Santa loves low code: why this holiday is make-it-or-break-it time for retailers
Meet our hosts
John Koetsier and Peggy Anne Salz
Previously, he was the Mobile Economist for TUNE and the VP Insights for Singular.
IN THIS EPISODE OF LOW-CODE NINJAS :
The holiday shopping season is quickly approaching, and retailers are wondering what to expect this year. What will Black Friday look like when people have to stay masked and six feet apart? According to research from Salesforce, the rate of online shopping will likely double, and much of that traffic will be mobile. In a recent episode of Low Code Ninjas, we talked to Sunil Rao, global head of consumer goods go-to-market at Salesforce, about the trends that will shape this holiday season, and how retailers and e-commerce brands will need to reimagine the buying experience and respond with a mobile-first experience.
In this episode, you will learn how brands like Burton are getting ready for a holiday season like no other, but accelerating digitization and making sure they drive experiences that reach customers on their preferred channels with the right messaging. Tune in to the latest episode of Low Code Ninjas to explore how “low-code deployment gives you agility.” And, in Sunil’s words, “It allows you to deploy tailored experiences for consumers at the right time and the right moment.” A capability that’s more important than ever before, as retailers and e-commerce brands prepare to adapt on the fly to an unprecedented shopping season.
Low-Code Ninjas – Episode#4 – Sunil Rao
(This transcript has been lightly edited for clarity).
John Koetsier: Every year, Christmas is critical for retailers. But maybe more than ever before … this year, it’s literally life or death. Welcome to Low Code Ninjas.
Peggy Anne Salz: And my name is Peggy Anne Salz, one of the co-hosts today. And we’re talking about this, you know, it is the holiday season. Growth is off the charts for mobile commerce. I’ve done articles about it. You’ve done articles about it. You know, e-commerce growth — my favorite one: 4 years accelerated change. And consumer behavior has also shifted, and it’s not going back. It’s moved in-store to digital, to mobile, to app.
John Koetsier: Absolutely, Peggy. And I’m John Koetsier. Some places are re-opening: some States, some counties, some countries. Some are locking down again. We saw Israel was locking down again. It doesn’t really seem to matter, in some sense, because that consumer behavior shift that you’re talking about means that retailers need to be digital first. That’s e-commerce of course — and we’ll have a big story about this from our guest during the show — it’s especially mobile commerce.
Peggy Anne Salz: Absolutely. And mobile first, mobile forced, whatever you want to call it. We’re going to also look at the data behind this, because it’s not just a hunch … it is really there. This is really happening. And we’re chatting today with Sunil Rao, he is global head of consumer goods go-to-market at Salesforce … major company, major guest. Welcome, Sunil! Great to have you today.
Sunil Rao: Thanks for having me.
Peggy Anne Salz: Awesome.
John Koetsier: So good to have you, Sunil. That is a long title, but it’s also a big job. Now, I want to dive into the data a little bit. We have a holiday season coming up and it’s — we’ve used the word “unprecedented” way too much in 2020 — but it is kind of unprecedented here. We’ve had this massive growth in e-commerce and mobile commerce this year. And now we have a holiday season, which we know is always super busy. What can we expect here? You’ve done a major report, Salesforce has done a major report. Walk us through what you’re expecting.
Sunil Rao: Yeah. Thanks for having me on John and appreciate the question. I think, you know, this report that you’re referencing, it’s actually a holiday predictions report that we do every year. And we’re in a unique position because Salesforce obviously has a commerce platform where we have access to first-party data that allows us to kind of see what buying patterns look like across our install base of customers. Of course it’s anonymized, but we can get views on shifts in categories, buying patterns, behaviors. And I think one of the key points that came up, and one of the first things it’s in the report you’ll see, is a lot of folks are talking about this shift into digital and how we’ve been catapulted into the future. Well, the numbers are showing it … like we’re now, from last year 14% online sales, to around 30%.
John Koetsier: Wow.
Sunil Rao: So it’s more than doubled, right?
Peggy Anne Salz: Wow, yeah.
Sunil Rao: And we kind of opened the presentation with that, like we … I’ve done this presentation a couple times now. And it’s a really compelling step because you’ve essentially seen this shift now to online and we suspect it’s here to stay. It’s not like this is a temporary surge, that’s going to last for a while. So, that’s one. The other thing is with this increase in sales comes a strain on the supply chain, comes a strain on logistics. So, all the typical — the UPS, FedEx, and every other logistics provider is now strained to the capacity of what the system can do. So companies are looking to other companies that could potentially help, like the Instacarts of the world. Is there an opportunity to work with companies like Uber and Lyft to do some sort of elastic fulfillment. So there’s conversations like that that are starting to occur. But it’s all coming back to the point: there are more people buying online today than there ever have been before.
