Episode Transcript
Transcripts are displayed as originally observed. Some content, including advertisements may have changed.
Use Ctrl + F to search
0:01
This is Functional & Fabulous, the omnichannel podcast where we unbox tales of online retail and digital transformation.
0:10
In this episode, Ger comes up with a new way to annoy our sound engineer...
0:15
Like the touching of my microphone.
0:17
Hello, Elaine. Do that one more time and I'll cut your fingers off.
0:21
You can't just start cutting things off. No, you're right.
0:24
I should calm down. After all, we're all friends.
0:27
It's a pivot. Not a pivot. Not a full pivot.
0:30
No, no, no. Stop saying pivot. You have no idea what it's like working with these two.
0:34
Oh my God, that must be so difficult. You know, it's difficulty squared, you know, it's factors of difficulty.
0:42
That doesn't even scratch the surface. So there you've got your problem married to the solution.
0:46
That's what you'll get for Christmas... You'll get nothing for Christmas.
0:50
This episode of Functional and Fabulous is brought to you with pride by StudioForty9, retail ecommerce experts, omnichannel growth consultants and cut-through performance marketing specialists.
1:03
StudioForty9, where your digital retail success is built.
1:07
Hello, and you're very welcome to another episode of Functional and Fabulous.
1:11
Today, we have the pleasure of hosting Jessica Lesesky, based out of California, USA.
1:16
Jessica is Vice President and General Manager at Shutterfly and Snapfish, and is a distinguished digital commerce executive with over two decades of experience in leading strategic growth initiatives and scaling operations for prominent companies like eBay, Barnes & Noble, Assurant and ChannelAdvisor.
1:35
Currently, she's spearheading the revitalisation of the Snapfish brand and driving innovation at Shutterfly.
1:42
Jessica's extensive background in merchandising, brand management and ecommerce, coupled with her knack for strategic business development, makes her a true leader in the digital space.
1:49
So we are thrilled to have you here today, Jessica. You're very welcome.
1:53
Oh, thank you so much for having me. It's an honour to be here, and I'm excited to talk to you two about the state of... the state of the state in ecommerce.
2:00
The state of the state. Welcome to the podcast.
2:02
I am thrilled and beyond excited to chat to you today, Jessica.
2:06
Yeah, I hope I can live up to what you guys wrote in my bio.
2:09
I'm going to take that tomorrow, if you don't mind.
2:12
I'm practicing it a lot. I've been practicing my introductions.
2:15
They're getting longer and more florid with every person.
2:19
Ger is the ultimate introduction writer. I'm totally hiring him for my LinkedIn.
2:23
It's pretty impressive. I want to talk to that person.
2:26
Where is she? It's right in front of us.
2:28
This is it. So I suppose just to get started, Shutterfly and Snapfish, they're two global brands with, I guess we could say, a lot of heritage from an ecommerce perspective.
2:39
You know, they've been around for quite a long time, brands that I've been familiar with for quite a while.
2:44
There's also quite a lot of overlap between the brands.
2:47
But for those who don't know the brands, would you tell us a little bit about them, the background and recent challenges, et cetera?
2:55
Yeah, yeah, absolutely. So, you know, Shutterfly started, we're going to actually have the 25-year anniversary this fall.
3:03
So it's really exciting. And they pioneered the prospect of taking, you know, really physical at the time, photos and memories and putting them into physical goods.
3:14
They started in photo books and then evolved to lots of different categories.
3:18
Many people know us for holiday cards because, you know, every year people send their holiday cards to celebrate their year, celebrate milestones, show how much their kids have grown, all of those things.
3:29
And it just becomes part of their annual holiday tradition.
3:33
And then recently, Shutterfly expanded into lots of other categories.
3:36
So like in drinkware, gifts, wall, home decor.
3:40
So lots of people love giving. If you've never given a fleece blanket with a kid's photo on it, it's a great gift for grandparents.
3:47
Like it gets them every single time. So I think that, you know, the evolution of taking now what is, like, all these memories trapped on your phone... On average, people have 6,000 photos and putting them into a physical good that helps capture that moment.
4:04
It's really special. So Snapfish has a bit of a similar story.
4:08
You know, they started a little bit later. They're about 20 years old.
4:13
As things happen, when you start a new pioneer industry, lots of people come and try to disrupt you.
4:19
Snapfish was one of those. And Snapfish has an interesting history where, you know, they started, they were acquired by HP.
4:26
The founder bought them back. They then sold to the private equity group Apollo that wanted to bring these two brands together in a way to really own market share.
4:37
And so Snap has a little bit of a different story and history and a little bit more focused in that value space and that value customer.
4:47
And we're finding that, you know, there's opportunity to probably tap into a different audience given there's lots of overlap between the brands.
4:55
So you mentioned the challenge. I think the challenge is you sell a lot of the same things.
