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24: Digital Services are Allowing Retailers to Successfully Navigate a Global Pandemic

Written by Rob Stott

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June 2, 2020

 

The digital transformation of the retail industry was kicked into high gear as a result of the coronavirus pandemic. Chat, appointment retailing, video consultations and more have been nothing short of a lifeline for many independent dealers during this time. We dive deep into digital with Nationwide’s tech guru, Dev Mukherjee.

Rob Stott: All right. We’re back on the Independent Thinking Podcast. Any time Dev and I sit down … Dev Mukherjee, President of Digital and Technology for Nationwide Marketing Group. We have a good time. I think so. Don’t you, Dev? We have good conversations.

Dev Mukherjee: Always. We do, we do. Very wide-ranging conversations. You ask, as you should, very provocative questions and I appreciate the followup.

Rob Stott: Certainly. Actually, a funny known fact about me. Usually, when we end up talking, we get into surveys and data, obviously, and that sort of thing. Numbers are something that I’ve always been intrigued by, even though I’m someone that writes things. The funny known fact, getting around to it, is that my SAT scores back in the day, my math way outperformed my reading and writing comprehension. Yeah. Maybe I was meant to be more of a numbers guy, but somehow fell into writing and telling stories. I don’t know how that worked out.

Dev Mukherjee: Hey Robert, if this communications gig doesn’t work out for you, we have a couple of spots on the analytics team. I think Mark and Tolga and Scott would be delighted to have you on the team.

Rob Stott: Who knows? We’ll see. Maybe someday. Don’t tell Amy that. Don’t tell the communications guys that. No, but Dev, I appreciate you taking some time and coming to chat. I know we’ve got some cool things to talk about today, but before diving into that, this is a chance to catch up. We’re still in the midst of everything going on with the COVID situation and all that. It’s been two months, 10 weeks now at this point, I think. Crazy to think about how that’s flown by. I know you and I work from home, so we haven’t really changed much in our day-to-day, but how has this situation been for you?

Dev Mukherjee: You know, I think you said it. All of the words are cliché. Unprecedented, crazy, things moving all the time. Honestly, what’s amazed me for both my own family and for the company is how easily we’ve got into it. Of course, little kids miss seeing their friends and we can’t all get together company-wise as well, but the transition to working from home across the company worked really well. My kids started doing remote learning. The teachers did an amazing job laying that stuff out. My son said about a month in, “Wow. We get two or three hours back during the day because we don’t have to get on the bus and we don’t have to wait anywhere. We just get our work done and then there’s all this extra time to play.” There’s definitely some upsides. I mean, as you know from our other conversations, things have just been really busy. I’m sure we’ll get into that.

Rob Stott: Yeah, absolutely. It’s funny. I always found myself … Working from home, you can be more productive. Now talk about how to take in a cue from your son. Get some hours back in the day that when you’re in front of your computer … Yeah, we have a lot of Zoom meetings or Microsoft Teams meetings in our case, but there’s the opportunity to sit down uninterrupted in front of your computer. It’s something that clearly I think is undervalued from the office space and thinking about what working in an office is like. It’s been interesting. It hasn’t been as much of an adjustment I don’t think as a lot of people would have anticipated. We’re still in contact. We still get to do meetings like this, but yeah. Like you said, a lot of work. A lot of things have happened in these 10 weeks.

Dev Mukherjee: I would say just as a followup to that, two interesting things that have popped up in a couple of the town halls I’ve done. One, I’m trying to remember. It was someone I think from Winston, Maria or Paula who said … I told them that Dean and Scott and Amanda and I frequently have meetings where we each grab a cup of coffee and sit around and shoot the breeze. It helps with the human connection as well as catching up on all the things that aren’t around a specific topic. I apologize. I forget who it was, but they said, “Yeah. We’ve started to do that. We’ve got the team together for coffee chats.”

