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The FODcast
In the FODcast (The Future of #DigitalCommerce) we explore the real career stories of the people who have made it to the very top of the sector and those who are working at the cutting edge of innovation and change right now. Listeners to the podcast gain insight into the journeys industry leaders have taken to be where they are today, the challenges they are facing now and their aims for the future.
The FODcast
Marketplaces, TikTok, and Dad Dancing: Why Not Every Brand Should Follow the Crowd with Rhea Fox
What’s really shaping the future of digital commerce?
According to Rhea Fox, Marketing Director of Gift Experiences at Moonpig Group, the biggest shift isn’t just technology - it’s how distribution and marketplaces are rewriting the rules of retail.
In this FODcast episode, Rhea draws on senior roles at eBay, Ted Baker, and Monsoon Accessorize to explore how brands are adapting to an increasingly fragmented ecosystem.
From the rise of retailers like Next and John Lewis as marketplace hubs, to the blurred lines between owned and paid channels, she explains why customer-centricity is making a comeback after years of acquisition obsession.
We dive into why not every brand belongs on TikTok, how marketing effectiveness tools are being underused despite huge potential, and where AI is already delivering tangible value - from SEO and creative optimisation to game-changing innovations in reducing apparel returns.
If you’re in marketing, ecommerce, or digital strategy, this is a practical, insightful conversation on navigating complexity while staying focused on what matters most: understanding your customer.
Simply Commerce is the leading supplier of talent into digital commerce across technology, digital marketing, product, sales, and leadership.
Find our more about our approach and our services within digital commerce recruitment here: https://simply-commerce.co.uk/
Hello and welcome to season seven of the podcast. The podcast focused on the future of digital commerce hosted by Simply Commerce. Season seven promises to continue to bring you some of the industry's brightest minds across the globe as we unpick the sector and where it's heading. From war stories to strategy and technology deep dives to future trends, we cover it all as we continue our journey to have one of the most popular podcasts in commerce. Before we start, if you enjoy our content, please do hit the subscribe button on whatever platform you're listening on, like and share on socials. Hello, and welcome back to the podcast, The Future of All Things Digital Commerce. Today I'm very pleased to welcome Rhea Fox as we break down how the best brands are evolving digitally. Welcome, Rhea.
SPEAKER_01:Hey James, how's it going?
SPEAKER_00:All good, thank you. It's great to have you here today. Looking forward to this one.
SPEAKER_01:Thanks for the invitation.
SPEAKER_00:So for those that don't know, uh Rhea's recently joined Moonpig Group as marketing director of experiences. Before this, she's had spells at Ted Baker, Monsoon Accessorise, and Paper Chase, to name a few. Rhea's certainly well versed in retail, and I'm looking forward to unpicking her knowledge on today's show. Before we start though, Rhea, do you want to give the audience a little bit more about your career to date?
SPEAKER_01:Yeah, sure, thank you. So I have got a really unusual career story. I spent 15 years in insight on a mix of kind of uh integrated agency and client side roles culminating in my time at um eBay where I was European Insight Director. And that's really where I started pivoting into broader marketing and trading roles. So for the last sort of seven or eight years, I've been doing marketing director or um digital director PL owner roles. Um I really like doing the two. So um, so yeah, really that that mix for me of both the marketing side hands-on across all the channels, and then um broader kind of digidirector roles.
SPEAKER_00:I I love it when you start off saying my background's been really interesting.
SPEAKER_01:It it it weirds a lot of people out, right? Because you know, it they it's it's not it's not usual, and um I think that's a real blessing. Like, you know, I definitely considers myself to be a Swiss Army knife in terms of the the digital disciplines, but it's it's not for everyone.
SPEAKER_00:No, it's not, but I think you bring a unique insight to the uh to the table, right? When you have that that broad and varied background. Uh I think a lot of a lot of people go through a specific uh career path. Um and I mean that's that's great as well, right? But when you've got a slightly different and a broader background and skill set, it's um it's unique.
SPEAKER_01:It is unique. And actually, I mean, I my personal view, and I would say this, wouldn't I, is you know, when you've got super high performers in your team who are because we're all T-shaped to some extent, right? We've all got a we've all got a spike, but it's really necessary to make sure that where you've got people who really want to do digidirector roles or becomes PL roles or even marketing director roles, you know, in the future, you've got to get them out of those those those deep kind of specialisms because um sooner or later you're gonna have to use a much broader toolkit. So um the sooner the better, really, in terms of building breadth.
SPEAKER_00:Nice. Um, well, I'm like I said, I'm looking forward to picking your knowledge here. I'm sure there's gonna be loads of insights that we can share. Um, let's jump straight in and uh let's start with uh the biggest shift that you've seen in how brands go to market digitally uh over the last five years.
