Luggage check at NRF

Personalization fuels Tumi’s customer experience renaissance

Charlie Cole is an e-commerce and digital marketing veteran who’s now running digital for Tumi, makers of the kind of high-end luggage that draws envious stares as it’s slipped into the overhead bin.

For the past year and half, Cole, Tumi’s chief digital officer, has been part of a team that has turned the brand around and dramatically increased sales. It took eliminating some corporate-culture baggage (sorry) and a renewed focus on the brand’s customer experience.

We caught up with Cole in advance of his appearance at BloomReach Connect New York, where he’ll talk about how the executive team turned Tumi’s shrinking business into a high-growth brand and where Tumi goes from here. This interview has been edited for length and clarity.

Charlie Cole, chief digital officer, Tumi

Q: Retailers for years have been getting crushed by the tyranny of promotions. Tumi has been able to reduce its reliance on promotions and still show improved financials. Can you talk about the perils of becoming over-reliant on sale pricing and the strategies for weaning a brand or retail operation from that reliance?

A: We think about this really simply, which is, if you are trying to differentiate on price you cannot beat Amazon. You can’t do it. And Jeff Bezos has actually gone out and said as much in his shareholder notes from a couple of years ago: ‘Our partners’ margin is our opportunity.’ When you spell it out like that, we’re surprised more people aren’t as nervous about it as we are. The other piece about it is, a promotion is, by definition, something with a limit. You only have so many days you can be promotional.

The idea of weaning them off is really quite simple. When you over simplify an e-commerce business into what is your revenue based on, it’s three things: traffic, average order value and conversion rate.

That means if you’re going to get off promotions, it’s a fair assumption to say, you’re probably going to hurt your conversion rate a little bit.  People love sales. People buy at a higher trajectory on sales. Which means, you have to come up with creative ways to drive traffic and average order value. For us, average-order-value increase is going to happen somewhat naturally, because things are going to cost more, because you’re not on a promotion. We really want to attack the question of, ‘How can we attract more people to Tumi that are ready to buy, that are interested in the brand and that can offset some of that traffic that isn’t going to convert because they’re deal hunting?’

Q: So how do you do that?

A: We did a multitude of things. We focused on on-site personalization. We focused on messaging personalization. But we also just sort of went back to the drawing board on what our traffic-generation strategy was going to be.

Q: Personalization is a term that’s thrown around a lot. What do you mean by personalization?

A: It’s definitely a nebulous definition. We talk about it as how do you serve the right message to the right person at the right time. That means in email, for example, if all you ever do is open emails about backpacks, we probably shouldn’t shove luggage down your face. That’s messaging personalization.

That’s applicable, also to advertising. And it’s certainly relevant on-site. So on-site personalization, meaning we know you’re logged into your account. Same example. You just bought a backpack. We probably shouldn’t show you a backpack home page. Or it’s Mother’s Day and we know that you just received a Mother’s Day gift. Maybe we should move certain things up, such as, ‘Hey, here’s how to register for the warranty repair.’

We actually started moving that into the store as well, where we want to have our store associates in brick-and-mortar stores have access to a clienteling application so they can have much more visibility into understanding what customers have and have not done, or what they’re interested in.

Give customers information on their terms

Let me give you another example of something that I’ve learned, that I’m kind of directly responsible for. Thirty percent of our inbound calls to our call center are based on people asking where their packages are. That is embarrassing, because to me, that means that we, as a digital team, are not doing our job of getting customers access to information on their terms.

So, the personalization option may be, after you buy something, you get a little thing that says, ‘Click here to receive your shipping notifications via text message as opposed to email.’ Something as simple as that is going to decrease our call volume by 20 percent among a chunk of people.

Q: It sounds like you see personalization as going well beyond selling products.

A: Personalization is far more than just product recommendations to drive conversion rates.  Personalization is after-sale service. Personalization is warranty-repair support. It’s just really more about making sure you’re doing business on your customers’ terms.

Q: You’ve talked about taking time to step back from big strategy to think about customers, to “optimize for the customer.” Can you talk about that?

A: I’ve got to give one of my bosses, Rob Cooper, a lot of credit for that. When I got to Tumi, we were so freaking tactical about fixing the business. And I think, when you say those words, if we just blindly asked 10 VPs of e-commerce, what does “optimize for the customer” mean, they’re going to go off on a diatribe about optimization, usability, digital marketing, CRM, analytics. And they’re going to say 100 words before they say ‘customer service’ and I was just as guilty about that.

