It's going to be receptive to us trying to run a sale and promotion during this time period. And we kind of took our toes into it. And the reception was there. They wanted to actually buy the product, which was good and helpful. And then that led to some additional client telling and store outreach that was interesting as well. Yeah, why don't you talk a little bit about that? Yeah. So one of the things, you know, with a lot of my experience, I've had the opportunities you alluded to working with contemporary brands. So we kind of sit, you know, just below a primary brand such as like Prada YSL. But we do pride ourselves on the level of service we provide, especially at theory. A lot of our stores, so she gets built relationships directly with their customers. And what we found is we started to allow them to kind of reach out, talk to their customers, and see if there's anything they needed just to check in. And the customers were actually really receptive to hearing from the associates that they had a relationship with. And then gradually over time, they built up, you know, doing either whether it's an edit or style. If they could send them making sure that if they needed anything from the store, they would actually have the opportunities send that to their customers. It was really a welcome opportunity both for the associates and stores to maintain that relationship. And then the customers actually enjoyed being reached out to and hearing from a lot of the personnel that they had interacted with in person. Yeah, one of the things that I think your brand did so effectively has done so effectively historically is really building those one-to-one relationships, those friendships with their customers. And obviously it's not every customer that walks in the store that has a client telling sort of relationship. But when you have that, you know, we're seeing an enormous amount of growth right now in client telling from these brands that are saying, "Okay, if we're going to have stores, we're going to have less of them, but we're going to do more outreach, we're going to engage our better customers." And really kind of try to leverage all of that. So it sounds like you guys got that right out of the gate. How did that impact your overall e-commerce business? I mean, kind of how did that look initially and then how has that kind of been playing out? From the perspective of the client telling side? Yeah, did you find it was actually driving, were they actually able to do that one-to-one kind of engagement that drove to any commerce transaction? Exactly. Or it was fulfilled.
the scenes, scenes, we would leverage either the warehouse for fulfillment. So it made it pretty seamless and was a good way to get product quickly and easily and safely to our customers. Okay, that's great. That's great. Maybe we could talk a little before the show. We were talking a little bit about kind of the old standard around planning and execution. And as you started to look at, okay, our business is changing fundamentally. The old standards that we have don't necessarily work today. The old approach and methodology. So you had to pivot so quickly. Tell me a little bit about the types of metrics and type of data-based decisioning that you were doing at that time. Yeah, I think there's a couple of things you touched on with that question. One is you still had to be mindful not to throw out best practices as when the things that wanted to make sure is that we knew exactly from a data perspective what measurements were important to us to understand, are we meeting our key objectives? Are they working? And if not, how can we optimize those? And I think the foundational elements to Joe Marketing became more and more important because you had to understand the impact that even the short-term decisions back to the promotionality we're having on customer acquisition in our existing database so that when we start coming out of this in the fall and try to get more into that full price selling, we could measure and understand the impact and know how we had to point our messaging and campaigns going forward. So that was that first piece is really staying true to foundational digital marketing. So I'll give you an example of what that looks like. It's starting to set up a cost of acquisition by channel and by cohort. So we can understand if I acquire you, Brian, as a new customer through paid search, what was that cost of acquisition to acquire you? Then look at the time period I acquired you in, was it May, was it April or June? And measure based on your first order of purchase, what's your predicted lifetime value? So then we can take those elements and say, okay, one, was it worth spending to acquire you? We very quickly realized we should dial back our spend because we were getting natural traffic to the site and leveraging our email audience to drive and fuel a lot of the cell selling that we had taking place. So it gave us that lens to look at. We can hold off on some of the acquisitions spend until later time. So you still needed to maintain those foundational elements and how you measure and optimize your digital marketing campaigns. Now what changed is the level campaigns we ran. So I think I mentioned to you before I've mentioned to a couple of friends as well, me industry, right now would be the time period we'd start thinking about, oh, hey, maybe we should throw on the calendar a holiday planning meeting. Start thinking about what we're going to do for Black Friday, Cyber Monday because that was our big flagship promotional event. You want to make sure it was rock solid, your execution was flawless. Well, with COVID, suddenly we had to start saying, okay, can we drive a flash sale or campaign that drives that much volume and activity. And we did that. We launched an April, had the teams or cross-functional partners pivot very quickly and it worked really well. And the other component is you started to see stores remain closed as well as wholesale. We realized we didn't need to clear some of the inventory. So then it's like, hey, we should probably do this once every three to four weeks. So suddenly you had to pivot and run these very large scale campaigns. There were some of our best days probably over the last three to four years. We sat records either on daily sales volume or by month, even stronger than what we would really see over our holiday. So I think, you know, gained a team to pivot and execute, granted it was promotional, they