SPEAKER_01:I think for me, the last five years has been really a distribution story um and kind of the proliferation really of channels available to you from a distribution. So it you know, I think about the the old world of commerce. First there were shops, and then there were sites, and then there was Omni, and now there's marketplaces. And actually, um, with that, has that's kind of moved to marketplaces, not just the pure marketplaces like Amazon and eBay and Timu, but also kind of what I consider to be, you know, marketplaces in their own right, which have got their own real gravitational pull. So, you know, John Lewis Partnership next, you know, enormously um compelling businesses growing their overall sales and customer base through acquiring new partners either on a pure partnership basis or wholesale basis. So really kind of going great guns. And I think with that has grown an enormous amount of opportunity for brands, but also masses of complexity, right? Because suddenly you're not just managing your stores PL and your site PL and your OmniPL, you're also then thinking about actually how do I make my stock and my my margins work and my distribution and my people and my marketing spend work when I've suddenly got all these other channels that also really need managing and feeding. So I think that's been the really interesting one for me. I find it really fascinating. And but it's that could that distribution side, you know, it if it's not managed well, can become a real headache and actually a real drag on kind of stock management and profit and all that kind of good stuff as well. So um, so yeah, distribution I think is is really key. And of course, with that comes um TikTok shop. So again, you know, the media channels themselves or what used to be media channels now becoming you know increasingly shoppable um and potentially you know your frenemy in terms of both your uh route to market but also your uh your place where you're generating kind of eyeballs. So so yeah, just absolutely fascinating. Distribution is is the big one, I think, for me.
SPEAKER_00:Yeah, so if you look at marketplaces in particular, you make a good point there. It's not just a traditional marketplace, like you might first assume like eBay as an example. And we've seen a lot of established retailers build marketplaces like John Lewis and next, as you just mentioned. Um if we if we talk about that in a little bit more detail, what in your opinion, what brands do you think should go down that marketplace route? At what like I guess at what point would a brand be uh would qualify in terms of criteria to say actually let's create a marketplace off the back of our platform because it's not for everybody?
SPEAKER_01:It's really not, and a lot of a lot of brands have tried to do it. You know, Monsoon, actually, where I worked, has its own small but thriving marketplace of um of kind of partnership brands, and actually, in that instance, is a really good example that I was a monsoon accessories um interim, quite sick leaves digital director, and the marketplace there is a really great example of a brilliant marketplace in that it offers the monsoon customer something really curated, really tightly curated brands that will appeal to that shopper. Um, you know, it's small but it's additive, it has a defined purpose, you know, it's there to drive engagement on, of course, sales from the base. But um, I think that sort of micro marketplace is also really fascinating, you know, because in that instance when you're building a marketplace of partnership brands, I mean Reese is another example actually, um, whilst they're not a marketplace, you know, they've grown their adjacent partners list enormously. So, you know, page jeans and some of the cooler sunglasses brands. So those brands are kind of there to enhance the overall um appeal of the you know the parent brand. So um I think when it's done well at that kind of small scale, it can be enormously compelling and give customers a reason to go, you know, I'm I'm a mad reach shopper myself, but that additional offering that they have there, while it's not pure marketplace, you know, gives me a reason to go look at Reese.com for the curation and the new product rather than go straight to John Lewis for my Reese stuff, you know. So um I think that can work really well. So I think when a brand is doing it to kind of drive um the customer experience and drive eyeballs and drive interest and give itself new things to talk about in a really authentic way, that's that's a really great way to use um the marketplace functionality. Um yeah.
SPEAKER_00:Okay, I mean I'm really interested in in probing a bit more around, say, Nectar as an example, then, because Necktia is like widely considered as a very successful uh retail brand, as a very successful and efficient e-commerce offering. Um they obviously decided to go down the marketplace route uh a few years ago now, which is also, to my saying, very successful. However, if I'm looking at it from my personal perspective, I see it as a big clash. All of the the majority of the brands that next sells on its marketplace is in direct competition to its to its own um clothing and and accessories. Um so slightly different to what you've just mentioned there with Reese, where it's there to enhance Reese with the sunglasses or what have you. So what I guess what's your as a as a someone that's far more knowledgeable in this space than I am, what what's your sort of thoughts around that and maybe why they went down that route?
SPEAKER_01:Yeah, absolutely. No, I'm um I'm a next I'm next shareholder, I think it's an amazingly well-run business, and you know, and results speak for themselves. Naturally, when you're a nerd and you spend too much time in retail digging around in annual reports and things, you know, it is it's really clear that when you look at their growth, you know, most of it is being, or a lot of it is being really powered by these third-party brands, this marketplace. And so I guess um a lot of people, particularly when they probably don't do as much shopping as me, will go, oh next, like I never go there because I don't like that brand, or it's not for me. I candidly, I only started shopping on Next again a couple of years ago because of um uh because of the partnership brand. And I suddenly realized that actually, if I wanted a department store online, I didn't it didn't have to be John Lewis, it could be Next. And so now Next is you know, it's gone from being a brand that I probably didn't shop in in 15 years to something that's I'm probably using once a month or at least once every couple of months for a kind of a big basket of stuff and brands, and actually as a result, it's done entirely what um these things do when the flywheel's working, which is now I've started considering and buying the odd next product, which I never would have done before. So I think they're growing their footprint and their um their overall kind of appeal and ability to appeal above and beyond comes the next brand. But the other thing that they're doing is I I kind of think of this as like a snowball effect. Once you've sort of built that center of gravity, you can bypass a lot of Google because you're not having to pay so much in terms of your acquisition cost, you've got increased repeat rate and customer lifetime value and app usage and all that good stuff. So, you know, you are generating your own kind of gravitational pull, and and now actually going to the next stage where they've got so much generational pull and eyeballs, they can then sell advertising space to the advertisers on their platform. So, you know, I guess in the same way that Amazon overtook Google some years ago as a first shopping destination. My feeling is next, and you know, to some extent, John Lewis, through what they're doing and the scale they're building, MS the same, right? That that actually, um, if you can do it, and it is a monumental effort, being Q are also trying, um, you know, it it has many rewards.
