Competing in the Effortless Economy | Callum Campbell

Jerry Sheldon: Today, we’re going to be kicking off another episode of Retail Rundown podcast. I’m your host, Jerry Sheldon. I’m from IHL Group. And today, we’re excited, because we’re going to be discussing a new era of eCommerce. It’s called the effortless economy, and it’s being driven by consumers. Convenience is the number one priority for shoppers, and a seamless customer experience is, of course, a standard expectation. This has created clear opportunities for retailers, but with that comes significant challenges. Joining me to dive further into this topic is our guest Callum Campbell. Callum is the CEO of Linnworks, a commerce platform that helps brands automate their operations and grow revenues across all their channels. Thanks for joining the show today, Callum. Callum Campbell: Thanks, Jerry. Good to be with you. Jerry Sheldon: My pleasure. So I think we just want to kind of jump right in, and I guess for me, the first question top of mind is this concept of effortless economy. I’m just not from familiar with the term, and I would think possibly some of our listeners might not be as well. So can you kick us off by defining what this effortless economy means in practical terms? Callum Campbell: Sure. Yeah. So the effortless economy is the new world of commerce that we’re now living in, where convenience is the top priority for consumers when they shop. So actually, at Linnworks, we conducted a study last year of over 1,000 shoppers in the UK and in North America. And what we learned from that study was that 76% of the respondents said that convenience was their number one priority when selecting a retailer, more so than price, which I found really interesting. But ultimately what we’re seeing with the effortless economy is this idea that commerce is moving closer to the consumer. We probably all feel it. I feel it. I’m sure you feel it as well, Jerry. It’s becoming easier and easier in terms of how we discover products that we want to purchase, how we purchase those products, how those products are shipped to us, and then the returns and after sales process. That entire experience for us as a consumer is becoming increasingly effortless. Callum Campbell: Convenience is king in this new world. And so, like you said, it’s fantastic for us as consumers, but it creates challenges for brands, for retailers. How do they navigate this new world? And I think the other thing to add to this is on the point around effortless commerce and discovery of products and where we purchase product, a great example of this is just considering new platforms that are coming to market. We’re seeing so many digital platforms becoming commerce enabled. So even recently, platforms like Facebook and Instagram and YouTube and Buzzfeed and Google, and many other digital environments, they’re all becoming commerce-enabled, so that they can monetize their audiences. Because for us as consumers, when we’re in these environments, these environments, they understand us, they understand our behaviors, and so they can serve our product to us that we may be interested in, making that experience ever more convenient. Jerry Sheldon: Well, we live in data all the time and we love consumer surveys, because that’s reality, but you made actually a fascinating point, and you said that convenience, more than price. To me, that’s surprising. Was that actually a surprising finding to you? Callum Campbell: Yeah, I think it definitely was a real surprise to me. I think instinctively, we all think, okay, price is the thing that’s always in front of mind for the consumer. And I think it still is front of mind. And I think Amazon’s driven this kind of dynamic around great prices, but also high levels of convenience. And I think what we’re seeing is that as the market matures and our expectations are shifting as consumers, yeah, we’re saying that actually convenience is the top priority. And if I look at my own purchasing behavior, I mean, of course I’m not going to go and pay twice the price for a product just kind of very casually, however, if the product’s slightly more expensive, yet the terms in which it’s, say, delivered to me are far more preferable, then again, it’s likely I’m going to choose the latter option and go with convenience. So actually, it was a surprise, but as I considered it and kind of processed that in my own behavior, it made a lot of sense. Jerry Sheldon: Yeah. It’s funny, it’s the old adage, time is money. It almost feels that that’s kind of what the survey is affirming, is that there is a definite trade off between time and money, and that we’re seeing that in consumer behavior. So- Callum Campbell: Totally. And again, you think of going to, say, I don’t know, onto a website or onto a marketplace, and if it’s difficult to check out and they’re asking too much information, I can be quite quick to bounce off that website and just go and look for that product somewhere else or something similar. If it feels is like hard work, then I’m kind of looking elsewhere. And I think that is just a growing and prevailing trend. I think we’ve gotten so used to sort of the experience that we get on Amazon, that that’s now almost expected in every different environment we shop on. Jerry Sheldon: Yeah, absolutely. Amazon is a bit of the great instigator. Now, we sort of talked about, for consumers, some of the challenges here. So now we’ll turn the table a little bit, and when we look at the challenges of this effortless economy that it poses now for brands and retailers, what are you seeing there? Callum Campbell: Yeah. So I think for the consumer, it’s great news, right? It’s great for us to be able to access the products in a really convenient way, but like you say, I think it creates these challenges for brands and retailers. So I think there’s two primary challenges. So the first challenge really is around connecting commerce channels. So if I’m a brand and