17 Dec Tom De Bondt | The Two Types of Ecommerce Companies
There are pure ecommerce companies, and then there are traditional retailers that moved online while still maintaining an offline presence.
To be successful, these two groups should approach the business with very different strategies, says Tom De Bondt, director of IT and digital at Overstock Home and X2O in Belgium.
For example, bricks and mortar brands should consider their ecommerce presence as a “showroom” for their products. It might seem counterintuitive, but in Tom’s research he’s found that with these brands more people browse online… then buy in the store.
Tom goes over some other unexpected truths many ecommerce companies don’t know about which may bestalling their growth, as well as…
- Where to focus your marketing if you sell expensive products
- A post-sale activity that is extremely important to your success
- The two key factors of thriving “pure” ecommerce retailers
- The unexpected findings that come with testing (if you do it right) – and why you should never stop
- The importance that encouraging and learning from failures has to personal and professional growth
Mentioned in this episode:
Joris Bryon: Hey, this is Joris of the Ecommerce Excellence Podcast. And today I’m really excited to talk to Tom De Bondt. Tom has led the ecommerce activities of some big Belgian and international ecommerce brands such as A.S. Adventure, Cotswold Outdoor, ZEB, and now he is the director IT and digital at Overstock and X2O. If you don’t know them, those are two big retail companies of Belgium. Anyway, with all this know-how and all this experience, I’m sure it’s going to be a very interesting episode. Tom, welcome to the Ecommerce Excellence Podcast. Super happy to have you here.
Tom De Bondt: Thanks for the introduction.
Joris: Cool. Yeah, I already told a bit about unit introduction. But can you tell a bit more about your background, where you come from in your career so that people can understand a bit more about you? How did you end up in ecommerce? Yeah.
Tom’s History With Ecommerce
Tom: Yeah, sure. It’s not a typical way of my career I did. I started my career in the army, where I studied IT. It was very old school IT because I had Token Ring, which was the first network technology they had in the Belgian army at that time. And it’s a very old school and very old technology. So that was my first introduction with technology. And after that, I started in two companies which were mainly focusing on software development. But they also had an infrastructure department.
And I was a consultant in those infrastructure departments, setting up servers, networks, firewalls, and all those kinds of things. And after a while, I decided that I wanted to be in the business instead of working for multiple businesses. And I decided to start working for A.S. Adventure, which was the first retail experience I had. I started my career there as an IT manager on a group level because back at the time A.S. Adventure just recently did their acquisition of Cotswold Outdoor in the UK.
Joris: Yeah. Well I can guess that the Dutch will
Tom: Will appreciate this. Yeah absolutely. I was responsible for all the infrastructure over the three business units aligning the three IT departments to achieve the same infrastructure and setup which was designed by myself then. But in that role, I was closely involved in all the business processes which will optimize them among the three business units as well.
And one important pillar as a potential back at the time was ecommerce. In the UK, it was already a stable market. Talking about 2009, 2010. But in Belgium, it was taking the first steps towards ecommerce in that period because I was really interested in one, A, the technology and B, the marketing part of around ecommerce.
I joined all the meetings from an IT point of view. But my boss at that time I’m Pieter Desmet, for whom I’m working right now again and myself at a big conversation about my role and where I wanted to go in my career path. And we both decided that ecommerce could be a good option for myself, to get to know more about the business more about the business model of ecommerce, delivery processes, the marketing around it, and also supported Of course, by the technology. So I started back at that time, I think it was 2011.
I started as the ecommerce manager for A.S. Adventure, booked for the international scale-up in fact that because they were already in Belgium on the markets, but the brand A.S. Adventure, which was only in Belgium had decided back at a time to grow via ecommerce in the neighbor countries, so, UK, Netherlands, France, Germany and Luxembourg were my focus markets. So I built a team there, I set up the sites, implemented the correct payment methods and off we went. So that was my first step in ecommerce.
After that, I decided to become an independent consultant. And my first big project was ZEB. ZEB is a fashion retailer with now around 100 stores in Belgium divided over multiple brands. And I became the ecommerce manager there. They had done ecommerce for two years, but in figures, it was two times nothing when I started. And I brought it up to a six-digit figure in five years time. So it was quite an interesting project because I started there with two people in my team and I grew with, I think when I left there were 12 or 13 people to real big growth each year, double-digit growth. So, yeah, that was the ZEB ecommerce project where I met you, Joris.
Joris: That right. Yeah. I think a couple of years ago.
Tom: That’s where we met. Yeah. When there was a little bit of stability in the conversion rates, we decided to do conversion optimization together with you.