5:00
How do you differentiate and delineate? And that's part of what we think about every day as a leadership team.
5:06
And then also, how do you navigate these, like, digital disruptors that try to come?
5:12
So lots of niche businesses will pop up and try to pick apart parts of the business.
5:16
And so you have to keep innovating and keep evolving your solutions and your offerings really with the customer in mind.
5:23
How do we create value every day for the customer and solve a real problem or need?
5:27
And so that's what we think about. And we feel like we can do that, in a position to do that just due to our expertise and how long we've been here.
5:36
And we do have the benefit of history with these customers.
5:41
And tell us a bit about the Snapfish journey where it was sold into HP, which is obviously a very, very large corporate and global brand, and presumably had quite a bit of expansion there.
5:53
And then maybe it was purchased back, and then maybe had contraction?
5:56
And I suppose sometimes it's hard for a brand to keep a strategic vision and maintain that between those sorts of pretty seismic changes, I guess, in the business.
6:07
What's that been like for Snapfish? Yeah, absolutely.
6:10
So you're right. You know, when HP acquired the brand, there was massive expansion.
6:15
They were in multiple countries, expanded into Asia, which has its own set of challenges.
6:22
They were also in Japan. And so there's a lot of expansion that happened that, as the company then was sold back to the founder and then now with us, we have decided to unwind some of that just primarily in the sense of, you've got to be able to do things well.
6:44
And we believe you want to execute well in the markets that you're in that you should ultimately own.
6:50
And sometimes moving into lots of different countries can create distractions.
6:54
And so what we did was scale back.
6:58
We ended up saying, look, the markets that we need to own globally are the UK, Ireland, Australia, New Zealand.
7:06
And then we worked with a third party to help maintain the presence in Spain, Italy and Germany so that it was just a bit more cohesive.
7:17
And it wasn't something that we had to necessarily worry about, but that we could at least maintain the presence if we ever wanted to go back in a full-fledged way into those locations.
7:29
It sounds like you had some big decisions to make, particularly given the brands are so similar.
7:36
So how do you even approach a challenge like that?
7:41
So you've got all this international going on over here.
7:44
You've got another brand over here. You've got very similar product.
7:47
Where do you even start with this?
7:50
Yeah, so you first have to understand very well the market and the landscape that you're in and the customer.
7:57
It all starts with the customer. And I'm sure you all talk about this a lot on the podcast with other guests.
8:04
But if you aren't waking up every day in service of the customer, you're really not going to be successful because we won't have jobs.
8:12
We won't serve our business well if we aren't thinking about the customer and putting them first.
8:17
And so what we thought about as we looked for ways to peel these brands apart or just own different pieces of the market is what can Shutterfly uniquely do and own?
8:29
And what can Snapfish uniquely do and own?
8:32
And are there ways that it may be easier for Snapfish to take, for example, a percentage of the market or reach the market in younger generations?
8:41
Because Shutterfly just appeals to an older customer.
8:45
It's a longer tentpole to get there. We can get there over time, but Snapfish could truly be repositioned to reach a younger audience because, quite frankly, in the US, it's a bit different when you go region-by-region.
8:58
But in the US, people had sort of forgotten about Snapfish when we did a brand study.
9:03
It was like the acquaintance you had fond memories of, but you forgot.
9:08
And you're like, oh, yeah, I know that person. You might experience that in your life.
9:12
And so we have a chance to reintroduce Snapfish to audiences that haven't grown up with it and start to reframe the brand in a different way.
9:21
And so that's part of what we think about is, what's the space that we can ultimately own?
9:26
Where are the opportunities? We delineate categories.
9:30
How do we use the brands together to box out other competitors in the space in categories that are just, we have to win, like cards, like photo books, and look for those very distinct pieces of the market and figure out how to take those together.
9:48
So it is not a simple thing.
9:50
We continue to, I'd say we don't have a silver bullet solve.
9:54
And it takes that tenacious commitment and three-year journey to say, this is the plan.
10:00
This is how we're going to break that down by milestone, and what we're going to learn along the way to gut check that it's resonating.
10:07
Yeah. I'm guessing that you might have to make tweaks, changes and adjustments along the way as you hit those milestones.
10:16
Yeah, exactly. So take a category like Prints.
10:20
Prints is really an acquisition channel.
10:23
It does appeal to a younger customer. It's something that you might, if you look at it singularly as a category, has lower lifetime value, but you really need to get the customer in and cross shop into other categories as well.
10:37
But we compete against each other. We compete in SEM, right?
10:41
We compete and we have to have those conversations.
10:44
Okay, how are we looking at the budgets holistically?
10:46
Where do we need to throttle Snap? Where do we need to throttle Shutterfly?
10:50
How do we look at SEO, and make sure that we're doing the right thing so that we can own the first page of results as much as possible?
10:58
But it is a balance and it's a lot of constant communication and push-and-pull.
11:03
People will be really important in that mix.