I’m taking my products direct to consumer to market, I can’t just assume that consumers are going to show up in my stores or on my website. I may need to now take my products to my customers wherever they’re choosing to shop. So, that might be on marketplaces. It might be on social commerce channels, also on my website, also in store. So I’ve got to move towards a multi-channel strategy. if I want to stay connected with my customers and make commerce happen on their terms, that’s their expectation, that it’s convenient, and therefore, they don’t just expect to show up where I want them to show up. Callum Campbell: So the challenge then is, well, how do I sell in all of these different environments and stay connected with my customers, and how do I act simultaneously? It’s one thing, selling, say, through a single channel, but moving to a true multi-channel proposition, that can become really complicated. So that’s challenge number one, connecting my commerce channels, selling across these different environments, and doing it simultaneously. Challenge number two is, okay, great. I’m selling on all of these different channels. I’m maximizing my reach. I’m maximizing my revenue opportunity. I’m doing what we call total commerce. How then, when I’m doing total commerce, do I connect all of my commerce operations? Because for anyone who’s sold across multiple channels or online, you’ll know that the point of sale is just the tip of the iceberg, and a huge amount of complexity exists beneath the surface, right? Callum Campbell: And so as you move into more channels, that kind of complexity profile only grows. And so you need to connect all of your back office operations, think about your inventory management, your order management, your shipping, how you’re thinking about kind of your customer profiles, your CRM. How do you do this in lots of different environments, in the backend simultaneously, as well, and make that connect such that firstly, you’re in control of your business and that you can make smart decisions and actually move quickly and things don’t slow down, but secondly, so that you deliver a great experience to your customers and that they keep shopping with you? Callum Campbell: We’re going after LTV, right? It’s not just about a one-off sale. We want to see repeat business. So to maximize LTV, you’ve got to deliver a great experience to your customer. So that second challenge is really about connecting all of those commerce operations together into a single environment, so that you’re set up to scale and be effective. So, yeah, challenge one, connecting commerce channels. Challenge two, connecting commerce operations. Those are the big challenges of the effortless economy for a brand or a retailer. Jerry Sheldon: I mean, I think you make an absolutely fantastic point, really, around this complexity. And I know for me, when I look at this complexity that you highlight, the trajectory is toward increasing complexity. So it seems the challenge is only going to be increasing. And now we start to kick the tires around this concept of the metaverse and certainly with the metaverse, another sales channel that [inaudible 00:08:20] have to stake out kind of their place there. When you look at how these challenges are manifesting, really, kind of in practical terms across different parts of a retailer’s operation, what are some examples that you see? Callum Campbell: So just to comment on what you said there, yeah, I think absolutely the complexity is going to grow. Because commerce is moving closer to the consumer, it kind of grows with that direction of travel. So we should anticipate that this complexity is going to grow and then these challenges become more significant for brands and retailers. So it’s super important that brands and retailers adapt and react to this. So in terms of very practical examples of what that could look like, let me give you a couple. So first up would be, say, around inventory management. So simple example, if you take a product and you sell it on your website and on Amazon and on Walmart, well, if you run out of product on your website, you need to update Amazon and Walmart to make sure that that stock level, that out of stock, is reflected on those channels. Callum Campbell: Because if it’s not, then you’re at risk of selling a product to a customer, but selling a product that you don’t have in stock. And that will leave that customer dissatisfied. They’re likely to give you a bad review, to be frustrated. You won’t be compliant with the standards of that marketplace, and the customer’s unlikely to shop with you again. And so that’s an inventory management problem where you’re trying to synchronize your inventory across, say, three channels with one product. So take that to a world where you’re selling on, say, 10 channels, and you’re selling 1,000 different products. Suddenly, that challenge of synchronizing your inventory becomes a very complicated one. And so that’s the type of example that in the effortless economy, when you’re trying to serve your customers on their terms, wherever they’re choosing to shop, that you need to be able to address. Callum Campbell: Second example might be, say, around order management. So this is sort of post sale. So rather than the presale example I gave you with the inventory, post sale. So you’ve got all of your orders coming in from your different channels. You’ve got them coming in from, say your Shopify store, your BigCommerce store. You’ve got them coming in from Amazon. You’ve got them coming in from Walmart. But then how do you manage all of those orders? How do you assign them to the correct shipping service? How do you ensure that they’re well-managed through your warehouses, or out to your 3PLs? So there’s a complex order management issue and challenge that then emerges when you’re selling multi-channel that needs to be addressed too. And, again, this is one of the kind of leading challenges of the