University of Arkansas

Walton College

The Sam M. Walton College of Business

Episode 23: John Collins, Founder & CEO of Omniix, Shares Insight on the E-commerce Algorithm

May 08, 2019  |  By Matt Waller

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John Collins is the Founder & CEO of OmniiX, a B2B marketing and advertising firm that specializes in helping brands thrive on Amazon and other e-commerce sites. John is an alumnus of the Walton College and received his BSBA in Financial Management and Investments.

Episode Transcript

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00:07 Matt Waller: Hi, I'm Matt Waller, Dean of the Sam M. Walton College of Business. Welcome to Be Epic, the podcast where we explore excellence, professionalism, innovation and collegiality, and what those values mean in business, education and your life today. I have with me today, John Collins, the founder and CEO of OmniiX. He's also a Walton College alumnus from 2001. Thank you for talking with me today.

00:38 John Collins: Thank you so much for having me.

00:40 Matt Waller: Here you are in Northwest Arkansas, in the epicenter of retail and consumer products. We're in your office here and your office is surrounded by the big brands.

00:52 John Collins: Absolutely.

00:52 Matt Waller: All the big brands in the world, the big consumer products brands are within two miles of here.

00:58 John Collins: Yes.

01:00 Matt Waller: And so you rub elbows with all these people, but you are an e-commerce expert, that's how I think of you and you have an e-commerce company. You do consulting for companies but you also are really helping to sell products through Amazon.

01:18 John Collins: Correct.

01:19 Matt Waller: And so, I know, of course, I've known you for quite a while but I still find it amazing what you've accomplished. And I know your team continues to grow. It's challenging to run a business like this.

01:33 John Collins: It is. It's one of those things to where it never is a check mark, "Hey, okay, we know what to do now." It's never a I've done that before. There's just so much that happens. It's one of those things to where more so than maybe some industries, the ability or the requirement to have to innovate, to come up with what are the new things that we have to do to continue to lead the pack, it's ever-changing.

01:56 Matt Waller: You started OmniiX in 2015, correct?

02:00 John Collins: Correct, March 2015.

02:01 Matt Waller: So it's still a relatively new company, but as we know, in entrepreneurship, you wind up morphing, pivoting quite a bit.

02:11 John Collins: Absolutely.

02:12 Matt Waller: Would you mind talking a little bit about... First of all, how did you found the company?

02:16 John Collins: Okay.

02:17 Matt Waller: And then how did you morph...

02:19 John Collins: That's a great one, and I think I will, I'll start and we were talking a little bit about this earlier and I'll maybe go a little bit deeper, and talk about how did I get into e-commerce a little bit. Just tell... I'll guess I'll give it my brief story in terms of how we got here. My background is in finance and so my degree was in finance from the U of A, and it was one of those things to where for me, I always knew what I wanted to do, at least I was when I was growing up. I wanted to be at that time, a stock broker, I wanted be dealing with investments, and so it was really never really a question about what I do, what I wanted to do, or what I wanted to major in. And I started out pretty early. I started working with Wells Fargo when I was still an intern. Yeah, so when I was there at the U of A, I did start my finance career pretty early. I was working almost full time particularly around the last couple of years there, when I was still in school.

03:08 John Collins: And so I was awarded the top internship award there at the U of A. All that to say is that I was pretty ingrained in what I wanted to do. And so I worked with Wells Fargo, I worked with most recently, at Merrill Lynch, and one of the things that I was wanting to do when I was still at Merrill here locally, my wife and I were contemplating a move out of the area to California at the time. And as you may know, when you have a book of business, it's a fairly localized business, it's hard to manage a book of investments with local business from 2000 miles away. And I was really thinking about what are some different things that I could do in terms of where it's not dependent on me sitting down directly in front of someone every day and just lining up my meetings and where John has to be heavily involved for the machine to run. And so, one of the things I thought back to was... One of the... Also during the process of when I was in the investments, I also owned a consulting company. And what we did is we worked with brands in terms of helping to get funding for their business. And one of the things I did to really promote the business was really the reason why I did it is I wrote a book, and what the purpose of the book was that, "Hey, let's get everyone on the same level playing field.

