Transcript
Brian Erickson:
Thanks for joining the Cardwell Beach Marketing Podcast. My name is Brian Erickson, Chief Strategy Officer and Partner at Cardwell Beach. In this series, we’re interviewing senior marketers across industries to develop perspective on what marketing will look like in a post COVID-19 world. Today’s guest is Steven Henderson, the Executive Vice President for Marketing and Merchandising at Keeco, a textile supplier and manufacturer that works with some of the world’s biggest retail brands, including Walmart, Bed Bath & Beyond and Target. Steven has also served as the president of Think, a product development and retail strategy company. Steven, thanks so much for joining us today.
Steven Henderson:
Thanks for having me.
Brian Erickson:
Talking about weathering the storm here and we’re in mid-December, which unfortunately seems like the storm is greater than ever, 10 months in here, however long it’s been. And I guess throughout the COVID-19 pandemic, consumers have had to adjust to spending much more time at home with our furnishings and textiles. And thanks to this many have probably decided to replace outdated and older products with something new. Talk to us about how this has changed the conversation at Keeco about your marketing efforts during this strange time.
Steven Henderson:
Well, we’ve definitely seen a surge in consumer demand for our products since the start of COVID. As you mentioned, people are at home and noticing what needs to be updated. There’s a natural nesting going on that we have definitely capitalized on, but there’s also been a customer shift in the market that we now have to aggressively market to. A big part of that is not only the much-talked-about shift to online sales, but the even more critical shift to omni-channel sales, especially in the home category, where touching and feeling the product as a key driver of the purchase decision, consumers are finding ways to utilize a combination of online and in-store to complete their purchases.
In multiple studies that we have done and cross-referenced with our POS sales data, we’ve found the true online sales where the product is shopped online, purchased online and shipped to the customer’s home without the store, the physical brick and mortar store, having any involvement in the process at all, that’s still a relatively small part of the total transactions for our products. However, the omni sales, where consumers use both online and in-store somewhere in their purchase process, have skyrocketed. To capture this emerging market, we’ve had an increased focused on rich content health and page placement because that both helps us drive sales in-store and online and it minimizes our returns, which can be a killer to profitability.
Brian Erickson:
Talk a little bit about that process. I assume it’s not entirely linear, right? As people are moving through their decision cycle, are you seeing people start in one medium or on one channel and move from digital to physical or vice versa? How is that typically working?
Steven Henderson:
It’s not a typical way that it works. It’s not consistent in any way. We’re seeing a variety of ways that people incorporate both in-store and online to navigate the purchase process. In some cases, where people can research online, people could look at price points, people could look at fabrications, people can get an idea of what they want instead of having it shipped to their home where they have to deal with a return process, they’re opting to pick that up in store so they can touch it once and make sure that they’re getting what they think they’re getting or else they just leave it in the store and move on to something else.
In other cases, customers are going in-store, getting a sense of what they want and then doing the research online and purchasing it and having it shipped to their home because they’ve already touched and felt what they think that they want before they complete the purchase online. There’s a variety of ways that this works, but the dominant trend that we’re seeing is consumers now are engaging both online and in-store in some way as part of the purchase process.
Brian Erickson:
And so you mentioned content being a key component of how you’re responding to this trend. How are you, I guess, mapping that content to your audiences’ journey, or how are you dealing with that kind of non-linear sort of approach that people are going through the purchase cycle?
Steven Henderson:
Well, one of the biggest things that we’re finding right now is that, and there’s a couple of other areas where this is coming into play as well, but most of our marketing message is focused on online content within the site description of the particular item and on the packaging in-store, because that is what’s driving, whether you initiate your process in store or initiate your process online, we have to make sure that information is consistent, really describes the experience the customer will have once they purchase the product and really represents what it is that the product needs to be for that customer. And that’s very different from an online engagement and an in-store engagement, but we’ve got to map that rich online content and that billboard that we have on the package in the store, so that we’re delivering the same messages and maybe going a little bit beyond that in the online content.
Brian Erickson:
Out of curiosity, are there any sort of sleeper products that weren’t really moving before the pandemic and just kind of came out of left field and took off in terms of demand after this all set in?
Steven Henderson:
There really isn’t. There’s been some shifts in product categories in our business to be sure, but not a lot of it has to do specifically with COVID. The big shift that we’re seeing because of COVID and because of the recessionary-driven economy that we’re kind of looking at because of COVID is a big focus on opening price point and value-driven price points. And that has really kind of changed and this kind of goes back to what we were just talking about. Your main marketing message is on the online content and the in-store packaging at these price points. There’s not a lot of outside of those two vehicle marketing campaign, but there has been a dramatic market shift to opening price point.
Brian Erickson:
Interesting. Okay. And I imagine that must have had some effects on the supply chain for manufacturing and obviously being an international firm with offices in China, Pakistan, India, have you experienced any sort of shift in your marketing approach as it relates to impact on supply chain?