still had to ramp up and do that all remotely. Right. So with a new leader, with a new guy at the helm, driving them towards all of that. So, you know, congrats to you. That's that's an awful lot about your ability to execute in a difficult situation with a new team. That was great. Yeah, thanks. And I think that was one of the biggest takeaways I've had throughout this experience is, you know, how do you continue to maintain at least, you know, the areas you can control, level of culture and environment with the team and knowing that there's a lot of distractions going on in people's environments. We had team members that stayed in New York, such as myself the entire time, others went down to Florida or California. So not only did you have just the notion of everything going on, but you may not know what's happening in their community and their family or their lives, and you have to strike that balance about the same time we still needed to find a way to execute. Right. Right. Wow. So, you know, you kind of went through through that first phase of this, trying to figure that out and standing up a new, you know, a new set of initiatives on a different kind of calendar than what you were used to for sure. And then you said it was initially pretty promotional and that was driving the revenue over time. I mean, we're now a few months into this. Maybe you can talk a little bit about how did you think about moving people back or moving your customer base back to a less promotional sort of engagement model with them and, you know, kind of dial that back up that you can only ship dollars for so long, right? Right. Yeah. And honestly, that's the tricky part and why I set up the first part of our conversation a few minutes ago, around the data and the analytics is we needed to understand what the impact was to our existing customer base to new customers that we actually brought in during that time period so that we could build segments and audiences to target them when we try to move back into full price. Yeah. That makes that makes great sense. You know, was there anything else that, you know, organizationally that you were thinking about from a customer engagement perspective? I mean, obviously a lot of the listeners of the show are really focused around, you know, how are we creating those one-to-one relationships? You obviously, you were talking a bit about your sales associates doing some outreach from the stores. You're talking about the fact that you're able to identify, you know, and you're doing all of this analytics around your customers. Were there any other kinds of initiatives or anything you've been kind of talking about internally? It says, okay, and this new world that we're moving to, the way we're going to need to engage our customers differently will look more like or be these other kinds of initiatives that we want to be doing that we haven't gotten to yet. Is there any of that kind of stuff that you're thinking about? No, it's really good question. I think you touched on it earlier as well. A lot of it goes back to, I think, brands and it's kind of cliché now. It wasn't two or three months ago, but you had this rapid acceleration of how they had to involve the retail experience. So we were talking about physical retail. Everyone knew that had the change, but most brands were looking at it as a roadmap item. Okay, maybe I had six months, a year or two years to change our entire fleet of stores, test out experiential stores. You look at what Nike's done with the various footprints, all the sudden that that was turned on its head and you had to step back and say, okay, what is the retail experience going for? And I think any brand that's successful today, it's more looking at it from a customer experience, customer first perspective and really thinking about almost a notion of experience design. So stepping back and saying, okay, what does experience design mean when we talk about having one or two stores? What does that mean when we talk about online? And how can we enact some of those experiences rather quickly? So one example is we were behind the curve on having live chat with store associates. We've always had it with customer service. So we deployed a test and we're rolling that out across a, I'd say probably 80, 90% of our stores to where a customer can check directly with the store associate and help build that relationship if they're in a market. So when they are comfortable coming back into the store or if they're not, they have the opportunity to really understand the product, the detailing and the craftsmanship. And that goes to your earlier question, that's another way to help get more back into that full price selling. So it's really easy for us as consumers to make a decision when something's on sale because your perceived value is like, I'm getting a good deal on this. But then when it goes back to full price and we deliberately wanted focus full price on new product to have that live chat, to have that experience say, okay, what does it mean when you talk about our zane pant and it has neotaric as part of the fabric? You can ask a store associate and they'll tell you exactly what that material is, why it's beneficial and why it's important. Yeah, it's interesting. I used to do a lot of work in the luxury space. Myself and my early days in my career, I was, you know, romancing luxury product. And, you know, was trying to think about, well, you know, what is it that really happens as you move further and further up the quality level of retours? And what really comes down to is the ability to draw up distinctions, right? And the distinctions have to be communicated. And so we have to draw them out. And as people end up interacting with the brands more and more remotely, whether it's through chat or whether it's through some sort of an online engagement or whether it's through streaming or whatever it might be, as we engage consumers, it's so important to really draw out the distinctions in this product. That's what creates the value. It's the hand stitching. It's the work that's here. It's a bem-light lining. It's a, you know, whatever it might be that's built into the the product that you really need to draw out to people see the value and all of that. And so we're not selling based on a diminishing price, but we're selling based on an increasing value. And communication tools are what you need in order to do that. And that seems like what you folks have been implementing. Exactly.