We drove the business in a way where it was turned around and we got to see some great things. Then Rob kind of sat me down and said, ‘OK, good. Now how do we make our customers’ lives better?’ And I kind of stopped and said, ‘I don’t think I’ve thought about that in a year.’

Three things about Charlie Cole

  • He’s color blind. It’s an unexpected strength in his role, Cole says. He tells his creative team that the condition means he’ll generally remain neutral on design issues, which means they need to pay that much more attention to the analytical feedback and insights he provides.
  • He plays volleyball. Well. Both Cole and his wife, Elissa, played in college, though Cole says he didn’t approach his wife’s caliber of play. He’d like to find more time for his favorite sport, which he’ll engage in indoors or on the beach. The beach, he acknowledges, is a little gentler on the body, even though he’s a much better player on the hardwood than on the sand.
  • He’s an auditory learner. Cole says he finds it difficult to fully absorb information through reading. In college, he would record lectures and listen to them one extra time to better retain the information. Now, when he reads, he eliminates distractions and slips on headphones to listen to music without lyrics. Classical, hip-hop, techno. It doesn’t matter, as long as there are no words.

Q: So how do you get to the place where you’re thinking about customers?

A: Step one is make it a priority. I know that sounds stupid, but if you want to make a business case for it, that reduction in phone calls (at Tumi”s call center) has a significant EBITA savings. You’re printing money. So customer-centricity and customer service in general, is really the perfect symbiosis between customer desires and company desires. Done properly, you’re increasing lifetime value; you’re decreasing customer support cost; you’re increasing Net Promoter Score. Nobody loses here. It’s just a matter of making it a priority. And we’re starting to talk about some really fun stuff.

Q: Such as?

A: We’re going to select half of our orders over a certain period of time and write handwritten thank-you notes to each one of them with a relevant tidbit about that customer. ‘Considering this is the third Alpha piece that you’ve bought from us, we just really appreciate the loyalty.’ And we’re going to do that and then we’re going to shut it off. We’re going to wait six months and see if it has any sort of effect on interaction with emails, post-purchase behavior, lifetime value, return rates.

It might not matter. And then we go back and we say, ‘Hey, but we got a lot of feedback that customers really like that. Do we just want to front this expense?’ And it’s OK to not have every test work. It’s just not OK, in my opinion, to just do something for the sake of doing it.

Q: You’ve said businesses need to try things that are outlandish and exceed customer expectations. I don’t know if thank you cards are outlandish, though I can’t remember when I’ve gotten one after buying something. What do you mean by being outlandish?

A: I think there’s sort of a lot of industry edict around this idea of surprise and delight. I’m not a big fan of the phrase, because I don’t want to shock anyone. Surprising a customer doesn’t have a positive connotation to me, but delighting them does.

One of my mentors, this guy named Tarang Amin, he used to say, one of the things we always can do is strive for a breakthrough. You have to really strive for something that makes the company different. So, I was talking to you before about  how there are a lot of people calling and asking where their packages are now. We basically leveraged the systems we were given. So UPS, FedEx, they send you a notification. But if you’ve ever bought something online at 8 a.m. and you got a tracking notification at 2 p.m., you and I both know that if you click on it, it won’t work until the next day.

We looked the problem and said, ‘Well there are technologies out there that basically will give you an algorithmically based answer. It’s another thing that’s a little silly. An algorithm to save you eight hours of waiting, but it exceeds any customer expectation. And at the same time, it decreases our phone calls and makes life a little better for all our customers

Keeping up with rising customer expectations

Q: But it seems like consumer expectations are constantly rising. You’ve used the example of Amazon Prime and the breakthrough of two-day delivery. Two-day delivery is no longer a wonder. Now it’s expected. How do you keep up with increasing expectations?

A: There is something very Sisyphus about it, I’ll give you that. What can we do as retailers? It’s another one of those things that I’m almost hesitant to say, because it sounds so obvious. But when you’re within a brand, you know exactly what’s going on, because you live within the brand all the time. The best thing you can do is just remove yourself from the equation and talk to your customers about what they think.