Joris: Yeah. So it was fun working together that time. Absolutely.
Tom: Yeah. And after ZEB I’ve done some several independent projects going from technology implementation within the big fashion 3PL player in Belgium, and in Holland. The Netherlands, sorry, which is called Blackmon and I’ve invented quote quote a solution for their return process because they had no system for the return process in their commerce delivery. We decided to build the system from scratch.
So I was the project lead for that. And then a few years later, I did the second project for them and designed the microservices architecture to support their transport management systems. Because of the growth of ecommerce, it became more and more important for them to have local heroes they call it. The right carrier in the right area in a certain country and do and that into the websites of the customers. We had the idea to create a platform where customers could just plug in and have all the local heroes available for them.
Joris: Okay, cool.
Tom: So that’s something that I designed them and conceptually talked about together with the business.
Joris: And that was right before you went to Overstock and X2O or any projects?
Tom: Yes. The design of the architecture was this year. Yeah, correct.
Joris: Okay. All right. Yeah. And then, No, no, no, I was just the particular about Overstock and X2O so that’s the next step then. And what’s your role there right now?
Tom: So Pieter Desmet from A.S. Adventure, he called me the beginning of this year and he told me well an hour for X2O and Overstock and to see it in a lot too polite way, I have a bit of legacy and dinosaurs in the organization. And we need to move forward and it’s impossible with these guys. So there are a lot of legacy systems here. And we are now focusing on two main areas.
In fact, measuring is knowing so we’re building up a data warehouse to have all one version of the truth and to have our KPIs available to one single platform for all the business units, so the retail concepts X2O and Overstock. And secondary, we’re going to replace all the systems that are involved in the customer journey. So all the sales tools will be replaced, ecommerce will be replaced, the point of sale system will be replaced. And we will also implement the marketing automation. Those are the three main goals for next year. And my role is to coordinate it and to just do it.
Joris: Okay, yeah. That’s a big responsibility and a big project. So you have a bit of a mix of experience between like pure online players and the classical bricks and mortar retailers that also have an online presence. In your opinion, what’s the difference between those two types of companies when it comes to ecommerce? Is it a different mentality, different processes?
Having a Physical Presence vs Pure Ecommerce
Tom: It all starts with mentality and strategy and of course you need to understand the business model of ecommerce before you can make a decision as a brand, what you want to do about. What do you want to with ecommerce? As I see it of course it’s still a growing market and it will become more and more important over the next few years. But still for the retailer which started with physical stores and physical outlets.
I see it as a marketing tool, as an extended showroom for your retail brand. We can definitely see that those testings and measurements within that is that a consumer is orienting himself first online and then buying in-store. It’s a traffic generator for your stores. It shows your products and your assortment. And it is key that you have it in your branding strategy and that you make it available to watch your customers in a physical store concept. I’ve worked in many who have bought all online and offline. The brick and mortars are still generating most of the revenue.
Joris: Yeah, I had an interesting chat about that with Matthias Laqueur about, the other podcast, where we talk about ROPO. So they research online and purchase offline. And I think still a lot of people who underestimated and we’re all, in a digital marketing sphere, we’re all towards the online part of things. But the offline part of things is, especially for retailers to have the bricks and mortar stores is still so important. And we underestimate that I guess.
Tom: Yeah, absolutely. And if you measure that, and you can attribute the value correctly in your total marketing attribution model, then you’re doing the right stuff. And then you can interact on the right medium at the right time with your customers.
Joris: Right. Yeah. That makes sense. Yeah. So
Tom: Yeah, I just want to say that for the product that we are doing with Overstock and X2O, and those are investment goods, which you don’t buy very frequently, so we don’t have many recurring customers. So we are more focusing on the customer journey before the buy period. So it’s more focusing on the on the pre-sales phase. Yeah.
Joris: Right. So that several touchpoints that lead up to the first purchase actually.
Tom: Absolutely. And those investment goods are, especially the big ones are in the boardrooms. They are not bought online very frequently because people want to see it want to touch it. Want to see the real dimensions of the product, so it’s typical a product that you buy online, buy in-store as you saw that the ROPOs has a very, very big value.
Joris: Yeah. So a lot of your marketing is about generating foot traffic to people getting people to the store, right?
Tom: Yeah, absolutely.