SPEAKER_00:Yeah, I I guess I didn't really think about it in that way, but actually, like you said, to to get someone back into the website by selling Adidas, for example, um, to it makes makes complete sense and it actually opens up a whole new demographic of customer as well. Um so okay, interesting. I didn't realize you are a shareholder of Next as well then.
SPEAKER_01:Oh, dabbling around, you know, dabbling around. Um, you know, bought some shares some time ago because it just just phenomenal business, just uh, you know, just uh a really well-run, brilliant business. There's a few bits I'd like to change on the UX if I was running it. Um, but you know, it's it's it's just it's just great. And for someone that buys too much, you know, if I'm buying all Saints and Reese, it's quite unusual now that I'll head to their size first. You know, it's it's gonna be John Lewis or next because it comes next day or it's free, or in the case of John Lewis, I can have scheduled delivery. So there's a whole heap of benefits that you get from shopping on those places, they're fearsome at returns. That actually means I'm kind of bypassing the original brands now.
SPEAKER_00:Self-confessed shopaholic. Uh yeah, it's not it's great to it's great to to hear about the the passion behind a brand like Next as well. That I say that's for for long it's been considered one of the leading retail brands in the UK. And I think um, if I remember correctly, it had a bit of a blip a few years ago, but it's certainly come out the other side now, and again, it's widely considered as uh as a leader. Um I I I shop in Next uh occasionally, and one thing I do really like about Next is how they promote all of their returns in store, uh, brings the customer back into store. Uh, and also the seamless approach it has. And I'll tell you now, Zara can definitely take a leaf out of their books because I can go into Next and I can just do it all do it all myself on a computer, put it in the box, and it's all done and dusted, rather than Zara having to queue in the local Redding one for about 45 minutes just to process their return. But uh hey, we're not talking about that right now. So um, but you also touched upon TikTok, uh and I think it's important to talk about that as well because that is a channel that has grown monumentally in the last couple of years. Uh, I think it's safe to say now that for many brands, if you're not on TikTok, you'd you are missing out on sales. I'd love to talk to you about how businesses can adopt TikTok into their into their kind of strategy and maybe who's doing this really well, in your opinion.
SPEAKER_01:TikTok. So I mean, look, it's super well established now. Um do I think TikTok have nailed the investment case in the same way that some of the more established media partners are have? Probably no. Can TikTok tell me with the same degree of accuracy or some degree of accuracy in the same way that Meta can, the value of investing on their platform? No. Do I think every brand should be on TikTok? No. Um, you know, I think there's always a risk, isn't there? I call this kind of dad dancing syndrome, which is, you know, uncool brands think that if they behave in the way that cool brands do, they'll get the same level of growth.
SPEAKER_00:Oh, that's really dad dancing syndrome. Love it.
SPEAKER_01:I mean, TikTok's a great, a great and fantastic place to grow about a brand that's going gangbusters with a youth audience. TikTok is a great place to reach um newer audiences in places that your existing brand may not have reached them in some instances. And actually, you know, look, I'm a believer. So, so so my brands, Red Less Days and um and uh buyer gift, we we've we've experimented with TikTok. On the face of it, you look like it's doing nothing. But actually, through the lens of our MMM, our econometry model, I really can see the incremental benefit of it. So, so I'm a believer, but but not indiscriminately. And of course, you know, a pound's a pound, so you you you you've got to you've got to have a it's gotta have a purpose and a place, TikTok. Um, and it it also has, you know, it's not without risk. Like my last role at Ted, I run a creative studio, and you know, the norms of the creative that's needed to succeed on the different platforms is different, right? So so this isn't just about taking the creative you've got and turning into something that works for TikTok and something that works for Meta and something that works for YouTube, it really there's a lot of kind of content um curation and editing that that needs people, time, money to get right. So um I I believe in TikTok, but you've got to be deliberate about it. Um, it's not something you can tinker around with. And one of the risks for TikTok is you know, it's if you're, for example, um a big retailer and you sell brands, there's a big risk on there because if you're doing TikTok shop and you're promoting the brand, actually, your MS and you're promoting XYZ brand, really it's XYZ brand that step that stands out, really, you know, um, and and there's a big risk that you're just sending sales into your branded product um to the parent. So yeah, it's uh it just needs thinking about it, and it and it needs dedicated leadership and thinking and and creative resource, I would say.
SPEAKER_00:Yeah, so I mean, arguably it might be better suited for for D2C brands um than retailers that sell uh other branded products, even if they sell their own products as well.
SPEAKER_01:It can depend. I think it really just does depend. I think you've got to be deliberate about it. And I know we've all been there, you know, you get a call from someone on the C-suite to say, what are we doing about X, new technology or channel? I've heard it's the best thing since sliced bread, and you just again it's just just needs to be thought about and properly incorporated into the marketing distribution plan.
SPEAKER_00:I think that leads quite nicely on to the next the next uh question, then which is talking about sort of your channel strategy. Uh and I guess it's very easy to just expand to say, look, we want to have a presence across all social media, across all the different channels, they've all got their place, and that surely the more we have, the more revenue we're gonna make. But actually, that's almost definitely not gonna be the case, and you can either spread yourself too thin or you can invest money in wrong areas and all that kind of stuff. I'm sure you've seen it all. So, where do you think brands go wrong when expanding their channel strategy?