One of the first things we did as a team, is we created this program that was called Brand Ambassadors. We found a group of 18,000 Tumi email list participants — some were buyers, some hadn’t bought, but they were willing to talk to us about very specific things. You can talk yourself into anything. So I think it’s important to keep up with customers and don’t let yourself have tunnel vision within your corporation.

Hear more from Charlie Cole at BloomReach Connect

  • Tumi chief digital officer Charlie Cole will be a featured speaker at BloomReach Connect in New York on May 4. Cole intends to get past “digital transformation” as a buzz phrase and talk about how he and his team actually changed the digital culture at Tumi and helped spark impressive revenue growth.
  • Connect banner

Q: How do you fend off tunnel vision? How do you keep things fresh?

A: Retail is such a microcosmic-timing business. It’s month-over-month comps. It’s day-over-day comps. It’s week-over-week comps, which I really think injects a certain attitude of incrementality. I also believe that incrementality is the biggest enemy to that aforementioned breakthrough. So how do we try to adopt the culture internally that does not preclude the dynamic thinking? And the short answer is, we respect and crave failure.We have a culture where we screw up so much, but we do it in a risk-averse way. We mitigate the cost implications. And we’re constantly testing and iterating at a rate that I don’t think most retailers our size do.

There’s this old adage of measure twice, cut once. We’re like, ‘Just cut the damn thing. Just don’t cut it too deeply that we can’t repair it if we screw it up.’ And I think that’s the attitude that you have to have to be great at digital. You have to make a lot of tiny bets, mitigate the risk around them. And then, the ones that work for you, you have to not double down — you have to octuple down on them immediately.

Charlie Cole portrait courtesy of Charlie Cole.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Michael Osborne, CEO of SmarterHQ, at Shop.org 2016

Combining in-store and online data is harder than it seems

Michael Osborne, CEO of SmarterHQ, knows all too well the challenges for retailers trying to marry in-store and online data to get a full picture of their customers.

He frequently talks with retailers who know that breaking through the barriers separating digital from brick-and-mortar data is vital to keeping up with consumers’ increasing demands during a period of digital transformation.

 

Often, other priorities get in the way of building a seamless system, meaning the customer experience those retailers offer is less than ideal. We caught up with Osborne at Shop.org in the fall. He’s the latest installment of BloomReach University, Video Campus.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Shannon Williams

Video: Digital retailing students embrace data as retail’s future

I recently visited the University of North Texas in Denton to get a sense of how the next generation of retailers (next generation as in like any minute) viewed the digital transformation that has been under way in the industry for some time.

Two seniors, Lindsay Norwick and Shannon Williams took the time to sit down with me and share their thoughts about where all this is headed.

Williams sees a world in which retailers will finally have that complete picture of customers, across devices and channels. Finally, the lines between online and offline will fade completely.

Norwick and Williams’ enthusiasm and keen insights were typical of what I heard on campus. In general, I found a group of forward-thinking and engaged digital retail students who are anxious to push the new models of data-driven merchandising forward and who see the rapid change as an opportunity to redefine how consumers shop and retailers sell.

For her part, Norwick also sees a data-rich world that merges physical stores with digital outlets to a degree that will leave consumers thinking not of online or offline, but just shopping.

As I said in my longer post, if the work going on at UNT is any indication, the future of retail is in good hands.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy. 

BloomReach's Tammy Sanders

Voice of the customer is heard through data at the University of North Texas

To any retail executive, manager or employee feeling a little frazzled, frustrated or forlorn because of the perpetual change and intense competition in the industry today, I have this message of hope:

Help is on the way.

I’ve seen it, having been lucky enough to sit in on a University of North Texas digital retail class called “Virtual Merchandising.” The class was stocked with college students who are ready to tackle the retail field with bright ideas, new technology and a determination to see that their chosen field flourishes.

“They need to have an understanding of their customers,” Associate Professor Kiseol Yang says of her digital merchandising students at UNT in Denton, Texas. “But they continue to think of new ideas and innovative ideas.”

BloomReach's Tammy Sanders teaches digital merchandising at the University of North Texas

BloomReach’s Tammy Sanders discusses data-driven merchandising at UNT.

I was on campus with my colleague Tammy Sanders, BloomReach’s head of learning for Compass, a merchandising analytics tool. Sanders was there as a guest lecturer leading a discussion on using data-generated insights to better think like a digital retailer. I was there to try to get a handle on where the next wave of retailers see the business headed.