Peggy Anne Salz: Sunil, I’m just curious, you know, a little bit of testing the data on yourself as well. I mean the massive numbers, but massive shift in behavior … I think yourself as well.
Sunil Rao: Ah, yes, and I think I know what you’re referencing.
John Koetsier: Here’s the story.
Sunil Rao: I’ll say it in two parts. I think one of the findings from the report was that there is a shift in categories that are being bought as well, right? So no big surprise, you know, we’re all now DIYers at home doing home projects while we’re all stuck at home. Myself, I’ve been picking up gardening as a skill — wouldn’t quite call it a skill yet, but you know, playing with the idea. But then home exercise and categories around home decor, like they’ve seen a surge this year relative to last year.
And I think firstly for me, and what you’re referencing, Peggy, is we were in the market for a car recently. And I wanted to purchase a specific car, and what ended up happening was when we went to see it, the car was sold right before we got there. So, on the way back home, the two options were either the car we were going to go see, or a Tesla.
And if you guys have seen the experience of buying this car, right, it is completely online. You don’t need to physically go into a store. They purposely made the experience digital first. So we ended up buying a car online, in one day, and it was all done on my iPhone. It’s absolutely crazy. I never thought that this would be the way that I would purchase my first vehicle in 15 years. But I ended up buying it on my iPhone, including the financing step, including the insurance, ’cause it’s all offered by them. But just goes to show you, like this is now a reality. These kind of high value goods are also something you can buy online.
John Koetsier: I think the most I’ve ever spent on a mobile commerce purchase, it’s gotta be somewhere in the hundreds. I think it was $300, $400, maybe $500 max. or something like that. So I think you’ve … I would like to know what the record is for most spent on a mobile commerce purchase. I suspect you’re somewhere up there.
Sunil Rao: I’m probably an outlier for now, but I hope to see, you know, I hope this is just indicative of more of a forward looking trend. I don’t know when multiple people would be making purchases like this online, but I think the experience, right, that’s what it comes down to. I didn’t feel, while I was doing this, that I was at any disadvantage because I was doing it.
I mean, let alone desktop and mobile, I had access to everything … the inventory that was available, the specs on the car. I was able to Chromecast the screen to my TV so my wife could see what I was looking at, and then we were looking at review websites and switching to YouTube on the phone. That’s the new reality, right? Like the experience for the consumer is centered around that device. So bring everything there.
John Koetsier: Wow.
Peggy Anne Salz: That’s amazing. I’m thinking about that experience, and when you talked about it right there, you know, it is about the experience. That’s what’s really going to make or break this is not just, ‘Is it mobile?’ as in, ‘Is it on my phone?’ Of course it’s on my phone. That’s where it is, that’s a mobile experience, mobile commerce makes sense. But enabling that — and you’re an enabler at Salesforce, you know — I really want to understand what that means, because every brand wants to be in my hand, right? Every brand wants to be close to me, at the holidays in particular, but how do they do that? And how are you enabling that?
Sunil Rao: You know, I talk a lot about this idea of the connected consumer or customer experience. And once again, the example that I just gave is just one of many that brands are trying to achieve, right?
It’s the concept of engaging the customer at the right place at the right time, engaging the consumer with the right message. It’s about allowing them to build the relationship with you, whether it’s through a brand community or it’s, you know, for them just showing interest in a website and filling a shopping cart, not yet creating an account. But being able to connect that digital exhaust and trail that the consumer is leaving behind with the actual transaction itself. And then once you’ve completed the transaction, how do you continue to engage with the customer or consumer and make sure they’re having a great experience with the product. Make sure that their needs are being met, which ultimately opens up the door to position more products and to have a more deep relationship with this customer and increase their lifetime value.
So, that’s kind of the connected consumer experience. It’s very abstract and, you know, any number of technologies could fulfill that. But for us, what we’re really focused on is how do we put the customer at the center and enable the capabilities around, to make that a possibility for a brand — whether they’re launching a new product, whether they’re taking an existing portfolio and making it more digital in nature. This experience itself becomes the project, not an individual capability like commerce.
Peggy Anne Salz: Mm-hmm.