SPEAKER_01:Yeah, it's a really interesting one, isn't it? And I think you know, a lot of the language that we talk about in terms of experimentation in digital and in e-comm is potentially a bit dated, right? So, you know, if you think 15 years ago, most digital media was pretty cheap. Um experimentation, the marketplace isn't as crowded as it is now in terms of e-comm. Experimentation was generally low risk and cheap, or more so than it is now. And actually, while some of it may still be low risk, it's not low cost. We all know about the high cost of digital media and digital media inflation, you know, really significant. We have to have these conversations all the time with our CFOs about actually why you can't get as much reach for the same amount of money as you spent, you know, last year and it's 20% more. So um, you know, this is, I guess, just how you manage things from a budget point of view. So it's not, it's not kind of not necessarily cheap to experiment in new channels. And sometimes one of the risks is you can sort of experiment at too shallow a level. So, for example, you put too little into TikTok, you get no traction, and you kind of move on quickly. So you've not really given it you know enough depth. So I think for me, um, experimentation is obviously part of it, but uh, I've spoken about this before. What really weirds me out is you know, in a lot of retail businesses or digital um e-com businesses, like your digital media budget is probably your single biggest cost line. Maybe it might be your operation centre, but but generally it's going to be your biggest cost line, yeah. And um, in any other aspect of business, if somebody said, Let's try and squeeze 5% of extra efficiency out of that 10 million, like anyone would buy your hand off. They'd be like, Yeah, of course we would do that. Why we why wouldn't we try and get you know 5% or 10% more out of our budget? And yet, still a lot of businesses don't take marketing effectiveness and efficiency as seriously as they should do. Um, you know, I've seen over the last sort of seven years really MMM adoption has finally sort of reached the mainstream, but it's still not blanket. There's big, big retailers spending big, big budgets out there, and they still haven't got econometric modelling. Um, so I hope it's coming, and I've seen like the discourse out in the market really change to really be about kind of effectiveness and incrementality and kind of bringing the marketing and finance and you know digisciplines really a lot closer together. But I think there's still a lot of room there. So to answer your point, I mean, I think being deliberate about experimentation, but getting really serious about marketing effectiveness as well is is really key. And one of the things I'm really looking forward to is when the cost of some of these tools, and some of the tools that are out there look amazing, I have to say, um, as they start to come down and become more accessible, um, I think all of like the digital marketing community and e-com will just get more literate and better at buying media and squeezing efficiency out of um out of the spend. The trouble is when you're moving at pace, we all know this, like the tendency is just to use your platform metrics and operate on last click and do all these things which actually really damage your brand in the long term. So, yeah, more widespread adoption of kind of MMM would be my uh would be my my hope, I guess, for the uh for the industry.
SPEAKER_00:It's a tough form of experimentation, isn't it? Because there's a very fine line between spending enough to experiment properly and spending too much in in channels which aren't going to give you any return on investment. And then how frequently should we do this? How are like these channels vary in success levels all of the time? Uh how once if it's failed, when should you retry that channel again, if ever? Like there's so many questions um that obviously come into that kind of experimentation part, which makes it which makes it tough. So, I mean, certainly, please, it's not me making that call because I feel like I would FOMO into all the different areas because that's just just who I am, and you know, we must be missing X amount of thousands from this channel, and yeah, it's it's it's a it's a tough gig.
SPEAKER_01:It is a tough gig, but um, this is where for me it always starts with the customer. So we have we have two brands in our portfolio um in gift experiences. One buyer gift, which is much younger, more family focused, uh uh and more potentially more more value-seeking, like a real fun-loving group, and then we have an audience of kind of uh 50 to 60, ABC one, slightly more kind of um more aspirant group, right? So they're two things, and actually, when you know that, when you really know it as a business and you feel it, kind of everything just gets easier. You the creative writes itself, the product robot writes itself, when new products come to the table, we can actually just really quickly say it's this one, this one, or it's both, and it it really helps with media as well. So I'm you know always thinking about where to lean. And actually, when you think about that dynamic, well, I'm probably gonna go more TikTok here and you know, potentially a bit more Reddit or um maybe some YouTube over here. So it just I think if you really know your customer, it it helps write the experimentation roadmap and start that feeling that you kind of have to be everywhere with all of your brands because it's yeah, to your point, you you could end up trying loads of things, but it's not necessarily like relevant experimentation.
SPEAKER_00:Yeah, I mean I'm just thinking out loud here, but thinking of like the red letter brand and the moonpick brand. Uh I personally think TikTok could be a great channel because you can really dial into that emotional connection of sending or receiving a present or an experience, and like I feel I feel like that's a would be a great channel. I don't know how it does perform for you, but uh yeah, I think yeah, really well.
SPEAKER_01:And actually, we've we're bringing the the so um buy gift read less days was acquired by by Moonpik Group uh a couple of years ago. We've actually moved into co-branding now, so we'll be buy gift by Moonpick, and that opens up a whole heap of um of opportunities. There's great synergy already between those two brands. There's a huge crossover in terms of the customer base, um, in terms of you know both Moonpig users using BioGift and vice versa. So, so yeah, opens up enormous opportunities and Moonpick Cards, you know, the parent group is extremely good at social media, so yeah, there's loads for us to learn in our division about how we kind of um kind of deepen that connection, but also kind of work together to um to help customers get more exposed.
SPEAKER_00:Okay. Um but you said uh experimentation is probably the biggest area where you feel as though um uh brands go wrong when it comes to their channel strategy. If you could give some if you could give a uh a business one tip around experimenting and ensuring they they do it as well as possible, kind of what would it be, Ria?
