The New Rules of eCommerce

Media Thumbnail
  • 0.5
  • 1
  • 1.25
  • 1.5
  • 1.75
  • 2
This is a podcast episode titled, The New Rules of eCommerce. The summary for this episode is: <p>The world of eCommerce has changed, and Jessica Schinazi is here to help us dig into the future of it. Jessica is the SVP of business development and transformation for Dyson, who previously led the charge in getting luxury beauty brands to sell on Amazon. There is no denying how COVID was a digital accelerator for most brands. On this episode she shares how eCommerce brands have evolved and shared strategies behind maintaining customers in a world where the rules have changed quite a bit.</p>
How Jess brought luxury beauty brands to Amazon
03:12 MIN
How to think about brand awareness on various social platforms (such as TikTok)
01:14 MIN
Luxury brands vs D2C brands
01:37 MIN
How COVID changed eCommerce brands
01:26 MIN
How social justice movements have changed the way brands interact with consumers
01:32 MIN
Personalizing experiences and incentives to maintain existing clients
01:40 MIN
Internal organization and transformational change
02:11 MIN

Speaker 1: Welcome to The Jump Off Point, an original podcast by Jump Capital. Today our host Jason Felger and partner Yelena Shkolnik, sit down to talk about the new rules of eCommerce with Jess Schinazi. Jess is an absolute rock star who's currently SVP of business development and transformation for Dyson in the Americas and has experience at LVMH, Amazon, L'Oreal, Cartier and more.

Jason Felger: Jess, we're so excited to have you on. Welcome.

Jess Schinazi: Thank you so much. It's great to be here.

Jason Felger: And to share with our listeners a quick review of your background, you started your career in marketing for brands like L'Oreal and Louis Vuitton, and then you spent six years doing marketing and business development at Richemont, which counts Van Cleef, and Cartier and Piaget, and many others among its brands. And from there you led the charge to convince luxury beauty brands to sell on Amazon, something we definitely want to come back to for sure, how you did that, before moving to LVMH to focus on distribution and eCommerce. And now you're here in Chicago as SVP of business development and transformation for Dyson in the Americas. That is a stellar list of experiences and makes your perspective on our topic today is so relevant, which is the evolution of luxury eCommerce and brand strategy. So thank you so much for being here.

Jess Schinazi: Thank you so much for having me. I'm so glad to be here with you today.

Jason Felger: And I certainly couldn't have this conversation without being joined by Yelena Shkolnik on our team who leads our investments in the future of commerce. Welcome Yelena.

Yelena Shkolnik: Hey guys.

Jess Schinazi: Hi Yelena.

Jason Felger: So Jessica, to get us warmed up and in the right mindset, take us through how you think about the evolution of luxury brands over the past few decades and specifically how they've embraced new technologies, especially around their marketing and distribution to customers.

Jess Schinazi: Absolutely. So, yeah, I have spent the past decade observing the intersection of technology, distribution, digital and tech within the lens of retail, fashion, beauty, and luxury. And it's been an amazing transformation. Brands have had to adapt to give away some control, to bring in consumers into two way conversations, to lean into new distribution channels, new social touchpoints, and to really reinvent themselves always to stay relevant. We went from the early days of eCommerce to frictionless for the most part, commerce experiences highly powered by technology. And I think that the acceleration of the technology has happened so fast and has really been set by the expectations of those consumers, of them wanting more from the brands. And those expectations have been set by consumers, but have been implemented by other big players in retail and eCommerce first,

Jason Felger: Let's get into some of your experiences with Amazon. I'm talking about a company that's kind of broken through and pushed some of this evolution and pushed some of this advancement. So you said in a very interesting position of Amazon where you were responsible for bringing on luxury beauty brands to the platform. This is arguably a radically different point of distribution for those brands. So how did they approach working with Amazon and frankly, how did you convince them to do that?

Jess Schinazi: Ah, that was such a good experience. So at Amazon I was wearing two hats. One was how do we grow the brands that we do have already signed into the platform form? Your overall sort of category leader business, managing the P& L ensuring profitability and growth for all of the brands in the platform. Luxury beauty at the time, about 400 brands of various sizes of various distribution, existing distribution in the US as well. What we didn't have at the time was that tier one luxury brand that had joined the platform. And frankly speaking, we were going to those luxury conglomerates, the LVMH, the L'Oreals, the Lauders, the inaudible and they were not interested in taking meetings with us. They did not see that they needed Amazon because they had never needed Amazon. They were very happy with their specialty beauty retailers, Sephora, Ulta and their legacy department stores, Nordstrom, Macy's, Newman's, et cetera, right? So honestly they did not see the need for Amazon. And that was the second hat that I was wearing. How do we convince those brands to join the platform and explore the business models? I have to say, Amazon came to those brands the Amazon way. We're Amazon, we're the biggest. We need everything. We want it now. We're going to price match everything. Please sign here at the bottom of the page. Didn't work for those luxury brands. So it was all about how do we change the narrative a little bit into talking about things that are important for those brands? And when we look at that and we talk about brand safety and storytelling and brand stores and gain, which is the notion of protecting the brand distribution online so that no one else can sell it. Suddenly the conversation was a lot more interesting. That was step one. Step two was a lot of education. How do we show that there is a one to one parity between your American luxury customer and your prime Amazon clients? Those are the exact same people. And to an extent, the value proposition of Amazon itself around convenience, around assortment, around extremely fast delivery, those are luxury value propositions as well. So by opening the eyes of some of those luxury brands into this, we were able to reopen the conversation in a way where we put the customer at the center of the conversation instead of the business model and the idea that it was an Amazon talking to those brands versus Sephora and Ulta again. And then really ultimately by going onto Amazon and seeing some of the results that they were seeing, including not cannibalizing the sales from other channels, which was also sort of like a primal fear that we had to diffuse, we made those brands much more comfortable being in the platform. And frankly, when you are talking about wanting to sell where your customers are, you have to be on Amazon today. It's 110 million prime members in the US or more. Those are customers who value their time, who know exactly what they're looking for, who do engage with the Amazon experience in that they are reading the reviews, who are leveraging and trusting Amazon customer service, who enjoy that. And so those are amazing consumers to be able to talk to Amazon. So I'm a big Amazon fan. I've had a prime account since 2001. So it was a good experience in that perspective.