04:25 John Collins: Here's what actually goes into getting funding for a new business." And then as you've learned that there's actually a lot of steps that's involved here, you'd say, "Hey, I need someone to do this for us." "Well hello, I can do, I can help you do that." That was the... It was a marketing avenue for me in writing the book, and one of the places that we launched the book was on Amazon. And so that's going back to around 2008 or so. One of the things that I found out is that we did press releases, we did all these different things. And one of the things we did is of course on Amazon, we'd listed the book on Amazon. Well, of course, I thought that that's when the sales start. I came to come to find out is that just because you have a book that's listed there, or any item that's listed there, doesn't mean you're gonna actually sell anything [chuckle] So the, actually selling the book and listing are two entirely different things. And so it really, it was a unique experience that although we didn't have success in terms of selling books, it was a unique experience and opportunity for me to learn that, hey, Amazon particularly at that time in 2008, this is an algorithm that's very, very similar to a search algorithm like Google at the time. And why, if you undershoot with the algorithm it was looking for, and you could play to those characteristics that it's looking for, then you could get more visibility just like websites could on Google.

05:43 John Collins: If you knew what Amazon was looking for in their search log algorithm, you could get a lot more visibility for your products. And so that was earlier on that I realized that there is this kind of game that was being played with this algorithm. And one of the great things about that time is that the algorithm at the time, was not very advanced. And so there was a couple of key things that you could do and tweak to really get your items showing up on the first page. And by the way, on Amazon, still to this day, depending on the category, 81% of sales happen from items that are right on the first page.

06:17 Matt Waller: Interesting.

06:18 John Collins: So you have to get the visibility. So what I learned, going back to your... To how we got to today was I had a debacle with the book, but fast forward to when I was there at Merrill Lynch, we're considering can I move and maybe go somewhere, and I got really interested in wanting to launch my own brand. And if I had my own brand, it's not gonna be dependent on John sitting down and talking to someone or any of those things, I could be anywhere in the world and my brand is the one that's out in the forefront, and my brand is one that's selling, and it's creating, or could be creating enormous value. And so I got really into that and that's when I thought about, "Hey, let's try this Amazon thing again."

06:55 John Collins: But however, this time, let's do it a little bit differently than what happened with the book. Let's actually find out what are the guys that are ranking on the first page, what are they doing? They obviously were doing much things much differently than what I was doing. And so that was the start of me going to Amazon and launching a brand. Well, not much long after I started launching my products there, and what I launched was a nutritional supplements company. And that product... Because I started having a lot of attention there, paying attention to our creative, paying attention to our content and our conversion. All those other things that goes beyond just listing on the platform, we started doing exceptionally well. We eventually started selling, I had one product at the time, that one product started selling more than the big, larger, the GNCs of the world on Amazon because again, they were just checking a box and saying, "Hey, am I on Amazon or not?

07:47 John Collins: And so I started having a lot of focus there, I started launching more products, I launched other brands, and I did that for a number of years. It was just myself, a small team that I had outsourced, and I had a really unique advantage that I knew how to outrank a much larger brand. So it goes back to what we were talking about earlier, those more nimble, smaller, had a lot of deep knowledge on the platform. And I think you can really only gain by actually going there and experiencing it. It's not something you can do by going and reading a book or even calling up Amazon and saying, "Hey my product's ranking on page 10, can you help me?" [chuckle] That doesn't happen. That doesn't exist.

08:21 John Collins: And so I had a strong focus there. And so I did that for four to five years. And then I had a friend of mine that worked for one of the shopper marketing agencies here locally and just as you said, there is thousands of brands here that are within a stone's throw of where we're at. And he says to me, "John, I know you're doing this Amazon thing, and you're doing... You're doing that and you're having some success but we work with what's called brand equity pages on walmart.com." And he says, we're building these pages working with great brands, but inevitably, when we're having our meetings, everyone's starting to ask us about Amazon. Can you help us on Amazon, can you help us on Amazon? And my friend says to me, "Well, we don't know anything about Amazon." So would you mind consulting with us maybe a couple of times a week, if we're gonna have a brand that's coming in and asking about Amazon, you can be a representative of us.

09:15 John Collins: So you know that's actually an interesting thing and have an interest in how the agencies are working and you guys have some great brands. It sounds fun, and to be honest, I had a lot of open time at that time because the great thing about Amazon and the brand is once you get some things established, you have this pathway of sales that are coming in. And so I started doing consulting there and I realized that there is a tremendous opportunity.

09:42 John Collins: And again, we're going back to 2015 and so you had... I had always assumed that these brands that are much larger than mine, they might not be doing the same strategies and deepness that I was doing things, but they had an e-commerce team, that they had maybe two, three, four, five people doing some things and trying to figure things out. And I'd come to find out that from the most basic levels, the most basic concepts of e-commerce, I would start talking in a meeting and you'd think I had three heads, [chuckle] from this huge billion-dollar brand. And so that was just amazing, it was a real eye-opener for me. And so it was a great time. I had a lot of fun there. But the biggest importance there is that I realized that I think there's a real opportunity from the brands that are right here in our backyard and guiding and ushering them across e-commerce.