John Koetsier: That’s a great segue, because Peggy and I are doing some research right now on the Top 50 e-commerce apps, m-commerce apps, if you will. And if we look at that list, there’s so many major brands, global brands that aren’t there. Big companies, international companies, you know, globally known brands that don’t show up on the list of the Top 50 mobile apps that do retail commerce. And so, you have this challenge where, look, timeframes are super accelerated right now because of COVID and all of the things that happened in 2020. And so many traditional companies are at risk of getting left behind. You offer huge amounts of technology that helps them get there, but it’s still challenging. How can they catch up?
Sunil Rao: You know, it’s a great question, and I think a lot of companies are struggling with this, right? Because ‘Where do I start?’ is a typical question I get in this domain. And we actually just did an interview with a company by the name of Burton who sells snowboards, if you’re familiar with them.
Peggy Anne Salz: Yeah.
John Koetsier: It’s the iconic snowboard company.
Sunil Rao: Exactly.
John Koetsier: It’s like ‘invented-the-industry’ company.
Peggy Anne Salz: Yeah.
Sunil Rao: Yeah. And they’re just like every other big CPG, they sell … a big chunk of their business is through wholesale and through retail physical stores, right, just like everyone else in the world. And when you get into FMCG it’s even more focused on the in-store experience.
But a company like Burton, you know, when we had this discussion just a couple of days ago, we were talking about how they built the business case to actually start the project, right? And what the project was for them, was to continue to build out what digital looked like. What was this transformation? What was the initial catalyst to say, hey, we need to really focus on the experience here and to build this channel out, because our business might only be 10% of this channel today, but in 3 years, 5 years, it’s going to be a big chunk of the business. And by the way, making this change digitally also comes and manifests itself in-store. So, when I make technology choices that make it easy for the consumer or customer to make a purchase online and have this connected consumer experience, actually when I also have my own storefronts, right, I can now think about the order and management system and the POS being modern, connected to digital, right? And it changes the employee’s experience, but also changes the customer and the consumer’s experience.
So my question, you know, when you hear this, you’re like, wow, that’s a lot like … how do I begin, right? And it all comes down to the business case and how that company or that brand is looking at that specific.
So for Burton, it was easy because it was for their whole portfolio, right? But if you look at a big company, maybe like a L’Oreal or like a Procter & Gamble, you probably have to be specific about what part of the business, which category, which market … and then start thinking, what are the brands that are probably going to be at the forefront when it comes to digital, that consumers are going to be able to engage with? And focus on building those out. And then once you have the capability in-house, you can take it to the other parts of your portfolio.
John Koetsier: Just to dial in on that a little bit deeper. I mean, it sounds a lot like Zumiez, by the way, they have a super interesting story about how they use their — I think they still have 700 stores and how they use those, and what they do there. Really, really cool.
But how can low-code help? If you want to get on that list of the Top 50 e-commerce apps and you’re doing some of the things that you talked about strategy wise, you’re doing some of the things you talked about back office wise, you know, software and distribution, other stuff like that.
How do you actually — how can low-code enable you on that front end piece as well?
Sunil Rao: I think it’s just another part of that, it’s another spoke on that wheel for that connected consumer experience.
Allowing low-code deployment gives you agility. It allows you to deploy tailored experiences for consumers at the right time and the right moment. With the intersection of some sort of an event taking place, whether it’s a pop-up shop or the launch of a new brand or just something going on like an election. Like you have a window of opportunity when you’re not tethered to these highly customized projects of yesterday, where you have to actually code things. You can deploy things that are maybe a little more transient in nature, but they’re able to hit at the right time and drive an experience. And I think that’s the competitive advantage, right? It’s not about building that perfect app that deploys after a 1-year implementation. It’s about just being relevant. And can you be agile and make it relevant?
Peggy Anne Salz: I love that comparison to the pop-up shop, you know that? I really do. I hadn’t thought of that, but that’s it exactly. You’re turning it, you know, commerce and content into a happening, right? It can happen here. It can happen there. It’s enabled by low-code, you know, very quick, very impactful.
And I just got done writing an article around how important it is to have full feature apps, right? And you want to have them from the get-go because, hey, guess what — we feel entitled to them now, right? So I’m just wondering from your experience also, can you talk a little bit about what it is that you need to put in an app?
What needs to be architected in there to bring the best of physical and digital to me?
Sunil Rao: I think … coming back once again, that connected consumer experience, right? Like if you look at the spokes, you’ve got the marketing component.
Peggy Anne Salz: Right.