SPEAKER_01:Just one tip. I mean, I guess um I'll give two. Sorry, James. I'll keep it over the tip.
SPEAKER_00:That's fine. The more the better.
SPEAKER_01:I guess the first one is know why you're doing it based on your customer. So again, if you know your customer, that will help kind of frame the experimentation. And then the second one has always been for me around to your point around making sure you've got enough license to do it and do it well. Like, you've got to set expectation with your stakeholders, you've got to know what you're looking for, have a roadmap of tech, like have lead and lag indicators and outcomes, and really hold your feet to the fire about it because sometimes it's too easy just to sack something off because your top line metric isn't moving, you know. Well, we did this and we didn't see the sales, so it didn't do anything. But actually, you know, really commit to it and wait three months, and your MMM may tell you something, or probably will that you know that channel might have reached a completely new cohort of customers that you've never had before, or um, you know, it's doing something else in terms of Halo benefiting the other channels. So so I think, yeah, if you if you're gonna do it, and when you do do it, you've just got to do it for a reason and then and then commit to it and make sure that you're kind of measuring it through the you know, lead and lag, what's gong green, what's not, what do we think is gonna happen? Um that is that's always my approach to experimentation in new channels.
SPEAKER_00:Yeah, and is there is there a it's probably gonna vary quite a lot based on the audience, the product, and all that kind of stuff. But is there like a a time frame that you would say you would need to to consider to make it a success? I.e. it needs to be running for at least six weeks or three months.
SPEAKER_01:Oh, I think it really depends, and I think it depends on your like what's your longest period of strategic measurement or reflection, I would say. So let's say you do your MMM once every six months, you probably want to make sure that what whatever experimentation you were doing was running, you know, long enough during that six-month window that you can spot it. If you just run it for, you know, four weeks. Well, within any given period in retail, one of those weeks is abnormal for some reason, you know, because it's summer or you had a hot heat wave or you had an outage or you're comping something weird the year before, or I don't know, it could be anything, right? So I always think you've got to have that decent period for normalization across a few different types of trading and commercial environments, haven't you? Just to make sure you've got a decent read. So I do I do think it really depends, but equally, some stuff you just you launch it and you know it's just taken off immediately. And and I think in that instance it's sort of almost the opposite, you don't wait, you see it and you and you push on. Um, so I guess it's always about being flexible around this. And I suppose it's one of the good things about having kind of an interdisciplinary team with lots of different experiences. It's it's brilliant when you bring a team together and they brought it to lots of different retailers and different environments because you know you can share knowledge about what's normal and what they've done in other businesses. You know, I worked in a business that was really skeptical about um SMS, but I was able to say, well, actually, in one of my roles, it was delivering a 10% sales uplift on an attributive basis. Okay, great. So then everyone's a bit more excited about you know SMS. So uh yeah, I think it's it's helpful as well just to have different opinions. One of the things I also like to do, and there's an amazing community, um, a couple of uh digital communities where we all kind of lean on each other to ask what's normal, what have we seen, what are our experiences for um different sort of digital providers and marketing services providers, and that's you know, the community at large, I think it's really helpful in terms of being able to set benchmarks around what's normal, what they've seen, row outs, all that good stuff.
SPEAKER_00:No, that's really cool as well. I like the fact that you've got that community that you can kind of uh sort of share knowledge with and and and braindump ideas and that kind of stuff. I think it's it's certainly helpful both to um experienced professionals, but also those that are building brands and and uh completely new to the space, that arguably that sort of information is invaluable. So uh that's really cool. I mean, yeah, I think it's fair to say then is there is no uh clear time frame, it's a case of being flexible, take into uh consideration all the possible scenarios that can come through and just make sure that you are running it for long enough to get a a normal outcome. Like you said, don't want a spike in in weather that's gonna in increase the amount of sales for paddling pools, for example. That's that's that's abnormal, right? So um all right. So let's talk a bit about um owned channels versus paid channels. Um I mean is there a
SPEAKER_01:It's so difficult now, isn't it? In terms of owned um, in terms of organic owned um channels beyond CRM like you know organic social is really hard to get traction now and you know most times even if you do your viral post it's giving it significant boost right in your paid, aren't you? That's that's sort of how you do it. Um so I do wonder if some of those holy grails have kind of owned organic social, those those kind of days are perhaps gone. Um CRM and all the one-to-one channels, I think, is is really kind of it's my deep passion. Um anyone can acquire a customer, but you really need to be able to monetize them through the life cycle. And um, you know, that's just that's just that's just bread and butter. And I love it. I love CRM. Um we just introduced a new segmentation, um, segmenting our customers by a couple of different variables. It was dead easy, it wasn't kind of a difficult segmentation, and immediately we saw the result of doing it, you know, and rolled it out to all our campaigns because it was you know super simple category and engagement-led segmentation, which you know is it's just working straight off the bat. It's just really it's you know, if you're someone like me and believes in kind of customer insight and stuff, it's nice to it's nice to be proven right and that these things still really matter. So, so so so yeah, I mean, I think more brands are starting funly enough to take CRM a bit more on one-to-one a bit more seriously. We kind of came out of that, in my perception, kind of COVID period where everything digitally went nuts, everybody got very excited, and it was all about kind of acquire at all costs. And actually, as kind of acquisition costs have gone up, customer confidence has gone down, I think more brands are starting to look more seriously again at their own base and loyalty and CX and CRM and all those good things, which is really positive and needed as well, because you know, you're they're your customers, and of course they want to come and shop with you more often. So, so so I think you know, there's definitely more of a focus on CRM. What's the right balance though between owned and owned and and I feel like the lines to some extent are blurring, so again, you know, there's probably very little in the way of genuine organic content that that that goes viral unless it's been um supported with paid media and in social, you know, unless it's had some cash but behind it. Likewise, I guess if you think about kind of first-party data exploitation in terms of PPC and paid social, you know, that is that just continues to grow and it's really kind of a core component to buying media effectively in the in the you know the paid channel. So, you know, again, the line is blurred there. That's your own first-party customer data that actually should be and can be and and would would be kind of massively improving the effectiveness of your um your your your performance media. So I don't know if there's an answer to kind of what the right balance is. The right balance is whatever gets you the most bang for buck from an effectiveness point of view, but I do think what will get you the most bang for buck is where paid and owned is fully in sync.