10:33 John Collins: And when I talk about e-commerce, where we are today, a big part of e-commerce is Amazon. There's a reason why we're not called Omni-Amazon [chuckle] It's OmniiX. Right now, Amazon is upfront, if you're looking at where the sales are at for many categories, Amazon owns 70% of those categories. But we're seeing a lot of differences, in terms of change with Walmart, growth with Walmart.com. There's been a tremendous amount of change with Mark Worry and Jet and so there is a lot of us shifting some focus to the Walmart platform right now as well.

11:06 Matt Waller: How many people are on your team now?

11:08 John Collins: 22.

11:10 Matt Waller: Wow. That's a fast growth over four years.

11:13 John Collins: Yeah, it's one of those things to where... And I think this is the journey of almost any company. It's, "Hey, I think there's an idea here. I think there'd be some value that someone may get out of what we're trying to offer here." And again, you talk about a shift of how things have been between 2015 and 2019, some of those focuses and the most we've had that I'll touch on but the change has been different, the change has been quite a bit. But when we started out, we... There was a lot of receptive, there was a lot of product if you will to market fit. We picked up over 50 brands in our first six months. And I'll tell you that's probably not a good thing for a small, nimble team, it's a small team to pick up over 50 brands in six months. And we had a lot of learnings with that but it was a testament to, "Hey, I think there's a real need for what we're offering out there."

12:06 Matt Waller: What kind of functions do you have on your team?

12:09 John Collins: We actually, we have four primary, I'll call it verticals of what we're doing. We have our advertising team. When you look at e-commerce, the advertising, and not only the advertising, what we're really getting to is the visibility of the items is a big need, and when you look at Amazon and you're seeing Walmart following a lot of those steps in the advertising side of things, we've seen some of this and other industries in terms of let's say a Facebook, for instance, used to be when you'd make a post on Facebook, all your followers, or what they called fans would see those posts, now, not so much. The numbers now about 2-5% of your followers or fans see a post, organic post on Facebook. Facebook says, "Hey, you got to pay us if you want your people to see it." I think we're gonna see the same thing in e-commerce. You're seeing that on Amazon right now, there's a bit of such a prevalence of the ads that are on the placements, are on the platform, so it's not only about the organic search. What are you doing on the advertising side of things to get... To make your items visible? We're also gonna see that in Walmart. Walmart just made an acquisition to Polymorph, that company is gonna really help them go to the next level in terms of their advertising platform.

13:23 Matt Waller: What is it called?

13:24 John Collins: Polymorph.

13:25 Matt Waller: I heard about it, but I don't know.

13:27 John Collins: Yeah, so what that's gonna allow them to do is become much closer to what you see on the Amazon platform in terms of how the advertising portal works. There's a strong self-service search capability in terms of advertising on the Amazon platform that you do not see right now on the Walmart platform. And so when you look at it in terms of Walmart growing their revenue, their advertising revenue, which is a goal of theirs, I think this acquisition is certainly gonna help them get there a lot quicker. You're gonna be able to see brands, and companies like myself, it's gonna be able to go out and self-serve, and actually put some spin and get visibility to our items.

14:02 Matt Waller: So, you personally developed the search engine optimization skills for Amazon?

14:10 John Collins: Yes. And trial and error.

14:12 Matt Waller: Trial and error. Lot of experience, you try and provide for yourself that way. And now you've got a company, are you still the main guru here when it comes to Amazon search engine optimization?

14:27 John Collins: In a lot of ways, I am.

14:28 Matt Waller: I would imagine.

14:29 John Collins: Yeah. I am... I would say I am the behind-the-scenes Amazon expert here.

14:35 Matt Waller: Do you enjoy that?

14:36 John Collins: I do. I think that... It's still my free time. I'm reading articles, and we got to talk about how much things evolve. And that's... That's e-commerce. And those are... That's... That's what the platforms do. As soon as something starts working well, it's their objective is to change that. [chuckle] And you stay a foot ahead of everybody else. And so, that's something that I actually enjoy doing. And so, I do that quite a bit.

15:05 Matt Waller: If you search for a product on Google, many times you'll see Amazon come up and walmart.com and others. And, forgive me, but I don't know. Is the search engine optimization coming from the brand that you're seeing, or from the platform?

