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UncommonGoods takes a novel approach to measuring success

David Bolotsky, CEO of UncommonGoods

CEO David Bolotsky and the rest of UncommonGoods works out of a nearly 100-year-old former Army terminal in Brooklyn.

Nothing is inevitable, but the idea that David Bolotsky would end up being a founder of a New York-based e-commerce company comes pretty close.

From the time he was a little kid, growing up on Manhattan’s Lower East Side, the CEO of UncommonGoods was drawn to entrepreneurship and retail. His grandfather owned a candy shop that he’d visit regularly. What’s not to like?

And the internet? He’s been fascinated with its potential since the moment a friend described it to him over dinner in 1994, at the dawn of the digital revolution.

“I thought it was the most interesting thing that I’d seen in my life, in terms of changing the world,” Bolotsky says.

And yet there were turns and twists along the way to the top of UncommonGoods. Today Bolotsky, 54, sits in a cramped fifth-floor office at the end of a hallway in the hulking Brooklyn Army Terminal — a sprawling, concrete, fortress-like complex that in the first half of the 20th century served as the place from which the military shipped out supplies and soldiers, including one Pvt. Elvis Presley.

From that office, overlooking an industrial section of Brooklyn, Bolotsky runs a retail business that is uncommon for reasons beyond the unusual gifts, crafts, jewelry, home goods and accessories that populate its catalog. UncommonGoods is a B Corporation, a designation presented by a third-party outfit that assesses companies’ social responsibility based on policies on workers, sustainability, governance and community involvement.

For UncommonGoods, that means the company has its own minimum wage — nearly 30 percent higher than the state minimum after a recent increase in the state guideline — and a progressive paid family leave program. It means that it offers modest scholarships to college kids studying art and design and that it donates $1 from purchases to various non-profits on customers’ behalf. It means that it has policies in place to minimize its environmental impact.

Those programs are described on the website, sure. But they’re also front and center in the 100-plus-person company that grows to many more than that during the holiday season.

“I’m super proud to work for this organization,” says Heather Thompson, a senior product manager, who’s worked at UncommonGoods for almost seven years. “It’s super awesome that I know that my work isn’t just about driving the bottom line for our business.”

But there is a bottom line. And UncommonGoods is a business — a business in the bare-knuckles retail industry, where department stores and others are closing locations and scrambling for new models; and where pure e-commerce companies, like UncommonGoods, go up against Amazon every day.

Moving from Wall Street to e-commerce

So how did Bolotsky, a guy who grew up on the Lower East Side, studied poly sci at the State University of New York, Binghamton, and went to work on Wall Street, end up switching careers and starting an online store in 1999?

Remember, there was the love of retail and the fascination with the internet. And, it turns out, the Wall Street gig had something to do with it. From the late 1980s through the 90’s, Bolotsky was an investment researcher at Goldman Sachs, leading a team covering retail.

As the internet became a thing, it became clear to him that it was about to turn the retail industry upside down.

Back in his Army Terminal office, Bolotsky reaches over to a bookcase and plucks an old Goldman Sachs report off his bookshelf. It’s called  “Cyber Retailing 1997: Not yet ready to turn stores into dinosaurs.”

Yeah. He wrote it.

“I quickly came to the view that this was a big deal that companies ought to pay attention to,” he says of the 1990s internet. “What I said in this report was that it was going to catch 15 to 20 percent of the retail market. That was a bold statement then. I think it’s going to end up being conservative.”

UncommonGoods operates out of the Brooklyn Army Terminal built at the end of World War I.

UncommonGoods operates out of the Brooklyn Army Terminal built at the end of World War I.

Sure, at the time some scoffed.

“I remember getting grilled by the management of Borders Group about how I was a cheerleader for Amazon,” he says, “and how I didn’t have a healthy perspective.”

Of course, Borders went out of business. And Bolotsky sits in his fifth-floor office, running a privately held e-commerce business that saw sales increase faster than 15 percent last year.