I’ve been doing remote meetings for, gosh, the best part of 20 years now with teams around the world when I was at IBM and Microsoft. Those kind of impromptu coffee mornings, lunch … When people are all over the world, it’s actually very, very good. The other thing I’m starting to hear from friends in the industry, particularly with the way the family situation is moving, people may want to choose to work from home, even after all this settles down because of the availability of school and camp and trying to protect older parents in particular. So I think we’re going to see a continuing shift to more flexible working across the economy.

Rob Stott: Yeah. You can get into all the things that the adjustments that bigger tech companies, Facebook, Twitter, offering essentially through this opportunity … “Hey, if you don’t want to come back to the office, stay at home. Work from home.” It’s something that I think that transition to working from home has always been there and happening, but it’s kicked it into high gear and was a major case study in what it’s like for people to work from home. Certainly something. A nice segue, too. You talk about digital technologies and what they’ve enabled businesses and individuals to do in this time.

We’ve gotten a glimpse at that firsthand from an independent retail side of things. I know you’ve been fielding a lot of questions from members and even from some staff here at Nationwide about what’s been changing, what’s been happening. From that high-level perspective to start, what are some of the biggest differences that you’ve noticed from dealers in what they’re doing to manage this situation? I hate the cliché, but I’m going to say it. This new normal that they’re working in.

Dev Mukherjee: I think that’s a great question. Just to pick up one thing quickly, I’ve actually been calling it the next normal as opposed to even the new normal because I don’t actually … Jenna at RWS really helped me with a lot of this thinking. We’re actually seeing it in a lot of what we’re doing at RWS and Site on Time. We think that there are going to be multiple phases. You said we’ve been at this for two months. The thought that we’ll go back to exactly where we were three months ago and all this will be gone just doesn’t seem very likely at this point.

There’s going to be a next normal in June and then a next normal in maybe July and August. Then depending on what we see, a next normal in maybe the fourth quarter. So I think there are going to be multiple phases. To go to your question about what we’re saying with the members, it’s very hard to avoid, as you’re saying, clichés and all the things that one might say here, but the number one piece of feedback we’ve had from members is … Jen Danko gave me this. Someone actually said to her directly, “All of these things that you’ve been telling us for the last two years, we now want to do them now.”

So you can check them off… your website, E-commerce, chat, your reviews. All of these things that we’ve been talking about, people are now embracing, but they want them immediately, which is … Site on Time teams, RWS teams, your marketing teams have all gone through the same transition that the rest of the company has and all of our partners as well, moving to working from home, and yet all of a sudden, I think Jen was telling me as well in this conversation, the number of her customers, or Site on Time’s customers, who were full E-commerce essentially doubled overnight. The demand doubled.

Rob Stott: Wow.

Dev Mukherjee: We got a lot of support, by the way, from the vendors for that, but a huge amount of interest on all parts of our platform. I would say that would be the number one reaction is, “Stores closed or in danger of getting closed. I’ve got to get online right now.”

Rob Stott: Yeah. You see that too I think in … You can go to any consumer sentiment survey and how there was a number of studies done on how shopping habits change because of this. The natural shift is that if you’re stuck at home and can’t go to a physical store, that online presence is where you’re going to turn. We’ve already seen it. I think you could look at the way customers start their shopping experience these days. You could quote the direct number. I think it’s something like 80, 90 percent of purchases now begin online, whether the research is done online.

That shift obviously was going to happen. I don’t want to say … I feel like justified in the message we’ve been preaching, but it’s got to feel rewarding to now see these people, although being a little stressful, having to handle so many customers coming all at once. To now be able to get them to transition online. It has to be something that the more work the merrier I guess is one way of looking at it for you guys, huh?

Dev Mukherjee: Definitely. What’s really exciting, and it’s really two-fold. One, the folks who are on the platform, particularly those that are doing E-commerce, are seeing two, three, four hundred percent increases. Those that were getting on the platform pretty quickly are also seeing dramatic increases. You’ve seen some of the data, particularly in the appliance area. April actually turned out to be a pretty good month because there were new ways of communicating with customers and being able to fulfill transactions.