Yelena Shkolnik: This is not a perfect comp, but one thing that I have always been curious about, I mean, obviously transitioning to selling on Amazon, that is a massive transition for a lot of these brands, but they've also made some other material transitions in the way they communicate with customers. Because now they're also available on Snap and TikTok and they're making their presences felt in these walled gardens, these social universes, which must feel to them. They're certainly the first few times as a very foreign, very different way to approach customers or interact. And I love your perspective on why they do that, how they think about doing that. Is this really a method of engaging with a very generation and bringing them up with the idea of these luxury brands? What makes them excited? How do they think about strategy for this very different portal?

Jess Schinazi: I love that question Yelena, because something that I spend a lot of time thinking about is a motion of commerce everywhere. In other words, you don't need to have a channel strategy that's either your website or your retailers anymore. Potentially, you can even rethink the validity of having a website. What is a website? Is it a place under which you are fulfilling orders online? And if that's the case, do clients actually need to land on a PDP on your site and go into a full final transaction process? I don't necessarily believe so today. And so when we see the emergence of those communities and those spaces online that gather people with intense engagement around shared interests, I think it's an incredible opportunity to tap into that and to engage in a very organic way with brands. I would say that it's kind of a two step process, brands go into it first sort of backwards, frankly looking at it from a, either a PR or a media opportunity, but then as the maturity in commerce offerings of those ecosystems matures, then it becomes interesting to engage with them as sort of like a true commerce channel. And we've seen that with the rise of Instagram shopping. We've seen that with the rise of TikTok shopable videos. We are seeing that with a lot of pilot that YouTube and others are starting to integrate on their platforms. And I love the idea of commerce and content to the most seamless way that you stay native in that social environment where you are building an experience and content that is made for that environment as well, and, and where it's super seamless, frankly, and frictionless for the brands. Now, do we see a ton of results? Honestly, no. Are we selling millions of dollars of products on those platforms? No, and not yet. Are those platforms skewing towards much younger/ aspirational consumers? Yes, certainly. But is it a great way to work upperfrontnel into increasing your brand awareness, your brand health, your brand image, and then offering that assortment? Yes, absolutely. I think that one of the key thing to remember though, is you cannot build like for like experiences on all of those platforms. In other words, you cannot have your entire assortment, your full price range on a TikTok or on a Snap. It doesn't make sense. I love the ideas of brands experimenting with drops with created assortment, with capsule collections, with collabs and partnerships. I think that's much more powerful to be in sync with the cultural phenomenon that are around some of those platforms. So this is on the commerce side. Now what you're talking about as well, in terms of lens, filters, ARS overlays, I love that as well as a great way to engage with brands, with brands switching from commerce outlets to media broadcasters, and to content streamers, right? How do we engage with a brand without even thinking that there is something to buy behind it? But because of what the brand stands for because of its creativity, because of its point of view, because of its cultural relevance and some amazing brands are doing great things in that space. And they're pushing it really far, right? We're seeing video games. We're seeing very sophisticated virtual environments into which you can navigate into those surreal worlds. There is a lot of excitement and I'm seeing just a whole new wave of creativity powered by those new technologies as well that's emerging from those brands. And that in itself is also incredibly excited even going beyond the sort of commerce outputs that could happen on some of those platforms.

Yelena Shkolnik: I love that you went there because that is definitely a category that we've been so fascinated by. I mean, the first part of your answer, the transition of historically we're marketing outlets these social channels to really commerce platforms and places where people are shopping. And we know something like 50% of Gen Zs have bought something through a social platform. It's a very different dynamic than the generations that came before. So it is really fascinating to hear you talk about how exciting that potentially could be for brands. I mean, one natural question is they do let go of the experience a bit, right? It isn't the same as walking into a Gucci store and having a lot of that tailored and customized to you. To some degree if you're on a live stream that's navigated by an influencer, that's not you, you're kind of letting go. And there's some nervousness I imagine. And the entirety of just how that interaction goes, it lives on someone else's platform. The whole dynamic of that technology is, it's outside of their control. And I just wonder how comfortable do they feel? Are they getting more comfortable with the idea that a lot of this interaction is not nearly as controlled as I imagine luxury has historically wanted it to be?