11:08
So, like, have you got two teams that are, like, head-to-head or have you got shared functions?
11:14
Like, I'm super interested, like the machinations of, like it's challenging enough intellectually squaring it with the brands.
11:22
How do you then square it with teams of people?
11:26
Yeah, so they've gone through evolutions.
11:29
We've gone through evolutions as a company. They used to be separate teams, and over time we have been bringing them together into a centre of excellence for that reason, so that you can have strategic conversations as business owners with your respective partners, but they're able to look across the brands holistically and we can have budget conversations.
11:49
At the end of the day, it all rolls up under one CEO.
11:53
It's one P&L. The brands have their own P&Ls, but truly it's kind of one big P&L you can pull from.
12:01
And so it has helped immensely to, especially in the performance marketing channels, to have someone who can oversee both, look at what's going on in the market.
12:11
Like Jillian Twaddle, who heads up our affiliate programmes, so smart, and she'll tell us, hey, I'm seeing this type of activity and this is working when we conquest these competitors for Snapfish, and we're seeing better results than if we conquest those same set of competitors for Shutterfly.
12:29
So let's, like, think about that. Let's have those conversations.
12:32
And I think that would be difficult to do if you had a person siloed, only focused on that one brand.
12:39
You need to be able to reach across and, knowing what you're trying to do to separate them, take the learnings from the team and what they see in the market of, again, is it working, is it not?
12:50
There's definitely a large amount of calibration to be done between the two brands, I suppose, and a lot of thinking about how they mesh together as two separate businesses that are kind of bouncing off each other and leveraging off each other a little bit.
13:05
And, you know, we talk a lot about, even within one brand, to try and understand across all of the channels how to operate.
13:13
This, you know, squares it up nearly in terms of, let's say, complexity.
13:17
And for sure you would need somebody at that oversight level who's really looking at it, trying to make sure that the right thing is happening.
13:25
Like you said, holiday cards is just so important to us.
13:28
And what we found where we were losing customers to, price was one of the number one reasons why we were losing customers, you know, in a difficult economy.
13:39
And what we saw was the competitors they listed that they were going to wasn't Snapfish.
13:43
And so we spent the next year saying, okay, how do we make sure Snapfish is positioned to pick those customers up, do that same survey?
13:49
And now you start to see Snapfish in the consideration set or in who they're mentioning.
13:54
And we can look at then the customer data to see where there's better overlap and synergy.
14:00
And so that was a really big win and unlock for us.
14:03
And so Snapfish moved from like being number nine in the market to being number five in just one year, one holiday season to the next.
14:12
So that was a big win for us in terms of tackling market share for a very relevant category in a space that we needed to own and bifurcating and understanding through the customer insights data, where were we losing and how do we then go put a plan to fix it?
14:27
How'd you get from number nine to number five in 12 months?
14:32
Yeah, so there were a couple things that... first was we talk, I am a huge fan and my team will know this, the fundamentals.
14:41
And I think a lot of times people will say, oh man, we need to be innovating.
14:47
We need to be pulling this lever. We need to go into this completely new space.
14:50
But the first thing that we did when I, so I elevated someone on the team.
14:56
Her name is Kim Schaefer. She's amazing. And she and I started to work through, well, what is the Snapfish strategy?
15:02
And the first thing we kind of saw that was missing was, happens sometimes with acquisitions.
15:06
As you know, you bring a brand in, you take the best talent out, or you take all the good and then you kind of start to like let it flounder and fail.
15:14
And that's sort of what was happening with Snapfish, to be honest.
15:17
Like we just kind of ignored it. And so the first thing was like, well, what's the strategy?
15:21
So we didn't have one. So we put one in place.
15:25
We put the categories that we wanted to focus on, which were cards and prints.
15:29
We had 10 quarters of customer declines.
15:31
And we're like, okay, we have to fix that.
15:34
Specifically with new customers, those were in the double-digit declines.
15:38
And we put something into action really quickly.
15:41
So that was one of the insights that we used. And I was like, hey, it does feel like if we're losing people to price because like many retailers, Shutterfly had been raising prices.
15:51
And trying to get AOS expansion and right size from a profitability perspective.
15:57
At the same time, we were losing customers. So how do we position Snap to pick up those customers?
16:03
We audited all the marketing. And in our SEM accounts, they were basically maybe a C, probably a C minus.
16:12
And so it was just shoring up.
16:14
Let's get our SEM accounts better structured.
16:18
I mean, we weren't even bidding on ornaments in Snap, like not even in the consideration set.
16:24
So it was just like basic cleanup stuff that we could do.
16:26
We weren't taking advantage of PMax.
16:29
So these new programmes that Google was rolling out, we weren't taking advantage of.
16:33
No one was looking at the funnel and saying, okay, when we get these new customers in, where are they falling off?
16:40
Specifically in MWeb, because we know people are gravitating to their phones.