The retail idea had been rattling around in Bolotsky mind for awhile before he launched UncommonGoods in 1999. The question was, what would he sell? What would he care about selling? The answer came when he heard about an upcoming Smithsonian Institution craft show in Washington D.C.

Bolotsky turned to one of the keys to retail success: Listen to the voice of the customer. When evaluating a retail investment idea, his first step was always to visit the store, he says. So, he went to the show.

Listening to customers pays off

“And this craft show was packed with customers, which is always the most important test of the viability of a concept. Are people shopping there?” Bolotsky says. “And I talked to a bunch of the customers and almost to a person they talked about how they were looking for something different than you’d find in a mall or in some mass-produced store.”

They said they were looking for gifts that reflected both the recipient’s personality and individuality as well as their own. Beyond the entrepreneurial opportunity, the artisan and artistic crafts business also appealed to another part of Bolotsky’s being.

Selling artisans’ and artists’ work via the internet would provide a new chance for those being excluded from economic opportunity — including those in developing countries and in remote areas, who created beautiful and inspirational objects, but who had no practical way to bring them to market.

“I thought, wow, the internet is perfect for this,” Bolotsky says. “You can have your craft show open 24/7, 365 days a year; the artists can focus on what they do best, which is creating their work; we can handle the marketing, selling, shipping, what have you; and only keep it in one physical location, much better than a chain of stores, which has to keep at least one piece on hand. So, I thought, this was a great idea.”

For Bolotsky, it was never just about selling, or even just about business success. From an early age, he focused on social issues. He became a vegetarian at 11 years old and volunteered at animal shelters. He’s been a strong advocate for workers rights — higher minimum wage, better family leave policies — an odd position for a CEO in corporate America. His LinkedIn profile lists his long-held board seat on a non-profit that helps disadvantaged high school kids and his founder position with Friends of Gulick Park — along with his Goldman Sachs stint and his time at Credit Suisse.

Bolotsky points to his dad, who worked at the United Nations, and his mom, a social worker, for inspiring him to think about the world beyond himself.

“She was somebody, who as a 22 years old, took a bus down to Montgomery and participated in the bus boycott,” he says of his mother. “She was always somebody with a very strong social conscience and drummed that into my sister and me.”

And there were the bullies. Yes, Bolotsky was bullied as a kid. He says he empathizes with the underdog and those who are mistreated because of it.

“I was a skinny kid with long hair, who looked a bit like a girl,” he says. “And I was a vegetarian, so I was definitely different. And I wasn’t apologetic about it. My dad always taught me not to take any crap from anybody. So, if anybody gave me crap, I didn’t back down, and I got into fights as a result of that.”

UncommonGoods is doing well while doing good

Social awareness is an ethic Bolotsky brings into his business, which is why you’ll find him working in support of more generous family leave policies in New York and the country. And why he spends time thinking about how he can be most effective in influencing public policy.

UncommonGoods is a craft show that stays open 24/7, Bolotsky says

UncommonGoods is a craft show that stays open 24/7, Bolotsky says

“We have been very active in trying to get certain laws changed, or created, and so years ago, I was more active on the federal front,” Bolotsky says. “I’ve learned there is a much bigger ROI to focus on the state of New York. It is a big state. It can have a big impact. As a business here, our voice is heard.”

And it’s an approach that inspires many who work for the company. Thompson, the product manager, says when she thinks about pushing UncommonGoods revenue higher, she is thinking about more than the bottom line.

Her thinking: The bigger the business grows in terms of revenue, the more powerful Bolotsky’s voice when he speaks up on social  and economic issues whether at the state house or the White House.

Jillian Brendlen is a site merchandiser who’s been at UncommonGoods for three years. She says that the social responsibility that the company displays was definitely part of her decision to take a job there.

“I really liked that aspect,” she says, noting not every retailer embraces social responsibility.

Still, Bolotsky doesn’t lose sight of the fact that UncommonGoods is a business, with all the requirements that businesses have.