Sunil Rao: How am I being engaged with? How are notifications aware of my location? How am I being messaged or engaged at the right time, without it being overwhelming? That needs to be baked into how the application is deployed, because if I’ve got something on my device, I expect it to give me something, but it’s got to be timely and it’s got to be at the right moment.
Then there’s the ability to capture the transaction.
So, for example, my story with Tesla, they made it easy for me to buy it on the phone, right? The transaction has to be easy, the data that’s provided, the information. Whether it’s an impulse buy, or if it’s a longer term buy, I should be able to engage with that experience in the app. And then the service component, right? Like how can I ask for help? How could I put up my hand and say, ‘I need more,’ or ‘I need a high touch experience.’ Can I get on a Zoom call that’s integrated in the app with the person that’s helping me buy a higher — actually, that’s a great idea.
If someone from Tesla is listening, that would’ve been a cool way to do a virtual … you know what I mean? Like I just, like, okay, let’s take a look at this thing. Like, I’ll buy that one specifically.
And I think a lot of the big luxury brands are already looking at this, right? Like how can we take the folks that were clientelling in store, but then drive that experience? And the app becomes the conduit to do that. So I think that’s why it’s so important to tie these things together.
John Koetsier: How do you integrate the website experience in the app? Because for a lot of these big brands, the web happened 20 years ago, you know — maybe 15 years ago for some who might’ve got there a little slower — and they have a fully functioning website up and running. And that’s great for people who want to access it on a big screen. It doesn’t always work super well for the small screen, but you can make it work for the small screen as well. But how do you have one experience between your website and your app?
Sunil Rao: You know, this is … it’s a typical conversation I have with several CIOs where you have these companies that have gone down a path where you have these smaller groups within the company that have come up with ideas, and they’ve like very quickly stood something up on a very small and agile commerce provider, or, you know, sometimes even custom. And you start accruing this tech debt, right? Because what ends up happening is every storefront looks different or is not connected on the back end.
John Koetsier: Yes.
Sunil Rao: There’s no underlying commerce infrastructure on which you can base the experiences that can be connected. So what we talk about several times is like, take a step back. Okay, how can we lay in the right substrate? So it’s exactly to your point, John. If I wanted to take that experience and I wanted to build it out further, or I wanted to take maybe a brand or something that has an older experience from a legacy website and start bringing it on and benefiting from what I’ve already done in a couple of other brands.
It’s thinking about it from a platform-first approach, right?
And the commerce capabilities are also abstracted. You’ve got the storefront, you’ve got the capability of the actual engagement with the consumer and the app. But then what are the APIs and end points it’s hitting? And how is that connected to my back office, right? And if I’ve done that the right way, then I can serve up more capabilities without having to go rewrite core components or worry about bringing them along.
John Koetsier: Then you’ve got the whole, you’ve got everything you need, right? Because, whether you’re doing commerce on your website, whether you’re doing commerce in your mobile app, whether you’re doing social commerce, whatever you’re doing, you have the same experience. You have the same service capabilities. You’ve got the same inventory. You’ve got the same connection to the backend. You’ve got it all together.
Sunil Rao: Exactly. And, you know, I want to appreciate the fact that most companies, just like us, right, like if you look at your closet or you look at the technology you have, everything was bought at a different point in time.
John Koetsier: Yes.
Sunil Rao: And you make them work together. Like that’s life, right? Companies are no different. You’ve made technology investments over time, and you might have something — your OMS system is something that’s, you know, 20 years old and you’ve got something a little more recent.
But what we’re seeing is, as companies are starting to think about their migration to the public cloud, like the Azures, the AWSes of the world, right? How can I re-architect the integration points between these systems to be more real time? And as they think about making investments, they now start to look at can I make investments in commerce platforms or front office platforms, that then enable an agility layer that allows me to do things like low-code, and allows me to operate in this space. So, you know, it’s coming from a vendor like Salesforce, of course I can show a slide and show you how all of our technology is neatly connected and all works together.
Reality is a lot of those boxes are different companies. So what’s more valuable is how can we help you get agile quick, bringing along what has to come along, but then starting to tackle the things that we can today to make it easier in the future.
John Koetsier: I love that analogy, Peggy, because I have this continual fantasy that I’m going to wipe my closet of everything in it, and start over.
Peggy Anne Salz: I don’t know about you, John, but are you like me? Do you have a place — I call it the technology cemetery, of all the things I have. ‘Cause I have …
John Koetsier: I have many technology cemeteries.