16:44
So let's focus there on MWeb in the cards journey.
16:48
So it's really compartmentalizing that strategy that you have and taking it down to a cross-functional level, looking at the customer journey, looking at the tweaks that you made.
16:59
And we just started getting more in the consideration set of the customer and getting more efficient at the way we spent our dollars, but also more smart about the way that we put the brand in front of customers.
17:11
And so it was a huge win. And I'm proud to say too, so after like 10 quarters of customer declines, our customers have grown 8% in 2023, or sorry, 2022.
17:25
We grew 18% last year. So it was a big win.
17:28
So fantastic. So that's clear strategy, fix your fundamentals, pick which categories you want to win and really try and win them.
17:36
And then manage your marketing.
17:39
It still sounds like it was quite performance marketing focused there.
17:43
So you were able to make that leap through, even just fixing the basics and almost residual brand value.
17:51
Yes, yes. It was residual brand value.
17:54
It was fixing the basics of the performance marketing channels and looking at how they interacted with one another.
18:01
I think if you just looked solely at the channel themselves and you're measuring the ROAS of those channels, yes, you need to do that, but you have to look at that holistic customer journey.
18:11
You all know this very well.
18:14
It takes a customer multiple touches to get to that final conversion.
18:18
So you can't just start cutting things off because they're not working.
18:21
You've got to look at that whole journey. And then on the CRM side, we actually just started to do more with the data that we had and feeding that back into the performance marketing channels.
18:32
So when I talk about the fundamentals, we discovered, hey, you know what?
18:36
We're only sending three months of inactive customer data.
18:40
Why aren't we blowing that out to 18 months?
18:42
That's not how our customer shops, right? They might shop one holiday season and not shop the next.
18:47
So I'm not saying any of this is rocket science or I'm some mad marketing genius.
18:52
I think a lot of it has to do with really diving into the business, asking the right questions and helping everyone rally around to what you said, which is, this is the core strategy that we're going after.
19:06
This is the way that we're going to attack it.
19:08
And we're going to keep, you know, learning and sharing information along the way.
19:12
So if we need to pivot, we can. Well, going from no strategy to a strategy is pretty genius.
19:18
Out of curiosity, in amongst all of those discussions you would have had, and I'm sure there's plenty of work involved in arriving at the strategies.
19:28
And it sounds like the decision has been to keep the two brands completely distinct from each other in terms of, like, the market perception.
19:39
But was there ever a conversation about, you know, cross-selling between them or making them overlap a bit more?
19:46
And why didn't you go that way? We did have that conversation, you know, and we talked about, would you put a tab on Shutterfly that's like shop Shutterfly, shop Snapfish?
19:57
We decided not to do that because I think that over time, maybe as the technology gets more in sync, that could make sense.
20:05
But you can't share photos between the two systems.
20:09
You can't share projects, like they truly are distinct.
20:12
And so if you shop the sites because they're on different tech platforms, different creation paths, like they're just too different from a user experience perspective that it didn't make sense to bring them together.
20:27
And then, you know, as we kind of thought about it, it's like, all right, well, let's try to use it potentially as a flanker brand and use it as a way to gain market share together so that if someone's like, eh, you know what, I'm not going to shop Shutterfly.
20:43
I want to shop Snapfish instead. It's not necessarily kind of tied to each other to the point where, like, the consumer might make a different decision.
20:53
And there's lots of brands that do this in our space too.
20:57
It's interesting, like they don't necessarily, unless you're, like, personalisation mall and in that space, they don't all tie together.
21:05
They typically keep them separate. I think it would be a difficult one to answer, you know, you can only really know which would have been the right way to go with the benefits of retrospect, by which time it might be too late, really.
21:19
Yeah, right, right. Yeah, your PhD in hindsight may not have kicked in at that point.
21:25
One of the questions that's top of mind for me now is you're very clear on the strategy for the two brands, and you've started to build innovation.
21:37
Now you're getting bombarded with things like the metaverse.
21:41
You're getting bombarded with AI. And there's all of these new technologies coming at you.
21:49
How do you decide which of those innovation routes that you are going to follow, which ones you're going to park and which ones you're going to ignore?
22:01
Yeah, so I would say you think that you're going to make the best decision with the information that you have to do the right thing.
22:10
We start again with what is going to help us solve a problem for a customer, or solve a pain point, or add value to their daily life, and then go from there as the starting, the launchpad to, okay, and now we're going to do what?
22:26
And so I'll give you an example where we did decide to use and leverage AI, but we tied it back to a core product and a core category that we have to win in, which is photo books.
22:37
So photo books, while people love them, there is sometimes a fear of making them because they take a long time.
22:46
Some people don't feel very creative. They don't feel like they know how to lay out their photos.
22:50
And so we have this service called a free designer service, or a Make My Book service, that a customer can hand over up to 1,000 photos.