SPEAKER_00:Okay, I guess it um it probably also depends massively on where this the business is at at current time, i.e., does it need to acquire new customers, or has it got X amount of customers that it can look to uh personally reach out to via one-to-one to um to increase sales and revenue, right? So I guess there's a big uh what if uh sort of question that overlooms that, but it's interesting to hear your hear your thoughts on that. Um I've long said that businesses can do a lot more in terms of CRM and how they engage with their customers. Companies have been collecting date our personal data for so long now, yet we still get sent these crappy generic emails. And it's just like what you you know who I am, you know, where I live, you know, everything about me. But why can you not form that into some kind of personalized campaign? Um and yeah, I mean, we all know that cost of living is high right now, and people are looking for um good deals. Businesses know if a customer shops with them, and actually you should be able to now reach out to that business, to that person, sorry, uh, as a customer of your of your brand with one-to-one marketing to help bring them back into the funnel. Um, I I don't know why that's not that hasn't been happening properly for years now.
SPEAKER_01:Yeah, I think the industry, I honestly think something was lost in that COVID period. I think a lot of brands took their eye off the board on customers, um, forgot who their customers really were. You see it in the bellwether stars, right? You know, for a few years the insight spend looked a bit crummy because I just don't think people were really investing because it again, everyone just there was I think a lot of the industry was just very focused on acquisition. So I'm hoping it turns back around. And it's an interesting one, I think, on some of those founder-led brands. You mentioned kind of where the brands are, you know, you see it, and I I see it a lot, they reach a plateau, which is you know, they've these brands have grown really inspirational founders, they've got you know 10 million followers, they build a brand, be it beauty or sportswear or confectionery, and then suddenly the plateau is reached, and then that founder has to then kind of reach very new audiences. The brand has reached a scale by which it's kind of almost outgrown its founder's ability to attract you know new audiences and grow. And you often see it, don't you, when they're kind of these brands are bought by private equity, they have to do something really different to acquire customers or or grow new categories to mine the new ones because the original concept has clearly got legs, but it's kind of yeah, it needs it needs a really different treatment from the founder speaking like super directly to their fans and buyers.
SPEAKER_00:Yeah, so I guess that's a a journey I'm starting to go on as well with the uh side group of optimal sports group. So uh so yes, um it's certainly an an area that I'm I'm very interested in. Um so yeah, it's it's a tough one, I think, for for brands to get right because there's there's no one size fits all approach, you know what I mean? It's uh every everything's unique to the to that business, to that customer base, uh, and everything else. I certainly think if we look if we're sort of looking at that kind of one-to-one marketing, the rise in technology over the over the last sort of two or three years in particular, but certainly over the last five years, um, has improved so much and it enables businesses to to do a lot more now than it could previously. So for me, there is no real excuse to not do it.
SPEAKER_01:Yeah, and I guess it's um oh I mean, I've talked about this a lot, but the the the the term customer and personalization, I think that if you're coming in like super cold, if you're a CFO or you're not like a very digitally solvy CEO, these sound like sort of soft concepts. They sound like things that you know where you're just sort of doing things to make customers happy. Like um, you would only buy and invest in personalization solutions and you know, something amazing. It's like I was at the Emetria conference earlier in there, like some of the stuff that they're doing with CRM and data is just like absolutely phenomenal, um, agentic stuff. And I think they could be seen as sort of soft, yeah, as I say, soft concepts, like why would you invest in this? And you you have to be promoting you know the real-time hard commercial benefits, of course, because we because we know they're there, right? But um, I think those those types of things and tools perhaps need a bit more selling sometimes to sort of see suites. Um, because the benefits are like they are absolutely there. I've seen them, I know it.
SPEAKER_00:It's uh yeah, I guess it's not easy at the best of times trying to get an extra few hundred thousand or a couple of million out of the CFO. Um when the times are tough like they have been over the last couple of years, I mean it's even harder. But uh yeah, I mean it's it's coming on so far, particularly agenda KI. Um that it's there are now a lot of genuine kind of use cases for retailers and and other brands to use it. Um we couldn't go a whole podcast without talking AI about AI, could we? I mean, it's the uh it's the hottest topic right now, and um I know from previous conversations with yourself there are a couple of areas that you feel there are genuine use cases for AI in retail. It's it's obviously spoken about widely and how it's gonna change the world and what have you. We're not quite at that point yet, but um yeah, where where are you seeing AI deliver like real uh value in in retail today?