“Do I want the business to be successful,” he asks? “One hundred percent. I care deeply about our return on capital investment. At the same time, having a positive effect on people, at the end of the day, means a lot more to me than what the business is valued at.”

Sure, he says, doing good and doing well in business can at times be colliding ideals. But the equation is more complicated than some make it out to be. Consider UncommonGoods’ decision to pay warehouse and seasonal workers a minimum of $14 an hour, when the state requires only $9.70.

“I do believe there is often enlightened self-interest, where you can pay people more and you get more from them. There is greater loyalty. Hey, if we’re paying above market, that person is less likely to want to quit their job. They might even work harder because they feel valued by you and respected by you.”

Some of those results are hard to measure precisely, though Bolotsky has another gauge by which he governs his minimum-wage strategy.

“I’m not a believer in socialism or communism,” he says. “At the same time, I think business owners have a responsibility to treat people fairly. And part of it is, I believe strongly in equality of opportunity and providing an opportunity for folks to start out with a seasonal warehouse job and work their way up or get an opportunity elsewhere.”

UncommonGoods is a retailer, not a political platform

All that said, Bolotsky is not interested in using UcommonGoods — neither the website nor the company — as a political platform.

“I want this to be a big tent,” he says. “Just like I want our country to be inclusive, I want  our company to be inclusive. And if you’re a conservative or a liberal, I want you to feel comfortable shopping here and working here. At the same time, I want us to be sensitive to people from all walks of life.”

Late last year, as the November presidential election approached, Thompson began thinking about adding to the post-election home page some acknowledgement of how exciting it was that the country had elected its first female president.

“That was my assumption,” she explains. So she brought the idea up with Bolotsky.

“Dave said, ‘Not everyone loves Hillary Clinton.’”

But, Thompson says, Bolotsky was willing to listen and explain his thinking, though the answer was no. But not just no.

The day after Clinton was defeated by President Donald Trump, Bolotsky sent Thompson a note. In it, the boss included a quote from Martin Luther King Jr.: “The arc of the moral universe is long, but it bends towards justice.”

It was his way, Thompson says, of lending support and encouragement.

“We went back and forth,” she says of the pre-election debate. “There was a lot of back-and-forth. He opens the door and allows for that kind of dialogue.”

Bolotsky has helped foster an atmosphere of openness. Though the company is privately held, he shares detailed quarterly financials with employees.

Thompson describes the atmosphere as being like a startup — a business where people are expected to try new things, move out of their comfort zones and speak up.

“The smartest people I’ve ever met are here,” Thompson says. “You work with incredible people and creative people. If you don’t have a solution, it’s, ‘Let’s figure one out.’ It’s really fun.”

For her part, Jillian Brendlen was surprised that Bolotsky interviewed her before she was hired. Her initial assistant merchandising coordinator position at the company, after all, was “kind of like low man on the totem pole.”

UncommonGoods' CEO David Bolotsky talks with PR person Jennifer Coleman

Bolotsky talks with PR and Social Media coordinator Jennifer Coleman about an upcoming New York Paid Leave Coalition event.

“I thought that said a lot about how much he cares for the staff and his team members,” she says. She soon found herself steering a big initiative to help create an UncommonGoods’ feature under which customers can pre-order items before they’re available for sale.

“I think he noticed that I was kind of stressed out,” Brendlen says. “He called me into his office and said, ‘Just come directly to me if you have any questions.’” As Brendlen left his office, Bolotsky leaned out the door to tell his executive assistant, “If Jillian Brendlen ever needs anything, make time for her.’”

“And that just made me feel, one, they’re very committed to this program, and two, they’re very committed to me leading it,” Brendlen says.

Committed is a good word for Bolotsky and his mission with UncommonGoods. He knows he faces unrelenting competition from upstarts, marketplaces and most of all Amazon. He’s still has a lot of faith in technology as a way to stay competitive.