effortless economy, is how do I centralize all of this in a way that means that I’m set up to scale, to bring in more channels, and deliver experience to my customers. Jerry Sheldon: And I know internally, we’ve been kind of really talking about this concept of unified commerce. It’s a single view of customers, a single view of product, a single view kind of price, a single view of loyalty, et cetera. We’ve been talking about it for a long time, but it’s interesting, given the challenges that the industry is looking to address, it strikes me as interesting that it’s still a very significant issue to try to align all of these different components of price, of customer product, et cetera, with a single view. Callum Campbell: Yeah, yeah. Totally. I mean that’s kind of exactly what we address at Linnworks, actually, that very problem with our software and our platform. How do we actually bring a central view of those core components? So how do you get a view of your inventory, of your product information, of your orders, in one central environment, so that you’re set up to be successful? Jerry Sheldon: What do you see are some ways that retailers can mitigate some of these challenges? Callum Campbell: Yeah, so maybe I kind of alluded to it in that last comment, but I think there’s a number of different ways that you can go about this. I think probably across kind of technology process, and then strategy. So probably strategy comes first, but it’s having a really clear view of, okay, have I got a kind of very clear strategy of where I’m going to sell, which products, and which types of customers I’m going after, getting a really clear baseline in the business of what we’re trying to achieve. That might sound obvious, but a lot of businesses don’t actually have that in place, and so they can kind of sleepwalk through the day, and create a lot of undesired complexity and kind of dilute resources. So I think having a really good strategy and a really strong sense of focus is key. Callum Campbell: But then to support that strategy, you are going to need a really strong technology stack. So again, a solution like Linnworks, that can sit at the heart of your business and give you total commerce control at the center of your organization. If you get the right platform in place in your business, it’s going to allow you to grow, i.e. to connect into all of these different selling channels so that you can maximize your revenue opportunities to automate, to connect those workflows together across your selling channels and your operational channels, so that your cost base comes down. Callum Campbell: And when your cost base comes down and you’ve got the right unit economics in your business, that means you can scale and know that you’ll be profitable. And then thirdly, I guess, the right technologies is going to allow you to be in control. By doing this centrally, through one system that brings these different elements together, rather than having in disparate systems, allows your team to work through one interface and get aligned around what they’re doing, and allows you to get the data that you need to make smart decisions into the future. Callum Campbell: So I think there’s strategy, there’s getting the right technology solution like Linnworks works, and then thirdly, is getting the right kind of people and process into the business. So making sure you’ve got the expertise and you’re set up in a way that’s going to allow you to essentially be a winner in the effortless economy. I mean, you want to have the right expertise. Now, I just want to be super clear. What I’m not saying around the effortless economy is that you need to sell in every single environment that’s out there. But what I am saying is you need to understand where your customers are and be in all of those environments. And so getting the right people into your organization to understand the types of channels you’re selling on well can really help you optimize to win in those channels. Jerry Sheldon: I mean, the folks that come to Linnworks, is this kind of how you would describe some of the biggest challenges that they have? I mean, talking about unified commerce maturity, and just kind of where retailers are at in that kind of maturation and continuum. Callum Campbell: Yeah. Yeah. This is exactly it. I mean, we have thousands of businesses working on the platform, from sort of smaller scale businesses, right through to some global enterprise names. And yeah, they’re coming to us, and it’s all the same problems. It really is these issues of, I feel like I’m at a bit of a breaking point, or I’ve hit this kind of glass ceiling, or our operation’s just out of control. It feels dysfunctional. How do we grow effectively? How do we pull all of this together in one environment? How do we grow effectively into the future? Callum Campbell: Because, this isn’t just about solving a kind of short-term issue. Oh, this is going to be here with us for the next six months. This is the future of our customer’s organizations. And so many businesses, this is the future for them. And so getting the right foundations in place, getting the right technology infrastructure at the center of the business to set you up for success is going to be so key. So these are exactly the challenges that we address, and we’ve seen a lot of success with our customers in doing so. Jerry Sheldon: Yeah. We all love a winner, right? Everybody loves a winner. But going forward, I mean, who [inaudible 00:15:49] the winners in this age of total commerce? Callum Campbell: The winners, I guess, are going to be, going back to my sort of previous comments around what brands and retailers need to kind of do in response to this, they’re going to be the ones that respond correctly. So first, they’re the ones that get the right strategy. So I think at the core of that, those who are recognizing that convenience is key. They’re seeing the rise of the effortless economy, and they’re developing