And that goes to where you're saying some of the roadmap items is starting again to think about, okay, what does the next iteration or retail look like? And that's why I'm still optimistic about physical locations. It's just simply there's too many stores for a lot of brands, but now it's right sizing that footprint and understanding, okay, what is the customer experience in the store? So they can understand for a brand where it's not a commoditized product, the value they can touch the product, as you said, the stitching, the craftsmanship and the detailing, that no matter what level of AI or virtual selling you get to, still doesn't cover that tactile component of actually touching and feeling the fabric and saying, okay, how much does it stretch? How much does it really stretch? Yeah, no, some of us aren't going away. That's for sure. I think that there's this incredible value in actually touching and engaging the brand and then also getting that brand promise communicated in three dimensions, right, around the customer where they're really sensing it from all directions. And I think stores are going to be the stores that are going to be left standing at the end of all of whatever we're going through right now are going to be those stores that are able to do that effectively. Yeah, and I still believe that there is a level of social component with shopping that I think will still exist. I've younger teenage kids, they still like to go into the store as a social component or just going and walking in Soho or whether it's my sister and Dallas going to North Park. I mean, I still think that'll come back safe and people are comfortable, but I don't think you'll ever lose that social aspect of it. Always been there, I think it always will be, I think you're right. I think I'll be interesting too. Go back to your comment on luxury. I saw, can't remember which publication, but that Amazon is going to continue to push to try to sell luxury. Yep. And I think it'll be really interesting to see how that plays out because, you know, whether there's been rumors back and forth if they leverage JC Penny, if they buy them out of bankruptcy to get that physical footprint. Mm-hmm. But I think if they are going to succeed in luxury, they are going to need some notion of a physical tactile approach on selling that product. Right. No, I agree. And the elevated experience, which brings us full circle back to why I think having that customer first experience design is critical going forward. Yep. Absolutely. Well, let's talk a little bit about, you know, it's been a crazy time in all of these organizations trying to adjust to all the change that's happening there. And, you know, you and I were having a conversation about, you know, it's all about execution right now. And how do we prioritize what we're focusing on day to day inside these organizations and with our teams and particular remote teams? Maybe you could talk a little bit about how do you think about how do you think about prioritizing activities? How do you think about making sure you're doing the things that are moving the needle? Yeah. I think it's a really good question because one of the things I wanted to hold on to, I've always believed I learned back at my agency days, my old boss, our CEO used to always say, like, I don't really care where you get your work done. As long as you actually get it done and your clients know how to get a hold of you. And this was 15 years ago before broadband, before, you know, being able to do video conferencing with widespread, and we had that inherent trust from an agency model. You could work remotely and still be able to accomplish what's needed. I wanted to make sure that, you know, especially starting new, that had that respect for the team knowing that they're working from home in that inherent trust that they would get things done. I think there's a lot of brands and colleagues I talked to out there that honestly had a little bit of distrust in me. You saw a lot of the articles to start with. It's like, hey, everybody's a remoteer. They're really going to be working. Can we pull this off? Get the same level of efficiency. So I think that was the first thing is just instilling that trust and knowing that, hey, figured out, do what works for you and as long as we can continue to get there. It's great. The second piece is making sure to hold on to the things I value culturally. And that's providing leadership and mentorship to the team. So making sure that we don't lose sight of those conversations. If you're on my team, I want to make sure that having a weekly touch base, understanding what's important to you. How can I continue to help you grow personally and professionally in the role, even though we're out of the office and don't necessarily have the proverbial FaceTime. Can't go for an espresso in the afternoon. That type of thing. So I think holding that cultural element brought the team together in a way that they hadn't been unified before. And that made it a lot easier for them to execute, especially with cross-functional partners that may not have been brought into the loop in the past. We included them in our Zoom conference calls, or when we would do Friday, virtual happy hour. So they felt more and more part of the team and built relationships with colleagues that they hadn't had before. And that made it easier when we needed to get creative at the last minute or the night before to reach out to our creative director and say, "Hey, can you do me a favor and get this push through?" Right. That's great. That's great. You know, I think we talked a little bit about the investment areas from a technology foundation perspective before the call. And it seems that obviously everybody's moving more and more of the business is moving to online. We know that requires kind of fresh thinking and fresh technologies that belive all of that. How have you been thinking about that? And even maybe on a broader perspective, other colleagues you have in the industry, where are you hearing that people are thinking about making those investments in terms of replatforming or getting ready for what comes next in retail from a technology perspective. Yeah. And I