“I’m a huge believer in technology. If I weren’t, I wouldn’t have started an internet retail business that is built on technology,” he says. “So we are always looking at technology to make us more efficient, make our team members and our customer experience better.”

But technology alone is not enough to fend off Amazon.

“They’ve largely taken over e-commerce and they certainly are setting the standard for customer expectation,” Bolotsky says. “They keep getting bigger and they keep getting better. They’re a ferocious competitor that I have a lot of respect for.”

Bolotsky’s approach to Amazon is to focus on minimizing UncommonGoods’ disadvantage in areas where the Seattle behemoth is hard to beat. Think speed and price of delivery. And then he focuses on ways to set UncommonGoods apart.

“I think you can compete against them by having differentiated product and differentiated customer experience — and we work hard to do it.”

The internet that Bolotsky saw in 1994 has indeed changed the world — in ways predicted and unforeseen. It spawned Amazon, which arguably has changed retail in ways unlike anything since. But Bolotsky is ready to take on that challenge from his fortress in Brooklyn.

After all, in many ways, when it comes to e-commerce, he remains that kid in the candy store.

UncommonGoods is a BloomReach Compass customer.

Photos by Mike Cassidy

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

 

Scott Emmons

Video: Make innovation a part of your e-commerce strategy

Technology visionaries in retail organizations shouldn’t be order-takers, fulfilling ideas cooked up without the upfront input of digital experts, says Scott Emmons, head of Neiman Marcus’ Innovation Lab.

 
Technology should be included in the earliest conversations about strategy, Emmons told us when we caught up with him last month at NRF’s Big Show. Being open to new ideas and creating a space where they can germinate and be nurtured is one key to Neiman’s e-commerce success.

This is the fourth in our ongoing series.  See more BloomReach NRF coverage on the blog.

(Full disclosure: Neiman Marcus is a BloomReach customer.)

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

 

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The NRF’s Big Show in photos: BloomReach Relevance Report

So, another Big Show has come and gone. The annual trade show is the gathering for the retail tribe — and 35,000 industry professionals converged on the Jacob K. Javits Convention Center in New York for this year’s version.

NRF attendees spring through the Javits center

It passes in a blur. Omnichannel, AR, VR, robots, CX, DX, data, POS, ROI, millennials and GenZers. No one could see or hear it all and certainly no one could remember it all.

And so, a few enduring images. (And for those who want to learn a little something, BloomReach’s blog posts from NRF are available for reading and memorizing).

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The event got off to a cold start with a something of a snow storm the night before the curtain went up on the Big Show. It started out looking pretty serious, but in the end it was more of a whimper. Nothing like the record snowfall of  nearly 30 inches that blasted the city shortly after last year’s affair.

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Things heated up pretty quickly in the exhibit halls (235,000 square feet worth), during presentations (more than 300 speakers) and during networking encounters (too many to count).

Attendees getting shoes shined at NRF's Big Show

Like high school, NRF is a place to make an impression — and of course you want to make a good one. For many it’s an opportunity to fish for customers, employees, partners and jobs. There is always some angle to be working, which is not to say that everyone is on all the time. Sometimes it’s just nice to commiserate with members of your own tribe. But it’s always good to put you best foot forward, in the hopes that just the right person will take a shine to you.

Tristan Pollock introducing a presentation by Lars Petersson of IKEA and Christopher Gavigan of the Honest Co.

It could be easy to feel small at times. The hall where the main keynote speeches were delivered was the size of an airplane hanger — or two, as Tristan Pollock of 500 Startups might have discovered. He took to the stage to talk to Lars Petersson and Christopher Gavigan about connecting with socially aware consumers.
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The thing about the talks at NRF, and other trade shows, is that the talking never stops. There is the talk and then there is the talk after the talk. And sometimes the talk before the talk. You’ll find that some of the big acts, your Richard Bransonsmarkbishop (Virgin), your Brian Krzaniches (Intel), they take to a big stage with a back way out. The rest of the speakers? They politely field questions, hear pleas for hiring someone or buying something and exchange business cards long after their talks are finished.