Joris: Okay. Yeah, that’s interesting. I think we, well, I at least because I’m working online all the time and an ecommerce part. I tend to, again, overestimate sometimes the impact of the online transaction, but it’s possible because like Overstock X2O it’s, yeah, big items, as you said, investment items, stuff that you want to touch and feel and try out maybe before you actually buy them and that’s hard. Yeah, that’s hard online. Of course, we have to basically get people to the stores. So maybe one question. So if you’ve worked in so many companies and for so many ecommerce brands and both pure online and retail. What do you believe are the two or three keys to grow an ecommerce business in today’s environment?
Keys to Growing a Successful Contemporary Ecommerce Business
Tom: First of all, you need to understand the business model behind ecommerce. And that depends of course, where you want to position the ecommerce in your total business model. For online players, it’s obvious that the business model is pure ecommerce. So your delivery process is key in the excellence of your total ecommerce perception with your customer. Delivery and service. Those are the two key factors for a pure online dealer. For a brick and mortar concept where you also have ecommerce, it depends on where you want to position your ecommerce. Do you want to use it as a branding tool to create traffic in the stores? Or do you want to make it the biggest channel in your organization? And then it’s a different mindset than. A different way of looking at things. So that’s important to be successful in ecommerce. What is successful, and how successful do you want to be? If the business model for example, in the fashion retailer with bricks and mortars, the profitability of the ecommerce channel is very, very low. Because the delivery process of the brick and mortar retailer is not adapted to the ecommerce process, and that’s where many retailers struggle in organizing the delivery process and being able to achieve the same goals into the delivery promise as a Zalando.
Joris: Yeah, I see. So you’re saying delivering service. That’s important. delivery is hard for, for retail, well, the traditional retail bricks and mortar stores, you have to decide like, do you want a branding tool? Or does it have to be the big driver of your revenue? Anything else that is important? So that’s interesting about understanding the business model. Any other keys to growing an ecommerce business that are important to you?
Tom: Yes, focus on the customer. Always best measure what your customer on your website wants to do. So we started the process with ZEB, Joris. The conversion optimization. And sometimes you see things which you wouldn’t expect customers to do. When you run an experiment and you on the forehand say this is never going to be a winner, and then all of a sudden it seems that at typically, customers do it the other way than you expected. So measuring and experimenting is for me also an important factor to grow your ecommerce.
Joris: Yeah. And I love to hear that of course, because that’s what we are all about, and we sometimes have a hard time convincing people of doing it. And of course I know you already do that because we did that together when you worked at ZEB. But yeah, it’s I totally agree. You have to focus on the customer and understand what they’re doing and don’t always assume that you know.
And as I said about this testing isn’t so you just be like, Ah, that’s never gonna work or Yes, that’s gonna work and then you’re wrong. Because you can never know for sure. Because if you, well if I would know for sure, upfront well, AB testing would not exist. And that’s what we do right?
Tom: Yeah, and also retesting some because it might be a winner in year one, but by year two, the market can be different. Your customers can react differently because they are used to other websites where they shop frequently. And which has additional features where a winner of year one can be a loser in year two. So you need to also dare to retest things and not create a stable flat organization.
Joris: Yeah, absolutely. The thing is that there’s never a shortage of good test ideas. So it’s not always easy to test stuff again. But sometimes it definitely makes sense to test something again because, as you said, the customers change, the market changes, competitors start doing things differently.
And customers get used to that way of working and you had in your old solution to a problem that you tested and worked out maybe a year ago, two years ago, may not be that big winner anymore. It might be a loser. Yeah, absolutely interesting. So we have like, understand your business model, focus on the customer test everything. Any other things that are important to growing your ecommerce business?
Tom: Continuously look for optimizations in everything you do. It’s a never-finished work.
Joris: And then you mean the business as a whole I can imagine. I don’t know, just because we tend to look at it from a marketing point of view or
Tom: Yeah, it never stops, so
Joris: Yeah. And you can always keep tweaking and sometimes small tweaks can have a, make a difference.
Tom: Huge impact there. Yeah. And it depends on what KPI has an impact because increasing the conversion rate with 0.1% can have a huge impact in your turn out.
Joris: Yeah. Sometimes it’s seemingly very, very small. But at the end of the day, when you look at that your total revenue it has a huge impact. So yeah, we’re talking about impact here. And when you look back at companies you worked for what would you say was the one thing that made the biggest impact, or a few things that you said we did this at that company that had a huge impact or we did this. And of course, you’ve done so many things both marketing and but also infrastructurally and processes. Is there anything that stands out?
