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Episode 54: Why an omnichannel strategy will boost sales

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All Xero Gravity episodes

Hosted by Elizabeth Ü

Two questions: What does a successful omnichannel strategy entail? How does it build consumers’ trust?

One answer: Sell your brand / unique product with the same pricing, availability and service all the way to the same look and feel — across your website, mobile app, social pages, brick-and-mortar store, and with marketplace giants like Amazon.

Yes, that Amazon, where 40% of all online shoppers search for products first.

So as a small business owner, how do you get there? 

Meet Kevin McKeand, the Strategic Business Development and Partnerships leader at BigCommerce. To stay present, he practices mindfulness, like listening to his breathing as he runs. Speaking of listening, you’re going to want to hear Kevin share the best way to develop and profit from an omnichannel strategy, especially in the online marketplace, where consumers are waiting to pounce. Xero Gravity #54.

Small business resources:

Episode transcript

Host: Elizabeth Ü [EÜ]

Guest: Kevin McKeand [KM]

Intro: You’ve just tuned into Xero Gravity — a podcast for small business leaders and entrepreneurs across the globe. Now to your host, Elizabeth Ü.

EÜ: Hey everyone, I’m Elizabeth Ü, and you’re listening to Xero Gravity.

Guest soundbite:

“I learned self-awareness, presence and that my way of being in the past that made me successful, was not the way of being that was going to take me to the next level of my professional career.”

EÜ: Meet Kevin McKeand. Kevin is responsible for strategic business development and partnerships at BigCommerce.

I felt quite a kinship with Kevin after this conversation. Very few people who are as knowledgeable as he is about such a technical topic, are also as willing to talk about personal transformation and self-awareness. It’s quite refreshing actually. You can tell from his deep presence and sense of calm, how focused he is on giving small business owners the tools they need to achieve their dreams.

During our conversation, Kevin explains in great detail where businesses should start when it comes to executing on their omnichannel strategy.

Guest soundbite:

“The first thing they need to do is build that strategy. So look at what your product is, where do customers shop to find your products, and what is the most appropriate place for you to be in.”

EÜ: So we have all that and more coming up on Xero Gravity, right after this.

Promo: Do you want 30% off Xero's beautiful accounting software? Businesses new to Xero can head to xero.com/signup and use the promo code XEROGRAVITY to get a discount on a 6-month subscription. 

EÜ: Kevin, thanks for joining us on Xero Gravity.

KM: Thank you for having me. I’m happy to be here.

EÜ: So tell us a little bit about what you get up to when you’re not in the office?

KM: When I’m not in the office, I love to stay active. It helps to clear my mind and it gives me the space to think. So to do that I either lift weights or I run — it’s my meditation time. It’s when I solve problems and when I listen to my breathing. And on the professional side, I also have a passion for working with teams of people to create new possibilities. Companies that are using technology to transform the way that we work and we play today, and to do that I actually invest in a couple of small startup businesses here in Austin. And that helps me stay connected.

EÜ: I know that there are lots of people who would love to have not only your advice in their ear, but also your finances in their business. So tell us a bit about how you got to where you are now here at BigCommerce?

KM: So I started working in the cellular telephone business some 30 years ago. During that period of time I was lucky enough to work with a couple of teams of people who ultimately invented cellular roaming. Giving consumers the freedom to use their cell phone wherever they wanted, whenever they visited another city. And then I also worked with another team of people who invented inter-carrier SMS or text messaging. So the ability to send a text message between two different cell phone networks.

I ended up staying in that industry for about 18 years and then I went to work for a relatively new industry, the public wifi business. I ended up working in that business for about six years, where we worked to give consumers the freedom to work anywhere they wanted — whether it be at home or a coffee shop or the airport or their hotel. And then in 2010 I went to work in the mobile payments industry for a small startup business here in Austin, in which we were working to build a way to give consumers the freedom to review and pay their bar and restaurant tab when they want, and leave when they’re ready.

And then from there I focused on transforming my business experiences and came to work at BigCommerce and today we’re building a platform and tools for business owners who want to sell online and we’re giving the average person the freedom to build and run their own business quickly and easily.

EÜ: And can you tell us a bit about your educational background? Do you have any interesting accolades that we should know about?

KM: During the time that I was working in the cell phone business at AT&T, I was able to attend something that AT&T put on a couple times a year for just about 20 or 30 people. It was called the AT&T Advanced Management Program, and it was what they put people through whom they had high hopes for — I guess is the best way to put it — that they could actually be a leader in the organization at some point. And so essentially what that meant for me was two weeks in New Jersey. They brought in professors from Stanford and Harvard and Yale and that was a pretty awesome experience for me to get, in a two week period of time, get that much exposure to that much information and help me as a leader, to grow.