And, of course, it’s not that everyone wants to speak and run. There are opportunities in the crowd for those who address the crowd, which is one reason they’re on stage in the first place.

Not that anyone is counting, but you can draw some conclusions about the quality of the talk, or the place in the pecking order one holds, by the size of the crowd descending after the formal presentation.

Jodie Fox's fetching gold boots on stage at NRF

But the talk is still the thing and style counts, particularly at a retail show, where honest-to-goodness fashionistas are known to roam. So you can imagine the pressure Jodie Fox must have felt. She’s a founder of Shoes of Prey, a site that allows customers to design their own shoes. A pair of flip flops wasn’t going to cut it for a shoe enthusiast in front thousands. No worries. She was fast on her feet, strolling out in some stunning gold boots, for a presentation on how the consumer experience is growing more important in retail.

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And sometimes, on stage, in front of God and everybody, you just have to be honest. IKEA’s Lars Petersson gave a presentation with Christoper Gavigan, who’s company is called Honest, but it was Petersson who was most forthcoming. He acknowledged that building IKEA furniture can at times be a maddening experience. Maddening enough to cause stress among family members — think spouses especially. He talked about it in a humorous way. Nonetheless, good for him for addressing the elephant in the room during the keynote, a room, as we’ve established that would hold plenty of elephants.

display with a robot playing a guitar

There was plenty of talk about artificial intelligence and it’s ability to revolutionize retail by learning about customers at a scale that humans never could alone.Simbe CEO Brad Bogolea on stage with the company's Tally Robot during a talk by Intel's Brian Kzranich And so, the model is human+machine.
Simbe CEO Brad Bogolea took to the stage to show off Tally, a robot that can help with keeping track of inventory.

Augmented reality and virtual reality were hot topics as well. And, of course, those technologies could help. But you have to wonder how many retailers have the capacity to start playing around with things like augmented and virtual reality. To answer our own question, we think some players are in a position to see if they can get a competitive edge, or a bigger competitive edge. And, of course, some are already using the tools.

The Empire State Building on a gorgeous sun-splashed day in Manhattan

And as fascinating as all the talk was, NRF felt at times like those days back in elementary school, when you thought you’d burst if you had to stay inside one more second. While most of the week was cloudy, if not winter cold , Monday presented Manhattan with a glorious sunny day, the kind of day you could walk for miles and marvel at the world’s loveliness. If you could actually get outside.

DJs playing tunes at 2017 NRF Big Show

But even if you couldn’t get outside, there was plenty of opportunity for fun and exercise. DJ’s were scattered about the convention center spinning discs (figuratively) that seemed a little incongruous, but welcome, in a place where serious business was going on. Speaking of serious business, just as the BRRR wondered to itself, whether anyone would actually dance to DJ music at a trade show, two women bopped by cutting a mean rug. We had, of course, put our camera away, because that’s just how these things go. Use your imagination.

luggage lined up at NRF on the last day of the show

And then there comes a time when it is time to go. At some points during the three-day show it seems like it will never come. And yet in retrospect it sometimes seems the last day snuck up on you while you weren’t paying attention.

Crowd streaming out of the Javits center

Until next time.

Photos by Mike Cassidy

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

 

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How to connect with socially aware consumers: NRF’s Big Show

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Staples Ryan Bartley speaks at NRF

That was easy: Staples shows us what Alexa would be like at work: NRF’s Big Show

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The future of retail starts now: lessons from NRF’s Big Show

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How to use content to connect with customers: NRF’s Big Show

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Charging up the stairs at NRF's Big Show

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BloomReach’s reliability delivers happy holidays to online retailers

Santa on a scooter

After a month of looking at what e-commerce data says about consumers, retailers and the economy in general, it’s time to turn our gaze inward.

And honestly, the numbers are good. BloomReach at times during the recent holiday season handled record levels of traffic, while delivering superior service to our retail customers during their most crucial time of the year.