Jess Schinazi: Yeah, that's such a great one and a key theme as well in the past 10 years about giving up control. And for the brands, it's a major change in how they are thinking about their brands. We went from brands again, having one way conversations for their entire lifetime with their clients, them being the taste makers, the decision makers, telling you what to buy and when to all of those spaces that are diffusing and personalizing that control in a very real way. I think that acurilization probably in the mid 2000s was that those conversations were happening, whether the brands were involved or no. And so the brands had a choice, either we can partake in some of those conversations or we can let the conversations happen without us by people who either love us or hate us. And so by deciding to engage into that two- way conversation, it's a trade off. You have to give away a bit of control because you are bringing in the consumer for the first time into that very real conversation. It has very pragmatic applications. We're taking thousands of customer orders in DM requests on Facebook messages, on the WhatsApp, right? We're engaging at a one- on- one granular level with consumers in a way that we had never done before. But to your point as well, when we are creating those environments and entering into some of those platforms and an ecosystem that we do not control, I think that the key is to not measure the success of it by the same KPIs and outputs that we look at when we look at a retail experience. Yes, you're not going into beautiful Vuitton or Gucci store being served some champagne and some pitiful while you are shopping with your personal stylist. But what can you do? You are shopping with friends in a highly engaged community where a creative director still can explode with his creative vision into building that virtual environment. And that too is exciting for those brands. There is also the notion of how do you stay for relevant that I think is super important. When we talk about luxury brands, we talk about timelessness. And timelessness and relevance have a very interesting dynamic together. How do you stay relevant at a very specific moment in time while building a legacy that's going to still be here a hundred years from now? So some of those experience are meant to be, I think, more short term, and I kind of love the ephemeral nature of some of those, right? In retail, the same notion would be, how do we think about pop- ups? How do we think about little events in a retail environment that's not your fully flashed, beautiful flagship? But when we take that online, we can have a lot more fun at a much cheaper cost with different audiences that you are usually not talking to. So yes, we're building that aspirational buyer, the buyer of tomorrow, but we are also showing a side of the brand that potentially we haven't shown before. And yeah, there's a fun element into that. Is it easy? No. I can tell you that there's a lot of internal negotiations to get some of those things fully past the line, but the preliminary results we're seeing out of a lot of those are quite successful. And this is why you're seeing also a relocation of media dollars into some of those new platforms, I believe.

Yelena Shkolnik: Yeah. I mean, you kind of took us down the marketing path. So the questions that follow are really as you mentioned, right? The KPIs have changed. The dynamics of marketing have changed. So maybe a broader question here, right? As I think about historically, what these brands have done has just been traditional sort of brand marketing, right? It's billboards out of home, it's TV. It's let me give the aura of this brand to you. And whether you're an aspirational buyer or a current buyer, you just think of us. We're very top of mind. And that's how we kind of win you over, over time. And then obviously there's our physical experiences for the experiences that we cultivate. I do feel like it has transitioned a bit from that brand spend to a little more of maybe like direct marketing spend, right? Maybe more specific KPIs. We are actually looking for attribution. We're a little more targeted in our approaches, and we need to know that that dollar in is$2 out. Is that fair? Are they starting to just think like maybe other categories, other brands have been doing for a while?

Jess Schinazi: Yeah, I think that's super fair. You think about traditional media dollar spends in all of the sort of offline touch points within the customer journey, a lot of TV, a lot of print, a lot of out of home and billboards, to your points. With the increase of eCommerce, we've had to start engaging into both paid search and display. A little bit more on those online touch points is a huge advantage that those are much better trackable outputs, and we can measure the ROI of those in a much better way as well with a direct correlation into attribution with its limits, obviously into the actual commerce experience that a brand will have and generate. So that happened certainly, huge shift of media dollars into those online touch points. However, as all of the brands started doing that, the competivity and the prices of those channels has increased. And it's now super, super expensive, right? To spend dollars in a meaningful way on a Facebook or in an Instagram or a TikTok to that matter. And breaking through the noise is also very hard because now you're not only competing with your traditional brands, you're also competing with your DTC brands that are actually spending 100% of their dollars into those channels. They do not have money to really spend to direct people to nonexistent retail stores at are brick and mortar, right? So I am seeing that cost of acquisition increasing a lot, which is forcing brands to either optimize a lot more and be a lot more efficient in their spend, or funnily enough go back to some of the traditional ways of doing media advertising. And this is the rise of some really interesting subway takeovers, for example, that I've seen in New York city from luxury brands, the rise of much better bus shelter billboards that I've seen as well, that are video optimized. Connected TV, I love what we do with that as well, is something where we're spending a little bit of time investigating what can be done there. So it's been that interesting curve. Let's see what's going on in the next five years perhaps, but yes, overall we are shifting more online. It's becoming more competitive. How do we get more efficient? And this is a sort of like a nice bridge into the notion that we also be more efficient because we have way more data behind it to measure the efficiency. So now we can have sophisticated media mix modeling, for example, to really start correlating the optimal channel allocation of our media dollars into whatever output we decide to have, right? And that can be a commerce one, that can be an a Pernel an awareness one, that can be a CRM and customer engagement one. And so we have that data as well that is making it a little bit easier to, to invest in some of those channels.

Jason Felger: Jess, you, you said a term that we want to go into next, which is direct to consumer. And so we're talking about distribution, we're talking about commerce and marketing and how luxury's adopting that. And what I'm curious to hear from you is the D2C model is definitely a distribution channel. It's also a different business model and there are different marketing tactics. And how can you summarize how the traditional kind of legacy luxury brands have thought about the D2C movement? And do they see it as competitive, or do they see it as a maybe evolution of how they should think about reaching customers? And just contextualize kind of that very different and somewhat recent model to bring brands and products in front of a customer.