23:00
They can hand over as little as 40 photos and we will make the book for them.
23:05
Now, what they don't know behind the scenes is there is an AI algorithm that over time has built out 50 million templates, which could be possible layouts for their photos.
23:18
And so that model has evolved over time with all the different photos that we've been receiving, looking at different layouts and also being smart about what drives conversion with customers when a photo book is laid out a certain way.
23:31
And then there is a designer on the other end of that that will make some finishing touches and tweaks so that it's a beautiful book that's handed to the customer.
23:39
So they come in, we handle the photo curation part, which is, I don't know which photos are my best photos.
23:45
Just give them all, give us as many as you want.
23:48
We'll pick the best ones. We handle the embellishments.
23:51
So some people love like all stickers or they love other little elements in their photo book.
23:57
We can do that too. So the model and the algorithm will take those inputs from customer embellishments, little embellishments, build it out.
24:05
And then we also will look for opportunities to give customers maybe those finishing touches.
24:12
We know if it's a travel book or a wedding album, some of those upsells like lay flats or six-colour printing a customer might be interested in.
24:21
So we'll go ahead and put them in those upsells, but let them know, you know, that these have these options, you can remove them.
24:27
And what's exciting is our conversion is extremely high.
24:33
We have 2X new customers in this service. It's a 30% higher AOS as well because people love the book so much.
24:39
They're like, I want all of these photos. I want as many as I can.
24:43
And that service grew 98% last year, which was really exciting.
24:47
So for us, it's a way to use AI to again, solve a problem, but make sure that we're tying it back to what we ultimately need to do, which is grow the categories that we're in.
24:58
Yeah, and it sounds like it ties back beautifully to the bit you open with, which is build something for the customer.
25:05
Yes. That the customer is going to want. And I'm always thrilled to hear stories like that, where we've invested in making something that actually makes the product really good for the customer.
25:15
I mean, it makes the experience good for the customer. And guess what?
25:18
The customer bought loads more of it.
25:21
They did. And the best part is, what we wake up and do at Shutterfly every day is we try to bring people joy, right?
25:29
And give them ways to relive these memories that they took in their photos.
25:34
And so that we'll get back from customers, they'll say things like, oh my gosh, I cried twice.
25:40
I cried the first time when I opened this book for the first time.
25:44
And I cried the second time when I gave it to X, Y, Z person.
25:48
Like I gave it to my mom for Mother's Day or I gave it to my daughter as her graduation gift.
25:53
Or I gave it to my friend whose dog passed away and we wanted to commemorate him.
25:59
So it's just lots of heartwarming testimonials where people just say this service has changed their life in a way because they never felt like they could do a photo book.
26:10
They never felt creative, but we helped them in a way that they didn't expect.
26:16
So that's the best part at the end of the day. It must be interesting when, you know, you're a brand that's been around for a while.
26:22
I'd imagine the gravitational pull to rest on the laurels and play it a bit safer must be pretty strong.
26:30
So like, and then you're faced with, let's say, the cost.
26:33
I mean, obviously something like that would be an expensive investment.
26:36
How does the business look at innovation and what is the general attitude towards innovation in the business?
26:43
Well, if I told you we were all holding hands and agreeing and just skipping around the office in the decisions that we were making, I would be wrong.
26:52
I think there is that push-pull that happens.
26:55
And the best, I think, comes from the nice, respectfully heated debates that you can get into as teams about what you do and what you invest in.
27:05
And there is always going to be a bit of, well, we've always done it this way.
27:10
And some of that, you know, you have to know and you have to respect the history and you have to respect and understand it in order to inform the future and where you go.
27:20
I think a lot of where we make the decisions is, there is some data driven things.
27:27
And then you have to be smart about the way you use your data to substantiate your gut to a certain extent.
27:33
I think that if you only live and die by data, you're probably going to move really slow and it's going to be very difficult to get things done because you're never going to get the perfect answer.
27:44
And so part of what we try to do, I find that there's always a cohort of individuals across the organisation.
27:55
And it's not just at an executive level, but I like to go find the people that can get things done and make things happen.
28:01
And, you know, you just form a group and you start to just make inroads and make headway.
28:08
So it's not easy, especially at a big company.
28:11
You know, being at eBay too, we ran into the same thing.
28:13
Being at Barnes & Noble, we ran into the same thing. But I will say that if you have that momentum and you have a way to rally people and inspire them of, like, the future possibilities, generally you can get a crew of folks on board with you and you guys just kind of start pushing things through and it'll all fall into place.
28:37
Like the Snapfish team is really scrappy. You know, while I say they didn't have a strategy, they had a very tenacious team, still do.
28:44
I love that team. They just want to get stuff done.
28:46
They just needed people to help kind of structure, all right, like, well, what do we go after?
28:50
Because everyone's kind of like making their own interpretation where you don't have a strategy.
