Sylvain Perrier: All right, ladies and gentlemen. Welcome to the Mercatus Podcast Digital Grocer live here from the floor at Grocery Shop 2019 in beautiful Las Vegas. I don’t know what’s going on with Las Vegas. It is damn hot. I saw three people burst into flames on the sidewalk, so it’s kind of crazy.
Sylvain Perrier: This is your host, Sylvain Perrier, president and CEO of Mercatus Technologies. Today I’m flying solo. Mark Fairhurst is absent, which I’m not surprised. It is Las Vegas. I’m sure he’s caught up somewhere in a hotel room.
Sylvain Perrier: In any case, walking the trade show floor today, I am bumping into CPGs, retailers, and it’s kind of interesting to see and their eyes are kind of glazing over and I’m not sure if it’s because it’s the day after being in Las Vegas, but when I started asking them questions, it seems there’s a bit of information overload, and more so, I think they’re trying to approach their businesses a little bit more strategically when it comes to commerce, but more so they’re asking questions, “What should I focus on? How should I be strategic? Where should I invest my dollars? Who should I partner with?”
Sylvain Perrier: And you know, funny enough, my understanding is these questions are asked more often than anything. So we’ve decided to bring an expert into the podcast today. She’s an amazing woman, tremendously accomplished from what I’m told. She’s the CEO of FitForCommerce and her name is Bernardine Wu. And most people don’t know this. She has an extensive finance background, technology and commerce, and she’s experienced and rooted from the world of Wall Street. And she has tremendous amount of success in helping people really crack that e-commerce knot. It doesn’t matter who it is, retailer, brand, and so on. Bernardine, thank you so much for joining our little podcast.
Bernardine Wu: I’m excited to be here, especially it being Vegas and it being the place to be.
Sylvain Perrier: Cool. Awesome. So I want to understand from you. You’re founder and CEO. Tell me how did you come up with this great idea, FitForCommerce?
Bernardine Wu: So it’s funny you ask because I get this asked a lot. So we’re in our 11th year. I came from a lot of other industries and ran a company within the, call it digital commerce space. And what I found 11 years ago was that there was a lot of confusion. There was a lot of energy being put obviously into online shopping. It’s clearly a trend that we’re still in the midst of our consumers, us as shoppers are just getting more and more digital and connected and shopping in different ways. But we just noticed that retail, and I’m using retail as sort of generally to include brands, retailers, wholesalers, anybody that wants to sell anything online really didn’t have the necessarily vision, talent, capabilities in order to win in that space. And so we created a firm in order to help retailers with that journey.
Bernardine Wu: Sometimes I joke, “We’re the help essentially.” And what we’ve pulled together is this team of folks who have been there, done that, have this sort of like glory of victory and the agony of defeat, have run digital businesses, omnichannel businesses, retailers. And we basically help our clients who are brands and retailers figure out how to accelerate growth. And sometimes that’s zero to 60 miles an hour. Sometimes it’s brands and retailers that are already doing hundreds of millions or billions online and they also need to get to the next level. But, we like to think that they’re focused day to day on their sort of day job, or sometimes evening and weekend jobs, and we’re there to help with extra help or extra expertise. Then that’s kind of what we do.
Sylvain Perrier: That’s amazing. I can imagine being a fellow CEO. Much like the rest of us, you have this massive collection of war stories, of things that just happen, whether you’re on a new project or it’s an old project. Can you share with us maybe one of those stories of how you helped one customer be super successful?
Bernardine Wu: Well, I think every project has sort of a uniqueness to it, but then there also are common themes. One of the things that we honed in on pretty quickly, you raised as sort of an entrepreneur and a CEO as well, that this notion of ownership and investing every dollar wisely is so important. It’s probably what you and I go to bed thinking about and what we wake up thinking about and what we stress about in the shower and on the road, et cetera. It sounds simple, but this investment mindset that we take, we often see that it isn’t really done either in a disciplined way or in a broad way at a company.
Bernardine Wu: One of the best values I think we bring is sort of a disciplined approach to what we call digital diligence. And the notion is just sort of do your homework before you make any kind of a decision and think about that decision like an investment, thinking about your strategy, where to spend your money, what kind of talent to hire, what systems and technologies to leverage. Think like an owner. Think like an investor.