Jess Schinazi: It will spread my answer into two pieces. One, D2C only brands that have been emerging and been extremely successful in the past 10 years are not D2C anymore, right? They all have some sort of retail expansion. I think that with D2C and back to that rising cost of acquisition, you are getting to a level of diminishing returns in your spend that is making it super hard to continue acquiring new customers. So you can cultivate your existing, retain your existing customers, build that lifetime value, but at some point you actually need to build really organic growth. And that very often comes in the form of retail stores. So we're back into that loop of retail. And I have to tell you, I'm a huge fan of retail. I enjoy shopping. I love going to stores. So we are seeing the early D2C brands of yesterday, the Woobies the Caspers, to an extent the Glossiers, right? Now, all experimenting with some stores. Where it gets interesting that those stores are not their mom stores. Those are smaller footprints, leaner inventory, mobile checkout stores, stores as community hubs as well with a lot of content, master classes, community events, right? So that's a super interesting conversation into how they are rethinking about their 2.0, which is a store expansion strategy. Now, when we take a step back and we look at luxury brands, they saw the rise of D2C brands as pretty much like a non- competitive threat at the beginning, I would say. Now though as those brands are becoming extremely sophisticated in building those hubs and that community online, they are becoming brands that we are, I think, competing with online. Not only because again, they're spending 100% of their media dollars into online channels competing with us on both branded and non- branded keywords on paid search, but because they are also offering value propositions on their D2C experiences, that us, for a lot of legacy reasons we cannot offer. When you think about a lot of personalization, a lot of subscription work, a lot of loyalty programs for example, we are building that maturity, but we are starting with a step backwards, right? So it's a very interesting dynamic to look at that. A lot of the D2C brands are also starting to expand into other online channels. So a lot of D2C brands have D2C plus Amazon or D2C plus Sephora in beauty, for example. And I think that ultimately, it's also showing one of the limits of D2C, which is how do you get that rich at scale? How do you get that discovery at scale? How do you build that awareness, right? And so working that opfinol, that customer acquisition, bringing that client in, you have to do with some of those much bigger legacy player that still remain online. The experience can still be very much an online experience, but it sounds like you do need to bring in some of those new partners, right? So some, yeah, very interesting trends there. Lastly, I would say that there is a push from a channel and distribution strategy of all the brands that I've worked with to move more towards a D2C business and rely probably a little bit less on some of their existing retailers of choice. And the reason why generally speaking and beyond the idea that it's a little bit more profitable is that you also have a better control over your assortment, your pricing strategy, and then super importantly, your consumer data. When you sell on your website, it's your consumer. When you sell via a retailer, it's not your consumer. And this is a gold currency. We want to be able to talk to our consumer. We want to understand them. We want to tailor our offerings and products and services to them as well. So there is definitely that goal as well towards just more reliance into D2C. And that's something that all the brands that I've worked with are exploring intensely.

Yelena Shkolnik: You hit something really interesting there, and I want to make sure that we have time in this conversation to talk about the impact of COVID because how could we not. And the one piece of this is I've always thought in luxury brands especially, but the omnichannel brands generally, right? Like a omnichannel brands have always, it seems to me, let eCommerce be kind of second fiddle, third fiddle even to how important the physical in- store experience has been to them. And even how important just being a wholesaler has been, right? Selling through retail channels that are outside of their scope. And the transition in COVID was rapid. It was accelerated. They were forced to think about eCommerce as central. They were forced to maybe pull back on wholesale relationships because those retailers were themselves struggling. How much of that sticks around? How much of the re- priotization to eCommerce around? How much of this new direction of being a direct to customer seller sticks around?

Jess Schinazi: I think a lot from the results that we're seeing this story in 2021, a lot of it is sticky behavior that is impacting how we're shaping our roadmap in the medium term. Last year, in the span of two weeks, we had to close all of our stores in the US and rely essentially on the only door open, which was our website for a lot of brands. Beyond the horrific health and people grassrophe behind it, COVID was an amazing digital accelerator for a lot of those brands. In the last year, we were able to unlock and secure investments and IT resources that previously had been planned for five years from now. And it forced a lot of brands to become a lot leaner and agile into the customer experiences that they were offering. Things like curbside pickup, for example, or the thinking of how do you rethink the role of a store. If it's not a store that can welcome customers anymore, can it become a black stores and function with back of house operations into less mile fulfillments, delivering assortment to your eCommerce customers, for example, as well, right? So we had to pivot really fast, frankly, be very scrappy in delivering some of that. And this year in 2021, as the behavior is sticking, we are rebuilding some of those features as more foundational features of our tech ecosystem. And so it has allowed us to have much better discussions backed up by consumer data and expectations and behaviors that we did see last year to build a roadmap that is, I think, a lot more sophisticated when we think about tech and digital channels. So what we're seeing is that yes, 2021 the digital behavior is ticking. I was reading that about two third of Americans tried a new way of shopping during COVID and at least a third of them are intending to keep with it moving forward. It was not all in beauty and luxury and retail in fashion. A lot of people for the first time bought groceries online, for example, last year. But now they're realizing that convenience and that assortment that comes with it as well. And so they're sticking with that and then expanding that to other categories. So we are absolutely still seeing the effects I think of of COVID. Another thing that happened I think in 2020 in the US particularly, a lot of the social justice movements that have happened have also forced brands to rethink how lean they want to be into having conversation and a point of view and a voice online. And so beyond the commerce element, I also see 2020 just generally as such a pivotal year in how brands decide to interact with consumers on different touchpoints online. Because now they've been asked to commit, to have an opinion, to not hide behind just a marketing message. And this even from a transformation perspective has forced us to have discussions internally about decision making, about taking a stance, about rapidity of action instead of waiting three months for a PR message to get approved, right? And talking about all of that. And it has also has really interesting effect of how do we not just talk about products and discounts, but how do we just ask our consumers if they're doing okay, right? And so how do we also us as a brand switch the messaging a little bit more into, hey, it's such a hard time, are you good? Is there anything that I can do for you? And at LVMH, I was there last year, but I've seen so many cool examples of brands in a very organic, very authentic way, just engaging with their consumers, without having anything to sell. And that too, I mean, I think was incredibly refreshing. And that's also something that is sticking this year when we look at how do we communicate on what kind of platforms with what kind of messaging?