SPEAKER_01:Yeah, sure. So a few different areas. Um I think it was really it's really interesting. I've I've really had to eat my like eat my hat on this, right? So so a few years ago, about three years ago, I was on one of these podcasts, and I was really not convinced about AI. I mainly because my experience has shown me that you know a lot of retailers, not just retailers, a lot of businesses, just full full stop B2C businesses in this country have got really crap data, right? Like their first party and proprietary data is either shallow or badly warehoused, or not in a great place, um, including you know some fairly significant businesses. So so um so on that basis, I was kind of thought, well, you know, open source stuff, then there's no competitive advantage, but actually brands are going to have to get their own data in order before they'll they'll they'll um they'll succeed. And actually, I'm really changing my I've obviously changed my mind enormously. So where I see real-time benefits, SEO copy optimization at scale, massive, massive SEO benefits from getting your copyright. Um, I've implemented that in a couple of places. All forms of kind of copy optimization, including PPC, I think is going to be is going to be really huge. Um on the creative side, um, obviously image quality and and uh and creation, but I think what's the really interesting one, I can't remember which retailer was, but I think it might be HM. Um but someone recently has gone out with a whole campaign that um uses uh AI-driven models. Now, having run a studio and see how much work goes into the shoots and the styling, that is an absolute game changer. That time lag that you have between your product arriving into your, you know, if in apparel, for example, you know, your product comes off the boat to get to your studio to get it pressed, ironed, on a model, photographed and um you know, cleaned up and recharged and then launched on site. Like there's there's the long lag there between when that product arrives on your shores and when you can um sell it. So anything that can streamline that product that process means massive um reduction in kind of time and um effort and just get your product on your shelves quicker. So I think that is going to be an absolute game changer. I do worry for all the photographers and copywriters and models out there candidly because things are gonna change very rapidly. But but yeah, as a as a retailer, it excites me. And and then I think over the longer term we talked about this, but you know, again, thinking back to my last role, sort of apparel-wise um returns. So anything that reduces the ability, anything that reduces the impact of returns is is like seismic. So, you know, in a lot of apparel businesses in this in this country, you're getting 40 to 50 percent of your stock back. It comes back to you, you have to pay for it to go out, you pay for it to come back. There's time when it's not in store and it's someone's in someone's wardrobe or in the post office, you've got to steam it, clean it, make sure it's labelled, QA it, get it back on the shelf. So, so expensive. And and and the reason most people buy multiple you know, items and return them is because the sizing's wrong. So, you know, when the day comes that we can scan a photo of ourselves or do a full-body scan, know what size to buy and not have to do that return, I think is going to be an absolute game changer in terms of yeah, like profitability of the apparel sector, um, and potentially other channels too, you know, home furnishings, etc. So, yeah, I think that will be a real um a real life use case that will really sort of transform I think the dynamics of the commercials really in the apparel sector in particular.
SPEAKER_00:I mean that's huge. Are the numbers really that high? 40 to 50 percent. Wow.
SPEAKER_01:I mean, I knew they were high, but yeah, yeah, really bad, and worse actually in some markets, so say Germany, you know, 50 50 is very normal.
SPEAKER_00:Wow, okay. Yeah, I mean, and you and first hand, I can see I can now see sort of the impact of uh uh the returns on the business. Uh the cost of of just the actual return itself is sky high, not to mention all of the other points you then mentioned around having to re-lean it, iron it, press it, whatever, then sell it at likely at a discounted rate, maybe not sell it at all. Um, it's it's huge. So to if we can get that down from 40 to 50 percent to 10 to 20 percent or potentially lower, then that'd be huge. I guess the question I have for you then is obviously AI will make a big difference in that because you can take a picture of body, figure, shape, size, etc., and and upload it and it can make the recommendation. But do we not have a big issue in retail with sizing itself and the fact that uh the same business will have a large t-shirt, but it's actually is different sizes. So, but for for example, um I sit between a medium and a large, and I'm not always the same in the same brand, so I kind of have to buy both because I don't know how that large is gonna sit on me. Um and until I guess we get some kind of universal sizing, then the AI will help, but there's still going to be a discrepancy, right?
SPEAKER_01:Yeah, you're probably right. And um I don't know if there's an answer to that. I'd love some universal, I know everybody would, but um it's one that funnily enough, one of the things that I think drives people to buy a multi-brand basket of stuff. So again, you know, I really like Reese and All Saints. If I go to Reese, I have to buy two things if I want you know them the same. And then one of them goes back because it's not the right size, and then I have to go to Reese, you know. Um, but if I've bought a multi-branded basket of goods, so if I bought my Reese and All Saints oil at the same place on John Lewis, that's just one time for me to go to the post office. It's one set of stuff for me to package up. So um, from a customer effort point of view, it makes a lot more sense to kind of buy stuff in a big branded basket of goods where you just do one delivery, one return rather than you know, single deliveries and returns from different brands.
SPEAKER_00:Yeah, I love how you brought it back to the John Lewis marketplace type scenario as well. It's almost like it was planned out. I promise you it wasn't. Um, but so that's that I do agree. I think the returns area is is huge. And if retailers can not just yeah, just get on top of that and bring that number down, that's massive in terms of the actual profitability they can make. And ultimately that might even bring the cost down of the product as well, which will only benefit customers, right? And uh um I guess what we spoke quickly about areas where AI can add real value. Is there like one specific area right now that stands out where you think it's just being like massively overhyped?