My company also paid to send me to a two-week class at Harvard at the Business School, to learn more about customer service, because at the time I was in an operational role. Those two experiences were awesome for me in terms of the time of my life and where I was in my professional career, and what it taught me.

EÜ: And this two-week class at Harvard Business School: was there anything in particular from that customer service training that really stood out in your mind?

KM: The main thing that I learned while I was at Harvard was learning how you learn in that environment. I don’t have an MBA so I haven’t gone through that kind of experience. But essentially in these classes at Harvard, what we would do was, the night before, we would read a case study and something very similar too, if you were in the MBA program. You read this case study — it’s 8-10 pages long— and then you form your own opinions about what happened to this business. And then you go to class and the professor encourages everybody to speak up, and you talk about what you think they should have done. And then, in every specific case study during this two-week course, they either brought them in personally or they had them do a video conference. And they brought in the person who was involved in that case study to explain what they…

EÜ: Wow.

KM: …actually decided to do.

And so the one that I remember the most was (at the time this was pretty unique), an online florist company called Calyx & Corolla. And what they had done is they had figured out how to disintermediate the florist business. Meaning that if you go on Calyx & Corolla today and you buy a dozen roses, there’s actually a person somewhere around the world that grows roses. They’ve given that person a box and all the materials that they need: so they cut the roses, they put them in a box and they FedEx them to you so you get them the next day. So these roses will last three weeks, whereas the ones that you buy at the grocery store might last three or four days.

EÜ: Wow, that’s an interesting example. I love that they actually brought in the people that were involved in the case study.

KM: It makes it so real, you know. And it’s not like you’re reading a story about something that happened. These people come in and they talk about how they went through that decision process, which is pretty unique.

EÜ: So is there any one person, or is there any one moment, that you can really trace your career success back to?

KM: I have both a person and a moment. The person in particular who I give a lot of credit to for my professional success, his name is Barry. Barry is a professional coach and he took me and a team of executives at one of my companies through a personal transformation process.

During that time period I learned more about myself than any other time in my life. I learned self-awareness, presence and that my way of being in the past that made me successful, was not the way of being that was going to take me to the next level of my professional career. He’s still my coach, I still talk to him once a month.

EÜ: I think it’s so important to have people like that who can be your touchstones who you can check back in with regularly. What a great opportunity it is to have a coach like that.

Well, now it’s time to dig a little deeper into this episode’s theme, which is why small businesses need an omnichannel strategy. So I’d love to ask you first to help us understand what does omnichannel mean?

KM: At its core, omnichannel is a multi-channel approach to sales. It’s a way to provide a customer with a seamless shopping experience, whether that customer is online from a desktop or a mobile device, buying over the telephone, or they’re actually in your brick-and-mortar store.

Some examples that are often used would be: maybe you have a mobile app that matches the responsive design of a website which should then thematically reflect the look and feel inside of your store. So you know, I’d argue that some people think of it as cross-channel selling, which is different. Omnichannel is something very new, even revolutionary, and it’s not just a marginal evolution of existing thinking — it’s a whole new way of thinking. It’s ensuring that whether it’s in your store or online on a responsive app, or a native application, or whether it be on social commerce like Facebook or Pinterest, that it builds trust with the consumer because it looks familiar to them.

EÜ: So how does a small business execute an omnichannel strategy?

KM: To have a strategy means that you believe there’s value to your business, to have all your products and services that you’re offering across all of these different ways of buying. So that’s a good way to start, which is: Where should my products be seen? Should they be seen in a brick-and-mortar business? Maybe that’s not right for everybody, maybe you should be online, maybe you believe that it’s a mobile app, maybe you believe that it’s social commerce or a marketplace. So omnichannel means everything from eBay and Amazon as a marketplace, to Facebook and Pinterest for social, to your own mobile response app, as well as a native app, as well as your online business.

EÜ: And what kinds of businesses benefit most from omnichannel? I mean you’ve mentioned retail, but are there other industries where this is important?

KM: Specifically the businesses that benefit the most from an omnichannel strategy would be those businesses that have a branded product or a unique product as compared to a business that might have more of a commodity-based product.

What I mean by that is that if you have your own brand, you have a product that nobody else sells and/or you have a very unique product that isn’t necessarily found in a lot of different marketplaces. Then it’s best for you to make sure that you get that product out into as many places as possible, because that’s where your consumers are. The consumers who are buying your products today, particularly those unique products — they may not be able to find you as easily. But they’re looking across social marketplaces as well as on your own branded website.