An Action Which Had a Huge Impact On Growth and Revenue
Tom: Back at my time at ZEP, changing our delivery from our own warehouse to a 3PL who did the job for us had a huge impact on our growth because we all of a sudden could make it possible to deliver on time and deliver next day. So our delivery promise also changed because of our move towards 3PL. And that’s when I started to understand that the delivery process in ecommerce is very, very important.
It also reduces your customer service requests. Most of the customer service requests are both still. And where is my package? When will it be delivered? There’s something wrong in my parcel. All those customer service things can be reduced by optimizing your delivery process. So I never thought about the impact of the delivery process on the mobile.
Joris: Yeah. It’s by actually changing this that you understand how big an impact that could have
Tom: How important it is, yeah.
Joris: Yeah. So I mean, did you shave off a couple of days in terms of delivery, or what was the exact advantage of switching from your warehouse to 3PL?
Tom: Well, we delivered two to three days beforehand, and all of a sudden, we could do a cutoff time of eight o’clock and have delivery next day. And yeah, that made a big impact.
Joris: Yeah. Both in your promise, a promise of maybe people convert more easily when they say, Oh, I’m already going to have a next day and but also in terms of customer happiness I can imagine. Yeah. Did you see an impact on returns from that as well?
Tom: No. Not in the fashion, no. Well, it did have a slight impact on returns because the quality of the goods in the parcel were better. So it was more accurate. So that reduced a bit of the number of returns. But because we, at that time, we really had a boost in number of transactions. The absolute volume of those returns Increased as well. So it’s difficult to isolate that.
Joris: Okay. Yeah, I see. But I like the fact that you also mentioned that it reduces the customer service request because there’s a big win there, of course, as well. It’s probably not the one you were well going after, but it’s a nice side effect of that. Yeah. So one of the questions I had like to ask in the podcast is what’s the biggest mistake you made? I know it’s a difficult one.
Tom: I made so many I can’t remember. Maybe my biggest mistake always is that I’m not doing enough PR. around ecommerce. I started in every business mainly when it was a little thing where people didn’t watch what it was doing. So I never did a lot of PR. So, and all of a sudden you’re the biggest store, you’re a decent part of the total turnover of the retail company. And then people start to watch you and look into your direction and start to give comments. But of course, they don’t know the background of what you all have done to get there. And, that may be my biggest mistake I made in the past.
Joris: Okay, no, that’s an interesting one. With PR you mean internal PR, right? So letting your organization know what you are actually doing. Yeah. And I think that’s one of the mistakes I used to make as well. Sometimes in the past when I used to work at companies before I started my own company. It was like you just get things done then to make it happen. And then you don’t always think about, yeah, tooting your own horn and making sure that everyone has, knows what you’ve been doing and the successes you’ve got.
And then I can, especially in situation where you almost set up an ecommerce from scratch within organization to grow it within your organization to an important part of the organization, that it is important to get everyone on board and make sure that they know what you’re doing, what results you’re getting the struggles you’re going through as well. Yeah, yeah, absolutely. That’s one of the lessons I wish I had learned like in the beginning of my career.
Tom: Yeah. Unfortunately, they don’t teach that stuff at school so
Joris: No, no, no, but I for me, it only hit me when I started working in some companies where some people and I won’t name names, but some people were more concerned about their internal PR than actually doing the work. And they got away with it.
Tom: That’s of course the opposite.
Joris: Yeah. And that’s when it hit me like, oh, okay, I’m the total opposite, but maybe I should little bit more of it because they only do that. For the rest, they don’t do much but they get away with it. So t’s all about perception and towards, not only towards managers but I think also towards other departments. They understand what you’re doing and know what you’re trying to accomplish. That makes your position within the company, I think, a lot more comfortable. And it also helps you to get things done if you need other people on your project.
Tom: Yeah, absolutely.
Joris: Alright. So yeah, we’re kind of running out of time. But maybe just as the last question, what’s your number one piece of advice for people who want to accelerate their ecommerce growth?
Encourage Educative Failures
Tom: Look for continuous improvement. Do it quick and dare to experiment and encourage failure. Not to fail, but to learn.
Joris: Wow, those are wise words and I can stand behind those. Yeah, that’s great advice to finish this interview. Tom, It’s been absolutely great. We could go on for hours and hours. And but yeah, we’re running out of time. We just want to make sure that people know how they can find you, learn more about you. Maybe connect with you. Where can they find you online?
Tom: I think the best place to find me on LinkedIn.
Joris: Okay, so we’ll put the link to your LinkedIn profile in the show notes. Thank you so much for being here Tom. It’s been absolutely great.
Tom: Yeah, me too. Thank you Joris.