Bernardine Wu: Yeah, we’ve got some more stories about some that haven’t happened in the best of ways. I mean, one of my favorites is with a major intimates apparel brand. We did this project and it was like a big project and then we kept honing in on specific areas and it became sort of a, all right, what are some very specific things we can do with the website or the ecommerce business and stack rank the prioritization of them. Because when you’ve got spaghetti code or when you’ve got legacy systems, yeah, you may have 300 people in your ecomm or IT group working on this, but you might only be able to do three things. And so it literally mattered what was number two versus number three and number four. In the first 60 days after we concluded the project and made the recommendations, they changed three things and they made $60 million.
Sylvain Perrier: That’s amazing.
Bernardine Wu: In that three months.
Sylvain Perrier: That’s amazing. Congratulations.
Bernardine Wu: Unfortunately I didn’t do a rev share arrangement.
Sylvain Perrier: Oh my. I hate when that happens.
Bernardine Wu: Right?
Sylvain Perrier: Right. You’ve been around for 11 years. Are you seeing reoccurring themes across those 11 years when working with so many different customers? Is it more of the same?
Bernardine Wu: I think that there’s always a theme around accelerating growth and having the right ingredients. You and I are sitting here at this grocery shop conference and there’s a lot of food themes. So keying off of that, the notion of having the right ingredients but having the right tools and having the right chef or cooking staff. I feel like in the industry there’s like this cycle of brands and retailers have to keep reinventing themselves and therefore they need the innovation and they need the partnership of great technology and service providers and talent and so on also.
Bernardine Wu: I look around this floor for example, and I see a lot of new exhibitors. And we track all the technologies and innovations in the industry. And that’s good. That’s good for our industry. It’s good for there to be some that kind of do something flameout and then reinvent themselves. It’s great to have new entrance into the mix. And then it’s the job of the brands and the retailers to make sure that they’re staying up-to-date on innovation, on best practices, on things that are table stakes. And we always say that today’s best practices become tomorrow’s table table stakes and today’s innovation becomes tomorrow’s best practices and that cycle just keeps going faster and faster and faster.
Sylvain Perrier: That’s interesting. I want to ask you a couple of questions, off topic maybe. Do you feel that the innovation cycle, and we’re talking about this in a previous episode, innovation cycle in this vertical is roughly two years?
Bernardine Wu: Oh, that’s a tough one because obviously it’s a big it depends. I think that there’s some innovation that is two to three years. I think any system that you buy, you shouldn’t be doing your TCO analysis on anything more than three years. And that includes the big puzzle pieces, right? Some of your big systems like ecommerce platforms and order management systems and so on. I think that the industry needs to get shorter in terms of testing and trying innovation.
Bernardine Wu: We actually run something called the Innovation Office. It’s a service that curates innovation for some of our clients. But the reason why I raise it is because companies have to figure out how to curate first, test, onboard, fail 80% of the time, and then off board that experiment and learn from it. Whether that’s something that they learned from and they, whatever, choose a different solution or they build something in-house or they say, “Op, we learned that, wasn’t right for us, and I don’t know that we’re really ready for that.” The more innovative companies that you hear about, they are experimenting over and over and they’re failing, and they’re … We often recommend that people put 5% of their budget towards failure.
Sylvain Perrier: Wow.
Bernardine Wu: And of course it could vary, right?
Sylvain Perrier: Right, right.
Bernardine Wu: But the notion of fail fast has to be in play and it’s not just vogue. It’s got to be a part of your M.O. And if it’s not part of your culture and your M.O, then that’s got to change or that’s got to start at the top.
Sylvain Perrier: Yeah. And I think DNA is just, that whole failure is not part of our DNA as human beings. Right? We just feel bad, blah, blah, blah. Those things.
Bernardine Wu: Right.
Sylvain Perrier: Do you see, is there like this mental block from certain retailers that have invested so heavily in the brick and mortar space to really do what you’re suggesting on the ecommerce side, which is get in there, try, experiment, fail, fail fast, and then learn?
Bernardine Wu: I definitely think it’s a cultural thing. I think it’s a heritage thing. But I think right now in the year 2019 those retailers are already suffering. They’re already behind. They won’t be here for very long. Their boards are firing their …
Sylvain Perrier: CEOs.
Bernardine Wu: Themselves or their CEOs. So it’s almost like we’re on the downward curve of that. I think that the losers are already losing and on their way out. So to me it seems kind of obvious what a company needs to do. The question is just, can they get out of their own way?
Sylvain Perrier: Right.