EÜ: So why do small businesses, or, why would a small business want to have an omnichannel approach?

KM: The best reason I would say is that ecommerce sales are still only about 10% of total worldwide retail sales, which should amount to over $500 billion in sales in 2017. And while mobile itself, just as an example, represented only 12 billion of the 70 billion in online sales last holiday season, it was growing at a rate of 47% year over year versus desktop online sales which only grew 9%. In addition…

EÜ: Wow!

KM: …I would add that consumer trust continues to build with the use of mobile online shopping, and it is the most convenient and reactive way to shop. Consumers see it and they buy it.

So it isn’t just being in those locations, being on mobile or being in a store, or being online. It’s omnichannel building that trust through having the same products, the same pricing, the same look and feel. And so in the instance of an online retailer who has their own website, for example, if you’re not on Amazon, then you’re missing out on a large opportunity. Because over 40% of all consumer shopping today, those searches are taking place on Amazon first. So not having a presence on Amazon, for example, means that you’re simply not reaching a potentially larger customer base or you’re losing customers who may be looking on the marketplace and not finding you instead of a similar product.

EÜ: So what can a small business do to make sure that they are showing up on all of these channels?

KM: The first thing they need to do is build that strategy. So look at what your product is: where do customers shop to find your products and what is the most appropriate place for you to be in? So in terms of omnichannel, is it marketplaces, is it social, is it in brick-and-mortar stores, is it an online store or is it a mobile site?

So as you think about where your consumers are who are buying your products, that’s the first thing you should do is build that assessment and build that strategy, and then start to build out your product solution in each one of those, one at a time. It doesn’t have to be all of them obviously, but you need to be in the places where consumers are looking for your products and where you’ll get the best conversion rate on people who are viewing the products.

EÜ: And what do you mean by a product solution?

KM: So a product solution for example: maybe you have cellular telephone products and services — like cases or holsters or cabling that may be more appropriate for you to be on your own branded online store — where there may be other cases, where maybe you just sell a particular item and it’s a single item, but it’s a bit more commoditized. Meaning other people have that product, but consumers go to find that product. So the best way to put that is that sometimes you sell specialty products, and having your own online branded store is the best solution. Other times getting seen by the most consumers who can get eyes on it, might be a marketplace.

EÜ: And by marketplace you mean an Amazon, an eBay.

KM: There are lots of different ones depending upon your product, so I would even include in that Houzz or Sears or Open Sky, or things like that. There are marketplaces where you just can drop lots and lots of products into, and it’s really all about the marketing to drive consumers to those sites to find those products. And some of them are very specific to your particular market segment, like a Houzz.

EÜ: Got you. And so customers might not necessarily realize that a business is omnichannel, but what will they notice?

KM: The one thing that consumers should notice — and this is where that builds trust for the consumer — is when they go to your online store on their computer, for example, their laptop or their desktop computer, and then they look at your site on their iPad or their mobile phone — the look and the feel is the same and that builds trust.

Now if you have a brick-and-mortar business as well, when they walk in there the colors are the same, the products are the same, the pricing is the same and that again builds trust. And so, you know, I think that’s really what it is all about is not just being in the right place where the consumers are going to buy your products, it’s also making sure that you build that trust by creating a seamless, or what is close to being a seamless marketing strategy, so that it builds trust with the consumer.

EÜ: When it comes to evaluating where your customers are and where they shop and where’s the most appropriate channel for you to place your products, what’s the best way for a small business to understand all of that in the first place?

KM: Do the research. You know, today they know that they can build their own online store, and from there they can build a native app for their products and they can also have a responsive theme on their online store that translates into a mobile retail store.

Whether they go into a marketplace and whether they build their own brick-and-mortar store is a different question altogether. But it should be a part of that strategy. Sometimes retailers have products and their brand isn’t very strong, so they need to start off in a marketplace to get lots of consumers to see their product and eventually build some brand loyalty, and then they can slowly but surely work them back over into their own online store.

EÜ: So it’s interesting that you’ve mentioned now a couple of times about pricing. So if it builds trust to have the same pricing across all channels — I’ve definitely noticed myself as a shopper — that often things are a lot cheaper on Amazon than on a company’s website. Does that mean that they are not approaching their omnichannel strategy correctly?

KM: You know I think you have, would have to ask the retailer, why they would price something different on Amazon. And I think that happens because they probably have a commoditized product and they feel the need to compete on price within a very large marketplace where there’s probably lots of other products on that marketplace that are like theirs. As opposed to somebody who might go to your own online store and then they’re not seeing other competing products, so you can offer them maybe a little bit higher price. But again, to me the best omnichannel strategy is that it’s consistent across all of those, and that’s what builds the trust. If you have a lower price on a marketplace consistently than your own site, then you’re probably not doing yourself a service by bringing consumers to your own online branded store, because they’re going to learn not to trust that your pricing is the most competitive on your own site, and they will always go try to find you in the marketplace.