Peggy Anne Salz: And you’re saying like, yeah, you know, I’ve got this content. If I get rid of this, I’ll never be able to access it again. So, yes, it’s a fantasy. It’s also about bringing together those disparate parts.
And I want to get to something ’cause you’re talking about sort of the enabling part of this, right? I’m going to go back, a little bit of reality here. The challenge, okay? You’ve got your stuff in gear, you know, your company. You’re connected to your consumer, you’re connected amongst yourselves. How about your supply chain? You know, it’s the whole idea that the connected company has partners who are at different levels, at different speeds, impacted differently by COVID. I mean, what is involved in bringing that all together in some sort of cohesive experience? Because it’s not just front end, backend, it is the ecosystem. And maybe also ending at the retailer, but maybe even beyond that?
Sunil Rao: You know, it’s interesting, because the way that we look at the consumer goods industry, it’s RCG — so it’s retail consumer goods. Arguably it’s retail consumer goods manufacturing. Some people will argue it’s also travel and tourism, because when you look at it the continuum — to your point, Peggy, right — the constraints aren’t in any one small box we decide to draw around how the product goes from raw material to finished good. Even in the recycle bin, right?
So to your point, I think one of the things that we’ve heard a lot about, obviously through the pandemic, is the constraint supply and that could have occurred because of a raw material being off, which then hits every downstream process. So it’s not even about driving the experience at the retail store, if you can’t source the product from your supplier, then you’re already at a disadvantage, right?
So I think there are companies that are kind of looking at how can they make it easier to engage with suppliers or maintain a relationship and build resilience, or let’s say redundancy, in terms of how they source goods. So, when I have an SLA for shipping a specific type of product with a specific retail partner as a brand, right, I will probably hedge my bets by making sure I have sourced correctly what I need to hit those SLAs. From a technology standpoint where we have conversations with customers, how can we drive more robust conversations and data exchange change with them, so that we can make those decisions?
Now, one of the interesting outcomes with these discussions is, once again, coming to the connected consumer experience. We care a lot about sustainable products. We care a lot about how products are being sourced, whether they’re ethical, what the materials are, and specifically, if they are for our loved ones, we want to know what’s in them, right? So we’re seeing companies now think about the unlock of the data that used to stay stuck in the supply chain. Meaning here’s the scorecard for the carbon emissions of these X suppliers. How can I take that data and make that a data point that’s available to a consumer making a buying decision?
So that’s what this front office conversation unlocks, because now you can think about this as, not just I need to do this on the backend, but this is actually an enabler for the front end. And if I have low-code, if I have the ability to deploy things quickly, I can create a whole experience around this, and I can make it relevant for the consumer. So, I don’t know if I answered your question directly, but I think that’s how you tie supply chain back to kind of the front office.
John Koetsier: Absolutely.
Peggy Anne Salz: That’s fascinating. I couldn’t ask for a better answer. I mean, think about it John, ‘cause you’ve done your webinars also, and some work on the supply chain, you know. And we think about it as the challenge, but here he’s highlighting something entirely different, which is around using low-code to expose sustainability scorecards, etc. So it’s actually a very different story and something that companies want to tell. So I’m fascinated by that.
John Koetsier: That is super interesting. And it brings up a question that I wanted to ask, which is we’ve been talking about having the right backend, having the right infrastructure, which means you can propagate whatever you need, whatever functionality you need, wherever you need to go. Talk about some of the companies that you’ve seen implementing low-code solutions for their mobile component, what have they been able to achieve? And what kinds of timelines have they been able to make … is it faster? What have they been able to do?
Sunil Rao: Yeah, I think this concept of low-code has been true to Salesforce as a company’s approach in terms of how we deploy capabilities, being a multi-tenant public SaaS company. We’ve always kind of focused on how we make the low-code layer as agile as possible, and allow our customers to kind of build apps by clicks and not code, like we’ve literally cut it in all of our decks.
So a lot of customers that have gone down the route of leveraging the platform to build apps have done so in a low-code fashion.
So, a couple of companies, like Unilever, for example, you know, they’ve built a lot of apps on top of the core platform in order to meet needs across the business, whether it’s a customer marketing supply chain, they’ll have an idea for an app and then they’ll be able to build it with clicks not code. Another example is kind of, they’ve actually built an app — this is a while ago — but they built an app to harvest ideas. So it’s kind of like an idea exchange internally. Like if a bunch of employees are submitting ideas, like what’s a central way to do that? And then what’s a way for people to upvote an idea? ‘Cause most employees might be interested in reducing packaging size by a certain amount for a specific product. So, this kind of environment allows folks to take an idea and say, ‘Hey, you know, historically, if I wanted to realize this capability, I would have to invest in building something on a legacy stack, which would involve coding and a whole IT project.’ A lot of the platform related capabilities allow folks to kind of deploy these apps with clicks not code.