28:54
But that team gets a lot of stuff done really fast.
28:57
And so it's fun to watch.
28:59
It's an interesting thing. I think we're seeing, Gordon, you know, throughout this season, a lot of conversation about maintaining and mastering the brilliant basics, a lot of conversation about the customer, and knowing the customer, and understanding and servicing the customer.
29:16
But also a reasonable amount of discussion around data and, let's say the application of common sense.
29:24
So the data-driven decision, but also you need the common sense or your gut or your experience.
29:30
Because if you only follow the data, you end up at a certain point, which may or may not be the right place to end up.
29:36
And you need the experience to decide, well, actually, we're going to try going to another area.
29:42
I have a slightly separate question.
29:45
It's a pivot. Not a pivot.
29:47
Not a full pivot. No, no, no, it's just a gentle veer.
29:51
So the question is, it was one of the statements that you had.
29:56
And I wonder, is this like an internal, let's say, mission statement of any sort?
30:01
But if it's not, I think it would make a pretty good one.
30:03
Is that concept of taking the stress out of thoughtfulness?
30:07
I really liked that phrase.
30:10
Is that something that you talk about internally, that kind of, that idea?
30:14
Yeah, I will say it's not official.
30:16
It's not like a rubber stamp. Oh, you couldn't make it an official thing.
30:19
But it's my personal thing.
30:22
It's what guides me in, when I think about the value add that Shutterfly can bring for the customer, it is, and what will differentiate us from the competition, it is taking the stress out of being thoughtful.
30:37
And I think about it in my own personal life and just what I see in, and hear from our customers as well, is like, ah, I really wanted to do that.
30:47
But I just, again, I didn't feel creative.
30:49
I didn't feel like I had it in me. I didn't know what photo to use.
30:53
I didn't know, or I'm not comfortable, or I also just forgot.
30:57
Oh man, Mother's Day, it sneaks up on you.
30:59
And even though it's like the same Sunday in the US, generally every year.
31:04
So I think that there is a lot of merit to that.
31:08
And when you can combine, there's different tools and things that you can combine.
31:13
So we have an auto-sync with your photos, where if you download our app, you can auto-sync your photos.
31:19
We have a recommendation engine that's constantly creating products with those photos.
31:25
We have an address book that allows you to store your contacts and be able to easily send things to them.
31:34
So how can we bring those three tool sets together to create a product or a service that could be really valuable to customers?
31:42
And I think there's truly an unlock there.
31:45
Because again, in this space, if I just say like, here's a, you know, 11-ounce mug that you can put a photo on, you can get that a lot of places.
31:57
You can get it on Amazon now. So it's not enough to say, oh, Shutterfly can make that for you.
32:02
We'll make it beautiful. We have 100% happiness guarantee.
32:05
Guess what? A lot of other people do. So you've got to go beyond the physical products and the quality now to offer something different.
32:14
And that's what has to fuel us to be relevant in the next generation, or to the next generation of customers.
32:21
Very interesting. And in terms of the, we talked a bit about the acquisition and how you're using performance marketing between the brands and all of that side of things.
32:31
Curious to know about your retention marketing and how that operates.
32:34
I presume that area of the business and the lifetime value is something that you guys must focus on quite a lot?
32:43
Yes. Yeah, absolutely. So it's extremely important and we can't just look at it by category.
32:50
You know, in our business, we have to look at it by occasion as well.
32:53
So an example is wedding. Wedding is a very high lifetime value occasion.
32:58
And we looked at all aspects of the customer journey to say, man, we could actually unlock a lot more opportunity and revenue if we get customers to kind of keep that journey with us.
33:11
So an example is the wedding customer lifetime values over $240.
33:18
They actually will come in on a save the date or they might come in on engagement.
33:24
And we knew there were a certain percentage, a very low percentage of customers who bought save the dates that would buy invites or who buy invites that buy day of.
33:34
And day of, which if you think of the menus or the bar list, the other pictures and things that people will put at the event to just make it personal to them, that's actually the largest portion of the wedding total addressable market for Shutterfly.
33:53
Yet we own the smallest percentage of that.
33:55
And so we were like, how do we get more unlock from that?
34:00
And what could be some things that we could do utilizing all the different products that we had, not just paper products and cards and stationery.
34:07
And then the last mile of that is the holiday cards, right?
34:10
So when you get married, you have these beautiful photos, like how can we help you do something with that to announce and celebrate?
34:17
And for us, like only 11% of customers were buying and who bought wedding were buying holiday cards.
34:24
So those are just, like, simple things that as you start to unlock the data, you then can reframe your journeys and to your point, the retention efforts, your trigger streams and email, your cross shopping that you bring customers into, things that you could package up, right?
34:41
In your promos and your strategy.
34:45
So I think that there's lots of things that you can do when you start to understand where you get the LTV, where are you, where are kind of like the big rocks you can unlock with just more maniacal focus.