EÜ: So this might sound a bit overwhelming to some of the people listening: what do you recommend for small businesses so that they can stay on top of all of these open channels?

KM: Number one: can you support the channels that you’re looking at operationally? By that I mean do you have the ability to change product descriptions, sku’s, pricing and can you support it from a customer service standpoint? So again, operationally, do you have a central place in which you update product information and it flows out into all of these other locations? So maybe I have an online store, do I change the color or update products inside my online store and is it automatically going to Amazon and eBay, and one of the other marketplaces? Does it automatically update on my native mobile app? And what about in my brick-and-mortar business?

So first question is: do you have the ability to support all of these different channels operationally? And if not, then which ones are the most important to you that you should add? Because you can only support a couple of them.

Many marketplaces that you want to sell on as a retailer will have very specific service level agreements or SLAs that you have to adhere to. In contrast to that, when you build and run your own online store, you manage those service level agreements yourself, meaning that you tell your consumers: if you buy today I ship in three days. Or, I allow refunds up to a week after you buy, something like that. When you sell on a marketplace like Amazon or eBay there are certain rules you have to follow. Are you as a retailer comfortable with those rules? Those rules might be you have to ship the product within a certain amount of time, you have to allow refunds within a certain window of time, that sort of thing. So you have to be aware of what those service level agreements are and you have to be able to meet those obligations.

And then also I think you should think about, as a retailer: is the product unique in some way or is it a commodity? Are there sellers in other locations who you want to sell, like marketplaces and social commerce for example? And if so, what differentiates you from all the others if you decide to go into a marketplace?

EÜ: Do you have an example of a small business that you think is doing omnichannel really effectively?

KM: The best example that I have would be a Big Commerce merchant. The name of their business is Native Union. They sell across their own branded online store; they also have a mobile site and they sell on Pinterest as well as Amazon. All of their locations have a simple consistent look and feel and that builds trust and drives sales conversions for them, which is revenue.

EÜ: Kevin, can you explain some common misconceptions that small businesses often have about omnichannel?

KM: The number one misconception is that it’s not possible for a small business to compete or to launch multiple channels. That used to be the case, as it was very expensive, and only the largest retailers had the money or the resources, and the people to invest in the technology solutions to enable them to do that.

But luckily today, companies like BigCommerce for example, you know, we strive to make those technologies available to small- and medium-sized businesses. So, you know, ecommerce in general is literally only about 10 years old. So it’s not a very old industry, and these things are evolving very quickly. So, you know, you couldn’t even build your own online store 10 years ago and pay a monthly fee to do so with tools that anybody could build an online store. And so today you can actually build your own omnichannel solution yourself. That wasn’t available two years ago.

EÜ: Well Kevin, I think the most interesting thing that I learned from you today was the fact that, you know, even if you do start putting your products in all of these different channels, if you don’t have a solution for updating all of the information across all those channels, you may have dug yourself into a bit of a hole.

So really great to hear that there are some solutions to make that happen seamlessly. And we’re going to finish up with our question countdown. Five quick questions and five quick answers, are you ready?

KM: I’m ready.

EÜ: What business, book or idea has made the biggest impact on your life and why?

KM: The book is the Last Word on Power, by Tracy Goss. It reinforces my training in personal transformation.

EÜ: And what’s the one thing you can’t live without?

KM: My family. The reason for that is because they give me the power to live the life that I want, since I know that they’re always there for me in good times and bad.

EÜ: Oh I love that! What’s the most useful app on your phone right now?

KM: Spotify. It helps me adjust my mood by listening to different genres of music depending upon what mood I want to be in.

EÜ: Ooh excellent, yes, music is so powerful! And in one sentence, what’s the greatest lesson you’ve learned throughout your small business journey.

KM: That any person with a strong desire and persistence can start and run their own business, and have the freedom to control their life and how it turns out.

EÜ: And finally, what skill do you want to enhance this year?

KM: Presence.

EÜ: Well, that’s all we have time for today, Kevin. Thanks so much for joining us on the show.

KM: Thank you!

Promo: Enjoying today's show? Then why not join the conversation! Just use the hashtag XeroGravity.

EÜ: That was Kevin McKeand, who heads up strategic business development and partnerships at BigCommerce.

Thanks for listening to Xero Gravity. Make sure you join us next Wednesday as we’ve got another awesome show lined up for you. We’ll see you then. Ciao for now.

 

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