And, you know, that’s more of like a desktop and kind of how that’s approached.
Now, to your question, John, a couple of companies come to mind, and FollowAnalytics, you know, a company that we work really closely with — well, actually when I met the founder, he told me about what they were doing with L’Oreal, which was really cool, right? So it’s enabling the experiences for the mobile consumer on the mobile device, but then how it ties back to all of the capabilities from a commerce standpoint and a marketing standpoint, which is what makes it interesting.
And Peggy, this goes back to the initial discussion we were having, right?
So, companies like L’Oreal, they’re really thinking about how they can they level up the experience for the consumer through mobile, through desktop and also in B2B, right? Because we always give so much credence to how consumers, like how John yourself, Peggy, and myself go online. We always get these like beautiful merchandised images that are like 2, 4, 10 megapixels in size. The B2B buyer goes in and sees like a 512 pixel, like a really crappy image and they’ve got to make their buying decisions on products based on that, right?
John Koetsier: Wow.
Sunil Rao: So a lot of these companies are starting to think, hey, okay, I know the consumer is king and I have to make sure I create product and content for them. How can we take that experience and also drive it to the B2B channels and the B2B buyers as well? So, companies like L’Oreal when they look at their salon-centric capability, right — which is for salons to buy from them directly — the experience for them will look a lot more like the experience for the consumer buying online, than the solutions of yesteryear. So, you know, I would say that there’s a spectrum when you think desktop or mobile, but hopefully that answers the question.
John Koetsier: Imagine being able to invest what you need to invest in your B2B side and be able to do that quickly, and offer the best kind of experience for them to buy, and to order, and to communicate, and to collaborate and all those other capabilities as you can on the B2C side … that’s pretty impressive.
Sunil Rao: Yeah. I mean … for my vertical, the area that I look after at Salesforce, which really is the consumer goods part of the whole retail consumer goods value chain. B2B is a huge point, right? We talk about that as much as the B2C side of the house. And a lot of the conversations are around bringing the B2C experience to the B2B buyer.
And that’s why, as a company we’re investing in something we call “Consumer Goods Cloud,” which is really focused on driving that same experience in an integrated way for the B2B buyer. You know, companies like Frito Lay, for example, they have a website called Snacks To You. You can go online right now and check it out: snackstoyou.com. And it’s meant for …
John Koetsier: This could be dangerous 🙂
Sunil Rao: … it’s meant for retailers to go online and purchase the product online, right? And it looks a lot like the experience that you would have when you go to a website to buy a product as a consumer. There’ll be product recommendations and the whole shebang, but that’s what we expect as humans, right? The interface, once again, comes back to that connected experience. Just ‘cause I’m a buyer at a company, it doesn’t mean that when I shop on Amazon, I’m expecting two different versions of the way I engage.
John Koetsier: Peggy, you know, what’s super interesting about that is that we’re upscaling the expectations on the B2B side, on the enterprise side at the same time as we’re having great experiences on the consumer side.
Peggy Anne Salz: Because they have it at both levels, right, John? I mean, I hate to say it, so I’m like, ‘Buyers are human too,’ is what I want to say, but … could be a t-shirt. I won’t go there. But it really is true because we have these expectations.
It reminds me of when we were both probably writing about what to do with millennials in the workforce. You have to have the tools that they have at home, in the office, or they simply won’t come. And I wanted to look at some of those features because now it’s fascinating me to think, okay, we’re talking about capabilities, and you think about stuff like, okay, augmented reality, geolocation, buy online/pickup in the store.
But maybe you can give me some insights into which of these mobile capabilities are, you know, really delivering. And I don’t mean just like delivering the experience, but maybe even uplift, or figures here to understand what do we need to unlock in the experience for people and also for buyers?
Sunil Rao: Yeah. I think it comes back once again to the joke recommendation I was making — it wasn’t really a joke, but — being able to dive into a video call while I’m making a purchase of a high value good, right? That experience, I think now is an expectation. We’ve been conditioned now to remotely take meetings, to remotely do visits for anything. And I say this because I’m just in the process of a move to Southern California, and we rented a place without seeing it, because we did one of the FaceTime calls and they walked us around, right? So I’m trying to be on the forefront here with digital, so …
John Koetsier: You’re succeeding.