15:33 John Collins: Both. When you look at Amazon, one of the hidden... I think, one of the most unique things and I call it a hidden advantage that Amazon gives you. When you start having items that start performing well on the Amazon platform, Amazon... So, you pay an Amazon... You pay Amazon fees, obviously. One of the things that those fees are getting you is Amazon starts to partner with those products that are performing well. Is if Amazon realizes that, "Hey, as these items move, we are making money." But when you have as a brand, when you have a product that starts performing well on Amazon, Amazon starts paying that advertising, Google AdWords. So, what you're probably saying is, let's say you're doing the search for a coffee mug or whatever it may be.

16:14 Matt Waller: I never knew that.

16:15 John Collins: Absolutely. And so, when you see those, those ads there, Amazon is paying the bill for that, pushing the product right to a brand's product page. That's a huge win, huge kind of a cost that you're not paying for.

16:32 Matt Waller: So, you have a huge incentive to try to drive business on Amazon, 'cause if you cross a threshold, all of a sudden you hit the afterburners...

16:44 John Collins: Absolutely. And Amazon starts to get there, they're pushing their way in behind your sales there. "Hey, we're gonna... " They're gonna say, "Here's one that's doing well, let's rise it up even better." You gotta think about, there's something that I call, we call here internally... It's called the MAMM factor, and that's an acronym that stands, Make Amazon The Most Money. What are the things that we can do to help Amazon make money? It's... Amazon is a very smart company, and one of their biggest goals is they wanna make a lot of money. [chuckle]

17:12 Matt Waller: And that's really smart. Get everyone going in the same direction and you'll get more of that.

17:18 John Collins: Yes, you'll get more of that.

17:19 Matt Waller: So, I'm more familiar personally with, and I'm not an expert in this by any means, but I'm more familiar with Google search engine optimization. I may be out of date here, but I think for search engine optimization, you want to... If you want to be on the first page or high up in the ranking, you need to use words that...

17:47 John Collins: Keywords? Right.

17:48 Matt Waller: Well, keywords. You need to have backlinks. Is that kind of thing true?

17:55 John Collins: There's a lot of similarity. And I think with both, what you could say that the similarity between a Google platform algorithm and an Amazon algorithm, both of them are ultimately trying to drive relevancy for a shopper search or a consumer search versus what it's serving up. Google, what they're serving up is websites, Amazon is serving up products. Both of them are trying to be as relevant as possible and putting a lot of technology and early AI, artificial intelligence, behind. "Hey, I know you said this. You searched. This is what you typed in, but what you meant is this." And what are all those things that's happening behind the scene that help them serve you what you're going to actually be interested in reading about or interested in purchasing.

18:38 John Collins: On the Amazon platform, the primary drivers are the items that are actually getting on the first page or prominent search rankings, for me, are three primary things. One is your velocity of sales relative to the other items in that category. So, let's say, it is, again, coffee mugs. When you do that search, one of the things that Amazon is tracking, and they track everything. And so, when that shopper goes to Amazon.com and they put whatever search term or keyword that may be in that search field, they're tracking, okay, here's our database of items that we have indexed that may have some kind of relevance to this search term. Which ones are ultimately people buying the most?

19:22 John Collins: Now, here's one of the things that we've recognized, one of the things I've recognized very, very early on. When you put an item on Amazon, initially, when it's first there, there's not a lot of history. And so, especially for a competitive category, you certainly are not gonna be on the first page. You're gonna be on page 20. 'Cause they're like, "Hey, we don't know you. We don't know what your performance is going to be. The first page, it's like our high level real estate. That's our Main Street real estate. That's the expensive stuff. Only the good stuff is gonna be there." And so, a brand new item has to kind of prove itself. And so, one of the things that I've found out very early, and I'll call it a very early metric that Amazon had, is that when you had an item that was... Maybe it's new, or whatever, maybe the timeline isn't so important, but it's not ranking well, meaning on the first two, three pages, and it's on page 10. When you start sending traffic, let's say, I started as a brand sending traffic to Amazon...

20:21 John Collins: With certain search terms. Let's say I was selling a fish oil, which is what I started selling. And I would pay a lot of money from Google to send traffic for people that searched on fish oil and I would give them a coupon code for instance, "Hey buy my fish oil, and get it for 50% off. You had to go there, you gotta search for it, and then find my fish oil, it's on page 10." So what that algorithm realizes that, "Hey, this item that's on page 10 is outselling these items that are on page one. Something's not right. We're out of balance here. People that are searching fish oil are buying this item over in page 10, I better change that." And what did they do? They started moving that item up. So the velocity is a big piece of it. That's kind of the first metric. Your sales velocity compared to other items on that search term.