think it goes back to similar to how I put digital marketing. We had to make sure we had the foundational ecosystem, if you will, in place. So one of the areas is looking at back to, I think you'd call it, needle moving. What capabilities do we need to drive the experience and the business forward in the next three, six, one year of time period? So as an example, curbsides exploded, obviously. So we were fast tracking. How do we get by online pickup and store, curbside, shift from store, just so we can get product in our customers hands faster and on their terms. So that's one element to look at. So we approached it from a capabilities and feature perspective first. And then looking at do we have the right technology in place to solve that need or do we need to actually go out and look at a new potential solution? The second piece is then on the infrastructure, knowing that if we're going to see the level growth and expectation that we expect from e-commerce, does our current tech stack actually somewhere? Or the rapid growth. So those are a lot of conversations we're having, luckily with a lot of the key platforms that we operate on. We're pretty robust and solid. So we felt good from that perspective. For me, it's really tying up digital marketing, the data side, leveraging our CDP, which is Action IQ and making sure we get those audiences or looking at partners like a live ramp that will be more and more critical, especially as third party browser cookies become a thing of the past with Chrome moving much closer to getting rid of that. You have to rely on first party data. So to me, that's kind of the critical element. Because if you can't kind of ignite that side of your marketing from an acquisition or retention perspective, it doesn't matter if you have the best technology in the world, if you're not able to reach and acquire the customers you need to and keep them engaged. So if I made one other piece that I think has been interesting and is just the level of partners or vendors that have reached out, and I think that's been the biggest change, in a little bit of a disappointment on my side because in the past, I used to be able to entertain a call. You know, friends said, "Oh, you should check out this new technology," or "I know this guy that's starting an AI company, you should check it out." I would probably have time to do a 30 minute call, but now I don't unless it really is a business critical technology or kind of plugging a hole that I see in the next three to six months. Right. I just don't have time to speak to those partners or vendors. Now, having said that, the one recommendation I would have to lie to them is I've said this over the years is to do their homework and network and make sure that if they have strong connections, don't just send blind emails because there's no way. Yeah, you're not going to make a room for that. But it's surprising, even in this time period, I get it. How many people just say, "Oh, we work with XYZ company. You should set up or my boss wants to meet with you." Yeah. With Brian, if you called me and said, "Hey, there's this really, I think this would be critical and worth your time," then I'll check them out. Right. But outside of that, I just don't have to bandwidth to do that. Yeah. Well, listen, the most important resource any of us have right now with change happening, the way it's happening is how we use our time and somebody has to get very, very clear with you about why it's worth your time to even take a nanosecond to look at something. But we're speaking of time, we're just about at that point before we wrap this up. But what I like to do with my guests is ask them for three nuggets that they'd like retailers to think about as they navigate the next generation of what's going to be happening here. So do you have three things that you think retailers should keep in mind as they move forward from your perspective? Yeah. I would say one, definitely driving towards customer first approach.
and experiential design across all channels and platforms. The second piece is to not forget about foundational elements and making sure that you have a solid framework and best practices in place, because the last thing and what we learned through the pandemic is you don't want execution to be the reason you did not achieve goals. You wanna make sure that's flawless. And then the third is maintaining your culture and team. I think even though it's a challenging environment and economy, I do think people will have a choice on where they want to work, especially in digital and e-commerce. So ensuring that they have a right culture where they can continue to learn and be challenged and making sure you don't lose sight of that component. - Those are great, great, three great suggestions and things to keep in mind. Yeah, it's been a fantastic half hour or so here together. Thank you so much. I know how busy you are and I really appreciate you finding a few minutes in that schedule to talk to me into the listeners. If someone wanted to reach you directly, how would they do that? - Yeah, the best is connect with me on LinkedIn under Scott Lux, a made direct message or feel free to email me directly at Scott Lux. That's SCOTT,
[email protected]. And yes, I do still use my old Mac email address. - Nice to see. (laughing) - Well, I'm a big fan of Scott. - That's not real. (laughing) - There's no AOL still in your language. - Exactly. (laughing) - Well, I'll make sure that your email is included in the show notes that'll come along with this. And I really appreciate you finding a few minutes with us. Thank you so much. And I wish you just continued success on all the best men. - Yeah, thanks. I enjoyed it and appreciate you having me on. - All right, take care. (upbeat music) - Well, that's today's show. Thank you for listening. If you like what you heard, be sure to subscribe to the podcast and like us on social media. Or drop me a line at
[email protected]. If you'd like to learn more about what we do at Clientricity, visit www.clientricity.net. Until next time, stay well and go do something amazing for your customers. (upbeat music) (gentle music)
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