I talked to one member whose store was actually closed and told me he had a delivery of I think it was 80 freezers. 40 of them had already been purchased and another 40 went that day. How did they know about the freezers through the website, through an email blast? Whether the transaction actually took place on the website or they called up, being able to leverage the website to be able to stay in business and actually grow business during this difficult time has actually been exciting.

Rob Stott: You mentioned appliances. I know that was I think one of those industries where those stores were deemed essential for the most part across the country and able to stay open. You look at a category then like furniture and bedding. I know they had a different experience, as these lockdowns were put in place. From the digital side and what you were seeing, was the experience different from one category to the next? What did you see from that perspective as far as what the different category stores were able to take advantage of from a digital perspective?

Dev Mukherjee: A great question. Actually, we need to use some podcast magic here and insert this slide that I’m putting up. It actually came from Google, but it just shows the searches being done in each of the different categories. As you can see, there was a definite debt for furniture, bedding. Not office furniture and working from home furniture, but generally furniture. As you can see, a massive, massive increase compared to where we were just in January of people searching online for all of these categories.

I think your point on changing consumer behavior, I think this slide shows it. To come back to the actual experience, I think things were very tough in the first few weeks for our members who were selling primarily furniture. I spoke to one member who had over $300,000 worth of merchandise that was scheduled to go out for delivery. He said to me, “I don’t know what the rules are. Do we deliver it and we leave this really heavy stuff outside the front door? Or what can we do?” Because if you remember, even a month ago, we didn’t know what was actually either allowable based on the rules or even appropriate given the nature of the disease.

I think they were hit quite hard, but what’s been fascinating, as we saw in the search chart, is many of the members who stayed open across category and reported that their stores were closed to our MSM team continued to see a lot of traffic on their websites and a lot of transactions. Those who stuck with it, continued to get organized digitally, maybe even did some marketing to tell the customers that they’re open have definitely seen an uptick.

Rob Stott: Related but maybe switching gears a little bit, going back to the earlier point about all these services and offerings that members have been able to and have taken advantage of at this time, I think hearing what you talked about, the marketing side of things. There’s the website, the E-commerce side. There’s chat that I know we’ve been talking a lot about as Nationwide … There’s a lot that goes into this. I think even to some members who … Despite how many have reached out about this, there’s still certainly going to be some that are hesitant or maybe even a little scared of all the things that go into website building, website managing, things like that. Maybe leaning on some of what’s happened over these past few months, what are some of the things you can say to I guess alleviate those fears and simplify this process for them?

Dev Mukherjee: Simplify the process to digital?

Rob Stott: Yeah, of becoming that sort of digital retailer and using a situation like this and turning it from something that could be bad for business to some of these dealers that are realizing actual success right now.

Dev Mukherjee: Sure. I think that’s a great question, and a lot of the reason that we started this even a couple of years ago. I haven’t met anybody yet who thinks any of this stuff is bad, but they are scared. I’ve spent most of my career in this space. So I don’t really find it that scary because of what I understand, but I really am very sympathetic, very empathetic for folks who much of this stuff is new. The unknown is always scary, but the reason that we got into this space is to help with that because we have this ongoing relationship with our members. They trust us. They know that we’re in it for the long haul. They know that we understand the industry.

So we’ve built these platforms to be as simple to implement as possible, from even something as simple as the catalog of all of the products and the images and prices. We’ve worked very closely with vendors to get all of that. Then as we’ve talked about it at PrimeTime a couple of times, these systems are turnkey. If a member chooses to work with us at either Site on Time or RWS, we can actually do 99 percent of the work to get them up and running with a website. Then again, almost all of the work when it comes to digital marketing or setting up some of these systems.

Now if we set up chat for them, they’re going to have to learn how to use chat and video to communicate with customers, but even there, we can help them with advice and best practice. Yeah. Probably if you haven’t done it before, a little intimidating, but that’s why we’re here to help walk them through a process. Tell them what we’ve experienced with many other … Virtually hundreds of other members. Then help them with best practices, so that we can actually leverage all of these capabilities as best as possible.