34:59
And then how to, again, do you put targeted strategies at the customer journey?
35:02
You can't just be one channel doing it alone.
35:05
You have to look how they all connect. And when you're looking at so many other businesses, as you mentioned, even Amazon now is in the market, and of course a bunch of others for that 11-ounce mug.
35:17
How do you manage that in terms of, like, your discounting and promotion strategy?
35:23
I presume you don't want to get into free fall with everybody else and rely on a parachute, you know, for the race to the bottom.
35:30
So how do you think about that side of things?
35:34
Yeah, so it is, it's difficult.
35:38
I think every retailer goes through this and struggles with it where you feel that competitive pressure.
35:44
You also see consumer pressure where in times of economic stress, like we're in now, they start to pull back.
35:53
And so your natural inclination is, let's start discounting, let's start running promos, let's see if we can light up, you know, some consumer activity that way.
36:05
And in some cases it can work, but it typically then becomes a race to the bottom.
36:10
And so we have a very sophisticated and it's gained sophistication over time, pricing and promotions team led by Monica Dahl in our organisation.
36:22
She is so smart. And ultimately she has helped us continue to refine those strategies over the past four years and working really closely with our CRM teams to say, okay, how do we think about the customer segmentation differently in terms of who is more offer-driven?
36:40
So how do we take these lower AOS band customers and make sure that we have things that are relevant for them while we don't have to discount as much to a different audience.
36:51
And so I know people talk a lot about personalized promos and unlocking that.
36:55
It can work, you know, with the right segmentation strategy.
37:02
And I think the other thing is to what we talked about earlier, you just can't say, well, we're gonna keep offering the same white mug and not evolve.
37:11
And so part on the merchandising side that we think about is, what are new ways that we can offer products that will make it interesting?
37:18
So we're looking at, you know, launching some different types of products that will appeal to more of a younger customer base, but also have some new design elements and techniques that we think will be interesting and go beyond just like I said, the white mug with the photo that everybody else has.
37:39
Brilliant. So, like, we've covered quite a lot of stuff, but can you give us as we start to wrap up, a little bit of insight into maybe what we can expect to see next from Shutterfly and Snapfish without giving away too many secrets?
38:01
Yeah, sure. Well, I'll do a plug actually, because I told you about the free 24-hour designer service that we have on Shutterfly.
38:11
We intentionally decided not to launch that in Snapfish US, but we're launching it in the UK, Ireland, Australia and New Zealand.
38:19
And so that's going live now-ish.
38:23
So we just got, I just saw an email going out that we're ready to start pushing that out and testing it.
38:29
And we believe that that's gonna allow us to take something we know works domestically, bring that to the global market and to these, you know, other locales that will help us differentiate from some of the up-and-comers that are very app-driven and, you know, again, using AI tools.
38:47
So we're excited about that. Hopefully you guys will try it out.
38:51
And then we have, and let me know what you think.
38:54
We love brutal feedback. And then we have some other products that we're bringing to market.
39:01
I'm really excited about a partnership that I can't disclose fully, but we are starting to look at how do we partner with brands that are kindred brands, that we could bring something unique to their product set.
39:16
And it's value-add because they can use our customer base to widen their audience.
39:23
We can use their customer base to widen our audience and just create some symbiotic value for one another.
39:29
So we're hopefully gonna launch something with a very large-brand household name with a new product that they're launching in the next couple of months.
39:42
So that should be out in the July, August timeframe.
39:46
And then we are hopefully continuing to expand our services.
39:51
So as we think about how do we take the learnings of this Make My Book service and apply it to other categories.
39:57
And so we have some things in testing right now that we believe will continue to solve problems for customers in these categories that we truly should have a right to win in and we do have a right to win and we just need to approach the market differently.
40:12
That's great. So many things going on and quite a lot of innovation.
40:16
And as you said to us in a previous chat, playing it safe has never been the recipe for success.
40:21
So it's great to see a brand, well, the brands with that kind of heritage and that, you know, let's say provenance from an ecommerce perspective continue to push forward with such energy and such momentum.
40:36
So we applaud you on that, Jessica.
40:39
Thank you. Thanks so much for being with us today.
40:42
Yeah, thank you for being so generous with your time and sharing your stories and insight.
40:47
It's been brilliant. Oh, it's such an honour.
40:49
I truly, I feel so honoured to be here and with you guys.
40:54
So thank you so much for the invite and the chance to talk.
41:01
I love talking to Jessica.
41:03
Wasn't that a brilliant story? And wouldn't you love to be involved in an organisation that's going through such transformation and seeing huge success off the back of it?
41:15
It is, it's a great story. We're involved in businesses that are innovative, you know, and maintaining that level of innovation, continuously pushing things out through apps and on the website and via the technology and, you know, all of the, trying to maintain it across two separate brands with two separate stacks of technology, by the sounds of things.