Steven Henderson:
We haven’t really seen a major shift in how we market to our customers, but how we market our company to our supply chain partners has changed dramatically because we’ve had disruptions in global supply chain everywhere, and it’s been constantly evolving. The root cause of the challenges that we face today are different than the ones that we faced at beginning of COVID. In January and February, COVID hit production in China hard. That was right after we had just finished navigating some tariffs that had big implications in our business. And then, as things stabilized in China, COVID hit the U.S. Retailers started to close and started to stop accepting orders that were already produced.
Today, we’re dealing with currency fluctuations because of the economic environment that has come out of the COVID crisis and that’s affecting costing and margins all across the board. And really what we’ve tried to do with that is aggressively marketed ourselves as a supply chain partner that’s a fully transparent problem solver. Because as these challenges hit every aspect of the supply chain, we need to let our partners, and that’s our retail partners, our brand partners, our manufacturing partners, our raw material partners and our transportation and logistics partners, that we have put ourselves out there as a company that looks at data, drives solutions and navigates around these challenges better than everyone else, because that puts us at the top of the priority list of an environment where it’s tough to get prioritized.
Brian Erickson:
So it sounds like nimbleness is the name of the game for you during all this. Lot of change and happening quickly.
Steven Henderson:
Nimbleness, transparency, and not waiting for something to happen, trying to be on top of things as they’re happening and be as proactive about them as possible.
Brian Erickson:
Looking forward, we’re not through everything yet. And even though we have some seemingly promising vaccines, we’ve yet to see about adoption and distribution and I think we still have a little bit of this road ahead of us. What do you see coming next as we enter 2021 for the textile industry and what aspects of a pre-COVID reality are we going to return to, or what aspects are going to become a new normal that we incorporate from this pandemic and what sort of marketing lessons will we learn?
Steven Henderson:
Well, one thing that we’ve referenced constantly throughout COVID is that disruption accelerates inevitable change. And we’re seeing that in our business now, and we’re preparing for that to continue. In reality, the 2021 that we’re looking at is something that we probably didn’t think that we would see until 2023 or beyond. The shift to omni-channel shopping experience is one example of that. But there’s major changes in the brick and mortar retail landscape right now, again, that we didn’t expect for maybe another three to five years. And there are competing marketing challenges in retail. Retailers that were open during the beginning of COVID are working to retain the shoppers that shifted to them in the second quarter when many of their competitors were closed. And those retailers that were closed, they’re trying to put together marketing challenges to keep the customers that they had pre-COVID. So, as a supplier to retailers that were both open and closed, we’ve got very different agendas with retailers based on where they are in that cycle.
Brian Erickson:
That’s a lot of different entities and stakeholders to manage, I’m sure. And I’m sure even just having so many different brands under your roof, you’ve got a lot of different combinations of things that you have to communicate. And I like that quote, I think that’s definitely a great sound bite there. “Disruption accelerates inevitable change.” We’ve been using the term pandemic time warp for things that we’re seeing just speed up and kind accelerate 10, 20 years into the future, like Zoom and remote work and things like that. And then there are just things that grind to a halt and potentially may even disappear and maybe those things were going to disappear anyway. I like that, “Disruption accelerates inevitable change.”
Steven Henderson:
Yeah. It has guided almost every thought process that we’ve had since April. And again, a lot of the changes that we’re seeing in the market are changes that we expected but we certainly didn’t expect them now.
Brian Erickson:
Part of that disruption and something that’s been brewing for a long time, as you mentioned, is more of that omni-channel experience and the shift to digital, right? Just tactically, how has your marketing mix shifted from your original 2020 plan? You have the visibility into what you’ve done throughout the course of the year. At the beginning of the year, what would you have thought you would have done that maybe you didn’t do? And what have you changed that you added on as a response mechanism?
Steven Henderson:
Well, one of the biggest things that we’ve seen is, again, there’s been an accelerated change in how to reach the customer, how to reach the consumer, in general, not just in our business, but across many industries, TV is certainly not an economical proposition to reach the customer. And there is so many options of what you can watch, it’s very hard to dial into who you’re going to reach and when you’re going to reach them. Print has been massively reduced, social media, influencers, and direct online content appears to be the future of how to reach a targeted audience. And that has had some changes in the way that we think about communicating with our customers. And I think that’s probably true of every industry.
Brian Erickson:
And so looking forward into 2021 here, if you could give one piece of advice to marketers at a manufacturing firm or in the textiles industry, what would you say is the most important thing to keep focused on?
Steven Henderson:
Well, the word that you used earlier is the one that I had in my notes, which is to stay nimble because things are changing quickly and you also need to stay focused on data and consumer feedback so that you’re identifying those changes as they’re happening, if not before. Because once they’ve happened, there’s a lot of companies that are trying to play catch up and you want to be slightly ahead of that curve.