21:08 John Collins: The second thing that goes into it is your conversion, how many people that are clicking into that item detail page, or ultimately ended up actually buying the item. So what that's telling them is, "Okay, we fed this item here. People went into it. Someone bought it, we made money [chuckle] If the opposite's happening, we had 100 people go into this item, only one person bought versus when the other people bought, the 100 clicks on to it, and there's 10 people that bought it, a 10% conversion. There's not a search term to product relevancy. There's a relevancy problem. We're taking that off their first page. And then the other piece of it, thirdly is, how is our consumers reviewing this product? Okay? So maybe people are going and buying it, but once Amazon starts to see that we're starting to get bad product reviews, it's a three-star product, two-star product, you're gonna start to see your search rankings also start to tail down. So three primary things we focus a lot on.

22:09 John Collins: And ultimately you'd like for people to search specifically for your item. Like Jim's big coffee mugs.

22:19 Matt Waller: Yes, and no.

22:19 John Collins: Would you or not?

22:20 Matt Waller: And I'll tell you why. Sure, I wanna be found when someone puts in Jim's big coffee mugs. But let's think about it. Who would I and we... If we think about things from a visibility standpoint, what I want people to find me from, is broad, fat search terms. I want people to find me not from just Jim's big coffee mugs, but when people put in coffee mugs, I wanna be found.

22:46 John Collins: That makes sense. [chuckle]

22:47 Matt Waller: Okay?

22:48 John Collins: Because there's about...

22:48 Matt Waller: And that's harder to do.

22:49 John Collins: That's much harder to do. So there's about 200,000 people in with... Let's just say they're searching for coffee mugs. And that's one of the things we pay a lot of attention to, is the search volume of those keywords. And when we're writing content those are the things that we're looking at.

23:04 Matt Waller: When you say content, you mean product descriptions?

23:07 John Collins: That's correct. When I say content, specifically, titles, bullet points, product descriptions. And also back...

23:14 Matt Waller: And photos.

23:15 John Collins: As well as photos yes.

23:16 Matt Waller: How about videos?

23:18 John Collins: Videos are important, but it's important, I'll call it indirectly, because it's important to conversion. So if you've got a great video and someone's on, they're trying to... It's sales. So if you can convert and have a great sales message in your videos, it's gonna help you convert better. Now, we don't do a heck of a whole lot here in terms of production of videos. We do a lot of production in terms of the creative content and what we call an image stack. And so what we're doing is a lot of looking at the industry, looking at the category, the top sellers, the number one best sellers, how are they merchandising the items, what does their image stack look like? How are they doing their lifestyles? How are they... Their lifestyles images? What their graphical images look like. We're trying to get a lot of learning there, and that's one of the great things about a platform like Amazon, is that we don't have to reinvent the wheel. Everything that I'm gonna come to talk to Matt about, it's because here's what's proven, it's already working and here's what the data is telling us, that's going to work for you.

24:16 Matt Waller: There's a proliferation of brands right now, and I don't mean that in a negative way, I mean in it in a good way, there's a proliferation of brands. Small players are able to create.

24:29 John Collins: And compete on the same levels now.

24:30 Matt Waller: And compete on the same level.

24:33 John Collins: Yeah.

24:33 Matt Waller: So the optimal size of a firm in general is decreasing as a result of this.

24:41 John Collins: Right, right.

24:42 Matt Waller: And it's challenging for the big companies that are out there because someone... Allbirds, is an example.

24:50 John Collins: Yeah.

24:51 Matt Waller: I saw it on Instagram and it said swipe up and I swiped up, I picked my color and size and then I don't remember exactly what it said, but I was able to buy it with my Amazon account.

25:05 John Collins: Perfect. They're doing something right.

25:08 Matt Waller: So I was able to... 'Cause I already have my Amazon account set up, so it knew my address, it had my credit card information.

25:14 John Collins: Didn't have to yell into your computer or on your phone trying to put in the credit card.

25:18 Matt Waller: No.

25:19 John Collins: It's already there.

25:20 Matt Waller: So, they made it so easy to buy Allbirds. And so I bought them really 'cause I wanted to see how the process worked more than anything personally.

25:30 John Collins: Yeah, learning experience.

25:32 Matt Waller: But it really occurred to me that, yeah, you're seeing this proliferation of brands.

25:38 John Collins: Yeah.

25:38 Matt Waller: Everybody can get into brands.