Yelena Shkolnik: Yeah, that is a really fascinating transition generally. It feels, and I've always thought a little bit catalyzed by Gen Zs that there's so much demand from that audience to have a real authentic connection with the brands that they purchase from. Their demand for there to be a real story from those brands. And to feel like, obviously they're looking at beauty, they're looking at clean beauty, right? They have priorities in the way that they shop. And that has really guided a lot it seems like from the brands of how they direct those messages and how they communicate very organically and how they reflect all their goals and just have a real two- way conversation, which, I mean, social has clearly, it seems enabled it and supported it. And it's such an interesting transition that you've highlighted there.

Jess Schinazi: Yeah, it's that. It's also holding brand accountable. I think it's Gen Z's particularly kind of voting with their wallet when it comes to brand loyalty. We are seeing generally loyalty level declining across newer generations because of that accountability that's demanded from the brands. It's about showing the receipts of what you're preaching. Is that actually true? So it's not just saying that we're clean to your point. It's show me how clean you are, right? And show me the list of ingredients. It's adding a whole layer of transparency typically in the beauty industry. Don't put a nice statement on Instagram, about diversity in your workforce, show us how many minorities and people of colors you have on your board sitting, right? I think that that's a fascinating change as well that we're observing in the retail industry, and some brands I think are struggling with that in that it's a demand now. I mean, you have to do that, right? And then some brands are doing great. I mean, Sephora typically has done it's 15% pledge last year dedicating 15% of its shelf space to black owned businesses. And they've committed to this and they're showing the results and they're acknowledging that they could have done better many, many years ago, right? And I think I love that. I love that self- reflection. I love brands that can put themselves in perspective and have that authentic conversation with Gen Zs. I think that's extremely powerful. And I think that it's also a really nice way to actually encourage small businesses and entrepreneurs to also have a voice in that conversation. So back to, again, the rise of D2C and sort of emergence of new, I think the sort of value driven brands are super important, are here to stay. And I highly encourage that, frankly.

Jason Felger: Jess, you were talking about not just how these things are communicated from the brands and their presence and the kind of the halo around that. But you started to get into, what are the products they actually are producing? And what are they buying? And much more of to get into the weeds of their business, around their supply chain and who they're working with. And that's an area I want to explore a little bit more, especially then if you kind of just bring more complexity in around sustainability and the circular economy with the product. And so I'm curious how all of that is then brought kind of into the organization of not just how are we communicating these things, what are the broader initiatives that we're embracing and how we're actually going about doing that, but around what are you actually producing? Are they changing the products and are they changing the assortment of those? And potentially how and where they're actually produced.

Jess Schinazi: I think that we're seeing that in multiple touchpoints within that product journey. At the production level itself, yes, we are paying very close attention to the materials being used, how sustainable are those materials, work force and labor conditions of the people touching on those materials. What are the working conditions, the wages, the quality of life of those people as well? And then we are powering that by technology. So there is some real interesting work being done today with leather coming out of mushrooms, for example, or other organic ingredients, right? So there's that entire world that's trending. We have a ton of transparency, way more than before powered by various blockchains, for example, that are allowing the customer to see exactly where is the raw material coming from and that chain of traceability. And so that's definitely happening. Once the products gets manufactured and gets sold, then we have that customer recycling ecosystem that comes into place with a lot of new business models as well. I think originally it was mostly C2C, right? Consumers selling to each other, facilitated by new marketplace platforms to be able to do that, taking a cut out of the exchanges. Now, interestingly in the past maybe three to five years, brands are starting to get involved as well into that discussion. And it's a very interesting dynamic as well, because suddenly we're starting to talk about depreciation and we're selling value of a product. So looking at the macroeconomics of luxury goods or beauty product, it's changing as well. Who sets the depreciation, what holds its value the best, and how is that working backwards affecting the volumes and the sales that you're seeing for the first buyer really? This is typically very prevalent in watches and jewelry. People are buying watches as investment pieces, looking definitely at the reselling value that they can have behind it. But going back to the brand role within this, we are starting to see brands tip- toeing a little bit into resell, to want to reclaim a little bit as well some of that ownership of brand image, equity, value, all of those notions together with some really interesting programs around tradings, around refurbishments, around guaranteed to have been certified by the brand itself, right? Some players are doing that very well that are not brands. I mean, the real real is an example that comes to mind. There's a bunch of others that are more institutional players that are coming into this. We haven't seen yet huge brand programs going into that space, right? I think that in luxury specifically, there's a little bit as well as the notion that our products are manufactured so well that they're very well lasting. So we don't really need to get into that circular economy yet, right? I've seen that a little bit. What I've seen are mostly department stores starting to build volts of pre- owned, pre- loved products that they can sell back again as well. They're playing more on the marketing side, I think of it's a product that you can buy. It's a collection that we're... It's a skew that we're not producing anymore. So there's that as well, but it's very much a parallel conversation to the amazing velocity I'm seeing in still consumer to consumer exchanges on platforms like Poshmark and ThredUp. And those guys as well, that are, I think, generating millions of volume and that is exciting, sort of like that second life of those products. What I'm excited to see our brand starting to get into, how do we bring back that consumer into the brand ecosystem? If it's a consumer that's second hand consumer, what's the value prep that we're bringing to them versus a first time buyer or just a new product buyer all the time? I'd love to see more brands play within that a little bit, frankly.