Rob Stott: That’s awesome. There is a lot of opportunity I think in options open to members, which is cool to see. It’s constantly evolving. We talked a lot about so far on the member side. Are you seeing anything on the vendor side as far as what they’re doing and what … Are they going more online? Has this situation impacted the way they do business with our members and that sort of thing?

Dev Mukherjee: Sure. That’s a number of things together. Let me break them up a little bit. First, I want to say to everybody watching this thing that our vendors have been incredibly supportive. They’ve had a similar reaction to a number of the things that we’ve been talking about for years. They say, “Wow, man. We really need to get on top of it.” Particularly in the data area, how can we get more product information? How can we get live feeds around inventory so that a dealer can sell not only what’s in their warehouse, but what’s also in the local regional distribution center for the vendor? Then pricing information. The pricing can be kept automatically up to date. All those areas, our vendors have been very supportive.

The other thing that they’ve done which was very exciting is that they’ve decided … A number of big vendors have decided to help our members adopt some of these technologies. Support getting E-commerce up and running from not just our biggest members, but actually a number of our smaller members as well. They’ve done this before, supporting MemberNet TV and supporting Flash Tags, which are good for the entire industry. So it’s good to see them do that. The last thing, three, I guess, is yes, we have seen Whirlpool last year and now GE announcing that they will sell online. A number of our partners in other categories also sell through online channels. Not just themselves, but through online retailers.

What’s interesting is in the consumer durable space, I firmly believe that consumers will continue after all this is over to want to see the product at some point. Even if they don’t want to see the product, they want to talk to a local expert that can actually help them decide what to buy. Even the big manufacturers and the big online retailers are not going to be able to deliver the same expertise that Nationwide and definitely our members can provide. In many ways, although this shift to digital or shift to online, shift to buying on websites may seem a little scary, I think that expertise, that knowledge, that ability to pick the right assortment and guide and support the customer will actually help our members out in the long-run.

Rob Stott: Following on that, maybe a lofty sort of question. Put the thinking cap, your wizard’s cap on, Dev. Borrowing your phrase of next normal, what is that next normal for this blend of digital and in-person shopping for the independent retailer?

Dev Mukherjee: I think the immediate next normal for independent retail is going to be what some are calling scheduled shopping. Scheduled shopping is essentially making appointments to either do a chat or a call or video or visit the store. The unplanned dropping in to browse I think will probably go down, certainly over the next few months, but the booking of an appointment to, say, do a video chat to be able to see the product, talk about the product, look at where the product is going to go, get some advice, I think we’re going to see a massive uptick in that. Actually, a significant uptick in appointment booking so that someone can schedule to come to the store, take a look and buy.

What I actually think is very exciting about that is what could be a better indicator of consumer interest than booking a meeting and saying, “I’m going to show up at this time to have this discussion.” In fact, we’re already seeing it. The conversion rates or the measure of how many browsers versus purchases we see on chat is … It’s much higher in terms of the number of purchases. If you measure this as sales productivity for our retailer, productivity around chat, video, scheduled appointments, I expect to be much higher.

Now they’re going to have to work harder to capture those customers in because people are not going to just be driving by and dropping in so much, but I do see that the scheduled shopping phase is going to be very good and very productive for our members if they can support it.

Rob Stott: Yeah, right. Maybe that lends nicely too to what I was going to close on. That’s thinking ahead to the technologies that you see what’s been adopted during this time, but obviously, with technology, things change. Things get upgraded. New systems, new capabilities, things like that. Is there anything you’re looking to as far as what’s next for the independent retailer from a digital perspective?

Dev Mukherjee: Sure. Essentially across the range of things we’ve been talking about, I think for many, the move to fully commerce … At the very least, showing availability and pricing on the website and allowing customers to get right up to the point of purchase. Maybe even scheduling delivery. That is going to become the standard that is expected. I think it’s going to be very challenging for anybody who does not want to show pricing in particular on their website. Availability is a very close second to that, so I think that’s very important.