25:39 John Collins: What I say, one of the biggest things that the Amazon platform has done over these recent years, and it's an amazing time because, I think when you look at those early 2000s and even... And we're still in the midst of it, I don't know if another opportunity where someone from very small means can go and compete with a billion dollar brand. What Amazon has created is what I like to call, it's a brand democracy that they said has not existed in the brick-and-mortar world. What you see, you had a certain kind of a limited players that got to play in that game. You know, the Cloroxes of the world, the P&Gs of the world. How do you go and compete with those guys? You can't. Or it's very hard to. It's unusual. What Amazon gave is a green light, this brand democracy, put your brand out there, make a great product, like Allbirds, and you're gonna have this wonderful opportunity right to the consumer. For someone like myself, it was a... With my first brand on Amazon, it really was a life-changing experience because it's like I could not believe that I can be right here...

26:45 John Collins: Outselling GNC, outselling Nature Made from this product here and this small team that I have. It's a great product and I had a better product than they had at that time. And so, it was just an amazing, amazing opportunity and that opportunity still exists. That's one of the primary things that we're talking to those brands about, the larger brands is here's what they're doing. What we have to now do for a large brand is say, "What can we learn from those guys? What can we learn from the Allbirds? What can we learn from... Maybe some of the guys that are on Shark Tank, and then they went on to Amazon and had crazy success. What can we learn from them and put it into our product?

27:26 John Collins: Another example is you look at the shaving industry. One of our brands is in the shaving category, and you talk about a category with razor blade specifically that's changed over, let's just call it the last 10 years, the entire industry has changed. I remember one of the biggest things that used to irritate me and it's when I used to shave, is when I go to Walmart, and I'd see those razor blades there and it's $30 for this pack of six razor blades and I'd say, "There's no way I should be paying $30 for this pack of six razor blades." Well, I think a lot of people felt that. But at the time, they could do that 'cause that's what was on the shelf.

28:06 John Collins: So then, of course, Dollar Shave Club came about. You saw the Harry's come about, this kind of direct-to-consumer guys that says, "You shouldn't be paying $30 for a pack of six razor blades." Well, what I'll tell you is that that has shifted the entire razor blade industry because of those guys.

28:24 Matt Waller: So one question I have about that is... And you're really perfectly positioned to do this because you're in CPG Central...

28:39 John Collins: Yeah.

28:40 Matt Waller: Here. You have friends, you have colleagues, old classmates, alumni.

28:47 John Collins: Yeah, yeah.

28:47 Matt Waller: Who are leaders in CPG, so you've got an unbelievable network, but at the same time, you know how the little brands are working 'cause you've done it yourself.

28:57 John Collins: Yeah.

28:57 Matt Waller: You know how to use search engine optimization within Amazon. That's a pretty powerful combination of things.

29:06 John Collins: It's a skillset.

29:07 Matt Waller: So what I'm wondering is, from your experience, 'cause I really have no idea. Can the big brands compete? Can they take your learnings and apply it?

29:21 John Collins: I'll tell you the answer is, "Yes, they can," however, it's going to take strong commitment from the leadership to do it.

29:30 Matt Waller: The top leadership.

29:31 John Collins: Top leadership, to do it.

29:32 Matt Waller: Do they have any clue?

29:34 John Collins: The answer right now is no [chuckle] What they see, what top leadership see is and I'll give you a case in point, what top leadership sees is when they go to a place like Amazon and they put in whatever their company's primary search terms are, and they're seeing brands that are not familiar to them.

29:49 Matt Waller: Never heard of them before. [chuckle]

29:50 John Collins: Right.

29:50 John Collins: They never heard of them, they're saying, "Why is my brand not here. I am king of the castle here, I'm a billion-dollar brand. Why are we not here?" And that's what they say. And they say, "I know that we have a problem, we know we're behind. Why are these guys doing this?" But then that question will be posed, so we know there's an issue but there has to be the commitment because there's gonna take some real change in that organization to make a focus on e-commerce.

30:15 Matt Waller: Okay, so let's suppose that some top leaders... Let's suppose you became the CEO of a big brand.

30:27 John Collins: Yeah.

30:27 Matt Waller: Say a pet food brand.

30:29 John Collins: Yeah. Okay.

30:31 Matt Waller: What would you do?

30:33 John Collins: I think one of the things you have to start realizing is... And what, primarily what you're seeing is they're looking at e-commerce as this offshoot type of... Kind of thing, that we should start doing something a little bit better on. Of course, all our focus is over here in brick-and-mortar, but we should maybe start figuring out, "Why are we... Let's do that search thing," and what we're saying too much is, "Hey, let's go get an intern, let's put them on the Amazon listings and we'll get that figured out." What I think what so many are not understanding and if I was the CEO, I'd understand that how my company is represented on the Amazons of the world, of the Walmart.coms of the world is directly impacting my business in the aisle. There's a lot of what I talk about and I talk to my team about this point of inspiration that we have to be at.