Yelena Shkolnik: Maybe to do a little transition here, we've spent a lot of time talking about winning over customers and having a great and authentic conversation with them in that front end. I am interested also in something that you said earlier, which was boy, is it hard to compete for new customer acquisition? It's only getting harder. And so on some level, it is a little bit about, let's just make sure that we keep the customers that we have and let's get them to buy more stuff and let's drive loyalty and grow that experience. And then that has been a huge interest area for us. I think there's maybe two questions there. One is, I mean, do you see that? Are you seeing a lot of brands turn inward and say, hey, how do I really cultivate the audience that I have here? What kinds of tips and tricks and personalization and messaging and styling products and any associate interactions that I can use to drive these customers to keep coming back to me? How do I kind of think about prioritizing that? And maybe the flip side of it is eCommerce changes that a little bit, right? Instead of walking into a physical store and building a relationship with my favorite associate in that retail environment, you kind of have random touch points on me and increasingly fewer and fewer touch points given the movements toward privacy. So how do you reengage me? If I purchased something, if I purchased a couple of times, do you know? How do you loop me into that cycle of, I want to come back and I'm loyal to your brand?

Jess Schinazi: Yeah, definitely amazing questions. I think that to your first point, I can see both experiences and services as being two fundamental pillars that we're working on to cultivate and retain and maintain that clients that are existing clients. Experiences in that we want to make sure that the website experience that they're experiencing is very custom, very personalized. And we have the data today to do that, right? To show you the products you are the most likely to purchase, to pre- select your size on a PDP, to ensure that we can have a shade finder for your foundation that's going to be exactly the one that you need. By doing that, we are removing the frictions, the uncertainty around purchasing new product online, we're lowering returns. I mean, it's a very much a self- fulfilling virtual cycle. On the other side of that, I think from a services perspective, this is where we are spending quite a bit of time thinking about the incentives for you to stay a client. And those very often, they go beyond products. So this is everything around loyalty, and how do we reward you being a loyal brand customer? And loyalty triggers, yes, they have price incentives and promos and buy one, get one off, those kind of things. But they can also get a bit more sophisticated into how do we invite you to events, to master classes, to talk with our creative directors, to engage with other people in the community, to have a voice when you leave a review as a preferred customer? I mean, there's a lot of things, right? That we can do there that would allow us to continue cultivating that sort of like CRM database of those super loyal clients. Another sort of side note there is how do we transform detractors into some of those super good clients? And I kind of love that topic because statistically we've seen that if you have a really bad experience but we make it amazing, you over index in how loyal of a client you are, because you remember that at the time of hardship, we did you right, right? So there's that aspect as well I think that's interesting. So I think, yes, customization, services powered by data, this we spend a ton of time thinking about. Now, yes, it's harder because people don't want to be tracked. I'm the first one to decline every single time I download a new app, please do not track what I'm doing on this app, right? So it's harder. So how do we create the value prop that's good enough for you to want to have that authentic conversation with the brand to leave your email address, to be contacted? I think that the key here to prove to the clients that we're going to be able to trustworthy relationship with him or her to not spam the client with unwanted emails to be so focused, so relevant, so perfect that one email equals one conversion, right? To get to that optimum level of how do we communicate with them? Now you said something interesting Yelena which is you don't have your dedicated stylist. I think that that's changing online as well. Now you are able to through technology talk to the same person every time, video with them all the time. They can send you on WhatsApp the key new items from the hot new collections in your size that they know you're going to love, send you a pay by link and then you can just complete that transaction online. So we are also spending a bit of time trying to replicate that one- on- one connection, human interaction that you have with your stylist in store, right? And we have some core technology that we've tried that allows us to do that, allowing us to leverage people in store, to talk to clients on the websites directly as well. We at Dyson do some really interesting virtual demo videos as well to show you a product, to show you how to potentially troubleshoot a product as well. So there is excitement there. I think that's new for a lot of brands. And so we're kind of, it's a test and learn. We're playing with it a little bit.

Jason Felger: Some of what you're talking about is here post- purchase. How do you fulfill this promise post- purchase? When I think about Amazon, one of the most amazing things post- purchase, there is just speed of delivery. And so I'd love to hear you give a sense of prioritization. In the realm of post- purchase and how to both fulfill that transaction, how to fulfill that brand promise this, how do you think about, and where do you think most brands are at as far as the prioritization of the different technologies, the different components they're using for post- purchase? Is it just speed to delivery or what are the other things that fit around that to make sure that they have that loyal customer?

Jess Schinazi: I spend a lot of time in the basketball years thinking about this because free two day shipping from Amazon has reset the expectation of how I think about delivery as an American consumer. And anything else that's considerably more than that has a linear coloration in lower conversion rates, right? So it's forcing brands to step up their games. And we've been relying on lot on legacy carriers who do a great job, frankly, in the US. We're thinking about the UPS and the FedEx, right? Into delivering that product. Often though it's not fast enough now for the expectations that consumers have, especially when it comes to peak season, to last minute gifting, to things like that. So we are starting to play with new carriers, smaller local ones who are doing some really good job, really good working to last mile delivery. And to that last mile delivery, going back Yelena, to the notion of sort of like giving back control very often, you're actually not loosing legacy players. You're losing contractors who you lend your great product and your great bucks to, and they are responsible to bring that last mile experience to the consumer. So super interested in some of the tech that's happening here. I touched on that, but I am super interested in how do we use our store networks and potentially our retailer store networks into reducing that last distance to the end consumer? Because we don't need to ship from two or three main national warehouses but potentially we can ship from 1500 stores, right? If we have the capacity behind it. Huge implications from IT, supply chain, operations, logistics on how do have a seamless stock? How do you move things from one place to the other? How do you add a huge data foundation on all of this to make sure that you can actually deliver on some of those things? So I think that speeds to delivery is a critical component. I would add that reverse logistics is equally as important. Ability to return, to exchange in a very seamless way without having to box your product, to pack your product, to print a label. Who has a printer? I don't have a printer at home. That's also is super important, right? I think that initiatives like you can return your Amazon product at Kohl's has been really interesting for Kohl's as well. It's great consumer ad, but it's been super interesting. One of the company that I kind of I'm super excited about is Olive right now and how they're rethinking sustainability around boxes. Instead of sending you cardboard boxes all the time, you have that single recyclable, reusable box with all of your eCommerce delivery. There is a ton there that's exciting around speak to delivery, but the delivery experience itself in touching, including sustainability on reverse logistics on some of all of that as well. So yes, a ton of time, lots of infrastructure investments spent on that. And I would add as well that one of the complexities, because people are engaging more in moving to cross border purchases, it's also harder and harder to ship to even here Canada or Mexico, right? From the US. We're not talking about shipping super further than that in the world, but the cost associated with that are there. So we have to partner with the right people. And typically that's one thing where I do believe that partnering with the right people is probably a lot more efficient than building your own capabilities. So we are experimenting with some of those things as well. Cross- border is super interesting topic as well because there's that appetite in that global demand, I think accelerated by the fact that with COVID, people are not traveling anymore as much. And so how do we really are able to provide that experience without forcing the consumer to wait two weeks for a product they've ordered online? We are also thinking about that a bit.