Brian Erickson:
So let’s unpack nimbleness a little bit because I think that’s a nice word and it’s a pleasant sounding thing, but when you actually try to implement it and, you know, turn around or stop a freight train in a huge company and turn on a dime, that can be very difficult. So, I guess, are there any aspects of the way that you approach your process or your team or communication at an executive level or your channel partners that allow you to be nimble or any specific recommendations that you think would be impactful for marketers to help them stay nimble in an environment like this?
Steven Henderson:
Well, just from a company perspective, one of the things that we’ve tried to do, even though we have grown into a fairly large company, is we try to act like a small one. And when we were a smaller company, we had a smaller number of stakeholders and decision makers that could move very quickly. We’ve tried to implement that process throughout our entire organization and from a marketing standpoint, as we market ourselves to our retail partners and to our supply chain partners, we’ve tried to take that approach in working with them. It’s not nearly as applicable to how we’re communicating with the end consumer, but it’s definitely applicable to how we’re dealing with our business partners, opposed to our end consumer customer.
Brian Erickson:
A lot of people to keep happy and keep moving in the same direction. So that’s definitely a major initiative I’m sure. And you mentioned just kind of data and metrics. What are you measuring that you think is an important aspect or facet of data that you want to keep in mind going into 2021? Or what sorts of things should people be using as KPIs in your industry do you feel?
Steven Henderson:
Well, the biggest thing that we’re looking at is there’s two things affecting sales right now. There’s a customer shift, which is customers that used to shop at one retailer, now they’re shopping at another. Customers that used to shop in store, now they’re shopping online or they’re embracing different parts of that omni-channel shopping experience. We believe that the shifts that we’re seeing are permanent, they’re not unchangeable, which is why each individual retailer’s marketing strategy can affect those numbers, but those are going to settle into a permanent change in the business. The part that we’re really trying to use consumer feedback to stay on top of is there’s also a lift that’s happening right now. And that lift is a COVID surge. People are at home, they’re thinking about their home, they’re nesting in their home, they’re not spending money on vacations, they’re not going out to dinner as often. So, there’s available dollars to spend.
So we’re riding the crest of that wave and one of the most important things that we’re doing is working with consumer feedback and with our retail partners to try and get an accurate read of when that might start to slow down, because if we’re wrong about when that starts to slow down, there’s going to be inventory and bottom line implications across the entire supply chain. And if we’re wrong in the other direction, and we think it’s going to end earlier than it does, then there will be opportunities where everyone’s missing sales and out-of-stocks start to rise. So being able to stay on top of that information, which is almost an impossible task, but staying as close to it as we possibly can so that we can plan the year correctly and we can work with our partners to plan their years correctly, and also our product launches and everything that we’re putting our marketing dollars behind, making sure those are correctly timed is the biggest challenge for ’21.
Brian Erickson:
Sounds like quite a big challenge, quite the tightrope to walk. Obviously we’ve hit quite a high level of unemployment and maybe we’ve seen the worst of it, maybe we haven’t. There are a number of people in our industry who are certainly marketing and digital executives who are going to find themselves as free agents. What sort of advice would you give to folks who are in the job market right now and looking for employment? Relative to what you see as important on a brand level in 2021, how can individuals position themselves to contribute to those important factors?
Steven Henderson:
Personal networking is incredibly important. Making sure you’re marketing yourself within LinkedIn and other resources of course is important, but it’s learning new skills and having a variety of skills that you can adapt to a rapidly changing and digitally evolving world that I think is the most important. Every company’s going to have its own unique challenges and its own unique existing bench strength. The wider your skillset, the more you can apply an individual skill to what a company that’s looking for something that they don’t have needs. And most likely, that is going to be in a space in a digitally evolving world into this omni shopping. How do we reach consumers if the old marketing methods don’t work anymore? How do we reach consumers when they’re changing how they shop and what they buy? It goes back to that word nimble that we talked about earlier. The more nimble you can be personally in the role that you can fit in an organization that has a need, the more likely you are to find a landing spot.
Brian Erickson:
Yeah, that’s definitely critical in the theme of T-shaped individuals, folks that have a narrow and deep expertise in one area, but the top of the T going horizontally across a number of different disciplines and skillsets, really being able to at least speak the language of folks in other disciplines and departments and being able to pivot, I think is super important.
Steven Henderson:
I agree.
Brian Erickson:
Great. Well, Steven, thank you so much for taking the time to talk with us today. Really appreciate it.
Steven Henderson:
Thank you very much. It was wonderful to be here. I appreciate the invitation. If there’s anything that anyone needs to follow up with me on, please feel free to reach out to me individually. My email is shenderson@L-K-E-E-C-O.com. I’d be happy to help anybody that reaches out.
Brian Erickson:
Awesome. Well, that’s a very generous offer and hope some folks take you up on it. This is Brian Erickson with Cardwell Beach. Thanks again for listening and please make sure to check back for more senior marketers sharing their perspectives on what marketing will look like in a post-COVID-19 world.