31:21 John Collins: So when you have a consumer, we have, I'd say a younger female pet lover, which is a growing category. Guess what, she's having a point of inspiration when she is watching Netflix and she sees something cool, what does she directly do? She doesn't immediately get up and go into the aisle, I'll tell you that. She picks up her phone. That was pretty cool. Let me do a search. We just saw that 74% of searches, product searches start on Amazon. Where should I better be at when she picks up her phone? 74%...

31:54 Matt Waller: Starts on Amazon?

31:56 John Collins: Product search, product search starts on Amazon.

32:00 Matt Waller: My!

32:01 John Collins: Okay, that's amazing, that's an amazing stat. We have to be with that consumer at her point of inspiration. And so, that point of inspiration again, it's not happening when I'm in the aisle most of the time. It is wherever they're at, they're on a jog, they're doing, they're living their life, what's the first, the first thing they're doing is going to their phone and doing a search, or as you said you're on Instagram and you are just scrolling through, you see an ad, "Hey, it's cool." And then even if you don't purchase then, it's now in your mind, and you have a decision that's made. What I'd understand here is that I've now gotta be there now in front of mine and now when my consumer is in the aisle in Walmart in Target in Walgreens, I've now already influenced them. This isn't about this difference between brick-and-mortar, retail and e-commerce, this is retail. If you're not understanding that and being there and representing with visibility, representing with your branding on the e-commerce channels on the Amazon, on the Walmart, you're not playing the full game of retail any longer.

33:10 Matt Waller: So we're probably gonna continue to see a huge proliferation of brands, and we're probably gonna see...

33:21 Matt Waller: Big brands, slowly having to get rid of some of the categories, they're in because they're not gonna... Yeah, there's gonna be some that will respond, but they're already kind of behind.

33:33 John Collins: They're already there. Every day, they're getting further behind. And I was talking, I was having a conversation with a potential client, it's been some time ago and they shared a story with me to where it said, "This e-commerce thing is reminiscent of when the club business came about." Okay, and "Oh, there's this club business but oh, we don't wanna mess with that. We don't wanna mess with that. It's gonna require us to do this, requires student packaging, gonna require new logistics and it's just... Let somebody else can do that."

34:06 John Collins: And before you know it, it had passed them by. They didn't have the club... The shell space in the club business. And now it's very, very easy to look back and say, "Well it's pretty good business. I better be there," You have to do it now. The train has already left. The further you're not putting your... You ain't putting initial behind it, making the commitment to go from the top-down leadership and making the investments in the platforms right now, you're getting further play beyond. And we talked a little bit earlier about people are making those kinds of buying decisions that they're sticking with until that brand screws up. So you're gonna be the guy next in line, hopefully getting a chance at that consumer.

34:44 Matt Waller: John, would you talk a little bit more about some of the different areas you cover within your business, your different departments?

34:53 John Collins: One of the things we've took at... We took a big step in terms of, "Hey what truly is the best thing that we're doing to bring value to our clients, on the e-commerce platforms?" And for us, it really nailed down to two things. It's visibility and branding. And when you look at those two things regardless of the actual e-retailer, Amazon, Walmart, Kroger whoever it may be. Those two things are at the heart of everything that we do here. Visibility and branding. And so here's what I mean by that in terms of from a visibility standpoint, you have to have... A lot of things we talk about is an endless shelf that you can have a million items out there. Does it really matter if you have a million items listed if no one is seeing them? I'd venture to say that, no, it doesn't matter.

35:40 Matt Waller: Yeah.

35:40 John Collins: You have to have the visibility of them. So there's two main drivers of that visibility. The first is the content itself. And so what we see a lot with brands is you have packaging content, or you have a brand brief, you have a brand story, and that's great. That is a wonderful starting point. But we have to realize in this digital environment through and now and when we're talking to an Amazon, we were talking to an algorithm. There are certain things that those platforms are looking for for information, and to try to build that relevancy from this search term to this set of products. And so, for all of our brands, we have a content team. So regardless, you're gonna share with... Your brand story or if you don't have one we'll help you do that but we have a content team to get the keyword research to make sure we have the important keywords in the best places so the search terms were gonna be viewed and indexed by the platforms that they need to be. So that's our content team.

36:39 John Collins: The other side of the visibility is the advertising side of things. So well, it used to be a one-man show, and I would talk a lot about, "Hey, it's about being on the first page, being on the first page." Well, guess what? Now, when you go to many categories on a platform like Amazon, everything that's above the fold are ad placements. You've now gotta scroll down the page to see what we call the organic rankings. The ones that are there for free. And so if you are not playing and participating, your competitor is. And he's there and being shown before you are even from an organic standpoint. So it's now become kind of a two-man show in terms of the visibility.