We’re doing lots of things to make that even easier for our members. In terms of what’s next, for many, it will be some of the things that we were just chatting about. Chat on the website, chat including video, so that you can actually do a sales call online, very much as we’re doing this video podcast. Then scheduling. I think those are the two new areas that we’re experimenting with some stuff and helping our members to get started. I think those will be the key areas.

Looking further into the future, as we’ve chatted on some of our other calls, we’re looking into augmented reality and virtual reality as ways to experience the product or browse the product more easily when you’re online as opposed to in the store. I think we’ll see some of those things maybe before the end of the year. Maybe as experiments first, but we’re definitely looking at both of those areas.

Rob Stott: A west world shopping experience is something I think I could get behind and buy into personally. I think that’d be pretty neat. Throw me virtual VR into … Get one of those full whole-body suits where you can get the sensory stuff happening. I’m in. If you need a test dummy, I’m there.

Dev Mukherjee: Just so I don’t get a call from Tom asking when that’s happening … Just to be very clear, I think step one might be a virtual experience, just so you can browse. Maybe a PrimeTime kind of show type experience to see. I think we’re joking a little bit here, but I think this is going to be exciting. How much will consumers want to do this versus what will actually be useful? Again, I know we’re joking, but for shopping at least, do I really need to have the full environment where I can touch and smell, or is it sufficient to be able to navigate that way?

As humans, we’re used to exploring places. Right? Rather than clicking on a website, looking for categories, maybe it is easier to walk around this virtual space. My kids play Minecraft and one of the things that they love to do as they get into a new world is to look around to see what’s there and to get some surprises. Maybe that will be the initial starting point, where consumers still want that surprise and that excitement around the exploration of shopping. Maybe VR will be where we start, but-

Rob Stott: I don’t think we’re that far off because you look at some of the services and things that are out there right now. A specific example, I can think of two. One in furniture and bedding and one in appliances. We have Mrs. G’s and Sweet Dreams that both have … I know there’s a few more. These are just two that come to mind. They have virtual tours of their stores on their website. It’s not that big of a leap to think that they’re Google Maps types experiences, but that you could throw yourself … Throw a VR headset on, get in that experience and basically be walking around their store in that environment in their store, in the VR environment. It sounds crazy. Like you said, we joke that it’s very futuristic, but I don’t think it’s in the very distant future if it’s not already happening in some ways already.

Dev Mukherjee: Yeah. Rob, you’re exactly right. I think those are two great member examples. Amazingly, this has ceased to be a technology problem. The technology can support the experiences that you’re describing. The question will be, “What do our members and what do their customers want to do? What will they get the most out of?” So I’m very excited to do all the things that we’re doing today and seeing what the impact is for the members. Some of these areas where we have the scale and the relationships that allow us to invest I think are going to be super exciting areas to explore.

Rob Stott: It’s awesome. Can’t wait to get there with you and see what it’s like, but for now, I know I’ve taken up a ton of your time. It’s always fun talking with you and it’s also hard. It’s fun to want to keep going. Hard to get us to stop. I know we get to a point where we’re lucky if people are still listening to us, but we love them if they are.

Dev Mukherjee: Well, if they are still listening, I always enjoy these chats because I think your questions are great. I think the more that we can get this information out there, the more we can stimulate the conversation. I’m always impressed with how many of our colleagues are getting on board, whether it’s using teams internally or having these sorts of conversations with our members. I encourage anybody who’s listening to reach out and ask questions. Maybe we’ll do this again to answer some of the questions that come up.

Rob Stott: Absolutely. Absolutely. Well Dev, appreciate you taking the time like I said.

Dev Mukherjee: No problem.

Rob Stott: I know we’ll catch up again soon. Until then, stay safe, stay healthy.

Dev Mukherjee: You too. You too. Thanks a lot, Rob

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