41:33
Keeping that in your head and pushing on for innovation the whole time and being so enthusiastic about the brand.
41:42
And, you know, even Jessica mentioned, you know, that, you know, they're stealing our market, for example.
41:48
It's that sense of like, this is our market.
41:50
We're going to go after this. We have the right to win in this market.
41:53
I love that language. And we're going to push. Yeah, we're pushing that innovation.
41:57
I think it takes such energy and determination and grit and tenacious, or tenacity.
42:03
It's a really great story. I think it's fantastic.
42:05
And I can totally see, as we speak to her, how that has come to pass, we'll say.
42:10
Yeah, it actually sounds like a really kind of positive energy place to work.
42:15
But, theme of the season, which I should have some sort of jingle for.
42:19
It's the theme of the season. Roger.
42:37
But, it's coming through again. Clarity on strategy, being like really, really clear on what you want to do and actually not having that too broad.
42:45
And then making sure that the team aligned to it, using that as a guide and having the customer at the centre of how you build and develop your products or your services around that.
42:59
And that seems to be something that's coming through from literally everybody that we've spoken to.
43:07
And the other bit is, like, the data on its own is not enough without the insight and almost the gut layer that sits over the top.
43:17
Yes, I think that is a mark of the kind of continuing maturity of the ecommerce industry, which is, you know, because we had, I suppose for the first time in, let's say, the history of business, you have an influx of data and not only an influx of data and a huge amount of data that you're able to record, you also have the computational power to do something with it.
43:43
And for a long time, that was, again, harking back to a previous recording, that was a solution looking for a problem.
43:51
People weren't quite sure what to do with it.
43:53
They knew that they wanted to understand the data, but they didn't quite know what their questions were, what their problems were.
44:01
Now we're seeing people talk about data-driven decisions and how important that was.
44:08
And then we've also been talking about, well, that whole idea of
44:11
if I'm optimising against my data-driven decisions,
44:15
or optimising via data-driven decisions all the time,
44:18
I will end up in a cul-de-sac eventually
44:20
and I need to use some form of experience,
44:23
or some form of testing, or my gut,
44:26
or something else to pull myself out of the cul-de-sac
44:29
and start exploring new areas, like the touching of my microphone,
44:34
for example. Hello, Elaine. So, I suppose my point there is just that thing where we've gone from, oh, wow, we can have so much data, to, oh, we must, you know, use our data-driven decisions everywhere, to now this, okay, actually, do you know what?
44:50
We need to use experience and layer that on top of the data.
44:53
Feels to me like a maturity milestone.
44:56
Yeah, like there was a couple of cracking examples in there, like there was an example of wedding then only winning 11% of, or people who bought wedding, only 11% of them went on to buy holiday.
45:12
When you think about that, you're like, okay, there's the interesting data point, but now you need your gut and now you need some insight to understand the why and what to do about it.
45:24
That was a really interesting, like, here's some data, here's some information, but now what are we going to do about it to move that on?
45:34
And I thought that was brilliant. And then the other one was the insight that people don't feel, or they don't have the creativity to make a photo book and they don't have that capability themselves, so we use that insight to then go and build a service.
45:54
And that service would not have been cheap to build or easy.
45:58
A service which is actually useful to the customer.
46:03
You can intuitively see immediately how that's going to be useful.
46:05
You can imagine using it yourself. So there you've got your problem married to the solution.
46:09
That's what you're getting for Christmas. You're getting a coffee table book full of photos of me.
46:14
Super, you and your dogs... Me, Hamish and Morag.
46:19
And here they are, jumping around the field.
46:23
So yeah, it was great. And also, I think, so interesting to hear about this, this kind of parallel path for the two brands.
46:32
Originally, I was kind of thinking, my God, that must be so difficult to, you know, it's difficulty squared, you know, it's factors of difficulty.
46:42
But while listening then, you certainly realise, well, actually, you know, there's a clear strategic vision here.
46:47
They know what they want to do with both brands. So actually, what a great position to be in now to bounce the two off each other, to leverage, or to hand off nearly customers from one to the other.
46:59
Obviously, you know, behind the scenes. I don't think we should underestimate the amount of effort that must have gone in behind the scenes to align the people in the organisation to be able to do that.
47:11
Yeah. That must have been tough now. Yeah, I'd imagine they have, by the sounds of things, they have some very, very good people in there.
47:17
Yeah. Oh, and also full marks for all of the shout outs to the different team members.
47:22
Yes, indeed. Very nice. So that's another one, Gordon.
47:26
Another one? You sound like DJ Khaled.
47:30
Thanks again for joining us. You've been listening to Functional and Fabulous.
47:35
We're signing off. Thanks, everyone. Bye.
47:37
You've been listening to Functional & Fabulous with Ger Keohane and Gordon Newman.
Podchaser is the ultimate destination for podcast data, search, and discovery. Learn More