37:20 John Collins: So you have the content that has to be right in terms of your keywords in the right place, your graphical images, and your image stack as we call it needs to help convert but you also have to have the other side of visibility which is from the advertising and actually getting a strong return on that investment. So that's the visibility side of things.

37:38 John Collins: The other side of the things that's also with our content team is with the branding aspect of your brand and the unification of your brand messaging and brand story across the e-retailers. What we see right now is if there is any kind of branding on a platform, it may look this way on Amazon, a different way on Walmart, a different way on Jet and a different way on Kroger. That's not a seamless brand message that many brands are trying to achieve. So we've gotta get that brand messaging and again, we talk about that point of inspiration. You better look good, you better have strong reviews you better have a brand store page where you can actually sell and have that consumer make a buying decision.

38:21 John Collins: So that's the content team. Then the other thing that we have is an operations team. One thing certainly for sure. Just because we go and do something today and it's working today, doesn't mean it's going to continue working tomorrow in these digital platforms. And so there's a lot of things that happen behind the scenes from our operations team, from a case management standpoint, from dealing with unauthorized sellers, price points, price changes, sellers changing images. All kinds of things that need to stay from something that's good and making sure, it stays good.

38:55 John Collins: Then the other team that we have is our reporting and analytics team. We also have software development here, and then we provide our clients with tools to help them manage the business, also helps us manage the business internally, but what we've gotta make sure that we're doing is providing the reporting and the performance so they understand what's going on and so they can report to their leadership and say, "Hey Matt, what's going on with e-commerce?" "Well, let's take a look at the reporting here. We can log in at the dashboard and see what's going on."

39:22 Matt Waller: So you're also a software company?

39:25 John Collins: You're only as good as the tools that you can utilize, [chuckle] okay. When you're out and I think that's what we see is right now, there's still a lot of fragmentation in terms of different tools and different kinds of needs of running the business. You have a tool for, again, maybe this little advertising side, you have a tool that's maybe gonna help you find different keywords, you have a different tool that's going to help you with inventory. You have a different tool that's gonna help you with accounting. And on and on and on. And it's this whole kind of proliferation of these different toolsets that are out there. And so what we step into is really trying to combine those different toolsets and we allow someone to, regardless of how they're running their business, whether if you are a first-party seller on Amazon or a third party seller on Amazon, a tool that allows them to see everything that's going on with their business from a single tool.

40:13 Matt Waller: That was outstanding.

40:15 John Collins: Thank you, thank you very much.

40:17 Matt Waller: Thank you so much, John. Appreciate it.

40:18 John Collins: I appreciate you coming out man. Thanks for chatting with me.

40:23 Matt Waller: Thanks for listening to today's episode of The Be EPIC podcast from the Walton College. You can find us on Google SoundCloud, iTunes, or look for us wherever you find your podcasts. Be sure to subscribe, and rate us. You can find current and past episodes by searching BeEPIC podcast, one word, that's B-E-E-P-I-C podcast. And now, be epic.

[music]

Matt WallerMatthew A. Waller is the dean of the Sam M. Walton College of Business, Sam M. Walton Leadership Chair and professor of supply chain management. He is also the host for the Be EPIC Podcast for Walton College.

 

Walton College's EPIC values -- Excellence, Professionalism, Innovation and Collegiality -- are the heart of Dean Waller’s podcast. Since the beginning of the series, Waller has interviewed business professionals, industry experts, CEOs and Walton College students to bring listeners first-hand accounts directly from the entrepreneurial world.

 

Waller is an SEC Academic Leadership Fellow and coauthor of “The Definitive Guide to Inventory Management: Principles and Strategies for the Efficient Flow of Inventory across the Supply Chain,” published by Pearson Education. He is the former co-editor-in-chief of Journal of Business Logistics. His opinion pieces have appeared in Wall Street Journal Asia and Financial Times.

 

Waller received an M.S. and Ph.D. from Pennsylvania State University and a B.S.B.A., summa cum laude, from the University of Missouri.





Walton College

Walton College of Business

Since its founding at the University of Arkansas in 1926, the Sam M. Walton College of Business has grown to become the state's premier college of business – as well as a nationally competitive business school. Learn more...

Be Epic Podcast

We're sitting down with innovators and business mavericks to discuss strategy, leadership and entrepreneurship. The Be EPIC Podcast is hosted by Matthew Waller, dean of the Sam M. Walton College of Business at the University of Arkansas. Learn more...

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