Retailers, of course, expect superior service. And every company promising to increase e-commerce revenue by providing a memorable and relevant experience for retailers’ customers, strives to deliver flawlessly.

Inside BloomReach

    One in an occasional series of stories that look at the people and projects that make BloomReach tick.

But since we put the performance factor out there and gave ourselves a little hat tip in the process, we thought it fair to look back at just how BloomReach performed during the holiday season.

Naturally, data flowing to BloomReach’s servers was substantially above normal, given that the holiday season is the busiest for our retail customers. No matter the season, that wealth of data gives BloomReach tremendous insight into what is happening on the web, particularly on commerce sites, on any given day.

Holiday traffic is a big test for everyone

But the holiday season is particularly interesting and particularly challenging. By one of the most telling measures of activity on our customers’ sites, traffic to BloomReach servers peaked at 300 percent of the traffic on a typical day. That mega-peak was Cyber Monday, not surprisingly, but traffic remained strong throughout the holiday season, as you would imagine.

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And throughout the dramatic holiday traffic spikes, BloomReach’s digital infrastructure was up and running with no outages or downtime — with typical (or better) response times.

BloomReach provides tools to help drive organic search traffic, to personalize digital sites, to increase conversions through improved site search and navigation and to provide merchandisers with the insights they need to best tell the right story to their customers.

And during the holiday season, BloomReach was able to deliver those services with reliability that couldn’t have been better.

It’s a huge deal for digital retailers, who generally rank latency — or speed — and uptime — or reliability — as their top requirements when partnering with technology companies.

BloomReach has a unique view into the web

BloomReach’s position as the company that more than a hundred retailers, including some of the largest online sellers, rely on to improve their customers’ discovery and search experience, gives us a unique view into the workings of the web.

The company’s machine-learning technology relies on data from 75 million unique consumers a month. In all, BloomReach captures data from more than 20 percent of all U.S. e-commerce.

And based on all that data, BloomReach is able to get a firm grasp on the trajectory of e-commerce. Company data shows that server calls related to BloomReach’s Commerce Search product increased 2.7 times on Cyber Monday compared to a more typical Monday in September. Again, BloomReach handled the surge without incident, which is key, given that Commerce Search powers site search and personalization on retail customers’ sites.

The holiday traffic spikes were global, by the way, with traffic to our European customers up more than four times at the peak during the long Thanksgiving weekend. In fact, the data shows that Black Friday is a thing outside the United States, given that the peak in Europe hit on the day after Thanksgiving.

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Reliability is a key consideration for any retailer choosing a partner to optimize the customer experience on their websites. Downtime means lost sales, frustrated consumers and the kind of poor customer experience that might mean that frustrated customer is not coming back.

A number of major retailers put their faith in BloomReach after head-to-head tests pitting BloomReach against multiple competitors. They included retail giants like Toys R Us and Staples, the largest office supply retailer online and a business that relies heavily on site search. Those retailers’ faith was rewarded over the holiday season, as BloomReach delivered service without fail.

Preparation is the key to a successful holiday shopping season

BloomReach’s peak performance, in the face of peak traffic, was no accident, of course.  We think about preparing for high holiday traffic all year. In fact, given BloomReach’s diverse set of retail customers, we face regular spikes on days like Valentine’s Day, Mother’s Day, Father’s Day, Singles Day and during the back to school season, for instance.

We torture test our systems in the run-up to the holiday season. We run drills, like first responders exploring ways to avoid the worst. We provision our cloud-based system with the ability to scale up in advance of monster traffic. As a result, BloomReach delivered its service to customers during the holiday season with the same speed it does during quieter times.

It’s nice, of course, to be able to look back at a successful holiday season. But if the season just past taught us anything, it’s the importance of looking forward. With the growth of e-commerce, the next surge will be here sooner than we think; and it will be bigger than the last.

Photo by Mike Cassidy.

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