Bernardine Wu: If I had a dollar for every time a digital executive said, “If we could only just get out of our own way, I’d be rich.”
Sylvain Perrier: You wouldn’t need a rev share.
Bernardine Wu: I wouldn’t need a rev share.
Sylvain Perrier: A rev share at this point, right?
Bernardine Wu: Yeah.
Sylvain Perrier: So when you look at your crystal ball, because you’re more than anyone-
Bernardine Wu: How did you know I have one?
Sylvain Perrier: I’m assuming. So when you look into your crystal ball, what gets you like, what are you seeing out there in the future for the next 18 months? Because we, I would say in this space it’s been about last mile for the last 12 to 14 months. It’s now teetering with talking about robotics in the back office, a lot of these grocery retailers. What’s that next big thing you’re seeing?
Bernardine Wu: Listen for both grocers, as well as non grocers, supply chain and operations is always going to be one of the largest expenses. So from a transformation perspective, there’s always going to be a focus on there. But I’ll answer your question in sort of the soapbox that I’ve been on, which is data.
Sylvain Perrier: Mm-hmm (affirmative), yeah.
Bernardine Wu: And you know what? It’s easy to say data, data, data. Right? Data’s the new black. But I really think that if a company was going to focus on one thing, it would be data. That means mapping out your entire operations from end to end, from farm to table, from whatever, dock to dish, from idea to doorstep, and really understanding all the steps along the way that one needs to do in order to serve the customer. It’s worth mapping out the customer journey or journeys, right? It’s worth mapping out everything. I’m a big fan of the war room, right? All the stakeholders come in and they map out the entire, whatever it is, process or operations and so on. And then finding those places where data’s critical, where it’s coming from and where it needs to go to and completely rethinking it.
Bernardine Wu: One of our number one recommendations is that every company should have some kind of data czar, someone who’s chief data officer, a data czar whose job it is to think at an enterprise level what’s needed and how to effectively get it. And then all the technologies and tools and talent that’s needed can come out of that. So I don’t know. I don’t know if data is sexy or not sexy. I mean there’s a lot of talk obviously about AI and machine learning and predictive analytics and so on, but at the heart of all of that is data.
Sylvain Perrier: Right. Yeah, I appreciate your answer and I 100% agree. I think that if I was to put on a pair of retailer shoes, I think that the notion or the technology becomes very confusing. That’s one side of the equation. And I think the other side, I’m not sure if they know what questions to ask of the data, and what are we really trying to achieve? Am I trying to understand what to put on sale on a weekly basis or how to increase the lifetime value of our customers? I think they don’t know yet what questions to ask-
Bernardine Wu: But sometimes that’s because they’re thinking like the technology would drive them to that answer, when really it’s the other way around. They should be thinking, “What is the result that I want? What do I need to do with sales,” or, “What do I need to … How do I need to serve that customer?” And back to that customer journey mapping, let’s say, or knowing personas or knowing what you need to do. It should be driving it sort of from the back.
Bernardine Wu: And again, I know as I say this, it kind of sounds like motherhood and apple pie, but we just, we don’t see it done enough. I mean, I was in a session. I do lots of hand polls and clearly people have data.
Sylvain Perrier: Oh absolutely.
Bernardine Wu: We have a ton of data. Like it used to be, didn’t have data. Right now we have a ton of data. The question is what do I do with it? How do I turn it into insights, into action? And one of my other favorite thing, I’m full of them.
Sylvain Perrier: Please.
Bernardine Wu: Is data’s like a rock star. If mismanaged, it will trash the place.
Sylvain Perrier: Absolutely. Absolutely. And hopefully it’ll burn out before it fades away.
Bernardine Wu: Exactly.
Sylvain Perrier: Right?
Bernardine Wu: Right.
Sylvain Perrier: So I’m going to give you a scenario and I would love to hear how you would help this customer.
Bernardine Wu: Uh-oh, okay.
Sylvain Perrier: So Midwest retailer, 300 locations, a mix of soft lines and hard lines and some food, launches a new website. And there’s an argument between the marketing team, the digital team and so on what to put on the homepage. They have no clue. They don’t know shit. It’s about optimizing revenue and sales. How would you walk into that situation and really guide this client to success?