Yelena Shkolnik: You bring up a really interesting point with cross- border. I think this is a fascinating tangent because COVID really was a double- edged sword on that front. Brands who relied on local tourism for revenue, I think luxury brands who at some point relied on China, Chinese consumers specifically for up to a third of their revenue, those groups are now really refocused. And in that window of quarantines, especially of course really trying to cultivate local audiences to replace this lost revenue. But on the other hand when I think about a lot of US brands from an eCommerce perspective, those guys saw real material surges in cross- border traffic. There was a general growth of about 106% in some territories. D2C brands said that they saw 350%, 400% searches in demand. And as you site, this is really happening without material optimization, right? These are not localized sites. There's not great fulfillment partners in place to reduce shipping delays or to make this less uncomfortable for the end customer waiting for their product. And there's still very substantial duties. I mean, you're probably paying almost as much for the duties and the shipping as you are for the product itself. So I'd love more of your thoughts here, right? How important has this cross- border demand really become to brands? Has that changed? Are they responding to this substantial surge with any material movement? Meaning if I've really seen such an enormous growth in Malaysia, for example, am I now starting to target websites there? Am I charting customer acquisition efforts there? Am I really tailoring to these customers and really tailoring my strategy in order to make the most of this growth?

Jess Schinazi: Yeah, no, it's great. And we are seeing some of those numbers either the volumes of hits we're just getting on our traffic, coming from regions where we didn't really have so much volume coming from before, or even just sales, if we are able to ship there. So there's a few layers, right? Like one, can we ship there? Yes or no? Can we do it ourselves or do we have to use a cross- border player? That's a thing that it's just like that sort of 101 step. Can you actually deliver products internationally to people? If yes, what are some of the constraints in terms of duties and customs, time to delivery, reverse logistics, customer service, all of those things that we need to explore and think about as well? What is super interesting in what you're discussing, Yelena, is the idea as well, that it's kind of like one global demand now. So in other words, how do you think about pricing? How do you think about product assortments? How do you think about brand messaging? We used to have significant price differences between regions, which was also by the way, an incentive for travel, right? People would buy things in Miami because it would be a lot cheaper than buying them in Brazil, for example, right? Now, if you have one single PDP that everyone is hitting in the world, what kind of pricing do you have and how is that impacting your PNL as well, right? So we are thinking about a lot of that before the act of are we able to ship internationally? And I think it has really interesting implications as far as your local strategy versus your global strategy when you are a very well known brand, because to your point, do you tailor the experience or is it kind of a one size fits all? If I see the demand, I'm going to sell the same product to an American, to someone who lives in Asia, to someone who lives in Europe. So super interesting topic as well. I think that because of COVID, we've lost a huge amount of tourism sales. We've lost a huge amount of travel retail sales. We've lost a huge amount of cruise ship sales as well. Some of those are starting to get back together, but I'm a huge believer that those three touchpoints will change as well because of COVID and accelerated by digital transformation. So how do we also rethink some of those touchpoints around travel retail and transnational commerce, those types of coverage touchpoints that are also very interesting? I was reading some stats around Canadian consumers and how time to deliver is more important than price for them as a key decision trigger when they're purchasing something online. That's huge, right? That tells you something. So is there own opportunity to have local warehouse partners, local carriers there that can improve your speed to market when you want to deliver last mile? Probably. And some of those things we're also so exploring to some extent.

Jason Felger: Just starting to summarize some of these things. A lot of what we're talking about is it's technology adoption, it's new business model, new distribution channels. I mean, just listening to you, it's complexity. It seems like the complexity, if you're sitting in your seat in your peers or just all of the alternatives that you have on how you reach customers or communicate with customers, it's just is in some respects, overwhelming, I would expect from a decisioning standpoint of what are the technologies that you want to try and how do you keep your core stable? And so, can you give us a sense of how does that feel? How does that inside of the day to day about making sure that you stick with your core and what's gotten you and the other brands to this point? But try these new technologies and are they viewed as experiments? And some will fail and some will succeed, or are they viewed as mission critical at this point and necessary to compete? And maybe just share with us a little bit about how do these things actually get decisioned and then start to take hold?