SPEAKER_01:There are some real terrible campaigns out there. So I was on holiday in Spain in in July. It wasn't actually retail, but it was a large international drinks pro producer, and uh we were you know like a um bus stop, and there was a you know digital media bus screen, you know, visual. And um this photo had these two guys on it, and one of them had the weirdest hand you've ever seen. I don't know how in the old days we'd have called it a Photoshop fail, but it it must have just been an AI fail, and it was just you just you just realise, and it's we see it all the time, and you can laugh about it in some of the groups, right? But there's just there's still a lot of things that look wrong and bad, even being created by some of the world's you know biggest brands. So um I think there's yeah, there's that there's gonna be a whole heap of governance actually, I think, that could comes out of this because in a world where anyone can create anything, including any of your teams, can you know um use the LLM's generative um AI to make brand assets? Like, how do you control creative and quality when you're dealing with it at scale? I don't know. I think there's gonna be a whole heap of governance that comes out of this.
SPEAKER_00:Yeah, I think you're you're right there. It's um it's certainly been adopted by businesses like thick and fast. And we're gonna we're we're gonna see some catastrophes along the way for sure. Sounds like you've seen one already. Sure, we've seen those. I mean, um take what you just said about content, and I've not seen the HM advert if it is HM, but uh to do something entirely using an AI is pretty cool. Um, if we start seeing more businesses doing that and it's not checked properly, then uh yeah, there's there will be some there'll be some viral uh content going around, albeit for the wrong reasons, probably. But there, but there we go.
SPEAKER_01:Yeah, and it's got like the opportunity to scale mistakes as well, right? So a couple of retailers recently, big ones, have been fined for using or had their adverts banned for using unrealistically thin models. But you know, let's say you then scale that, that's a mistake, and you make it once, and you scale that to everything because you've used AI, is that you know that's your your start point was wrong. Um, suddenly, yeah, you've you've multiplied, you've had the opportunity to multiply your original mistake quite a lot and do a lot of damage.
SPEAKER_00:Well, interestingly, I've got a podcast coming up with a chap who uh is very knowledgeable in the world of AI, and uh one of the bits we're going to be talking about is how businesses can influence AI. And I I kind of maybe looked at it a little bit naively, but ultimately the more you the more you feed it of a certain type of content, the more it believes that content is genuine. So actually you can kind of influence people with uh with false answers and false content.
SPEAKER_01:Um potentially very scary.
SPEAKER_00:Yeah, it is, yeah. And I'd never looked at it that way because I it came into conversation because I often just go on chat beat chat GPT and just take what it says to me as true and fact. Um, and he said to me, Well, we shouldn't be doing that at all. Um, but uh yeah, I think that would be an interesting conversation. So cool. Well, look, before we wrap things up, just a quick question for you then on um what you think um a successful D2C brand will do differently over the next two to three years to stand out.
SPEAKER_01:Funnily enough, actually, we talked about it earlier, and I agree with you on Zara, like the customer experience is awful and the UX is awful, which is a real shame because all those kind of intertext brands I really like, and I'd like to shop Masimo Duty online, but I just can't deal with that website, like it's awful. But but what I think that conglomerate does brilliantly well, Indotex, is it knows its customer inside out, it knows what they want, it runs lean, like you don't see Intertex like hiring thousands and thousands of people everywhere, like it's run a well-run, lean retail first retail business. It knows its places and where the brands exist, and actually, you know, if you look at kind of New Look and River Island, sadly, and you know, those sort of fast-fashioned brands in the UK, they are, you know, they're dying, killed off by kind of the twin impacts of used and and you know, Timu and Shein. So actually, I think for Zara to be able to do what it's doing is incredible because it's run lean, it's run well, it knows its customer, it maintains its brand, the product is good, the pricing is right, um, the website we could talk about. But but they also do something, they've done something really well as well, which is sort of they're over time, I feel like reducing their reliance on apparel. So, you know, there's Aura Home, there's fragrance, you know. So they're doing all the right things. And I think that is really what successful businesses will do. Know their customer, run lean, adapt, um, and and keep their brands like strong and healthy and show them respect. So it's it's proper retail basics to be honest, and and then I guess separately, you know, the distribution is really key. So making sure that that new distribution is really kind of incremental. It's either hoovering demand that you couldn't reach yourself, or it's creating new demand and being really deliberate about that.
SPEAKER_00:Uh, the Zara website continues to come up in conversations as well. For some love it, I personally can't stand it. I'm the same as you. I don't understand how they have such a successful business. It's such a bad website, and the just the user experience, in my opinion, is awful. I don't know if I've ever bought anything on the Zara website. Yeah, it's one of my favorite stores to go in and shop. Um, but maybe it's deliberate, maybe it's because maybe it's deliberate to get you into the store.
SPEAKER_01:I I do I have actually wondered if it's deliberately that bad because they want people in stores.
SPEAKER_00:So but uh yeah, forever a talking point. Um, but yeah, ultimately then knowing your customer and being able to adapt uh when needed is going to be the key for DC brands to success. I think so. Yeah, like you said, back to basics. But isn't that the isn't that the basis of everything? Basics. We always try and overthink things, overcomplicate situations, stick to the basics, do them well, chances are you'll you'll end up coming out alright.
SPEAKER_01:I think so.
SPEAKER_00:Lovely. Well, I think we'll wrap things up there. Um thank you for joining me, really. I loved it.
SPEAKER_01:Thanks, James. Bye.
SPEAKER_00:Brilliant. So thank you for listening. Um, if you enjoyed the conversation, please do subscribe to help us on our journey to be the number one podcast within digital commerce. I'll see you next time.
SPEAKER_01:Thanks everyone.