a strategy based on that principle. That would be the first, I guess, pillar of a winner. The second one would be those that are then responding to that and getting the right technology in place. So again, businesses who make those smart investments, really get their technology stack set up for scalability. That’s the second pillar. And then again, the third one is going to be those businesses are then investing deep into the expertise to win on these channels and deliver a great experience to their customers. Callum Campbell: But the headline is those who acknowledge that the effortless economy is here and is on the rise. I think what we so often see in the world of business is that in our organizations, we kind of get lost in the weeds and we forget to step back and look at what’s going on. Blockbuster’s a great example, right? They fought the prevailing trend in the market and they’re like, “No, we’re not going to make this move towards a digital world.” And we look back on that and think that was so obvious. Yeah, actually we all do it in our organizations day to day. We’re so focused on what’s in front of us. We get our heads and then we don’t lift our heads up, and the result is that it can cost us pretty big time. And so I think the winners ultimately are going to be those who are recognizing the rise in the effortless economy and getting a strategy and the tech stack and the people in place to build for the future. Jerry Sheldon: You kind of hit a little bit on what I was going to ask as my next question, but I was going to ask, because you kind of talk about Blockbuster. Great example of sort of tunnel vision or being myopic. I talked about everybody loves a winner, but for those who are struggling, kind of turn the tables a little bit, what do you think are going to be some of the characteristics of retailers that struggle in this new economy? Callum Campbell: Yeah, that’s a great question. I think that there are quite a few different ways to sort of think about that question. So I guess, going back to the previous question, it’s going to be around those who are not willing to really, as Jim Collins would say, sort of confront the brutal facts. What’s really going on in the world around them, and how do you position around the major trends in the market? So I think ultimately, those who are not willing to change and really recognize the big trends that are driving the market. So just to maybe give you a quick flyover, from my perspective, the big trends driving the market right now, rise of the effortless economy. We’ve talked about that. The shift to direct to consumer. So I think more and more brands, going direct, bypassing retail networks. Callum Campbell: So I think retailers need to have a response to that. What do they think about from a direct to consumer standpoint? Thirdly is the strengthening of marketplaces. So rather than saying, “Hey, I’m not going to work with Amazon or Walmart or Zaladno or Wayfair,” how do I integrate those platforms into part of my strategy, because they represent so much of the volume in the market. And then yeah, probably the fourth one is just around sort of the proliferation of SaaS and cloud technologies. Callum Campbell: How do I adopt those type of technologies into my business? So maybe thinking about those four trends I just mentioned, I think the losers are going to be those that try and fight those trends. Because I kind of started my career out, actually, in the Wall Street world of trading markets. And what I learned from that experience was that the way to win in a market is to position around the fundamentals. To not try and fight the kind of prevailing trend, but to get behind that trend. And so I think those who lose are going to be those that don’t want to acknowledge those fundamentals. They want to fight those trends, rather than really look at how they pivot their business to ride the wave of those trends. Jerry Sheldon: You didn’t say a single thing that I disagreed with. I’m in violent agreement, I would definitely say. Callum Campbell: Good stuff. Jerry Sheldon: Well, Callum, thanks so much. I know I’ve certainly learned a lot and I’m sure, no doubt, our listeners have as well. Again, I’m a data junkie. The data that you shared, absolutely fascinating. And I’m looking forward to the chance to dig into it further. And I’m sure, no doubt, it’s likely spurred a few follow-on questions for those that are listening to us. So where can our listeners go if they want to connect with you, learn more about Linnworks, and learn more about some of the survey data that you shared? Callum Campbell: So you can connect with me on LinkedIn. So my name’s Callum Campbell, so just search me on LinkedIn and I’m the CEO of Linnworks, so that should come up. So let’s connect and drop me a line and I’m happy to talk and look at whether we can help you with any of these challenges. Or alternatively, head over to our website, so Linnworks.com, and there’s a load of content there that can hopefully help you figure out what the right way to kind of address these problems is in your business. But I’m very happy to talk. I’m sure our team of experts will also be happy to support you where that could be useful. Jerry Sheldon: Well again, thank you so much. I really appreciate taking the time to really educate. Some great nuggets there. I’m sure the creative juices got flowing. A real concern about tunnel vision bad. A great highlight around signals. What are the signals that the marketplace is giving? And hey, we can’t fight against those signals. Embrace, respond, innovate around those signals. Callum Campbell: Totally. Totally. Yeah. I loved it, Jerry. Thanks so much. And I think to the listeners, I just say there’s a huge opportunity out there right now, and it’s just about really going for it and going after that opportunity. I think it’s such an exciting time for the industry. So really appreciate the time and great conversation, Jerry.