Bernardine Wu: Well, you gave away the first thing, which is sometimes getting outside help is helpful, whether that’s like as a referee or to build alignment or to build a process for getting to a decision. So of course I’m a fan of the first step. But secondly, again, we find that when we start with the customer and what the customer needs first, then the answers actually become pretty obvious. And so there can be some differences in the approach and how we would get to the end. But I think that there is again, data and there’s clear sort of indicators of what works, so in this case on the homepage. And so they should already have analytics and data. We’ve done lab based work where you brought people in and eye tracking and card sorting and all sorts of lab based testing.
Bernardine Wu: And again, the data, if you get multiple tests or multiple inputs, it will point in the same direction. Water flows will eventually flow in the direction that it should flow. I mean that’s sort of the approach we take. And then test, right? Digital is one of the most easily tested platforms. Why don’t we test it? We should be testing the hell out of every little nook and cranny, color, shape, message, et cetera. So it’s almost like why bother let these two heads of the departments duke it out when really like put the data in the arena and let it tell you where to go.
Sylvain Perrier: And it’s interesting. There seems to be a lot of resistance amongst retailers to be iterative and to kind of pause and learn from that latest iteration. I mean, they’re continuously seeking perfection.
Bernardine Wu: But think about where they’re coming from. Right? Like in other spaces they used to be catalogers.
Sylvain Perrier: Right.
Bernardine Wu: Right? So they’d put a book out and you only had X number of months till the next book. You put a store out and you’ve spent all this time designing the story. You’ve done the best that you can. And to move stuff around in a store or certain stores to change certain layouts is hard. So that mentality is there and that is, you’re right, like that’s the biggest chain to break. So that whether it’s the marketer or the operations person or the technology person is to get into that cycle of change in a much faster way. And as you pointed out before, it’s sometimes it’s not technical, sometimes it’s cultural.
Sylvain Perrier: Absolutely. So tell me what keeps you excited about this space? Because I can imagine 11 years, you’re like, what’s that next thing?
Bernardine Wu: I think it’s the cool innovation that’s happening. I mean some of the innovation around voice, around robotics, around, again, plug for data. I think about some of the things that are really sexy, the shopping carts and whether it’s robots in store or robots in the warehouses and autonomous vehicles. And in IoT, that stuff is really exciting. But then I’m just as excited about people changing out their plumbing. And then they’re electrical and the stuff that happens behind the scenes because sometimes that’s what’s limiting them.
Sylvain Perrier: Absolutely. I mean, you got to get the back office right?
Bernardine Wu: Right.
Sylvain Perrier: That is so critical. And we’re seeing right now, I don’t know if you’re seeing this, but in Europe right now, from talking to some European retailers, they’re going through and cycling through all that monolithic type of technology they built and now are migrating to some new innovative platforms. And I would suspect that it’ll be, it’ll take three to four years and then that cycle will eventually come back here to North America, which we’re going to be cycling out [inaudible 00:19:03].
Bernardine Wu: Absolutely.
Sylvain Perrier: So what’s the future for FitForCommerce?
Bernardine Wu: Well, like I said, we’re the help and we’re a good bellwether for the industry. If we’re busy, then it means people are still investing in digital, in technology, in growth. So, as long as we stay busy, then I think the industry is growing. I worry a bit about brick and mortar and retail. Obviously some the omnichannel innovators are going to do better. I think malls are actually going to make a comeback. I think the ones that are innovating and creating entertainment and community and places to gather, I think that there, like there is still something there, but just like we were talking about before, they got to reinvent themselves. So I’m bullish on the industry, but there’s going to be a lot of losers that are just going to have to go away.
Sylvain Perrier: How much of an impact do you think a downturn in the economy may have on some of these kind of innovations?
Bernardine Wu: It’s kind of like 2008. I think that there will be an adjustment. I think people will tighten their wallets. Consumers will as well as companies. And I worry about my stock portfolio and my retirement.
Sylvain Perrier: Tell me about it.
Bernardine Wu: And my house value and the cost of college, but I think it’s … The cycle is sort of necessary and it weeds out the weak and the ones who didn’t adjust fast enough. And so that’s not a bad thing for the consumer in the long term.
Sylvain Perrier: That’s great. Thank you so much for joining our show. It’s been a pleasure having you on. How do people get ahold of you?
Bernardine Wu: Thanks so much for having me. They can visit the FitForCommerce website or they can email us at [email protected]
Sylvain Perrier: Awesome. Thank you. Ladies and gentlemen, thank you for listening in and please don’t forget to download our next episode. Thank you.
Bernardine Wu: Thanks.