Sunil Rao: Exactly.
Peggy Anne Salz: I think the car and the house do it for me.
Sunil Rao: But that’s it. I mean, it’s the new reality, right?
Peggy Anne Salz: Yeah.
Sunil Rao: And it was good enough, and I think it will be good enough for more people moving forward. But Peggy, to your question, that’s what brands need to start thinking about. Like, this is no longer a question of this is a cool feature, we should probably do it. It’s like, oh, this is a core capability and that channel is also growing to sustain this type of experience.
So, I think what’s interesting that comes out of this now is this blending of the physical and the digital, right? So when things do open back up and we’ve got a vaccine, of course, there will still be a percentage of things that go back to normal in the store, but how much more digital is the experience for the person going into the store? How much more limited are the trips, right? Do we really need to go as frequently? Is there now some sort of a bounce back and forth?
And to your question, I think having the capabilities where you’re able to give that experience of physically being there, may offset the need to actually go there. And that’s the direct impact. I think it’s going to be a reduction in, you know, for a business it’s going to be a reduction in investment in actual real estate. It might be changes in the way that you strategically deploy storefronts, right? Once again, I’ll take Tesla as the example, right? They don’t spend a dollar on marketing, right? They’ve got these showrooms, but they don’t sell through dealers, and they’ve maintained that kind of way of distribution for their product.
Are companies in the future going to start thinking about moving away from the traditional model to think about this kind of an approach?
John Koetsier: Pretty sure the dollars that Tesla spends on marketing are the fines that Elon Musk has to pay to the FCC … but that’s neither here nor there.
Peggy, I think we actually, in Sunil, we’re kind of dealing with somebody — he’s a teenager masquerading as an adult human man. I mean, everything is mobile. He’s buying a car on his phone. He’s renting a house on his phone. This is quite interesting. But it speaks to the next question that I have for you, Sunil, which is uncharted territory.
What is that next uncharted territory? You talked about connect-to-consumer. That uncharted territory that you and your customers can explore, what does low-code open up?
Sunil Rao: Yeah, I think once again, coming back to consumer goods, just ’cause that’s, you know, the conversations that I have and the customers that I work with. I think this stat at the very beginning, that 14% to 30% jump … that is very telling because everyone just thought that that curve was linear and that it’s going to continue growing and that every year I need to slowly adjust the business to accommodate this growing channel.
And then there was a conversation that I had with the folks from Burton just a couple of days ago, and their whole point was ‘We were expecting to only have about 25% of the business be online this year — actually, it’s looking a little more like 30, it might be a little bit more.’ So, with that new reality, with the accelerated growth of the channel, right? I think the fundamental ways that some of these companies are structured and the channels through which they sell, if there’s this much of a shift, I think the impact is going to be in a couple of places, right?
So first of all, are we structured the right way to meet the needs of more digital demand? What does this constraint on the supply chain look like? What are we doing with the UPSs and the FedEx’s of the world? Do we even need to figure out last mile? What does direct-to-consumer mean for me? Is it just shoving more product through Amazon, or am I actually now going to start experimenting with specific brands and specific categories to sell directly and transact with the consumer?
Is there a value in doing that? Burton makes sense. Potato chip manufacturer, maybe not so much, right? So there’s a spectrum there. But I think more companies are going to start looking at that as a more nearer end state than it was, let’s say, a year and a half ago. And a lot of the projects that we’re seeing spin up now are reflective of that.
Peggy Anne Salz: Mm-hmm.
John Koetsier: It’s almost hard to overstate that, hey, Peggy, because I mean, we were — if you look at 100% of what’s sold in the economy, I think we were somewhere between 12% and 15% went to e-commerce, right? And we’re talking about a doubling of that in less than a year. That’s huge! I mean, it’s disruptive.
Peggy Anne Salz: It’s disruptive. It’s transformational. But it is new territory for a lot of companies as well. So I wanted to think — you’re talking about the numbers, you know, how it’s doubling, how it’s growing.
Let’s talk about some numbers just for those who are saying, ‘Yeah, you know what? You’re right, I have to get this. I have to get my act together quickly. I need to do this. I’m going to do it with low-code. It’s low time, it’s low friction, gets all those features quickly in front of my audience.’ But are there metrics, are there outcomes, are there signals along the way, on the pathway that say, ‘You are doing this the right way?’ or a warning, ‘I am not — you are not doing it the right way.’ I mean, what can you share, Sunil? You watch this, you talk with your clients.