Jess Schinazi: Again, we went from having retailers to retailers and eCommerce website to an ecosystem that's so complicated. And within that ecosystem, having so many different models. It's not just retailer wholesale anymore. It's e- concession, it's market per lace, it's popups, right? So all of those things are super complicated on one side. On the other side, consumer expectations are increasing all the time. So how do we over deliver in the services, in the experience while putting the client first? Another key bucket of why it's complicated is because we have data, but almost too much. And there's just data at every single touchpoint. So how do we make sense of it? And one of the key thing that you've touched on is we need to have a foundation from a transformation perspective that is allowing us to play with those different levers. There is probably an IT core, I would say that we need to have, and it's the notion of you cannot run before you start working in IT and tech, and you have to have the right OMS and the right CRM and the right systems in place to be able to engage with that. And once we do that, which by the way, not a small thing to do, it's actually very complicated to have that data link, have the super strong it foundation core for your organization to start building those experiences on top of each other. Once we have that, I think that you're talking on something that's super important, which is internal organization and transformational change. And it's all about how from a mindset and a culture perspective, are those brands able to start testing things out? Because we would like... I think on my project history now there's like 150 things, right? I cannot do everything. How do we think about prioritization of largest impacts, but also in light of feasibility price to make it happen, a number of teams that need to get involved? The fact that we all work for global organizations. And so it's not just one single market either. You have to go through the consideration of what is on the roadmap of some of the other markets as well. All of that requires I think, transformation at a very important level of the organization to be able to have the mindset of saying, we're going to test those things in a very agile way that's not disrupting the other systems. That's not putting at risk anything else. And I love tech today that is allowing us to do that in almost running in a parallel track to business as usual, allowing us to do enhancements that are very light, that are not code heavy, that we can AB test in a very similar way. I think to get those learnings fast. Once we get learnings, that's when we start scaling it. But a lot of the work that I've been doing in the past couple years as well has been identifying sort of wide space opportunities and how we get into some of those for testing in our brands. And a lot of that work has been around, okay, how do we test something without touching anything else in the business? How do we get those learnings fast? And if it sucks, let's fail fast, right? If it works, how do we scale? And what's the process to scale that to other markets, other regions, other products, other brands? So it's a complex topic because it's touching on how we work, how we process things, right? And it's hard for tech companies to come into that ecosystem because they have to fit in into ways of working of bigger brands and potential clients in the way where they're very light on the infrastructure and yet deliver immense results to get onboarded.

Jason Felger: You already started to answer this question and it was going to be all of that layered into then a lot of what we think about in our world is new technology and startups. And you started to kind of give the cheat code if you will, of what is that framework that you're thinking about as you're evaluating all of these nuances in as you said, risks. There's risk to all of these, and so there's a balancing of risk. To a certain extent, working with early stage companies probably introduces a new risk just because of where they're at. How have you thought, not just at Dyson, but in all of your roles about balancing all of these objectives that you have? With also then how do you think about working with early stage companies with startups? Which are probably trying to introduce new technologies that may fit into your framework or roadmap, but you're also sitting in a much larger entity than they are. And that usually proposes some kind of unique challenges to both sides.

Jess Schinazi: Yeah. And listen, the ideas are always good. Rarely have I seen a startup pitching me something that I thought was a bad idea. So if I could do everything, I would want to do everything, right? It's not even a matter of assessing how good the idea is. It's more, how do we actually make it happen? And that I think is the key component in how a startup can get into a company. How can you make it happen with the least amount of work on the company side and the most impact in the results that we're seeing? So I love working with companies that are coming to me, solving a problem that I have that they've identified already. Not just a sort of template solution that they're offering to everyone. From a business model perspective. I love working with companies that are de- riskifying a pilot program that we can engage in with them where it's a financial incentive for us to work with them. It's a performance based business model where we are really rewarding the incremental results that we are seeing. And then I think lastly, a very clear sense of what the actual load of work required from different teams in the organization. And those things all together, I think I don't see that very often when startups are pitching us their new tools and solutions. There are fundamentals that services are going to have to run through. So IT check, legal check, security check. Usually those are the main three, right? Out of that, I would add today a notion of checklists, right? Like, are you ADA compliant? Are you DTTR? Are you CPA? Et cetera, et cetera, right? Those things as well, we do not work with companies who don't have some of those basics either. But after that, understanding how lights they are, what ecosystems do they plug on? Are they only a Salesforce plugin or do they work with multiple tech stacks that we might be working on as well? I think that too is important. At LVMH particularly we have built an ecosystem to really grow startups with VivaTech Innovation Awards, Station F in France typically. Some of those are great ways for startups to get exposure to 80 plus brands at once. And every big conglomerate generally tends to have some of those options as well. So I'm also a big fan of startups engaging in that way to get introductions from brand and for brands to have a chance to shape their product roadmap before it comes to a full final product.

Yelena Shkolnik: This was an exceptional conversation. Thank you so much for doing this.

Jess Schinazi: Thank you so much for having me. I really appreciate it. It's been a great conversation.

Jason Felger: Awesome. Thanks Jess.

Speaker 1: Thank you so much for listening to this month's episode of The Jump Off Point, an original podcast by Jump Capital. If you have an idea for the show or know of someone who would make a great guest, please contact podcast @ jumpcap. com.


The world of eCommerce has changed, and Jessica Schinazi is here to help us dig into the future of it. Jessica is the SVP of business development and transformation for Dyson, who previously led the charge in getting luxury beauty brands to sell on Amazon. There is no denying how COVID was a digital accelerator for most brands. On this episode she shares how eCommerce brands have evolved and shared strategies behind maintaining customers in a world where the rules have changed quite a bit.

Today's Host

Guest Thumbnail

Jason Felger

|Partner, Head of Platform

Today's Guests

Guest Thumbnail

Jessica Schinazi

|SVP, Business Development and Transformation at Dyson