Retail has almost always operated in a state of flux — technology, trends, the economy, all have all shaped and reshaped the business of buying and selling stuff. But like so much that technology touches, the shifts and reshaping seem to be accelerating at a geometric rate, which has lead to great opportunity and great uncertainty for retailers. The students at UNT get that.

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  • It was evident from the classroom conversation that these students are bold believers in data-driven merchandising, while also being ready to embrace their own creative intuition and intelligence. And they are excited about finding new tools and leveraging them to bring about new ways of thinking.

    UNT students understand the power of the consumer

    They understand the power the consumer holds in the digital age. They know that in order to serve those empowered consumers, retailers need to focus on providing a five-star customer experience — a shopping experience that is personal and relevant every time, no matter the device or channel a customer uses.

    “Even though the technology is constantly moving forward; and we may not have access to the latest and greatest iteration of the platforms, just having the opportunity to get our feet wet a little bit, and getting the lay of the land for how they’re generally set up, that’s definitely going to put us at an advantage to the students who haven’t had that,” senior Lindsay Norwick, a digital retailing major, said after the class.

    Students at UNT learn digital retail principles and pitfalls using real-world e-commerce, marketing and analytics platforms. For Sanders’ two-class-period course, they used BloomReach Compass to gather insights about consumer behavior and product performance while deciding on moves they would make to optimize customers’ experiences and the retailer’s likelihood of making a sale. The discussion was lively with twists, turns, give and take.

    A sampling of the back-and-forth:

    When devil’s advocate Sanders put forth the argument, “All promotions are attractive to consumers,” the students knocked it down. “All relevant promotions are attractive to consumers,” they countered.

    Next came, “You should boost your best-selling products.” “Where’s the data?” one student countered. Good point, Sanders acknowledged. “Are they best sellers because they sell themselves?”

    “What if I told you that Compass proved this to be incorrect,” Sanders continued, referring to the notion that boosting best sellers boosts a product category’s performance. “Boosting your best sellers does not necessarily improve category performance.”

    In fact, she said, it can hurt category performance.  All of which led to a discussion of the shortcomings of using purchase data to determine the best way to improve product, category or site performance. Purchase data, Sanders pointed out, means you are basing decisions on the behavior of roughly 2 percent of your site visitors. What about the other 98 percent?

    Hearing the complete voice of the customer is key

    Understanding the other 98 percent requires analyzing behavior beyond buying. How did customers come to your site? What various products did they engage with during the same shopping session? What products did they search for from your category pages? What products did they ultimately add to cart or buy after using specific search terms?

    Judging from the students at UNT, the next wave of retailers appears hungry for just those kinds of insights. They understand that consumers are empowered like never before. They can search for the perfect product, the best price, the most convenient pick-up or delivery, the best customer service before and after a purchase. And they constantly carry with them the means to do it  — in the form of a smartphone.

    “It’s about creating that sort of seamless, multichannel experience, because customers are so demanding,” said Shannon Williams, a senior majoring in both merchandising and digital retailing. “They want what they want, and they want it now.”

    The class discussion bubbled with talk about data: Why add-to-cart data is an important measure of success for merchandisers, for instance. After all, in their role, merchandisers can only influence so much — particularly the look and arrangement of product grids.

    They can’t control conversion. They don’t influence the checkout process, for instance. They don’t control pricing.

    But data is power. It is how merchandisers develop a voice in larger decisions within a retail organization.

    “This is how merchandisers change the conversations they’re in,” Sanders told the class. “By saying, ‘The data shows . . . ’”

    Having access to data-fueled insights changes the game for merchandisers. It allows them to quickly and clearly see the value they are adding to their organizations.

    “You have the power to know the value you are bringing to the sites you work on,” Sanders told the class. “The more you can tell that story, the better it is for the business and the better it is for you as a professional.”

    Something tells me, that as these students move out into the workforce, they will have an important story to tell. As Sanders pointed out, the students at UNT are among retail’s first generation of digital natives, having never known a world without the internet and e-commerce.

    “You could be the evolution of the organizations that you go into,” she told the students. “You could be the evolution that is needed.”

    Like I said: Help is on the way.

    Photo by Mike Cassidy.

    Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.