What should they be looking for? Because some are striking out into very new territory.
Sunil Rao: You know, one of the things that I hear quite a lot, is this shift in mind state. When we talk about low-code, we have to talk about agile. And when I say agile, what I mean is you’re fundamentally shifting from a mindset perspective to absorb technology as a company in a different way than you have in the past, right? My previous employer, I used to do multi-year implementations of a complex back office technology, and those projects kind of set a standard in terms of how people can … how long it takes to realize benefit from these types of projects, right? So what’s happened now is this inflection point where companies are saying, okay, this digital thing, like, I think it has to be approached differently.
If I do business with a company that is multi tenant cloud SaaS, right, they’re able to give me three releases of technology a year. So I should probably change the way my IT organization is structured and the way they deliver capabilities to business. Okay, that means the KPIs and scorecards I have in place to see whether things are being used or not have to be adjusted, right? And I can probably have more of a real time feedback from my business users.
So Peggy, to your question, you know, I think it’s … the hard metrics are, you have to change the way in understanding how the capabilities are rolling out or being absorbed, and that low-code allows you to be more agile and adjust and course correct. And you don’t have to treat these as multi-year projects every single time. You’ve got to treat them as addressing a business case or a business need in a shorter window of time.
John Koetsier: You know what I love about that is it’s kind of the old adage of the ship, you’re steering the ship. You’re actually pointed in the right direction about 5% of the time, ’cause you’re constantly course correcting.
Peggy Anne Salz: Yeah.
John Koetsier: And that’s the nature of a ship, an airplane as well, and yet you somehow you arrive there, right? And so you don’t — if you’re using low-code, if you’re using agile tools, if you build a foundation correctly — you don’t have to know where Shangri-La is. You don’t have to know where the pot of gold is necessarily. You should have an idea, and you probably do, because you’ve been in business for decades potentially, or whatever the case might be.
But you can start. And there’s power in beginning. And there’s power in going.
And you’re going to learn. And you’re going to get metrics, and you get, you know, something more here, something less there, it works, doesn’t work, whatever. And you’re going to course correct. And if you can do that without being monolithic, if you can do that without having a year long, an 18-month or a 9-month software development project you bet the farm on, and guess what — oops, made the wrong bet, now the company has to close. If you can do that quickly, and cheaply, you can course correct and get where you need to go.
Peggy Anne Salz: I think that’s also really positive. I was just reading something from a webinar, that’s not the point, but the point is that ‘this is the time to be ambitious’ was the closing statement at this conference. And I thought that’s very empowering. It’s that old, you know, try it, experiment, fail fast, get on your feet, that sort of thing. And this is what makes it possible. So it’s actually a very positive note you leave us with, Sunil.
Sunil Rao: Glad to do it. And you know, I’ll say one last thing. There’s a comic by a gentleman named Tom Fishburne, he does a lot of these marketing, I think…
Peggy Anne Salz: Yeah.
Sunil Rao: … he’s called the Marketoonist.
John Koetsier: Yes.
Sunil Rao: There’s a very specific one, and I’ve actually licensed to use this one, so I think I could talk about it.
Peggy Anne Salz: Okay.
Sunil Rao: You have a group of people that come up and they’re talking to an executive and they’re like — the executive is like ‘We need to do something different. We’ve got to do something innovative, something very, very different.’ And then they go back to the drawing board and then they come back and present to the executive ‘Here’s what we should do.’ And his first question — it’s a guy in that comic — is ‘Okay, who else has done this?’ So, it’s like, we get that all the time, right? So it’s like, you’ve got to be the ones that kind of lead the charge here … be the person that buys the Tesla online. You’ll love the experience.
Peggy Anne Salz: And that’s a tough act to follow, Sunil. I don’t know.
John Koetsier: Well, Sunil, thank you so much for joining us on the Low Code Ninjas podcast. We really do appreciate your time.
Sunil Rao: Thank you for having me.
Peggy Anne Salz: Great to have you, Sunil. Great show and some great notes in it. A cartoon at the end — what could we hope to top that one, right? And of course everyone tuning in, thank you as well. And whatever platform you’re in, subscribe, share, comment, like, all of the above, spread the word. If you love this podcast, rate it, review it. We love it, it’s a massive help. And we’d love to have you follow us for more shows coming up.
John Koetsier: Awesome. Thanks, Peggy. Until then … my name is John Koetsier.
Peggy Anne Salz: And this is Peggy Anne Salz. Stay well, keep safe. We’re with Low Code Ninjas. We’ll see you soon.